UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from          to          

Commission file number: 001-43279

Micware Co., Ltd.

(Exact name of Registrant as specified in its charter)

Japan

(Jurisdiction of incorporation or organization)

Kobe Asahi Building 25^th Floor
59 Naniwa-machi, Chuo-ku
Kobe, Hyogo 650-0035

(Address of principal executive offices)

Kobe Asahi Building 25^th Floor
59 Naniwa-machi, Chuo-ku
Kobe, Hyogo 650-0035

Takuma Segawa, Chief Financial Officer
Telephone: +81-36-699-9899

Takuma Segawa, Chief Financial Officer

Telephone: +81-36-699-9899

Email: mic_ir@micware.co.jp

At the address of the Registrant set forth above

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 56,141,914 ordinary shares as of February 28, 2026. This number of ordinary shares is presented to give effect to the 241-for-1 share split of the issued and outstanding ordinary shares which became effective on March 31, 2026.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐   No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐   No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐   No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No ☒

TABLE OF CONTENTS

INTRODUCTION

In this annual report on Form 20-F, unless the context otherwise requires, references to:

Glossary of Technical Terms

This glossary contains explanations of certain terms used in this annual report. Unless we indicate otherwise, references in this annual report to:

On January 22, 2024, the Company’s board of directors approved (i) a 130-for-1 share split of its issued and outstanding Ordinary Shares, and (ii) the increase of the number of authorized shares from 4,000 to 520,000. The record date of such share split was February 29, 2024. Such share split and increase of the number of authorized shares became effective on March 1, 2024.

On February 16, 2026, the Company’s board of directors approved (i) a 241-for-1 share split of its issued and outstanding Ordinary Shares, and (ii) the increase of the number of authorized shares from 520,000 to 125,320,000. Such share split and increase of the number of authorized shares became effective on March 31, 2026.

Unless otherwise indicated, all share amounts and per share amounts in this annual report have been presented to give effect to (i) the 130-for-1 share split of our Ordinary Shares which became effective on March 1, 2024, and (ii) the 241-for-1 share split of our issued and outstanding Ordinary Shares which became effective on March 31, 2026.

This annual report on Form 20-F includes our audited consolidated financial statements for the fiscal years ended February 28, 2026 and 2025, and February 29, 2024. Our functional currency and reporting currency are the Japanese yen (“JPY” or “¥”), the legal currency of Japan. The terms “dollar,” “US$,” or “$” refer to U.S. dollars, the legal currency of the United States. Convenience translations with respect to financial information as of February 28, 2026 included in this annual report are based on the exchange rate of JPY to U.S. dollars of ¥156.05=$1.00, which was the foreign exchange rate on February 27, 2026, the last business day in fiscal year ended February 28, 2026, as published on the website of the United States Federal Reserve Board.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions in this annual report. These statements are likely to address our growth strategy, financial results, and future development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

We describe certain material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Item 3. Key Information—D. Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied, or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this annual report, whether as a result of new information, future events, changes in assumptions, or otherwise.

Part I

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

Item 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Risks Related to Our Business and Industry

We are a holding company and depend upon our operating subsidiaries for our cash flows.

As a holding company incorporated under Japanese law with no material operations of its own, Micware’s operations have been conducted primarily in Japan by its subsidiaries. Consequently, our cash flow and our ability to meet our obligations depend upon the cash flow of our operating subsidiaries and the payment of funds by these operating subsidiaries to us in the form of dividends, distributions or otherwise. The ability of our operating subsidiaries to make any payments to us depends on their earnings, the terms of their indebtedness, including the terms of any credit facilities and legal restrictions. Any failure to receive dividends or distributions from our operating subsidiaries when needed could have a material adverse effect on our business, results of operations, or financial condition.

The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected.

The automotive software industry is characterized by fragmented global competition, diverse technological approaches, and varying regional leaders. We face competition from a wide range of players across several categories. In software development services, we compete with SCSK Corporation, SKY Corporation, and Panasonic Corporation in Japan, and with TATA Consultancy Services Limited, KPIT Technologies Limited, and Wipro Limited from India. In software licensing, our peers include Aisin Corporation, Pioneer Corporation, ZENRIN DataCom Co., Ltd., and Panasonic Corporation. In digital map and software maintenance services, we compete with companies with established global presence such as HERE Technologies, TomTom N.V., Google (Alphabet) LLC, Environmental Systems Research Institute, Inc (ESRI), and Mapbox Inc.

Complicating this environment is the fact that many of the Company’s customers, primarily automotive OEMs, possess strong in-house software development capabilities, making them both clients and potential competitors. These competitors are large companies and have significant brand recognition, long operating histories, large marketing budgets, and substantial resources. These companies, as well as other competitors, may offer products and services on a stand-alone basis at a low price or bundled as part of a larger product sale. In order to take advantage of customer demand for their products and services, they may have greater capacity to expand their products and services through acquisitions and organic development.

Many of our competitors are able to devote significant resources to the development, promotion, and sale of their products and services. Furthermore, our current or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition. In addition, many of our competitors have established marketing relationships, access to large customer bases and major distribution agreements with Tier 1 Suppliers and OEMs. Our competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their product offerings or resources. If our competitors’ products, services, or technologies become more accepted than our products or services, if they are successful in bringing their products or services to market earlier than ours, or if their products or services are more technologically capable than ours, then our revenue could be adversely affected. In addition, some of our competitors may offer their products and services at a lower price. If we are unable to achieve our target pricing levels, our operating results would be negatively affected. Pricing pressures and increased competition could result in reduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.

We have experienced steady growth since our establishment. If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges.

Since the establishment of Micware in 2003, we have accumulated over 20 years of experience in software development in the automotive industry, which has translated into significant business growth in terms of business scope and client base. Starting from 2013, with the introduction of Linux OS into our products, we have started to act as a Tier 1 Software Supplier. In 2020 and 2022, the OEMs Toyota and Honda, respectively, who are also our customers, became our shareholders, testifying as to our brand reputation in the industry. As of the date of this annual report, our business is operated across Japan through six operating entities and 12 branch offices. We have also established subsidiaries in the U.S., Thailand, and Germany, for our operations overseas.

We anticipate that we will significantly expand our operations and headcount in the near term. See “Item 4. Information on the Company—B. Business Overview—Growth Strategies—Accelerate Talent Acquisition and Retention Through Geographic and Industry Expansion.” This growth has placed, and future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure. Our success will depend in part on our ability to manage this growth effectively. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures. Failure to effectively manage growth could result in difficulty or delays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.

For the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, revenue generated from software development services was JPY17,521.6 million (approximately $112.3 million), JPY17,178.2 million and JPY13,429.1 million, respectively, constituting 80.0%, 81.4% and 76.7% of our total revenue. We cannot assure you that the software development services will generate a similar amount of revenue for us in the future as they have done in the last three fiscal years. We cannot guarantee that the software development services will continue to grow at historical rates or at all, or that software development services, our other existing businesses, or any new businesses we may acquire will experience rapid or significant growth. In the event that we experience a decline in the software development services or other lines of business due to any reason, our results of operations and financial position may be materially and adversely affected.

Many of the factors discussed below could materially and adversely affect our business, prospects and future performance, including:

We may not be successful in addressing the risks and uncertainties listed above, among others, which may materially and adversely affect our business, results of operations, financial condition, and prospects.

If we fail to execute our strategies and plans effectively, we may not be able to take advantage of market opportunities or meet the demands of customers.

We believe that a key feature of the automotive software industry is the significant buying power held by OEMs, and without careful management, there is a risk of becoming relegated to a subcontractor role. To mitigate this risk, we are pursuing business domains that do not rely on revenue from OEMs. Our current DynaPlanet project represents a concrete initiative under this strategy. For this reason, we are also actively developing and monetizing our other location-based software products and services that directly target consumers, in an effort to expand our revenue streams. For a detailed discussion of these initiatives, see “B2C services—Navigation” and “B2C services—Other than navigation” in “Item 4. Information on the Company—B. Business Overview—Our Products and Services.”

Any factor adversely affecting sales of these products and services, including market acceptance, product competition, performance and reliability, reputation, price competition, and economic and market conditions, could adversely affect our business and operating results. Our participation in the markets for the products and services we are developing or have just launched is relatively new, and it is uncertain whether these areas will ever result in significant revenue for us. Further, the introduction of new products and services beyond these markets may not be successful.

In addition, such expansion will increase the complexity of our operations and may cause strain on managerial, operational, and financial resources. We must continue to hire, train, and effectively manage new employees. If our new hires perform poorly or if we are unsuccessful in hiring, training, managing and integrating new employees, our business, financial condition and results of operations may be materially harmed. These expansions will also require us to maintain the consistency of our product and service offerings to ensure that our market reputation does not suffer because of any deviations, whether actual or perceived, in the quality of our products and services.

Our future results of operations depend largely on our ability to execute our plans successfully. In particular, our continued growth may subject us to the following additional challenges and constraints:

All of these endeavors involve risks and will require significant management, financial, and human resources. We cannot assure you that we will be able to implement these strategies successfully. Besides, there is no assurance that the investment to be made by us, as contemplated by our business plans, will be successful and generate the expected return. If we are not able to execute our strategies effectively, or at all, our business, results of operations, and prospects may be materially and adversely affected.

Our business and sales are subject to the business strategies of the brand owners.

For the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, the majority of our revenue was attributed to our software development services, where we help customers, OEMs or Tier 1 suppliers, develop certain software based on specific requirements or agile development methodology. See “Item 4. Information on the Company—B. Business Overview—Our Business Model—Revenue and Pricing Model—Software Development Services.” The software is developed at the request of our customers, often but not always with our recommendation, inputs, or in partnership in the design process of the software. In addition, we may agree that intellectual property rights arising from the course of performing the software development belong to our customers. Our business and sales are heavily dependent on the market receptiveness of, and demand for, the products offered by our OEMs or Tier 1 suppliers. The overall business strategies and product development plans adopted by these customers and their ability to maintain and develop their brands are therefore essential to our business.

As we have limited influence on the decisions made by the OEMs or Tier 1 suppliers in relation to their business strategies, in particular, the production of their existing products and development of new products, we cannot assure that the customers will be able to maintain and further develop their brands and/or products, or that our customers will continue to show preferences to their brands and/or products. If the strategies of our customers turn out to be unsuccessful or due to any other reasons the marketability of the brands falls substantially, the profitability of our business would be materially and adversely affected.

If we are not able to provide successful enhancements, new features, and modifications to our software products, our business could be adversely affected.

If we are unable to provide enhancements and new features to our software products, our current services, or new products and services we may develop in the future that achieve market acceptance or that keep pace with rapid technological developments, our business could be adversely affected. For example, in order to continually provide software development services to OEMs, we must be able to continually achieve technological advancements and provide upgraded software for new vehicle models. We are also focused on enhancing the capability of our development platform, micAuto-PF. We must also regularly update our proprietary navigation algorithm, “Navi Core,” for our navigation software, with major updates being performed around every two years, and minor updates two to three times every year.

The success of enhancements, new features, and products depends on several factors, including the timely completion, introduction, and market acceptance of the enhancements or new features or products. Failure in this regard may significantly impair our revenue growth. We may not be successful in either developing these modifications and enhancements or in bringing them to market in a timely fashion. Furthermore, uncertainties about the trends in digital transformation and AI, the timing and nature of new software platforms or technologies, or modifications to existing platforms or technologies, could increase our research and development expenses. Any failure of our products and services to operate effectively with future digital transformation trends, software platforms or technologies could reduce the demand for our products and services, result in user dissatisfaction and adversely affect our business.

If we fail to continue innovating and keeping pace with technological developments, our business may be materially and adversely affected.

The technology landscape is constantly evolving. To remain competitive, we must adapt and migrate to new technologies, applications, and processes. The use of more advanced technologies and infrastructure is critical to the development of our products and services, and the scaling of our business for future growth. We may not be able to leverage new technologies effectively or adapt our products to meet customers’ needs or emerging industry standards. If we are unable to adapt in a cost-effective and timely manner in response to changing market conditions, whether for technical, legal, financial or other reasons, our business may be materially and adversely affected. Moreover, our success will depend partially on our ability to continuously identify, develop, acquire, protect or license advanced and new technologies that are valuable to our products and services. Failure to do so could render our existing products and services obsolete and unappealing, thereby adversely affecting our business prospects.

In addition, because our services are designed to be accessed through various networks, across numerous mobile devices, operating systems, and hardware and software platforms, we will need to continuously modify and enhance our services to keep pace with changes in internet-related hardware, software, communication, browser, application software development platform and database technologies. We may not be successful in either developing these modifications and enhancements or in bringing them to the market in a timely manner. Moreover, uncertainties regarding the timing and nature of the development in network platforms or technologies, or modifications to existing platforms or technologies, could increase our research and development or service delivery expenses. Any failure of our services to operate effectively with future network platforms and technologies could reduce the demand for our products and services, result in customer dissatisfaction, and adversely affect our business, financial condition, results of operations and prospects.

Our failure to adequately maintain and update our digital map database and minimize errors in our navigation and location-based solutions could harm our reputation and subject us to liability claims, which could result in loss of customers, decreased revenue and unexpected expenses.

Our digital map database requires constant maintenance and updating, which is a complex process and subject to error. There is no assurance that our controls and procedures for maintaining and updating our digital map database will be adequate to keep pace with the rapidly changing road systems in Japan and other parts of the world. If there are errors in our solutions due to actual or perceived database deficiencies, our reputation could be harmed and our customers may cease to buy our solutions.

Moreover, we could be subject to liability claims and the associated adverse publicity. Claims could be made by our customers if errors in our solutions result in the failure of their products or services, or by end-users of those products or services or others alleging loss or harm as a result of actual or perceived errors in our digital map data. Some of our license agreements include disclaimers, limitations of liability and similar provisions, which, however, may not be effective barriers to potential claims. Any associated adverse publicity may reduce our customers’ willingness to incorporate our map data and related applications into their products, which would adversely affect our revenue.

Liability claims present a risk of protracted litigation, substantial monetary damages, attorneys’ fees, costs and expenses, and diversion of management’s attention from the operation of our business. In some circumstances, we are contractually obligated to indemnify our customers for liabilities, costs and expenses arising out of liability claims. We may incur additional costs and expenses providing indemnification or contesting our customers’ indemnification claims. In addition, we may also have to recall our digital map data or offer to provide replacement, either involuntarily by mandate of our customers or a regulatory agency, or voluntarily in order to preserve our reputation and maintain good customer relations. Recalls or replacements can be costly and divert management’s attention from the operation of our business.

Our ability to operate and grow our business depends on our ability to obtain and maintain access to certain data, and our efforts to obtain such data ourselves rather than relying on external suppliers may be unsuccessful or may subject us to significant costs, delays, and risks.

Although we have traditionally procured map data from external suppliers, we plan to increase our internal data acquisition capabilities by collecting spatial information for DynaPlanet ourselves. See “Item 4. Information on the Company—B. Business Overview—Growth Strategies—Expand and Monetize Digital Mapping Software Services.” Building and maintaining these capabilities may require significant investment in technology, personnel, and infrastructure, and we may encounter challenges with scale, timeliness, coverage, and data quality. If we fail to obtain sufficient, reliable data on acceptable terms and within expected timelines, our products may perform worse than expected, our ability to innovate may be limited, and our operating costs may increase, which could materially and adversely affect our business, financial condition, and results of operations.

In addition, obtaining data directly may increase our legal, regulatory, cybersecurity, and reputational risks. Our data collection and use are subject to evolving privacy, data protection, cybersecurity, consumer protection, and intellectual property laws and regulations that vary across jurisdictions. As a result, compliance may require additional disclosures, consents, and controls, and any actual or alleged failure to comply could result in investigations, litigation, fines, penalties, remediation costs, or orders limiting our ability to collect or use data. Greater handling of data may also increase exposure to security incidents, which could disrupt operations and harm our reputation. If our self-sourcing initiative does not succeed, we may need to continue relying on third-party suppliers, potentially on less favorable terms, or may be unable to obtain certain data at all, either of which could adversely affect our business. As a result, our failure to source data ourselves as planned could materially adversely affect our business, financial condition, results of operations, and prospects.

We may be unable to manage risks associated with our potential expansion into international markets.

We have established subsidiaries in the U.S., Thailand, and Germany, for our operations overseas, and may further expand our business into international markets in the future. In our international expansion, we may face economic, regulatory, legal and political risks inherent in having relationships, operations and sales in other jurisdictions, including challenges caused by distance and linguistic and cultural differences, the potential for longer collection periods and for difficulty in collecting accounts receivable and enforcing contractual obligations, fluctuations in currency exchange rates, unanticipated changes in laws or regulatory requirements, including tariffs or other barriers to trade, and the potential for political, legal and economic instability. Any of these or other factors could have an adverse effect on our sales or costs, on the market acceptance of our solutions or on our ability to compete in one or more jurisdictions, which could have a material adverse effect on our business, results of operations or financial condition.

Expansion into international markets may place significant additional burdens on our senior management and our sales and marketing teams. We also may not be able to process and make available to our customers navigation and location-based solutions for a new geographic market in a timely or commercially favorable manner, in the native language or without substantial errors. Moreover, our ability to expand successfully depends in part on our establishment of sufficient operational resources and infrastructure. Our sales and marketing efforts in a new geographic market may fail to establish a viable distribution network or our solutions may not gain market acceptance or brand recognition sufficient to offset the costs of geographic expansion. If we fail to properly manage these risks, we may incur higher expenses and lower revenue, and any geographic expansion we undertake could have a material adverse effect on our business, results of operations, or financial condition.

In addition, if we expand more into international markets, our operations will be more influenced by currency rate fluctuations. Our consolidated financial statements are presented in JPY, which is our reporting currency, and our operations are conducted predominantly in JPY. However, we generate a portion of our revenue and incur a portion of our expenses through our subsidiaries in the United States, Thailand, and Germany, whose functional currencies are the US$, the Thai baht (“THB”), and the euro (“EUR”), respectively. As a result, we are exposed to foreign exchange risk arising from (i) the remeasurement of foreign-currency-denominated monetary assets and liabilities (including both third-party and intercompany balances), and (ii) the translation of the results of operations and net assets of our overseas subsidiaries into JPY for the purposes of preparing our consolidated financial statements. Because our overseas subsidiaries currently represent a relatively modest portion of our overall business, the direct impact of foreign currency fluctuations on our financial results has historically been limited; however, fluctuations in exchange rates between JPY and US$, THB, and EUR may still affect our reported revenue, expenses, assets, liabilities, and equity. As a result, a negative impact resulting from fluctuations in foreign currency exchange rates may adversely affect our financial condition, results of operations, cash flows and prospects, particularly if we expand more into international markets. For a further discussion of currency, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Foreign Exchange Risk.”

Interruptions, performance issues or security issues associated with our products and platform could materially and adversely affect our business, financial condition, results of operations, and prospects.

In providing our software services to clients, we rely on information technology infrastructure that is managed internally along with placing reliance on third-party service providers, including cloud server providers, providers of map data and camera footage, and licensors of social media contents. We and these third-party service providers are potentially vulnerable to damage or interruption from human error, cyber-attacks, natural disasters, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events. If our systems fail to perform, we could experience unanticipated disruptions in operations, slower response times, or decreased customer service and customer satisfaction. As we increase our reliance on third-party systems, our exposure to damages from service disruptions may increase, and we may incur additional costs to remedy damages caused by these disruptions. Any service interruptions or other performance issues could negatively impact our relationship with existing customers and harm our ability to attract new customers, and as a result could materially adversely affect our business, financial condition, results of operations, and prospects.

Additionally, our products and platform are inherently complex and may, from time to time, contain material defects or errors, particularly when new products or new features or capabilities are released. Any real or perceived errors, failures, vulnerabilities, or bugs in our products or platform could result in negative publicity or lead to data security, access, retention, or performance issues, all of which could harm our business and reputation. In addition, the costs incurred in correcting such defects or errors may be substantial. Any of these risks could materially adversely affect our business, financial condition, results of operations, and prospects.

If our security measures are breached or unauthorized access to user data is otherwise obtained, our software may be perceived as not being secure, customers may reduce the use of or stop using our products and services and we may incur significant liabilities.

Our location-based software services involve the use, storage, and transmission of licensed information, including social media contents and camera footages, for which we have entered into confidentiality agreements with the suppliers of such information. As a result, unauthorized access or security breaches could result in the loss of information, litigation, indemnity obligations, and other liability. Although we have security measures in place to protect sensitive information and prevent data loss and other security breaches, if these measures are breached as a result of third-party actions, employee errors, malfeasance or otherwise, and someone obtains unauthorized access to such data, our reputation could be damaged, our business may suffer and we could incur significant liability.

