(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 Six Months ended September 30, 2019 (Japanese GAAP)
November 8, 2019
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: Nobember 13, 2019
Scheduled date of payment of cash dividends: Supplementary materials for the quarterly financial results: No
Briefing session on the quarterly financial results: Yes
1. Non-consolidated financial results for the six months ended September 30, 2019 (April 1, 2019 through September 30, 2019)(1) Non-consolidated operating results
Net sales

Operating income
%
△16.5
△20.6

Millions of yen

293
351

6 months ended September 30, 2019
6 months ended September 30, 2018

Net income per shareyen△76.30△3.14

6 months ended Sep. 30, 2019
6 months ended Sep. 30, 2018

Millions of yen

△207
△17

(Percentages indicate year-on-year changes)
Ordinary income
Net income% Millions of yen% Millions of yen
%
△231
△231
－
－
－
△8
△8
－
－
－

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

Net assets

Equity ratio

Millions of yen

As of September 30, 2019
3,462
3,249
As of March 31, 2019
2,383
1,998
Reference) Net assets: 3,249 million yen as of September 30, 2019; 1,998 million yen as of March 31, 2019

%
93.8
83.8

Net assets per share
Yen
1,038.02
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 September 30, 2019

3,131,700 shares

As of September 30, 2018

2,811,700 shares

As of September 30, 2018369 shares

6 months ended June 30, 2018

2,798,621 shares(2) Number of treasury shares at the end of the period
As of September 30, 2019

1,069 shares(3) Average number of shares issued during the period
6 months ended June 30, 2019

3,032,891 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 3"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 ················································································ 3
2. Non-consolidated quarterly financial statements ···················································································· 4(1) Non-consolidated quarterly balance sheets ························································································ 4(2) Non-consolidated quarterly statements of income (6 months ended September 30, 2019) ··························· 5(3) Non-consolidated quarterly statements of cash flows (6 months ended September 30, 2019)······················· 6(4) 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(Additional Information) ··················································································································· 7(Material subsequent events) ··········································································································· 7-1-1. Quarterly financial results(1) Business results
The Japanese economy during the second quarter cumulative period has been on a moderate recovery track backed
by firm corporate profits and employment conditions despite rather weak production and exports, although there aresmoldering concerns about economic slowdown and the downturn in corporate performance partly due to theconsumption tax hike. On the other hand, the world economy has remained in an uncertain situation with a concern of
economic slowdown from the effects of geopolitical risks in the Middle East and East Asia in addition to trade issues
and the prospects for the Chinese economy.
In the semiconductor industry to which the Company belongs, the friction between the US and China over advanced
technologies has become apparent with negative impacts in specific fields. However, businesses related to Internet ofthings (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" to solve
social problems such as a declining birthrate, an aging population, and an accompanying increase in medical expenses,
and to realize 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 second quarter, the Company has continued to focus on the AI field and started licensing “ZIA™ Plate”
software incorporating AI and deep learning technology to identify vehicles’ license plates with a high degree of
accuracy. This product has been receiving many inquiries from customers. In addition, as an initiative in the medical
field, "Research and development of AI hardware for AI pathology imaging system for cancer companion diagnostics”
using image analysis hardware technology based on deep learning as the Company’s strength has been adopted forthe “Project for Accelerating Innovative AI Chip Development / Development towards the practical application of ideas
for AI chips” as a problem-oriented industrial technology development subsidy project run by the New Energy andIndustrial Technology Development Organization (NEDO).
In the second quarter, although the sales of the image processing semiconductor “RS1” were recorded in the LSI
business, running royalties mainly from game consoles decreased and some projects shifted to the second half in the
IP core license business. In the professional services business, although several projects went on for Yamaha MotorCo., Ltd., a business and capital alliance partner, NEDO commissioned revenue (100 million yen in the same period of
the previous year) fell off and some projects shifted to the second half. Accordingly, over-all results were lower than
expected.
As a result, net sales for the second quarter cumulative period were 293 million yen (down 16.5% year on year).
Operating loss worsened to 207 million yen (operating loss of 17 million yen in the same period last year) due to anincrease in expenses for strengthening the development system in addition to the influence of sales decline. 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 33 million yen as non-operating income regarding the above-mentioned NEDO project and “AI Platform for
Artificial Intelligence (AI): An Energy Efficient AI Engine” run by NEDO, ordinary loss worsened to 231 million yen(ordinary loss of 8 million yen in the same period last year). Net loss was 231 million yen (net loss of 8 million yen in-2-the same period last year).

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 82 million yen attributable to new AI IP license fee, running royalty income from existing customers andrevenue from maintenance support.
2) LSI product businessNet sales were 111 million yen attributable to the sales of RS1 and AI FPGA module "ZIA C3".
3) Professional service businessNet sales were 99 million yen attributable to the revenue of commissioned development mainly related to mobility.

