TRANSLATION FOR REFERENCE ONLY
December 14, 2015
For Immediate Release
Company Name:
Representative:
Inquiries:

Aplix IP Holdings Corporation
Ryu Koriyama, CEO and Representative Director(Code: 3727, TSE Mothers)
Kengo Nagahashi, Director(Tel: 050-3786-1715)

Notice Concerning the Establishment of a Subsidiary Through a Company Demerger(Simplified Incorporation-Type Demerger)
The Company announced at the Board of Directors meeting held on December 14, 2015 that it has decided to spin off thepublishing and video business. It shall be transferred to a new company that is to be established as a result of the company
demerger, which is described below, as of January 4, 2016 (scheduled). The company demerger and establishment of thenew company is in accordance with the policy for ensuring the self-supporting accounting systems of the Company group’sbusinesses, which consist of the IoT (Internet of Things) solution business, the IoT semiconductor business, the IoT patentbusiness, and the publishing and video business.
This company demerger will be conducted as a simplified incorporation-type demerger involving the Company only. For
this reason, only some of the information in relation to this demerger is disclosed, while other matters are omitted.

1. Purpose of the company demerger
The Company group has switched its core business from the past comprehensive entertainment business and the businessbased largely on software infrastructure technology to the technology business, and has made a fresh start as an Internet ofThings (IoT) start-up company. The Company group operates by positioning the IoT solution business, IoT semiconductorbusiness, and the IoT patent business under the Technology Business and the publishing and video business as its four
primary sources of revenue.
In the IoT-related business, the Company devotes all its energies to boosting sales and profits through the creation of IoTproducts and the provision of IoT solutions that utilize the Company’s technologies by targeting the rapidly expanding IoT
global market. In addition, the Company strengthens revenue management so that its respective businesses can support theirown accounting in future.
In the publishing and video business, which is one of the primary sources of revenue and consists of the comics businessof Flex Comix Inc. (“Flex”) that offers web comics [Comic meteor] and [Comic polaris] and the picture book/children’sbooks business of HOLP SHUPPAN, Publishing (“HOLP”), a surplus is expected thanks to the steady publication plan,reprinting, cost operations, and other measures for improving profitability, all of which were successful. In addition, because
the amortization of goodwill arising from the Company’s acquisition of Flex and HOLP in 2012 was completed in
September 2015, the business revenues will be reflected in the results of the publishing and video business as they are in thefuture. The Company will aim to secure consistent profits from this business and positions it as a stable revenue base of theCompany group.
In the management of the comics business by the Company group, the Company concludes agreements with authors forthe use of creative works, agreements with third parties for license to use creative works, and outsourcing contracts for theproduction of publications. Thus, any and all rights and obligations to these works are held and assumed by the Company.
When considering the Technology Business in light of this situation, the Company determined that the best course of action
was to, through the spin-off of the comics business, strengthen the revenue management of the business, and ensure efficientbusiness operations and prompt decision-making. The Company will aim to consistently maintain stable business operationof the comics business and further increase revenue through the company demerger it has announced.
Note: This press release is provided to share information about Aplix business activities, and it is not intended to solicit investment in Aplix shares. While the materials may describe
information such as forecasts related to future business performance, this information has been created based on the judgment of Aplix at the time the materials were created.
As a result, Aplix offers no guarantee that the conditions described will come to pass, and any of the information described is subject to change without notice in the future.

2. Summary of the company demerger(1) Schedule for the company demerger
Approval of the plan for the incorporation-type demerger by the Board of Directors: December 14, 2015
Date of the company demerger (effective date): January 4, 2016 (scheduled)
In addition, in accordance with the provisions of Article 805 of the Companies Act, this company demerger
will be conducted without the approval of the shareholders meeting.
(2) Method of the company demerger(Simplified) incorporation-type demerger with the Company as the demerging company, and Aplix IP
Publishing Corporation to be established (hereinafter the “New Company”) as the succeeding company thatassumes a portion of the Company’s business(3) Allotment of shares
When the company demerger is made, the New Company will issue 1,000 common shares and allot all of themto the Company, thereby becoming a wholly owned subsidiary of the Company.
(4) Treatment of the subscription rights to shares and the bonds with subscription rights to shares of the demerging
company
The treatment of the subscription rights to shares issued by the Company will not change as a result of thecompany demerger. In addition, the Company has not issued and will not issue bonds with subscription rights toshares.
(5) Decrease in stated capital as a result of the company demerger
There will be no decrease in stated capital as a result of the company demerger.
(6) Rights and obligations to be transferred and delegated to the New Company
The New Company will succeed and assume the assets, liabilities, agreements/contracts, and other rights andobligations which the Company holds with respect to the publishing and video business to the extent set forth
under the plan for the company demerger.
(7) Prospects for performing obligations
It is judged that there are no problems in the prospects for performing the obligations which the Company andthe New Company are to assume as a result of the company demerger.
3. Overview of the companies involved in the company demerger
Splitting company(As of June 30, 2015)(1) Trade name(2) Business description(3) Date established(4) Address of the headoffice(5) Representative(6) Stated capital(7) Total number
shares issued(8) Fiscal year endof(9) Major shareholders
and shareholdingNew Company(Scheduled to be established on January 4, 2016)

