WILLs Inc.

The Group handles confidential information and personal information of numerous client companies, and has a history of a past personal information leakage incident. Although the Group has implemented measures such as obtaining Privacy Mark and ISO/IEC 27001 certifications and managing information in virtual environments, if a leakage occurs, it may result in loss of social credibility, litigation, and claims for damages, which could affect the business and results of operations. The Group's position of having access to insider information in the course of its IR consulting business constitutes an additional risk factor.

The Group's services depend on internet communication networks, and there is a risk of server downtime due to natural disasters, accidents, sudden surges in access, or serious bugs. Although the Group implements distributed management on the cloud, system redundancy, load balancers, and unauthorized access countermeasures, if a failure occurs despite these measures, it may become difficult to provide stable services, which could affect the business and results of operations.

The Group's main services (IR-navi, Premium Yutai Club, and Sustainability Solutions) are provided to indirect departments such as IR departments and corporate planning departments of listed companies. When economic conditions or the business environment deteriorate, there is a tendency for indirect departments to reduce expenses, and budget cuts by client companies may directly affect the Group's results of operations.

Revenue from the Premium Yutai Club is recognized at the point when shareholders exchange shareholder benefit points for products, etc., and therefore business performance may be concentrated in a particular quarter or fiscal year depending on client companies' fiscal year-end months, number of shareholders, timing of point exchanges, and exchange ratios. While the Group's policy is to level out fluctuations by acquiring new clients, if this policy is not successful, the seasonal volatility may persist and affect business performance.

The IR consulting industry has low barriers to entry, as there are no licensing or other restrictions, creating a risk that the competitive environment will intensify due to improvements in competitors' service quality or the emergence of innovative technologies. The Company maintains its competitive advantage through extensive track record and know-how and continuous system improvements, but if these are lost, it could affect the business and results of operations.

The Company positions corporate acquisitions and capital alliances as one of its management strategies for improving services and expanding its customer base, and intends to conduct due diligence on the economic value of target companies. However, if the anticipated synergies are not achieved through such acquisitions or capital alliances, it may become difficult to recoup the investment, which could affect the business and results of operations.

The Group continuously makes capital investments and conducts system development related to systems for IR-navi, Premium Yutai Club, the Advertising Business, and other services, and the balance of fixed assets has been accumulating. If sufficient cash flow cannot be expected, an impairment loss may occur, which could affect the Group's business results and financial position.

Providing systems and IR consulting services to listed companies requires personnel with highly specialized skills, and the Company has implemented measures such as granting stock options, employee stock ownership incentive payments, qualification allowances, and personnel evaluation systems. However, if these measures fail to succeed in securing and developing personnel, or if personnel leave the Company, it could lead to a decline in service quality, which could affect the business and results of operations.

The Group is subject to multiple legal regulations, including the Act on the Protection of Personal Information, the Telecommunications Business Act, the Act on Specified Commercial Transactions, and the Unauthorized Computer Access Law. If future legal amendments or changes in the interpretation of existing laws render the Group's services unnecessary, business operations may be constrained, which could affect business performance.

Net Mile, operated by the consolidated subsidiary Net Mile Corporation, issues points that can be exchanged for electronic money, other companies' points, cash, and other items, and faces the risk of unauthorized access to its systems by malicious third parties seeking to illegitimately acquire points. If unauthorized access occurs, it may result in loss of social credibility, litigation, and claims for damages, which could affect the business and results of operations of the Group as a whole.