(2) Financial position(Assets)
Current assets at the end of the second quarter amounted to 2,563 million yen, up 500 million yen from the end of theprevious fiscal year mainly attributable to an increase in cash and deposits (up 813 million yen) and a decrease inaccounts receivable (down 344 million yen). Noncurrent assets amounted to 899 million yen, up 579 million yen fromthe end of the previous fiscal year mainly attributable to an increase in investment securities (up 602 million yen).
(Liabilities)
Current liabilities and noncurrent liabilities at the end of the second quarter totaled 213 million yen, down 172 million
yen from the end of the previous fiscal year mainly attributable to decreases in accounts payable (down 136 million
yen) and accrued consumption taxes (down 27 million yen).
(Net assets)
Net assets at the end of the second quarter amounted to 3,249 million yen, up 1,251 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 the third-party allotment from Yamaha Motor Co., Ltd. on May 27, 2019 as well asa decrease in retained earnings due to net loss (down 231 million yen).

(3) Forecasts information such as business forecast
Although the Company recorded the lower-than-expected results in the second quarter cumulative period mainly due
to the shift of some projects to the second half, there are no changes in the forecasts of the full fiscal year. The Company
expects good progress of RS1 shipment and recoveries of the performance in the IP core licensing business and AIrelated professional services business in the second half. The business alliance with Yamaha Motor Co., Ltd is speedingup as well. Actual performance may differ significantly from the forecast figures due to various factors.

-3-2. Non-consolidated quarterly financial statements(1) Non-consolidated quarterly balance sheets
Previous year
(As of Mar 31, 2019)(Thousands of yen)
Current Q2 period(As of Sep 30, 2019)

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

1,910,616
222,557
344,445
9,250
76,3452,563,215

27,75040,720204,93725
204,963

179,100
25
179,126

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

602,690
77,195
679,885899,732
3,463,947

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

156,767
9,862
28,085
194,715

1,932
16,656
18,588385,350

1,804
16,78018,584
213,299

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

1,804,592
1,823,803△372,596△1,482
3,254,317△2,594△4,670△2,594△4,6703,249,647
3,462,947

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

1,998,008
2,383,359-4-

(2) Non-consolidated quarterly statements of income (6 months ended September 30, 2019)(Thousands of yen)Previous Q2 period (YTD)

Current Q2 period (YTD)(From Apr 1, 2018

(From Apr 1, 2019

To Sep 30, 2018)

To Sep 30, 2019)

Net sales

351,285

293,323

Cost of sales

176,563

180,482

Gross profit

174,721112,840

Selling, general and administrative expenses

191,750

320,663

Operating loss (△)△17,029△207,822

629

1,337

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

7,920

-

-

33,600

-

35

8,549

34,972-56,162Foreign exchange losses

-

2,047

Commission for purchase of treasury shares

2-

Total non-operating income
Non-operating expenses
Share issuance cost

Total non-operating expenses

258,209△8,481△231,058

Gain on reversal of share acquisition rights

19-

Total extraordinary income

19-

Ordinary loss (△)
Extraordinary income

Loss before income taxes△8,462△231,058

Income taxes - current

475

475

Income taxes - deferred

△148

△128

Total income taxes (△)

326

346

△8,789△231,405

Net loss (△)-5-(3) Non-consolidated statements of cash flows (6 months ended September 30, 2019)(Yen thousand)Previous Q2 period (YTD)

Current Q2 period (YTD)(From Apr 1, 2018

(From Apr 1, 2019

To Sep 30, 2018)

To Sep 30, 2019)

Cash flows from operating activities
Profit (loss) before income taxes△8,462

Depreciation

30,621

46,083

Interest income△629△1,337

Subsidy income-△33,600

Foreign exchange losses (gains)Share issuance cost
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories△231,058△7,9201,945-

56,162

74,776344,439△1,533△1,778

Increase (decrease) in notes and accounts payable - trade△109,596△136,469

Increase (decrease) in accounts payable - other△36,490△9,536

Other, net

20,629△13,555

Subtotal△38,604

21,295629

1,005Interest income received
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities△9,045

-

-

2,939

△47,020

25,240-△300,000

Cash flows from investing activities
Purchase of securities
Purchase of investment securities△603,696

Purchase of property, plant and equipment△403△33,295

Purchase of intangible assets

△750

△500

Payments for lease deposits

△255

△987

Collection of lease deposits-

351△1,408△938,127

34,200-Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from issuance of shares resulting from exercise ofshare acquisition rights
Proceeds from issuance of common shares-

1,428,957

Purchase of treasury shares

△710

-

Net cash provided by (used in) financing activities

33,4891,428,957

10,877△3,192

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents△4,062512,878

Cash and cash equivalents at beginning of period

1,504,674

1,442,183

Cash and cash equivalents at end of period

1,500,611

1,955,062-6-

(4) 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 a third-party allotment of new shares from Yamaha Motor Co., Ltd. As aresult, the capital stock is 1,804,592 thousand yen, up 742,560 thousand yen and the capital surplus is 1,823,803
thousand yen, up 742,560 thousand yen at the end of the second quarter.

(Additional Information)
None(Material subsequent events)
None-7-