eWeLL Co.,Ltd.

The core service "iBow" is strongly affected by the medical and long-term care insurance systems, requiring timely system responses to medical fee revisions occurring once every two years and long-term care fee revisions occurring once every three years. If the Company's response lags behind competitors, it could lead to delayed service adoption, reduced usage, or switching to competitors' services, potentially having a material impact on business performance. The Company has established a system to capture trends in related laws and regulations and reflect them appropriately and in a timely manner in its management and business strategy.

All revenue is concentrated in the home-visit nursing industry, primarily home-visit nursing stations, exposing the Company to excessive dependence on a specific industry. A significant contraction in demand for home-visit nursing services or a significant decrease in the number of home-visit nursing stations due to nurse shortages could have a material impact on business performance. The Company is diversifying its business foundation through initiatives such as support for at-home clinical trials and joint development of a medical data business based on the "Agreement on Commercialization of PHR Utilization" with Sumitomo Mitsui Trust Bank.

In the fiscal year ended December 2025, "iBow" accounted for 70.5% of total net sales, indicating a high degree of dependence on a specific service. If this service diverges from customer needs or loses its competitive advantage over rivals, it could have a material impact on business performance. The Company is promoting diversification of revenue sources by strengthening BPaaS as its second pillar and promoting the utilization of medical data centered on PHR as its third pillar.

In the course of operating its services, the Company handles users' personal information and patient information. Unauthorized external access or unforeseen incidents leading to information leakage could result in a loss of social trust and have a material impact on business performance. The Company has obtained ISO/IEC 27001 certification to maintain and strengthen its information security management, and has established a framework based on the "Three Ministries, Two Guidelines" (3省2ガイドライン). Patient information is designed to be stored only on external servers and does not remain within the Company's own systems.

Since the majority of net sales are generated through cloud services, if the introduction of new legal regulations or a slowdown in technological innovation prevents the adoption of cloud services from progressing as expected, this could have a material impact on business performance. The Company has established a system for continuously gathering information on legal regulations and technological innovation trends in the cloud-related market and considering countermeasures to avoid disruption to service provision.

Delayed response to rapid changes in internet-related technology and difficulty securing engineers could lead to reduced competitiveness and increased additional costs. In addition, some functions of the cloud services utilize external generative AI providers, creating a risk that such functions could be interrupted or restricted due to tightened AI regulations, service outages, or changes in terms of use. The Company seeks to reduce this risk by exchanging information with multiple outsourcing partners and adopting a specification that selectively uses multiple generative AI providers rather than depending on a single company.

Multiple competitors exist in the domestic cloud service market for the nursing care and medical fields, and the number of new entrants may increase as the market expands. If intensifying competition undermines the Company's market advantage, this could affect business performance. The Company seeks to maintain its competitive advantage by pursuing a user-oriented UI/UX specialized for home-visit nursing stations.

Unforeseen incidents such as unknown computer viruses, terrorist attacks, or system modification troubles could seriously affect service provision and business transactions. The Company implements failure-resistant IT infrastructure design and cloud migration, and actively hires personnel with extensive system development and operation experience while conducting system-related training for employees.

Since all transactions are conducted in yen, the direct impact of exchange rate fluctuations is limited; however, because some outsourcing partners perform work using services from overseas vendors, a rise in outsourcing unit costs due to exchange rate fluctuations could affect business performance. Given the nature of the business, which serves the domestic market, direct foreign exchange exposure is small, but this is recognized as an indirect cost-increase risk.

Securing personnel with advanced expertise in the medical and long-term care insurance systems and specialized information systems skills is essential for business expansion, and difficulty in recruitment or the departure of core personnel could affect the Company's operational execution structure. In addition, founder and Representative Director, President Takahito Nakano plays a central role in management policy and business strategy, and if he becomes unable to continue his duties, this could have a material impact on business performance. The Company is working to reduce this dependence and develop human resources through the establishment of a management committee, delegation of authority to executive directors, and enhancement of internal training programs.