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Notice Concerning Issuance of New Shares and Secondary Offering of Shares in Japan



Notice Concerning Issuance of New Shares and Secondary Offering of Shares in
Japan

Note: This press release does not constitute an offer of any securities for
sale. This press release has been prepared for the purpose of publicly
announcing that the Company has resolved matters relating to the issuance of
new shares and the secondary offering of its shares and not for the purpose of
soliciting investment or engaging in any other similar activities. This press
release is not an offer of securities for sale in the United States. The
securities referred to above have not been, and will not be, registered under
the United States Securities Act of 1933, as amended (the "Securities Act").
The securities may not be offered or sold in the United States absent
registration or an exemption from registration under the Securities Act.

TOKYO, July 2, 2013 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ",
the "Company", "we",) (Nasdaq:IIJI) (TSE:3774) today announces that the
following resolution regarding the issuance of new shares and the secondary
offering of the Company's shares in Japan was adopted at the meeting of the
Board of Directors held on July 2, 2013.

We believe that growing trends of cloud computing and the outsourcing of
internal information systems among Japanese corporations provides us with an
enormous growth opportunity hereafter. We would like to leverage this market
circumstance and accelerate our business expansion. Through this public
offering, we intend to secure funds for further capital expenditure, for
business investment, including in overseas businesses, to hire more employees
or even to seek appropriate M&A opportunities.

We plan to issue 4,700,000 shares of common stock and additional 700,000
shares by way of over-allotment. The earnings per share will be diluted by
approximately 11.8% if the maximum number of 5,400,000 shares is issued. The
issue price in the public offering shall be determined on a day during the
period from and including Wednesday, July 10, 2013 to and including Wednesday,
July 17, 2013.

Ever since the establishment in December 1992 as a pioneer commercial Internet
Service Provider in Japan, we have been introducing a variety of
Internet-related services and have continued to grow in line with domestic
market expansion. Based on accumulated technologies on Internet, we and our
consolidated subsidiaries provide comprehensive network-related services in
combination, including highly reliable and value-added network services and
system integration services, mainly to corporate and public sector customers,
which number approximately 8,500.

To improve our corporate value, we should focus on several goals, including
developing innovative services continuously, enhancing service lineups,
promoting cloud computing services, meeting the demands of Japanese customers
who are headed overseas, demonstrating our competitive advantages in the
growing and competitive information system-related market and strengthening
our business operations.

1. Issuance of New Shares by way of Primary Offering (Public Offering)

(1)  Class and Number of Shares to be Offered
4,700,000 shares of common stock of the Company
(2)  Method of Determination of the Amount to be Paid
The amount to be paid shall be determined on a day during the period from and
including Wednesday, July 10, 2013 to and including Wednesday, July 17, 2013
(the "Pricing Date") in accordance with the method stated in Article 25 of the
Regulations Concerning Underwriting, etc. of Securities provided by the Japan
Securities Dealers Association ("JSDA").
(3)  Amount of Stated Capital and Additional Paid-in Capital to be Increased
The amount of stated capital to be increased shall be half of the maximum
amount of increase in stated capital, as calculated in accordance with the
provisions of Article 14, Paragraph 1 of the Rules of Account Settlement of
Corporations, with any fraction less than one yen resulting from the
calculation being rounded up to the nearest yen. The amount of the additional
paid-in capital to be increased shall be amount obtained by subtracting the
above amount of stated capital to be increased from the relevant maximum
amount of increase in stated capital.
(4)  Method of Offering
The offering shall be a public offering. All of the new shares shall be
purchased for sale by underwriters (the "Underwriters"). The issue price with
regard to the Public Offering (offer price) shall be determined on the Pricing
Date, based on the provisional range calculated by multiplying the closing
price in regular trading of the shares of the Company on the Tokyo Stock
Exchange on the Pricing Date (or, if no closing price is quoted, the closing
price of the immediately preceding date) by 0.90-1.00 (with any fraction less
than one yen being rounded down), in accordance with the method stated in
Article 25 of the Regulations Concerning Underwriting, etc. of Securities
provided by the JSDA, taking into account market demand and other conditions.
(5)  Condition to be paid to the Underwriters
The Company shall not pay any underwriting fees to the Underwriters. Instead,
the aggregate amount of the difference between (a) the issue price in the
Public Offering (offer price) and (b) the amount to be paid to the Company by
the Underwriters shall be retained by the Underwriters.
(6)  Subscription Period
The subscription period shall be from the next business day after the Pricing
Date to the second business day following the Pricing Date.
(7)  Payment Date
The payment date shall be a day during the period from and including Thursday,
July 18, 2013 to and including Wednesday, July 24, 2013; provided, however,
that such day shall be the fifth business day following the Pricing Date.
(8)  Subscription Unit
100 shares
(9)  The amount to be paid, the amount of stated capital and additional
paid-in capital to be increased, and any other matters necessary for the
issuance of new shares by the Public Offering shall be determined at the
discretion of Representative Directors.
(10)  Above items shall be subject to the effectiveness of registration
statement under the Financial Instruments and Exchange Act of Japan.

