(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 Three Months ended June 30, 2019 (Japanese GAAP)
August 7, 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
Tel. (03) 6454 - 0450
Scheduled date of filing Quarterly Securities Report: August 8, 2019
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 three months ended June 30, 2019 (April 1, 2019 through June 30, 2019)(1) Non-consolidated operating results
Net sales

Operating income% Millions of yen
△55.6
△154
△2.2
△52

Millions of yen

61137

3 months ended June 30, 2019
3 months ended June 30, 2018

Net income per shareyen△66.67△16.963 months ended June 30, 2019
3 months ended June 30, 2018

(Percentages indicate year-on-year changes)
Ordinary income
Net income% Millions of yen% Millions of yen
%
△195
△195
－
－
－
△47
△47
－
－
－

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

Net assets

Millions of yen

Equity ratio

Millions of yen

As of June 30, 2019
3,437
3,284
As of March 31, 2019
2,383
1,998
Reference) Net assets: 3,284 million yen as of June 30, 2019; 1,998 million yen as of March 31, 2019

%
95.5
83.8

Net assets per shareYen
1049.11710.702. Cash dividends
1Q-endyen-

Year ended March 2019Year ending March 2020

Annual dividends per share
2Q-end3Q-endYear-end
yen
yen
yen
0.00
0.00

0.00
Note) Revision of dividends forecast during the period: None

Year ending March 2020 (Forecast)

-

0.00

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)
Net Sales
Millions of yen(Percentages indicate year-on-year changes.)
Net income
Operating income
Ordinary income
Net income
per share% Millions of yen% Millions of yen% Millions of yen%
Yen

6 months ending
400
13.9
September 2019
Full year
1,300
19.6
Note) Revision of forecasts during the period: None

△115

-

△135

-

△135

-

△44.51

30

3.6

30

△9.9

20

△43.1

6.49

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
2. Number of shares issued(1) Number of shares issued at the end of the period (including treasury shares)
As of June 30, 2019

3,131,700 shares

As of June 30, 2018

2,811,700 shares

As of June 30, 2018369 shares(2) Number of treasury shares at the end of the period
As of June 30, 2019

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

2,934,077 shares

3 months ended June 30, 2018

2,795,837 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 (3 months ended June 30, 2019) ··································· 5(3) Notes on non-consolidated quarterly financial statements ····································································· 6(Note on the premise of a going concern) ··························································································· 6(Note on significant changes in the amount of shareholders' equity) ························································· 6(Additional Information) ··················································································································· 6-1-1. Quarterly financial results(1) Business results
The Japanese economy during the first quarter has been on a moderate recovery track backed by firm corporate profitsand employment conditions, although production and exports were rather weak. 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 serious impacts in specific fields. However, businesses related to IoT, artificial
intelligence (AI), 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 and an aging population accompanying an 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.
Specific measures in the first quarter are as follows.
Firstly, the Company entered into a business and capital alliance agreement with Yamaha Motor Co., Ltd. on May 10
with a view to establishing a system that can provide products with higher added value in the AI-related business andsecuring long-term stable fund for the acquisition of talented engineers. The Company has started concrete discussions
and initiatives in the fields of business alliance such as collaboration in the process of product development fromalgorithm development to product installation by applying AI technologies, and development of automatic andautonomous driving systems in low-speed areas.
Secondly in the area of AI products, the Company expanded the ZIA series lineup by upgrading and enhancing
performance of the edge AI processor IP cores and FPGA AI modules.
Thirdly, the image processing semiconductor “RS1” has been evaluated for coexistence of its beautiful image
expression with full of realism and the effect of reducing the chassis cost, and was adopted by ZEEG Co. Ltd., a joint
venture company of Sammy Corporation and Universal Entertainment Corporation as its game machine units/parts.
Lastly, with regard to the development of the “AI Platform for Artificial Intelligence (AI): An Energy Efficient AI Engine
and an Integrated Cloud of Heterogeneous AI engines” commissioned from the New Energy and Industrial Technology
Development Organization (NEDO), two-year extension from this fiscal year has been determined and the Company
continues the development with the subsidy for “AI Platform for Artificial Intelligence (AI): An Energy Efficient AI Engine”
from the first quarter.
As a result, net sales for the first quarter were 61 million yen (down 55.6% year on year) mainly with the sales of new
IP license fee, running royalty income and revenue of commissioned development for professional service. The decline
was mainly attributable to the falloff of commissioned revenue from NEDO (47 million yen in the same period last year)
and a decrease in running royalty of game consoles. In terms of profits, operating loss worsened to 154 million yen(operating loss of 52 million yen in the same period last year) due to an increase in expenses for strengthening thedevelopment system in addition to the influence of sales decline. As a result of recording share issuance cost of 56
million yen as non-operating expenses regarding the business and capital alliance with and the implementation of the-2-third-party allotment to Yamaha Motor Co., Ltd. and recording quarterly subsidy income of 17 million yen as nonoperating income regarding the above-mentioned NEDO project “AI Platform for Artificial Intelligence (AI): An Energy
Efficient AI Engine”, ordinary loss worsened to 195 million yen (ordinary loss of 47 million yen in the same period lastyear). Net loss was 195 million yen (net loss of 47 million yen in 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 34 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 0 million yen attributable to the sales of AI FPGA module "ZIA C3".
3) Professional service businessNet sales were 26 million yen attributable to the revenue of commissioned development related to mobility.

