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 June 9, 2004
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 per-mitted 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 per-mitted 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 reg-istrant 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
mate-rial 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-___________
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN
THE PROSPECTUS INCLUDED IN THE REGISTRATION STATMENT ON FORM F-3 (FILE NO.
333-12696) OF INTERNET INITIATIVE JAPAN INC. AND TO BE A PART THEREOF FROM THE
DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY
DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
EXHIBIT INDEX
Exhibit Date Description of Exhibit
------- ---- ----------------------
1 6/9/2004 CONVOCATION NOTICE OF
THE 12th ORDINARY GENERAL MEETING OF SHAREHOLDERS
---English Translation---
CAUTIONARY NOTES
This document is the English translation of the "Convocation notice of the 12th
ordinary general meeting of shareholders"("Dai ju-nikai teiji kabunushi sokai
shoshu gotsuchi") of Internet Initiative Japan Inc. ("IIJ" or "the Company") to
be held on June 24, 2004.
Note 1: This document contains forward-looking statements (within the meaning of
Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S.
Securities Exchange Act of 1934) about our future plans that involve known and
unknown risks, uncertainties and other factors . Such risks, uncertainties, and
other factors include, in particular, the factors set forth in "Item 3.D: Risk
Factors" of our Annual Report on Form 20-F/A dated October 8, 2003 which has
been filed with the U.S. Securities and Exchange Commission. Such risks,
uncertainties and other factors may cause our actual results, performance,
achievements or financial position to be materially different from any future
results, performance, achievement or financial position expressed or implied by
these forward-looking statements.
Note 2: This document has been prepared pursuant to the requirements of the
Commercial Code of Japan. Financial Statements have been prepared in accordance
with generally accepted accounting principles in Japan, which differ in certain
respects from generally accepted accounting principles in the United States.
Also, Financial Statements included in this document are unconsolidated base
which differ from consolidated ones which IIJ should file with the U.S.
Securities and Exchange Commission as Form 20-F.
Note 3: The ADRs holders shall instruct The Bank of New York to exercise its
voting right represented by the shares underlying their ADRs but they may only
provide their instructions to The Bank of New York. Otherwise, they are not
entitled to exercise any voting right unless they cancel their ADRs and withdraw
the shares. This means they may not be able to exercise any voting right for IIJ
and attend the ordinary general meeting of shareholders of IIJ.
[English Translation]
June 9, 2004
TO OUR SHAREHOLDERS:
Koichi Suzuki
Representative Director
Internet Initiative Japan Inc.
1-105, Kanda Jinbo-cho, Chiyoda-ku, Tokyo, Japan
CONVOCATION NOTICE OF
THE 12th ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are hereby requested to attend the 12th ordinary general meeting of
shareholders of Internet Initiative Japan Inc. ("IIJ" or "the Company",) which
is to be held as outlined below.
In the event you are unable to attend the meeting, please see the
documents attached hereto, and return to the Company the power of attorney by
indicating whether you agree to the proposals under each agendum and affixing
your seal thereto.
1. Date and time: 1:00 p.m., June 24, 2004 (Thursday)
2. Place: Conference Room on the 17th floor at the office of the
Company Jinbocho Mitsui Bldg. 1-105, Kanda Jinbo-cho,
Chiyoda-ku, Tokyo, Japan
3. Agenda of the meeting:
Subjects to be reported:
Reports on the business report, balance sheet and income statement of the 12th
fiscal year (from April 1, 2003 to March 31, 2004)
Subjects to be resolved:
Item 1: Approval of disposal of losses for the 12th fiscal year
Item 2: Amendments to the Articles of Incorporation
(As described in the attached " Reference Documents with Respect to
Solicitation to Exercise Voting Rights by Proxy".)
Item 3: Election of five directors
Item 4: Election of three statutory auditors
- End -
(Attachment)
Business Report for the 12th Fiscal Year (For April 1, 2003 to March 31, 2004)
------------------------------------------------------------------------------
1. Summary of Business
----------------------------
(1)History and Results of Business
Japan's economy saw a welcome rebound gathering momentum throughout the second
half of this period as concerns about the stock market and the Iraq war from the
first half faded and were followed by a improvement in the stock markets and
corporate performance. Economic indicators for real GDP in Japan improved in the
third quarter and continued to climb in the fourth quarter. Capital expenditures
in the private sector are recovering, and our operating environment continues to
improve.
The struggle for high-end customers and competition between telecommunications
carriers has increased. As the use of broadband technology spreads, corporations
and other with multiple locations are building advanced information network
systems that adopt new approaches like our Internet VPN services, which is
creating a new demand. The mid to long-term prospects for data communications
are considered favorable according to the growth of BtoC businesses such as
online trading and e-commerce, BtoB businesses exemplified by e-procurement, and
computerization of government administration as a step towards e-government.
Under this business environment, IIJ is working with others in the IIJ
Group to continually develop and offer advanced services. We have provided a mix
of value-added services to become a total solutions provider for corporations
and government bodies in order to increase revenues from existing customers as
well as develop new customer bases.
Crosswave Communications, Inc., which was formerly an equity method investee of
IIJ, filed for corporate reorganization in August 2003, which had a negative
impact over financial aspects and business development of us. Crosswave was a
communications carrier formed as a joint venture among Toyota Motor Corporation,
Sony Corporation and us in 1998. providing wide-area LANs and other
communications services to its customers, and eventually became the largest
network infrastructure supplier to IIJ. The financial impact over IIJ by
Crosswave's corporate reorganization proceedings resulted in loss of 11,041
million yen in total (using Japanese accounting rules) during this period
through loss on valuation of shares, allowances, and other items. We covered
such financial impact from Crosswave by the issuance of new shares amounting to
approximately 12,000 million yen through third party allocation to NTT Group
(Nippon Telegraph and Telephone Corporation, NTT Communications Corporation),
Itochu Corporation, Sumitomo Corporation and others in September 2003. Our
growth strategy involves modifying the business and technology divisions into a
more solution-oriented operation that responds better to customer needs, and
putting our effort into providing those solutions with the whole company working
as a team. Crosswave's operations were taken over by NTT Communications in a
business transfer in December 2003, and we acknowledged that our network
infrastructure operations will not experienced any material impact by this.
