ORO co.,ltd.

The Cloud Solutions Business and Marketing Solutions Business have low barriers to entry, and intensified competition is expected from numerous existing competitors as well as new entrants. In addition to competitors' pricing and product/service strategies affecting the market, there is a risk that new technologies such as AI could render the Company's products, services, and business model obsolete. Although the Company is working to strengthen service functionality, development capabilities, and secure excellent talent, if effective differentiation cannot be achieved, this may affect its business and operating results.

The Cloud Solutions Business has a structure in which revenue is concentrated in its flagship product, "ZAC", resulting in high dependence on a specific product. If "ZAC" loses competitiveness due to new entrants or intensified competition, this poses a risk of directly impacting the overall profitability of the business. While the Company is working to reduce this dependency through new product development, the dependent structure currently continues.

The core of the Cloud Solutions Business is the development and sale of proprietary products. If the Company fails to respond to changes in the competitive environment and customer needs, causing its products to lose market competitiveness, the competitiveness of peripheral services such as consulting and customization would also be lost in a chain reaction. The Company strives to respond to the latest technology trends and strengthen its development and consulting capabilities, but if it falls behind in responding to market changes, this may have a material impact on its business and operating results.

If malfunctions or bugs occur in provided products, if issues arise in implementation support or technical support due to the Company's responsibility, or if problems arise due to the quality of work performed by outsourcing partners, there is a risk of customer claims for damages and loss of trust. Similar impacts may occur if products are perceived to lack sufficient functionality. These events may affect the Company's business and operating results.

Due to the nature of its business, the Company handles confidential information and personal information of client companies. If infection by malware such as ransomware, server attacks, loss or theft of information, or disasters or accidents at data centers occur, there is a risk of information leakage or loss, as well as difficulty providing services due to system outages. The Company has implemented measures such as establishing information security and personal information protection policies, obtaining international certifications and the Privacy Mark, and distributing data centers, but responding to increasingly sophisticated cyberattack techniques in recent years remains a challenge. Customer claims for damages and loss of trust resulting from such incidents may have a material impact on the Company's business and operating results.

In the course of conducting business, the Company Group conducts investigations to prevent infringement of third parties' intellectual property rights. However, if it unintentionally infringes on a third party's intellectual property rights, there is a risk of facing claims for damages or requests for injunctions against use. Such legal disputes may affect business continuity and operating results.

Securing, developing, and retaining excellent talent is positioned as a top priority issue, but there is a risk that the Company may be unable to secure the necessary personnel amid a declining domestic working population. There is no guarantee that recruited and trained officers and employees will continue to contribute to the business, nor is the effectiveness of various talent acquisition measures, including diversity promotion, guaranteed. If a labor shortage occurs, it may affect the Company's business and operating results.

The Company Group is strengthening its compliance structure through the establishment of compliance policies and corporate ethics regulations, training for all officers and employees, and the development of an internal reporting system. However, if a situation arises in which laws and regulations are violated in connection with business activities, there is a risk of incurring costs from third-party claims for damages and loss of customer trust. These may affect the Company's business and operating results.