About Making Tifana.com Co., Ltd.
a Group Company
March 19, 2024
HEROZ, Inc｜4382｜

NoticeThis document is an excerpt translation of the original Japanese document and is onlyfor reference purposes. In the event of any discrepancy between this translated
document and the original Japanese document, the latter shall prevail.

Contents
1 . A b o u t T i f a n a . c o m C o ., L t d .

2.Aims And Synegies of This M& A

© 2024 HEROZ, Inc.

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01
About Tifana.com Co., Ltd.

© 2024 HEROZ, Inc.

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About Tifana.com Co., Ltd.
Corporate Visions「Make the world smile, with the power of the Web and AI」

Company Name：Tifana.com Co., Ltd. (hereafter referred to as “Tifana.com”)

Founding：1993 （Incorporation：May 2000）

Representative：President and Representative Director

Ryo Fujii

Number of Employees ：Approx. 50 employees
Capital Stock：200 million yen
Address
Tokyo Head Office ：2-22-7 Ohashi, Meguro-ku, Tokyo
Osaka Sales Office ：1-4-4-4 Dojimahama, Kita-ku, Osaka-shi, Osaka
Business
AI business：Developing business with Sakura-San series including “AI Chatbot Sakura-San”
Web Production business：Wide range of services from web consulting, video/image production, SEO and SEM services
Homepage: https://www.tifana.com/© 2024 HEROZ, Inc.

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Business of Tifana.com◼ AI business: developing "AI Sakura-San" series of DX solutions that can be used to meet a variety of issues and needs◼ Web Production business: providing a wide range of support for web production, maintenance and operation, consulting, etc

AI business⚫ “AI Sakura-San” has been introduced and is in
use at many major companies as well as train
stations and commercial facilities

Web Production business⚫ 30 years of expertise in web consulting forconsistent support

1. strategic planning
2. Planning/Information Design
3. Design production, system development
4. Web site operation© 2024 HEROZ, Inc.

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About Tifana.com’s “AI Sakura-San”◼ "AI Sakura-San" series is a series of AI services including chatbots and avatar customer service.
◼ She is actively working as a customer service avatar at train stations and commercial facilities, and, used by many major companies andmunicipalities, supporting DX promotion from many angles.
“AI Sakura-San”

3 points of this service
1. Worked in many companies, including train stations, commercialfacilities, and internal help desks.
2. AI that grows without effort due to self-learning.
3. Dedicated staff support from introduction to operation

Supreme Court ofJapan

East Japan
Railway CompanyHaneda Airport Garden(10 stations)© 2024 HEROZ, Inc.

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Advantages of Tifana.com’s "AI Sakura-San"◼

Familiar and useful AI-chatbot with easy-to-use design and design features◼ Developing many "Sakura-San Series“, in line with customer needs and promoted their use in business scenes◼ Attractive in terms of ease of implementation and operation with staff support, and almost no operating costs
Easy-to-understand andfriendly design

Series development to meetyour needs⚫ "AI Sakura-San Series" features a design that is easy
for anyone to understand and use, as well as a friendly
design.
Already installed in many transportation systems,
municipalities, and commercial facilities⚫ Click here for introduction results
https://www.tifana.ai/works

Support system for easy introduction
and operation⚫ Supporting DX Promotion Teams with the Latest AI Technology⚫ Patented, international standard ISO quality assurance⚫ Unique customization to suit your business needs⚫ Registration and tuning are fully automated© 2024 HEROZ, Inc.

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Tifana.com: Business Performance, etc.
AI Sakura-San cumulative
number of units installed

Net Sales⚫ In FY2023, sales temporarily declined due to the shift inbusiness focus to AI business.
⚫ In FY2024, sales will increase due to progress indevelopment and introduction of "AI Sakura-San" series
tailored to customer needs.
⚫ In the future, we will position AI business as the mainstayof the company's operations, and shrink Web Production
business.
⚫ AI business sales are recurring revenue, and we will
pursue quality of sales.

⚫ Most of this business is recurring sales, except for a small
portion of installed sales, and thus constitutes high qualitysales.
⚫ In the future, we will shift personnel from the web
development business to the AI business and shift ourstrategy to further increase the growth rate of the AI
business (AI Sakura-san).
⚫ By joining our group, we would like to accelerate ourgrowth rate by pursuing synergies not only in sales but
also in products.

（ Units: JPY millions ）Temporary decline
due to decrease inWeb Production
business568⚫ The cumulative number of AI Sakura-san installations
steadily increased year after year on the back of strong
demand.

570

Operating Profit⚫ Actual operating income related to business has remained in theblack in recent years.
⚫ We plan to actively shift personnel from web development
business, with AI business as the main focus.
⚫ We plan to aggressively increase marketing expenses andpersonnel in the next fiscal year and beyond in order to promote
full-fledged SaaS business.
⚫ For FY2023 and FY2024, actual profit/loss of the business to betransferred has been estimated and disclosed in the following
revised figures. Figures for earlier periods have not been adjusted
due to difficulty in determining the figures.
（Unit:JPY millions）（ Units: number of units ）

315

530
423

100

180
120
32

48
2021/022022/022023/022024/02(見込み)
Forecast

2021/022022/022023/022024/02(見込み)
Forecast*the cumulative number of units installed.

21-34
Forecast*FY2023 and FY2024 figures are “actualoperating income related to business”© 2024 HEROZ, Inc.

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Aims And Synegies of This M& A

© 2024 HEROZ, Inc.

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Aims of This M&A: ①LLM Penetration in Real Space◼

Although ChatGPT has expanded tremendously, its usage in Japan is only 12%, with the majority not benefiting from Generative AI.
◼ Realizing UX to reach most of remaining users will build essential competitive advantage and accelerate “AIX” of Japanese society. We’ll createsynergies between Tifana.com's realistic customer contacts and characters and HEROZ Group's comprehensive AI technology capabilities.

Status of ChatGPT of Usage
Utilized by
利用している

Promoting the use of Generative AI in real space

利用していない
Not used•
12%•88%Majority of thepopulation notbenefiting from
Generative AI
For many, thehurdle to start
using it and thefact that they are
limited to digitalchannels.

Assets of HEROZ Group

Advantages of “AI Sakura-San”

LLM x Search by“HEROZ ASK”

Automation by
Generative AI

Speech Recognition in“Quick Summary”

Customer contact inreal places

Template type Q&A
by “Quick Q&A”

HumanisticfriendlinessSupporting the real business of
HEROZ Group's clientele(Source: NRI) ChatGPT usage trends in Japan© 2024 HEROZ, Inc.

10Aims of This M&A: ②Synergies in Group Products◼

HEROZ ASK as a platform for LLM, with various applications from group companies on top of it, enables us to reach out to a new customer base.
◼ Provide a more casual and easy-to-use environment for using Generative AI as an AI assistant that is not only high-performance but also friendly.
◼ Accelerate the realization of HEROZ Group's AI transformation by realizing synergies among group products.

End UserJOINT

Character Bot

JOINT

JOINT

QuickSeries

AI Sakura-San

HEROZ ASK

Azure OpenAI Services

Hybrid Search

Other LLMs
© 2024 HEROZ, Inc.

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