2. Secondary Offering of Shares (Secondary Offering by way of Over-Allotment)
(See 1. of "For Reference" attached hereto)

(1)  Class and Number of Shares to be Sold
700,000 shares of common stock of the Company
The number of shares to be sold mentioned above is the maximum number of
shares to be sold. The above number may be decreased, or the Secondary
Offering by way of Over-Allotment may be cancelled entirely, depending on
market demand. The number of shares to be sold shall be determined on the
Pricing Date, taking into account market demand.
(2)  Seller
One of the Underwriters
(3)  Selling Price
Undetermined. (The selling price shall be determined on the Pricing Date;
provided, however, that such selling price shall be the same as the issue
price (offer price) in the Public Offering.)
(4)  Method of Secondary Offering
Taking into account market demand for the Public Offering, one of the
Underwriters will undertake a secondary offering of shares (up to 700,000)
that it will borrow from certain shareholder(s) of the Company.
(5)  Subscription Period
The subscription period shall be the same as the subscription period in
respect of the Public Offering.
(6)  Deliver Date
The delivery date shall be the next business day after the payment date in
respect of the Public Offering.
(7)  Subscription Unit
100 shares
(8) The selling price and any other matters necessary for the Secondary
Offering by way of Over-Allotment shall be determined at the discretion of
Representative Directors.
(9) Above items shall be subjected to the effectiveness of registration under
the Financial Instruments and Exchange Act of Japan.

3.Issuance of New Shares by way of Third-Party Allotment (the "Issuance
through Third-Party Allotment") (See 1. of "For Reference" attached hereto)

(1)  Class and Number of Shares to be Offered
700,000 shares of common stock of the Company
(2)  Method of Determination for the Amount to be Paid
The amount to be paid shall be determined on the Pricing Date; provided,
however, that such amount to be paid shall be the same as the amount to be
paid in respect of the Public Offering.
(3)  Amount of Stated Capital and Additional Paid-in Capital to be Increased
The amount of stated capital to be increased shall be half of the maximum
increased amount of stated capital, as calculated in accordance with the
provisions of Article 14, Paragraph 1 of the Rules of Account Settlement of
Corporations with any fraction less than one yen resulting from the
calculation being rounded up to the nearest yen. The amount of the additional
paid-in capital to be increased shall be the amount obtained by subtracting
the above amount of stated capital to be increased from the relevant maximum
amount of stated capital increase.
(4)  Allottee
One of the Underwriters
(5)  Subscription Period (Subscription Date)
Friday, August 2, 2013
(6)  Payment Date
Monday, August 5, 2013
(7)  Subscription Unit
100 shares
(8) Shares not subscribed within the subscription period (subscription date)
mentioned in (5) above shall not be issued.
(9) The amount to be paid, the amount of stated capital and additional paid-in
capital to be increased and any other matters necessary for the issuance of
new shares by way of Third-Party Allotment shall be determined at the
discretion of Representative Directors.
(10) Above items shall be subject to the effectiveness of registration under
the Financial Instruments and Exchange Act of Japan.

<For Reference>

The secondary offering by way of over-allotment mentioned in "2.Secondary
Offering of Shares (Secondary Offering by way of Over-Allotment)" above is a
secondary offering of shares of common stock of the Company in conjunction
with the Public Offering mentioned in "1.Issuance of New Shares by way of
Primary Offering (Public Offering)" which one of the Underwriters will borrow
up to 700,000 shares (the "Borrowed Shares") from certain shareholder(s) of
the Company (the "Share Lender(s)"), taking into account market demand. The
number of shares to be offered in the Secondary Offering by way of
Over-Allotment is planned to be 700,000 shares; provided, however, that it is
the maximum number of shares to be sold and such number may be decreased or
the Secondary Offering by way of Over-Allotment may be cancelled entirely,
depending on market demand.