In respect of the status each service in this fiscal year, sales of our primary
services, Internet access and value-added services, were almost flat this
period. Our primary service for corporate customers is the full-spec Internet
access service, and while the number of customers and the amount of bandwidth
provided have increased in this service, unit prices continue to fall, and total
income from this service did not grow. We saw continuing migration from our
packaged corporate Internet access services to our lower-priced FLET's access
services. Income continued to decline from Internet access services for
individuals, such as IIJ4U. However, sales rose steadily in the OEM services for
broadband access providers, data center services, and the value-added services
such as security services and e-mail services. This made up for the decline in
Internet access service sales over all. We have also seen steady growth in the
number of multi-site customers taking advantage of our bundled solutions for
corporate information network systems, which combines Internet access with an
Internet VPN service and the SEIL router developed by us. Since providing these
access services for multi-site corporations utilize our existing high-volume
nationwide network infrastructure and does not require additional capital
expenditures, we expect an improved capacity utilization ratio.
IIJ's systems integration services are provided in partnership with IIJ
Technology, Inc., our subsidiary, and the Internet connectivity and value-added
services for corporations and government organizations are augmented with system
design, construction, operation and other services. While we saw increased
orders in the last half of this period as the economy picked up, a floundering
stock market kept down corporate IT investments in the first half period, and
sales for the entire period were down over all. However, the maintenance and
operation outsourcing service provided in partnership with IIJ Technology has
provided a stable source of sales that contributed to continuous growth this
period. In addition, IIJ consulting services have been growing steadily, and
they are expected to contribute to sales in the coming fiscal year and
thereafter.
In addition to equipment sales to systems integration customers, we have been
promoting sales of the SEIL router as a way of getting the most out of the
Internet connectivity services. This fiscal year we decreased sales of
low-margin equipment, and overall sales declined as a result.
Financial statements for this year showed an 8.7% decrease in total sales to
31,199 million yen which is a result of reduced systems integration and
equipment sales. Operating income was better compared with the prior year
because of the effort to reduce network costs, but as a result of the disposal
of the loss on accounts receivables from Crosswave, IIJ ended the year with a
deficit of 868 million yen, a decrease of 37.2% from FY 2003. Ordinary income
showed a deficit of 1,160 million yen, a decrease of 48.9% from FY2003 due to
the decrease of foreign exchange loss and others. Despite the profits from the
sale of long-term securities, we recorded a net loss of 11,120 million yen, a
decrease of 19.2% from FY 2003, after adding in the losses related to Crosswave.
(2) Tasks to be addressed by the Company
Our priority in the coming fiscal year will be to improve earnings and get
firmly on track to restoring profitability. To continue to expand and reinforce
our business foundations, we will strive to provide our customers with highly
competitive solutions. The immediate objectives necessary to achieve these goals
are listed below.
a. Securing the profit base
In the coming fiscal year, we will firm up our profit base by continuing to
reduce costs associated with the network backbone and circuit acquisition as
well as network costs associated with the network operations center. It will
also be important to increase gross profits by increasing revenues from Internet
connectivity and value-added services, and from systems integration, and by
improving the capacity utilization ratio. In particular, to increase revenues
from Internet connectivity services, we will intend to capture the information
network systems business of customers using one of IIJ's many network services,
like data center services and the Internet VPN service, and offer network
systems to other carriers via our OEM services.
b. Providing competitive solutions
In response to the increased functionality and efficiency of networks in
corporate information systems, we will endeavor to provide solution services
designed for corporate information network systems. We will be able to use our
technological advantages in this sector as one of Japan's largest network
operation and management companies with the capacity to provide highly
competitive services. Our network integration division established last year has
acquired several more customer locations using efficient connectivity solutions
that combine the FLET's Internet connectivity service with the SEIL router and
Internet VPN service. In the coming fiscal year, we will restruct the
organization of the company, starting with the introduction of solution
services, and at the same time offering a wide range of services, including
Internet VPN, VoIP, SEIL and the network service operating system SEIL
Management Framework, wireless LAN, and solutions necessary to build corporate
information network systems, like disaster recovery services.
c. Providing solutions through IIJ Group Partnerships
In order to respond quickly to the diverse needs of our customers, we need to
strengthen cooperation within the IIJ Group on service development and sales
operations to provide total network solutions to our customers and to enhance
our presence in the market. We need to offer combinations of services and
packages that optimize the use of all the network services offered by the IIJ
Group, and we have to build and expand our operations to be able to take on
large-scale outsourcing projects. Through these partnerships, we hope to grow
over all sales in Internet connectivity and value-added services as well as
systems integration. Next fiscal year we will intend to enhance our systems
integration capabilities by working closer with IIJ Technology, and strengthen
our capacity to respond to the quickly growing market segment of large-scale
outsourcing projects by working closer with Net Care, Inc, our subsidiary.
In meeting these challenges, we continue to make every effort to develop
our business in a manner that may meet the expectations of our shareholders, and
we sincerely hope that we can count on your continued support to this end.
(3)Operating results and changes in properties
(Thousands of Yen)
9th Fiscal Year 10th Fiscal Year 11th Fiscal Year 12th Fiscal Year
FY 2000 FY 2001 FY 2002 FY 2003
Sales 26,944,586 32,044,785 34,188,460 31,198,882
Ordinary loss 673,494 560,025 2,272,580 1,160,249
Net loss 1,897,001 1,169,894 13,765,686 11,119,956
Net loss per share 84,386.18yen 52,041.54yen 612,352.62yen 350,136.34yen
Total assets 46,786,758 42,729,183 29,930,475 33,487,342
Net assets 17,540,405 14,497,585 -452,748 4,922,498
Net assets per share 780,267.14yen 644,910.39yen -20,140.05yen 128,323.72yen
(Notes)
(a) Net assets per share are calculated based on the number of outstanding
shares as of the balance sheet dates. Net loss per share is calculated
based on the average number of outstanding shares during the fiscal year
from the 11th fiscal year. There are no changes with net loss per share of
the 9th and the 10th fiscal year.
