April 25, 2018

To our customers and stakeholders
Company name
Representative nameContact Information

Geniee, Inc.
President and CEO
Tomoaki Kudo
(Code No.: 6562 TSE Mothers)
Director and Management Division Manager
Masahiro Endo
(TEL. 03-5337-8218)

Concerning Takeover of Operations via Corporate Split Agreement (Simple AbsorptionSplit) with Chikyu Inc.
The Geniee Board of Directors convened today and passed a resolution approving the takeover ofdevelopment and sales operations for "Chikyu", the SME CRM (client relations management) and SFA(sales force administration) system operated by Chikyu Inc. We further concluded a split and absorption
agreement through which Chikyu Inc. will conduct a company split (hereinafter, "Split") and Geniee willtake over control of the aforementioned operations effective June 14, 2018.
As this Split is considered a simple split and absorption as defined under the provisions of Article 796,
Paragraph 2 of the Companies Act, certain disclosure information and details have been omitted fromdisclosure.

Description

1.

Purpose of business succession
Since July 2016 when we launched the marketing automation tool MAJIN, Geniee has worked
aggressively to expand our business domain into the marketing technology field. MAJIN has been wellreceived by a wide variety of companies, both BtoC and BtoB, for its intuitive user interface, functions,and low cost. As of the end of December 2017, we have accounts with over 650 companies.
The SME cloud-based CRM/SFA system Chikyu is popular for its simple UI that provides turn-key
usability immediately after integration as well as for being highly customizable and low cost. Chikyu isused by nearly 290 companies (as of end of March 2018) in IT and other industries.
In an age of concern about shrinking sales and labor shortages, many companies are looking to IT
tools for marketing and sales support. This, however, creates its own unique problems: these tools only
lead to the optimization of specific tasks, leaving companies with the need for comprehensive
optimization that enables the broad application of data assets.
Amid such an environment, Geniee moved to take over control of the Chikyu business as a way togenerate business synergy by further strengthening the link between Chikyu and MAJIN. Future system
links made possible through this business takeover will enable the seamless integration of customer
attributes, negotiation history, and other data stored on Chikyu into MAJIN and enable the centralized
management of customer data by both marketing and sales staff. Specifically, this enhanced system will1

allow sales staff to approach promising potential customers in an efficient manner and marketing staff
will be able to apply the results of sales activities into their market strategies. The result is more strategicand efficient marketing activities for the user company.

2. Overview of business succession(1) Schedule of company split
Date of resolution by Board of Directors (Chikyu Inc.,Geniee)
Contract conclusion date
Date of resolution by General Meeting of Shareholders(Chikyu Inc.) *1
Date of business operations transfer (effective date)
New date of record (fund transfer date)

April 25, 2018
April 25, 2018
May 12, 2018 (planned)
June 14, 2018 (planned)
June 14, 2018 (planned)*1: As this Split is considered a simple split and absorption as defined under the provisions of Article 796, Paragraph 2 of
the Companies Act, Geniee will conduct this transaction without a resolution by our General Meeting of Shareholders.

(2) Company split method
Chikyu Inc. will conduct a corporate split and Geniee will absorb to operations of the entity resulting fromthe split.
(3) Details of allocation related to company split
In relation to this split, Geniee will transfer the amount of 235 million yen to Chikyu Inc.
(4) Matters related to the handling of new share warrants or bonds with share warrants as a result of thecompany split
The following share warrants issued by Chikyu Inc. will be expired as a result of this Split.
-First share warrants (issued January 2016)-Second share warrants (issued June 2017)(5) Increase/decrease in capital due to company split
There is no change in company capital as a result of the company split(6) Rights and obligations of the succeeding company
Of the assets, debts, rights, and obligations related to this Split, Geniee shall take of ownership of those
items indicated in the split and absorption agreement.
(7) Outlook for fulfillment of liabilities
We have determined that there is no problem with our outlook for fulfilling our liabilities.

