zig-zag,Inc.

The Company holds personal information acquired through its business, and if an information leak occurs due to an unforeseen incident, this could lead to a decline in service users due to reputational damage and claims for damages, which may affect business performance. The Company works to strengthen its information management system through strict access control, measures to prevent unauthorized access, development of a privacy policy, and regular training for officers and employees.

In the cross-border EC market, the speed of technological innovation and changes in customer needs is extremely rapid, and if the Company is unable to respond appropriately, this could lead to a decline in competitiveness. In addition, increases in system investment and personnel costs associated with responding to such changes may put pressure on business performance. The Company strives to actively gather information, including from overseas, and to build a system for rapid response.

The Company's business is subject to a wide range of laws and regulations, including the Act on the Protection of Personal Information, export control regulations, tax laws, the Pharmaceuticals and Medical Devices Act, the Liquor Tax Act, and the Food Sanitation Act. If the Company is unable to respond appropriately to changes in legal interpretation by authorities in each country or to the enactment and enforcement of new regulations, this could have a material impact on business continuity and performance. The Company strives for early identification of risks and countermeasures through regular exchanges of information with domestic and overseas attorneys and tax accountants.

The Company provides stable operation 24 hours a day, 365 days a year, centered on cloud-based services; however, if a large-scale system failure or communication network disconnection occurs due to unforeseen trouble such as a disaster or accident, this could hinder service provision and affect business performance. The Company implements continuous monitoring using data monitoring tools, regular vulnerability assessments, and data backup management.

If infrastructure such as communication networks, information systems, and logistics ceases to function normally due to natural disasters such as earthquakes, typhoons, or floods, or due to fires, power outages, terrorism, conflicts, or the spread of infectious diseases, this could hinder the provision of various services and affect business performance. The Company is working to build and maintain the infrastructure systems necessary for the internet, communications, logistics, and other functions.

In the cross-border EC market, there are operators both in Japan and overseas providing similar services, and if the competitive environment intensifies as the market expands, this could affect business performance through increased costs from additional investment to improve service levels and strengthened sales promotion activities. The Company strives to maintain its competitive advantage, leveraging its proprietary technology that enables cross-border sales with a single line of JavaScript tag, its intellectual property strategy, and its differentiated owned-EC support as strengths.

Although the Company itself does not bear direct foreign exchange risk, significant fluctuations in exchange rates could cause large fluctuations in product prices on a foreign-currency basis, which may temporarily affect the purchasing behavior of overseas customers. In addition, changes in the macroeconomic environment overseas, such as economic downturns, political changes, changes in laws and regulations, terrorism, and infectious diseases, may also affect purchasing behavior. The Company strives to reduce risk through constant information gathering and rapid implementation of countermeasures.

Continuous recruitment, development, and retention of excellent personnel regardless of nationality is essential for business expansion, and if recruitment and development do not proceed as planned, this could hinder the provision of high-quality services and improvement of competitiveness, affecting business performance. The Company is working to secure personnel through measures such as encouraging employee referrals, strengthening recruitment public relations, diversifying recruitment methods, and enhancing benefits for multinational personnel.

The Company outsources part of its logistics operations, purchasing operations, and other functions to external companies, including overseas outsourcing partners; however, if deterioration in the business environment of an outsourcing partner leads to soaring fees or difficulty in service provision, this could affect business continuity and performance. The Company strives to reduce the risk of dependence on specific outsourcing partners by promoting partial automation of operations and securing alternative partners.

The potential shares from stock acquisition rights granted for the purpose of providing incentives to officers and employees amount to 325,410 shares, equivalent to 13.5% of the total number of issued shares. If these are exercised, the value of shares held by existing shareholders and their voting rights ratio may be diluted.