visumo Inc.

The pace of technological innovation in the IT industry is rapid, and in particular, the rapid development of generative AI and AI search technologies is significantly changing corporate marketing activities and consumer information-gathering behavior. There is a risk that competitive advantage could decline if the Company fails to develop services that appropriately capture market needs and technology trends, or if competitors introduce innovative services; the Company is promoting active information gathering, research and development, and the utilization of AI-related technologies.

The market capitalization of the Company's tradable shares is close to the listing maintenance criteria set by the Tokyo Stock Exchange, and if the market capitalization of tradable shares declines for any reason, this could result in a breach of the listing maintenance criteria and stagnation in market trading. The Company plans to improve liquidity through a combination of measures including enhancing corporate value through sales and profit growth and requesting partial sell-downs by the parent company.

The Company's services are highly dependent on social media platforms centered on Instagram, and if specification changes, malfunctions, or a decline in the number of users occur on these platforms, service provision could be disrupted. The Company has established a system to provide services without issue even in the event of SNS integration malfunctions, but the risk that a decline in the value of photos and videos on social media could spread to the entire business cannot be ruled out.

The size and demand of the EC site construction support service market and the digital marketing market may not develop as the Company anticipates, and a slowdown in corporate IT investment due to deterioration in the economic environment could affect operating results. As countermeasures, the Company continues to pursue product development and generate best-practice cases in line with visual utilization trends, as well as continuing information dissemination through public relations activities.

Since the Company operates a single business, the Marketing Platform Business, if changes occur in the business environment or the competitiveness of its products and services declines, the impact cannot be diversified and could significantly affect operating results and financial condition. The structure does not allow for diversification effects through business diversification, and vulnerability increases particularly in a market contraction phase.

Multiple cloud service providers exist in the EC site construction support and digital marketing markets, and if competition intensifies due to the expansion of new entrants, including major companies, this could affect the Company's operating results and financial condition. The Company strives to maintain and improve service competitiveness through continuous functional enhancements tailored to corporate needs.

The Company handles a large amount of user company information and personal information in its cloud services, and if information leakage or deletion of important data occurs due to unauthorized external access or errors by officers and employees, this could result in a significant loss of trust and claims for damages. As countermeasures, the Company is promoting the strengthening of its information management system, including security measures, a data backup system, and thorough access authority management.

The Company's cloud services utilize internet communication networks and external cloud services, and if a system failure occurs due to natural disasters, hardware malfunctions, unauthorized access, a sudden increase in access, or other causes, this could disrupt the continued provision of services. The Company has implemented measures such as redundancy and security countermeasures, but minor failures occur every year, and recovery costs and a decline in trust could affect operating results.

The IT industry is a seller's market for engineers, and competition to acquire personnel well-versed in AI-related technologies in particular may intensify further going forward. If the Company faces difficulty in recruiting or experiences the departure of existing personnel, this could hinder service development and business expansion, and increased costs for securing and training personnel could affect operating results; the Company is addressing this through work-style reform, personnel development measures, and strengthened recruitment activities.

The parent company, SoftCreate Holdings Corp., holds 62.5% of the Company's total issued shares, and is in a position to influence the Company's management decisions through the appointment and dismissal of directors at shareholders' meetings, among other means. In addition, related party transactions, including cloud service transactions with the parent company group, occur on an ongoing basis, and if transaction terms change or the parent company changes its business strategy, this could affect the Company's operating results and financial condition.