(b) The significant increase in net losses and the considerable decrease in
total assets and net assets in the 11th fiscal year stemmed mainly from
impairment losses on investments in Crosswave Communications (11,171,154
thousand yen), which is formerly an equity method investee of IIJ.
(c) The detailed descriptions of the business for the 12th fiscal year are as
set forth in "(1) History and Results of Business".
(4) Business combination
(a) Significant affiliates
Name of company Capital Share-holding ratio Primary business
IIJ Technology Inc. 1,700,000,000yen 64.1% Network integration services
IIJ America Inc. USD2,530,000 96.9% Internet access services in the U.S.
(Note) The ratio of voting rights to IIJ America Inc. includes indirectly owned
shares.
(b) Process of business combination
Not applicable
(c) Results of business combination
For this fiscal year, we have four consolidated subsidiaries, consisting of
IIJ Technology Inc., IIJ Media Communications Inc., IIJ America Inc. and
Net Care, Inc. The number of companies accounted for under the equity
method was eight at the end of the previous fiscal year, but declined to
five as at the end of this fiscal year after three applied for
reorganization proceedings under the Corporate Reorganization Law of Japan
or were dissolved. Consolidated total revenues in accordance with generally
accepted accounting in the United States was 38,779,462 thousand yen, a
decrease of 11.9% from FY2002, consolidated net loss was 105,139 thousand
yen, a significant decrease of 99.4% from FY2002.
(d) Other significant results of business combination
Since Nippon Telegraph and Telephone Corporation (NTT) owns 31.6% of our
voting rights(including those owned indirectly), we are an equity-method
investee of NTT.
(5) Capital spending
During this fiscal year, we invested in the implementation of update of
communications equipment, development of customer-based system. In conjunction
with our move to a new headquarters, we invested in new office electrical and
air conditioning systems. The total capital spending during this fiscal year was
1,186,821 thousand yen.
(6) Financing
During the fiscal year, we completed a private placement in June 2003 for an
aggregate amount of 1,365,423 thousand yen (418,200 yen per share) and another
in September 2003 for an aggregate amount of 12,000,650 thousand yen (951,300
yen per share). We used 1,400,000 thousand yen to repay long-term borrowings,
400,000 thousand yen of which was refinanced. We raised 1,000,495 thousand yen
in short-term borrowings, and repaid 200,000 thousand yen.
2. Summary of the Company (as of March 31, 2004)
-------------------------------------------------
(1) Main businesses
To provide Internet access services
To provide Network integrations and data center services
(2) Main offices
Name Address Functions
Head office Chiyoda-ku, Tokyo Head office functions, supervision of Kanto region
Kansai Branch Office Osaka-shi, Osaka-fu Supervision of Kansai region
Nagoya Branch Office Nagoya-shi, Aichi Prefecture Supervision of Tokai region
Sapporo Branch Sapporo-shi, Hokkaido Supervision of Hokkaido region
Hokuriku Branch Toyama-shi, Toyama Prefecture Supervision of Hokuriku region
Chushikoku Branch Hiroshima-shi, Hiroshima Prefecture Supervision of Chugoku and Shikoku region
Kyushu Branch Fukuoka-shi, Fukuoka Prefecture Supervision of Kyushu region
Tohoku Branch Sendai-shi, Miyagi Prefecture Supervision of Tohoku region
Okinawa Branch Naha-shi, Okinawa Prefecture Sales Office of Okinawa region
Toyota Branch Toyota-shi, Aichi Prefecture Sales Office of Toyota region
(3) Shares
1. Number of total shares issued: 75,520 shares
2. Number of total shares outstanding: 38,360 shares
Increase of number of total shares outstanding during this period
Private placement to third parties as of June 27, 2003: 3,265 shares
Private placement to third parties as of September 17, 2003: 12,615 shares
3. Number of shareholders as of the balance sheet date: 103
4. Major shareholders:
Shareholder name Investment in the Company Investment by the Company
in each shareholder
Number of shares Ratio of Number of Ratio of
held voting shares held voting
rights rights
Nippon Telegraph and Telephone Corporation 10,095 shares 26.32%
Depositary Nominee Incorporated 7,263 shares 18.93%
Sumitomo Corporation 2,107 shares 5.49%
Itochu Corporation 2,086 shares 5.44%
NTT Communications Corporation 2,040 shares 5.32%
Koichi Suzuki 1,667 shares 4.35%
JAFCO Co., Ltd. 1,520 shares 3.96%
NIF Ventures Co., Ltd. 1,510 shares 3.94%
The Dai-ichi Mutual Life Insurance Company 1,273 shares 3.32%
Mizuho Corporate Bank, Ltd. 712 shares 1.86%
(4) Stock Acquisition Rights
Stock options which we have issued pursuant to Article 280-19, Paragraph 1 of
the former Commercial Code are described in notes of the balance sheet.
(5) Employees
Category Number of employees Annual change Average age Average years of service
Male 315 +20 32.2 4.3
Female 100 +17 31.2 3.8
Total 415 +37 31.9 4.2
(Notes)
(a) The above figures do not include 15 staff members seconded from other
companies.
(b) The above figures do not include 96 employees seconded by the Company to
other companies.
(6) Main sources of borrowings
Source Outstanding borrowings Number of the company's shares
(Thousands of Yen) and equity stakes held by sources
Number of shares Ratio of
held voting rights
Mizuho Corporate Bank, Ltd. 3,059,093 712 shares 1.9%
UFJ Bank Limited 2,800,000 686 shares 1.8%
Sumitomo Mitsui Banking Corporation 1,860,000 606 shares 1.6%
The Mitsubishi Trust & Banking Corp. 495,000 9 shares 0.0%
(7) Directors and statutory auditors
Position in the company Name Assignment or main occupation
President & Representative Director Koichi Suzuki
Managing Director Toshiya Asaba General Manager of Solution Department
Managing Director Hideshi Hojo General Manager of Sales Department
Director Yasuhiro Nishi General Manager of Administrative Department
Director Kazumasa Utashiro Manager of Enterprise Information System Division
Director Takamichi Miyoshi Manager of Strategy Planning Division
Standing Statutory Auditor Hideki Matsushita
Statutory Auditor * Bumpei Katayama General Manager of Information and
Telecommunication Division of Sumitomo Corporation
Statutory Auditor * Yoshihiko Habe Deputy Chief Operating Officer at Information
Technology & Telecommunication Div. and General
Manager at IT & Telecommunication Business Dept.,
Aerospace, Electronics & Multimedia Company, Itochu
Corporation
* Outside statutory auditors pursuant to Article 18, Paragraph 1 of the Law for
Special Provisions to Commercial Code concerning Audits, Etc. of
kabushiki-Kaisha.
