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HOME >> Investor Relations >> Top Message >> Message Archive (August 30, 201)

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To all of our investors - August 30, 2010 -

Yosuke Ozawa, President and CEO

In this Top Message, I would like to take this opportunity to give some explanation on the capital increase by third party allocation announced on August 30, 2010.

[Outline of the Press Release]
- FUJIFILM Corporation (hereafter referred to as FUJIFILM) underwrites the capital increase of 4 billion yen through third party allocation of new shares issued by J-TEC.
- The largest shareholder in J-TEC changes from NIDEK Co., Ltd. to FUJIFILM.

Main purpose and Reason

I am pleased to announce that FUJIFILM has become the underwriter of the new shares issued by J-TEC through third party allocation for capital increase. I would like to explain below the purpose of this capital increase and the reason why we chose FUJIFILM to be the allottee.

As Japan's general economic outlook continues being clouded with global financial unrest, J-TEC has explored possibilities since last year to tie up with other domestic companies in equity capital to reinforce the company's financial base and further stabilize its management foundations. J-TEC had different options, such as public stock offerings and issuance of bonds with subscription right to shares, as a way to enhance capital adequacy. However, considering the synergy effects and the protection of existing shareholder interests, we have come to a decision to tie up with FUJIFILM.
In recent years, FUJIFILM and FUJIFILM group have focused on the medical and life science field as a growth area, proactively pumping their managerial resources into the life science business. And in 2008, FUJIFILM has acquired ownership of Toyama Chemical Co., Ltd.; the second largest shareholder in J-TEC, next to NIDEK. FUJIFILM group is the business enterprise who leads the domestic and global market of diagnostic imaging and information systems for healthcare facilities as well as advanced materials. Actively making investments in facilities and R&D also in the field of regenerative medicine, FUJIFILM has worked together with J-TEC in several areas as well.
J-TEC has accumulated a vast store of crucial know-how through R&D, manufacturing and sales of the autologous cultured epidermis JACE (indication: severe burn treatment); the first and the only medical device utilizing human cell and tissue to be approved by the Ministry of Health, Labor and Welfare in Japan. Additionally, the application for manufacturing and sales of autologous cultured cartilage has been submitted and is currently under regulatory review (applied indication: full-thickness knee cartilage defect).
J-TEC believes this capital affiliation with FUJIFILM can further stabilize the company's operating foundations, and working closely together brings about powerful synergies toward the industrialization of regenerative medicine in Japan.

Requirement

There is a requirement for this third party allocation. Since it is a large scale capital increase causing stock dilution, there is expected to be a huge influence on existing shareholders. In addition, when this capital increase is completed, the largest shareholder in J-TEC changes from NIDEK to FUJIFILM, holding up to 41.30% of shares. Thus, J-TEC has decided to convene the extraordinary shareholders' meeting on October 28, 2010, to give a full account and share the necessity and the reasonableness of this third party allocation, making shareholders' approval a requirement for this matter.

For the details of this third party allocation, please refer to the press release. As I will give a clear and detailed explanation on how and why along with the future perspective at the extraordinary shareholders' meeting, I hope to see you in Gamagori.

August 30, 2010
Yosuke Ozawa
President & CEO
Japan Tissue Engineering Co., Ltd.

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