BeeX Inc.

The Company outsources work to multiple external partners in Cloud Integration operations, but if it is unable to secure appropriate partners or sufficient numbers of engineers, or if outsourcing rates rise sharply, this may result in increased costs or delivery delays, affecting results of operations and financial condition. The Company recognizes that this risk will remain relevant to a certain degree in the following fiscal year and plans to continue developing new partner relationships.

The Company's revenue growth is heavily dependent on the market expansion of AWS and Azure, and there is a risk that if the public cloud market contracts or if either vendor changes its business strategy, the initially planned revenue growth may not be achieved. The Company is currently working to diversify this dependence by strengthening its multi-cloud support, including Google Cloud.

The Company conducts Cloud License Resale based on contracts with three companies: Amazon Web Services, Inc., Microsoft Corporation, and Google LLC. If any of these contracts is terminated, it could have a material impact on business operations, results of operations, and financial condition. At present, no facts constituting grounds for termination have arisen, and the Company maintains good relationships with these vendors, while also monitoring the trends of a fourth or fifth vendor and considering responses accordingly.

The parent company, TerraSky Co., Ltd., holds 68.0% of the Company's total issued shares (as of the end of February 2025) and has decision-making and veto rights over fundamental matters, which may influence the Company's decision-making. The Company has established its own decision-making structure centered on independent and dedicated officers, but matters related to capital policy require prior consultation with the parent company.

The Company's services depend on the continued provision of services by employees, primarily in technical departments. If the Company is unable to secure and retain appropriate personnel at the appropriate time, or if labor costs rise sharply, this may affect business operations, results of operations, and financial condition. The Company recognizes that this risk will remain relevant to a certain degree in the following fiscal year and is addressing it through enhanced mid-career hiring, expanded training programs, and revisions to its personnel evaluation system.

In the process of implementing and operating cloud platforms, the Company handles confidential information and personal information of client companies. If unauthorized external access or human error results in the leakage, loss, or alteration of information, this could lead to loss of credibility and losses from damages, affecting results of operations and financial condition. The Company participates as a business division in the ISO/IEC 27001 certification obtained by parent company TerraSky, and is currently preparing to obtain the certification independently.

As of the end of February 2025, the tradable share ratio was 23.1%, which does not meet the 25% listing maintenance criterion for the Tokyo Stock Exchange Growth Market. If the Company fails to meet this requirement by the end of the transitional measure period, it may result in delisting, which could adversely affect the share price and liquidity. The Company plans to improve this through a combination of measures, including cooperation from the parent company in secondary offerings and the exercise of stock options.

If it becomes difficult to win new projects in Cloud Integration, this could not only reduce Cloud Integration revenue alone but also cause a chain reaction that slows revenue growth in Cloud License Resale and MSP. A similar chain-reaction risk exists for SAP system cloud migration projects. The Company aims to secure stable project wins through differentiation built on accumulated implementation track record and technical superiority.

In the cloud industry, changes in the market, customer needs, and technology occur very rapidly, and the process of developing cloud engineers is becoming longer and more difficult. If the Company is slow to respond to technological innovation or changes in customer needs, this could result in reduced service competitiveness or deteriorating profitability due to additional investment, affecting results of operations and financial condition. The Company recognizes that this risk will remain relevant to a certain degree in the following fiscal year and is addressing it through ongoing analysis of the latest technology trends and continuous investment in research and development.

In AWS resale transactions with Amazon Web Services, Inc., the monthly AWS usage fee is calculated in U.S. dollars, so a sharp change in exchange rates could affect results of operations and financial condition. Since both revenue and cost of sales move in tandem, the impact on profit margins is mitigated to some extent, but the Company also utilizes forward exchange contracts to minimize this risk.