3. Basis for details of allocation related to company split(1) Basis and reason for details of allocation
To ensure the fairness and adequacy of allocations related to this Split, Geniee designated AZX Sogo
Accounting Office as a third-party accounting firm and requested a valuation of the business value for thebusiness in question.
We concluded the split and absorption agreement following a comprehensive evaluation of the results of athird-party valuation and future projections reflecting the status of the target business and the effect of theconsolidation with our business. Following careful and diligent negotiations between both parties, we2eventually came to the conclusion that the amounts indicated in “2. Overview of business succession – 3)
Details of allocation related to company split” to be adequate.
(2) Matters concerning valuation
1) Name of accounting firm and relationship with Geniee
AZX Sogo Accounting Office, the accounting firm we hired to conduct the valuation for the target
business, is not an affiliate of Geniee or Chikyu Inc., and has no particular interests of note in relation to thisSplit.
2) Summary of valuation
The valuation of the target business is based on the assumption that Geniee will continue to operate thetarget business following the Split. Thus, it is appropriate that the valuation be conducted based on aconsideration of the cash flow expected to generate through the continued operation of the target business.
As such, the method used for this valuation is the discounted cash flow method (hereinafter, DCF Method),which is a type of income approach.
Presumptions for the DCF method are based on the business projections for FY2017 through FY2021 wecreated based on the business plan presented by Chikyu Inc. with this business valuation involving dividing
future cash flow by a certain discount rate and using that value to discount the current value. Furthermore,
we do not forecast any major earnings increases or decreases in the business forecasts used as presumptions
for calculations.
An overview of the results of the valuation conducted by AZX Sogo Accounting Office are as follows.
Assumed range for split compensation

217-266 million yen

This is the result of a comprehensive evaluation of the results of the valuation made by AZX SogoAccounting Office and future projections that reflect the effect of our absorption of the target business. As aresult, we feel the above split value to be adequate.

4.

Overview of companies party to split(1) Name(2) Address(3) Representative
position/name(4) Business operations(5) Capital(6) Date of establishment(7) Shares issued(8) End of fiscal year(9) Number of employees(10) Major clients(11) Major transaction banks

Succeeding company
Geniee, Inc.
Sumitomo Fudohsan Nishi
Shinjuku Bldg., 25F, 7-20-1 NishiShinjuku, Shinjuku-ku, Tokyo
Tomoaki Kudo, Representative
Director & President
Ad Platform Business
Market Automation Business
1,519 million yen(As of March 31, 2018)
April 14, 2010
17,508,200 shares(As of March 31, 2018)
March 31257(Consolidated, as of March 31, 2018)Yahoo! Japan, Google Inc.
Tokyo Mitsubishi UFJ Bank

Split company
Chikyu Inc.
4F, 3-5-4 Minami Aoyama,
Minato-ku, Tokyo
Toshihiro Asai, Representative
Director
Development and sales ofSFA/CRM for SME companies
68 million yen(As of December 31, 2017)
January 24, 2014
488 shares(As of December 31, 2017)
December 313(As of December 31, 2017)――3

Sumitomo Mitsui Bank
(12) Major shareholders and Tomoaki Kudo
37.35%
percentage of shares held
SoftBank Group International GK(*2)
32.12%

Toshihiro Asai
70.30%
Global Brain No. 5 Investment
Limited Partnership13.90%*2: Transferred ownership to SoftBank Corp. on April 1, 2018.

(13) Relationship withcompanies in question

Capital relationship
Personal relationships
Transactional relationships
Status as affiliate

None in particular.
None in particular.
None in particular.
None in particular.

(14) Most recent financial status and business performanceGeniee, Inc.
FY2017 (April 1, 2017 - March
End of fiscal year31, 2018)(Consolidate)
Net assets (million yen)
1,613
Total assets (million yen)
4,197
Net assets per share (yen)
76.27
Revenue (million yen)
11,730Operating income (million yen)
257
Ordinary income (million yen)
194
Net income attributable toowners of parent-14
Net income (million yen)
Net income per share (yen)-0.92
Per-share dividend (yen)―Chikyu Inc.
FY2017 (January 1, 2017 December 31, 2017)(Nonconsolidated)-29
27-59,667
9.0-50-52-52-108,410―

5. Overview of business division to be succeeded(1) Overview of business to be succeededThis succession plan targets the development and sales operations for "Chikyu", the SME CRM/SFA
system operated by Chikyu Inc. The succession includes a portion of assets and employees and directors
related to these operations.
(2) Earnings for business to be succeeded (FY2017 (January 1, 2017 - December 31, 2017))
Net sales 9 million yen(3) Target asset/debt items and book value (unit: million yen)
Current assets―
Current liabilities―
Fixed assets
0 Fixed liabilities―
Assets total
0 Total liabilities―(Note) To be finalized after adjustments to the above mounts for increases/decreases occurring up to theeffective date.

6.

Status after split
There is no change in the Geniee business name, address, representative position or name, businessoperations, company capital, or fiscal year as a result of this Split.

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7.

Summary of accounting treatments
This split is applicable to acquisition based on accounting standards related to business combination.
At present, the goodwill amount is projected to be around 160 million yen but there is a possibility thisamount could increase/decrease due to changes final values of succeeded assets.

8.

Future outlook
We are planning to disclose our forecast for FY2018 full-year earnings, including the effect of thisSplit, in the FY2017 Financial Results planned for release on May 11, 2018.

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