The Business Realignment of Faith Group Aiming For Streamlining of the Management and the Enhancement of the Group Synergies to the Optimal Level

Company name: Faith, Inc.
Representative: Hajime Hirasawa, CEO/President
(Stock code 4295, Listed on TSE 1st section)
Press Contact: Kotaro Kasai, Corporate Communication
TEL: +81-(0)3-5776-6255 (Representative)

The Business Realignment of Faith Group Aiming For Streamlining of the Management and the Enhancement of the Group Synergies to the Optimal Level

Tokyo - January 27, 2009--Faith, Inc. (hereinafter referred to as “Faith”; TSE stock code: 4295) has announced that the Board of Directors today passed a resolution to conduct realignment of the Group businesses as follows.

■	Absorption-type merger of a subsidiary specializing in the development of content distribution technologies
■	Merger of two subsidiaries, a video content distribution company and a film/video production company
■	Integration of the business from a subsidiary in the US into Faith, and the dissolution of the company
■	Business transfer (business integration) from a subsidiary specializing in the medical and health information content services

<Executive Summary> Realignment of Faith Group Faith Group conducts the realignment with the aim of enhancement of the digital content business and substantial increase in earnings from the next fiscal year onward. The group focuses on strengthening the foundation of the business growth by promoting further streamlining of the management, and on utilizing the optimal group synergies.

1. Absorption-Type Merger of Faith.biz, Inc.
	Faith will absorb Faith.biz, Inc. (hereinafter referred to as “Faith.biz”), a wholly owned subsidiary of Faith, to integrate and enhance the production and sales structure in the content distribution technology field.
2. Merger of GIGA NETWORKS, INC. and Desperado, Inc.
	Merger of two of the Faith's wholly owned subsidiaries, GIGA NETWORKS, INC. (hereinafter referred to as “GIGA NETWORKS”) and Desperado, Inc. (hereinafter referred to as “Desperado”). By integrating GIGA NETWORKS’ content distribution channels and Desperado’s content, enhancement of group synergies and streamline of management are expected.
3. Dissolution and Liquidation of Faith West, Inc., a US subsidiary
	By consolidating the function of Faith West, Inc. (hereinafter referred to as “Faith West”), an outpost for the business operation in North America, into Faith, and dissolution of Faith West, the Group is to streamline the operation.
4. Business transfer from Medical Communication, Inc. to Faith
	The entire businesses of Medical Communication, Inc. (hereinafter referred to as “Medical Communication”), a wholly owned subsidiary, to be transferred to Faith with the aim of strengthening the business promotion in the medical and health content related fields.

[Realignment of Faith Group]
■Details
1. Absorption-Type Merger of Faith.biz
Faith established Faith.biz in May 2007 aiming for improving the Group’s technological innovation and productivity by temporarily converging the Group's resources mainly related to the system software developments and operational technologies. Since the original purposes have been achieved, Faith decided to absorb Faith.biz into Faith as of April 1, 2009. The aims of this merger are to strengthen the Group's business structure and the further growth accelerated by creation of new services, by utilizing the mutual resources, and taking speedy actions both on management and business operation levels, alongside the cost reduction by unifying the back offices, especially under the rapidly changing market environment. This merger will ensure that the Group is to establish a new service structure and make various management decisions more flexibly in order to respond rapidly to the ever diversifying content needs and the increasingly complex network environment.

2. Merger of GIGA NETWORKS and Desperado
GIGA NETWORKS' services ranges from the ringtone and mobile music distribution to the planning, development and distribution of various multi-media services including video, CD/DVD, decorative emoticon, provision of the entertainment information, and the production of the offshoot digital content of TV programs. Desperado produces films and a wide range of videos, and also operates film distribution business as well as other digital distributions. The merger of the two companies brings integration of the GIGA NETWORKS' distribution channels which are crucial to the digital content distribution business and the Desperado's experience and expertise in film and video production.
In accordance with the merger, Shinichi Yoshida, Faith's Senior Executive Officer, will take up the role as President and CEO of the merging company, which is GIGA NETWORKS. Also, it is to be renamed to "Faith Wonderworks, Inc." to clarify its role in the Group as the core company of the planning, production, and distribution of video content.
Under the new business structure, the entire functions essential to the video content distribution business from the production of high-quality videos to the distribution to PC and mobile phone are to be unified. It will enable the Group to promptly construct internal one-stop system to provide contents to the appropriate user categories, and the Group promotes further streamline and optimizes the content distribution business.

3. Dissolution and Liquidation of Faith West, Inc., a US subsidiary
As a pioneer of ringtone business in the world, Faith has been expanding its business into the global markets, and established Faith West in 2002, as a sales outpost to provide ringtone and other digital content and to license Faith's music modulation technologies mainly to the electric device manufacturers in North America.
Faith decided to dissolve and liquidate Faith West aiming for streamlining the management, by integration of the sales and marketing functions in Japan and overseas and unified promotion for the global marketing and sales activities. Accordingly, Faith West is scheduled to be dissolved at the end of February, 2009.

