giftee Inc.

In providing services based on internet communication, there is a risk that system failures may occur due to human error, natural disasters, unauthorized access, software defects, or other causes. In the event of a failure, in addition to a suspension of service provision, there is a risk of damage to the Company's social reputation. The Company strives for prevention and avoidance through regular backups and monitoring of operational status, but complete elimination of this risk is considered difficult.

The Company acquires personal information in the course of providing services, and if a leakage or unauthorized use occurs, it may lead to claims for damages or a decline in social credibility. Although the Company has obtained Privacy Mark certification and established a management system based on the Act on the Protection of Personal Information, the risk of information security incidents remains even after taking countermeasures. This is positioned as a particularly important risk to the business and performance.

Securing, retaining, and developing excellent human resources is essential for improving competitiveness and expanding business, but if this does not proceed as planned or if outflow of personnel to outside the company occurs, it may become a constraint factor on competitiveness and business scale expansion. This is classified as a particularly important risk, as a shortage of human resources directly affects performance through a decline in technological development and sales capabilities.

The eGift market is in a growth phase, and if the emergence of new business models, unexpected factors hindering market expansion, or intensified competition due to new entrants occurs, the Company's first-mover advantage may be undermined. The Group strives to maintain competitiveness by continuously providing new services in response to customer needs, but if it becomes difficult to maintain competitiveness or advantage, this will affect the business and performance. This is positioned as a particularly important risk.

The internet-related field is a rapidly changing industry with successive introductions of new technologies and services, and if the Company is slow to respond to environmental changes or if a large expenditure becomes necessary to respond, this may affect the business and performance. The Company is working on the continuous development of new technologies and services and securing excellent human resources, but there is a risk of being unable to keep pace with the speed of technological change.

The Company promotes M&A and capital/business alliances to accelerate growth, but if contingent liabilities or unrecognized liabilities that could not be identified through prior due diligence arise, or if business development does not proceed as planned, impairment of goodwill and other assets may become necessary, making it difficult to recover the investment. The Company conducts prior due diligence and risk assessment regarding the financial condition and contractual relationships of target companies, but the risk of unforeseen problems arising cannot be eliminated.

The Company has subsidiaries in the United Arab Emirates, Malaysia, Vietnam, and Indonesia and is promoting overseas expansion, but there are potential risks such as unexpected legislation, deterioration of political and economic conditions, differences in culture and business practices, and fluctuations in exchange rates. If overseas expansion is hindered by unforeseen circumstances, it may affect the plan to expand the revenue base.

In the 'giftee' service, there is a risk of unauthorized use in eGift purchases due to impersonation access or fraudulent payments using another person's credit card. The Company has implemented measures such as suspension or cancellation of membership qualification under the terms of use and setting daily payment limits, but if fraudulent activity occurs excessively, it may affect business and performance through a decline in the reputation of the service.

Expansion of the eGift Platform Business requires improving customer satisfaction for both issuing companies and user companies as well as acquiring new customers, but if continued transactions with existing customers or acquisition of new customers does not proceed smoothly, this will affect performance. In particular, if sales promotion activities for corporate customers stagnate, there is a risk that eGift sales will not proceed as planned. The Company works to maintain and expand its customer base through advertising and promotional activities and new proposals to existing customers.

For some sales destinations and eGift content, the Company adopts a revenue model in which it receives, as fees, the issued amount of eGifts that expire unused by users, but if the fee calculation method is changed to one that multiplies the issued amount by a fixed rate, or if the usage rate by users rises significantly and the unused issued amount decreases, revenue may decline. This risk of fluctuation in the revenue structure arises from the Group's own unique business model.