Because the techniques used to obtain unauthorized access to proprietary data or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any or all of these issues could negatively affect our ability to attract new customers, result in reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our operating results.

Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our products and services and could adversely affect our business.

We collect live video and location data from taxis which have installed our Mvcube for Taxi software, to utilize for the development of our other location-based software products. While we enter into agreements with taxi operators to limit the use of such data to our development efforts, privacy concerns that such data will be improperly handled, whether or not valid, may inhibit market adoption of our products and services. In addition, IVI systems enable users to collect, use, and store personal or identifying information. Furthermore, concerns have been raised with respect to the possibility that GPS-based navigation products could be used to violate personal privacy by making available a record of a person’s geographical location to others. While we do not directly collect data on the location of individual end-users, our location-based solutions could enable our mobile operator customers to collect such data if they chose to do so. We also plan to increase our internal data acquisition capabilities by collecting spatial information for DynaPlanet ourselves. See “Item 4. Information on the Company—B. Business Overview—Growth Strategies—Expand and Monetize Digital Mapping Software Services.” The technological potential of our current or future solutions may create privacy concerns in the general public. If these or other problems with public opinion arise in connection with our solutions or the navigation and located-based services industry in general, or if new laws or regulations are passed relating to privacy concerns, our reputation, results of operations or financial condition could be materially and adversely affected.

Japanese government bodies and agencies have adopted laws and regulations regarding the collection, use, storage and disclosure of personal information obtained from consumers and individuals. Currently, the Act on the Protection of Personal Information (Act No. 57 of May 30, 2003, as amended) and its related guidelines impose various requirements on businesses, including us, that use databases containing personal information. See “Item 4. Information on the Company—B. Business Overview— Regulations.” The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businesses of our customers may limit the use and adoption of our products and services and reduce overall demand, or lead to significant fines, penalties or liabilities for any noncompliance with such privacy laws.

All of these domestic and international legislative and regulatory initiatives may adversely affect our customers’ ability to process, handle, store, use and transmit demographic and personal information from their employees, customers and suppliers, which could reduce demand for our products and services. In addition to government activity, privacy advocacy groups and the technology industry and other sectors are considering various new, additional or different self-regulatory standards that may place additional burdens on us. If the processing of personal information were to be curtailed in this manner, our products would be less effective, which may reduce demand for our products and adversely affect our business.

We depend on a cloud storage service provider to operate our software and any disruption in the operation of the cloud storage service provider could adversely affect our business.

We have built extensive expertise not only in in-vehicle software but also in smartphone app development and cloud platform integration. Since 2018, we have developed and provided communication protocols that connect smartphones to the cloud, connect the cloud to vehicles, and connect smartphones directly to vehicles (for instance, for remote control or keyless entry).

While we control and have access to our files and data that are located in Amazon Web Services (AWS), we do not control the operation of these facilities. Since the cloud server is located at our cloud storage service provider’s facilities, we fully rely on the provider’s service support to maintain the server and its infrastructure, including cybersecurity protection and recovery resulting from server failure. The server performance may also temporarily deteriorate since hosting infrastructure is also employed to serve the significant number of our cloud storage service provider’s users. Our cloud storage service provider has no obligation to renew a cloud storage service agreement with us on commercially reasonable terms, or at all. If we are unable to renew the agreement on commercially reasonable terms, or if our cloud storage service provider is acquired, we may be required to transfer our servers and other infrastructure to new data center facilities, and we may incur significant costs and possible service interruption in connection with doing so.

Any problems faced by our cloud storage service provider, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of our customers. Our cloud storage service provider may decide to terminate their service without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our cloud storage service provider or any of the service providers with whom we or it contract may have negative effects on our business, the nature and extent of which are difficult to predict. Additionally, if our cloud storage service provider is unable to keep up with our growing needs for capacity, this could have an adverse effect on our business. Any changes in third-party service levels at our cloud storage service provider’s server or any errors, defects, disruptions, or other performance problems with our products could adversely affect our reputation and may damage customers’ stored files or result in lengthy interruptions in our services. Interruptions in our services might reduce our revenue, subject us to potential liability, or adversely affect our future sales.

We have incorporated AI technologies into some of our products and services, which presents operational and reputational risks.

Our BeatMap app uses NLP tools powered by Transformer models, a deep learning architecture introduced by Google in 2017, to analyze public contents on social media platforms licensed to us and uses a proprietary AI filtering algorithm that refines answers by referencing a curated internal dataset. Our work in this domain has resulted in several critical patents (for instance, Patent No. 6788637 and Patent No. 7023821) protecting our methods of location inference and data generation using AI. Our DynaPlanet also uses AI to generate 3D reconstructions of urban space in our DynaPlanet project. See “Item 4. Information on the Company—B. Business Overview—Our Competitive Strengths—Technical Strength in Advanced Generative AI Technology” and “Item 4. Information on the Company—B. Business Overview—Our Products and Services—Beatmap.” Although we view AI-enabled features as an important component of certain of our technologies and product development initiatives, these features remain at an early stage of commercialization and have made only a limited contribution to our revenue to date.

As with many innovations, there are associated risks involved in utilizing AI technology. Although we believe that overall testing results of our current product and development efforts show promise, no assurance can be provided that our use of such AI will produce the intended results in the future. Even if it could produce such intended results, we cannot guarantee that such AI will not produce errors going forward. AI, particularly generative AI, has been known to produce false or “hallucinatory” inferences or outputs. AI can also present ethical issues and may subject us to new or heightened legal, regulatory, ethical, or other challenges. Inappropriate or controversial data practices by developers and end-users, or other factors adversely affecting public opinion of AI, could impair the acceptance of AI solutions, including those incorporated in our products and services. If the AI tools that we use are deficient, inaccurate, or controversial, we could incur operational inefficiencies, competitive harm, legal liability, brand or reputational harm, or other adverse impacts on our business and financial results.

Additionally, we have incorporated machine learning models into our AI tools. If the machine learning models are incorrectly designed, the data we use to train them is incomplete, inadequate, or biased in some way, or we do not have sufficient rights to use the data on which its machine learning models rely, the performance of our software that uses AI could suffer.

In addition, regulation of AI is rapidly evolving worldwide, as legislators and regulators are increasingly focused on these powerful emerging technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and security, customer protection, competition, and equal opportunity laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations. For example, Japan enacted the Act on Promotion of Research and Development, and Utilization of Artificial Intelligence-related Technology (Act No. 53 of June 4, 2025), which establishes a basic framework for promoting the research and development and utilization of AI-related technology, including basic principles, responsibilities of the national and local governments, research and development institutions, and business operators utilizing AI-related technology, and the establishment of the AI Strategy Headquarters. In addition, in May 2024, the Japanese government embarked on drafting bills to regulate large AI developers. On April 10, 2024, Ministry of Economy, Trade, and Industry and Ministry of Internal Affairs and Communications published AI Guidelines for Business version 1.0 by compiling existing AI guidelines released by these two ministries. The guidelines were subsequently updated to version 1.2 in March 2026. In July 2025, President Trump announced an “AI Action Plan” through three executive orders. The plan mandates “truth-seeking” and “ideological neutrality” for federal use of large language models, requiring all procurement contracts to comply by November 20, 2025. It streamlines federal permitting for high-power data centers by overriding environmental reviews and encourages financing and fast-tracking of AI infrastructure. A third order promotes global exports of the U.S. “AI technology stack,” including chips, models, and security tools. The Office of Management and Budget (OMB) implemented this through memos M-25-21 and M-25-22, embedding AI governance across federal systems and requiring transparency in public AI use cases, while prioritizing domestic AI suppliers under “buy American” provisions. Subsequently, on June 2, 2026, President Trump signed another executive order titled “Promoting Advanced Artificial Intelligence Innovation and Securities” including measures to address emerging cybersecurity risks presented by advanced AI models by directing the Secretaries of the Treasury, War, and Homeland Securities and relevant components to develop (i) a classified benchmarking process to assess the advanced cyber capabilities of AI models and determine the threshold at which they should be designated a “covered frontier model” for the purposes of the order, and (ii) a voluntary framework for AI developers to (x) engage with the federal government to determine whether models meet the threshold for designation, and (y) grant agencies access to covered frontier models for 30 days prior to release to wider audiences.

Since these regulatory frameworks rapidly evolve, we may become subject to new laws and regulations in Japan, the United States, Germany, or Thailand, which may affect the legality, profitability, or sustainability of our businesses, and we may be unable to predict all the legal, operational, or technological risks that may arise relating to the use of AI. The failure to comply with recommended guidelines, such as the AI Guidelines for Business version 1.0, may also negatively affect our reputation. Because AI technology itself is highly complex and rapidly developing, it is not possible to predict all the legal, operational, or technological risks that may arise relating to the use of AI. Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm.

The successful continued integration of AI technologies in our product may be dependent on our access to specific third-party software and infrastructure, and our business may be adversely impacted if we are unable to access such third-party software and infrastructure.

We use NLP tools powered by Transformer models, a deep learning architecture introduced by Google in 2017. We also employ other AI technologies, including third-party generative AI tools, in our current products. Our ability to continue to use such technologies at the scale we need may be dependent on access to such specific third-party software and infrastructure. We cannot control the availability or pricing of such third-party AI technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers. If any third-party AI technologies become incompatible with our solutions, become unavailable for use, or the providers of such models unfavorably change the terms on which their AI technologies are offered or terminate their relationship with us, our products and services may become less appealing to our customers, and our business will be harmed. In addition, to the extent any third-party AI technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from such affected provider.

We may also make our products that employ AI technologies available via license agreements to third parties, who can use our products in their own operations. We may not have insight into, or control over, the practices of third parties who may utilize such products. As such, we cannot guarantee that such third parties will not use such AI technologies for improper purposes, including through the dissemination of illegal, inaccurate, defamatory, or harmful content, intellectual property infringement or misappropriation, furthering bias or discrimination, cybersecurity attacks, data privacy violations, or to develop competing technologies, or that the measures we implement to prevent such improper use will be effective. Such improper use by any third party could adversely affect our business, financial condition, reputation (and the reputations of our customers), and/or subject us to legal liability.

We use certain open source software in our business, which could expose us to information security vulnerabilities, result in failures, errors, and defects, or subject us to possible litigation or to certain unfavorable conditions, including requirements that we offer our products that incorporate the open source software for no cost or that we make publicly available our confidential, proprietary source code, and any other intellectual property that we developed using or derived from such open source software.

We use open source software in connection with certain of our technologies. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification, or other contractual protections regarding infringement claims or the quality of the code. Accordingly, we cannot assure that the authors of such open source software will implement or push updates to address security risks or will not abandon further development and maintenance. In addition, the public availability of such software may make it easier for others to compromise our technology. Many of the risks associated with the use of open source software cannot be eliminated, and could, if not properly addressed, negatively affect our business, our intellectual property, and the security of our systems, products, and services. To the extent that our systems depend upon the successful operation of the open source software they use, any undetected errors or defects in such open source software could prevent the deployment or impair the functionality of our systems or applications, delay the introduction of new solutions, result in a failure of our systems, products or services, and injure our reputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks and make our systems more vulnerable to data breaches.

Furthermore, some open source software licenses require users who distribute open source software as part of their proprietary software, or derive proprietary software from or based on open source software, or link proprietary code to open source software, to publicly disclose all or part of the source code to such proprietary software and/or make available any derivative works of the open source code on unfavorable terms or at no cost. In some circumstances, distribution of our software that is derived from open source software or incorporating or linking to or otherwise in connection with open source software could require that we disclose and license some or all of our proprietary source code in that software, as well as distribute our products that use particular open source software at no cost to the user. We generally try to use open source software in a manner that will not require the disclosure of the source code to our proprietary software or prevent us from charging fees to our customers or passengers for the use of our proprietary software. However, we cannot guarantee that these efforts will be successful, and thus, there is a risk that the use of open source may ultimately preclude us from charging fees for the use of certain software, require us to replace certain code used in our products and/or services, pay a royalty to use some open source code, make the source code publicly available, or discontinue certain software. The release of the source code of our proprietary software could substantially help our competitors develop products that are similar to or better than ours with lower development effort and time and ultimately could result in a loss of our competitive advantage.

Open source license terms are often ambiguous and there is little legal precedent governing their interpretation. Accordingly, there is a risk that these licenses could be construed in a way that could impose unanticipated obligations, conditions, or restrictions regarding our ability to provide or distribute our products and technologies. Companies that incorporate open source software into their products have, in the past, faced claims seeking enforcement of open source license provisions and claims asserting ownership of open source software incorporated into their product. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software or claiming non-compliance with the terms and conditions of an open source license, and we could incur significant legal costs defending ourselves against such allegations. If we were held to have breached or to have failed to fully comply with such terms and conditions, we could face infringement claims or other liability, or could be required to seek costly licenses from third parties to continue providing our technology on terms that are not economically feasible, to re-engineer our system, or to make generally available, in source code form our proprietary code, any of which could adversely affect our business, financial condition, and operating results.

Our business could be adversely affected if our customers are not satisfied with the deployment services provided by us.

In our SDV and LBS businesses, we develop in-vehicle software per the requirements of our customers. Our business depends on our ability to satisfy our customers, both with respect to the quality and features of the end product and communications with the customers during the development process. Despite the fact that customers are involved in the development process, there is no assurance that a customer will not sue us for damages they experience arising from the use of our product and services, if a customer is not satisfied with the development services we provided.

Disputes and legal and other proceedings may require substantial time and expense to resolve, which could divert valuable resources, such as management time and working capital, delay our planned projects, and increase our costs. There is no assurance that courts will not enter into judgments against us. In such events, our business operations, financial condition, and reputation may be materially and adversely affected. In addition, negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.

A significant portion of our total revenue was derived from a few major customers. A high concentration of our revenue from a few major customers means that loss of business from any of them may have a significant negative impact on our business and financial performance.

During the fiscal year ended February 28, 2026, we had three significant customers who accounted for more than 10% of our revenue: Honda Group, Toyota Group, and Uni Electronics, representing 50.6%, 16.3%, and 11.4% of our revenue, respectively. During the fiscal year ended February 28, 2025, we had three significant customers who accounted for more than 10% of our revenue: Honda Group, Toyota Group, and Uni Electronics representing 51.5%, 14.3%, and 14.0% of our revenue, respectively. During the fiscal year ended February 29, 2024, we had two significant customers who accounted for more than 10% of our revenue: Honda Group and Uni Electronics, representing 48.1% and 24.2% of our revenue, respectively. For purposes of the above disclosure, customers that are under common control are aggregated and presented on a combined basis.

There is no guarantee that we will not have a concentration of customers in the future. Having several significant customers may make us vulnerable to the risk of financial impact if we are unable to secure new revenue-generating customer contracts. Such customers are independent entities with their own operational and financial risks that are beyond our control. The major customer may not continue using our services in the future, because it (i) may not need such services; (ii) may not have the budget for purchasing these services; (iii) may choose to purchase these services from our competitors instead of us; or (iv) may determine not to use our services for other reasons. A high concentration of revenue from a few major customers means that loss of business from any of them may have a significant negative impact on our business and financial performance. If any of these customers breach or terminate their contracts with us, or experience significant disruptions to their operations, we will be required to find and enter into contracts with one or more customers as replacement. It could be costly and time-consuming to find alternative customers, and these customers may not be available at reasonable terms or at all. As a result, this could harm our business and financial results and result in lost or deferred revenue.

Two of our major customers are also our major suppliers. If we are unable to maintain our relationship with these suppliers-customers, our business could suffer significant disruption.

Among our major customers, Uni Electronics also acted as our major supplier for the fiscal years ended February 29, 2024. In addition, another major customer, Toyota, including its wholly owned subsidiary Toyota Mapmaster Incorporated (“TMI”), also acted as our major suppliers for the fiscal year ended February 28, 2025 and February 29, 2024. Any deterioration in our relationship with these parties, whether as a supplier or customer, could disrupt our supply chain, reduce revenue, or negatively impact pricing and contractual terms. For example, unfavorable changes in the commercial terms of one side of the relationship may influence or pressure negotiations on the other side, potentially reducing our ability to operate at arm’s length.

Moreover, a conflict of interest or competing strategic priorities on the part of these counterparties could lead to reduced commitments, delayed orders, supply interruptions, or termination of business arrangements. We may also face difficulties in enforcing our contractual rights due to the interdependence of the relationships, or in finding suitable alternative suppliers or customers on acceptable terms or within required timeframes in the event that our relationship with these parties is terminated. As a result, if we are unable to maintain a stable and mutually beneficial relationship with these suppliers-customers, or if they experience financial or operational difficulties, our business could suffer significant disruption.

Our significant customers are also our shareholders. This could create potential conflicts of interest and adversely affect our business operations.

Our significant customers during the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, Honda, Uni Electronics, and Toyota, are also our shareholders. Among them, Honda, Toyota, and O-Well, a parent company of Uni Electronics, respectively, are beneficial owners of 5% or more of our Ordinary Shares as of the date of this annual report (See “Item 6. Directors, Senior Management and Employees—E. Share Ownership”). The dual role of these companies as both significant customer and significant shareholder creates the potential for actual or perceived conflicts of interest that could adversely affect our business operations, strategic direction, or the interests of our other shareholders.

For example, any of these customers may seek to influence decisions related to price terms, contract terms, allocation of resources, or strategic initiatives in a manner that favors its commercial interests as a customer over the interests of the Company or our broader shareholder base. In addition, our management and Board of Directors may face increased complexity or pressure in negotiating or evaluating agreements or business terms involving such customers, as any perception of preferential treatment or non-arm’s-length dealings could lead to reputational damage, shareholder litigation, or regulatory scrutiny.

This relationship could also raise questions about the objectivity and independence of our corporate governance processes. For instance, the customer-shareholder may exert informal influence over management or attempt to sway corporate actions, such as strategic partnerships, capital allocation, or decisions related to the customer’s contracts or competitive positioning. Even if such influence is not exerted, the mere perception of it could undermine investor confidence and raise concerns about the fairness and transparency of our decision-making.

We cannot assure investors that this dual relationship will not influence our corporate decisions or lead to circumstances in which our obligations to the customer are prioritized over our fiduciary duties to other shareholders. Additionally, if our relationship with such customers were to deteriorate, whether due to a dispute, change in business strategy, or competitive conflict, we could face a material loss of revenue, and the customers could seek to use their shareholder position to exert pressure or influence corporate outcomes, including through voting or shareholder proposals.

Furthermore, the loss or reduction of business from these customers could have a material adverse effect on our financial condition and results of operations. Given such customers’ significant ownership stake, any deterioration in our relationship could also negatively affect investor perception, potentially leading to stock price volatility or reputational harm. We cannot guarantee that our relationship with customer-shareholders will continue or that any future dealings will be free from the appearance or risk of conflict.

Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and our financial results.

Customers of our software services depend on our support team to resolve technical issues relating to services rendered. We may be unable to respond quickly enough to accommodate short-term increases in user demand for support services. In addition, our sales process is highly dependent on our business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to effectively sell our SDV software development and other services to customers and other future products to existing and prospective customers, and may adversely impact our business, operating results and financial position.

Our growth depends in part on the success of our strategic relationships with third parties.

In order to grow our business, we anticipate that we will continue to depend on relationships with third parties, such as suppliers of traffic and map data, OEMs, and trading companies. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. Our competitors may be effective in providing incentives to third parties to favor their products or services or to prevent or reduce purchases of our services. In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our current and potential customers, as our partners may no longer facilitate the adoption of our products and services by potential customers.

If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.

If our products fail to perform properly, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims.

Our primary products and services, such as our IVI software system and navigation software, are internet-based and complex, and may contain material defects or errors. The costs incurred in correcting any material defects or errors might be substantial and could adversely affect our operating results. Any defects in functionality or that cause interruptions in the availability of our service could result in:

Due to the complex and data-intensive nature of our IVI and navigation software systems, there is a risk that hardware failures, software bugs, or system errors could lead to data corruption, loss, or inaccuracies in critical information—such as map data, vehicle diagnostics, media content, or real-time traffic updates. These inaccuracies may be considered material by end users, particularly in navigation use cases where reliability and precision are paramount. Moreover, the performance and availability of our IVI and navigation products may be adversely impacted by several factors beyond our control, including hardware limitations in end-user vehicles, intermittent or unavailable GPS or network signals, cyberattacks or security breaches, and fluctuations in data traffic volume or user behavior. These issues may prevent our systems from functioning as expected, or may cause degraded user experience, which could in turn damage user trust and brand reputation. We may be held responsible for damages that users experience in connection with service disruptions, errors, or data inaccuracies, particularly if such issues are perceived to impact vehicle safety, navigation accuracy, or regulatory compliance.

