FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934
For April 5, 2007
Commission File Number: 0-30204
-------
Internet Initiative Japan Inc.
(Translation of registrant's name into English)
Jinbocho Mitsui Bldg. 1-105 Kanda Jinbo-cho, Chiyoda-ku, Tokyo 101-0051, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F:
Form 20-F [ X ] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [ X ]
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-
-------------
EXHIBIT INDEX
Exhibit Date Description of Exhibit
------- ---- ----------------------
1 2007/04/05 IIJ Makes its Two Consolidated Subsidiaries 100% Owned
through Exchange of Shares
EXHIBIT 1
---------
IIJ Makes its Two Consolidated Subsidiaries 100% Owned through
Exchanges of Shares
TOKYO--(BUSINESS WIRE)--April 5, 2007--Internet Initiative Japan
Inc. ("IIJ", NASDAQ: IIJI, TSE1: 3774), one of Japan's leading
Internet access and comprehensive network solutions providers, today
announced that the boards of directors of IIJ and its consolidated
subsidiaries, IIJ Technology Inc. ("IIJ-Tech") and Net Care, Inc ("Net
Care") resolved that IIJ make the two consolidated subsidiaries 100%
owned through share exchanges. IIJ and each of the two consolidated
subsidiaries have closed an agreement in respect of the exchanges.
1. Purpose for IIJ to make the two consolidated subsidiaries 100% owned
Customers' network systems are becoming more advanced and
complicated as Internet technology is more widely used in internal
corporate networks and business systems. In these circumstances, IIJ
is being required by customers to provide a comprehensive suite of
services including design and construction of overall network systems,
network services, and the operation and monitoring of networks as
total solutions to its customers.
While it is conducting its business by tying up with its
consolidated subsidiaries as a Group, IIJ intends to create a
foundation for enhancing its future business development, such as
managing the IIJ Group more effectively and allocating group resources
more efficiently. IIJ also foresees the future possibility of
introducing a consolidated tax payment system.
2. Summary of the share exchanges
(1) Schedule
April 5, 2007 Resolution of the share exchanges by the boards
of directors
(IIJ, IIJ-Tech and Net Care)
Close of the agreements for the share exchanges
(IIJ, IIJ-Tech and Net Care)
May 11, 2007 (planned) Share exchanges to be effective
(IIJ, IIJ-Tech and Net Care)
Issuance of the shares
Note) The board of directors of IIJ resolved the exchange of the
shares in accordance with the rules defined under Article 796.3
of the Corporation Act in Japan (the simplified method of
exchange of shares). The board of directors of IIJ-Tech and Net
Care resolved the exchanges of the shares in accordance with the
rule defined under Article 784.1 of the Corporation Act in Japan
(the informal method of exchange of shares).
(2) Ratio of the exchange
IIJ IIJ-Tech Net Care
(100% owning (100% owned (100% owned
company) company) company)
----------------------------------------------------------------------
Ratio of the exchange 1 0.84 0.22
----------------------------------------------------------------------
Note) 1. Ratio of the allocation of the shares
0.84 shares of common stock of IIJ per 1 share of common
stock of IIJ-Tech will be issued to be allocated to the
shareholders listed on the shareholder list of IIJ-Tech on
the day before the agreement for the share exchange becomes
effective (May 10, 2007) excluding IIJ (holding 43,805 shares
of common stock of IIJ-Tech).
0.22 shares of common stock of IIJ per 1 share of common
stock of IIJ will be issued to be allocated to the
shareholders listed on the shareholder list of Net Care
excluding IIJ (holding 18,500 shares of common stock of Net
Care) on the day before the agreement for the share exchange
becomes effective (May 10, 2007).
2. Handling of fractional figures
Fractional shares that are smaller than 1 share of common
stock of IIJ that should be issued to the shareholders of
IIJ-Tech through the exchange of the shares will be settled
in cash with the shareholders in accordance with the rules
defined under Article 234 of the Corporation Act in Japan.
No fractional shares will be issued to the shareholders of
Net Care.
3. Number of the new shares to be issued by the exchange of the
shares
IIJ will newly issue 2,178 shares of common stock of IIJ upon
the exchanges of the shares.
