i-mobile Co.,Ltd.

The rise of foreign-capital platforms, tightening of personal information protection regulations, and stricter advertising review standards, together with a decline in advertising demand due to economic downturn or changes in consumer behavior, may affect earnings. Although the internet advertising market is expected to continue expanding, there is a risk that these changes in the external environment may make it difficult to secure the initially anticipated earnings. The Company monitors industry trends and has adopted a policy of responding promptly, but details of specific countermeasures remain limited.

The Furusato Nozei business may be directly affected by legal regulations such as tax system reforms, as well as guidance and requests from the government, ministries, and local municipalities. Depending on the content of system changes or administrative guidance, the fundamentals of the business model could be affected, resulting in a significant impact on business performance. The Group positions this business as one of its core businesses, making close monitoring of regulatory trends essential.

If new laws or administrative guidance targeting internet users and businesses, or stricter advertising regulations, are enacted, substantial investment may be required to develop alternative measures. There is also a risk that changes in the business policies of platform operators such as Apple Inc.'s App Store or Google LLC's Google Play could make it difficult for the Group to continue providing its services. Currently, the Company does not recognize any legal regulations that would have a direct and materially significant impact on its core businesses, but preparation for future tightening of regulations is required.

If the Group is slow to respond to rapid advances in science and technology and changes in customer needs, existing services may become obsolete or lose competitiveness. Even where a response is possible, costs associated with improving existing systems or developing new ones may increase, posing a risk to business performance. The Group's policy is to continuously monitor industry trends and respond promptly and appropriately, but the risk that the pace of technological change may exceed its response capacity cannot be eliminated.

The Consumer Business and Internet Advertising Business handle users' personal information, and if an information leak occurs due to unforeseen circumstances, it may materially affect the business and performance through claims for damages or loss of credibility. The Group has established a framework including network management, formulation and compliance with privacy policies, and internal audits, but complete prevention is difficult. As a business operator subject to obligations under the Personal Information Protection Act, continuous strengthening of this framework is required.

For the Group, which provides services over the internet, stable system operation is essential to business execution, and if a system failure occurs due to overload, software defects, cyberattacks, natural disasters, or other causes, it could significantly affect the business. The Group has established a framework to prevent failures through continuous network monitoring, maintenance management, and ongoing capital investment, but unknown risk factors cannot be completely eliminated. Should a failure occur, it would affect both business performance and future business development.

The founders and representative directors, Mr. Toshihiko Tanaka and Mr. Tetsuya Noguchi, possess extensive experience and knowledge in the digital marketing business and play an extremely important role in management policy, business strategy, and technical decision-making. If, for any reason, either of them becomes unable to continue their duties, it could affect the business and performance. The Group is working to reduce this dependence through information sharing at Board of Directors' meetings and division head meetings and through strengthening its management organization, but the risk remains.

Numerous companies have entered both the Consumer Business and Internet Advertising Business fields, and the emergence of superior competitors, service improvements, or business models offering higher added value could relatively reduce the Group's competitiveness. An increase in competing services directly leads to a shrinking of revenue opportunities, posing a risk to business performance. The Group is continuously working to expand each business and maintain and strengthen its competitiveness.

In aggressive investment in new businesses, including M&A and the sale or merger of group companies aimed at expanding business scale and diversifying revenue sources, changes in market conditions or unforeseen circumstances may prevent the achievement of the original business plan. Launching new businesses entails upfront investment such as personnel recruitment, research and development, and capital expenditure, posing a risk of pressure on business performance. The Group has established a framework to investigate and verify market potential, profitability, and the appropriateness of acquisition prices in advance, but uncertainty cannot be eliminated.

In the Internet Advertising Business, if advertisers or partner sites provide content that violates public order and morals or the law, it could lead to a decline in the Group's credibility and litigation risk from advertisers. The Group has implemented measures such as registration screening based on its own standards, regular monitoring, fraud investigations, and immediate suspension of malicious accounts, but the possibility of inadequate response due to unforeseen factors remains. This also includes risks of violating the Act against Unjustifiable Premiums and Misleading Representations, the Pharmaceuticals and Medical Devices Act, and the Act on Specified Commercial Transactions, among others.