Aplix IP Holdings Corporation

Aplix IP Publishing Corporation

Technology Business
Publishing and video businessFebruary 22, 1986

Publishing and video business

2-20-9, Nishiwaseda, Shinjuku-ku, Tokyo

January 4, 2016 (scheduled)
2-20-9, Nishiwaseda, Shinjuku-ku, Tokyo

Ryu Koriyama, CEO & Representative Director

Ryu Koriyama, CEO & Representative Director

13,416 million yen

50 million yen

12,753,930 shares

1,000 shares

December 31

December 31

NTT DOCOMO, INC.: 11.76%
Ryu Koriyama: 8.46%

Aplix IP Holdings Corporation: 100%

Note: This press release is provided to share information about Aplix business activities, and it is not intended to solicit investment in Aplix shares. While the materials may describe
information such as forecasts related to future business performance, this information has been created based on the judgment of Aplix at the time the materials were created.
As a result, Aplix offers no guarantee that the conditions described will come to pass, and any of the information described is subject to change without notice in the future.

Japan Trustee Services Bank, Ltd. (trust account):
3.64%
CREDIT SUISSE SECURITIES (EUROPE)
LIMITED PB OMNIBUS CLIENT ACCOUNT(Standing proxy: Credit Suisse Securities (Japan)
Limited): 2.55%
The Master Trust Bank of Japan, Ltd. (trustaccount): 1.71%
4. Financial position and operating results of the demerging company for the immediately preceding fiscal year (on aconsolidated basis)
Aplix IP Holdings Corporation
Fiscal year end

December 2014

Net assets

4,455 million yen

Total assets

5,964 million yen

Net sales

2,172 million yen

Operating income-2,766 million yen

Ordinary income-2,672 million yen

Profit-3,311 million yenProfit per share-264.08 yen

Dividend income per share-Net assets per share355.29 yen

5. Business division to be demerged(1) Description of the business to be demerged
The publishing and video business(2) Operating results of the business to be demerged for the fiscal year ended December 2014
Business to be demerged(a)

The Company’s results on a
non-consolidated basis (b)476 million yen

1,584 million yen

Net sales

Ratio (a/b)
30.1%(3) Items and amount of the assets and liabilities to be demerged (as of September 30, 2015)
Assets
Items
Current assets

Liabilities
Book value
298 million yen-Non-current assets
TotalItems

298 million yen

Current liabilities
Non-current liabilities
Total

Book value
74 million yen
74 million yen(Note) The amounts above are calculated based on the book value as of September 30, 2015. For this reason, theamounts of assets and liabilities to be actually demerged will differ from the amounts described above.
6. Situation after the company demerger(4) The situation of the Company
There will be no change in the Company’s trade name, business description, address of head office, title andname of the representative, stated capital, and fiscal year end as a result of the company demerger.
(5) The situation of the New Company’s situations
Note: This press release is provided to share information about Aplix business activities, and it is not intended to solicit investment in Aplix shares. While the materials may describe
information such as forecasts related to future business performance, this information has been created based on the judgment of Aplix at the time the materials were created.
As a result, Aplix offers no guarantee that the conditions described will come to pass, and any of the information described is subject to change without notice in the future.

For the situation of the New Company, see “3. Overview of the companies involved in the company demerger.”
7. Future outlook
This company demerger will be conducted as an incorporation-type demerger involving the Company only, andthus will have very little impact on the Company’s consolidated results.

Disclaimer: This English translation is for reference purposes only. In the event of any discrepancy between theJapanese original and this English translation, the Japanese original shall prevail. We assume no responsibility forthis translation or for direct, indirect or any other form of damage arising from the translation.

Note: This press release is provided to share information about Aplix business activities, and it is not intended to solicit investment in Aplix shares. While the materials may describe
information such as forecasts related to future business performance, this information has been created based on the judgment of Aplix at the time the materials were created.
As a result, Aplix offers no guarantee that the conditions described will come to pass, and any of the information described is subject to change without notice in the future.