jig.jp co. ,ltd.

Approximately 95% of operating revenue is derived from item sales on the live streaming service "Fuwacc," resulting in an extremely high degree of dependence on a single service. If the live streaming service fails to grow as expected due to the introduction of new legal regulations or unforeseen factors, this could materially affect operating results and financial condition. Although the Company is working to expand revenue through marketing measures such as advertising and functional enhancements, this dependency structure has not been resolved.

The ratio of sales from smartphone application services is high, and the Group's revenue is heavily dependent on the two platform operators, Apple Inc. and Google Inc. If live streaming apps or accounts are removed due to changes in commission rates, business strategy shifts, or policy changes, this could have a material impact on business operations and results. The Group strives to comply with guidelines in accordance with its "Basic Policy on App Review and Release," but the risk of unilateral policy changes by platform operators cannot be eliminated.

The Group holds a large volume of important information that can identify individuals, such as users' names, addresses, and email addresses. If an information leak occurs, it could have a material impact on business and results due to damages claims from affected parties and loss of credibility. Although the Group works to strengthen its information management system based on its personal information protection regulations, risks from unauthorized external access or internal factors remain.

The business is entirely dependent on communication networks and computer systems, and if a system outage occurs due to natural disasters, accidents, unauthorized access, computer viruses, or other causes, the business and results would be seriously affected. Unpredictable factors such as a sudden surge in access or the suspension of cloud services could also cause failures. While appropriate security measures are in place, complete protection is difficult.

If a large earthquake or other natural disaster occurs near the Group's locations, business continuity could be disrupted due to facility damage or restricted power supply, potentially having a material impact on results. The Group strives to prevent problems through regular backups and continuous monitoring of operational status, but there are limits to its ability to respond to large-scale disasters.

The internet-related field is a rapidly changing industry with a continuous stream of new technologies and services. If the Group is slow to respond to technological innovation, its competitiveness could decline, potentially leading to a deterioration in service quality. Additional expenditures for system costs and personnel costs to address this may also increase. The Group is focusing on hiring and developing engineers, building a creative work environment, and acquiring technology and know-how related to smartphones.

Intensifying competition from new entrants with strong capital resources and brand recognition could lead to user attrition and increased user acquisition costs, affecting business development. Depending on the situation of competitors and competing services, maintaining a competitive advantage may become difficult, creating uncertainty in maintaining and enhancing corporate value.

In a live streaming service where an unspecified large number of users participate, it is difficult to fully grasp and control inappropriate user conduct, creating potential legal liability and reputational risk in the event of trouble. Although the Group works to strengthen its monitoring systems and enhance site patrol capabilities, response costs may increase beyond expectations as the business scale expands.

The introduction of legal regulations on communications, increases in communication costs, communication failures, deterioration of relationships with mobile phone and internet communication carriers, and changes in smartphone or OS specifications could hinder the Group's continued provision of services. While the current situation is expanding steadily due to the spread of smartphones and the increasing speed and decreasing cost of internet connectivity, the risk remains that changes in the external environment could affect the business, results, and financial condition.

The Group is subject to various legal regulations, including the Telecommunications Business Act, the Payment Services Act, and the Provider Liability Limitation Act. Future enactment or revision of regulations could restrict part of the Group's operations or require new responses. Although the Group has established and strengthened its compliance systems and conducts employee training, the risk of costs arising from responding to changes in the regulatory environment cannot be eliminated.