ZUU CO.,Ltd.

The funds operated and managed by the Group invest in listed and unlisted equities in Japan, Asia, and the United States, and fund performance is affected by the economic conditions and stock market trends of each country. In addition, foreign exchange rate fluctuation risk exists with respect to overseas investments denominated in foreign currencies. Changes in these external environments may have a direct impact on the Group's business and results of operations.

Due to the development of the Financial Instruments and Exchange Act and other regulations, entry into the market for investment services targeting unlisted companies has increased, with major securities firms entering the market one after another. While the Company offers diverse investment opportunities including equity-type, bond-type, and lending, changes in the competitive environment may make it difficult to acquire customers. Expanding competition may affect the Group's business and results of operations.

Due to changes in search algorithms accompanying the proliferation of AI such as Google AI Overviews, the number of visitors to the Company's own media, including "ZUU online," may not trend as expected. This poses a risk of decreased advertising and marketing revenue in the FinTech Platform Business. The Group plans to respond by expanding site functionality and revising its business strategy, but it is difficult to completely eliminate the impact.

In the internet industry, rapid technological changes and changes in user needs are progressing, and if the response is delayed, there is a risk that the appeal as a media outlet will decline. If the Group is unable to secure engineers as planned, or if it becomes difficult to grasp user needs and provide sufficient functional enhancements, the Group's business and results of operations may be affected. The Company plans to respond through service expansion and swift revision of business strategy.

If regulations related to the financial licenses held by the Group, such as the Type I Small-Amount Electronic Public Offering Service, Type II Financial Instruments Business, and Financial Instruments Intermediary Business, are tightened or changed, it will become necessary to develop management systems and make additional investments. In addition, in the Crowdfunding business, the lending-based type is subject to regulation under the Financial Instruments and Exchange Act and the Money Lending Business Act, while the equity-based type is subject to regulation under the Financial Instruments and Exchange Act, and legal amendments may increase management costs and adversely affect reputation. If the Company is unable to appropriately respond to regulations, this may have a material impact on business continuity and results of operations.

In the Group's business fields, legal regulations such as the Act on the Protection of Personal Information and the Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers exist, and there is a possibility of new legislation or amendments to existing laws leading to tightened regulation in internet-related fields in the future. In addition, there are risks of copyright infringement associated with reliance on external writers for content creation, as well as risks of infringement of intellectual property rights. If these risks materialize, the withdrawal of content, incurrence of legal response costs, and other consequences may affect the business and results of operations.

The FinTech Platform Business provides services in an internet environment, and there is a possibility of system failures occurring due to hardware or software malfunctions, human error, computer viruses, cyber attacks by third parties, natural disasters, and other causes. While the Group implements appropriate security measures, if unexpected events occur, they may disrupt business activities and affect results of operations.

Kazumasa Tomita, the founder and Representative Director, has extensive experience and knowledge in wealth management consulting for high-net-worth individuals and web marketing, and plays an important role in the determination and execution of management policy and business strategy. If, for any reason, he becomes unable to continue his duties, this may affect the Group's business and results of operations. The Company aims to reduce this dependence through information sharing at board meetings and other venues and through strengthening its management organization.

While securing excellent personnel in sales, corporate functions, and other areas is essential for business expansion, the Group is a small organization, and if it is unable to sufficiently secure the necessary personnel or if key personnel leave the organization, this will constrain business expansion. Although the Company is implementing measures such as active recruitment activities and enhancement of study sessions and employee benefits, if these do not proceed as planned, the development of the operational execution system may be delayed, affecting results of operations.

The Group issues stock acquisition rights for the purpose of enhancing the motivation of officers and employees to improve business performance, and as of the date of submission of this document, the number of potential shares is 103,880 shares (equivalent to 2.19% of the total number of issued shares of common stock). If the exercise conditions are met and these rights are exercised, this may lead to dilution of share value and affect the supply-demand balance of share trading, thereby influencing share price formation. In addition, as the Group is in a growth phase, the possibility and timing of dividend payments remain undetermined, and shareholder returns may be limited.