Basic Inc.

Revenue is heavily dependent on two products, "ferret One" and "formrun"; if revenue from these products declines significantly due to intensifying competition or other factors, there is a risk of a direct impact on business performance and financial condition. As a countermeasure, the Company is advancing product development aimed at optimizing the entire workflow from the front-office domain to the back-office domain, thereby expanding the target customer base and enhancing competitiveness.

In response to rapid technological innovation, exemplified by advances in AI, and changing customer needs, if the Company's response is delayed due to constraints on development resources, the maturity of new technologies, legal uncertainty, or other factors, competitive advantage may be lost, affecting operating results. In particular, in the field of generative AI, legal clarification is ongoing regarding copyright, the legality of training data, and the rights associated with generated output, and future tightening of regulations could force a review of services. The Company has established AI usage guidelines and built a risk monitoring framework in cooperation with its retained attorney.

Representative Director Masaru Akiyama, as founder, plays an important role in determining and executing management policy and business strategy; if he becomes unable to continue in his duties, this may affect business operations, operating results, and financial condition. The Company strives to reduce excessive dependence on a specific individual through the development of its internal management framework, delegation of authority, and human resource development.

The Company's business depends on the operating environment of network equipment such as communication networks and servers; if network disconnection or equipment failure occurs due to natural disasters, unauthorized access, power supply interruption, or other causes, this may affect operating results and financial condition. The Company has built computer systems with appropriate security and protective measures, but it is difficult to completely eliminate risks arising from external factors.

In the domains to which "ferret One" and "formrun" belong, existing competitors are present, and the competitive environment may intensify further going forward, including through an increase in new entrants. If the Company is unable to achieve effective differentiation in response to competitors' pricing and enhancement of products and services, this will affect operating results and financial condition. The Company is working to continuously monitor the competitive environment and improve service functionality and enhance added value based on customer needs.

The domestic SaaS market is growing at a CAGR of over 10% amid expanding demand for DX, but if deterioration in domestic and overseas economic conditions or changes in corporate IT investment policies lead to a reduction in digital-related investment and marketing spending, this could affect business performance and financial condition. The Company strives to closely monitor market trends on a daily basis and to build a framework for flexibly incorporating them into management strategy.

If personal information held by the Company is leaked or misappropriated due to malicious hacking, computer viruses, or other causes, there is a risk of loss of social trust and an impact on operating results and financial condition. The Company has obtained Privacy Mark and ISMS (ISO27001) certifications and implements security improvement activities such as formulating basic information security policies and conducting regular vulnerability assessments, but states that complete elimination of such risk is difficult.

As of the filing date of this document, the number of shares held by investment limited partnerships organized by venture capital firms amounts to 548,146 shares (9.3% of the total number of shares issued prior to the public offering); if, after listing, venture capital firms or others sell part or all of their held shares on the market, the supply-demand balance of the shares may be temporarily disrupted, potentially affecting share price formation. No direct countermeasure by the Company is described, but the Company intends to strive to ensure transparency in disclosure.

The Company released the workflow-building tool "workrun" and the AI platform "AIBOW" in January 2026, and is also developing the AI chatbot "askrun"; however, uncertainty remains as to whether customer acquisition and profitability can be achieved as planned, due to potential delays in the development schedule or insufficient functional quality. The Company strives to reduce this risk through development milestone management and co-creation with early-adopting companies, but uncertainties specific to new products remain.

As of the end of the fiscal year ended December 2025, the Company has tax loss carryforwards, and therefore corporate income tax at the normal rate is not currently levied; however, if business performance progresses favorably in the future and the loss carryforwards are exhausted, a tax burden based on the normal corporate tax rate will arise, which may affect operating results and financial condition. The Company strives to maintain a stable earnings base and sound financial condition while anticipating this future tax burden.