(3) Policy of calculation of the share exchange ratio
As a basis of the calculation of the share exchange ratio, IIJ,
IIJ-Tech and Net Care conducted the following analysis. For IIJ, the
analysis was made with the average of the closing price on the First
Section of the Tokyo Stock Exchange for the consecutive 30 business
days including and before March 30, 2007. For IIJ-Tech and Net Care,
the analysis was made by a discount cash flow method and comparison
with other similar companies and in reference to the share values
calculated by a third party appraiser that does not have relationships
with IIJ, IIJ-Tech and Net Care. The share exchange ratio has been
determined as above considering generally the results of the above
analysis.
IIJ, IIJ-Tech and Net Care assumed that there would be no
significant change in the trend of recent business results as a basis
for the discount cash flow method.
(4) Handling of share warrants and bonds with share warrants of
IIJ-Tech and Net Care
There are no share warrants or bonds with share warrant regarding
IIJ-Tech and Net Care on the date of this announcement.
3. Overview of the companies related to the exchanges of the
shares
(1) Company name Internet Initiative IIJ Technology Net Care, Inc.
Japan Inc. (100% Inc. (100% (100% owned
owing company) owned company) company)
----------------------------------------------------------------------
(2) Main business Provision of Provision of Provision of
Internet design, monitoring and
connectivity construction, operation of
services, value- maintenance networks,
added services, services and outsourced
systems operation of customer
integration and systems support
equipment sales services and
operation of
data centers
----------------------------------------------------------------------
(3) Date of December 3, 1992 November 26, February 9, 1998
establishment 1996
----------------------------------------------------------------------
(4) Location of 1-105 Kanda Jinbo- 1-105 Kanda 1-105 Kanda
headquarters cho, Chiyoda-ku, Jinbo-cho, Jinbo-cho,
Tokyo Chiyoda-ku, Chiyoda-ku,
Tokyo Tokyo
----------------------------------------------------------------------
(5) Title and Koichi Suzuki, Takeshi Koichi Suzuki,
name of the President and Kikuchi, President and
representatives Representative President and Representative
Director Representative Director
Director
----------------------------------------------------------------------
(6) Common stock JPY 16,834 million JPY 2,358 JPY 1,000
(consolidated) million million
----------------------------------------------------------------------
(7) Number of 204,300 46,005 20,000
shares
outstanding
----------------------------------------------------------------------
(8) Total JPY 20,222 million JPY 2,637 JPY 1,207
shareholders' (consolidated) million (non- million (non-
equity consolidated) consolidated)
----------------------------------------------------------------------
(9) Total assets JPY 50,705 million JPY 7,552 JPY 1,504
(consolidated) million (non- million (non-
consolidated) consolidated)
----------------------------------------------------------------------
(10) Fiscal year March 31 March 31 March 31
end
----------------------------------------------------------------------
(11) Major Nippon Telegraph Internet Internet
shareholders and and Telephone Initiative Initiative
ownership Corporation 24.71% Japan Inc. Japan Inc.
Hero and Company 95.22% 92.50%
15.95%
Koichi Suzuki 6.13%
Itochu Corporation
5.11%
----------------------------------------------------------------------
Notes)
1. Information from (1) through (7) is as of April 5, 2007.
2. Figures from (8) and (9) are as of September 30, 2006. The figures
for IIJ-Tech and Net Care are not audited.
3. The information for IIJ in (11) is as of September 30, 2006. The
information for IIJ-Tech and Net Care is as of April 5, 2007. IIJ's
ownership to IIJ-Tech and Net Care increased compared to the end of
the second quarter of the fiscal year ended March 31, 2007, since
IIJ purchased a portion of the shares of IIJ-Tech and Net Care by
cash from IIJ-Tech and Net Care's minority shareholders.
4. Hero and Company shown in (11) is the depository facility for IIJ
shares, and nominee of the Bank of New York as issuer of American
Depositary Receipts (ADR).
5. The revenues, operating income and net income of IIJ-Tech in its
non-consolidated financial statements for the fiscal year ended
March 31, 2006 were JPY 18.4 billion, JPY 0.8 billion and JPY 0.7
billion, respectively. The revenues, operating income and net
income of IIJ-Tech in its non-consolidated financial statements for
the fiscal year ended March 31, 2007 are expected to be JPY 22.6
billion, JPY 1.2 billion and JPY 0.7 billion, respectively.
