Hmcomm Inc.

The top five sales partners account for 42.8% of net sales (FY2025 (ended December 2025) actual results). If a change in a partner company's sales policy, business underperformance, natural disaster, or similar event causes a delay or suspension of customer acquisition, this could have a material impact on business performance. As a countermeasure, the Company seeks to increase and diversify its sales partners by enhancing service value through new feature development and strengthening relationships with sales partners.

Securing, developing, and retaining excellent human resources is a key challenge for business expansion. If the Company is unable to hire the necessary personnel, or if trained officers and employees leave the Company, this could affect business development and operating results. In particular, responding to technological innovation requires highly specialized personnel, and intensifying competition for hiring is a concern. The Company strives to secure talented personnel and prevent attrition through the grant of incentives such as stock options, enhancement of talent development programs, and expansion of employee benefit programs.

Under a policy of actively pursuing M&A and capital/business alliances aimed at achieving non-continuous growth, even where thorough due diligence has been conducted, the expected synergy effects may not be realized due to unforeseen liabilities of the target company, the departure of key personnel or customers, or drastic changes in the market environment. In particular, with respect to goodwill, if the target company's performance falls short of plan, an impairment loss may be recognized, which could have a material impact on the Company's financial position and results of operations. The Company has established a dedicated organization that manages the process consistently from deal sourcing through PMI, and rigorously evaluates risk and return through a multifaceted review process.

If servers or systems become unable to operate normally, or if accumulated data is lost, due to natural disasters, computer viruses, unauthorized acts by third parties, human error, or other causes, services may be suspended, potentially affecting business development and operating results. Although the Company utilizes external cloud services, the risk of failure cannot be completely eliminated. The Company strives to maintain stable operations through enhanced security measures, vulnerability management, verification by outside experts, and system redundancy.

Barriers to entry in the speech recognition solutions market cannot be described as remarkably high, and expanded entry by competitors—including major companies with financial strength and brand power—is expected. Intensifying price competition, a decline in market share, or the emergence of competing services utilizing entirely new technologies could reduce the relative advantage of the Company's services and adversely affect business performance. The Company strives to maintain its competitive advantage through continuous monitoring of competitor trends and improvement of service quality.

In service fields such as the internet, systems utilizing new technologies and new devices continue to emerge, and strengthening and maintaining the development organization is essential to maintaining technological superiority. If, for some reason, it becomes difficult to strengthen or maintain the development organization, the Company may be unable to demonstrate technological superiority, which could affect business performance. The Company strives to respond swiftly to technological innovation through the selection and R&D promotion of core technologies, including generative AI, and through knowledge sharing.

The Company provides products that manage many information assets held by customers. If information assets are leaked or tampered with due to unauthorized access, data theft, or loss, the Company could face substantial claims for damages, revocation of its ISMS certification, or fines. Although the Company obtained ISMS certification in January 2020, risks such as cyberattacks exceeding expectations cannot be completely eliminated. The Company implements appropriate information management through the conclusion of confidentiality agreements, establishment of basic information security regulations, and regular meetings of the Compliance and Risk Management Committee.

The Company's services use AWS (Amazon Web Services) as its data center, and server costs paid to AWS in FY2025 (ended December 2025) actual results amounted to ¥53,153 thousand, which is expected to continue increasing as the business expands. If a failure occurs at AWS and an alternative cannot be established, resulting in a prolonged service outage, this could affect operating results and financial position. The Company's policy is to select the optimal infrastructure environment on a case-by-case basis while also considering the use of cloud services other than AWS.

If stock acquisition rights granted as incentives to officers and employees are exercised, the value of shares per unit may be diluted, potentially affecting the future stock price. As of the end of the fiscal year under review, the number of potential shares was 286,000 shares (7.0% of the 4,097,400 total shares issued), and as the Company plans to continue utilizing its stock option system going forward, further dilution may occur. The Company's policy is to leverage such measures to raise the motivation of officers and employees to improve performance and to align their interests with those of shareholders, thereby contributing to the enhancement of corporate value.

The Company plans to expand its business in the speech recognition market targeting fields such as call centers, smart life, plant and infrastructure maintenance, manufacturing and robotics, and autonomous driving/mobility services, but market creation may not proceed as planned and may take a long time. If market growth falls short of expectations, this could affect the Company's business and performance. The Company continues to approach multiple fields while flexibly adjusting the priority of focus areas, aiming to diversify risk through a balanced portfolio construction.