Additionally, our reliance on third-party connectivity providers, such as mobile networks, cloud platforms, and GPS satellite services, means that any interruptions or degradation in those services could disrupt the functioning of our software. For example, if a vehicle loses connectivity or GPS signal, users may be unable to access navigation, media streaming, or over-the-air updates, which may lead to user dissatisfaction and reduced confidence in our systems. In the event of prolonged service outages or critical errors, our reputation could suffer significantly, potentially resulting in loss of customers, diminished future sales, and harm to our relationships with OEM partners and fleet operators.

Our future success depends on our ability to retain our key executives and to attract and retain qualified personnel.

We are highly dependent on our executive officers, as well as the other principal members of our management team. We also depend on our ability to retain and motivate key employees and attract qualified new employees, especially technical personnel and engineers who contribute to our product development. See “Item 4. Information on the Company—B. Business Overview—Our Competitive Strengths—Experienced Technical Workforce and Long-Term Development Capacity.” We may be unable to replace key members of our management team or key employees if we lose their services. Integrating new employees into our team could prove disruptive to our operations, require substantial resources and management attention, and ultimately prove unsuccessful. Any inability to attract and retain sufficient managerial personnel who have critical industry experience and relationships could limit or delay our strategic efforts, which could have a material adverse effect on our business, financial condition, and results of operations.

The loss of the services of any of these persons could impede the achievement of our growth, development, and commercialization objectives. The unexpected loss of the services of one or more of our directors or executive officers and/or advisors, including due to disease, disability, or death, could have a detrimental effect on us.

Our business depends on the continued success of our brands, and if we fail to maintain and enhance the recognition of our brands, we may face difficulty increasing our network of business partners and customers, and our reputation and operating results may be harmed.

We believe that market awareness of our brands, such as “naviAZ,” “micAuto,” “Beatrip,” and “Inner Tourism,” under which we promote and sell our software products and services, have contributed significantly to the success of our business. Maintaining and enhancing our brands is critical to our efforts to increase our network of business partners and customers.

Our ability to attract business partners and customers depends not only on investment in our brands, our marketing efforts, and the success of our products and services, but also on the perceived value of our products and services versus competing alternatives among our customer bases. In addition, a failure by our customers to distinguish between our brands and the different products and services provided by our competitors may result in a reduction in revenue, profit, and margins. If our marketing initiatives are not successful or become less effective, or if we are unable to further enhance our brand recognition, or if we incur excessive marketing and promotion expenses, we may not be able to attract new customers successfully or efficiently, and our business and results of operations may be materially and adversely affected.

In addition, negative publicity about our business, products, services, shareholders, affiliates, directors, officers, and other employees, and the industry in which we operate, can harm the recognition of our brands or reputation. Negative publicity, regardless of merits, concerning the foregoing, could be related to a wide variety of matters, including, but not limited to:

In addition to traditional media, there has been increasing use of social media platforms and similar devices in Japan, including instant messaging applications, social media websites, and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on instant messaging applications and social media platforms is virtually immediate, as is its impact, without affording us an opportunity for redress or correction. The opportunity for dissemination of information, including inaccurate information, is readily available. Information concerning our Company, shareholders, affiliates, directors, officers, other employees, and business partners, may be posted on such platforms at any time. The risks associated with any such negative publicity or incorrect information cannot be completely eliminated by our strategies to maintain our brand integrity and may materially harm the recognition of our brand, our reputation, business, financial condition, and results of operations.

We could be adversely affected by a failure to protect our intellectual property or the intellectual property of our business partners.

As of June 11, 2026, we had 307 registered patents in Japan,45 registered patents in the U.S., 12 registered patents in European countries, two registered patents in China, one registered patent in Taiwan, and one registered patent in Thailand. We also had 154 registered trademarks in Japan, 12 registered trademarks in the U.S., 10 registered trademarks in the United Kingdom, 14 registered trademarks in European Union, 10 registered trademarks in Thailand, and 40 registered trademarks in 16 other countries, including Hong Kong and Taiwan. In addition, we had one registered design in the U.S. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”

We regard our intellectual property as critical to our success, and we depend, to a large extent, on our ability to develop and maintain our intellectual property rights. To do so, we rely upon a combination of confidential policies, nondisclosure, and other contractual arrangements and copyrights, software copyrights, trademarks, and other intellectual property laws. We also make use of the intellectual property rights from business partners to monetize the services we provide. Despite our efforts to protect our or our business partners’ intellectual property rights, the steps we take in this regard might not be adequate to prevent, or deter, infringement or other misappropriation of our or our business partners’ intellectual property by competitors, former employees, or other third parties.

Monitoring and preventing any unauthorized use of our or our business partners’ intellectual property is difficult and costly, and any of our or our business partners’ intellectual property rights could be challenged, invalidated, circumvented, or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. Litigation or proceedings before governmental authorities, or administrative and judicial bodies may be necessary to enforce our intellectual property rights and to determine the validity and scope of our rights. Our efforts to protect our intellectual property in such litigation and proceedings may be ineffective and could result in substantial costs and diversion of resources and management time, each of which could substantially harm our operating results. Any failure in protecting or enforcing our or our business partners’ intellectual property rights could have a material adverse effect on our business, results of operations, financial condition, or prospects.

We may be subject to intellectual property claims that create uncertainty about ownership or use of intellectual property essential to our business and divert our managerial and other resources.

Our success depends, in part, on our ability to operate without infringing the intellectual property rights of others. Third parties may, in the future, claim our or our business partners’ current or future copyrights, patents, trademarks, technologies, business methods, or processes infringe on their intellectual property rights or challenge the validity of our or our business partners’ intellectual property rights. We may be subject to intellectual property infringement claims that would be costly to defend and could limit our ability to use certain critical copyrights, trademarks, or business methods.

The defense and prosecution, if necessary, of intellectual property suits, interference proceedings, and related legal and administrative proceedings can become very costly and may divert our management personnel from their normal responsibilities. We may not prevail in any of these suits or proceedings. An adverse determination of any litigation or defense proceedings could require us to pay substantial compensatory and punitive damages, could restrain us from using critical copyrights, patents, trademarks, business methods, or processes, and could result in us losing or not gaining valuable intellectual property rights.

Furthermore, due to the voluminous amount of discovery frequently conducted in connection with intellectual property litigation, some of our confidential information could be disclosed to competitors during this type of litigation. In addition, public announcements of the results of hearings, motions, or other interim proceedings or developments in the litigation could be perceived negatively by investors and thus have an adverse effect on the trading price of the ADSs.

Because intellectual property we develop under development service agreements may be owned by our customers, we may not be able to realize future benefits from such work, which could adversely affect our growth prospects.

A significant portion of our business involves developing customized software and related technology solutions pursuant to development service agreements with our customers, including OEMs or Tier 1 suppliers. See “Item 4. Information on the Company—B. Business Overview—Our Business Model—Revenue and Pricing Model—Software Development Services.” Under the terms of certain agreements, we have agreed with certain customers that intellectual property rights arising from our service performance are assigned to, and owned by, the customers. As a result, we do not retain rights to use, commercialize, or further develop certain intellectual property for our own business purposes or for use with other customers.

This arrangement limits our ability to build a portfolio of proprietary technology assets from our software development services, which may constrain the scalability of our business and reduce opportunities to generate recurring revenue from licensing or re-use of our work product. In addition, our reliance on customer-owned intellectual property may make it more difficult to differentiate ourselves from competitors that have developed their own proprietary platforms or solutions. Furthermore, disputes could arise with customers regarding the scope of rights granted or retained under our agreements, which could lead to costly litigation, damage customer relationships, or result in restrictions on our ability to use technology we believe to be part of our proprietary know-how.

If we are unable to balance customer demands for ownership of developed intellectual property with our strategic objective of developing reusable and proprietary technologies, our ability to grow our business and improve our financial performance could be materially and adversely affected.

Our operations are subject to natural disasters, adverse weather conditions, operating hazards, and labor disputes.

Our operations are subject to natural disasters, adverse weather conditions, operating hazards, and labor disputes. We may experience earthquakes, floods, typhoons, power outages, labor disputes, or similar events beyond our control that could materially and adversely affect our operations. In the event of uncontrollable circumstances, including operating hazards, fires, and explosions, natural disasters, adverse weather conditions, and major equipment failures, for which we may not be able to obtain insurance at a reasonable cost, there could be a material and adverse effect on our business.

In addition, since a significant portion of our research and development activities and operations and our business partners’ activities occur at specific locations, the occurrence of any natural disaster, unanticipated catastrophic event, or unexpected accident at these locations could result in disruptions or shutdowns, which could significantly disrupt our business operations, cause us to incur additional costs, and affect our ability to deliver services and conduct courses as scheduled, thereby materially and adversely affecting our business, financial condition, and results of operations.

We are currently operating in a period of economic uncertainty and capital markets disruption, significantly impacted by geopolitical instability due to the ongoing military conflict involving Iran, military actions in the Middle East, and the war in Ukraine. Our business, financial condition, and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from these conflicts or any other geopolitical tensions.

The heightened military conflict involving the United States, Israel, and Iran, which escalated significantly in February 2026, has led to profound instability in global financial and energy markets. These events, including the closure of strategic airspaces and critical maritime routes such as the Strait of Hormuz and the Red Sea, have contributed to a dramatic increase in the price of oil and gas and created widespread market uncertainty. The ongoing disruptions caused by these military actions, and the potential for further escalation, could result in protracted and severe damage to the global economy and investment climate.

Furthermore, the continuing war in Ukraine and the resulting sanctions levied by the United States, the European Union (the “EU”), and other nations including Japan against Russia continue to impact global financial markets. The extent and duration of these military actions in the Middle East and Eastern Europe, as well as the resulting sanctions and market disruptions, are impossible to predict but are expected to remain substantial.

Such geopolitical instability may further exacerbate volatility in global energy prices, increasing our facility operating costs, including utilities and event hosting expenses, and contributing to broader economic fluctuations in Japan. If Japan becomes actively involved in these conflicts or extends support to any involved parties, it could face sanctions and penalties by the United States, the EU, and other countries. While our business has not been materially impacted by these geopolitical events as of the date of this annual report, the extent to which our operations or those of our business partners will be affected in the future, or the ways in which the conflicts may impact our business, including sanctions and penalties, is unpredictable. The extent and duration of the military actions, sanctions, and resulting market disruptions could be substantial. Any such disruptions may also amplify the impact of other risks described in this annual report.

Recent changes in the U.S. tariff policies may adversely affect our business, financial condition, and results of operations.

In recent years, and particularly in 2025, the U.S. government has taken steps to reassess its trade policies with a number of countries. We cannot guarantee that we will remain unaffected by changes in these tariff policies. If U.S. tariff policies negatively impact our business, our operating costs could rise significantly. If we are unable to successfully pass these increased costs on to our customers, our business, financial condition, and results of operations could be materially and adversely affected.

In addition, evolving U.S. tariff policies may reduce the willingness of foreign enterprises to invest in Japan, where we operate. These policies may also adversely affect our customers, which could, in turn, indirectly impact our business. Our overseas customers could incur greater costs by sourcing from us as a result of such policies. If we lose customers as a result of changes in tariff policies, our operating results could be materially and adversely affected.

We have engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

We have entered into a number of transactions with related parties. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” and “—Our significant customers are also our shareholders. This could create potential conflicts of interest and adversely affect our business operations.” We may, in the future, enter into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests. Transactions with the entities in which related parties hold ownership interests present potential for conflicts of interest, as the interests of these entities and their shareholders may not align with the interests of the Company and our unaffiliated shareholders with respect to the negotiation of, and certain other matters related to, our purchases from and other transactions with such entities. Conflicts of interest may also arise in connection with the exercise of contractual remedies under these transactions, such as default.

Nevertheless, we may have achieved more favorable terms if such transactions had not been entered into with related parties. These transactions, individually or in the aggregate, may have an adverse effect on our business and results of operations or may result in government enforcement actions and other litigation.

Risks Relating to the Trading Market

Share ownership is concentrated in the hands of our directors and major shareholders, who will continue to be able to exercise a direct or indirect controlling influence on us.

Our directors, executive officers, and major shareholders together beneficially own approximately 27.6% of our Ordinary Shares issued and outstanding. As a result, they are able to determine the outcome of all matters that require approval by our shareholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other shareholders, including those who purchased ADSs in our initial public offering (“IPO”) or in the public market, oppose them.

Future issuances of the ADSs or Ordinary Shares or securities convertible into, or exercisable or exchangeable for, ADSs or Ordinary Shares, or the expiration of lock-up agreements that restrict the issuance of new ADSs or Ordinary Shares or the trading of outstanding ADSs or Ordinary Shares, could cause the market price of the ADSs to decline and would result in the dilution of your holdings.

Future issuances of the ADSs or our Ordinary Shares or securities convertible into, or exercisable or exchangeable for, ADSs or our Ordinary Shares, or the expiration of lock-up agreements that restrict the issuance of new ADSs or Ordinary Shares or the trading of outstanding ADSs or Ordinary Shares, could cause the market price of the ADSs to decline. We cannot predict the effect, if any, of future issuances of our securities, or the future expirations of lock-up agreements, on the price of the ADSs. In all events, future issuances of the ADSs or our Ordinary Shares would result in the dilution of your holdings. In addition, the perception that new issuances of our securities could occur, or the perception that locked-up parties will sell their securities when the lock-ups expire, could adversely affect the market price of the ADSs. Pursuant to the underwriting agreement (the “Underwriting Agreement”) between the Company and A.G.P./Alliance Global Partners, the sole underwriter of the IPO (the “Underwriter”), the Company agreed not to, for a period of six months from the closing of the IPO, among others, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares, ADSs, or any securities convertible into or exercisable or exchangeable for Ordinary Shares of the Company, without prior consent of the Underwriter. In connection with the IPO, on May 13, 2026 our directors, corporate auditors, executive officer, and 5% or greater shareholders entered into lock-up agreements and agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of, or otherwise dispose of any securities of the Company without the Underwriter’s prior written consent of for up to six months from the effective date of the registration statement on Form F-1 (No. 333-294081) on May 13, 2026. In addition to any adverse effects that may arise upon the expiration of these lock-up periods, the lock-up provisions in these agreements may be waived at any time. If the restrictions under the Underwriting Agreement or the lock-up agreements are waived, the ADSs or our Ordinary Shares may become available for resale, subject to applicable law, including without notice, which could reduce the market price for the ADSs.

The sale or availability for sale of substantial amounts of the ADSs could adversely affect their market price.

Sales of substantial amounts of the ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of the ADSs and could materially impair our ability to raise capital through equity offerings in the future. As of the date of this annual report, 59,419,414 of our Ordinary Shares were issued and outstanding. Among these shares, according to The Bank of New York Mellon, 6,959,980 were in the form of ADSs. All of the ADSs are freely tradable without restriction or additional registration under the Securities Act. The remaining Ordinary Shares outstanding are available for sale, subject to volume and other restrictions as applicable under Rules 144 and 701 under the Securities Act. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of the ADSs.

If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding the ADSs, the price of the ADSs and trading volume could decline.

Any trading market for the ADSs may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of the ADSs would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of the ADSs and the trading volume to decline.

The market price of the ADSs may be volatile or may decline regardless of our operating performance.

The market price of the ADSs may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

If we fail to implement and maintain an effective system of internal control over financial reporting or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of the ADSs may be materially and adversely affected.

We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our second annual report following the completion of our IPO. In addition, once we cease to be an “emerging growth company,” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we are a public company, our reporting obligations place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented, or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could, in turn, limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of the ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations, and civil or criminal sanctions. We may also be required to restate our financial statements for prior periods.

We have identified a material weakness in our internal control over financial reporting and, as a result, management has concluded that our internal control over financial reporting and our disclosure controls and procedures were not effective as of February 28, 2026. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified as of the date of this annual report relates to the lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and the reporting requirements set forth by the SEC to properly address complex technical accounting issues and to prepare and review the financial statements and related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the SEC.

Following the identification of the material weakness described above, we are in the process of implementing measures to improve our internal control over financial reporting, including: (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; and (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with the assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control. We also plan to implement additional measures to improve our internal control over financial reporting, including creating U.S. GAAP accounting policies and procedures manual, which will be maintained, reviewed and updated, on a regular basis, to the latest U.S. GAAP accounting standards, and strengthening corporate governance. With the implementation of these measures, we aim to become fully compliant with the relevant U.S. GAAP and SEC reporting requirements.

However, the implementation of these measures may not fully address the material weakness in our internal control over financial reporting.

As of the date of this annual report, we have not undertaken a comprehensive assessment of our internal control under the Sarbanes-Oxley Act for purposes of identifying and reporting any other weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses we have already identified or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations, and prospects, as well as the trading price of the ADSs, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

We incur significant costs as a result of being a public company.

As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.

We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means our public float equals or exceeds $700 million as of the prior August 31, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

After we are no longer an “emerging growth company,” or until five years following the completion of our IPO, whichever is earlier, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we will be required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. In addition, investors may find the ADSs less attractive if we rely on the exemptions and relief granted by the JOBS Act. If some investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and our stock price may decline and/or become more volatile.

We continue to evaluate and monitor developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition, or prospects, making it difficult for prospective investors to assess the rapidly changing value of the ADSs.

Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and high stock price volatility with a number of recent IPOs, especially among companies with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume, and less liquidity than large-capitalization companies. In particular, the ADSs may be subject to immediate and substantial price volatility, low volumes of trades, and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition, or prospects, making it difficult for prospective investors to assess the rapidly changing value of the ADSs.

In addition, if the trading volumes of the ADSs are low, persons buying or selling in relatively small quantities may easily influence prices of the ADSs. This low volume of trades could also cause the price of the ADSs to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of the ADSs may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of the ADSs. As a result of this volatility, investors may experience losses on their investment in the ADSs. A decline in the market price of the ADSs also could adversely affect our ability to issue additional ADSs or Ordinary Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in the ADSs will develop or be sustained. If an active market does not develop, holders of the ADSs may be unable to readily sell the ADSs they hold or may not be able to sell their ADSs at all.

We do not intend to pay dividends for the foreseeable future.

We currently intend to retain all of our available funds and any future earnings to fund the operation, development, and growth of our business and, as a result, we do not expect to declare or pay any dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income. Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

Rights of shareholders under Japanese law may be different from rights of shareholders in other jurisdictions.

Our articles of incorporation and the Companies Act of Japan (Act No. 86 of 2005, as amended) (the “Companies Act”), govern our corporate affairs. Legal principles relating to matters such as the validity of corporate procedures, directors’ and executive officers’ fiduciary duties, and obligations and shareholders’ rights under Japanese law may be different from, or less clearly defined than, those that would apply to a company incorporated in any other jurisdiction. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the law of other countries. For example, under the Companies Act, only holders of 3% or more of our total voting rights or our outstanding shares are entitled to examine our accounting books and records. Furthermore, there is a degree of uncertainty as to what duties the directors of a Japanese joint-stock corporation may have in response to an unsolicited takeover bid, and such uncertainty may be more pronounced than in other jurisdictions.

As holders of ADSs, you may have fewer rights than holders of our Ordinary Shares and must act through the depositary to exercise those rights.

The rights of shareholders under the Companies Act, including voting their shares, receiving dividends and distributions, bringing derivative actions, examining our accounting books and records, and exercising appraisal rights, are available only to shareholders of record. Because the depositary, through its custodian, is the record holder of our Ordinary Shares underlying the ADSs, only the depositary can exercise those rights in connection with the deposited shares. ADS holders will not be able to, for example, perform shareholders’ rights under the Companies Act, such as bringing a derivative action, examining our accounting books and records, or exercising appraisal rights through the depositary.

Holders of ADSs may exercise their voting rights only in accordance with the provisions of the deposit agreement. Holders of ADSs will have a right to instruct the depositary how to vote the Ordinary Shares represented by their ADSs. Otherwise, you will not be able to exercise your right to vote unless you surrender your ADSs and withdraw the underlying Ordinary Shares represented by the ADSs. However, you may not know of the meeting sufficiently in advance to withdraw the Ordinary Shares. If we ask for instructions from ADS holders, the depositary will notify you of the upcoming vote and arrange to deliver our voting materials to you. We cannot assure you that you will receive voting materials in time to instruct the depositary to vote, and it is possible that you, including persons who hold their ADSs through brokers, dealers, or other third parties, will not have the opportunity to exercise a right to vote.