(2) Financial position(Assets)
Current assets at the end of the first quarter amounted to 2,511 million yen, up 448 million yen from the end of theprevious fiscal year mainly attributable to an increase in cash and deposits (up 943 million yen) and a decrease inaccounts receivable (down 515 million yen). Noncurrent assets amounted to 926 million yen, up 605 million yen fromthe end of the previous fiscal year mainly attributable to an increase in investment securities (up 601 million yen).
(Liabilities)
Current liabilities and noncurrent liabilities at the end of the first quarter totaled 153 million yen, down 232 million yen
from the previous fiscal year mainly attributable to decreases in accounts payable (down 207 million yen) and accrued
consumption taxes (down 27 million yen).
(Net assets)
Net assets at the end of the first quarter amounted to 3,284 million yen, up 1,286 million yen from the end of the previous
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 as a decrease
in retained earnings due to net loss (down 195 million yen).

(3) Forecasts information such as business forecast
There are no changes in the forecasts of the second quarter cumulative period and the full fiscal year disclosed on May
10, 2019. RS1 sales are expected in each quarter from the second quarter. 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 Q1 period(As of Jun 30, 2019)

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

2,039,850
51,774344,206
15,3006,370
53,8002,511,303

27,75050,124204,93725
204,963

192,24425
192,270

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

601,860
81,972683,832
926,227
3,437,530

293,237
2,252
27,72843,542366,761

85,343752
48,472
134,568

1,932
16,656
18,588385,350

1,868
16,71818,586
153,154

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

1,804,592
1,823,803△336,797△1,482
3,290,116△2,594△5,740△2,594△5,7403,284,376
3,437,530

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Inventories
Consumption taxes receivable
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
Accrued consumption taxes
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 (3 months ended June 30, 2019)(Thousands of yen)Previous Q1 period (YTD)

Current Q1 period (YTD)(From Apr 1, 2018

(From Apr 1, 2019

To Jun 30, 2018)

To Jun 30, 2019)

Net sales

137,941

61,181

Cost of sales

87,70533,584Gross profit

50,236

27,597

Selling, general and administrative expenses

102,414

181,915

Operating loss (△)△52,178△154,317

270

396

Non-operating income
Interest income
Subsidy income-

17,000Foreign exchange gains

4,663

-

Total non-operating income

4,933

17,396

Share issuance cost-

56,162Foreign exchange losses

-

2,350

Commission for purchase of treasury shares

0-

Non-operating expenses

Total non-operating expenses

058,512

Ordinary loss (△)△47,244△195,433

Loss before income taxes△47,244△195,433

Income taxes - current

237

237

Income taxes - deferred

△74

△64

Total income taxes (△)

163

173

△47,408△195,606

Net loss (△)-5-(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 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 first quarter period.

(Additional Information)None-6-