Directors and statutory auditors who assumed offices during the year under
review are as follows:
Date of
Title Name Assumption of Office
-------- -------------- ---------------
Statutory Auditor Yoshihiko Habe June 27, 2003
Directors and statutory auditors who resigned from their offices during the year
under review are as follows:
Date of
Title Name Retirement of Office
-------- -------------- --------------------
Statutory Auditor Hiroo Inoue June 27, 2003
Director Akio Onishi August 20, 2003
(8)The compensation and other fees paid for services performed to directors and
statutory auditors are as follows:
Classification Directors Statutory auditors Total Notes
Number Amount Number Amount Number Amount
Compensation based on the
articles of incorporation or 7 133,729 thousand 1 9,750 thousand yen 8 143,479 thousand
the resolution of the yen yen
general meeting of
shareholders
Notes
(1) The limit on compensation to directors as approved by shareholders at the
ordinary general meeting of shareholders on June 15, 1999 is 300,000
thousand yen a year in total.
(2) The limit on compensation to statutory auditors as approved by shareholders
at the ordinary general meeting of shareholders on June 16, 1995 is 100,000
thousand yen a year in total.
(3) The number of directors as of the end of the fiscal year was six. The
number of statutory auditors as of the end of this fiscal year was three,
two of whom were not paid any compensation in this fiscal year.
3. Significant Event, Which Occurred after the Company's Balance
Sheet Date, regarding the Conditions of the Company (Subsequent Event)
(1) On March 11, 2004, the board of directors of the Company adopted a
resolution to subscribe a part of new shares issued by IIJ Technology Inc.
(IIJ-Tech), our subsidiary, through third party allocation in order to increase
its working capital etc. On April 26, 2004, IIJ-Tech completed the payment as
set forth below:
Class and number of shares to be issued: Common shares 10,000
Price per share: JPY 100,000
Number of common stock to be issued to IIJ : 8,500(500 shares will be
transferred to an employee stock holding after its establishment)
Date for payment: April 26, 2004
IIJ's ratio of voting rights to IIJ-Tech increased to 67.7% from 64.1%
as a result of the transaction.
(2) On April 28, 2004, the board of directors of the Company adopted a
resolution to repurchase and cancel a portion of its convertible notes to reduce
annual coupon payments as set forth below:
Maximum principal amount of convertible notes
to be repurchased and cancelled: JPY 2 billion
Maximum price per notes to be purchased: 100.5
Purchase period of notes: June 30, 2004
Based on the resolution, on April 30, 2004 we purchased our convertible notes
with a face value of 744 million yen for 745.88 million yen (a price of 100.2).
The aforementioned unit figures are rounded to the nearest 1,000 yen.
The Financial Statements presented herein are translation of the originals,
which were prepared in accordance with the accounting principles generally
accepted in Japan, and unconsolidated base which differ from consolidated ones
which IIJ should file with the U.S. Securities and Exchange Commission as Form
20-F.
Internet Initiative Japan Inc.
-----------------------------
Balance Sheet
As of March 31, 2004
-------------------------------------------------------------------------------------------------------------------
Assets Liabilities
-------------------------------------------------------------------------------------------------------------------
Item Amount Item Amount
-------------------------------------------------------------------------------------------------------------------
thousand of Japanese yen thousand of Japanese yen
[Current assets] [ 18,239,294 ] [Current liabilities] [ 23,659,117 ]
Cash 11,014,271 Accounts payable 3,338,530
Accounts receivable 6,508,255 Short-term borrowings 4,814,093
Securities 100,001 Current portion of
long-term debt 1,400,000
Inventories Current portion of
18,227 convertible notes 11,832,000
Work in process 1,893 Accounts payable-other 2,000,467
Supplies 30,598 Income taxes payable 14,854
Prepaid expenses Consumption tax
241,466 payable 73,589
Accounts receivable -
other 270,520 Advance received 20,964
Short-term loans
receivable 71,208 Deposits received 41,502
Other current assets Other current
55,454 liabilities 123,118
Allowance for doubtful
accounts -72,599 [ Long-term liabilities] [ 4,905,727 ]
[Non-current assets] [ 15,172,207 ] Long-term borrowings 2,000,000
[Tangible non-current Long-term accounts
assets] [ 821,450 ] payable 325,476
Leasehold improvements 736,434 Accrued retirement and
pension cost 46,609
Data Communication equipment and Deferred tax
office equipment 691,141 liabilities 2,533,642
Accumulated depreciation -606,125
------------------------------------------------------------
(Intangible non-current
assets) [ 2,148,146 ] Total liabilities 28,564,844
------------------------------------------------------------
Telephone rights 147,576
------------------------------------------------------------
Software 2,000,570 Shareholders' equity
------------------------------------------------------------
(Investments and other
assets) [ 12,202,611 ]
Investments in equity
securities 7,377,830 [Common stock] [ 13,765,372 ]
Affiliates' stock 2,334,626
Investments in
partnerships 571,034 [Legal reserve] [ 18,911,933 ]
Long-term prepaid Additional Paid-in
Expenses 13,071 capital 18,911,933
Guarantee deposits 1,901,498
Other investments 6,945,563 [Accumulated deficit] [ -31,446,330 ]
Allowance for doubtful Undisposed deficit for
accounts -6,941,011 the current period -31,446,330
[deferred asset] [ 75,841 ] [Accumulated other
comprehensive income] [ 3,691,523 ]
Unrealized gain on
available-for-sale
New share issuing expense 75,841 securities 3,691,523
------------------------------------------------------------
Total shareholders'
equity 4,922,498
-------------------------------------------------------------------------------------------------------------------
Total assets Total liabilities and
33,487,342 shareholders' equity 33,487,342
-------------------------------------------------------------------------------------------------------------------
Internet Initiative Japan Inc.