By agreeing to the provisions of the deposit agreement, it will not be deemed that you have waived the right to our compliance with the federal securities laws and the rules and regulations thereunder.

Direct acquisition of our Ordinary Shares is subject to a prior filing requirement under recent amendments to the Japanese Foreign Exchange and Foreign Trade Act and related regulations.

Because we are engaged in certain businesses designated by the Foreign Exchange and Foreign Trade Act of Japan (Act No. 228 of 1949, as amended, “FEFTA”), and its related cabinet orders and ministerial ordinances (collectively, the “Foreign Exchange Regulations”) such as a software business and information processing business, if a foreign investor, as defined under the FEFTA, intends to consummate an acquisition of our Ordinary Shares that constitutes an “inward direct investment” (“IDI”) under the Foreign Exchange Regulations, the foreign investor, in general, must file prior notification of such inward direct investment with the Minister of Finance and any other competent minister (“Ministers”). IDI includes an acquisition by a foreign investor of one or more of our Ordinary Shares. If such prior notification is filed, the proposed acquisition may not be consummated until the prescribed screening period, normally 30 days, expires. In some cases, the Ministers may extend the screening period, and may recommend or order a modification or abandonment of such acquisition. In addition, if certain conditions, including those prescribed in light of national security of Japan under the Foreign Exchange Regulations are met, the Ministers may order the disposal of the shares acquired or take other measures. Consequently, any foreign investor seeking to acquire our Ordinary Shares that constitutes an IDI may not consummate such acquisition on the expected timeframe, in accordance with an intended plan, or at all.

Additionally, if a foreign investor holds one or more voting rights and, at a general meeting of shareholders, consents to certain proposals having a material influence on our management such as the (i) election of such foreign investor or any of its related persons (as defined in the Foreign Exchange Regulations) as our directors or (ii) transfer or discontinuation of our business, such consent, subject to certain exemptions, also constitutes an IDI requiring prior notification. If such prior notification is filed, such consent may not be given until the prescribed screening period expires. As a result, such foreign investors may have difficulties giving such consent in accordance with an intended plan, or at all. Since the depositary is considered a foreign investor for purposes of FEFTA, the depositary would not be able to carry out instructions to vote deposited Ordinary Shares as to the matters described in the preceding sentence unless it filed prior notification and the relevant waiting period has expired without action by the relevant Ministers prior to the shareholders’ meeting. See “Item 4. Information on the Company—B. Business Overview—Regulations—Export Control and Cross-Border Transfers” and “Item 10. Additional Information—D. Exchange Controls—Foreign Exchange Regulations.”

ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.

The deposit agreement governing the ADSs representing our Ordinary Shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial for any claim they may have against us or the depositary arising out of or relating to our Ordinary Shares, the ADSs, or the deposit agreement, which may include any claim under the U.S. federal securities laws. The waiver continues to apply to claims that arise during the period when a holder holds the ADSs, whether the ADS holder purchased the ADSs in our initial public offering or secondary transactions, even if the ADS holder subsequently withdraws the underlying Ordinary Shares.

If we or the depositary were to oppose a jury trial based on this waiver, the court would have to determine whether the waiver was enforceable based on the facts and circumstances of the case in accordance with applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. We believe, however, that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement, or by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver, courts will generally consider whether a party knowingly, intelligently, and voluntarily waived the right to a jury trial. We believe that this would be the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.

This jury trial waiver provision can discourage claims or limit shareholders’ ability to bring and successfully prosecute a claim in a judicial forum. If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. If a lawsuit is brought against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including outcomes that could be less favorable to the plaintiff(s) in any such action. Nevertheless, if this jury trial waiver is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation, or provision of the deposit agreement or the ADSs serves as a waiver by any holder or beneficial owner of ADSs (including purchasers of the ADSs in the secondary market) or by us or the depositary of compliance with the U.S. federal securities laws and the rules and regulations promulgated thereunder.

Holders of ADSs may not receive distributions on our Ordinary Shares or any value for them if it is illegal or impractical to make them available to such holders.

The depositary for the ADS facility will agree to pay holders of ADSs any cash dividends or other distributions it or its custodian receives on the Ordinary Shares or other deposited securities after deducting its fees and expenses. Holders of ADSs will receive these distributions in proportion to the number of our Ordinary Shares that such ADSs represent. However, the depositary will not be responsible for making such payments or distributions if it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act, but that are not properly registered or distributed pursuant to an applicable exemption from registration. The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration required for such distribution is not obtained by us. We have no obligation to file for any approval or registration or take any other action to permit distributions on our Ordinary Shares to holders of ADSs. This means that holders of ADSs may not receive the distributions we make on our Ordinary Shares if it is illegal or impractical to make them available to such holders. These restrictions may materially reduce the value of the ADSs.

Holders of ADSs may be subject to limitations on transfer of their ADSs.

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer, or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

We and the depositary may agree to amend the deposit agreement without consent from holders of ADSs and, if such holders disagree with our amendments, their choices will be limited to selling the ADSs or withdrawing the underlying Ordinary Shares.

We may agree with the depositary to amend the deposit agreement without consent from holders of ADSs. If an amendment increases fees to be charged to ADS holders or prejudices a material right of ADS holders, it will not become effective until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, ADS holders are considered, by continuing to hold their ADSs, to have agreed to the amendment and to be bound by the amended deposit agreement. If holders of ADSs do not agree with an amendment to the deposit agreement, their choices will be limited to selling the ADSs or withdrawing the underlying Ordinary Shares. No assurance can be given that a sale of ADSs could be made at a price satisfactory to the holder in such circumstances.

We are incorporated in Japan, and it may be more difficult to enforce judgments obtained in courts outside Japan.

We are incorporated in Japan as a joint-stock corporation with limited liability. All of our directors are non-U.S. residents, and our assets and the personal assets of our directors and executive officers are located outside the United States. As a result, when compared to a U.S. company, it may be more difficult for investors in the U.S. to effect service of process upon us or to enforce against us, our directors or executive officers, judgments obtained in U.S. courts predicated upon civil liability provisions of the federal or state securities laws of the U.S. or similar judgments obtained in other courts outside Japan. There may be doubt as to the enforceability in Japanese courts, in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon the federal and state securities laws of the United States.

Dividend payments and the amount you may realize upon a sale of our Ordinary Shares or the ADSs that you hold will be affected by fluctuations in the exchange rate between the U.S. dollar and JPY.

Cash dividends, if any, in respect of our Ordinary Shares represented by the ADSs will be paid to the depositary in JPY and then converted by the depositary into U.S. dollars, subject to certain conditions and terms of the deposit agreement. Accordingly, fluctuations in the exchange rate between JPY and the U.S. dollar will affect, among other things, the amounts a holder of ADSs will receive from the depositary in respect of dividends, the U.S. dollar value of the proceeds that a holder of ADSs would receive upon sale in Japan of our Ordinary Shares obtained upon surrender of ADSs and the secondary market price of ADSs. Such fluctuations will also affect the U.S. dollar value of dividends and sales proceeds received by holders of our Ordinary Shares.

If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting, and other expenses that we would not incur as a foreign private issuer.

We qualify as a foreign private issuer. As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our executive officers, directors, and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Our executive officers and directors are required, pursuant to the Holding Foreign Insiders Accountable Act, to file Section 16(a) reports with the SEC to disclose their beneficial ownership of our securities. Our principal shareholders who are not officers or directors, however, remain exempt from Section 16(a) reporting requirements. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we are not required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently qualify as a foreign private issuer, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.

Because we are a foreign private issuer and have taken advantage of exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.

Nasdaq listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to follow home country practice in lieu of the above requirements. The corporate governance practice in our home country, Japan, does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of our Company may decrease as a result. In addition, Nasdaq listing rules require U.S. domestic issuers to have an audit committee, a compensation committee and a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We intend to follow home country practice, as permitted by Nasdaq. See “Item 16G. Corporate Governance.” Accordingly, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

If we cannot continue to satisfy the continued listing requirements and other rules of Nasdaq, the ADSs may be delisted, which could negatively impact the price of the ADSs and your ability to sell them.

To maintain our listing on Nasdaq, we are required to comply with certain rules of Nasdaq, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Although we currently meet the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy Nasdaq criteria for maintaining our listing, the ADSs could be subject to delisting.

If the ADSs are delisted from Nasdaq, we could face significant consequences, including:

We are an “emerging growth company” within the meaning of the Securities Act, and we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies, which will make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This will make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and the ADSs.

For as long as we remain an “emerging growth company,” as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of other public companies. If some investors find the ADSs less attractive as a result, there may be a less active trading market for the ADSs and the ADS price may be more volatile.

If we are classified as a passive foreign investment company, United States taxpayers who own the ADSs or our Ordinary Shares may have adverse United States federal income tax consequences.

A non-U.S. corporation such as ourselves will be classified as a passive foreign investment company (“PFIC”) for any taxable year if, for such year, either:

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds the ADSs or our Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

Depending on the amount of cash we raise in subsequent offerings, together with any other assets held for the production of passive income, it is possible that, for our 2026 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC, which could have adverse U.S. federal income tax consequences for U.S. taxpayers who are shareholders. We will make this determination following the end of any particular tax year. Accordingly, our U.S. counsel expresses no opinion with respect to our PFIC status and also expresses no opinion with regard to our expectations regarding our PFIC status. Prospective U.S. Holders should note that, if we are determined to be a PFIC for any taxable year, we do not currently intend to prepare or provide the information that would enable investors to make a qualified electing fund election which, if available, would result in different (and generally, less adverse) U.S. federal income tax consequences under the PFIC rules.

The classification of certain of our income as active or passive, and certain of our assets as producing active or passive income, and hence whether we are or will become a PFIC, depends on the interpretation of certain United States Treasury Regulations as well as certain IRS guidance relating to the classification of assets as producing active or passive income. Such regulations and guidance are potentially subject to different interpretations. If due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets treated as producing passive income increases, we may be a PFIC in one or more taxable years.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were or are determined to be a PFIC, see “Item 10. Additional Information—E. Taxation—Material Income Tax Consideration—United States Federal Income Taxation—PFIC.”

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISERS ABOUT THE PFIC RULES, THE POTENTIAL APPLICABILITY OF THESE RULES TO THE COMPANY CURRENTLY AND IN THE FUTURE, AND THEIR FILING OBLIGATIONS IF THE COMPANY IS A PFIC.

Item 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Corporate History

Micware was incorporated as a joint-stock corporation (kabushiki kaisha) with limited liability under Japanese law on March 3, 2003, in Hyogo, Japan. Micware completed its reorganization in March 2024 and since then has become a holding company, conducting substantially all of its businesses through subsidiaries. See “—Holding Company Reorganization.” As a holding company, our future operating revenue is dependent on our subsidiaries and the distribution of those earnings to us. See also “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We are a holding company and depend upon our operating subsidiaries for our cash flows.” Below is the list of Micware’s subsidiaries:

Acquisition of Micware’s Wholly Owned Subsidiaries

Databroad

On June 28, 2019, Micware and Yoshiki Matsubara and Chikako Matsubara entered into a share transfer agreement, whereby Yoshiki Matsubara and Chikako Matsubara agreed to transfer all 700 ordinary shares of Databroad, a company focusing on the development of media systems, including data and text broadcasting on televisions, video on demand, and live streaming, for an aggregate consideration of JPY159 million. The purpose of the acquisition was to diversify our portfolio as well as to employ Databroad’s know-how in broadcasting systems and expand our business into the broadcasting industry. The transfer became effective on July 16, 2019.

HI Corporation

On February 12, 2021, Micware entered into a share transfer agreement with Candera Japan Co., Ltd. and its parent company, ArtSpark HD Inc. (merged into CELYSYS Inc. (TYO:3663) in September 2022), whereby Candera agreed to transfer all 30,974 shares of HI Corporation, a joint-stock corporation with limited liability organized under Japanese law focusing on middleware development, licensing, and sales, to Micware for an aggregate consideration of JPY450 million. The transfer became effective on March 1, 2021. The purpose of the acquisition was to increase Micware’s software development capacity.

Micware Europe

On March 28, 2024, Micware and O-Well entered into a share purchase and assignment agreement, whereby O-Well agreed to sell one and only share of O-Well Germany GmbH, a then wholly owned subsidiary of O-Well, to Micware for the consideration of EUR1. The transfer became effective on March 28, 2024. The purpose of the acquisition was to establish Micware’s base in Germany. O-Well Germany GmbH’s name was changed to “Micware Europe GmbH” on the same day.

Holding Company Reorganization

On January 22, 2024, the board of directors approved the following organizational changes to split Micware’s internal companies into Micware’s wholly owned subsidiaries, causing Micware to be a holding company (the “Reorganization Plan”): (i) the execution of absorption-type company split agreement between Micware and Databroad, splitting Micware’s micNexus internal company and merging it with Databroad; (ii) the execution of absorption-type company split agreement between Micware and HI Corporation, splitting Micware’s micAuto internal company and merging it with HI Corporation; (iii) the implementation of incorporation-type company split plan, according to Article 763 of the Companies Act, splitting two of Micware’s an internal companies, micMobility and micHoldings, into two different joint-stock corporations with limited liability, namely Micware Mobility and Micware Operation; and (iv) the establishment of Micware Challenged.

On January 22, 2024, Micware entered into such absorption-type company split agreements with Databroad and HI Corporation, respectively. The splits were made free of consideration. The absorption-type company splits became effective on March 1, 2024. On the same day, the names of Databroad and HI Corporation were changed to “Micware Navigations Co., Ltd.” and “Micware Automotive Co., Ltd.,” respectively.

On March 1, 2024, Micware Challenged was established. Micware Challenged was renamed to “Micware Create Co., Ltd.” on May 26, 2025.

On March 4, 2024, the incorporation-type company split plan was implemented, and Micware Mobility and Micware Operation were established.

Share Split

On January 22, 2024, Micware’s board of directors approved a 130-for-1 share split of its issued and outstanding Ordinary Shares, which was based on a record date of February 29, 2024. On March 1, 2024, Micware effected the 130-for-1 share split of its issued and outstanding Ordinary Shares.

On February 16, 2026, the Company’s board of directors approved (i) a 241-for-1 share split of its issued and outstanding Ordinary Shares, and (ii) the increase of the number of authorized shares from 520,000 to 125,320,000. Such share split and increase of the number of authorized shares became effective on March 31, 2026.

Recent Business Acquisitions

On February 17, 2023, Micware entered into a software transfer agreement with Telecom Square Inc., a Japanese mobile telecommunication company (“Telecom Square”), to purchase “PinnAR,” a navigation mobile application with augmented reality technology incorporated, for a purchase price of JPY140 million, excluding consumption tax. According to the agreement, four employees were transferred from Telecom Square to Micware. Micware has agreed to cooperate in facilitating the transferred employees to continue working at Micware. The software was transferred to Micware on February 24, 2023.

On April 26, 2024, Micware Mobility entered into a business transfer agreement with DENSO Corporation (TYO: 6902, “Denso”). Under this agreement, Denso agreed to transfer its businesses related to smartphone applications that enable users to send locations selected on their smartphones to compatible car navigation systems. The applications are known as “NaviCon” in the Japanese market and “NaviBridge” in the international market. The transfer included certain software, contents, technical documentation, operational information, business information, intellectual properties, and contracts. The consideration for this transfer was JPY165 million, including consumption tax. The transfer became effective on March 31, 2025.

On January 31, 2025, Micware Mobility entered into a business transfer agreement with DENSO TEN Limited (“Denso Ten”). Under this agreement, Denso Ten agreed to transfer its business relating to the provision, development, and maintenance of taxi dispatch system to Micware Mobility. The transfer included certain assets and contracts. The consideration for this transfer was JPY60.5 million, including consumption tax. The transfer became effective on April 1, 2025.

Our IPO

On May 13, 2026, we entered into the Underwriting Agreement with the Underwriter, relating to our IPO of 2,850,000 ADSs. Each ADS represents one Ordinary Share. We had also granted the Underwriter a 45-day option to purchase up to an additional 427,500 ADSs at the public offering price of $8.00 per ADS (the “Over-Allotment ADSs”) to cover over-allotments (the “Over-Allotment Option”).

On May 15, 2026, we closed the IPO. We completed the IPO pursuant to (i) our registration statement on Form F-1 (File No. 333-294081), as amended, which was initially filed with the SEC on March 6, 2026 and declared effective by the SEC on May 13, 2026, and (ii) our registration statement on Form F-1 (File No. 333-295864), which was filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, with the SEC and became effective on May 13, 2026 (collectively, the “Registration Statements”). The ADSs were priced at $8.00 per ADS, and the offering was conducted on a firm commitment basis. The ADSs were approved for listing on Nasdaq and commenced trading under the ticker symbol “MWC” on May 14, 2026.

On May 20, 2026, the Underwriter exercised the Over-Allotment Option in full to purchase the additional 427,500 ADSs. The closing for the offering and sale of the Over-Allotment ADSs took place on May 27, 2026, resulting in additional gross proceeds of $3,420,000, before underwriting discounts and offering expenses. As a result, we issued and sold an aggregate of 3,277,500 ADSs and raised aggregate gross proceeds of approximately $26,220,000 in the IPO, including the full exercise of the Over-Allotment Option, prior to deducting underwriting discounts and offering expenses payable by us.

See “Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds—Use of Proceeds” for details on the use of proceeds.

Our Corporate Structure

The following chart illustrates our corporate structure as of the date of this annual report.

For details of our principal shareholders’ ownership, please refer to the beneficial ownership table in “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”

Corporate Information

Our headquarters are located at Kobe Asahi Building 25th Floor, 59 Naniwa-machi, Chuo-ku, Kobe, Hyogo 650-0035 and our phone number is +81-36-699-9899. Our website address is https://micware.co.jp. The information contained in, or accessible from, our website or any other website does not constitute a part of this annual report. Our agent for service of process in the United States is Cogency Global Inc. at 122 East 42nd Street, 18th Floor New York, NY 10168.

The SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.

For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources.”

B. Business Overview

Overview

We are a Japan-based provider of software development services and innovative IT solutions mainly focused on the automotive and mobility sectors. Our main focus is the development and sale of IVI systems that cover a broad range of modern car functionality from multimedia to navigation, human machine interface, telematics, and driver assistance. We also specialize in the development of navigation software and location information-based smartphone applications. Since the establishment of Micware in 2003, we have accumulated over 20 years of experience in software development in the automotive industry, which has translated into significant business growth. As of the date of this annual report, our business is operated across Japan through six operating entities and 13 branch offices. We have also established subsidiaries in the U.S., Thailand, and Germany, for our operations overseas.

We present our results of operations by three categories:

We disaggregate our revenue into three categories: (i) software development services, (ii) licensing, and (iii) other software-related services.

For the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, we had total revenue of JPY21,895.8 million (approximately US$140.3 million), JPY21,119.3 million and JPY17,516.7 million, respectively. For the fiscal year ended February 28, 2026, revenue generated from software development services, licensing, and other software-related services was JPY17,521.6 million (approximately US$112.3 million), JPY3,228.8 million (approximately US$20.7 million), and JPY1,145.4 million (approximately US$7.3 million), respectively, constituting 80.0%, 14.8%, and 5.2% of our total revenue, respectively. For the fiscal year ended February 28, 2025, revenue generated from software development services, licensing, and other software-related services was JPY17,178.2 million, JPY3,175.1 million, and JPY766.0 million, respectively, constituting 81.4%, 15.0%, and 3.6% of our total revenue, respectively. For the fiscal year ended February 29, 2024, revenue generated from software development services, licensing, and other software-related services was JPY13,429.1 million, JPY3,364.6 million, and JPY723.1 million, respectively, constituting 76.7%, 19.2%, and 4.1% of our total revenue, respectively.

For the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, we had net income of JPY1,602.6 million (approximately US$10.3 million), JPY1,330.6 million, and JPY1,370.6 million, respectively. Unless otherwise indicated, references to net income in this section refer to net income attributable to the Company’s ordinary shareholders.

Our Competitive Strengths

Proprietary IVI Platform and Scalable Development Framework

We have developed a proprietary IVI software platform, micAuto-PF, which serves as the foundation for delivering customized IVI solutions across a wide range of client requirements and vehicle types. The platform utilizes Google Automotive Services to support the efficient launch and termination of Android-based applications. The platform is designed to be modular, enabling reuse of software components, such as navigation engines, multimedia functionality, and connectivity protocols, across multiple projects. This modular structure allows for greater development efficiency and faster adaptation to new client specifications. The platform is compatible with a variety of operating systems, including Android and Linux-based environments, and supports a range of input/output devices, cloud-based features, and automotive interface standards. By utilizing this platform, we reduce duplicated engineering effort across projects and achieve economies of scope, which contribute to more predictable development timelines and improved cost structure.

