July 25, 2023
Company Name: HEROZ, Inc.
Names of Representatives:
Takahiro Hayashi,
Co-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 of Progress Based on the Plan for Compliance with the Listing Maintenance Standards for theTSE Prime Market,and Status of Application for Selection and Compliance with the Standard Market
HEROZ, Inc. (the “Company”) submitted and disclosed on December 10, 2021 its plan to complywith the criteria for maintaining its listing on the prime market. The Company hereby announces thestatus of its compliance with the criteria for maintaining listing on the prime market as of the mostrecent reference date (April 30, 2023) and the progress toward such compliance, as described below.
Based on the Company's compliance with the listing maintenance standards of the Tokyo Stock
Exchange ("TSE"), and after considering how to respond to the TSE's rule revisions, the Board ofDirectors of the Company resolved at a meeting held today to apply for selection to the Standard
Market, and the Company hereby announces that it has submitted an application for selection to theTSE.

１．Trends in compliance with prime market listing maintenance standards and planning period
The Company's compliance with the criteria for maintaining prime market listings as of April 2023,including the transition thereof, is as follows.
As of April 30, 2023, the Company was non-compliant with respect to "tradable share ratio" and"market capitalization of tradable shares" in terms of compliance with the criteria for maintaining
prime market listing. In addition, as of June 30, 2021 (the transition standard date), the Company wasnot in conformity with the standards with respect to "tradable share ratio".
Total market capitalization of

Tradable share ratio (%)

tradable shares (yen)Company's

As of the transition reference dateconformity(June 30, 2021)

status

As of April 30, 2022

andtransition

13,163,563,703

33.6

4,981,954,654

33.6

6,415,340,657

34.5Over 10 billion yen

Over 35 %Fiscal year ending April 2026

Fiscal year ending April 2026

(As of the previous record date)As of April 30, 2023
(as of the most recent record date)Listing Maintenance Criteria
planning period*The Company's compliance status is calculated based on the distribution of share certificates, etc.
as understood by the Tokyo Stock Exchange as of the record date.
2．Status of implementation and evaluation of efforts to comply with prime market listing
maintenance standards(a) Basic policy
Under the concept of "Surprise to the Heart," the Company provides AI-based services tomake people's lives more convenient and enjoyable. The Company has worked to further
enhance its corporate governance by conducting fair and honest business activities whileaiming to continuously improve its corporate value, and by strengthening its internal control
system in response to the expansion of the Company's business.
(b) About the “Tradable share ratio”
・Status of Implementation of Initiatives
In the plan submitted on December 10, 2021, the Company had granted its employees the6th Stock Acquisition Rights, 7th Stock Acquisition Rights, 8th Stock Acquisition Rights,
and 11th Stock Acquisition Rights. The Company's plan was to increase its corporate value
by implementing its medium- to long-term growth strategy and to create an environmentthat facilitates exercise by its employees, In addition, to further increase the tradable shareratio, the Company had set a plan to sell the Company shares held by some of its operatingcompanies, etc. on the market. In addition, the Company announced the issuance of the 12thand 13th Stock Acquisition Rights in December 2022.
・Evaluation of Initiatives
The sale of the Company's shares held by business companies and others has progressed,

and the tradable share ratio has increased from 33.6% to 34.5%. On the other hand, since
we expect that stock acquisition rights will be exercised gradually in the future, at this stage
we will work to promote the exercise of stock acquisition rights and achieve the tradable
share ratio by enhancing our corporate value through the execution of our business plan.
(c) About the“Total market capitalization of tradable shares”
・Status of Implementation of Initiatives
As of the previous record date, the total market capitalization of tradable shares was 4.9
billion yen, failing to meet the criteria of 10 billion yen or more required by the criteria for
maintaining listing on the prime market.
In response to this situation, the Company had set a plan to improve its corporate value
through the realization of its medium- to long-term strategy by improving its "tradable shareratio" and realizing its growth strategy in BtoB services, which has become an issue. For theperiod of the plan, we have set KPIs for both BtoC and BtoB services, and by implementing
business strategies based on these KPIs, we have expected to increase sales by the fiscal
year ending April 2026 and aimed to achieve a market capitalization of 10 billion yen or
more by the same period.
・Evaluation of Initiatives
The Company was able to achieve discontinuous growth by forming a sales organizationand improving the performance of its BtoB services beginning in the fiscal year ended April
30, 2023, as well as by making VarioSecure, Inc. and StrategIT, Inc. a consolidated
subsidiary in the second quarter of the fiscal year ended April 30, 2023. However, as of April
30, 2023, the total market capitalization of tradable shares was 6.4 billion yen, and although
we achieved growth compared to the previous base date, we continued to fail to meet thecriteria of 10 billion yen or more required by the prime market listing maintenance criteria.
In addition to improving the "tradable share ratio," the Company intends to continue toachieve growth through organic growth and M&A, as in the previous period, in order toincrease corporate value and improve the market capitalization of tradable shares.

3．Reasons for selecting the Standard Market
In accordance with the recent revision of the Tokyo Stock Exchange rules, the termination date of
the transitional measures, which had not been clarified, has been set for March 2025, and companies,that have previously set a deadline for achieving the standard after March 2025, will be designated as

“Securities Under Supervision” from March 2026, although there is a grace period until that deadline.
In light of these circumstances, the Company has decided to select the Standard Market because webelieve that ensuring an environment in which shareholders and investors can hold and trade ourshares with peace of mind without concerns about maintaining our listing, and allocating management
resources for the execution of our plans from a medium- to long-term perspective, rather than from ashort-term perspective to meet the Prime Market's criteria for maintaining listing, will contribute toour growth and increase corporate value.
4．Conformity to standard market
The Company's compliance with the criteria for maintaining listing on the Standard Market as ofApril 30, 2023 is as follows, and the Company is in compliance with all of the criteria.
Total market
Number of

Number ofshareholde

tradablers

Monthly

capitalization

Tradableaverageof tradable

share ratio

trading

Net Assets

sharessharesOurvolume

As of April

Conforming30, 202351,870

6.4units

Billion yen

8,165

34.5％

StatusStandardMarketListing

2,0001units

Billion yen

400
Maintenance Criteria

25％

8,942

6unitsBillion yen

(*２)

(*３)

10 units

Over 0 yen(*1)The Company's compliance status is calculated based on the distribution of shares, etc. as known by the Tokyo Stock
Exchange as of the base date.
(*2) Monthly average trading volume is calculated by dividing the total trading volume of the Company from January to June
2023 (*2) Average monthly trading volume is calculated by dividing the total trading volume of the Company from January toJune 2023 by 6.
(*3) The figures are based on the "Consolidated Financial Results for the Fiscal Year Ended April 30, 2023 [Japanese GAAP](Consolidated)" disclosed by the Company on June 9, 2023.

After the change of market classification to the Standard Market, we will continue to promotevarious measures for organic and discontinuous growth with the aim of increasing corporate value,including projects planned for conforming to the listing maintenance standards of the Prime Market,
and we will also continue to work on improving the tradable share ratio.
5．Scheduled date of market reclassification to the Standard Market
The scheduled date of the market reclassification to the Standard Market is Friday, October 20, 2023.