-------------------------------
Income Statement
From April 1, 2003 to March 31, 2004
---------------------------------------------------------------------------------------------------
Item Amount
---------------------------------------------------------------------------------------------------
thousand of
Japanese yen
[Ordinary Items]
[Operationg income and loss]
[Total revenues] 31,198,882
[Total costs] 28,266,615
------------------
Total cost of revenues 2,932,267
[Total costs and expenses] 3,800,578
------------------
Operating income(loss) -868,311
(Non-operating income and expenses)
[Non-operating income]
Interest and dividends
income 124,811
Commissions received 142,177
Other non-operating income 55,524 322,512
---------------------------------
[Non-operating expenses]
Interest expense 148,891
Interest expense on
convertible notes 238,643
Exchange loss 4,660
Stock issue expense 37,920
Provision for allowance
for doubtful accounts 53,876
Bad debt loss 74,366
Other non-operating
expenses 56,094 614,450
---------------------------------
Ordinary loss -1,160,249
(Extraordinary items)
[Extraordinary income]
Gain on sales of
investments in securities 1,653,829
Gain on purchase and
cancellation of
convertible notes 120,540 1,774,369
---------------------------------
[Extraordinary loss]
Cost of relocation of the
head office 91,436
Loss on disposal of
property and equipment 95,406
Impairment loss on
investment in equity
securities 215,112
Loss on sales of
investments in securities 2,289
Loss on valuation of golf
club memberships 19,967
Impairment loss on
affiliates' stock 11,294,978 11,719,188
---------------------------------
Income(loss) before income
taxes(benefit) -11,105,068
Income taxes expense(benefit) 14,888
------------------
Net loss -11,119,956
Deficit brought forward -20,326,374
------------------
Undisposed deficit for the
current period -31,446,330
---------------------------------------------------------------------------------------------------
1. Significant accounting policies
----------------------------------
(1) Valuation standards and methods for securities
Shares of subsidiaries and affiliates: stated at cost based on the moving
average method.
Other securities: Securities whose market prices are quoted: market value method
based on the market price, etc. as of the end of the fiscal term (all of the
variances resulting from the valuation are directly incorporated into capital,
while the cost of the securities at the time of their sale is calculated using
the moving average method.)
Securities whose market prices are not quoted: stated at cost based on the
moving average method.
(2) Valuation standards and methods for derivatives and others: market value
method, in principle.
(3) Valuation standards and methods for inventories
Merchandise and supplies: stated at cost based on the moving average method.
Work-in-process: specific-order cost method.
(4) Depreciation methods used for non-current assets
Tangible non-current assets: declining balance method.
The depreciable asset whose acquisition value is 100,000 yen or more but less
than 200,000yen is depreciated in equal installments over three years.
The numbers of useful years of main depreciable assets are as specified below:
Leasehold improvements: 8-15 years
Data communication equipment and office equipment: 3-15 years
Intangible non-current assets: straight line method.
The software used by the Company is depreciated over the number of useful years
for internal use, i.e., five years.
(5) Lease transactions
Financing lease transactions, other than those in which ownership of the leased
assets is deemed to transfer to the lessee, are recorded based on the same
accounting method as is used for normal rental transactions.
(6) Deferred assets
Issue cost for new shares: amortized in equal installments over three years.
(7) Basis for recording of allowances
Allowance for doubtful accounts: To prepare for possible losses resulting from
non-payments of account receivables for trade and loans and others, an allowance
is provided based on the percentage of actual credit losses incurred in the case
of general receivables. In the case of credits for which the relevant debtors
are likely to default and other certain credits. Such allowance is based on the
anticipated uncorrectable amount after assessment of likelihood of non-payment
of individual credit.
Allowance for employees' retirement benefits: To prepare for payments of
retirement benefits to employees, an allowance is provided based on the
projected retirement benefits obligations and pension assets as of the end of
the current fiscal term.
The difference arising from actuarial computations is amortized and disposed as
expenses in the subsequent fiscal terms using the straight-line method over a
certain number of years not exceeding the average number of remaining service
years of the employees at the time of accrual of such payment (14 years).
(8) Accounting for important hedging transactions
The Company uses interest swaps in order to hedge the risk of fluctuation of the
interest rate on loans payable, pursuant to the internal rules prescribing the
authorities and maximum transaction volumes, etc. concerning derivative
transactions.
Since the accounting for interest swaps is processed according to special tax
treatment, the evaluation of the validity is omitted.
(9) Consumption tax, etc.
Consumption tax is separately recorded.
2. Notes to balance sheet and income statement
----------------------------------------------
(1) Monetary claims and liabilities to subsidiaries
Short-term monetary claims: 395,898 thousand yen
Short-term monetary liabilities: 1,886,184 thousand yen
(2) Loans pledged as collateral
Loan to i-Heart, Inc. amount to 51,246 thousand yen, are collateralized by
securities, with a market value of 19,868 thousand yen as of the end of the
fiscal year.
(3) In addition to the non-current assets recorded on the balance sheet,
electronic office equipment, modems, routers, terminal adapters and others.
are used under lease contracts.
(4) Asset provided as security
Deposit in an amount of 1,705,036 thousand yen
(5) Liabilities for guarantee Outstanding liabilities for guarantees: 28,944
thousand yen (274 thousand in U.S. dollars)
(6) Stock Options under Article 280-19, Paragraph 1 of the Commercial Code
Date of resolution of the general meeting of April 7, 2000 June 27, 2001
shareholders
Class of shares to be issued Common stock Common stock
Stock Options outstanding 2,650,186 thousand yen 618,728 thousand yen
Issue price 10,817,086 yen 1,672,239 yen
(7) The increase in net assets, based on market value calculated in accordance
with Paragraph 3 of Article 124 of the Enforcement Regulation of the
Commercial Code: 3,691,523 thousand yen.
