Accrete Inc.

The SMS delivery service market has continued to grow since 2023, but there is a possibility that the market will not develop as expected due to the introduction of new legal regulations, technological innovations that reduce or eliminate the need for SMS delivery, or changes in mobile carrier policies. If market growth slows, this would directly affect the Group's business and results of operations. The Company is working to expand use cases and foster healthy market development in order to sustain growth.

The provision of SMS delivery services is premised on direct connection agreements with the four major mobile carriers, which form the foundation of the Company's business activities. If mobile carriers raise SMS transmission unit prices, if progress on contracts with new entrant carriers is delayed, or if existing contracts are changed or terminated, this could have a material impact on business operations and results of operations. As of the reporting date, no factors that would impede the continuation of these contracts have arisen.

Currently, the domestic SMS delivery service market is largely dominated by four companies, including the Company, but as the market expands, new entrants may increase. If competition intensifies due to an increase in competitors, this may affect the Group's business growth and results of operations. Use of the official delivery route requires direct connection agreements with all mobile carriers, which currently functions as a barrier to entry, but future changes cannot be ruled out.

There is a risk that the credibility of SMS delivery as a whole could be undermined by spam SMS sent by competitors or unauthorized SMS delivery operators outside the official route. If market credibility declines, development of the SMS delivery service market could be hindered, potentially affecting the Group's business growth and results of operations. The Company, as a member of the "Anti-Spam Mail Promotion Council" and a full member of the "Council of Anti-Phishing Japan," conducts prior screening of delivery content and strives to foster healthy market development.

The Company undertakes SMS delivery to domestic users via overseas SMS aggregators through its SMPP international gateway service. If a major global company changes its contracted aggregator, or if an aggregator independently enters the domestic market, the volume of outsourced delivery could decrease significantly, affecting results of operations. The Company seeks to reduce this risk by diversifying transactions across multiple aggregators and maintaining good relationships to build an information-gathering framework.

Because the provision of services involves handling personal information and confidential information of client companies, there is a risk of information leakage due to computer viruses including ransomware, unauthorized access, human error, and other causes. If an information leak occurs, this could result in damage claims from client companies and loss of credibility, affecting results of operations. The Company has obtained ISO/IEC 27001 certification (acquired October 2014) and ISO/IEC 27017 certification (acquired January 2020), and strives to strengthen its information security framework.

The Company's services depend on its in-house developed SMS delivery system, and in the event of system downtime or a serious failure, this could damage the Company's social credibility and brand image, affecting results of operations. The Company operates its systems with consideration for loads from high-volume delivery, security attacks, and natural disasters, and conducts 24-hour monitoring, but complete elimination of failures cannot be guaranteed. The Company recognizes the maintenance and improvement of system stability as a critical management issue.

The Group is subject to regulation under the Telecommunications Business Act and the Act on Regulation of Transmission of Specified Electronic Mail (the anti-spam mail law), and amendments to these laws or the establishment of new regulations or industry rules could affect the Group's business and results of operations. Violations of the Telecommunications Business Act carry the risk of business improvement orders or penalties, and with respect to the anti-spam mail law, the Company has established a framework to prevent legal violations by confirming that client sending companies comply with the opt-in method.

The Group has Technomics Inc., Zunow Media Solutions Co., Ltd., Zunow Inc., Fourglobe Inc., VietGuys J.S.C., and FowardEdge-AI Japan Inc. as subsidiaries, and expects them to contribute to results of operations. However, if changes in the business environment or other factors cause performance to fall short of initial expectations, this could affect the Group's financial position and results of operations. In addition, if it is determined that the book value of held fixed assets cannot be recovered through future cash flows, recognition of impairment losses may be required, which could affect the Group's financial position.

As of the end of December 2025, BANA No.1 Limited Liability Partnership, the largest shareholder, holds 18.45% of total issued shares (excluding treasury shares), and is also the allottee of the 4th series of stock acquisition rights issued by the Company in September 2024. If, for any reason, the long-term holding policy is changed and shares are sold, this could affect the market price and trading conditions of the Company's shares. In addition, the number of potential shares from stock acquisition rights stands at 457,000 shares (equivalent to 5.9% of total issued shares), which also carries a risk of future share dilution.