Orchestra Holdings Inc.

The Group, which operates the Digital Marketing Business and the Digital Transformation Business, has adopted a business strategy premised on growth markets. If market growth is impeded for any reason, this may affect business activities, financial condition, and business results. As a countermeasure, the Group closely monitors changes in economic conditions and the market environment, regularly monitors progress of business strategy and changes in the business environment, and reviews its business strategy in response to environmental changes.

The Group is engaged in the continuous development of new technologies and services and in the training and securing of excellent human resources. However, if it is slow to respond to environmental changes, its competitiveness may decline. Additionally, if significant expenditure becomes necessary for the development of new technologies and services, this may adversely affect financial condition and business results. The Group plans to continue responding to new technologies while promoting the training and securing of excellent human resources.

The Group has a policy of actively working to develop new services and new businesses in order to expand its business scale and strengthen its earnings base. However, additional investments such as hiring and system development may arise, and it may take time to generate stable earnings. If progress does not proceed as planned, recovery of investment may become difficult, which may affect financial condition and business results. As a countermeasure, the Group verifies future profitability by carefully examining the planning stage and continuously grasping progress and changes in the external environment, and determines whether to continue.

Securing, retaining, and developing excellent human resources with specialized expertise in each business is an important prerequisite for improving competitiveness and expanding business operations. If this does not proceed as planned, or if excellent human resources leave the company, this may become a factor constraining competitiveness and limiting business scale expansion. As a countermeasure, in addition to active recruitment activities, the Group implements measures such as enhancing various internal systems and educational programs.

Numerous operators exist in the market for each business, and industry restructuring is also expected due to changes in relevant laws and regulations accompanying changes in social conditions. If transaction unit prices decline due to economic downturns or price competition among competitors, this may affect business results. As a countermeasure, the Group seeks to differentiate itself from other companies by strengthening business synergies within the Group.

The Group conducts business and investment activities under legal regulations in various fields, and is directly or indirectly affected by them. Although countermeasures such as establishing compliance regulations and introducing an internal whistleblowing system have been implemented, if an issue related to legal regulations arises, the imposition of penalties including criminal punishment, claims for damages, and deterioration of corporate image may materially affect business activities, financial condition, and business results.

At present, there are no facts of claims for damages or lawsuits filed against the Group. However, unforeseen troubles such as infringement of intellectual property rights or problems arising in relationships with business partners could give rise to a risk of claims for damages or lawsuits being filed. Although the Group has established a system for receiving specialist advice through advisory contracts with law firms, depending on the content and outcome of any litigation, this may affect social credibility, financial condition, and business results.

The Group provides services using internet communications, and system failures may occur due to human error, malfunction of communication network equipment, sudden increases in access, software defects, computer viruses, power outages, natural disasters, accidents, and other causes. Although countermeasures such as regular backups and monitoring of operational status have been implemented, if a failure occurs and disrupts service provision, this may affect business activities, financial condition, and business results.

Due to the nature of its transaction structure, the Digital Marketing Business depends on the purchase of advertising space from media operating companies. If changes occur in transaction relationships with media operating companies, it may become difficult to procure optimal advertising space for advertisers, which may affect business activities, financial condition, and business results. As a countermeasure, the Group strives to maintain good transaction relationships with media operating companies, while building a business portfolio through the Digital Transformation Business, New Business, and other businesses to reduce dependence on the Digital Marketing Business alone.

The Group has granted stock acquisition rights as stock options to officers and employees, and is considering continued use of the stock option system in the future. If these stock acquisition rights are exercised, new shares will be issued, which may dilute the value of shares held by existing shareholders and their voting rights ratio. As of the end of the month preceding the submission of this document, there are no exercisable stock acquisition rights.