Business Environment and Issues to be Addressed

(From the Annual Securities Report disclosed on June 20, 2025)
https://ssl4.eir-parts.net/doc/3853/yuho_pdf/S100W0T0/00.pdf

With the software business at its core, our Group is committed to value creation in the digital age through product development and service provision. To respond more flexibly to the rapidly changing market environment and drive sustained strong growth, we will accelerate our efforts in the key areas outlined below.

1. Further Enhancing Corporate Governance

Since our establishment, Asteria has consistently appointed two or more outside directors. Since June 2015, they make up the majority of our board to ensure objective decision-making and oversee execution with an outside perspective and expertise. We will continue to improve corporate governance with a focus on constructive dialogue with shareholders and board diversity.

2. Creation of New Market Opportunities in the Software Business

To further increase revenues from sales of our products, we aim to establish a firm position in each field by proposing specific use cases that effectively address market needs. Our Group will focus on the following areas with especially high market potential.

2-1. Cloud Data Integration Market
With the acceleration of digitalization, it is expected that enterprise information systems will become increasingly cloud-based. In light of this, the demand for platforms allow flexible data integration with cloud-based systems is steadily increasing, creating significant growth opportunities. Adoption of the “Warp” series, centered on the monthly subscription product “Warp Core” is progressing steadily. Going forward, we will continue to strengthen a sustainable revenue base through further promotion of the same product.

2-2. AI Integration Market
As companies accelerate their digital transformation efforts, machine learning-based AI is an area where significant growth is expected in the medium to long term. With generative AI attracting significant attention in recent years, our company has been proactive in incorporating advanced AI technology. We were among the first to announce ChatGPT compatibility with the Warp series, and equipped Gravio and Handbook X with AI-based functions. We will continue to accelerate the practical application and value creation of AI through our work with Asteria Artificial Recognition Technology, LLC, which specializes in AI research and development, as well as through collaboration with external technology partners.

2-3. IoT/ Edge Computing Integration Market
The IoT/edge computing market is projected to grow significantly over the medium to long term, as next-generation foundational technologies after cloud computing. Device, cloud and system integration are important for enterprise IoT – all of which are areas in which we excel. We will enhance collaboration with partner companies on AI-powered edgeware “Gravio” and actively expand our market presence in this field.

2-4. Robotics Support market
Due to the growing need for automation (and reduced reliance on human labor), the use of robotics is progressing in fields such as manufacturing, logistics and space exploration, with the market for related software expected to grow. In response, we released new product “Artefacts” in May 2025. As a virtual environment platform that supports the development and deployment of robot applications, it aims to serve as a new foundation for promoting digital transformation in robotics.

3. Strengthen Strategic Investments and Post-Investment Management Structure

We actively invest strategically in promising companies to enhance corporate value over the medium to long term, focusing on synergies, new market entry, technology acquisition and deepening partnerships and more. Through these investments, we aim to accelerate business growth and maximize the value of our assets.
We recognize that the valuation of investment securities can impact our financial and operating results due to fluctuations in the performance and market environment of invested companies. To address this, we have been consistently refining our investment decision-making process and post-investment monitoring framework.
Moving forward, we will continue to maintain a flexible operational policy in response to external environments, ensuring that appropriate exit strategies can be selected and executed in a timely manner based on market conditions. At the same time, we will strengthen the performance of the entire investment portfolio by ensuring proper management of existing holdings and ensuring liquidity.

4. Overseas Expansion

Since the Group’s founding, our aim has been to develop and provide software that can be used globally. Currently, we are actively expanding internationally with a focus on “Gravio” and “Handbook X” and strengthening our product offerings to meet local needs. Our software is available in three languages (Japanese, English and Chinese). We will leverage this strength in multilingual development to strategically enhance overseas expansion for other products.

5. Strengthening Human Resources to Support Growth

The number of client companies using our products and services is growing each year, along with the diversity of target industries and business types. To further promote product/service diversification and globalization for solid growth in each field, we place importance on the timely recruitment and training of talent in development, marketing, sales, management and other positions. Our company will place this talent strategy at the core of our efforts to strengthen sustainable competitiveness.