Securities Report - 18th Fiscal Period (2025/05/01 - 2026/04/30)

HEROZ Corporation Securities Report - 18th Fiscal Period (2025/05/01 - 2026/04/30)

In accordance with the Financial Instruments and Exchange Act, we hereby submit the Securities Report for the 18th fiscal period (from May 1, 2025 to April 30, 2026). This report contains important information regarding the Company's financial performance, financial position, and management policies, and is disclosed to investors, financial institutions, business partners, and other stakeholders.

HEROZ Corporation is a company specialized in the research and development of artificial intelligence (AI) technologies. Through the development and operation of the shogi AI "Ponanza," the Company has demonstrated its technical capabilities both domestically and internationally. In recent years, leveraging the advanced algorithms and machine learning technologies cultivated through shogi AI, HEROZ has expanded its provision of AI solutions to diverse industries such as manufacturing, logistics, and finance.

For the 18th fiscal period, the Company's management strategy emphasizes accelerating the commercialization of existing AI technologies, expanding into new business domains, entering overseas markets, and actively recruiting talent. In particular, the Company will strengthen its R&D investments in generative AI and large language models (LLMs), focusing on developing next-generation AI products that enhance business efficiency and support decision-making in enterprises.

Regarding financial conditions, the Company continues to invest in research and development expenses and personnel costs, supported by funds raised through a third-party allotment of new shares in the prior fiscal period. Operating revenue is projected to show a slight increase compared to the previous year, primarily driven by growth in enterprise AI consulting services and licensing income.

Key risk factors include intensifying competition due to the rapid advancement of AI technologies, risks of intellectual property infringement, and differences in regulatory environments in overseas markets. The Company plans to address these risks through continuous technological innovation, strengthened patent strategies, and collaboration with local partners.

Moving forward, the Company will continue striving for sustainable growth by balancing technological excellence with management transparency. This report is available for viewing on the Financial Services Agency's EDINET system and the Company's official website IR page.