Our proprietary software platform has been central to our IVI software development services and, by enabling us to deliver products to the satisfaction of our customers, serves as the foundation for our ability to maintain long-term collaborative relationships with OEMs. In this way, the development and operation of the platform also incorporate our expertise gained through close development collaboration with the OEMs. In addition, it has evolved throughout the years through iterative updates informed by operational feedback, client requests, and technological advancements.

Experienced Technical Workforce and Long-Term Development Capacity

Our engineering staff includes approximately 800 developers, including our full-time employees as well as our contractors as of February 28, 2026, with long-standing experience in embedded systems, IVI software, and automotive technology. Many of our engineers have engaged in multi-year, co-development programs with OEM clients, which has enabled them to build strong familiarity with automotive software development lifecycles, testing protocols, and regulatory compliance requirements. Since 2017, our development organization has led Android IVI system development projects with OEM partners, managing teams of up to 650 engineers. Through collaboration with global OEMs and Tier 1 suppliers, we have consistently executed large-scale development initiatives and contributed to the advancement of next-generation in-car user experiences.

Our large engineering development capacity enables us to support high-complexity projects that require parallel development, testing, and integration efforts. Our engineers cover a wide range of competencies, including platform architecture, UI/UX design, middleware integration, and diagnostics support. We also manage an internal training pipeline to maintain skill levels in our technologies. Our strong development capacity is demonstrated by our capability of delivering all SDV IVI platform components entirely in-house.

Pioneer Status in Mobile Connectivity Services

We have proactively anticipated the needs of OEMs and Tier 1 suppliers, engaging in proof-of-concept projects to accumulate valuable insights and technical expertise, allowing us to quickly deliver solutions that adapt to the latest customer needs. Since 2014, we have provided differential OTA map update technology, which minimizes data transmission by updating only the parts of a map that have changed, using mobile network connectivity and cloud infrastructure. Building on this foundation, in 2018, we introduced in-car Wi-Fi services, allowing vehicles to act as mobile hotspots using cellular data. In 2019 and 2021, we deployed Multi-access Edge Computing centers, which place computing resources closer to vehicles to reduce communication latency, a network architecture critical for technologies like cellular Vehicle-to-Everything (“V2X”), which enables real-time communication between vehicles, infrastructure, pedestrians, and networks. In 2022, we launched online navigation systems that use live cloud data instead of static onboard maps, improving routing accuracy, and efficiency. In 2023, we deployed large-scale center infrastructure to support the high data demands of connected and autonomous vehicles.

These developments form the backbone of a robust cloud-based ecosystem for connected cars and SDVs. This ecosystem supports not just OTA updates, but also critical services such as account management, authentication and authorization (verifying user identities and access rights), app stores for in-car applications, and digital payment systems for services like tolling or charging. This end-to-end platform reduces the initial development burden for OEMs and Tier 1 suppliers, accelerates the implementation of next-generation features, and provides us with sustainable revenue through royalties and intellectual property rights.

Through years of PoC-driven innovation, we have built extensive expertise not only in in-vehicle software but also in smartphone app development and cloud platform integration. Since 2018, we have developed and provided communication protocols that connect smartphones to the cloud, connect the cloud to vehicles, and connect smartphones directly to vehicles (for instance, for remote control or keyless entry).

Our proven capabilities span across all three domains of vehicle, cloud, and mobile, which, we believe, position us strongly for the connected and software-defined future of mobility.

Technical Strength in Advanced Generative AI Technology

Although we view AI-enabled features as an important component of certain of our technologies and product development initiatives, these features remain at an early stage of commercialization and have made only a limited contribution to our revenue to date. We do not currently sell AI technologies on a standalone basis. For the fiscal year ended February 28, 2026, revenue from products and services incorporating AI-enabled features was not material to our total revenue. Our core customized software development services for OEM customers are not treated as revenue from AI-enabled products or services unless AI-enabled features are incorporated into products or services delivered to the customer.

In 2018, we launched our proprietary software BeatMap, which identifies real-time trending locations by analyzing social media posts, particularly from platforms like X (formerly Twitter). Even when posts lack explicit geolocation data, BeatMap can estimate geographic coordinates based on the content and context of the posts, then visualize these inferred locations on a map. This is made possible by a sophisticated natural language analysis (or language processing (NLP)) system powered by Transformer models, a deep learning architecture introduced by Google in 2017. Transformers are now the foundation of most NLP systems, including large language models. To generate accurate insights, BeatMap uses a proprietary AI filtering algorithm that refines answers by referencing a curated internal dataset. This process mirrors what is now known as RAG, a method in which generative AI systems retrieve relevant documents from an external source to ground and enhance the output. While the term “RAG” only became common in 2021, we had already implemented a similar architecture as early as 2017 to 2018, showcasing the forward-thinking and innovative nature of our AI development. Our work in this domain has resulted in several critical patents (for instance, Patent No. 6788637 and Patent No. 7023821) protecting our methods of location inference and data generation using AI. BeatMap’s technology has also been integrated into our mobile app Tama-musubi, and the expertise developed through the BeatMap project has been fed back into our collaborative work with OEMs and Tier 1 suppliers, in projects related to SDVs.

Recognizing that traditional geospatial data cannot keep pace with rapidly evolving urban environments, we developed a cutting-edge solution using images and videos with embedded location information from networked drive recorders and smartphones to deliver real-time, high-accuracy 3D geospatial data, as part of our DynaPlanet project (See “—Growth Strategies—Expand and Monetize Digital Mapping Software Services” and “—Research and Development”). We first launched the Mvcube service to collect and organize drive recorder videos. Currently, we collect live video and location data from 1,300 taxis which have installed our Mvcube for Taxi software across Tokyo, a city known for its dense and complex road infrastructure. In addition to vehicle footage, we incorporate visual inputs from AR navigation apps (for instance, our PinnAR app) and collaborate with the Institute of Science Tokyo to generate initial AI-driven 3D reconstructions, which are then polished by our in-house designers. Our commercial DynaPlanet-based service, Dynamic Share Map, was launched in March 2026, after the end of the fiscal year ended February 28, 2026.

Our 3D modeling relies on video sources that offer limited perspectives tied to vehicle movement. To address this constraint, we have developed proprietary image correction and occlusion removal techniques that cleanly extract geospatial data even amidst obstructing vehicles. Our system integrates advanced AI tools, including NeRF and Stable Diffusion, to produce accurate, view-consistent 3D maps. Underpinning this innovation are several patents we own or have applied for: Patent No. 7036783, PCT/JP2023/003445, and Japanese Patent Application No. 2025-084236, covering our methods in image processing, reconstruction, and positioning.

For a discussion of the risks related with the use of AI, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We have incorporated AI technologies into some of our products and services, which present operational and reputational risks,” “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—The successful continued integration of AI technologies in our products may be dependent on our access to specific third-party software and infrastructure and our business may be adversely impacted if we are unable to access such third-party software and infrastructure,” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Some aspects of our future products and services may incorporate open-source AI technology, and our future use of open-source AI technology could negatively affect our business, results of operations, financial condition, and prospects.”

Proprietary Large-Scale Development Environment CARE-SUITE

In addition to software development, we provide an environment specifically optimized for large-scale SDV-related development. Our solution, CARE-SUITE, was created based on the real-world needs and insights gained through close collaboration with Japanese OEMs and Tier 1 suppliers. Whereas traditional development environments often rely on a fragmented set of tools, such as for account management, task tracking, and knowledge sharing, CARE-SUITE integrates these functions into a single unified platform. This holistic approach reduces the setup time for new projects from approximately six months to as little as one week, while also enabling continuous updates and efficient environment maintenance. CARE-SUITE is already in active use by many OEMs, including for recruitment, training, and trial deployment purposes. Its adoption has helped strengthen collaborative relationships between engineering teams and project stakeholders, fostering faster, more scalable development in the SDV ecosystem.

Stable OEM Relationships and Structured Project Ecosystem

We maintain multi-year, recurring relationships with well-established OEMs, including Toyota, Honda, and Daihatsu, which has contributed to a stable and repeatable project pipeline. For details, see “—Revenue and Pricing Model,” as well as “In-Vehicle Platform Software” and “Navigation Software” in “—Our Products and Services” below. These relationships are typically characterized by deep technical integration, early-stage project involvement, and strong mutual dependency due to the complexity and long-term nature of IVI system development.

In addition to OEM clients, we work closely with a range of third-party collaborators, whom we classify into two categories:

This structured supplier/partner ecosystem allows us to retain control over core intellectual property and strategic direction, while scaling development throughput as required. Our internal management processes include tools for partner coordination, quality assurance, milestone tracking, and customer reporting.

We have also established capital and operational alliances with certain customers and partners, which further solidify our role as a long-term technology contributor within the automotive ecosystem. For example, Honda and Toyota each holds around 12% of our equity interests. We believe that such alliance with major OEMs reflects the strong trust and expectations placed in us by these customers and, at the same time, serves as a significant barrier to entry for potential competitors. We also partner with Vizzion Enterprises, Inc. (“Vizzion”) in our R&D efforts, as discussed in “—Growth Strategies—Expand and Monetize Location-Based Software Services” below.

Growth Strategies

Evolving from IVI Tier 1 Software Supplier to SDV Tier 1 Software Supplier

We plan to drive our growth from an IVI Tier 1 software supplier toward a broader role as an SDV Tier 1 software supplier, where we would directly supply software to OEMs with respect to all aspects of SDV. Accordingly, we are pursuing the following strategic initiatives:

Strengthen and Deepen Long-Term Partnerships with OEMs and Tier 1 Suppliers

We aim to further solidify and expand our collaborative frameworks with OEMs and Tier 1 suppliers. We intend to expand our participation in upstream development phases with existing OEM clients. This includes earlier involvement in requirement definition, system architecture planning, and platform design. By engaging earlier in the development lifecycle, we expect to increase our influence on system-level decisions, improve alignment with customer objectives, and expand the scope of our development responsibility.

We plan to expand our customer base by pursuing new OEM engagements in Japan and potentially internationally. Our strategy will focus on showcasing our delivery track record, engineering capabilities, and the adaptability of our micAuto-PF platform to new client environments. We intend to pursue OEMs that are expanding their SDV capabilities and seeking long-term software development partners. To support this effort, we plan to invest in technical presales, including proposal engineering, platform demonstrations, and pilot deployments. We will also allocate resources to onboarding support and customer integration teams to ensure timely and smooth project launches for new clients. This expansion strategy is intended to reduce our dependency on our current core client base, increase revenue diversity, and leverage our existing technology assets in new commercial relationships.

In parallel, we plan to further enhance the micAuto-PF platform by expanding its codebase and accelerating its development cycle. As modern IVI systems require significant development investment, OEMs are increasingly demanding a cross-OEM IVI ecosystem to share costs and reduce duplication. In response, we developed micAuto-PF to meet this industry-wide need. To drive the evolution of micAuto-PF, we aim to deliver cost-effective performance by open-sourcing select components and functionalities of the platform. This will allow external developers, partners, and other OEMs to contribute improvements, bug fixes, and new features. In addition, we are working to integrate autonomous driving and ADAS features into micAuto-PF in order to further evolve it into a next-generation SDV development environment. We expect to offer this upgraded platform to OEMs that face financial or operational constraints in developing and continuously investing in such environments in-house, including domestic OEMs beyond our current major clients as well as overseas OEMs that are seeking scalable and cost-effective SDV development platforms.

These efforts are intended to enhance our ability to scale projects efficiently, reduce labor requirements per engagement, and increase gross margin over time. This strategy aligns with the industry trend toward SDVs, where software plays a central role in delivering vehicle functionality and value. By strengthening both our upstream engagement and our internal platform capabilities, we aim to remain a competitive software and technology partner and provider for OEMs.

Approximately 44% of the proceeds from the IPO are planned to be used for the DynaPlanet project and micAuto-PF, together with a portion of the approximately 8% allocated to marketing and advertising.

Accelerate Talent Acquisition and Retention Through Geographic and Industry Expansion

We will continue expanding our presence in key Japanese cities and explore international talent hubs to attract highly skilled engineers. Particular focus will be placed on mid-career professionals from adjacent sectors, such as electronics, robotics, or aerospace, who bring fresh perspectives and complementary skills. Our long-term objective is to become the top destination for engineers looking to grow professionally while contributing to the advancement of future mobility technologies.

Strengthen Business and Technical Development Capabilities

To increase our value to clients, we are broadening our technical capabilities. Targeted areas include new navigation systems, advanced Human-Machine Interfaces, emerging Operating System platforms, and the establishment of evaluation teams to support growing quality and safety requirements in modern vehicle software development.

We will continue to invest in developing all key IVI software components in-house, positioning ourselves as the only Japan-based supplier able to deliver comprehensive IVI solutions independently. Unlike competitors reliant on short-term staffing models, we are focused on building stable, long-term engineering teams that can be integrated directly into OEM and Tier 1 development processes. This approach allows us to offer consistency, expertise, and agility in adapting to the evolving needs of business partners.

Transition Toward ADAS/AD Integration and Software Packaging

Our forward-looking strategy includes entering the ADAS and AD domains, leveraging our IVI foundation to create integrated cockpit-to-driving system solutions. In parallel, we are developing software packaging strategies, which are modular, reusable software bundles that can be licensed or adapted across multiple vehicle platforms, to enhance scalability and operational efficiency.

A large part of the approximately 36% of the IPO proceeds allocated to general corporate purposes, including working capital and operating expenses, together with the approximately 12% allocated to strategic investments, is expected to be used to accelerate our strategy of evolving from an IVI Tier 1 software supplier to an SDV Tier 1 software supplier.

Transition Toward Standardized and Scalable Navigation Software Offerings

We expect the Japanese navigation market, as part of the IVI market, to continue developing while gradually maturing. As the competitive landscape evolves in line with this transition, we aim to capture the resulting long-term survivor benefits by leveraging our long-standing technical capabilities and customer relationships.

In addition, although we have historically provided fully customized navigation software in the Japanese market, we expect OEMs to increasingly seek more standardized and configurable navigation platforms rather than fully bespoke solutions for each OEM. Accordingly, based on the expertise we have accumulated to date, we are considering expanding our market share through the provision of more standardized and general-purpose navigation software.

In overseas markets, for certain vehicle models sold outside Japan by our existing OEM customers, we provide navigation software and license our technology through collaboration with local partner companies. As our existing OEM customers continue to expand their model lineups in overseas markets, we believe there will be additional business opportunities for us in those overseas models, supported by the trusted relationships we have built with OEMs in Japan.

Expand and Monetize Digital Mapping Software Services

In Dynamic Street Map & Market Place (DSMM) project, the name of which is scheduled to change to “DynaPlanet” effective July 1, 2026, we have developed Dynamic Share Map, the first product from our DynaPlanet project, a consumer-facing digital platform that aggregates, curates, and monetizes location-based multimedia content. The platform collects visual and spatial data from edge sources, including our Mvcube service, ADAS cameras, and user-contributed content, and processes it into a dynamic 3D street map. DynaPlanet aims to support a marketplace where individuals or organizations can upload, sell, and purchase digital assets related to specific geographic locations. Our monetization plan includes transaction commissions and licensing fees for third-party use (for instance, navigation, tourism, or advertising). Dynamic Share Map is currently available in Microsoft Store and Google Play Store with limited features. We exhibited the software product at MWC Barcelona 2025, a trade show dedicated to the mobile communications industry, and at Osaka Expo in July 2025. We subsequently launched Dynamic Share Map for the business-to-business market as well as showcased the platform capabilities at MWC Barcelona 2026 in March 2026. To expand content availability, we are collaborating with partners such as Vizzion, which specializes in collecting and distributing vehicle-mounted camera data in more than 30 countries outside Japan. Per our agreements with Vizzion, we have a worldwide, non-exclusive license to use traffic data sourced by Vizzion in all our products. This collaboration is expected to enhance our global content footprint and diversify our content supply base.

In addition, building on the technology developed for Dynamic Share Map, we have developed PreSpot, an indoor digital-twin experience service for stadiums and large event venues, scheduled to launch on July 1, 2026. Delivered as a smartphone web application, PreSpot allows visitors to preview the view from their seats, navigate within the venue, and access pre- and post-visit guidance in a single service. We intend to offer PreSpot to stadium and event operators to support digitalized visitor guidance and improve foot-traffic flow and congestion mitigation. We plan to expand its functionality and adoption across sports, concerts, exhibitions, and community events as part of our broader strategy to monetize DynaPlanet-based location services beyond the automotive market.

We believe that a key feature of the automotive software industry is the significant buying power held by OEMs, and without careful management, there is a risk of becoming relegated to a subcontractor role. To mitigate this risk, we are pursuing business domains that do not rely on revenue from OEMs. DynaPlanet represents a concrete initiative under this strategy. For this reason, we are also actively developing and monetizing our other digital mapping software products and services that directly target consumers, in an effort to expand our revenue streams. For a detailed discussion of these initiatives, see “B2C services—Navigation” and “B2C services—Other than navigation” in “—Our Products and Services” below.

Going forward, through our new service offerings, we aim to transform our digital mapping business into recurring revenue models. As OEMs face growing pressure to maximize the value of vehicle-generated data and move away from traditional one-time sales, we are proactively developing services that capitalize on data utilization. By launching these services ahead of OEM timelines, we position ourselves to lead the shift from royalty-based revenue to a recurring business model, such as subscriptions or usage-based pricing. In contrast to one-time licensing or royalties, recurring models provide stable, ongoing income through periodic payments tied to continued service use. Furthermore, OEMs today face challenges in terms of high software development costs and difficulty recovering those investments solely through upfront vehicle sales. We aim to provide both strategic planning and technical implementation support to OEMs through service-based models. These models offer long-term sustainability by monetizing software and services over the entire vehicle lifecycle, rather than relying solely on the initial vehicle purchase.

In addition to consumer-oriented mapping services, we intend to pursue B2B and Business-to-Government opportunities for DynaPlanet in both new and overseas markets, where demand for advanced spatial-information-based services is expected to grow.

Furthermore, although we have traditionally procured map data from external suppliers, we plan to increase our internal data acquisition capabilities by collecting spatial information for DynaPlanet ourselves. By incorporating such internally acquired data into our navigation software, we aim to raise our level of in-house data acquisition and reduce reliance on third-party map providers over the long term. However, if we fail to source data ourselves as planned, it could materially adversely affect our business, financial condition, results of operations, and prospects. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our ability to operate and grow our business depends on our ability to obtain and maintain access to certain data, and our efforts to obtain such data ourselves rather than relying on external suppliers may be unsuccessful or may subject us to significant costs, delays, and risks.”

Approximately 44% of the proceeds from the IPO are planned to be used for the DynaPlanet project and micAuto-PF, together with a portion of the approximately 8% allocated to marketing and advertising.

Our Business Model

We present our results of operations by three categories:

Revenue and Pricing Model

We generate revenue through three revenue streams: software development services, licensing, and other software-related services. For the fiscal year ended February 28, 2026, revenue generated from software development services, licensing, and other software-related services was JPY17,521.6 million (approximately $112.3 million), JPY3,228.8 million (approximately $20.7 million), and JPY1,145.4 million (approximately $7.3 million), respectively, constituting 80.0%, 14.8%, and 5.2% of our total revenue, respectively. For the fiscal year ended February 28, 2025, revenue generated from software development service, licensing, and other software-related services was JPY17,178.2 million, JPY3,175.1 million, and JPY766.0 million, respectively, constituting 81.4%, 15.0%, and 3.6% of our total revenue, respectively. For the fiscal year ended February 29, 2024, revenue generated from software development services, licensing, and other software-related services was JPY13,429.1 million, JPY3,364.6 million, and JPY723.1 million, respectively, constituting 76.7%, 19.2%, and 4.1% of our total revenue, respectively.

Software Development Services

Traditional Contract-based Development

Under this model, the customer contracts us to develop a specific software product according to the customer’s specific requirements for a fixed price. Depending on the customer and project structure, payments are generally made periodically during the development term in accordance with contractual provisions, which may specify monthly, quarterly, or other regular billing schedules. In the case of certain long-term collaborations, such as annual development roadmaps, customers issue multiple purchase orders within a fiscal year that are aligned under a single integrated plan, with billing typically structured on a quarterly basis. We typically encounter this type of business model in the development of IVI software and in-vehicle navigation software.