(8) Amount of deficit in capital: 446,330 thousand yen
(9) Net loss per share: 350,136.34 yen
(10) Transactions with affiliates
Revenues: 887,426 thousand yen
Purchases: 8,113,034 thousand yen
Turnover from non-operating transactions: 66,464 thousand yen
(11) Impairment losses on investment securities include 55,000 thousand yen in
allowances for doubtful accounts for convertible notes we own.
(12) Breakdown of impairment loss on affiliates' stock
Breakdown of impairment loss on affiliates' stock is as follows:
Impairment losses on investment in equity securities
Crosswave Communications Inc. 4,131,446 thousand yen
Asia Internet Holding Co. Ltd. 273,010 thousand yen
i-Heart, Inc. 65,578 thousand yen
Net Chart Japan Inc. 48,713 thousand yen
Impairment losses on share acquisition rights
Crosswave Communications Inc. 56,250 thousand yen
Allowances for doubtful loans
Crosswave Communications Inc. 6,719,981 thousand yen
-----------------------
Total 11,294,978 thousand yen
=======================
As a result of Crosswave's filing of a voluntary petition for the commencement
of corporate reorganization proceedings in August 2003, we recognized losses for
the full value of our investment in Crosswave shares, share acquisition rights,
and deposits and advances for Crosswave. Impairment losses were recognized on
investments in other subsidiaries because of significant declines in the
substantive values of those shares.
(13) Retirement and Pension cost
1. Outline of the current retirement benefit system
The Company employs, as a defined retirement benefit system, a lump-sum
retirement allowance system and a tax-qualified retirement pension plan funded
by accumulated internal reserve pursuant to the Regulations for Retirement
Benefits. The rate of the retirement benefits funded under the tax-qualified
retirement pension plan has reached 70 percent. The Company is a member of
Zenkoku Joho Service Sangyo Kosei Nenkin Kikin (JJK: the Japan Information Se
rvice Industry Welfare Pension Fund), which pension system adopts such irregular
treatment method as provided for in Paragraph 33 of the Guidelines for
Retirement Benefit Accounting Practices. The balance of the Company's pension
assets as of the end of the current term calculated on the basis of its premium
payments in proportion to the balance of the aggregate pension assets of the
aforementioned Pension Fund stands at 998,172 thousand yen, while the premiums
paid by the Company for the current term is 55,234 thousand yen.
2. Matters concerning retirement benefit obligations (as of March 31, 2004)
(thousand yen)
Retirement benefit obligations: -816,110
Plan assets: 656,443
-------
Unfunded retirement benefit obligations: -159,667
Expensed portion of the difference resulting
from actuarial computations: 113,059
-------
Retirement benefit allowance: -46,608
=======
(Note: The above figures do not include welfare pension fund.)
3. Matters concerning retirement benefits expenses (from April 1, 2003 to
March 31, 2004)
(thousand yen)
Service cost: 119,374
Interest expense: 7,971
Projected income from investment: -11,722
Disposal of cost of difference accrued from
changes in accounting standards: -3,099
------
Retirement benefit expenses: 112,524
=======
Note: The above figures do not include the amount of the premiums paid to
the welfare pension fund.
4. Matters concerning the bases for computations of the retirement benefit
liabilities, etc.
Allocation method of projected retirement benefit per period:
Fixed amount per period Discount rate: 1.6%
Rate of projected income from investment: 2.0%
Number of years used for amortization of
difference resulting from actuarial
computations: 14 years
(Differences are amortized and disposed as expenses in the subsequent
fiscal terms using the straight line method, for which a certain number of years
not exceeding the employees' average remaining service years at the time of the
accrual is used.)
(14) Tax-effect accounting, etc.
1. Breakdown by major causes of deferred tax assets and deferred tax liabilities
Deferred tax assets
Loss carried-forward for tax purposes: 10,416,628 thousand yen
Allowance for doubtful accounts: 1,448,121 thousand yen
Loss on investments in or loans to affiliates: 523,279 thousand yen
Special contribution to pension fund: 18,970 thousand yen
Others: 87,678 thousand yen
---------------------
Subtotal of deferred tax assets: 12,494,676 thousand yen
Valuation allowance: -12,494,676 thousand yen
========================
Total of deferred tax assets: --
Deferred tax liabilities
Difference from valuation of other securities: 2,533,642 thousand yen
-----------------------
Total of deferred tax liabilities: 2,533,642 thousand yen
-----------------------
Net amount of deferred tax liabilities: 2,533,642 thousand yen
=======================
2. Rough account of difference between statutory effective tax rate and
burden ratio of income tax, etc. after adoption of tax effective accounting
Statutory effective tax rate: 42.0%
(Adjustments):
Entertainment expense: -0.2
Additions to valuation reserves: -36.9
Expiration of Loss carried-forward for tax purposes: -4.9
Others: -0.1
----
Burden ratio of income tax, etc. after adoption of
tax effective accounting: -0.1%
====
* The aforementioned figures are rounded to the nearest 1,000 in the respective
units.
Internet Initiative Japan Inc.
The Proposal for Appropriation of Disposition of Losses
(Unit: Yen)
-------------------------------------------------------- ------------------
Description Amount
-------------------------------------------------------- ------------------
Undisposed deficit for the current period 31,446,330,392
-------------------------------------------------------- ------------------
The amount above will be appropriated as below.
-------------------------------------------------------- ------------------
Deficit carried forward to the next period 31,446,330,392
-------------------------------------------------------- ------------------
(TRANSLATION)
INDEPENDENT AUDITORS' REPORT
May 26, 2004
To the Board of Directors of Internet Initiative Japan Ltd.:
Tohmatsu & Co.
