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, 2006
Commission File Number: 0-30204
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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
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1 2006/06/09 IIJ Discloses the Additional Items for the Notes to
the Consolidated Financial Statements for the
Fiscal Year Ended March 31, 2006 under Accounting
Principles Generally Accepted in the United States
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, 2006 /s/ Koichi Suzuki
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Koichi Suzuki
President, Chief Executive Officer and
Representative Director
EXHIBIT 1
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(English translation)
June 9, 2006
Company name Internet Initiative Japan Inc.
Representative Koichi Suzuki
President and Representative Director
(Stock code number: 3774 TSE Mothers)
Contact Akihisa Watai, Director and CFO
(TEL. 03-5259-6500)
IIJ Discloses the Additional Items for the Notes to the Consolidated Financial
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Statements for the Fiscal Year Ended March 31, 2006 under
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Accounting Principles Generally Accepted in the United States
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IIJ discloses the additional items for the notes to the consolidated financial
statements under accounting principles generally accepted in the Unites States
("U.S. GAAP") that were announced on May 10, 2006, in accordance with the
disclosure rules defined by the Tokyo Stock Exchange.
Items to be additionally disclosed:
Income taxes
Retirement and pension plans
1. INCOME TAXES (Unaudited)
Net deferred income tax assets and liabilities reflected on the consolidated
balance sheets as of March 31, 2005 and 2006 as follows:
(Unit: Thousands of Yen)
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Fiscal Year Ended March Fiscal Year Ended March
31, 2005 31, 2006
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Current Assets - Other current assets 26,399 138,938
Noncurrent Assets - Other assets - 193,681
Noncurrent liabilities - Other noncurrent liablities (7,748) (83,127)
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Total 18,651 249,492
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The approximate effect of temporary differences and carryforwards giving rise
to deferred tax balances at March 31, 2005 and 2006 was as follows:
(Unit: Thousands of Yen)
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Fiscal Year Ended March 31, 2005 Fiscal Year Ended March 31, 2006
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Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities
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Unrealized gains on - 3,580,494 - 2,686,560
available-for-sale securities
Valuation of limited
partnership investments for
tax purpose - 35,014 - 81,020
Capitalized leases 74,621 - 84,345 -
Accrued expenses 185,732 - 161,902 -
Retirement and pension cost 58,885 - 89,705 -
Stock issue cost 15,548 - 29,212 -
Allowance for doubtful accounts 1,461,058 - 16,333 -
Depreciation 25,699 - 25,070 -
Net loss on other investment 92,080 - 127,115 -
Operating loss carryforward 9,902,013 - 9,602,271 -
Other 261,843 27,563 121,659 69,109
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Total 12,077,479 3,643,071 10,257,612 2,836,689
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Valuation allowance (8,415,757) - (7,171,431) -
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Total 3,661,722 3,643,071 3,086,181 2,836,689
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As of March 31, 2005 and 2006, the valuation allowance for deferred tax assets
has been provided at amounts which are not considered more likely than not to be
realized. The net changes in the valuation allowance for deferred tax assets
were a decrease of JPY 2,224,170 thousand and JPY 1,244,326 thousand for the
fiscal years ended March 31, 2005 and 2006, respectively.
A reconciliation between the amount of reported income taxes and the amount of
income taxes computed using the normal statutory rate (approximately 41.0%) for
each of the fiscal year ended March 31, 2005 and 2006 is as follows:
(Unit: Thousands of Yen)
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Fiscal Year Ended March Fiscal Year Ended March
31, 2005 31, 2006
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Amount computed by using normal Japanese statutory tax
rate 1,290,888 2,205,209
Increase (decrease) in taxes resulting from:
Expenses not deductible for tax purpose 34,820 38,653
Reserve for tax contingencies - 197,753
Inhabitant tax-per capital 23,410 25,085
Realization of tax benefit of operating loss
carryforwards (1,426,755) (439,256)
Other change in valuation allowance 261,380 (1,933,379)
Expiration of operating loss carryforwards - 149,750
Other--net (83,873) 13,545
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Income tax expense as reported 99,870 257,360
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2. RETIREMENT AND PENSION PLANS (Unaudited)
IIJ and certain subsidiaries have unfunded retirement benefit and
noncontributory defined benefit pension plans which together cover substantially
all of their employees who are not directors and also participate in a
contributory multi-employer pension plan, the Japan Computer Information Service
Employee's Pension Fund (the "Multi-Employer Plan"), covering substantially all
of their employees.
