NE Inc.

The Company is highly dependent on Next Engine, which accounts for over 70% of net sales. If oligopolization of EC malls progresses, demand for online shop management systems declines, the Company's own system becomes obsolete, or the Company falls behind competitors, sales may decrease due to an increase in cancellations. Despite ongoing efforts to enhance functionality, the structure of high dependence on a single service constitutes a vulnerability to business continuity.

If major EC malls such as Rakuten Ichiba and Yahoo! Shopping change their operating policies (e.g., prohibiting a single company from opening multiple stores) or if EC operators concentrate their store openings on specific malls, demand from EC operators for multi-store expansion may decline, reducing the number of Next Engine customers. The Company's business model presupposes multi-store expansion by EC operators, meaning that policy changes on the part of malls translate directly into customer attrition.

The Company's business assumes the continued expansion of the EC-related market as a basic premise; however, unforeseen factors such as the introduction of new legal regulations, delays in technological innovation, or trends among telecommunications carriers could impede the development of the EC-related market. If market growth slows, this would affect the Company's business performance through stagnation in new customer acquisition and contraction of existing customers' businesses.

Next Engine is the Company's principal service, accounting for over 70% of net sales, and is also utilized as a tool in the Localco business and the Consulting business. Therefore, if a malfunction occurs, it would not only make provision of the principal service difficult but would also cause operational disruption in other businesses. Although the Company works to maintain and manage the system, malfunction risk cannot be completely eliminated, and the risk of spillover to the entire business is high.

If a communication network disconnection due to a natural disaster or accident, a computer system failure due to a surge in access or power outage, or unauthorized access due to a computer virus or hacking occurs, there is a risk of disruption to business continuity. Although the Company implements appropriate security measures, there is no guarantee that all threats can be completely eliminated.

In operating Next Engine, the Consulting business, and the Localco business, the Company acquires and manages information on customers' business partners and confidential information. If information leakage, loss, or unauthorized use occurs due to human error or intentional acts by employees, there is a risk of loss of credibility and economic loss from damages. Although appropriate management is conducted based on the terms of use of each service, the risk cannot be completely eliminated.

As the Company's scale expands, retaining and expanding excellent personnel is essential. If the Company is unable to secure personnel meeting its hiring standards as planned, or if key personnel leave the Company, this may affect business development and operating results. Although the Company emphasizes new graduate hiring in its recruitment policy and actively works on personnel development, the securities report explicitly states that the likelihood of occurrence is high.

Although no lawsuits have been filed against the Company at present, if customers incur lost business opportunities due to a system failure in Next Engine or similar issues, the Company may face damages litigation. Depending on the content and outcome of any litigation and the amount of damages, this could affect not only business performance but also the Company's social credibility as a corporation. The Company works to reduce this risk through system maintenance and management.

The Company is subject to legal regulations such as the Act against Unjustifiable Premiums and Misleading Representations, the Act on Specified Commercial Transactions, the Act on the Protection of Personal Information, and the Copyright Act. If violations of laws and regulations occur, or if laws are amended or new laws are enacted, this may affect the Company's business and performance. Although the Company has established a compliance framework through the development of management systems, ongoing responses to changes in the regulatory environment are required.

Following the spin-off implemented on November 4, 2025, Hamee will cease to be the Company's parent company; however, AOI Inc. and Atsushi Higuchi, the largest shareholders of Hamee, hold 49.18% of Hamee's voting rights, and given their policy of holding the Company's shares over the medium to long term even after the spin-off, their substantial influence may continue. While the spin-off is intended to achieve independence in management and capital, the continued high concentration of voting rights among specific shareholders leaves a residual risk of conflicts of interest with minority shareholders.