GMO Commerce, Inc.

The occurrence of natural disasters may lead to a decrease in the number of customers visiting client companies (retail, food service, etc.) and shortened business hours, which, through deterioration of clients' business conditions, could lead to delinquency or cancellation of service usage fees. In the event of a widespread disaster, the Company's own business continuity could also be affected. The Company addresses this through the formulation and periodic review of its BCP, establishment of a remote work system, and provision of online services.

If contractual terms with platform operators such as LINE Yahoo Corporation and Meta Platforms, Inc. are changed, this could adversely affect the cost of providing the Company's marketing support services and its revenue structure. If dependence on a specific platform is high, the impact could be significant. The Company mitigates this risk by developing proprietary services and utilizing multiple platforms to diversify risk.

The Company's services are highly dependent on IT systems, and if a system failure occurs, service provision could be interrupted, directly affecting the business activities of client companies and potentially undermining the Company's credibility. Given the nature of the services, the impact of a failure could extend to a wide range of customers. The Company maintains stable operations through system redundancy, enhanced security measures, and regular maintenance.

As the Company handles important information of client companies, if an information leak or unauthorized access occurs, it could result in loss of client trust and adversely affect business performance. The increasing sophistication and complexity of cyberattacks requires continuous strengthening of security measures. The Company addresses this through the formulation of an information security policy, employee training, and the introduction of security systems.

If related laws and regulations such as the Act on the Protection of Personal Information, GDPR, or CCPA are amended, this could result in restrictions on business activities and additional costs. In particular, tightening of cookie regulations and heightened awareness of privacy protection could directly affect the manner in which digital marketing support services are provided. The Company strengthens its compliance framework through expert advice and internal training.

If domestic and overseas economic conditions deteriorate or financial markets experience turmoil, client companies' marketing budgets may be reduced, potentially decreasing demand for the Company's services. Given the nature of the digital marketing support business, which is susceptible to economic fluctuations, the impact on business performance is recognized as moderate. The Company mitigates this risk by building a recurring revenue model and diversifying its customer base.

Due to rapid changes in digital marketing technology and customer needs, if the Company's services become obsolete or diverge from customer needs, there is a risk of decreased service usage. Changes in clients' marketing policies could also be a factor in decreased usage. The Company maintains its competitiveness through market research, strengthened customer relationships, and continuous service improvement and expansion.

Due to intensifying competition for talent in the digital marketing industry, it may become difficult to secure and develop excellent personnel, particularly those with expertise in AI and data analysis. Human resources are the Company's greatest asset, and difficulty in recruitment directly affects the acquisition of new customers and improvement of service quality. The Company addresses this by establishing an attractive work environment, enhancing training programs, and introducing a competitive compensation system.

Funds raised through the public offering are planned to be allocated to system development related to enhancing product functionality, but changes in the business environment may result in a change in the intended use of proceeds. In addition, even if the funds are used as planned, if the expected effects are not achieved, this could adversely affect business performance. The Company's policy is to promptly make timely disclosure in the event of any change in the use of proceeds.

The parent company, GMO Internet Group, Inc., holds 65.04% of the Company's total issued shares, and if significant changes occur in the future to the Group's business strategy or the Company's positioning within the Group, this could affect the Company's business results and financial condition. In addition, 2 of the Company's 7 officers concurrently serve as officers or employees of GMO Internet Group, Inc., which could raise concerns regarding independence. The Company strives to ensure management independence through the appointment of 3 independent outside directors.