Rebase, inc.

If systems become inoperable due to natural disasters, cyberattacks, computer viruses, or other causes, there is a risk of claims for damages, lost business opportunities, and a loss of trust in the Company's services. New threats such as supply chain attacks and sophisticated phishing attacks and unauthorized API access exploiting generative AI have also become apparent, and the Company is addressing these through strengthened vulnerability management of dependent libraries and the development of AI security guidelines. Although measures such as 24-hour monitoring, redundancy, and insurance coverage have been implemented, complete prevention is difficult.

The Company holds personal information and confidential information of space listers and users, and there is a risk that if such information is leaked due to unauthorized access, theft, or other causes, it could result in a decline in social credibility and have a material impact on the Company's business and operating results. The Company addresses this through a management system based on its Privacy Mark (obtained in December 2021), the establishment of personal information protection regulations, and thorough internal training; however, the risk of leakage via outsourcing partners is increasing along with the expansion of outsourcing and offshore development.

The Company stores data on external cloud services such as AWS and Google Cloud Platform, and there is a risk that major earthquakes, fires, or other natural disasters, or equipment malfunctions, could cause serious disruption to service provision or stored information. The Company has implemented physical redundancy through a Multi-AZ configuration and failover arrangements across multiple cloud providers, but failures at external cloud providers cannot be controlled by the Company alone.

There is competition from similar services in the space-sharing market, and there is a risk that the Company's competitive advantage could be undermined by changes in competitors' strategies, an increase in new entrants, technological innovation, or changes in industry regulations. The Company addresses this through multifaceted differentiation in service concept, functionality, and customer support, but the possibility that competitors will adopt similar measures cannot be ruled out.

With the expanding adoption of generative AI in the development process, there are risks such as vulnerabilities being introduced into AI-generated code and text, external leakage of input information (such as source code and personal information), and legal issues related to copyright infringement or rights attribution. The Company addresses this through the establishment of internal AI guidelines, an approval process for tools used, and strengthened code review systems, but there is a possibility that responses may not keep pace with rapid technological advances.

There is a risk that an impairment loss may be recognized if an invested affiliate fails to achieve the originally anticipated synergies or business expansion effects, or if its business plan is not achieved due to changes in the market. The Company addresses this through due diligence conducted by external specialists, deliberation by the Board of Directors, a focus on post-merger integration (PMI), and strengthened performance monitoring systems, but business-specific risks of investees cannot be completely eliminated.

The Company is subject to a wide range of laws and regulations, including those related to real estate, the travel industry, the hotel and inn business, and internet-related regulations, and there is a risk that new legislation or the strengthening of existing regulations could constrain business operations. The Company has established a compliance framework through internal regulations and regular training, but there remains a possibility that it may be forced to bear the costs of adapting to changes in the regulatory environment or to modify its business model.

In FY2026 (ending March 2026), the single service "Instabase" accounted for 96.9% of net sales, and there is a risk that if the profitability of this service deteriorates due to intensifying competition, new market entrants, or changes in the market environment, it could have a direct and severe impact on the Company's overall business performance. The Company is promoting synergy creation with new businesses and differentiation, but diversification of revenue sources remains a work in progress.

The Company relies heavily on external search engines as a customer acquisition channel, and there is a risk that structural declines in customer acquisition could occur if changes to search logic or the spread of AI-generated overviews using generative AI strengthen the tendency of users to obtain information directly from search results pages. The Company is responding through technical adaptation to the latest search logic and by strengthening relationships with existing customers, but this has not fundamentally resolved the underlying platform dependency.

Core management and technical functions are concentrated in the two co-founders, Representative Director Kai Sato (management policy and business strategy) and Director Yuji Takahata (overall system development), and there is a risk that if either of them becomes unable to continue their duties for any reason, it could have a material impact on the Company's business and operating results. The Company is proceeding with delegation of authority to each business division head, strengthening its management systems, and developing personnel, but resolving this dependence on the founders will take time.