Ateam Holdings Co., Ltd.

Increasingly sophisticated and elaborate cyberattacks, such as targeted attacks and ransomware, pose a risk of business disruption, customer data leakage, and financial loss. Although the Company has implemented multi-layered countermeasures, including multi-factor authentication via IDaaS, deployment of EDR and SSE, and the establishment of Ateam-CSIRT, it is impossible to completely eliminate such risks. In the event of a major incident, business activities could be halted and social credibility could be damaged, potentially resulting in a serious impact on business performance.

As of the end of the current consolidated fiscal year, the Company recorded goodwill of ¥1,300 million arising from M&A (mainly ¥1,140 million in goodwill related to microCMS), customer-related assets of ¥248 million, and marketing-related assets of ¥21 million. If a significant divergence from the revenue plans at the time of acquisition arises due to rapid changes in the market environment or other factors, an impairment of goodwill may be required, which could affect business performance and financial condition. Although business growth is currently continuing and the impairment assessment is considered appropriate at this time, future uncertainty cannot be eliminated.

A wide range of laws and regulations apply to the Company's business areas, including the Act against Unjustifiable Premiums and Misleading Representations, the Act on the Protection of Personal Information, the Specified Commercial Transactions Act, the Payment Services Act, the Act on Pharmaceuticals and Medical Devices, and the Act on Regulation of Transmission of Specified Electronic Mail. If the content and services provided are restricted due to the enactment or amendment of laws, administrative dispositions by regulatory authorities, or the establishment of new regulations, this could affect the Company's business, business performance, and corporate image. The Company strives to prevent legal violations by promoting compliance based on adherence to laws and regulations.

The Company acquires personal information from users of its services and content, which carries the risk of leakage or unauthorized use due to computer viruses, unauthorized access, or intentional or negligent acts. Although the Company conducts strict management in accordance with the Act on the Protection of Personal Information, including thorough business flows and authority structures, in the event of an incident, damage claims, loss of trust, and deterioration of corporate image could affect business performance and business development.

Regarding the stock acquisition rights and unsecured convertible bonds with stock acquisition rights issued under the subscription agreement with AASC II P, L.P., phased exercise is expected through June 26, 2029. As of June 13, 2025, a portion (2,721,617 shares) has already been exercised, and the remaining number of shares subject to the rights is fixed at 5,054,383 shares, so there will be no increase in the dilution rate. However, the value per share may be diluted, including through the exercise of paid stock options granted to employees.

The mobile game, internet, and E-Commerce markets have grown along with the spread of smartphones and other factors, but if the market size shrinks in the future or is affected by deteriorating economic sentiment or economic fluctuations, this could affect business performance and financial condition. In the D2C business, there is also a risk that a sharp rise in crude oil prices or a shortage of raw material supply, leading to soaring raw material prices, could affect the business and business performance.

While the Company provides a diverse range of content and services utilizing the internet, intensifying competition with existing companies offering similar services and new entrants may affect its business and business performance. The Company strives to improve its competitiveness by providing distinctive content, pursuing optimal usability, diversifying services, and enhancing customer support, but the risk of a sudden change in the competitive environment continues to exist.

The Company promotes business expansion through venture investment, fund investment, and M&A, but investments in unlisted companies involve uncertain factors such as changes in the market environment and insufficient management capability, and there is a risk that the investment may become unrecoverable if the expected results are not achieved. In M&A transactions, the Company conducts due diligence on financial conditions and other matters; however, if issues that were not identified during due diligence arise after acquisition, such as the emergence of contingent liabilities or the discovery of unrecognized liabilities, this could affect business performance and financial condition.

Representative Director and President Takao Hayashi, the founder and an engineer with extensive experience, plays an extremely important role in a wide range of areas, including management strategy. If he becomes unable to participate in management for any reason, this could affect business performance and future business development. The Company is working to build a management structure that avoids excessive dependence on him, but at present, the degree of dependence remains high.

The Company holds crypto assets for the operation of a crypto asset exchangeable points application by Paddle Inc., and there is a risk of outflow or loss due to unauthorized access by malicious third parties. In addition, the trading price of crypto assets can fluctuate significantly in the short term, and such price fluctuations could have a significant impact on business performance. Although the Company has implemented appropriate security measures and strengthened its monitoring system, it is difficult to completely eliminate this risk.