Notice regarding approval of listing of consolidated subsidiary Cybertrust Japan Co., Ltd.

Cybertrust Japan Co., Ltd. (hereinafter referred to as "CTJ"), a consolidated subsidiary of the Company, has today been approved by the Tokyo Stock Exchange for its new listing on Tokyo Stock Exchange Mothers market (hereinafter referred to as the "Listing"). I would like to inform you that.

Record

1. CTJ 's position within our group

Our company's mission is `` Information Revolution - Happiness for everyone `- Technologies Design the Future -', and we are developing our business activities with ICT services as our main content.
CTJ, which became a consolidated subsidiary of our company in 2014, provides authentication and security services that we have been providing for over 20 years as Japan's first commercial electronic certification authority, as well as kernel technology and open source software (OSS). We apply our knowledge to develop Linux/OSS services for on-premises, cloud, and embedded areas. By combining these technologies and achievements, we have proven the validity of "people, things, and things" and developed services that support the reliability of our customers' services for cutting-edge fields such as IoT. With our specialized technical capabilities as our strength, we provide IT infrastructure and security services not only to our group but also to a wide range of companies.
CTJ and our company have separate businesses based on the technological elements they possess, and while we each develop our own businesses, we also collaborate to provide services that combine the technological elements of both companies. In addition, CTJ is operated independently within the Group, and its business performance accounts for less than 10% of the Company's consolidated sales for the fiscal year ending March 2019, so we recognize that it does not fall under the category of core business.

2. Purpose of this listing

CTJ 's business provides services that require third-party services such as IT infrastructure and authentication infrastructure, so transparency and reliability as a company are essential to the company's growth. We believe. CTJ has been developing businesses that are not limited to our group by developing unique services and cultivating customers, and has already achieved a certain degree of transparency and reliability. We hope that by further increasing these through these efforts, we will pursue further increases in corporate value. We also believe that the growth of CTJ as a listed company will ultimately lead to an increase in the corporate value of our group.

3. Overview of CTJ

4. Overview of this listing

5. Overview of stock offering and issuance of offered shares in conjunction with listing

6. Number of shares held by the Company and percentage held

*Changes in ownership ratio are due to dilution in the event of a secondary offering or new stock issuance associated with listing.
※※The planned number of outstanding shares does not include capital increase through third-party allotment (up to 52,500 shares) related to the secondary offering through over-allotment.

7. Thoughts regarding the listing of our subsidiary

(1) Significance of having a listed subsidiary based on the philosophy and policy regarding group management
In our group, each group company aims to achieve its own corporate objectives in the spirit of independence while maximizing the corporate value of the group as a whole. The Company shall perform the necessary functions to ensure that business synergies among group companies are appropriately demonstrated and that the corporate value of the entire Group is maximized, while respecting the management independence of each group company. We will provide the necessary support to achieve each company's corporate objectives.
When listing a subsidiary, the Company considers the significance of listing based on the business characteristics of group companies, the possibility of accelerating growth through listing, consistency with the business portfolio strategy of the entire group, and whether the profits associated with listing are compatible with costs and constraints. From the perspective of maximizing the corporate value of the entire group, we carefully consider whether we can build and operate appropriate internal controls and manage risks as a listed company, in order to avoid harming the interests of our existing shareholders and minority shareholders. Decisions will be made after consideration. At present, there are no specific plans for listing subsidiaries other than this listing, but the same will apply if a subsidiary is listed in the future.
Based on the above, the significance of having listed subsidiaries for each company is as follows.

(2) Measures to ensure the effectiveness of the governance system of listed subsidiaries
The parent company's policy for ensuring the effectiveness of the governance system of listed subsidiaries is as follows.

• ① If our group has a listed subsidiary, we will respect the independence of the listed subsidiary in the spirit of autonomy and independence, and will not engage in any act that violates the principle of shareholder equality.
• ② Considering that there is a risk of conflict of interest between the Company and the general shareholders of the listed subsidiary, we will build a governance system that effectively utilizes independent outside directors in order to ensure independent decision-making as the listed subsidiary. We urge the listed subsidiary to do so.
• ③The Company will fulfill its accountability for the significance of maintaining listed subsidiaries of the Group as listed subsidiaries and the effectiveness of the governance structure of such subsidiaries.

8. About stock ownership policy

Due to the sale of some of the company's shares and the issuance of new shares CTJ in connection with this listing, the company's shareholding ratio is expected to decrease to 63.84%. For the time being, the Company plans to maintain its shareholding ratio with CTJ as a consolidated group company.

9. Regarding the impact on our consolidated business results

In the Company's consolidated financial statements, as CTJ continues to be a consolidated subsidiary of the Company even after this offering, the amount equivalent to the gain on sale from this offering (after deducting miscellaneous expenses and taxes) will be recorded as capital surplus in the consolidated financial statements.

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■ Related releases

Cybertrust Japan Co., Ltd.
Notice Regarding Approval of Listing on Tokyo Stock Exchange Mothers Market

■The PDF of this release can be downloaded from the link below.
Click here for the PDF (Japanese Only)

• *The company names, product names, and service names mentioned in this release are trademarks or registered trademarks of our company or each company or organization.
• *This press release is for the purpose of disseminating information to the general public and is not prepared for the purpose of soliciting investment either in Japan or abroad. Additionally, this press release does not constitute an offering of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended. In the event of a public offering of securities in the United States, an English prospectus prepared under the United States Securities Act of 1933 will be used. A prospectus, which can be obtained from the issuer or seller of the security, contains detailed information about the issuer and its management, as well as its financial statements. Please note that there will be no public offering of securities in the United States in this case.