Development Outsourcing under Quasi-Delegation

We engage in software development projects under quasi-delegation contracts, particularly in cases where an agile development methodology is applied. Instead of a single long-term agreement with a fixed scope, the work is performed through a series of short-term contracts that align with iterative development cycles. These contracts are structured to allow flexibility, with evolving scopes and modular deliverables that are not fully defined at the outset. Customers are billed based on actual working hours and pre-agreed unit rates, typically on a monthly basis.

Under both traditional contract-based development and quasi-delegation arrangements, customers are provided with ownership or usage rights to deliverables that are specifically developed for their projects. Such rights are conveyed progressively throughout the development process in accordance with the terms of each contract. Micware retains ownership of its underlying proprietary technologies, reusable modules, development tools, and frameworks (such as internal navigation engines or platform components) that are not specifically customized for individual clients. Accordingly, customers obtain rights only to project-specific outputs, while Micware reserves the ability to reuse general-purpose components across other customer engagements.

Licensing

Licensing revenue primarily arises from licensing agreements with Tier 1 suppliers, such as Uni Electronics, Denso, and Visteon Japan Ltd. Under these agreements, Micware grants the right to use its navigation engine or related software modules, which are typically integrated by the Tier 1 suppliers into in-vehicle systems ultimately delivered to automotive OEMs. Micware receives ongoing sales-based royalties on a per-unit basis, calculated according to the volume of shipments from the Tier 1 suppliers to the OEMs.

As a business model, particularly in our LBS, customers who initially engage us for software development services (often navigation software) subsequently enter into licensing agreements with us. Under these arrangements, once development is completed, we grant the customer a right to use the software and charge separate licensing fees. This approach enables us to first establish a relationship with customers through software development projects and then generate recurring licensing revenue over time.

Other Software-related Services

B2C (Business-to-Consumer) Business

Under this consumer-facing business model, we directly monetize our proprietary software by offering them as services to end-users. This applies to our location information-based smartphone applications. We typically generate revenue under this business model from advertisements displayed in-app using Google AdMob (a mobile advertising platform by Google). Depending on the functions of the app, we also generate revenue from commerce commissions, such as from digital ticket sales and credit card payments. For example, for our app Tama-musubi, we generate such commerce commissions from local railway companies and destination marketing organizations (organizations which promote a location as an attractive travel destination) in Japan.

After-sales services

We offer support and maintenance services to customers after the completion of software development for them or licensing our proprietary software to them. We typically enter a separate contract with customers for such after-sales services and charge monthly for different types of services, such as system maintenance.

Our Products and Services

In-Vehicle Platform Software

Since 2013, we have been acting as a Tier 1 software supplier in the automotive industry. We develop and implement large-scale software with a wide range of components, which operates on IVI systems on the Android OS platform (an open-source operating system for mobile devices). We provide our IVI software to automotive OEMs, including Honda and Toyota. For example, in recent years, we completed the development of Honda’s IVI system for the 2023 models (H23M), with development finalized in November 2022 and the first product launched in February 2023. We are currently working on the next series of models (H26M), with development scheduled for completion around the second half of 2026 and the first product launch also expected around the second half of 2026. In addition, we are concurrently pursuing additional development projects and commercial discussions with other OEMs.

Our software has the following structure:

We offer a comprehensive one-stop service using our proprietary IVI development platform for Android systems, covering everything from development environment setup to automated testing of software, optimizing efficient system start-up and power-down performance.

Our development process typically begins with requirement definition, followed by software development, implementation, software evaluation, and functional evaluation. During the requirement definition phase, we create the Software Requirements Specification (“SRS”) documents based on the customer’s needs. In the software development phase, we develop the software according to the specifications outlined in the SRS. The implementation phase involves combining the developed software components and installing the software into the IVI device to ensure it functions properly. In the software evaluation phase, we verify that the implemented software behaves as designed. Finally, in the functional evaluation phase, we assess whether the software meets the requirements defined in the original SRS.

The adoption of Linux OS in our IVI systems since 2013 enables multi-task processing and supports the integration of diverse functions within a single platform. Linux provides a rich, sophisticated, and modular environment that allows multiple applications to run simultaneously and efficiently, such as navigation, media playback, connectivity, and voice control. This functional integration transforms previously separate hardware-based features (for instance, TV and radio) into software modules that can be managed centrally. As a result, Linux facilitates greater scalability, flexibility, and efficiency in IVI development, supporting larger and more complex system architectures and enhancing the overall user experience.

We play a highly involved role throughout each stage. In terms of decision-making, while the OEM retains final authority, we work closely with them in the development effort, actively proposing alternative features and development options. As a result, we are able to offer a comprehensive one-stop solution. Unlike competitors who focus only on standard software development, implementation, and evaluation, we also provide requirement definition, custom development tools, and project management capabilities, enabling us to deliver broader support across the development process.

Navigation Software

Since 2009, we have specialized in the development and sale of our proprietary in-vehicle navigation software under the brand naviAZ. We commenced the development of our first navigation engine as a product in 2008 under the name “MR-NAVI,” made a market release in 2009, and subsequently changed its name to “naviAZ.” For the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, we sold 480,030 units, 493,869 units, and 461,702 units of our navigation software, respectively. As of the date of this annual report, we have sold around five million units of our software product in total. According to industry sources (see, for example, “Global Demand Trends for AV & IT Equipment: Global Demand Outlook through 2028” released by Japan Electronics and Information Technology Industries Association in Japanese on February 29. 2024), our naviAZ brand accounts for 15% of the Japanese car navigation market share.

Product Types

The navigation software products can be categorized based on how they are delivered to end-users, including DOP, MOP, and retail. DOP navigations are installed or offered by the car dealer at the point of sale. MOP navigations are integrated at the factory level by the car manufacturer before the vehicle is shipped. Retail navigations are available for purchase by consumers through automotive goods retailers, separate from the vehicle purchase process.

The navigation software we develop for different customers is largely similar in terms of core functionality, as it is all based on our proprietary navigation algorithm called “Navi Core.” Navi Core is regularly updated, with major updates being performed around every two years, and minor updates two to three times every year. As a result, the version provided to a customer depends on the timing of their order. While the underlying software remains largely consistent across customers, we customize the UI/UX based on each customer’s specific requirements.

Below are some of the navigation products which we have developed for our OEM customers:

Features

Our navigation software offers a wide range of features, over 180 in total, designed to enhance usability and improve the overall user experience. Based on our industry data, naviAZ is one of the most feature-rich navigation software products on the Japanese market as of the date of this annual report. These features are organized into several key categories:

One of the notable capabilities of our navigation software is its connectivity feature, which allows the navigation system to link with other electronic devices. For example, the mobile phone synchronization feature enables users to continue receiving navigation or travel-related information even after exiting the vehicle. This is achieved through the integration of the in-car navigation device with a dedicated smartphone app. Once the vehicle is registered within the app, it can access data from the car via a cloud server where the navigation information is stored. This seamless data sharing between the car and smartphone ensures a consistent user experience both inside and outside the vehicle.

Other useful features of naviAZ include differential map updates, intelligent functions such as voice recognition, and multilingual support, which allows users to switch between different languages, an essential feature for commercial and international use. The differential map update system is made possible through a combination of embedded software and cloud server technology. The system checks the current status of the embedded map data. When outdated map data is detected, the software initiates an update process that downloads only the necessary changes (differential data), ensuring efficiency in both time and data usage. For voice recognition, we collaborate with a specialized technology partner that provides advanced voice recognition capabilities. While integrating this functionality into automotive environments is particularly challenging due to limited computing resources and the presence of background noise, we have successfully implemented voice control features that enhance the user experience.

NaviAZ is designed to enhance the user’s travel experience by providing navigation that seamlessly connects the user to the latest information at any time. The software maintains a real-time link with cloud servers to access and retrieve up-to-date data. This ensures that users always receive the most current content, including automatic monthly updates of map data, newly added POIs (such as facility names or store locations), live traffic information, and real-time route suggestions. This monthly map update capability is made possible through Micware’s proprietary map authoring technology, which enables efficient and accurate creation, maintenance, and distribution of updated map content. This technology ensures the reliability and timeliness of the navigation data provided by naviAZ.

Adoption

The use of naviAZ extends far beyond traditional in-car navigation. It has been adopted by leading manufacturers both in Japan and internationally as a versatile navigation solution across a wide range of mobility applications, including walking, cycling, motorcycles, and even marine vessels. For example, PinnAR is our walking navigation application that utilizes naviAZ technology. We provide a map display feature for digital cameras, enabling location-based tagging and visual navigation. We are also developing navigation software for a bicycle demonstration project and have created software for demonstration experiments involving map viewing on boats and water vehicles.

This broad adaptability is made possible by naviAZ’s modular architecture. The system allows developers to selectively combine only the required modules to build navigation solutions optimized for specific use cases, such as traffic information (through VICS), route calculation, map display, search, mapping, guidance, map-matching (aligning GPS data to actual roads or paths), and location services.

Other Mobility Software

Entertainment stick

Our in-car entertainment stick is a compact device designed to enhance a vehicle’s infotainment system by enabling access to various multimedia content. It connects to the car’s display primarily via HDMI ports and offers functionalities such as video streaming, music playback, and app integration with platforms like Netflix, YouTube, and more. Our product also supports USB interfaces. However, since most in-car displays do not accept USB-C input, HDMI remains the standard for automotive use.

We develop the software for the entertainment stick, source the hardware from suppliers, and install our proprietary software on the device. The product is sold to business customers, such as car dealers. Customization can also be made for clients requesting tailored features or integrations at a fee, such as the various apps to be accessed through the entertainment stick.

Wariate-kun logistics IoT system

We have developed and released a logistics IoT system called Wariate-kun, which provides comprehensive support for order receipt, delivery planning, and vehicle movement management in the logistics industry. The industry often faces challenges such as outdated communication methods (for instance, telephone and fax), resulting in inefficiencies due to paper-based, non-updated information. Additionally, many logistics systems require costly specialized terminals, creating a financial barrier to adoption. Wariate-kun addresses these issues by offering a simple and cost-effective system that is easy to deploy and operate. It runs entirely through a standard web browser, requiring no dedicated software installation on office computers.

On the vehicle side, Wariate-kun uses LPWA (Low Power Wide Area) communication technology, a type of telecommunications technology that transmits data with low power consumption and covers large geographic areas, which is ideal for IoT devices to send small data packets at regular intervals over long distances with minimal power. Specifically, it uses cellular LPWA (LTE-M / Cat. M1) to collect and transmit vehicle location data in real time at a low cost. Key features of Wariate-kun include:

Wariate-kun can also be tailored to fit each company’s operations and integrated with existing systems, ensuring smooth and effective implementation.

Mvcube for Taxi

Mvcube for Taxi is a real-time data management service tailored for taxi operators. The software collects video footage and data from onboard drive recorders of registered vehicles and uses this information to support fleet operations and improve safety, contributing to the digital transformation of taxi businesses. Key features include:

As of June 11, 2026, Mvcube for Taxi had been implemented in 1,311 vehicles in Tokyo and a total of 2,308 vehicles across Japan, including in regions such as Fukuoka and Okayama.

ITS Connect retrofit onboard unit

Our ITS Connect retrofit onboard unit is a communication device for emergency vehicles that can be installed regardless of vehicle manufacturer or model. By equipping emergency vehicles such as fire trucks and ambulances, it encourages surrounding vehicles to yield during emergency runs, enabling faster and safer passages. We sell the device as a complete product. The business model involves purchasing the hardware from a supplier, then installing our proprietary software onto the device.

ITS Connect is one of Japan’s practical implementations of a V2X communication system, which enables wireless data exchange between vehicles, vehicles and infrastructure, vehicles and networks, and vehicles and pedestrians. This data sharing enhances traffic safety and efficiency by preventing accidents and improving traffic flow. Vehicles equipped with ITS Connect receive real-time alerts about approaching emergency vehicles. When an emergency siren sounds, the system notifies drivers of the emergency vehicle’s position, direction, and distance. At ITS Connect-enabled intersections, the system integrates with traffic signals to provide warnings for red-light violations and assists with safe right turns.

B2C services – Navigation

PinnAR

PinnAR is a navigation app that uses augmented reality to display route directions over real-world images captured by a smartphone camera. Since its launch in July 2023, the app has been downloaded over 1.91 million times globally.

To support indoor navigation, we developed a beacon sensing algorithm and an indoor routing system. The app uses indoor maps, which are either created in-house or obtained externally, to enable navigation across different floors of a building. For outdoor use, the app utilizes Google Map data and overlays the navigation path onto the real world through AR.

PinnAR allows users to search for nearby facilities in 15 categories and shows facility details, user reviews, and videos posted by users in the app, such as for trains, restaurants, shopping centers, hospitals, hotels, museums, and nightclubs. PinnAR offers digital coupons that users can display at participating stores to receive services or discounts. The app supports five languages: Japanese, English, Traditional Chinese, Simplified Chinese, and Korean, and includes text, voice, and camera translation features.

Images show the indoor and outdoor navigation interfaces of PinnAR.

Beatmap

Beatmap is designed to help users instantly discover the latest trending spots and provide navigation to those locations. It leverages self-developed AI technology to perform linguistic analysis on public social media content. Beatmap uses this technology to extract and analyze POI information from social posts. The AI identifies likely categories by analyzing keywords. For example, if it detects terms like “eat” or “delicious,” it infers that the location is a restaurant.

Many social media posts lack location data, so Beatmap employs its proprietary AI algorithm to estimate the location based on context. Once a probable location is identified, the system cross-references it with geographic data sources, such as Google Maps, to verify and enhance the information. Based on this layered analysis, Beatmap identifies businesses and venues that are trending in real time. These are presented on a map as “spot info,” often alongside details about limited-time promotions and events.

Public data is sourced from platforms like X and Retty, with license agreements in place to allow the use of the platform contents. Spot recommendations appear dynamically as users scroll across the map (currently limited to Japan). The density of visible spots depends on the population density of each region, meaning urban areas display more detailed information than rural ones. The AI continuously evaluates various parameters to determine whether a spot is “trendy” enough to be featured, such as how recently a post was made or the number of retweets. At any given time, the app displays around 700,000 POIs. Social media-derived information is updated every two hours, while more static sources (for instance, local event websites or Wikipedia) are updated monthly.

Interface of BeatMap mobile app

B2C services –Other than navigation

Tama-musubi

Tama-musubi is a travel application designed to help users explore local myths and folklore, providing information about regional stories and traditions. Folklore-related sites are displayed on interactive maps, supported by features such as transportation route recommendations, guidance, ticket purchasing, and quest-based activities. As of the date of this annual report, the app covered all 47 prefectures in Japan.

PicLive

PicLive is a social media platform that displays live video footage on a map, allowing users to intuitively access real-time information. Users can livestream or upload videos and images, and the app showcases the most recent content posted within the last 12 hours. Additionally, the app displays relevant images and footage collected from contracted security cameras and YouTube. Through the app, users can access up-to-date information on live shows, exhibitions, and other events. The platform is also useful for obtaining situational updates from areas affected by disasters.

Overseas Operations

We provide software development services to Japanese OEMs outside Japan, with most of these services currently conducted by Micware North America. We sell all our software products to OEMs overseas, including IVI and navigation software. In addition, our overseas subsidiaries develop products independently, such as the Handy Tracking Life vehicle tracking system developed by Micware Asia Pacific for fleet management in logistics operations. As of the date of this annual report, we have offices in the U.S, Thailand, and Germany. As of the date of this annual report, we do not consider our overseas operations significant.

Suppliers

We recognize the following types of suppliers: providers of map data (data of geographic features, locations, and routes) and tourism information, cloud server providers, providers of GPS navigation software, providers of camera footage and other video materials, hardware suppliers (including dashcam, SD card, and ITS-Connect device), trading companies, and product HMI and design service providers. The major factors that we evaluate when selecting suppliers are product performance (including features, capabilities, and overall functionality), financial performance of the supplier company, price competitiveness, and quality and adequacy of technical support.

There was no supplier whose revenue from us individually represented more than 10% of our total purchases for the fiscal year ended February 28, 2026.

Below are the lists of our suppliers whose revenue from us individually represented more than 10% of our total purchases for the fiscal years ended February 28, 2025 and February 29, 2024, respectively. For purposes of the disclosure, vendors that are under common control are aggregated and presented on a combined basis.

Fiscal year ended February 28, 2025:

Fiscal year ended February 29, 2024:

Material Agreements with Toyota Group and Uni Electronics

Toyota Group and Uni Electronics accounted for more than 10% of our total purchases in the fiscal years ended February 28, 2025 and February 29, 2024. Toyota and O-Well, a parent company of Uni Electronics, are also beneficial owners of 5% or more of our Ordinary Shares. For additional details on the transactions with the parties, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

Toyota Group

The Company’s direct contractual counterparty within the Toyota Group is TMI, a supplier of map data. We entered into a copyright license agreement with the TMI on November 30, 2011, which was renewed annually, under which we entered into individual license agreements for the use of specific copyrighted works. According to the agreement, TMI granted us a non-exclusive, non-transferable copyright license of certain copyrighted works used in our products that we license to certain permitted third parties. The specific content of the works, their scope of use, and licensing fee are to be negotiated by a memorandum of understanding on a case-by-case basis. TMI has also allowed us to sublicense the use of such works to certain designated third parties only for the purpose of achieving the objectives of the permitted scope of use specified under the applicable memorandum of understanding. Either party may terminate the agreement upon material breach of the agreement, suspension of payment, merger, dissolution or transfers of all or part of its business to a third party, and bankruptcy, among others. Either party may also terminate the agreement after giving the other party a reasonable period of notice if the other party is found to have violated the terms of the agreement and is unable to achieve the purpose of the agreement.

Uni Electronics

We entered into a master outsourcing agreement with Uni Electronics on January 1, 2023. Under the agreement, an individual agreement shall be established by the parties executing the individual agreement or by us issuing individual purchase orders and Uni Electronics accepting such orders. The agreement is automatically renewed for successive one-year terms unless either party provides a written notice two months before the end of term. Either party may terminate the agreement or its individual agreement, in whole or in part, upon the other party’s seizure, suspension of payment, dissolution or transfers of all of its business, and bankruptcy, among others, by providing a notice to the other party. Either party may also terminate the agreement or its individual agreement, in whole or in part, if the other party commits a breach or causes a material issue that hinders performance. Termination is permitted if the breaching party fails to cure the breach within 14 days after receiving written notice.

Customers, Sales, and Marketing

We recognize the following types of customers: automotive OEMs, automotive consortiums, and their suppliers, telecommunications service providers, mobility-as-a-service providers, and other firms with demand for location information-related software.

We have a sales and marketing team of 18 persons as of the date of this annual report. We regularly participate in industry events, such as conferences, conventions, and exhibitions, to promote our brand, including those held by Linux Foundation, Japan Automotive Software Platform and Architecture, Japan Embedded Systems Association, and Software Association of Japan.

During fiscal years ended February 28, 2026 and 2025 and February 29, 2024, we had 180, 158, and 135 customers, respectively. Below are the lists of our customers whose purchases made individually with us represented more than 10% of our total revenue for the fiscal years ended February 28, 2026 and 2025 and February 29, 2024, respectively. For purposes of the disclosure, customers that are under common control are aggregated and presented on a combined basis.

Fiscal year ended February 28, 2026:

Fiscal year ended February 28, 2025:

Fiscal year ended February 29, 2024:

In certain development service agreements with our customers, such as OEMs or Tier 1 suppliers, we have agreed with certain customers that intellectual property rights arising from our service performance are assigned to, and owned by, the customers. As a result, we do not retain rights to use, commercialize, or further develop certain intellectual property for our own business purposes or for use with other customers. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Because intellectual property we develop under development service agreements may be owned by our customers, we may not be able to realize future benefits from such work, which could adversely affect our growth prospects.”

Material Agreements with Honda Group, Uni Electronics, and Toyota Group

Honda Group, Uni Electronics, and Toyota Group each accounted for more than 10% of our revenue in the fiscal years ended February 28, 2026 and 2025. Honda Group and Uni Electronics each accounted for more than 10% of our revenue in the fiscal year ended February 29, 2024. Honda, Toyota, and O-Well, a parent company of Uni Electronics, are also beneficial owners of 5% or more of our Ordinary Shares. For additional details on the transactions with the parties, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions.”

Honda Group

Among the Honda Group, our most significant contractual counterparty is Honda, an automotive OEM.