In connection with the foregoing Secondary Offering by way of Over-Allotment,
the board of directors of the Company resolved on July 2, 2013, that the
Company will issue 700,000 shares of common stock of the Company through
third-party allotment (the "Issuance through Third-Party Allotment") to one of
the Underwriters for the purpose of returning the shares borrowed from certain
shareholders of the Company ("Borrowed Shares"). The payment date for the
Issuance through Third-Party Allotment is scheduled on August 5, 2013.

One of the Underwriters may also purchase shares of common stock of the
company (the "Syndicate Cover Transaction") on the Tokyo Stock Exchange, up to
the number of shares to be sold in the Secondary Offering by way of
Over-Allotment, for the purpose of returning the Borrowed Shares, during the
period from and including (a) the day immediately following the last day of
the subscription period for the Public Offering and the Secondary Offering by
way of Over-Allotment to and including (b) July 29, 2013 (the "Syndicate Cover
Transaction Period"). All of the shares purchased through the Syndicate Cover
Transaction will be used to return the Borrowed Shares. During the Syndicate
Cover Transaction Period the underwriter may decide not to undertake the
Syndicate Cover Transactions or to terminate the Syndicate Cover Transactions
before the number of shares purchased reaches the number of shares to be sold
in the Secondary Offering by way of Over-Allotment.

Further, one of the Underwriters may conduct stabilizing transactions with
respect to the shares of the Company in connection with the Public Offering
and the Secondary Offering by way of Over-Allotment. The shares purchased
through such stabilizing transactions may be used, in whole or in part, to
return the Borrowed Shares.

With respect to the number of shares obtained by deducting (a) the number of
shares that are purchased through the stabilization transactions and the
Syndicate Cover Transactions and are to be used to return the Borrowed Shares
from (b) the number of shares to be offered in the Secondary Offering by way
of Over-Allotment, one of the Underwriters will acquire shares of common stock
of the Company by accepting the allotment under the Issuance through
Third-Party Allotment. As a result, all or a part of the shares planned to be
issued under the Issuance through Third-Party Allotment may not be subscribed
for, which may result in a decrease in the number of shares to be finally
issued under the Issuance through Third-Party Allotment or in the cancellation
thereof, due to forfeiture.

In the event that one of the Underwriters accepts the allotment under the
Issuance through Third-Party Allotment, it will make payment there for with
the funds obtained from the Secondary Offering by way of Over-Allotment.

2. Change in the total number of issued shares as a result of the
above-mentioned issuance

Total number of issued shares at present     41,297,800 shares (As of June 28,
                                                               2013)
Increase in the number of shares as a result 4,700,000 shares   
of the Public Offering
Total number of issued shares after the      45,997,800 shares  
Public Offering
Increase in the number of shares as a result
of the Issuance through Third-Party          700,000 shares    (Note)
Allotment
Total number of issued shares after the      46,697,800 shares (Note)
Issuance through Third-Party Allotment

(Note) These figures are based on the assumption that all of the shares to be
allotted as set forth in "3. Issuance of New Shares by way of Third-Party
Allotment (Issuance through Third-Party Allotment)" above are subscribed for
by one of the Underwriters.

