Voltage Incorporation

The Group provides content through platform operators such as Google and Apple, and there is a risk that contracts may not be concluded or continued due to changes in business policy, fluctuations in fee rates, or determinations of content non-conformity by these operators. Including unforeseen circumstances at platform operators, this could have a material impact on the Group's business performance and business development. This is positioned as the highest-ranked item among the "particularly important risks" in the Annual Securities Report.

The collection of content usage fees for web services such as digital comic distribution is outsourced to payment agency companies, and there is a possibility that difficulties in contract renewal or an inability to collect fees due to system trouble could affect business performance. Expansion of services is premised on the continuation of these contracts, and securing alternative means is an issue. This is classified as a "particularly important risk" in the Annual Securities Report.

Cyberattacks such as computer viruses and hacker intrusions, as well as server outages due to excessive access and network equipment failures, may cause disruptions to content distribution. Although measures such as unauthorized access monitoring, server load balancing, and regular backups are in place, the occurrence of such trouble would affect business performance. This is classified as a "particularly important risk" in the Annual Securities Report.

Development sites are located in Tokyo and Aichi Prefecture, and a data center is located in Tokyo, creating a risk that natural disasters such as major earthquakes and typhoons, or fires and accidents, could halt development operations, damage facilities, or restrict power supply. Such unforeseen circumstances could disrupt business activities and affect business performance. This is classified as a "particularly important risk" in the Annual Securities Report.

The Group is considering M&A as a means of business expansion, and there is a possibility that significant changes in the market environment after an acquisition, or failure of the acquired business to meet its plans, could make it difficult to recover invested funds or result in additional costs. Although the Group proceeds with due consideration of customer base, business performance, financial condition, synergy effects, and risk analysis in advance, uncertainty cannot be eliminated. This is classified as a "particularly important risk" in the Annual Securities Report.

The Group operates in the mobile content market across categories such as Japanese Women-Targeted, English/Asian Women-Targeted, Male-Targeted, and Digital Comics, but as this market has a short history and changes rapidly, its future prospects remain somewhat uncertain. If market growth falls short of the Group's projections, this could affect its business performance and business development.

Numerous competitors exist in the mobile content market. The Group seeks to differentiate itself through content themed on "dramas of love and conflict," but if it is unable to develop and provide appealing content, this could lead to a decline in user numbers. Rising user acquisition costs due to intensifying competition for advertising placement slots are also cited as a risk affecting business performance.

Since some of the content provided includes sexual and violent expressions, the Group has established its own standards stricter than legal requirements and has built systems such as training upon joining the company. However, there is a possibility that changes in social conditions could lead to stricter legal regulations or the enactment of new laws, causing content to run afoul of legal regulations. If such regulatory violations occur, this could have a material impact on business performance and business development.

The Group obtains users' personal information and has established a management system, including obtaining Privacy Mark certification, but if an information leak occurs, this could affect business performance through claims for damages or loss of credibility. Additionally, while contractual arrangements to prevent infringement of intellectual property rights are made when outsourcing to external creators, there is a risk of claims for damages if unrecognized infringement of third-party intellectual property rights occurs.

The Group provides overseas-oriented content in its English/Asian Women-Targeted, Consumer, and Digital Comics businesses, but potential risks exist due to differences in laws, systems, political and economic conditions, culture, religion, user preferences, and business customs in each country, as well as exchange rate fluctuations. If it becomes difficult to address these risks, recovery of investment may become difficult, which could affect business performance.