On February 6, 2025, Micware Automotive entered into an amendment memorandum (the “Honda Amendment”) with Honda to amend the Basic Agreement for Long-Term Development Commission (the “Honda Development Agreement”) between the Company and Honda R&D Co., Ltd. dated September 24, 2019. Based on the Honda Amendment, we have agreed to develop Honda’s IVI system for certain models upon an individual agreement to be executed between Honda and us pursuant to the Honda Development Agreement. The Honda Development Agreement will terminate on December 31, 2026, subject to extension conditions. Either party may immediately terminate the Honda Development Agreement or its individual agreement, in whole or in part, in the event of the other party’s gross negligence, breach of trust, suspension of payment, or tax delinquency, among others. Honda may also terminate the Honda Development Agreement by providing a six-month prior written notice. We may terminate the Honda Development Agreement by providing a six-month prior written notice if there is no effective individual agreement pursuant to the Development Agreement at the time we provide the notice.

Uni Electronics

We entered into a master outsourcing agreement with Uni Electronics on August 18, 2003, which is renewed for one-year terms each year, unless either party provides a written notice two months before the end of the term. Under the agreement, Uni Electronics makes an individual software-development order with us, and an individual agreement is established when we accept such order. Uni Electronics may terminate the master outsourcing agreement or its individual agreement, in whole or in part, in the event of Micware’s technical incapabilities to perform services as confirmed by Uni Electronics, performance difficulty due to Micware’s labor issue, suspension of payment, bankruptcy, change of management resulting in performance difficulty, or breach of agreement despite Uni Electronics’ notice and demand. We may terminate the master outsourcing agreement or its individual agreement, in whole or in part, in the event of Uni Electronics’ breach of agreement despite our notice and demand.

Toyota Group

Among the Toyota Group, our most significant contractual counterparty is Toyota, an automotive OEM. On August 20, 2024, we entered into a basic system development agreement with Toyota to develop certain IT systems for it. Under the agreement, Toyota makes an individual order with us, and an individual agreement is established when we accept such order. The agreement has an initial term of one year and shall be automatically renewed for subsequent one-year terms, unless it is terminated by either party by providing notice 30 days before the end of the term.

Competition

The automotive and software industries are characterized by fragmented global competition, diverse technological approaches, and varying regional leaders. Complicating this environment is the fact that many of the Company’s customers, primarily automotive OEMs, possess strong in-house software development capabilities, making them both clients and potential competitors.

Despite this challenging landscape, we have established our brand as a Tier 1 software provider in Japan. Over the years, we have built long-term, cooperative relationships with major OEMs. A key indicator of this trust and integration is the capital participation of both Toyota and Honda, two of the world’s largest and most competitive car manufacturers. To our knowledge, we are the only company globally with both as shareholders, highlighting the depth of our partnerships and the unique value we bring. These long-standing relationships position us as an integral part of Japan’s automotive software ecosystem.

Our business remains primarily Japan-focused, with 98.5% of revenue in fiscal year ended February 28, 2026 coming from the Japan domestic market. We are, however, actively expanding internationally. The United States accounted for 1.4% of our revenue, and Thailand for 0.1%. The establishment of Micware Europe in March 2025 marks the beginning of our strategic entry into the European market, and the revenue from Europe accounted for 0.0% of our revenue for the fiscal year ended February 28, 2026.

We face competition from a wide range of players across several categories:

Depending on the business area, we compete in multiple dimensions.

In software development, our key competitive strengths are:

In licensing, we offer competitive pricing and value-added features that enhance system performance and user experience.

In digital map and maintenance services, our focus is on:

We recognize three core elements as critical to our continued success:

We believe that these strengths allow us to compete effectively across markets and lay the foundation for our continued growth, both in Japan and globally.

Research and Development

Our R&D team plays a central role in advancing our technology roadmap. As of the date of this annual report, the team consists of approximately 50 staff members, including a core group of 15 specialists who lead major development efforts and oversee the strategic direction of our R&D initiatives. Our R&D expenditure totaled JPY1,536.7 million ($9.8 million) for the fiscal year ended February 28, 2026, JPY1,057.7 million for the fiscal year ended February 28, 2025, and JPY960.9 million for the fiscal year ended February 29, 2024, respectively.

In recent years, our R&D activities have focused primarily on the development of automatic 3D modeling technology from dashcam video footage, under the DynaPlanet project. Our goal is to generate accurate 3D spatial data from dashcam inputs, enabling advanced mapping and analysis capabilities.

Current geospatial information systems are struggling to keep pace with the rapid transformation of urban and transportation environments. Traditional map providers face significant limitations both in cost and timeliness. Updates relying on satellite imagery or dedicated mapping vehicles are not only expensive but also inherently delayed, making them ill-suited for dynamic cityscapes. Further complicating matters are the growing complexities of modern cities, including vertical expansion (for instance, high-rise buildings), underground infrastructure, and legal and national security restrictions that limit the use of drones for wide-scale data acquisition in urban areas.

To address these challenges, we have initiated and invested in the development of a new geospatial framework, the DynaPlanet. Unlike conventional maps, DynaPlanet reconstructs and updates wide-area spatial data using limited visual inputs, such as images and videos collected from everyday devices. This allows for real-time, low-cost, and scalable acquisition of urban geospatial information.

Looking ahead to a future where vehicles and drones operate autonomously in complex urban environments, DynaPlanet is positioned to serve as the core infrastructure for navigation, spatial awareness, and control. We have already established systems capable of dynamically delivering and updating DynaPlanet-based spatial data and software to vehicles and smartphones, demonstrating a strong foundation for practical, real-world deployment of this next-generation technology.

This direction aligns closely with our business focus, as many of our customers are mobility OEMs, and we have established experience in both map development and dashcam integration. With access to large volumes of video and image data through connected dashcam solutions, we are well positioned to lead innovation in this area. Progress on this project has been steady and is proceeding according to our development plan.

We launched the first DynaPlanet-based service, Dynamic Share Map, in March 2026. Following the initial release, we aim to expand geographic coverage and continuously improve the accuracy and quality of the 3D models generated, thereby enhancing the value we can offer to OEMs and other mobility-related partners.

To protect the outcomes of our R&D efforts, we have registered patents, trademarks, and design in key markets, including Japan, the United States, Germany, and Thailand. These measures are part of our strategy to secure and protect intellectual property on a global scale.

We, from time to time, do joint research and development with universities in Japan. In the past ten years, we entered into joint research and development agreements with Tokyo Institute of Technology (currently known as Institute of Science Tokyo), University of Hyogo, and Kwansei Gakuin University, where we jointly researched on, for example, construction of experimental environment for capturing and collecting images using in-vehicles cameras or smartphones, development of deep learning algorithms employing geographic information metadata to recommend relevant topics to application or software users, and developing data processing methods for acquiring and processing and distributing mobile data collected from moving vehicles. As of the date of this annual report, all joint research and development agreements with universities have expired, except for the joint research development agreement with Institute of Science Tokyo and Kwansei Gakuin University.

Insurance

We currently maintain fire insurance and life insurance. There are certain types of losses, such as losses from natural disasters, terrorist attacks, construction delays, and business interruptions, for which insurance is either not available or not available at a reasonable cost. We believe our practice is consistent with the customary industry practice in Japan.

Employees

We had 483, 452, and 426 full-time employees as of February 28, 2026, February 28, 2025, and February 29, 2024, respectively. As of February 28, 2026, we do not have any part-time employees. We have 316 contract workers as of February 28, 2025. The following table sets forth the number of our full-time employees employed by each of our operating entities as of February 28, 2026:

We enter into employment agreements with our full-time employees. The employment agreements have an indefinite term and may be terminated by the employee with a one-month advance notice. If, upon evaluation, an employee’s work attitude is extremely poor or if misconduct is repeated, the Company may proceed with dismissal. We also enter into a confidentiality agreement with each employee.

We believe that we maintain a good working relationship with our employees, and we have not experienced material labor disputes in the past. None of our employees are represented by labor unions.

Intellectual Property

As of June 11 2026, we had 18 registered domain names.

We had 307 registered patents in Japan, 45 registered patents in the U.S., 12 registered patents in European countries, two registered patents in China, one registered patent in Taiwan, and one registered patent in Thailand.

We also had 154 registered trademarks in Japan, 12 registered trademarks in the U.S., 10 registered trademarks in the United Kingdom, 14 registered trademarks in European Union, 10 registered trademarks in Thailand, and 40 registered trademarks in 16 other countries, including Hong Kong and Taiwan.

In addition, we had one registered design in the U.S.

As of June 11, 2026, our pending intellectual property applications in Japan included 39 patents and 4 trademarks.

Properties

As of the date of this annual report, we own one property in Japan and lease an aggregate of 13 offices in Japan, two offices in the U.S, one office in Germany, and one office in Thailand. The owned property is being used as a recreational facility and accommodation for employees on long-term business trips. The areas of owned and leased premises are based on the figures specified in the land use certificates or the corresponding lease agreements. The following table shows notable information for the properties we lease as of the date of this annual report:

We believe that our existing facilities are sufficient for our near-term needs.

Seasonality

Our business is not subject to seasonal fluctuations.

Legal Proceedings

From time to time, we may become a party to various legal or administrative proceedings arising in the ordinary course of our business, including actions with respect to intellectual property infringement, breach of contract, and labor and employment claims. We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion of our management, are likely to have any material and adverse effect on our business, financial condition, cash flow, or results of operations.

Regulations

We are subject to a variety of laws and regulations in Japan that affect our operations. These include, but are not limited to, laws governing software development and information technology, telecommunications and network connectivity, automotive industry requirements, data privacy and protection, consumer protection, cybersecurity, AI, and export controls. As we continue to expand our operations globally, including in the United States, Germany, and Thailand, we anticipate that we will become subject to additional regulations in those jurisdictions as well.

Software Development and Information Technology Regulations

Our core business activities in Japan involve the development of embedded software for IVI systems, navigation software, and mobile applications. These activities are subject to the following laws and regulations:

We also follow industry norms and customer guidelines in software development practices and intellectual property protection.

Telecommunications and Network Connectivity

We provide OTA updates, telematics, in-car Wi-Fi, and cloud-based services that rely on third-party telecommunications providers. While we are not classified as a telecommunications carrier under Japanese law, our use of telecommunications infrastructure renders us indirectly subject to the Telecommunications Business Act (Act No. 86 of December 25, 1984, as amended) and the Radio Act (Act No. 131 of May 2, 1950, as amended), particularly with respect to connected vehicle devices and LPWA communications, such as LTE-M.

Automotive Industry and Vehicle Software Regulations

As a provider of embedded software for vehicles, we must comply with safety and technical standards required by our OEM customers. These standards incorporate Japanese domestic law and international automotive norms, including:

Although we do not manufacture hardware, our software must be tested and validated under OEM-mandated automotive safety compliance frameworks.

Data Privacy and Protection

We collect, store, and process user data, including personal and geolocation data, through various services, such as BeatMap, PinnAR, and connected vehicle platforms. As such, we are subject to Japan’s Act on the Protection of Personal Information (“APPI”) (Act No. 57 of May 30, 2003, as amended), which imposes obligations on:

Under APPI, we are required to lawfully use personal information we have obtained within the purposes of use we have specified and take appropriate measures to maintain security of such information. We are also restricted from providing personal information to third parties without obtaining prior consent of the corresponding individual, except for (i) cases based on laws and regulations, (ii) cases in which there is a need to protect human life, body or fortune, and when it is difficult to obtain a principal’s consent, (iii) cases in which there is a special need to enhance public hygiene or promote fostering healthy children, and when it is difficult to obtain a principal’s consent, or (iv) cases in which there is a need to cooperate in regard to a central government organization or a local government, or a person entrusted by them performing affairs prescribed by laws and regulations, and when there is a possibility that obtaining a principal’s consent would interfere with the performance of the said affairs.

Non-compliance with any order issued by the Personal Information Protection Commission or any other relevant authorities to take necessary measures to comply with the law could subject us to criminal and/or administrative sanctions. Anonymously processed information (tokumei kako joho), pseudonymized information (kamei kako joho), and individual-related information (kojin kanren joho) are subject to the Personal Information Protection Act.

We maintain a privacy policy that reflects our commitment to protecting personal data and our obligation to manage such data in accordance with applicable laws and internal corporate rules. Our policy requires us to implement appropriate security measures, ensure the accuracy of personal data, promptly delete unnecessary data, and conduct regular training for employees on privacy protection.

Artificial Intelligence and Content Regulation

We incorporate AI into several of our products, including BeatMap and DynaPlanet, which involve natural language processing and geospatial estimation. Japan enacted the Act on Promotion of Research and Development, and Utilization of Artificial Intelligence-related Technology (Act No. 53 of June 4, 2025), which establishes a basic framework for promoting the research and development and utilization of AI-related technology, including basic principles, responsibilities of the national and local governments, research and development institutions, and business operators utilizing AI-related technology, and the establishment of the AI Strategy Headquarters. In addition, the Japanese government has issued AI Guidelines for Business version 1.0 on April 19, 2024, which we voluntarily observe. The guidelines are established by Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry, and the latest version, version 1.2, was published on March 31, 2026. These guidelines outline fundamental concepts necessary for the development, provision, and use of AI. The ten “Common Guiding Principles” outline (i) seven certain principles AI business actors should consider when doing their business activities, including (1) human-centric, (2) safety, (3) fairness, (4) privacy protection, (5) ensuring security, (6) transparency, and (7) accountability) and (ii) three certain principles AI business actors are expected to collaborate with general society, including (1) education/literacy, (2) ensuring fair competition, and (3) innovation.

We also follow the Act on Responses to Rights Infringement, etc. Arising from the Distribution of Information by Specified Telecommunications (Act No. 137 of November 30, 2001, as amended), which governs intermediary liability for content on our user-facing applications, such as PicLive, and implement content moderation tools for user-generated content.

Export Control and Cross-Border Transfers

We export proprietary software and technical know-how from Japan to our overseas subsidiaries and customers. Accordingly, we are subject to the FEFTA (Act No. 228 of December 1, 1949, as amended), which governs the export of cryptographic and dual-use technologies. We believe that we comply with Japanese export screening procedures and obtain licenses when required.

Cross-border transfers of personal data are also subject to APPI requirements. Japan has received adequacy recognition from the European Commission under GDPR, facilitating compliant data transfer with our EU operations.

Company Laws

The formation, organization, operation, and management of companies are governed by the Companies Act and other related laws. Our Company is categorized as “Company with a Board of Corporate Auditors” provided by the Companies Act.

According to our Japanese legal counsel, as of the date of this annual report, we comply with these laws and regulations.

Intellectual Property Protection Laws

There are various intellectual property laws in Japan, including the Patent Act (Act No. 121 of April 13, 1959, as amended), the Utility Model Act (Act No. 123 of April 13, 1959, as amended), the Design Act (Act No. 125 of April 13, 1959, as amended), the Trademark Act (Act No. 127 of April 13, 1959, as amended), and the Copyright Act (Act No. 48 of May 6, 1970, as amended). The Patent Act provides patent right and regulates protection and utilization of inventions. The Utility Model Act provides utility model right and regulates protection and utilization of devices. The Design Act provides design rights. The Trademark Act provides trademark rights. The Copyright Act provides for authors’ rights and neighboring rights.

For details about our patents and trademarks, see “—Intellectual Property.”

Labor Laws

There are various labor-related laws in Japan, including the Labor Standards Act (Act No. 49 of April 7, 1947, as amended), the Industrial Safety and Health Act (Act No. 57 of June 8, 1972, as amended), and the Labor Contracts Act (Act No. 128 of December 5, 2007). The Labor Standards Act regulates, among others, minimum standards for working conditions such as working hours, leave period, and leave days. The Industrial Safety and Health Act requires, among others, the implementation of measures to secure employee safety and protect the health of workers in the workplace. The Labor Contracts Act regulates, among others, the change of terms of employment contracts and working rules, and dismissal and disciplinary action.

According to our Japanese legal counsel, as of the date of this annual report, we comply with these laws and regulations.

Regulations under the Antimonopoly Act

Japan has antitrust laws that protect consumers and regulate how companies operate their businesses. Among the various Japanese antitrust laws, the seminal antitrust law is the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947, as amended) (the “Antimonopoly Act”). The Antimonopoly Act prohibits private monopolization, unreasonable restraint of trade, and certain unfair trade practices, and regulates business combinations and other conduct that may substantially restrain competition.

The Japan Fair Trade Commission (the “JFTC”) enforces the Antimonopoly Act and other Japanese antitrust laws.

If the JFTC finds conduct that violates the Antimonopoly Act, it may issue cease and desist orders, impose administrative surcharge payment orders in certain cases, or require other measures necessary to eliminate such violations.

In the event the JFTC suspects any violation of the Antimonopoly Act or determines that we have violated the Antimonopoly Act, we could be exposed to risks, including governmental action against us.

Regulations regarding Customer Protection

We are subject to laws and regulations regarding customer protection, which could affect us in jurisdictions in which we sell our products.

In Japan, Consumer Contract Act (Act No. 61 of May 12, 2000, as amended) mainly regulates the customer protection. The Consumer Contract Act invalidates certain provisions in contracts with consumers, such as exemption of compensation for damages to consumers and restrictions of termination by consumers due to the seller’s breach of contract. We believe that we comply with these regulations.

Regulations on Advertising

The Act against Unjustifiable Premiums and Misleading Representations (Act No. 134 of May 15, 1962) stipulates the restricted methods and means of various advertisements, representations, and sales promotions, in a broad sense. When we advertise our products, we must provide appropriate information under this act, so as not to mislead our customers. We believe that we comply with these regulations.

Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors

In Japan, the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors, which was revised from January 1, 2026 as the Act Against Delay in Payment of Fees, etc. to Small and Medium-sized Entrusted Business Operators in Manufacturing and Other Specified Fields, is the law regulating certain level of large companies subcontracting their jobs to protect subcontractors from exploitation. This act is applicable to a subcontracting of work if, among others, (i) the type of subcontracted work is creation of program, (ii) registered capital of the large procuring enterprise exceeds JPY300 million or the number of its employees is more than 300, and (iii) registered capital of the subcontractor is JPY300 million or less or number of its employees is 300 or less. In a case where this act is applied, a number of duties are imposed on the procuring enterprise. These duties include, among others: (i) duty to provide a document stating terms and conditions of order, such as the amount of subcontract fees; (ii) duty to retain the document; (iii) duty to specify a payment due, which must not exceed 60 days from receipt of the work; (iv) prohibition of unreasonable refusal of deliverable; (v) prohibition of delay in payment of subcontract fees; (vi) prohibition of setting subcontract proceeds at a level conspicuously lower than the price ordinarily paid for the same or similar content of work; (vii) prohibition of unreasonable request of rework; (viii) prohibition of unilateral determination of the amount of fees without consultation; and (ix) prohibition of payment by promissory notes or other payment methods that make it difficult for the entrusted business operator to receive the full amount of fees by the payment due date.

Other Legal and Compliance Matters

We are also subject to general commercial regulations in Japan, including:

We have adopted internal compliance policies and provide training to employees on matters including anti-corruption, trade compliance, and ethical conduct. As we grow our overseas operations and pursue an international public offering, we are enhancing our global compliance infrastructure.

Material Regulations in the United States

Data Privacy and Cybersecurity

In the United States, we are subject to federal and state laws and regulations regarding data privacy and protection. U.S. rules and regulations governing data privacy and security include those promulgated under the authority of the Federal Trade Commission Act, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California’s California Consumer Privacy Act of 2018 (“CCPA”) and California Privacy Rights Act of 2020 (“CPRA”), and other state and federal laws relating to privacy, consumer protection, and data security. The CCPA and CPRA contain requirements regarding the handling of personal information of California consumers and households, including compliance and record keeping obligations, the right of individuals to request access to and deletion of their personal information, and the right to opt out of the sale and other uses of their personal information, and provides a private right of action and statutory damages for data breaches. State laws are changing rapidly as other states in the United States have adopted or are considering adopting similar laws. There is also discussion in Congress of a new comprehensive federal data protection law to which our U.S. operations would become subject if it were enacted.

All U.S. states have enacted legislation that addresses certain aspects of data privacy. Much of such legislation focuses on notification to data subjects and regulators in the event of a data breach, but as privacy becomes more of a focus for both regulators and the general public, many states have amended their original data-breach legislation to address a broader scope of personal information and to impose additional requirements on companies in the event of a data breach. This patchwork of legislation and regulations regarding security, privacy and data protection may give rise to conflicts or differing views of personal privacy rights. For example, certain state laws may be more stringent or broader in scope or offer greater individual rights with respect to personal data than federal or other state laws, and such laws may differ from each other, all of which may complicate compliance efforts.