4. Business transfer from Medical Communication to Faith
Faith established Medical Communication in November 2005 to develop and distribute content related to medical and health field.
Considering the future potential of health related services including "Pocket Carte," an individual medical check and health information solution in electronic form, Faith decided to take over the entire businesses from Medical Communication. By utilizing the Company's expertise in content distribution and the sales networks, Faith will expand the businesses and become more competitive in this field under the further efficient and effective business framework.
Accordingly, Medical Communication is scheduled to be dissolved after the completion of the business transfer.

Faith Group, as a pioneer of the mobile content distribution service, has been working on the wide range of development and provision in the field of content business since the development and provision of ringtone to the world. Considering the current situation of developing advanced functions added on content viewing devices such as PC and mobile phone, and also the diversification of the network environment and the user needs, Faith Group decided the realignment. The Group intends to integrate and realign various functions such as content business, distribution technologies and operational framework, which are managed separately in each Group company to improve its business structure. The new structure should be able to respond to the changes of the market environment rapidly and flexibly. This realignment will ensure that the Group is to fortify the foundation of the business growth by promoting further streamlining and to strengthen the content business by enhancing the Group synergy to the optimal level, which is to realize the substantial increase in earnings from the next fiscal year onward.

[Details]
1. Absorption-Type Merger of Faith.biz

(1) Outline of merger

1) Schedule
Board of directors' meeting to approve merger	January 27, 2009
Signing of merger agreement	January 27, 2009
Effective date of merger	April 1, 2009
(Note: The merger will be conducted through the simplified procedures provided under the Company Law of Japan, by which resolutions of the shareholders' meeting of Faith and Faith.biz will not be made.) 2) Method of merger Faith, as the continuing company, will absorb Faith.biz, which will be subsequently dissolved. 3) Others There are no arrangements with regard to merger ratio, issuance of new shares, or cash-out merger as the absorbed company is wholly owned subsidiary of Faith.

(2) Outline of companies to be merged

Company Name	Faith, Inc. （Continuing company）	Faith.biz, Inc. （Company to be absorbed）
Business Lines	■Development and support of the content distribution services ■Development and provision of licenses of the technologies such as content formatting, music modulation, audio data processing	■Construction of content　distribution platforms
Establishment	October 9, 1992	May 1, 2007
Address of the head office	Imon-Meiji-Yasudaseimei bldg 566-1Karasumaoike-Sagaru Toraya-cho, Nakagyo-ku, Kyoto	Toranomon Towers Office 23F4-1-28 Toranomon, Minato-ku Tokyo
Representative	Hajime Hirasawa	Masaru Koshimizu
Capital	3,218 million yen	80 million yen
Shares issued	1,196,000 shares	1,000 shares
Financial closing date	March 31	March 31
Number ofemployees	81 persons	41 persons

(3) Situation after the merger

Company Name	Faith, Inc.
Business lines	■Development and support of the content distribution services ■Development and provision of licenses of the technologies such as content formatting, music modulation, audio data processing ■Construction of content distribution platforms
Establishment	October 9, 1992
Address of the head office	Imon-Meiji-Yasudaseimei bldg 566-1 Karasumaoike-Sagaru Toraya-cho, Nakagyo-ku, Kyoto
Representative	Hajime Hirasawa
Capital	3,218 million yen
Shares issued	1,196,000 shares
Financial closing date	March 31
Number of employees	104 persons

(4) Effect of the merger on the financial forecast
The merger will not result in changes to the financial forecast of consolidated or non-consolidated financial results closing March 2009 as the absorbed company is a wholly owned subsidiary of Faith.

2. Merger of GIGA NETWORKS and Desperado, and Change in Company Name
I． Merger of GIGA NETWORKS and Desperado

(1) Outline of merger

1) Schedule
Board of directors' meeting to approve merger	January 27, 2009
Signing of merger agreement	January 27, 2009
Extraordinary shareholders’ meeting to approve merger agreement	February 5, 2009
Effective date of merger	April 1, 2009
2) Method of merger GIGA NETWORKS, as the continuing company, will absorb Desperado, which will be subsequently dissolved. 3) Other There are no arrangements with regard to merger ratio, issuance of new shares, or cash-out merger as both companies are wholly owned subsidiaries of Faith.

