Business Risks

(From the Annual Securities Report disclosed on June 20, 2025)

Below is a list of potential risk factors that we believe may affect the Group’s business and other related matters.

Matters that may not necessarily constitute ‘risk factors’ but are nonetheless considered important for investor decision-making as part of our proactive information disclosure have also been included. Although it is the Group’s policy to recognize the possibility of risks occurring and making efforts to avoid or address them if the occasion arises, the decision to invest in Asteria stock should only be made after careful consideration of this section and other information contained in this document. The forward-looking statements in this document are based on information available to our Group as of the end of the current fiscal year.

1. Overseas Business

The Group is actively expanding overseas in accordance with its management policy. Country risks exist for each of these target regions, including changes in laws and regulations, politics and economics, as well as culture and religious influences. Should unforeseen circumstances arise that impede business progress, they may impact the Group’s performance.

Consolidated financial statements show the business performance, assets, and liabilities of the Group’s overseas affiliates, converted into Japanese yen from local currencies. As this is difficult to completely avoid, fluctuations in foreign exchange rates may affect the Group’s reflected business performance and financial position.

2. New Products and Services

The Group strives to increase profits by introducing valuable new products and services to the market, as it believes increasing revenue through the development of compelling new products and services is crucial to corporate growth. With this in mind, we proactively incorporate new and innovative technologies, such as smart devices, IoT, and blockchain-related solutions, into our management strategy from an early stage. However, it may not always be possible to keep up with technological innovation or develop new products in a timely manner due to the fast-paced and unpredictable nature of the software industry. Should the Group falls behind technological innovations or market trends due to inaccurate forecasts, significant discrepancies in corporate earnings may arise and potential impacting its business and performance.

3. Litigation Risks

As of the date of submission of this document, no lawsuits have been filed against the Group. That said, given the nature of our Group’s business, which derives its value from intellectual property rights and operates overseas, there is a possibility that unexpected lawsuits may arise overseas.

The Group has established a system to minimize the possibility of litigation, with measures that include the establishment of “Compliance Regulations”, a Risk Management Committee, and thorough dissemination of legal compliance through internal training. However, in the event of a lawsuit of any kind, the Group’s business performance may be affected depending on the content and outcome of such proceedings.

4. Investments, Mergers and Acquisitions (M&A)

The Group makes strategic investments through M&A and other capital participation to achieve medium- to long-term growth and enhance corporate value.

In making these investments, thorough due diligence on the target company’s business, financial position, legal affairs, governance structure, etc. is conducted to mitigate risks. However, there is a possibility that events not identified or anticipated at the investigation stage may occur or become apparent after an investment is made, or that post-investment business development may not proceed as planned. In such cases, the Group may be unable to fulfill the initially expected contribution to its business performance and may be required to recognize an impairment loss on its investment, which could adversely affect the Group’s business performance.

5. Profitability of New Products/Versions

Our Group is constantly engaged in the research and development of new products and new versions. These new products and new versions are developed and launched in anticipation of significant future growth in the market. However, the relevant market not growing as planned, or the emergence of unexpected competing products, could prevent the Group from securing revenues as planned – thus impacting results.

6. Securing Human Resources

The Group focuses on assembling a small, elite team of highly skilled and motivated individuals to provide quality products that meet market needs. As the business continues to expand, the Group will actively recruit and train talent, and provide an positive work environment. However, inability to secure sufficient human resources, may affect the Group’s business and earnings.

7. Defects in Software Provided by the Group

The Group takes utmost care in quality control to prevent software defects arising from causes within its responsibility. It also implements malfunction risk mitigation measures such as software license agreements and liability insurance coverage. Although no such major defects have occurred since the release of its products, there is no guarantee that defects attributable to the Group will not occur in the future. Therefore, liability for damages caused by software defects or loss of public trust could potentially affect the Group’s business and earnings.

8. Intellectual Property Risks

As of the date of submission of this document, the Group has not confirmed that any patents, trademarks, or other intellectual property rights that could affect its business activities have been acquired by third parties. Since its founding, the Group has never received any warnings from or been sued for infringement of intellectual property rights by third parties. However, if a third party asserts claims of intellectual property infringement in connection with the Group’s future business activities, Group operations may be suspended or held liable for financial losses, including damages. Licenses for third-party intellectual property rights may be required, potentially resulting in royalty payments and the risk that such licenses may not be obtainable. Should any of these situations occur, they could impact the Group’s business and earnings.