Representative Partner,
Engagement Partner,
Certified Public Accountant:
Hitoshi Matsufuji
Representative Partner,
Engagement Partner,
Certified Public Accountant:
Shuko Shimoe
Pursuant to the first clause of Article 2 of the "Law Concerning
Special Measures under the Commercial Code with respect to Audit, etc. of
Corporations (Kabushiki-Kaisha)" of Japan, we have audited the balance sheet,
the statement of operations, the business report (with respect to accounting
matters only), the proposed disposition of accumulated deficits and the
supplementary schedules (with respect to accounting matters only) of Internet
Initiative Japan Ltd. for the 11th fiscal year from April 1, 2002 to March 31,
2003. The accounting matters included in the business report and supplementary
schedules referred to above are based on the Company's books of account. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with auditing standards generally accepted
in Japan. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion. Our audit
includes auditing procedures applied to subsidiaries as considered necessary.
As a result of our audit, in our opinion,
(1) The balance sheet and the statement of operations present fairly the
financial position and the results of operations of the Company in conformity
with the applicable laws and regulations of Japan and the Articles of
Incorporation,
(2) The business report (with respect to accounting matters only) presents
fairly the Company's affairs in conformity with the applicable laws and
regulations of Japan and the Articles of Incorporation,
(3) The proposed disposition of accumulated deficits are in conformity with the
applicable laws and regulations of Japan and the Articles of Incorporation, and
(4) The supplementary schedules (with respect to accounting matters only)
present fairly the information required to be set forth therein under the
Commercial Code of Japan.
The subsequent events regarding subscription of new shares issued by the
Company's subsidiary and repurchase of its convertible notes are described in
the business report.
Our firm and the engagement partners do not have any financial interest in the
Company for which disclosure is required under the provisions of the Certified
Public Accountants Law.
The above represents a translation, for convenience only, of the original report
issued in the Japanese language.
AUDIT REPORT BY THE BOARD OF STATUTORY AUDITORS
===============================================
(Certified Copy)
AUDIT REPORT
------------
The Board of Statutory Auditors of the Company received reports from each of the
Statutory Auditors regarding the methods and results of the audit of the
performance by the Directors of their duties during the Company's 12th fiscal
year, which began on April 1, 2003 and ended on March 31, 2004. Based on our
review of and discussions regarding such reports, we hereby report the
following:
1. Summary of Auditing Methods Used by Statutory Auditors
In addition to attending meetings of the Board of Directors and other
important meetings pursuant to the audit policies and division of duties set
forth by the Board of Statutory Auditors, each of the Statutory Auditors made
inquiries to the Directors, etc., with regard to the results of business,
reviewed important documents, etc., stating decisions and approvals,
investigated the state of the operations and assets and liabilities at the head
office and main branch offices of the Company, and, as necessary, asked the
Company's subsidiaries to provide reports on the state of their businesses.
Also, we received reports and explanations from the accounting auditors and
examined financial statements and schedules thereto.
As for transactions made by the Directors which were in
competition with the business of the Company, transactions between the
Directors and the Company which were in conflict with the interests of
the Company, benefits given without consideration by the Company,
unusual transactions with subsidiaries or shareholders, and the
Company's acquisition and disposition of its treasury stocks, we not
only applied the above mentioned auditing methods, but also obtained
relevant reports from the Directors, etc., and conducted detailed
examinations of such transactions.
2. Results of Audit
(1) We acknowledge that the methods and results of the audit as reported by the
accounting auditors, Tohmatsu & Co., are appropriate.
(2) We acknowledge that the business report present fairly the state of the
Company in accordance with the relevant laws, regulations and the Company's
articles of incorporation.
(3) We did not find anything that should be specified with respect to the
proposal on the disposition of losses in light of the conditions of the
assets and liabilities and other circumstances of the Company.
(4) We acknowledge that the schedules to the financial statements correctly
state matters that should be stated therein, and did not discover anything
that should be specified in connection therewith.
(5) As for the performance by the Directors of their duties, including their
duties with respect to subsidiaries, we did not discover any significant
facts indicating any unlawful conduct or breach of the relevant laws,
regulations or the Company's articles of incorporation.
In addition, we did not discover any breach of duties by the
Directors in light of the transactions made by any of the Directors
which were in competition with the business of the Company,
transactions between any of the Directors and the Company that were in
conflict with the interests of the Company, benefits given without
consideration by the Company, unusual transactions with subsidiaries or
shareholders, or the Company's acquisition and disposition of treasury
stocks.
May 31, 2004
Board of Statutory Auditors
Internet Initiative Japan Inc.
Standing Statutory Auditor: Hideki Matsushita (Seal)
Statutory Auditor: Bumpei Katayama (Seal)
Statutory Auditor: Yoshihiko Habe (Seal)
Note: Two of the Statutory Auditors, Bumpei Katayama and Yoshihiko Habe,
are outside auditors as set forth in Article 18, Paragraph 1 of the Law for
Special Provisions for the Commercial Code concerning Audit, etc., of
Kabushiki-Kaisha.
Reference Documents with Respect to Solicitation to Exercise Voting Rights by
Proxy
-----------------------------------------------------------------------------
1. Solicitor who solicits shareholders to exercise their voting rights
by proxy:
Internet Initiative Japan Inc.
Koichi Suzuki, Representative Director
2. Total number of outstanding shares having voting rights: 38,360
shares
3. Agenda of the meeting and reference matters:
Item 1: Approval of disposal of losses for the 12th fiscal year
The method of disposal of losses for the 12th fiscal year is as stated in the
aforementioned document attached hereto.
Item 2: Amendments to the Articles of Incorporation
You are requested to approve amendments to the present Articles of Incorporation
as follows.
1. Reason for the amendments:
(1) The maximum number of directors shall be increased in order to strengthen
management.
(2) Pursuant to "Amendments to the Commercial Code and the Law for Special
Provisions for the Commercial Code Concerning Audits, Etc. of Kabushiki-kaisha"
(Law No. 149 of 2001) which came into force on May 1, 2002 in Japan, a new
provision in respect of exemption of liability for a director shall be added
under which liability for a director. Against the company shall be limited to a
certain extent, so as to enable a director to sufficiently fulfill his/her role
as expected (Article 20.2 of the proposal of Amendment). Accordingly, unanimous
approval of the Board of Statutory Auditors of the Company has been obtained in
respect of establishment of the below provision.