The revenues, operating income and net income of Net Care in its
non-consolidated financial statements for the fiscal year ended
March 31, 2006 were JPY 2.3 billion, JPY 0.2 billion and JPY 0.2
billion, respectively. The revenues, operating income and net
income of Net Care in its non-consolidated financial statements for
the fiscal year ended March 31, 2007 are expected to be JPY 2.7
billion, JPY 0.2 billion and JPY 0.1 billion, respectively.
4. Situation after the share exchanges
(1) Company name, business, location of headquarters, representative and
fiscal year end of IIJ
There is no change in the company name, business, location of
headquarters, representative and fiscal year end of IIJ shown in "3.
Overview of the companies related to the exchanges of the shares."
(2) Number of shares outstanding of IIJ
The number of shares of common stock outstanding of IIJ after the
share exchanges will be 206,478. The number of shares of common stock
to be issued upon the share exchanges is 2,178, which represents 1.05%
of the number of shares of common stock outstanding after the
exchanges of the shares.
(3) Common stock and others of IIJ
The additional paid-in capital of IIJ in its non-consolidated
financial statements will increase by the change in the capital paid
by shareholders as defined under Article 68.1 of the Corporate
Accounting Rules in Japan upon the share exchanges. The common stock
of IIJ will not be changed.
(4) Effect of the share exchanges to IIJ's business results
IIJ's financial results for the fiscal year ended March 31, 2007
will not be effected by the share exchanges, since the effective date
of the share exchanges is planned to be May 11, 2007.
Upon the exchanges of the shares, the minority interests in losses
of subsidiaries regarding IIJ-Tech and Net Care will disappear. IIJ
plans to announce the effect of the share exchanges and other items
including its target for the financial results for the fiscal year
ending March 31, 2008 (consolidated and non-consolidated) upon the
announcement of the financial results for the fiscal year ended March
31, 2007 planned to be made in May 2007.
(5) Others
IIJ Financial Systems Inc., the 100% owned subsidiary of IIJ-Tech,
will become a 100% owned subsidiary of IIJ in indirect ownership,
since IIJ-Tech will become IIJ's 100% owned subsidiary.
IIJ America Inc. will become a 100% owned subsidiary of IIJ in
direct and indirect ownership though IIJ-Tech, since IIJ-Tech will
become IIJ's 100% owned subsidiary.
About IIJ
Founded in 1992, Internet Initiative Japan Inc. (IIJ, NASDAQ:
IIJI, TSE1: 3774) is one of Japan's leading Internet-access and
comprehensive network solutions providers. IIJ and its group of
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, hosting/housing, and content design. Moreover, the company has
built one of the largest Internet backbone networks in Japan, and
between Japan and the United States. IIJ was 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/.
Statements made in this press release regarding IIJ's or
management's intentions, beliefs, expectations, or predictions for the
future are forward-looking statements that are based on IIJ's and
managements' current expectations, assumptions, estimates and
projections about its business and the industry. These forward-looking
statements, such as statements regarding FY2006 revenues and operating
and net profitability, are subject to various risks, uncertainties and
other factors that could cause IIJ's actual results to differ
materially from those contained in any forward-looking statement.
These risks, uncertainties and other factors include: IIJ's ability to
maintain and increase revenues from higher-margin services such as
systems integration and value-added services; the possibility that
revenues from connectivity services may decline substantially as a
result of competition and other factors; the ability to compete in a
rapidly evolving and competitive marketplace; the impact on IIJ's
profits of fluctuations in costs such as backbone costs and
subcontractor costs; the impact on IIJ's profits of fluctuations in
the price of available-for-sale securities; the impact of
technological changes in its industry; IIJ's ability to raise
additional capital to cover its indebtedness; the possibility that
NTT, IIJ's largest shareholder, may decide to exercise substantial
influence over IIJ; and other risks referred to from time to time in
IIJ's filings on Form 20-F of its annual report and other filings with
the United States Securities and Exchange Commission.
CONTACT: IIJ Corporate Communications
Tel: +81-3-5259-6500
Fax: +81-3-5259-6311
ir@iij.ad.jp
http://www.iij.ad.jp/
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Internet Initiative Japan Inc.
Date: April 5, 2007 By: /s/ Koichi Suzuki
-----------------------------------------
Koichi Suzuki
President, Chief Executive Officer and
Representative Director