Hamee Corp.

The majority of the Commerce Business's sales depend on the smartphone case brand "iFace" series. If demand declines due to a significant deterioration in brand image or the emergence of competing products with similar concepts, there is a risk that sales could decrease substantially. The company is working to strengthen brands other than "iFace" and consider new brands, but the development of alternative brands remains a work in progress.

Next Engine, the core service of the Platform Business, is also used as the order management system for the Commerce Business. In the event of a malfunction, there is a risk that both businesses could simultaneously suffer functional failure. Although the company strives to maintain and manage the system, if a failure occurs, it could result in the suspension of customers' operations and loss of business opportunities, potentially leading to litigation risk as well.

Changes in the operating policies of major EC malls such as Rakuten Ichiba and Yahoo! Shopping (e.g., prohibition of multiple store openings, increases in sales royalty rates) pose a risk of increasing operating costs for the company's own EC stores and reducing customers for the Platform Business. The company aims to reduce its dependence by opening stores on multiple malls and operating sites on its own domain, but there are limits to how it can respond to policy changes made by the malls themselves.

The Group has carried out multiple M&A transactions, including Hamee Consulting, anea design, and Pixio USA Inc. (acquired in January 2025), and may continue to pursue corporate acquisitions both domestically and internationally going forward. If expected cash flows cannot be generated due to divergence from business performance plans, goodwill impairment may occur, potentially having a material impact on business results. The company's policy is to take early countermeasures through post-investment monitoring.

The mobile accessories industry is strongly influenced by trends in smartphone models, and products designed for specific models generally have short life cycles due to model changes occurring roughly once a year. If trends in model popularity or changes in customer preferences diverge from demand forecasts, sales fluctuations, increased inventory, and inventory valuation losses may occur, potentially affecting the company's financial position.

Merchandise procurement for the Commerce Business is based on demand forecasts. If actual demand falls short of forecasts, excess inventory, deteriorating cash flow, and inventory valuation losses may occur; conversely, if actual demand exceeds forecasts, loss of sales opportunities may result. Improving the accuracy of demand forecasting is a challenge, with particularly significant impact on products designed for specific models and seasonal products.

The Commerce Business holds and manages a large volume of personal information on members, while the Platform Business holds and manages business partner information and confidential information of Next Engine users. If information leakage occurs due to unauthorized external access, human error, or intentional employee misconduct, there is a risk of loss of trust and liability for damages. The company has established a personal information protection management system and conducts employee training, but complete elimination of this risk is difficult.

Storage and inbound/outbound operations for the domestic Commerce Business are outsourced to Seicho Co., Ltd. and Cainz Shohai Co., Ltd. If the outsourced partners' services are interrupted due to system failures, natural disasters, force majeure, or other causes, shipping operations may be halted, potentially impeding business continuity. In addition, if shipping companies request price increases, the resulting rise in logistics costs could affect business results.

The Group is subject to a wide range of laws and regulations, including the Act against Unjustifiable Premiums and Misleading Representations, the Product Liability Act, the Act on Specified Commercial Transactions, the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices, the Act on the Protection of Personal Information, the Trademark Act, and the Copyright Act. If a violation of laws occurs, or if laws are revised or new legislation is enacted, this may result in restrictions on business operations and adversely affect business results. The company has established a management structure to build a compliance framework.

As the business expands, securing and developing highly specialized personnel in each department is essential. If recruitment plans are not achieved or key personnel leave the company, this may affect business development and operating results. The company's policy is to proactively work on developing and retaining personnel with high growth potential, but competition for talent in the IT and EC fields remains intense.