3. Use of Proceeds to be Raised

(1) Use of Proceeds to be Raised this time
    Out of proceeds from the Public Offering of new shares and the Issuance through Third-Party
    Allotment, which is estimated to be up to JPY18,773,000,000 in total, JPY10,122,000,000 is planned
    to be used for capital investment for the Network Services and Systems Integration business by the
    end of March 2015, JPY6,661,000,000 is planned to be used to repay debt for network equipment
    leased by the end of March 2013 and to be repaid by the end of March 2015 and JPY1,990,000,000 is
    planned to be used to repay debt to be repaid by August 2014.
    As of July 2 2013, our facility planning is as follows ("Paid" investment amount figures are as of
    June 30, 2013);
    Name of
    Company      Name of     Facility         Investment Amount    Fundraising Commencement and
    (Location of Segment                                           Scheme      Completion Schedule
    Key Office)
                                              Total      Paid
                                              (thousand  (thousand             Commencement Completion
                                              yen)       yen)
    IIJ Data     Network
    Centers      Services    Leasehold                             Cash on
    (Mitaka,     and Systems improvement in   1,745,000  47,144    hand and    April 2013   March 2015
    Tokyo and    Integration data centers and                      capital
    other        business    other facilities                      increase
    cities)
    IIJ Data     Network     Data
    Centers      Services    communications                        Cash on
    (Mitaka,     and Systems equipment,       1,872,000  55,611    hand and    April 2013   March 2015
    Tokyo and    Integration servers and                           capital
    other        business    other equipment                       increase
    cities)
    IIJ Matsue   Network                                           Cash on
    Data Center  Services    Buildings, power                      hand and                 September
    (Matsue,     and Systems supply and other 1,200,000  6,734     capital     April 2013   2013
    Shimane      Integration facilities                            increase
    Pref.)       business
    IIJ Data                 Buildings, IT
    Centers      Network     modules, power                        Cash on
    (Matsue,     Services    supply                                hand and
    Shimane      and Systems facilities,      1,586,000  5,004     capital     April 2013   March 2015
    Pref. and    Integration air-conditioning                      increase
    other        business    and other
    cities)                  facilities
    IIJ          Network     Software to                           Cash on
    Headquarters Services    provide data                          hand and
    (Chiyoda,    and Systems communications   2,415,000  196,537   capital     April 2013   March 2015
    Tokyo)       Integration services                              increase
                 business
    IIJ          Network                                           Cash on
    Headquarters Services    Back-office                           hand and
    (Chiyoda,    and Systems systems          1,633,000  17,708    capital     April 2013   March 2015
    Tokyo)       Integration                                       increase
                 business
    Total                                     10,451,000 328,738    
    Note: Increase in capabilities per each facility investment is not described because such scales
    are not measurable.
(2) Change in the use of the proceeds raised last time
    No relevant matters
(3) Expected impact on business results
    The Company believes that the capital investment backed by the above-mentioned raised fund will
    increase sales and profits of the Company's Network Services and Systems Integration business
    operations and help achieve medium- and long-term growth and increase corporate value.

4. Other Matters

(1) Designation of party to receive distribution
    No relevant matters
(2) Lock-up
    Nippon Telegraph and Telephone Corporation, NTT Communications Co., Koichi
    Suzuki and KS Holdings Co., all of whom are shareholders of the Company,
    have agreed with one of the Underwriters that, during the period beginning
    on the Pricing Date and ending on the 90^th calendar day after the
    delivery date of the Public Offering (the "Lock-up Period"), they shall
    not in principle conduct a sale of shares of common stock of the Company
    without prior written consent of one of the Underwriters.
    The Company has agreed with one of the Underwriters that, during the
    Lock-up Period, it shall not conduct an issuance of shares of common stock
    of the Company, securities that are convertible or changeable into common
    stock of the Company nor any other securities with a right to purchase
    shares of common stock of the Company, etc. (other than the issuance of
    new shares conducted as a public offering, the above-mentioned Issuance
    through Third-Party Allotment or any issuance of shares conducted with
    respect to any stock split) without prior written consent of one of the
    Underwriters.
    In each case above, one of the Underwriters is entitled to cancel such
    agreement in whole or in part at their discretion even during the Lock-up
    Period.

Note: This press release does not constitute an offer of any securities for
sale. This press release has been prepared for the purpose of publicly
announcing that the Company has resolved matters relating to the issuance of
new shares and the secondary offering of its shares and not for the purpose of
soliciting investment or engaging in any other similar activities. This press
release is not an offer of securities for sale in the United States. The
securities referred to above have not been, and will not be, registered under
the United States Securities Act of 1933, as amended (the "Securities Act").
The securities may not be offered or sold in the United States absent
registration or an exemption from registration under the Securities Act.

About IIJ

Founded in 1992, Internet Initiative Japan Inc. is one of Japan's leading
Internet-access and comprehensive network solutions providers. IIJ and its
group companies provide total network solutions that mainly cater to high-end
corporate customers. The company's services include high-quality systems
integration and security services, Internet access, and cloud computing.
Moreover, the company has built one of the largest Internet backbone networks
in Japan that is connected to the United States and the United Kingdom. IIJ
listed on NASDAQ in 1999 and on the First Section of the Tokyo Stock Exchange
in 2006. For more information about IIJ, visit the IIJ Web site at
http://www.iij.ad.jp/en/.

The statements within this release contain forward-looking statements about
our future plans that involve risk and uncertainty. These statements may
differ materially from actual future events or results. Readers are referred
to the documents furnished by Internet Initiative Japan Inc. with the SEC,
specifically the most recent reports on Forms 20-F and 6-K, which identify
important risk factors that could cause actual results to differ from those
contained in the forward-looking statements.

CONTACT: For inquiries, contact:
         IIJ Investor Relations
         Tel: +81-3-5259-6500  E-mail: ir@iij.ad.jp
         URL: http://www.iij.ad.jp/en/ir

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