September 9, 2022

Company Name: HEROZ, Inc.
Name of Representatives:
Takahiro Hayashi,
Co-Chief Executive Officer:
Stock Code: 4382, TSE Prime Market
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 Capital and Business Alliance with VarioSecure Inc. and Underwriting of Third-Party Allotment ofNew Shares by an Equity Method Affiliate (Conversion to a Consolidated Subsidiary)

HEROZ, Inc. (the “Company”) hereby announce that its Board of Directors, at a meeting held on Today,
has passed a resolution to enter into a capital and business alliance agreement with VarioSecure Inc. (Code:4494, Tokyo Stock Exchange Standard Market, hereinafter referred to as "VarioSecure") and to subscribe
for all of the third-party allotment of new shares to be conducted by an equity-method affiliate, VarioSecure.
As a result, the Company's ownership interest in VarioSecure will be 40% or more, and by dispatching
officers to VarioSecure, VarioSecure will become a consolidated subsidiary of the Company under theeffective control standard.
Since the capital of VarioSecure is more than 10/100 of the Company's capital, VarioSecure is a specified
subsidiary of the Company

1. Reason for Capital and Business Alliance
In September 2021, the Company entered into a capital and business alliance with VarioSecure, aiming
to establish a system for continuous creation of new services unique to a group of technical experts bycombining "domain knowledge of rare security personnel possessed by VarioSecure" with "AI personnel
possessed by the Company". The two companies have continued discussions to establish a structure for the1continuous creation of new services that can only be achieved by a group of technical experts.
In the process of considering how to strengthen VarioSecure's service capabilities by utilizing our AI
technology, we have regularly provided opportunities for discussions not only between the top managementof the two companies, but also between many members of the sales, technical, and management teams, andhave also discussed VarioSecure's future roadmap and growth strategy.
As a result, both companies agreed to further enhance the corporate value of both companies byestablishing a more in-depth alliance, and today we decided to enter into a capital and business allianceagreement and to underwrite VarioSecure's third-party allotment of new shares.

2. Outline of the Capital and Business Alliance
The Capital and Business Alliance Agreement provides for the following.
(１) Outline of the Business Alliance
The Company and VarioSecure have decided to form a business alliance mainly for the following
items in order to enhance the corporate value of both parties.
⚫

Mutual provision and collaboration of our AI technology and VarioSecure's industrial domain
knowledge, data, and other management resources to realize an AI security company and promotecollaboration in new areas.

⚫

Promote the use of AI in VarioSecure's managed security services and the expansion of services
into the zero-trust area.

⚫

Promote the use of AI in the backyard (core system), which is not limited to VarioSecure's
customer-facing front-end services, and use AI technology for labor saving, efficiency
improvement, and sales promotion based on such use.

(２) Outline of the Capital Alliance
The Company will subscribe for 710,000 shares of VarioSecure common stock through a private
placement by VarioSecure.

(３) VarioSecure's Management Structure
In order to appropriately realize the content of the above business alliance while ensuring thecommon interests of shareholders, the Company and VarioSecure have agreed that VarioSecure willtransition from a company with a board of auditors to a company with an audit committee, that anominating committee will be established in VarioSecure, and that the authority to appoint directors(including directors who are members of the Audit Committee) and representative directors ofVarioSecure will be as follows:①

VarioSecure shall have eleven directors, including those who are members of the AuditCommittee.

②The Company has the authority to nominate candidates for the six directors of VarioSecure2

(excluding directors who are members of the Audit Committee) and to remove them from office.
The above management structure is premised on VarioSecure's transition to a company with an
Audit Committee.

3. Reason for underwriting the third-party allotment“１.Reason for the Capital and Business Alliance” above.

4. Outline of consolidation
As of August 31, 2022, the Company holds 1,224,000 shares of VarioSecure's 3,802,613 outstandingshares (32.21% of voting rights held). In addition, the Company will subscribe to all VarioSecure's thirdparty allotment of 710,000 shares on September 27, 2022.
As a result, the Company will hold 1,934,000 shares of VarioSecure (the ratio of voting rights held by
the Company after the capital increase through third-party allotment will be 42.88% (planned)). Inaddition, the Company will dispatch officers to VarioSecure, which will make VarioSecure a consolidated
subsidiary of the Company under the effective control standard.

5.

Outline of the subsidiary to be transferred (VarioSecure)
(1)

Name

VarioSecure, Inc.

(2)

Location

1-6 Kanda Nishiki-cho, Chiyoda-ku, Tokyo(3)

Job title and name ofRepresentative

Yoshihiko Inami, President and Representative Director
Managed Security Services(4)

Description of business(5)

Share capital

330 million yen (As of February 28, 2022)(6)

Date of establishment

September 17, 2015

(7)

Integration Services

HEROZ Inc.

32.19%HIKARI POWER LIMITED

2.92%NOMURA PB NOMINEES LIMITED A/C CPB 30072 482276

2.90%

Major shareholders andYasumitsu Shigeta

2.80%

ownership ratios

SBI SECURITIES Co.,Ltd.

2.10%(As of August 31,Rakuten Securities, Inc.

1.92%2022)

Kazuo Mochizuki

1.49%

Jo Hirao

1.18%

Shigeo Makita

1.17%

Yasuji Iwasaki

1.16%

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Relationship between
the Company and said
(8)

company(As of August 31,2022)(9)

CapitalVarioSecure is an equity-method affiliate in which therelationship

Company holds 32.21% of the voting rights.

Personnel

One director of the Company is seconded from the Company

relationshipto VarioSecure as a director.

BusinessThe Company has a transaction with VarioSecure to provide

relationshipAI services.

Operating results and financial condition of VarioSecure for the past three years
As of / Fiscal year ended

February 2020

February 2021

February 2022

Net assets

2,592,692

2,891,183

3,038,829

Total assets

6,194,121

5,993,938

5,704,031

695.73767.58799.822,513,337

2,545,189

2,566,735

Operating income

519,497535,034

504,612

Ordinary income

495,894

514,744

485,080

Net income

260,402278,345276,359

69.88

74.62

73.05

－39.44

40.44

Net assets per share(Yen)Net sales

Net income per share(Yen)Dividend per share (Yen)(Million of yen, unless otherwise noted)

4.

Number of shares acquired, acquisition price and shareholding before and after acquisition

(1)

(2)

(3)

(4)

Number of shares

1,224,000 shares

held(Number of voting rights: 12,240 unit)

before the change(Ratio of voting rights held: 32.21%)

Number of shares to710,000 sharesbe acquired(Number of voting rights: 7,100units)

Acquisition price

Number of shares
held after the change

Acquisition price by underwriting a third-party allotment
836,380 (Thousands of yen)
1,934,000 shares(Number of voting rights：19,340 units)(Ratio of voting rights held: 42.88％)

45.

Timetable(1)

Date of resolution at themeeting of the Board ofSeptember 9, 2022

Directors(2)

Date of conclusion of businessand capital alliance agreement

(3)

6.

September 9, 2022

Date of commencement ofFrom September 27,2022 To September

share transfer

29,2022(scheduled)

Future outlook
For the impact of this matter on our business results for the fiscal year ending April 30, 2023, pleaserefer to the "Notice of Announcement of Consolidated Earnings Forecast in Connection with Transition

to Consolidated Financial Statements” released today.

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