(2) Outline of companies to be merged

Company name	GIGA NETWORKS, INC. （Continuing company）	Desperado, Inc. （Company to be absorbed）
Business lines	■Production of contents including sound source, music and video, and those distribution through internet	■Planning, production, investment, distribution and promotion of film and video contents
Establishment	January 18, 2000	May 1, 2007
Address of head office	Ebisu Square 1-23-23 Ebisu, Shibuya-ku, Tokyo	Ebisu Square 1-23-23 Ebisu, Shibuya-ku, Tokyo
Representative	Keizo Odori	Yuji Ishida
Capital	1,700 million yen	50 million yen
Financial closing date	March 31	March 31
Faith’s controlling share	100％	100％

(3) Situation after the merger

Company name	Faith Wonderworks, Inc.
Business lines	■Production of contents including sound source, music, film and video, and those distribution through internet ■Planning, production, investment and promotion of film
Establishment	January 18, 2000
Address of head office	Ebisu Square 1-23-23 Ebisu, Shibuya-ku, Tokyo
Representative	Shinichi Yoshida
Capital	1,700 million yen
Financial closing date	March 31
Faith’s controlling share	100％

(4) Effect of the merger on the financial forecast
The merger will not result in changes to the financial forecast of consolidated or non-consolidated financial results closing March 2009 as both companies are wholly owned subsidiaries of Faith.

(5) Profile of incoming CEO/President
Profile of Shinichi Yoshida

March 1991
April 1991
January 2001
May 2004
May 2005
June 2007
January 2009

Graduated from Keio University
Joined ITOCHU Corporation （Stock code 8001, 1st section of TSE）
Joined Broccoli （Stock code 2706, JASDAQ） as the Director
Appointed to the Executive Managing Director of Broccoli
Appointed to the CEO/President of Broccoli
Joined Vandai Investments Limited as the Director
Joined Faith, Inc. as the Senior Executive Officer

II．Change in Subsidiary’s Name after merger
(1) New Company Name
Faith Wonderworks, Inc.

(2) Effective Date of Renaming
April 1, 2009

(3) Reason of renaming
Upon merger of GIGA NETWORKS and Desperado stated in "I" above, the continuing company, GIGA NETWORKS, will change its name to “Faith Wonderworks, Inc.” in light of the future direction of its business.
The prefix of "Faith" is clarifying the position in Faith Group as the core company operating planning, production and distribution of contents and "Wonderworks" indicates the groups desire to deliver amazing or fascinating content works. "GIGA NETWORKS" and "Desperado" which are familiar names in the market will be continually used as brands, aiming at further expansion of business and improvement of customer awareness.

3. Dissolution and Liquidation of Faith West, Inc., a US subsidiary
(1) Outline of concerned subsidiary

Company name	Faith West, Inc.
Representative	Toshinori Abe, Senior Executive Officer and General Manager of Corporate Planning Department of Faith
Address of head office	San Francisco, United States
Establishment	February 11, 2005
Capital	20,000 USD
Financial closing date	31 December

(2) Schedule
Determined by the Board of Directors of Faith, Inc.	January 27, 2009
Completion of liquidation	April 2009 (Plan)

(3) Effects of the dissolution on business performance
The effect of the dissolution of Faith West, Inc. will be nominal and no revision will be made on the estimation of consolidated or non-consolidated financial results of Faith.

4. Business transfer (business integration) from Medical Communication to Faith

(1) Detail of business transfer

1) Business to be transferred
Development and provision of medical and health related contents

(2) Outline of Medical Communication

Company name	Medical Communication, Inc.
Business line	■Development of medical and health related contents ■Corporate service provision of related contents ■Development and sales of medical and health related products
Establishment	November 21, 2005
Address of	Toranomon Towers Office 23F 4-1-28 Toranomon, Minato-ku Tokyo
Representative	Hiroshi Tanaka
Capital	20 million yen
Faith’s controlling share	100％

(3) Schedule
Board of directors' meeting to approve business transfer	January 27, 2009
Signing of business transfer agreement	January 27, 2009
Effective date of business transfer	April 1, 2009
(Note: The business transfer will be conducted through the simplified procedures provided under the Company Law of Japan, by which resolutions of the shareholders' meeting of Faith and Medical Communication will not be made.)

(4) Effects of the business transfer on business performance
The effect of the business transfer of Medical Communication will be nominal.

About Faith, Inc.　http://www.faith-inc.com/ (Stock code 4295, 1st section of TSE)
Faith is a pioneer of ringtone business for mobile phones. Originally, the concept of “ringtone” started from this company. It commercialized the idea, and expanded the business. Moreover, the company provides a wide range of services such as on-line game and music distribution, and issuance of electronic money to settle e-commerce. In future, Faith aims to provide the higher added-value services through the creation of “a new scheme for the content distribution” in various environments such as mobile phones and PCs.

*Names of companies and products in this press release are either trademarks or registered trademarks of the respective companies.

[Reference]

■Before Realignment

■After Realignment