Approximately 70 percent of the employees' benefits from IIJ's severance
indemnity plan was transferred in May 1997 to its newly established
noncontributory defined benefits pension plan. The following information
regarding net periodic pension cost and accrued pension cost also includes the
30 percent of severance benefits not transferred to the noncontributory plan.
Under the severance and pension plans, all of IIJ's employees are entitled, upon
voluntary retirement with 15 years or more service, or upon mandatory retirement
at age 60, to a 10-year period of annuity payments (or lump-sum severance
indemnities) based on the rate of pay at the time of retirement, length of
service and certain other factors. IIJ's employees who do not meet these
conditions are entitled to lump-sum severance indemnities.
As stipulated by the Japanese Welfare Pension Insurance Law, the
Multi-Employer Plan is composed of a substitutional portion of Japanese Pension
Insurance and a multi-employers' portion of a contributory defined benefit
pension plan. The benefits for the substitutional portion are based on a
standard remuneration schedule under the Welfare Pension Insurance Law and the
length of participation. The multi-employers' portion of the benefits is based
on the employees' length of service. However, assets contributed by an employer
are not segregated in a separate account or restricted to provide benefits only
to employees of that employer, including IIJ. The net pension cost under the
Multi-Employer Plan is recognized when contributions become due.
Net periodic pension cost for the fiscal years ended March 31, 2005 and 2006
included the following components:
(Unit: Thousands of Yen)
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Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2005 2006
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Service cost 221,132 240,765
Interest cost 14,944 20,524
Expected return on plan assets (13,129) (16,736)
Amortization of transition obligation 402 402
Recognized net actuarial loss 8,262 1,904
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Net periodic pension cost 231,611 246,859
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The funded status as of March 31, 2005 and 2006 is as follows:
(Unit: Thousands of Yen)
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Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2005 2006
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Change in benefit obligation:
Benefit obligation at beginning of year 933,969 1,140,240
Service cost 221,132 240,765
Interest cost 14,944 20,524
Actuarial loss (gain) (558) (31,171)
Benefit paid (29,247) (40,906)
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Benefit obligation at end of year 1,140,240 1,329,452
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Change in plan assets:
Fair value of plan assets at beginning of
year 656,443 796,946
Actual return on plan assets 17,844 68,185
Employer contribution 143,471 155,191
Benefits paid (20,812) (22,466)
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Fair value of plan assets at end of year 796,946 997,856
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Funded status (343,294) (331,596)
Unrecognized actuarial loss 195,530 111,009
Unrecognized transition obligation 4,418 4,016
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Net amount recognized (143,346) (216,571)
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Accumulated benefit obligation 635,122 750,900
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Amounts recognized in the consolidated balance sheets consist of accrued
retirement and pension costs of JPY 143,346 thousand as of March 31, 2005, and
prepaid pension costs of JPY 3,891 thousand and accrued retirement and pension
costs of JPY 220,462 thousand as of March 31, 2006.
The Company uses a March 31 measurement date for all its plans.
Actuarial assumptions as of March 31:
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Benefit Obligations Net Periodic Costs
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2005 2006 2005 2006
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Discount rate 1.8% 2.0% 1.6% 1.8%
Expected long-term rate of return on plan assets 2.0 2.1
Rate of increase in compensation 3.4 3.4 3.25 3.4
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