My name is Hiroshi Shinohara, newly appointed president of the company.
I would like to extend my greetings in assuming this post and to express my future aspirations.
Our outgoing president, Mr. Junya Tsutsumi is an extraordinarily talented person in IT. I truly regret that he has turned to treating his health condition at the very moment the IT nurtured under his watch is just about to bloom magnificently. I look forward to the day he will be able to return to the company.

I was born in Aichi Prefecture. After graduating from the Faculty of Engineering at Osaka University, I worked at both scientific and literary enterprises, including an overseas financial fund. In December 2017, I was appointed to executive officer of Acrodea, and later become Director and Vice President. I never imagined an appointment of such responsibility in two years; however, I have resolved to accept this position in the belief that my insights could contribute to the expansion and success of Acrodea’s business. Drawing on the experience as Vice President during these two years that drove the company ahead toward profitability, I would like to propel the company further, not only within IT fields where the company’s strengths lie, but also into fintech and integrated resort (IR) business operations by fully leveraging my insights and practical business experience.
Undoubtedly some people will be concerned with this change of the guard at the top. We assure you, therefore, that management and operating structures will be built even stronger than before.

Now let me express my aspirations as the new president.
First, I would like to present the company’s motto, “Challenging Future IT”.

Last year, our going concern note was removed as the company finally turned profitable on EBITDA basis (index of cash retained in the company). On a P&L (income) basis, however, our financial condition remains unstable. My resolve is to transform into a strong, income-generating company.
Inheriting basic policy from the previous president, I will develop the following businesses into large revenue streams going forward. Our short-term objective aims to achieve consolidated net sales of 5 billion yen across the whole group as quickly as possible, and mid- and long-term, we aim for listing on the TSE First Section through further growth of sales and profit.

1. Solution Business
In this division, our ongoing business operations consist of the social gaming business marked by our lead title Soccer Japan National Team Heroes, the demo-terminal management system business targeting mobile phone retail stores, and the system contracting business. The introduction of new technology and new products will reinforce these existing operations. The next pillars of business that we intend to grow pertain to security and camera monitoring of the SIM intercom system that has finally completed development and blockchain technology, cultivated in the provisioning of a cryptocurrency exchange operation system. I have particularly large expectations for recent developments in our blockchain business.

2. Sports IOT Business
Efforts go forward to expand distribution of our commercial lineup of baseballs (original hard ball, rubber M ball, rubber J ball). Validation tests need to be completed as quickly as possible to commercialize the golf ball, soccer ball, cricket ball, and volleyball, which have completed development. Our challenge continues in developing balls used for all other sports and products embedded with IOT technology to be used as tools in sports. Our goal is be the pioneer for sports IOT.
The collaboration with KDDI extends the product selling to analytics of big data, aggregated from users of the products. This program can broaden to business services for coaching and scouting and drive development of a recurring revenue stream based on membership.

3. Integrated Resort (IR) Business
We are ready to fully roll out our own bingo parlor operations and system provisioning business that employ the internally developed, online bingo casino system. Our first bingo parlor opened in Cambodia’s Babette District in January earlier this year. We plan to develop additional bingo parlors globally going forward and to accelerate operations by opening a Japanese parlor focused essentially on bingo and based on the IR Law enacted in Japan.

As described above, we have world-class IT products based on proprietary original IT, that will allow us to achieve our objectives. We are determined to head out to global markets like Sony has done before us.
Baseballs and bingo games have a home market in the US. We are confident the US market will acknowledge the quality of our Japanese IT products and bring us success. Because they are truly excellent products. For example, an online bingo parlor enables users to play bingo games on their mobile phone from anywhere. Although each country has their own conditions, our original IT supports not only the system to charge, bet and dispense winnings, but also can arrange taxation payments according to each country’s regulations. This business is moving ahead on an orthodox plane.
The US is facing the aging of its population, just like Japan. Moreover, the US is vast, and bingo is highly popular among Americans. Therefore, our bingo system, in which users can participate no matter where they are, represents ample potential for acceptance.
As a sports IOT initiative, we have registered the trademark for “i-Ball” around the world. I am committed to grow the “i-Ball” mark into a globally renowned brand.

Our SIM intercom, Sports IOT, and online bingo system each represent a product with its own market potential to become a business listed in the First Section of TSE. Once we consolidate our operating base, even greater advancements will no longer be a dream.

I note strategy for the group companies below:

Acrodea group companies include Shibuya Nikuyokocho, Inc., dining and real estate subleasing business; InterPlan Co., Ltd., IT education-related business; Central Bear Asset Management, Inc., a fintech business; Pacific Delta Bingo Co., Ltd., international bingo operations; and Muto Mfg., Inc., in the shooting range business. We are committed to increase sales and profits at these subsidiaries starting with dining and real estate subleasing Shibuya Nikuyokocho, Inc., which has become a core business.

Until now, headquarters and group companies were like discrete dots. We are committed to strengthen their integration by connecting the dots to form lines and planes. More specifically, Shibuya Nikuyokocho can accelerate the merger of restaurant operations and IT, developing S-NY (“Shibuya NikuYokocho”) as a global brand. To illustrate the project more concretely, we develop a social network restaurant featuring image, sound, and translation functions in order to communicate with other alley-style restaurants not just in Japan but also worldwide. We can also start a market research business that will become a pillar for Shibuya Nikuyokocho, leveraging the annual traffic of 500,000 people, primarily from younger age brackets.

InterPlan engaged in our education-related business will aim to open a training academy for blockchain engineers to meet demand expected to rapidly increase in the near future.
For the other group companies as well, we intend to streamline and be ready to support within the group as required, at any time.

For our shareholders and investors, as soon as we can generate steady revenues, we are committed to enhancing shareholder benefits and delivering satisfactory dividends.
I thank you sincerely for your further guidance and support.

March 16, 2020

Hiroshi Shinohara
Representative Director and President
Acrodea, Inc.