We adhere to certain cybersecurity and compliance guidelines when developing our products and services, including:

Employment

We have employees in Ohio. Employees in Ohio are generally deemed to be employees at will, meaning they can be terminated, or the terms and conditions of their employment can be altered, for any reason or no reason, absent a contractual arrangement that alters the employment at-will status. Broadly, we are obligated to comply with applicable Ohio employment-related laws and regulations, including wage and hour standards, anti-discrimination, anti-harassment, and anti-retaliation prevention, whistleblower protection, and state laws on restrictive covenants on confidential information, invention assignment, non-competition and non-solicitation.

Material Regulations in European Union and Germany

Data Privacy and Cybersecurity

In the EU and Germany, we are also subject to laws and regulations regarding data privacy and protection. These include the EU General Data Protection Regulation (“GDPR”). In addition to our general privacy policy, we have also established a separate privacy policy specifically designed to comply with the requirements of the GDPR for customers located in the EU.

In Germany, we are also subject to the Federal Data Protection Act (the “BDSG”), which implements the provisions of the GDPR. The BDSG sets out specific regulations and guidelines concerning the collection, processing, and storage of personal data by both public and private entities operating within Germany’s jurisdiction. In addition to the BDSG, the Telecommunications-Digital-Services-Data Protection Act (or the “TDDDG”), provides data protection regulations specific to telecommunication and digital services providers.

The Network and Information Security (“NIS 2”) (EU 2022/2555, amending Regulation (EU) No 910/2014 and Directive (EU) 2018/1972 and repealing Directive (EU) 2016/11), sets forth measures required to be implemented for a high common level of cyber security across the EU, has come into effect. EU member states must incorporate the provisions of the regulation into their national law by October 2024. In response, Germany enacted Implementation Act for the NIS2 on network and information security in November 2025.

The Cybersecurity Act (EU 2019/881) sets out the framework for the voluntary EU common criteria (“EUCC”) cybersecurity certification scheme. The adoption measures are laid out in the EUCC Implementing Regulation, which took effect on February 27, 2025. The Cybersecurity Act applies to any organization that manufactures or provides information technology and computer products and services in the EU.

The Cyber Resilience Act (EU 2024/2847, “CRA”) imposes a range of cybersecurity obligations on manufacturers, importers and distributors of products with digital elements. It creates a uniform regulatory framework for cybersecurity across the EU, addressing the increasing risks associated with connected devices and digital products. The CRA imposes binding minimum cybersecurity standards for hardware and software products with digital components, thereby enhancing the overall security posture of the European union market. The CRA was entered into force on December 10, 2024, but most provisions will become applicable 36 months later, while reporting requirements will become effective 21 months after the entry into force.

The German IT Security Act 2.0, enacted in 2021, strengthens Germany’s cybersecurity framework by expanding the definition of critical infrastructure and imposing stricter security requirements on operators, companies of special public interest, and manufacturers of IT components used in critical infrastructure. It enhances the authority of the Federal Office for Information Security (BSI), mandates IT security standards, incident reporting, and certification for critical components (especially in 5G networks).

Employment

German labor and employment relations are regulated by a number of different laws and regulations, for example, Act on Protection against Unfair Dismissal, Act on Working Hours, Federal Vacation Act, Act on Continued Remuneration with regard to sick pay, Minimum Wage Act, Act on Temporary Employment, Works Constitution Act, Act on Collective Bargaining Agreements, case law, collective bargaining agreements, works agreements and individual employment contracts. In general, in Germany, in business units with more than 10 employees, the requirements for a valid notice and restrictions on terminations are governed by the Act on Protection Against Unfair Dismissal. The employer must observe certain form requirements for terminations.

Material Regulations in Thailand

Foreign Investment in Thailand

The laws and regulations in Thailand place restrictions on foreign investment in and ownership of entities engaged in a number of business activities. The Thai Foreign Business Act B.E. 2542 (1999 (“FBA”) requires foreigners to obtain approval under the FBA in order to engage in most service businesses. A company registered in Thailand will be considered a foreigner under the FBA if foreigners hold 50% or more of the shares in the company. Micware Asia Pacific, our subsidiary in Thailand, is considered a foreigner under the FBA, and it has obtained an approval under the FBA necessary for its operation.

Board of Investment of Thailand

Under Investment Promotion Act B.E. 2520 (“IPA”), an investor may apply for investment incentives, such as tax benefits, with the Board of Investment of Thailand (“BOI”). Micware Asia Pacific has been granted various privileges from BOI, such as the right to employ foreign experts and certain tax exemptions. Such incentives are granted to us by way of a BOI certificate which contains conditions which must be complied with to maintain the grant. The failure to do so will result in the revocation, in total or in part, of the BOI certificate and certain penalties related to such revocation, such as it shall be treated as if the investor had never been granted an exemption or reduction of taxes and duties and shall be required to pay taxes and duties computed on the basis of the condition and price of the items and the rate of taxes and duties thereof, as existed on the date of the relevant import or export. As for the reduction of the granted taxes and duties, the outstanding balance of the full amount of taxes and duties as computed above shall be paid.

Data Privacy and Cybersecurity

Thai regulations governing data privacy and cybersecurity include those promulgated under the authority of the Personal Data Protection Act B.E. 2562 (2019) (the “Personal Data Protection Act”), the Computer Crime Act B.E. 2550 (2007), as amended (the “Computer Crime Act”), the Cybersecurity Act B.E. 2562 (2019), and the Electronic Transactions Act B.E. 2544 (the “Electronic Transactions Act”).

Personal data collected from our conduct of businesses fall within the scope of the Personal Data Protection Act. The Personal Data Protection Act applies to the collection and processing of personal data, including but not limited to the collection, use, disclosure or transfer by a data controller or a data processor. As the law has extraterritorial enforcement, data controllers and data processors both in and outside of Thailand may be subject to this regulation. Cross-border transfer of personal data is subject to those criteria and methods as prescribed by the Personal Data Committee Notifications pursuant to Section 28 and Section 29 of the Personal Data Protection Act. In addition, data controllers are required to inform data subjects of the purpose of their collection and subsequent processing of the personal data collected, and obtain consent for such collection or processing, unless otherwise provided in the Personal Data Protection Act or the regulations or announcements issued by the Personal Data Protection Commission.

The Computer Crime Act regulates computer-related offenses. It criminalizes unauthorized access to computer systems, interception of data, and alteration or destruction of computer data, with penalties ranging from fines to imprisonment. The act also addresses the distribution of malware and the posting of false or harmful information online. Amendments in 2017 expanded its scope to include stricter content regulation, empowered authorities to block illegal content, and required service providers to retain traffic data, though these changes have raised concerns about freedom of expression.

The Cybersecurity Act applies to both public and private sector entities that own information and communication infrastructure essential for maintaining vital societal functions, known as Critical Information Infrastructure (“CII”), and to those engaged in services such as information technology and telecommunications. Under this Act, these organizations are required to establish internal guidelines for managing cybersecurity issues, ensuring that these guidelines align with the national cybersecurity master plan. Thailand’s National Cyber Security Committee (“NCSC”) sets out general cybersecurity policies and action plans and minimum standards for computer systems used in both government agencies and CII entities, according to the national cybersecurity master plan.

The Electronic Transactions Act is foundational for e-commerce business in Thailand, providing businesses with the legal assurance needed to conduct transactions online. It mandates that businesses adopt measures to ensure the integrity and security of electronic records. For B2C online businesses in Thailand, the act guarantees that electronic contracts and records are legally valid as long as they meet standards of reliability and accessibility. We are required to comply with these standards when obtaining users’ electronic consent for terms of service for our application.

Employment

Labor matters are mainly governed by the Thai Civil and Commercial Code and the Thai Labor Protection Act, B.E. 2541 (1998), as amended, and its subsequent notifications. The laws stipulate the relationship between the employer and the employees in essential aspects, including working hours, leaves, wages, entitlements, employment termination and severance payment, etc. The employment arrangement can be made verbally and is not required in writing.

Under the Thai Labor Protection Act, it is mandatory for employers to establish work rules when 10 or more employees are hired and it shall cover the following issues: (i) working days, normal working hours and rest period; (ii) holidays and rules governing the taking of holidays; (iii) rules governing overtime and holiday work; (iv) the day and place where wages, overtime pay, holiday pay and holiday overtime pay are to be made; (v) leave and rules governing the taking of leave; (vi) discipline and disciplinary measures; (vii) lodging of grievances; and (viii) termination of employment, severance pay and special severance pay. In addition, all employees of businesses with more than 10 employees shall be members of the Employee Welfare Fund. Employers are required to make a deduction from the employees’ wage to pay for contributions, and the employer shall pay supplementary contributions to the Employee Welfare Fund at a rate of 0.25% of the wages effective from October 1, 2025 until September 30, 2030. The 0.25% rate will increase to 0.50% from October 1, 2030.

C. Organizational Structure

See “—A. History and Development of the Company.”

D. Property, Plants and Equipment

See “—B. Business Overview—Facilities.”

Item 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis is designed to provide readers of our financial statements with a narrative from the perspective of Company’s management. You should read the following discussion and analysis of our results of operations and financial condition in conjunction with our financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors,” “Forward-Looking Statements,” and elsewhere in this annual report.

Overview

We are a Japan-based provider of software development services and innovative IT solutions mainly focused on the automotive and mobility sectors. Our main focus is the development and sale of IVI systems that cover a broad range of modern car functionality from multimedia to navigation, human machine interface, telematics, and driver assistance. We also specialize in the development of navigation software and location information-based smartphone applications. Since the establishment of Micware in 2003, we have accumulated over 20 years of experience in software development in the automotive industry, which has translated into significant business growth. As of the date of this annual report, our business is operated across Japan through 6 operating entities and 12 branch offices. We have also established subsidiaries in the U.S., Thailand, and Germany, for our operations overseas.

We present our results of operations by three categories:

We disaggregate our revenue into three categories: (i) software development services, (ii) licensing, and (iii) other software-related services.

For the fiscal years ended February 29, 2024 and February 28, 2025 and 2026, we had total revenue of JPY17,516.7 million, JPY21,119.3 million and JPY21,895.8 million (approximately US$140.3 million), respectively. For the fiscal year ended February 29, 2024, revenue generated from software development services, licensing, and other software-related services was JPY13,429.1 million, JPY3,364.6 million, and JPY723.1 million, respectively, constituting 76.7%, 19.2%, and 4.1% of our total revenue, respectively. For the fiscal year ended February 28, 2025, revenue generated from software development services, licensing, and other software-related services was JPY17,178.2 million, JPY3,175.1 million, and JPY766.0 million, respectively, constituting 81.4%, 15.0%, and 3.6% of our total revenue, respectively. For the fiscal year ended February 28, 2026, revenue generated from software development services, licensing, and other software-related services was JPY17,521.6 million (approximately US$112.3 million), JPY3,228.8 million (approximately US$20.7 million), and JPY1,145.4 million (approximately US$7.3 million), respectively, constituting 80.0%, 14.8%, and 5.2% of our total revenue, respectively.

For the fiscal years ended February 29, 2024 and February 28, 2025 and 2026, we had net income of JPY1,370.6 million, JPY1,330.6 million, and JPY1,602.6 million (approximately US$10.3 million), respectively. Unless otherwise indicated, references to net income in this section refer to net income attributable to the Company’s ordinary shareholders.

For recent developments regarding our IPO, see “Item 4. Information on the Company—A. History and Development of the Company—Corporate History—Our IPO” and “Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds—Use of Proceeds.”

Key Factors Affecting Results of Operations

We operate in a highly competitive automotive software industry, and increased competition could adversely affect our revenue and profitability.

Many companies in the IVI industry are large-scale enterprises with abundant capital and human resources, and competition is becoming increasingly intense. In both the SDV and LBS domains, it is common to engage customers by first engaging in software development, which is later monetized through license income and licensing-related services. Because large-scale software development typically requires substantial resources, such large-scale enterprises are often in a more advantageous position when bidding for such projects, and thus represent a significant competitive threat. Indirectly, we also compete with the in-house development initiatives of OEMs, who are our customers in the IVI contract development space. Intensified competition may exert pressure on pricing and development schedules, which could materially and adversely affect our customer base, project unit prices, revenue, and profit margins. Heightened competition may also lead to a decrease in average revenue per customer and an increase in selling and recruiting expenses, which could negatively impact our profitability and cash flows.

We are highly dependent on a limited number of major customers, who are large OEMs with significant buying power, and this concentration poses risks to our business.

A substantial portion of our revenue is derived from a limited number of major customers, most of whom are large-scale OEMs in the automotive industry. These OEMs possess significant bargaining power due to their size, procurement scale, and internal technical capabilities. As a result, they are often able to demand favorable terms, including lower pricing, extended payment terms, and compressed development schedules, which can adversely affect our profit margins and cash flows. In addition, the high concentration of revenue among a few key customers exposes us to increased risk in the event of a loss, delay, or reduction in orders from any of these customers. Strategic decisions by such OEMs, including shifting to in-house development of IVI systems or changing suppliers due to cost, technical, or strategic considerations, could materially impact our revenue. Furthermore, because these OEMs often engage in long and complex product development cycles, any changes in their vehicle programs, volume forecasts, or launch timelines can directly influence the timing and amount of our recognized revenue. As competition in the IVI and SDV markets continues to intensify, these dynamics may become more pronounced, increasing the uncertainty of our business performance and operational planning.

The performance and retention of engineers are critical to our project execution capabilities and profitability.

Our business is highly dependent on the productivity and retention of skilled engineers with advanced technical capabilities. A significant portion of our workforce consists of experienced professionals with deep domain expertise and hands-on experience in areas such as SDVs and LBS. These engineers play a central role in ensuring project quality, on-time delivery, and customer satisfaction. The loss or departure of such experienced engineers could materially impair our development capacity, hinder our ability to meet project deadlines, and reduce our chances of securing new contracts or expanding existing ones. Furthermore, competition for engineering talent in the automotive software industry has been intensifying year by year, and the recruitment and retention of top-tier engineers remain critical and ongoing challenges for us. If we are unable to maintain a stable and highly capable engineering team, it may negatively impact our ability to secure projects and execute them efficiently. In such cases, we may become increasingly reliant on subcontractors and external partners, which could lead to higher costs, diminished quality control, and adverse effects on our profitability and cash flows. To maintain our competitive advantage and support sustainable growth, we intend to continue investing in talent acquisition, development, and retention.

We are highly dependent on the Japanese market, and any deterioration in the economic, social, or regulatory environment in Japan could materially and adversely affect our performance. At the same time, we believe our technology has demonstrated a certain level of competitiveness in the global market.

A substantial majority of our revenue is generated from customers located in Japan, and most of our personnel are also based in Japan. While we have established subsidiaries in North America, the EU, and Southeast Asia, revenue contributions from these overseas regions have remained limited on a consolidated basis to date. This geographic concentration makes us vulnerable to risks specific to the Japanese market. For example, a downturn in the Japanese economy, inflationary pressure, labor shortages, or changes in government policies and regulatory frameworks could materially and adversely affect our business operations, financial condition, and results of operations. In addition, region-specific disruptions such as natural disasters, public health emergencies, or geopolitical tensions could negatively impact our business continuity and our ability to provide services to customers. Our current dependency on the Japanese market also limits the regional diversification of our revenue base. If we are unable to expand our overseas operations and customer base in a timely and effective manner, it may become difficult to mitigate the risks of domestic market saturation or economic downturns, and our long-term growth prospects and resilience to external shocks could be adversely affected. On the other hand, our major customers—Japanese OEMs—have secured a significant share in the global automotive market. As our technologies are integrated into their products, this indicates that our solutions are being adopted and accepted by consumers worldwide. We view this as a positive factor that demonstrates the quality and global competitiveness of our technology and provides a potential foundation for our future international expansion. We intend to leverage this advantage to strengthen our business platform as we pursue growth opportunities beyond Japan.

Our recent group reorganization aimed at enhancing operational efficiency and business synergy may not achieve its intended results and could lead to increased complexity and operating costs.

In Mach 2024, we implemented a group reorganization to better integrate overlapping business operations and pursue synergies across the organization. Prior to the reorganization, our parent company operated three business units internally, while several businesses acquired externally—although partially overlapping in function—continued to operate as separate legal entities. As part of the reorganization, we consolidated these overlapping businesses by integrating the acquired companies with the relevant business units, aligning them more directly along functional lines. This restructuring was based on our belief that concentrating talent and operations under a unified structure would enhance management efficiency and organizational effectiveness. However, despite the time elapsed since the original acquisitions, integration of previously independent companies carries inherent risks. Post-merger integration challenges, such as cultural differences, system misalignment, inconsistent processes, and personnel attrition, may arise and could hinder the realization of expected synergies and operational improvements. Moreover, as part of the reorganization, we established new subsidiaries through company split processes, resulting in an increase in the number of legal entities within the group. This may lead to greater administrative and compliance costs, as well as increased complexity in group-level management and financial reporting. If we fail to successfully execute the reorganization or manage the expanded group structure effectively, our anticipated benefits may not materialize, and we may experience operational inefficiencies, increased costs, or disruption to our business activities, all of which could adversely affect our business, financial condition, and results of operations.

Key Components of Our Results of Operations

Revenue

We disaggregate revenue into the following major categories:

Software development services

The Company generates revenue from software development services. This includes the design and delivery of custom automotive software based on the Company’s proprietary IVI platform. The platform supports a range of functions such as navigation, multimedia, and connectivity across Android- and Linux-based environments, and enables efficient, modular development for a variety of customer requirements.

Licensing

The Company grants customers rights to use its software modules, such as navigation engines, under licensing arrangements for a fixed term, in most cases between a three- and five-year time frame. These modules are generally integrated into in-vehicle systems by Tier 1 suppliers and licensed on a per-unit basis.

Other Software-Related Services

The Company generates other software-related revenue primarily from after-sales maintenance and support services provided to customers who have licensed or developed software with the Company. The Company also earns revenue from bundled equipment-and-software arrangements, primarily through the Company’s Mvcube service, which is classified as sales-type leases.

Cost of revenue and gross profit

Cost of revenue consists primarily of employee-related expenses, material costs, outsourcing expenses, license fees, project-related transportation costs, rental fees, communication costs, and allocated overhead. Employee-related expenses include salaries, bonuses, accrued vacation expenses, and fringe benefits.

Our ability to lower our cost of revenue depends on our capability to improve engineer utilization and productivity, enhance customer acquisition and retention, increase our share of spend within OEM customers, increase unit pricing per customer or project, and achieve cost reductions in outsourcing as well as procurement from our suppliers.

Our employees are a critical asset, necessary for our continued success. Therefore, we expect to continue hiring talented employees and providing them with competitive compensation programs. We manage the utilization levels of our delivery professionals through strategic hiring practices, dynamic management of staff, and efficient staffing of projects. Some of these professionals are hired and trained to work for specific customers or on specific projects. Our staff utilization also depends on the general economy and its effect on our customers and their business decisions regarding the use of our services.

Selling, general, and administrative expenses

Selling, general, and administrative expenses include all operating costs of the Company, except cost of revenue, as described above. These primarily consist of directors’ and staff costs, recruitment costs, promotion fees, professional fees, commission fees, rental fees, depreciation, transportation costs, and advertisement fees. Since we do not operate separate sales departments, our operating costs related to selling activities are managed together with administrative costs, as they serve similar functions and pertain to the same aspects of the business. Accordingly, the Company has consolidated them into a single line item under this title.

After the completion of this offering, we expect to incur on an ongoing basis certain new cost related to the requirements of being a publicly traded company, including insurance, accounting, legal, and other professional services costs, which could be material.

Research and development expenses

Research and development expenses include costs attributable to the conduct of research and development programs, including employee-related expenses, rental fees, utility costs, professional service costs, and material costs used for research and development activities, and related transportation expenses.

Interest expenses, net

Interest expenses consist primarily of interest on loans and finance leases. Interest income consists primarily of interest received on cash and cash equivalents.

Other income (expenses), net

Other income (expenses), net consists of one-time gains and losses and other miscellaneous income and expense items unrelated to our core operations, including gains or losses from foreign currency exchange, and gains or losses from change in fair market value of equity securities.

Income taxes expenses

We account for income taxes using the asset and liability method under U.S. GAAP, whereby deferred income taxes are recognized for the tax consequences of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Income tax expenses reflect income earned and taxed, in jurisdictions in which we conduct business.

A. Operating Results

The following tables set forth our selected profit or loss data, both in absolute amount and as a percentage of total revenue for the fiscal years ended February 29, 2024 and February 28, 2025 and 2026, respectively. This information should be read together with our financial statements and related notes included elsewhere in this annual report. The results of operations in any year are not necessarily indicative of the results that may be expected for any future year.

Comparison of Results of Operations for the Fiscal Years Ended February 29, 2024 and February 28, 2025