AltPlusInc.

The Group recorded an operating loss of ¥467 million, an ordinary loss of ¥442 million, and a net loss attributable to owners of the parent of ¥434 million for the fiscal year under review, extending the losses recorded in the previous 11 consecutive fiscal years. Events exist that raise material doubt about the going concern assumption, and material uncertainty is currently recognized. As countermeasures, the Company is pursuing fundraising of up to ¥11,100 million through the exercise of the 11th and 12th Stock Acquisition Rights as well as measures to improve its earnings structure; however, if these measures do not succeed, there is a possibility of a significant impact on cash flow.

The total number of potential shares, including the 11th and 12th Stock Acquisition Rights approved at the 16th Annual General Meeting of Shareholders, is 208,000,000 shares, equivalent to 276.0% of the 75,355,233 shares issued and outstanding as of the filing date of this document. If the rights are exercised, the value per share and voting rights ratio of existing shareholders will be significantly diluted. On the other hand, if the share price falls below the exercise price and the rights are not exercised, fundraising will become difficult, potentially hindering the execution of business plans such as development of new titles, M&A, and purchase of crypto assets.

To generate stable revenue from online games, it is necessary to continuously provide titles that can acquire a large number of users; however, there is a risk that development and operation of titles may become difficult due to factors such as the loss of ability to use an IP. The Group has built a structure enabling parallel development of multiple titles by acquiring new title projects using IPs and by undertaking development and operation of other companies' titles on a contract basis, but if user acquisition is insufficient, this will have a material impact on business performance. The increasing trend in development costs and rising advertising expenses are also factors squeezing profitability, and the Group seeks to contain these through contract arrangements in which partner companies bear certain costs.

The Group's online games are provided to users mainly through domestic and overseas platform operators, and there is a risk that changes in each operator's business strategy or terms of service could result in service suspension, content changes, or changes to fee rates. Given the high degree of dependence on platforms, if policy changes occur at one or multiple platforms, the impact on business performance would be significant. The Group strives to maintain good relationships by developing and operating in compliance with the terms of service of each operator.

There are numerous competitors in the online game market, and intensifying competition could lead to a decrease in the number of users of the Group's titles and a decrease or shrinkage in contracted development and operation projects. Amid signs of slowing market growth, if it becomes difficult to differentiate from other companies, there is a risk that the revenue base will become further weakened. The Group is addressing this through cost reductions, improved development efficiency, and continued provision of differentiated titles utilizing its know-how, but fundamentally strengthening competitiveness remains a challenge.

The Group plans to launch a crypto asset purchase and management business aimed at enhancing corporate value and strengthening its financial base over the medium to long term; however, crypto asset trading prices can fluctuate significantly in the short term, potentially having a material impact on business performance. In addition, if an exchange suffers a system failure or cyber attack, losses may not be compensated by the administrator. Holding crypto assets while the Group's financial base remains fragile entails the risk that losses from price declines will directly affect the financial statements.

The Group holds important information assets such as personal information and trade secrets through its game development and operation business and human resources services. If a leakage or falsification occurs due to computer virus infection or unauthorized access, this could lead to loss of competitive advantage, claims for damages from business partners, and loss of credibility. While the Group has obtained ISMS certification (ISO/IEC 27001:2022) and implemented measures such as establishing an information security policy and conducting internal training, complete protection is difficult given the increasing sophistication of cyber attacks. If an information leakage occurs, there is a risk that it could also hinder the continuation of contracted development and operation businesses.

In contracted development projects, if the total estimated cost fluctuates significantly due to development delays, specification changes, rising labor costs, or other factors, the revenue estimate will be revised, and if the total estimated cost exceeds the contract amount, a provision for loss on order received must be recorded. In addition, if contract non-conformity occurs due to negligence or other causes attributable to the Group, there is a risk of being subject to large-scale rework, service interruption or discontinuation, and claims for damages. The Group addresses this through progress checks at management meetings, improving estimation accuracy, and clarifying specifications at the time of contract conclusion, but the risk is increasing amid an environment of rising development costs.

G Fund, the largest shareholder, held 36.51% of the Company's shares as of the end of September 2025, and would hold 45.75% if all stock acquisition rights are exercised. The capital and business alliance with G Fund and GF Holdings Co., Ltd. is an important pillar of the Group's business development; however, if the shareholding policy is changed in the future and the alliance relationship is dissolved, this could have a material impact on business development and performance. High dependence on a specific major shareholder, combined with the lack of a clear alternative strategy in the event the alliance is dissolved, heightens this risk.

The mobile internet industry is characterized by rapid technological innovation and fast-changing user needs, and if the Group is slow to respond to game development and service development utilizing new technologies such as AI, this could reduce its competitiveness and affect business development and performance. The Group is working to acquire and establish new technologies and know-how, including AI, but under a fragile financial base, there is also a risk that it will become difficult to continue investing in research and development. Because a delayed response to technological innovation directly leads to a loss of differentiation from competitors, this is a critical risk that also relates to the continuity of the business.