Speee, Inc.

Japan's internet advertising market expanded 114.3% year on year in 2022, but it is subject to economic conditions and changes in advertisers' strategies, and the Group's business performance is also affected by such factors. If market growth is impeded for any reason, this may adversely affect the Group's business and results of operations. The Group conducts its business operations while closely monitoring market trends, but the fundamental means of defense against changes in the external environment are limited.

The Real Estate DX Business and the Marketing DX Business have short histories, and the number of entrant companies tends to increase. If the Group's services fail to achieve sufficient differentiation or functional improvement, or if competition intensifies due to new entrants, this may affect the Group's business and results of operations. Maintaining competitive advantage requires continuous service improvement and differentiation strategies.

In the multiple markets to which the Group belongs, rapid technological change is progressing and client needs are also changing significantly. If the Group is slow to respond to new technologies and services, or if competitors develop innovative technologies, this may reduce competitiveness and affect the Group's financial position and results of operations. The Group is responding by continuing human and capital investment, but the possibility that it may fail to keep pace with the speed of technological change cannot be excluded.

In addition to internet-related laws and regulations such as the "Act on the Prohibition of Unauthorized Computer Access" and the "Act on the Protection of Personal Information," consideration of new regulations such as cookie regulations continues. If new laws are enacted or existing laws are amended to strengthen regulation in internet-related fields going forward, this may affect the Group's business and results of operations. At present, there are no legal regulations deemed to have a materially significant impact on business continuity, but continuous monitoring of changes in the regulatory environment is necessary.

The Group is actively engaged in new services and new businesses, and additional expenditures such as upfront system investments, advertising expenses, and personnel costs may arise, potentially reducing profit margins. If business development does not proceed as planned, it may become necessary to record impairment losses, and there is a risk that investments may not be recouped. In particular, the Data Platform Business, which utilizes blockchain technology, is in its infancy, and there is a risk that the investment period may extend longer than anticipated.

If systems go down due to unpredictable factors such as overload, power outages, software malfunctions, computer viruses, unauthorized external intrusion, or natural disasters, the Group may suffer a loss of trust, suspension of transactions, or claims for damages. The Group thoroughly strengthens its systems and security and maintains a framework for rapid recovery, but the risk cannot be completely eliminated.

The Group acquires personal information such as names, phone numbers, and email addresses in each of its services, and if a leak or information breach occurs due to unauthorized access, this may have a material impact on the Group's business, results of operations, and social credibility. The Group has established a management framework and internal training based on its "Personal Information Protection Policy" and "Personal Information Handling Regulations," but states that the risk of leakage cannot be entirely eliminated. In addition, amendments to laws and regulations related to personal information protection may also affect the Group's business, results of operations, and financial position.

With business expansion and new business development, it is necessary to secure personnel with business development and management capabilities, personnel with skills in the systems technology field, and highly specialized corporate personnel. If the Group fails to secure and develop sufficient personnel at the necessary times, or if the outflow of personnel progresses, this may hinder business operations and new business expansion, potentially affecting the Group's business and results of operations. The Group strives to develop its training framework and to retain and enhance the capabilities of its personnel, but securing personnel in a highly competitive labor market is not easy.

Representative Director Hideki Otsuka and founder and Director Tetsushi Kuda play important roles in determining management and business strategy and in developing new businesses. If either of them becomes unable to continue their duties, this may affect the Group's business and results of operations. The Group is strengthening its organizational structure by promoting information sharing and delegation of authority through the Board of Directors and other bodies, but currently remains highly dependent on these two individuals.

Stock acquisition rights have been granted to officers and employees with the aim of increasing their motivation to improve business performance, and as of September 30, 2023, the number of potential shares was 243,797, equivalent to 2.3% of the total number of issued shares of 10,466,000. If these stock acquisition rights are exercised, the value per share may be diluted, which may affect the stock price. In addition, the Company has not paid dividends since its founding and, for the time being, prioritizes strengthening internal reserves, with the timing of dividend payments yet to be determined.