Moi Corporation

The live streaming market is significantly affected by legal regulations, economic conditions, and changes in individual preferences, and if market growth slows, point sales revenue, which accounts for the majority of the Company's sales, may not expand smoothly. In the fiscal year ended January 2024, point PU fell below initial expectations due to changes in the external environment such as the competitive landscape and diversification of creator activities, resulting in a decline in sales. The Company strives for early identification and response through market research and user inquiry handling, but complete prevention is considered difficult.

Numerous domestic and international companies have entered the smartphone live streaming service market, and competition with companies possessing capital strength, marketing power, and development capabilities is intensifying. If competitors release more attractive services, this could lead to a decrease in active users and paying users, as well as a decline in average spending per paying user, which may affect business performance and financial condition. The Company strives for early detection and response through competitor and market research, but predicting the timing and extent of such risks materializing is considered difficult.

The majority of the Company's sales derive from a single service, "TwitCasting," and furthermore, the majority of that revenue depends on point purchases by users. If the Company fails to maintain user interest and engagement, or if the adoption and monetization of new services do not progress as expected, this may materially affect business performance and financial condition. The Company is working on user engagement through feature improvements, new feature additions, and various promotions, as well as new service development, but complete prevention is considered difficult.

The Company's smartphone applications are provided through Apple Inc. and Google Inc., and the Company depends substantially on them for payment collection, system usage, and user acquisition. If these operators change the terms, rules, or fees for in-app purchases, or change their business policies, making it difficult to continue providing the app as before, this may affect business performance and financial condition. The Company seeks to diversify platform dependence risk by introducing credit card and convenience store payment methods, while also striving to build good relationships and gather information.

Due to the nature of a platform in which an unspecified large number of users participate, it is difficult to comprehensively prevent illegal acts such as defamation, slander, and copyright infringement, or inappropriate communications. If problematic conduct occurs, it may damage the Company's corporate and service brand image, leading to user attrition and claims for damages. The Company has implemented measures such as terms of use, a reporting system, a monitoring framework, and obtaining licenses from copyright management organizations such as JASRAC, but complete prevention is considered difficult.

If the system goes down due to unpredictable factors such as a sudden increase in access, DDoS attacks, unauthorized access, or natural disasters, this could result in increased recovery costs, loss of trust, suspension of transactions, and claims for damages, which may affect business performance and financial condition. The Company has built a system with redundancy, enhanced security, and a data backup framework, and utilizes external data centers, but it considers it difficult to completely prevent such risks from materializing due to unpredictable factors.

The Company obtains personal information and My Number information from some users who use monetization features, and if leakage, tampering, or unauthorized use occurs, this may affect business performance and financial condition due to response costs, claims for damages, and loss of credibility. The Company has obtained and maintains Privacy Mark certification, and has implemented measures such as establishing basic regulations for personal information protection, using a 24-hour managed data center, limiting access privileges, and providing employee training, but complete elimination of this risk is considered difficult.

The Company's business is subject to numerous laws and regulations, including the Telecommunications Business Act, the Payment Services Act, the Act on Development of an Environment that Provides Safe and Secure Internet Use for Young People, the Act on Provider Liability Limitation and Information Distribution Platform Countermeasures, and the Copyright Act, and legal amendments, new guideline formulation, or revocation of licenses may impose new restrictions on the business. In particular, the Company bears the obligation to notify and provide security deposits as an issuer of self-issued prepaid payment instruments under the Payment Services Act, and violations could result in administrative dispositions such as business suspension orders. Additionally, in responding to requests for transmission prevention measures and disclosure of sender information under the Act on Provider Liability Limitation and Information Distribution Platform Countermeasures, there is a risk of claims for damages or administrative guidance if the Company's judgment is deemed inappropriate.

The Company depends substantially on its management team for the formulation and execution of business strategy, and if management becomes unable to continue their duties, this may affect business performance and financial condition. In addition, securing technical specialist personnel such as those for app development and design is essential, but if hiring and training do not proceed as planned due to intensifying competition for talent or changes in market needs, this could lead to a decline in competitiveness. The Company addresses this through the establishment of personnel development systems, delegation of authority, and continued recruitment activities, but complete prevention is considered difficult.

As of the end of the month preceding the filing date of this document, stock options for 366,000 shares (2.6% of the total number of issued shares) have been granted against a total of 13,966,000 issued shares, and exercise of these options may result in dilution of share value and affect the supply-demand balance. In addition, venture capital firms and others hold 2,080,000 shares, equivalent to 14.9% of the total number of issued shares, and depending on stock price movements, sales of these shares could occur, potentially worsening the short-term supply-demand balance for the stock and affecting share price formation. The Company strives to build good relationships with venture capital firms and others, but recognizes that there is a reasonable possibility of this risk materializing.