ASTERIA Corporation

The Group is actively expanding overseas and faces various country risks, including changes in laws, politics, and economic conditions in the countries where it operates, as well as cultural and religious influences. If unforeseen circumstances arise, obstacles to business promotion may occur, potentially affecting performance. No specific countermeasures for risk avoidance are currently disclosed in the securities report.

The performance, assets, and liabilities of overseas affiliated companies are denominated in local currencies and translated into yen when preparing the consolidated financial statements, so fluctuations in foreign exchange rates may affect operating results and financial position. It is explicitly stated that complete risk avoidance is difficult, and the exposure is structurally expected to increase as overseas business expands.

The pace of technological innovation in the software industry is rapid, and while the Group has been engaged early on with advanced technologies such as smart devices, IoT, blockchain, AI, and robotics, predicting technological innovation is extremely difficult. If the response to market trends and technology trends is delayed, significant discrepancies in expected corporate earnings may arise, potentially having a material impact on business and performance.

The Group continuously develops and offers new products and new versions in anticipation of growing markets, but if the target market does not grow as expected or unexpected competing products emerge, securing revenue as planned becomes difficult. The risk of not obtaining a return on R&D investment may affect performance.

The Group implements strategic investments such as M&A and capital participation for the purpose of medium- to long-term growth and enhancement of corporate value, and intends to conduct thorough due diligence. However, if issues not identified or anticipated during the due diligence stage arise or come to light after the investment is executed, or if post-investment business development does not proceed as planned, the Group may not only fail to obtain the expected contribution to performance but may also need to record impairment of the investment value of the target company, potentially affecting performance.

The Group adopts a policy of maintaining a small, elite team of highly capable and highly motivated personnel, and as its business expands, it is focusing on recruiting and training excellent personnel and providing an attractive working environment. However, if the necessary personnel cannot be sufficiently secured in a highly competitive labor market, it may hinder the maintenance of product and service quality and business expansion, potentially affecting performance.

The Group pays utmost attention to quality control and has implemented risk reduction measures such as preparing software license agreements and taking out liability insurance; no significant defects have occurred since product release. However, if software defects (malfunctions, bugs, etc.) occur in the future, liability for damages or loss of social trust may arise, potentially affecting business and performance.

Since its founding, the Group has not received any warnings or infringement lawsuits from third parties regarding intellectual property rights, and no third-party intellectual property rights that would affect business activities have been identified at this time. However, if a third party asserts infringement in connection with future business activities, this could result in injunctions against business operations, damages, or royalty payments, or if licensing cannot be obtained, this may affect business and performance.

As of the date of submission of this report, the Group has not been subject to any litigation; however, given the nature of its business, which derives its value from intellectual property rights, and its overseas expansion, unforeseen litigation may occur. Although the Group has established systems such as compliance regulations, a risk management committee, and internal education, the content and outcome of litigation could affect performance and other matters.