(3) In preparation for the case where the Company has a vacancy in the number
of its statutory auditors provided by laws or regulations, new provisions
in respect of election of a substitute statutory auditor (Article 27 of the
Proposal of Amendment) shall be added under which the Company may elect
such substitute statutory auditor in advance.
(4) With the addition of Article 27 of the Proposal of Amendment, numbering for
subsequent articles shall be increased by one.
2. Contents of amendments:
Contents of amendments are as follows:
(The amendments are indicated by underlines.)
Present Articles Proposal of Amendment
Article 14. (Number of Directors) Article 14. (Number of Directors)
The number of directors of the Company The number of directors of the Company
shall be between three (3) and seven shall be between three (3) and ten (10).
(7).
------------------------------------------------------------------------------------
(New provision) Article 20.2 (Exemption of Liability for
Directors)
1. The Company may, pursuant to the
provision of Article 266 paragraph 12 of
the Commercial Code of Japan, with a
resolution of the Board of Directors,
exempt a director (either incumbent or
past) from liabilities in respect of the
acts mentioned in Article 266 paragraph 1
item 5 of the Commercial Code of Japan
only to the extent permitted by laws or
regulations.
2. The Company may, pursuant to Article
266 paragraph 19 of the Commercial Code of
Japan, enter into an agreement with an
outside director under which liability of
such director against the Company for the
damages resulting from acts mentioned in
Article 266 paragraph 1 item (5) shall be
limited; provided, however, that the
limited amount of such damages pursuant to
the agreement shall be the larger of the
amount not less than 10 million yen which
has been determined in advance or the
amount provided by laws or regulations.
------------------------------------------------------------------------------------
(New provision) Article 27 (Substitute Statutory Auditor)
1. The Company may, in preparation for the
case where the Company has a vacancy in
the number of its statutory auditors
provided by laws or regulations, elect a
substitute statutory auditor at a general
meeting of shareholders in advance.
2. A resolution for election of a
substitute statutory auditor shall be made
by a majority of voting rights of the
shareholders present at the meeting where
the shareholders representing one third
(1/3) or more of the total number of the
voting rights of all shareholders are
present.
3. A resolution for election of a
substitute statutory auditor shall remain
effective until the holding of the
immediate subsequent ordinary general
meeting of shareholders.
4. In case a substitute statutory auditor
assumes the office of a statutory auditor,
the term of office of such statutory
auditor shall expire at such time as the
term of office of his/her predecessor
would otherwise expire.
------------------------------------------------------------------------------------
From Article 27 to Article 31 From Article 28 to Article 32
(Provisions omitted) (No amendment)
------------------------------------------------------------------------------------
Item 3: Election of five directors
Shareholders are asked to approval the election of Mr. Takamichi
Miyoshi, an incumbent director, who finishes his term of office at the close of
this general meeting of shareholders. In addition , shareholders are asked to
approve the election of four directors to strengthen our management.
The candidates for directors are as follows:
Name Resume & representation of other companies Number of
Date of birth shares
owned
Fukuzou Inoue Apr. 1980 Joined Nippon Telegraph and Telephone Public 0
July 6, 1955 Corporation
Jul. 1999 Executive Manager, Corporate Users Business Division
of NTT Communication Corporation
Jul. 2002 Executive Manager, Public Relations Office
(currently holding the position)
Takamichi Miyoshi Apr. 1993 Joined the Company 77
May 5, 1963 Jun. 2002 Director
Apr. 2004 General Manager, Strategy Planning Division
(currently holding the position)
Akihisa Watai Apr. 1988 Joined The Sumitomo Bank, Limited(Currently Sumitomo Mitsui 0
September 30, 1965 Banking Corporation)
Aug. 1996 Temporarily transferred to the Company
Feb. 2000 Joined the Company
Apr. 2004 General Manager, Finance Division
(currently holding the position)
Yasurou Tanahashi Apr. 1963 Joined Fuji Iron & Steel Co., Ltd. 0
January 4, 1941 Apr. 2000 Representative Director & President of Nippon
Steel Information & Communication Systems Inc.
Apr. 2001 Representative Director & President of NS Solutions
Corporation
Apr. 2003 Chairman of NS Solutions Corporation
(currently holding the position)
Takashi Hiroi Apr. 1986 Joined Nippon Telegraph and Telephone Corporation 0
February 13, 1963 Apr. 2002 Senior Manager, Department 4
Jul. 2002 Senior Manager, Department 1
(currently holding the position)
There is no special interest between the candidates above and the
Company.
Mr. Yasurou Tanahashi and Mr. Takashi Hiroi are candidates who satisfy
the conditions of the outside director provided for in Article 188, Paragraph 2,
Item 7-2 of Commercial Code.
Item 4: Election of three statutory auditors
Shareholders are asked to approve the election of three statutory auditors since
all three incumbent statutory auditors finish their term of office at the close
of this general meeting of shareholders. This agendum has been approved by the
Board of Statutory Auditors for presentation at this general meeting of
shareholders.
The candidates for the statutory auditor are as follows:
Name Resume & representation of other companies Number of
Date of birth shares owned
Hideki Matsushita Apr. 1967 Joined The Dai-ichi Mutual Life Insurance Company 0
September 20, 1942 Jun. 1998 Statutory auditor of the Company
(Currently holding the position)
Masaki Okada Apr. 1988 Admitted, Daini Tokyo Bar Association and 0
January 9, 1959 joined Ishii Law Office
Apr. 1997 Partner (Currently holding the position)
Masaaki Koizumi Oct. 1987 Joined Eiwa & Co. (Currently Azsa & Co.) 0
October 4, 1965 Sep. 2003 Retired Azsa & Co.
Oct. 2003 Established Koizumi CPA Office
(Currently holding the position)
There is no special interest between the above candidates above and the Company.
Mr. Masaki Okada and Mr. Masaaki Koizumi are candidates for the outside
statutory auditors as provided for in Article 18, Paragraph 1 of "The Law for
Special Provisions for the Commercial Code concerning Audits, Etc. of
Kabushiki-Kaisha."
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: June 9, 2004 By: /s/ Koichi Suzuki
-------------------------------------
Koichi Suzuki
President, Chief Executive Officer and
Representative Director