ValueCommerce Co., Ltd.

The risk that changes in the revenue base make it impossible to maintain the existing profit structure, resulting in difficulty securing profit. Assessed at likelihood level 2 (occasional: roughly once every 1-2 years) and impact level 8 (significant: a loss of approximately 20% of key management indicators), this is one of the most critical financial risks. Countermeasures include optimizing the cost structure, building a flexible operating framework, and examining new businesses.

The risk that insufficient or delayed response to changes in the market environment leads to lower profitability. Assessed at likelihood level 1 (low: roughly once every 5 years) and impact level 8 (significant), this risk is closely linked to the opportunity for profitability improvement through higher value-added offerings and differentiation. The Company addresses this through a differentiation strategy driven by data utilization and product sophistication, selective investment in priority areas, and diversification of the revenue structure.

The risk that human error or intentional misconduct, malware infection, targeted attacks, ransomware attacks that encrypt core systems or critical data, data theft and double extortion, or exploitation of system vulnerabilities could result in information leakage, data destruction or tampering, or service outages that materially affect business continuity. Assessed at likelihood level 1 and impact level 8 (significant). The Company implements system management framework establishment and continuous operation, regular backups, vulnerability countermeasures, and unauthorized access monitoring and defense.

The risk that business continuity becomes difficult in the event of a large-scale disaster because physical resources such as servers and information systems are concentrated in Tokyo. Assessed at likelihood level 1 and impact level 8 (significant), with infrastructure concentration constituting a vulnerability. The Company addresses this through distributing and duplicating data centers by using multiple cloud services, examining expansion to other regions, and clarifying recovery procedures in the event of a failure.

The risk that service provision is suspended during an emergency disaster, or that delays in post-disaster business recovery work affect financial results. Assessed at likelihood level 1 and impact level 8 (significant). The Company seeks to maintain and improve business continuity capability during disasters by formulating a BCP (business continuity plan) that takes remote work environments into account and by conducting regular drills.

The risk that service users' personal information is leaked due to intentional or negligent acts by the Company or outsourcing partners' personnel, attacks by malicious third parties, or unforeseen circumstances. Assessed at likelihood level 1 and impact level 8 (significant), with potential for reputational damage and legal liability. The Company addresses this through maintaining and managing security levels based on ISMS certification, thorough security check processes, and ongoing employee education.

The risk that reputational damage or customer attrition resulting from troubles in data acquisition methods or data management, or the generation of misinformation, discriminatory output, infringement of intellectual property rights or personal information, or non-compliance with laws and regulations in the use of AI technology, undermines the reliability of business activities. Assessed at likelihood level 1 and impact level 8 (significant). The Company implements the formulation of a basic AI ethics policy and AI usage guidelines, risk assessment and monitoring in AI use, establishment of data governance operating rules, and employee education.

The risk that aggregation errors arising from system malfunctions, specification errors, or operational mistakes result in impaired sales or overbilling. Assessed at likelihood level 1 and impact level 8 (significant); given that the business model is centered on measuring the performance of affiliate advertising, aggregation accuracy is fundamental to the business. The Company addresses this through thorough development review and testing, migration to more accurate data, and regular monitoring.

The risk that strengthened restrictions on cookie-based tracking by browser vendors, the W3C, and others make it difficult to measure advertising effectiveness. Assessed at likelihood level 3 (high: roughly once every 6 months) and impact level 3 (limited: a loss of approximately 5-10% of key management indicators). At the same time, there is an opportunity for differentiation from competitors through proprietary tracking technology, and the Company continues technology development, examination of workaround measures, and industry trend research.

The risk that reduced transactions with the Company resulting from changes in major business partners' business policies lead to weaker business performance. Assessed at likelihood level 2 (occasional) and impact level 3 (limited), with revenue dependence on specific services constituting a vulnerability. In addition to diversifying business partners and strengthening new customer acquisition, the Company seeks to reduce dependence risk by planning and developing indispensable services deeply embedded in partners' business processes and revenue models.