pluszero Inc.

Rapid innovation in the IT industry and the emergence of alternative technologies or generic competing products may make it difficult for the Company to maintain the competitiveness and added value of its services, which combine natural language processing, machine learning, and IT system development. Although the Company currently maintains stable new order intake through referrals from existing customers and a high customer retention rate, a sudden change in the technological environment could lead to a decline in new orders and a decrease in the customer contract renewal rate, potentially having a material impact on the Company's business and performance.

As the business expands, it has become essential to continuously recruit and develop engineers and managers capable of handling natural language processing, machine learning, and IT system development, as well as interns with the latest knowledge in the AI field. Although the Company is working to prevent talent attrition by improving the work environment, including telework arrangements, if it is unable to secure the necessary personnel as planned, this may delay business expansion and adversely affect performance.

While demand for improved corporate management efficiency is expected to grow due to the declining working population, there is a risk that demand for the Company's services could decline due to economic downturn or a shift of investment toward other new technologies. If the business environment deteriorates over the long term beyond expectations due to changes in economic conditions, this may affect the Company's operating results and financial position.

In addition to the security, advertising, and call center markets, the Company is promoting new services and new business development across a wide range of industries, but there is a risk that profit margins may decline due to additional expenditures such as system investment and personnel costs. If the expansion and growth of new businesses do not proceed as initially expected, this may affect the Company's business and performance, raising concerns that the outlook for investment recovery may become unclear.

At present, there are no laws or regulations directly regulating the Company's internet-related business; however, new laws targeting internet users, services, and operators may be enacted, or the interpretation of existing laws may change. If such regulatory changes occur, the Company's business activities may be restricted, potentially having a material impact on its performance.

Although the Company has established intellectual property management regulations and conducts investigations into potential infringement of third parties' intellectual property rights, it is difficult to fully identify all third-party intellectual property rights relevant to its business areas, and there is a possibility that the Company may unknowingly infringe upon another company's patents. If infringement is determined to have occurred, this could affect the Company's operating results and financial position through royalty payments or claims for damages.

The Company is a small organization, and if it is unable to appropriately adapt its internal management and business execution structure in response to business expansion and service diversification, this may affect its performance and business operations. The Company is addressing this through organizational restructuring, staff reinforcement, and automation and efficiency improvements in operations, but there is a possibility that structural development may not keep pace with the speed of growth.

For project-based engagements, estimates are prepared based on internal standard manuals and reviewed by department heads and the CTO, among others; however, there is a risk of excess costs arising from estimation errors or work delays, particularly in large-scale projects. If profitability deteriorates or delivery is delayed, this may affect the Company's operating results and financial position through increased cost of sales or delayed recognition of revenue.

Regarding stock acquisition rights granted as incentives to officers and employees, the ratio of potential shares to the total number of issued shares (excluding treasury shares) as of the end of October 2025 was 5.0%. If these stock acquisition rights are exercised, the value per share may be diluted, potentially reducing the share value and voting rights ratio of existing shareholders.

In the course of its business, the Company handles projects in which it may become privy to customers' confidential information, and if an information leak were to occur, this could damage the relationship of trust with customers and give rise to a risk of liability for damages. Although the Company has implemented measures such as establishing information security regulations, training officers and employees, and strengthening network security, complete prevention is difficult, and there are concerns about the potential impact on its business and performance.