14, June 2024

Company Name: HEROZ, Inc.
Names of Representatives:
Takahiro Hayashi,
Chief Executive Officer
Stock Code: 4382
Contact: Hiroya Mori,
Chief Financial Officer(Telephone: +81-3-6435-2495)

Notice: This document is an excerpt translation of the original Japanese document and is only for reference
purposes. In the event of any discrepancy between this translated document and the original Japanese
document, the latter shall prevail.

Notice Concerning Recording of Extraordinary Loss

HEROZ, Inc. (the “Company”) hereby announces that it will record an impairment loss on goodwill as anextraordinary loss in its consolidated financial results for the fourth quarter of the fiscal year ending April
30, 2024, and a loss on valuation of stocks of affiliated companies as an extraordinary loss in its nonconsolidated financial results for the fourth quarter of the fiscal year ending April 30, 2024.

1.

Recording of Extraordinary Loss
As a result of a review of business plans and other factors and an examination of the recoverabilityof the goodwill related to StrategIT, Inc (our group company: hereinafter referred to as “StrategIT”),
the Company has decided to record an impairment loss, as an extraordinary loss in the consolidated
financial statements. The amount of that loss is 184,966 thousand yen.
In conjunction with the goodwill impairment loss, an extraordinary loss of 359,594 thousand yen
was recorded in the non-consolidated accounts as a loss on valuation of stocks of subsidiaries andaffiliates. However, there is no impact on consolidated results of operations because the loss on
valuation of stocks of subsidiaries and affiliates is eliminated in the consolidated financial
statements.
In the rapidly growing SaaS market, the Company acquired shares of StrategIT in August 2022 andmade it a group company in order to promote business and market growth through "StrategIT's
domain knowledge on SaaS implementation and collaboration" and "our AI development knowhow”. Since then, we have pursued business growth and group synergy through information1

collaboration and communication in terms of sales, technology, and management. Despite constantfluctuations in performance, StrategIT has worked to strengthen its business foundation, and in May
2024, released "JOINT iPaaS for SaaS," a SaaS-to-SaaS collaboration product for SaaS vendors.
Currently, they are in the process of developing a recurring business model through the "JOINT
iPaaS for SaaS" business, a collaboration platform for SaaS vendors, from the traditional SaaS
implementation support and solution business of developing SaaS-to-SaaS collaboration, and are in
the stage of making up-front investments in sales personnel and marketing expenses to expand salesof the product.
As a result, we have recognized signs of impairment of the goodwill held by the Company as weare shifting to a business model in which expenses will be incurred in advance for several years. As
a result of our assessment of whether an impairment loss should be recognized, we have decided torecord an impairment loss on the goodwill, related to StrategIT, for the fiscal year ending April 30,
2024. In conjunction with the recording of the goodwill impairment loss in the consolidated
financial statements, a loss on valuation of stocks of subsidiaries and affiliates will also be recordedin the non-consolidated financial statements. However, as mentioned above, the loss on valuation ofstocks of subsidiaries and affiliates will be eliminated in the consolidated financial statements, sothe only impact on the consolidated financial statements will be the goodwill impairment loss.
The SaaS market is expected to continue to expand, and with the rapid spread of Generative AI,etc., seamless linkage and collaboration between various SaaS is expected to continue to be an
important need and trend. We will aim for further business growth and ARR expansion as a stocktype business through sales expansion and functional enhancement of the "JOINT" platform.

2.

Impact on business performanceThe above extraordinary loss (impairment loss) is reflected in the "Consolidated Financial Results
for the Fiscal Year Ended April 30, 2024 (Japanese GAAP)" released on June 14, 2024, and pleaserefer to that report for details.

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