Feedforce Group Inc.

The Group's core business, digital marketing-related services, is susceptible to the effects of economic downturns and changes in corporate advertising strategies, as the advertising market is sensitive to corporate economic trends. Changes in customer companies' advertising budgets or media-specific budget allocation policies may affect the Group's business and performance. The Group is addressing this through the diversified expansion of its digital marketing-related services.

In the digital marketing field, the pace of technological innovation and changes in customer needs is extremely fast, and delays in responding to new technologies and services, or the obsolescence of existing services and technologies, may affect the Group's business and performance. The Group strives to respond promptly through the recruitment and development of talented engineers, holding technical study sessions, and building a system to keep abreast of the latest technology trends.

With the widespread use of the internet, various issues have been raised regarding the legal regulation of advertising methods that utilize individuals' purchase and browsing history and attribute data. If laws, administrative guidance, or other regulations targeting internet users and businesses are enacted in the future, this may affect the Group's business and performance. At present, the Group recognizes no legal regulations that would significantly impact business continuity.

In each of the Professional Services, SaaS Business, and DX Business segments, there are competitors both domestically and internationally, and competition may intensify due to new entrants and other factors. If the Group is unable to maintain a competitive advantage in its services in the future, this may affect the Group's business and performance.

The proportion of the Group's advertising expenditure accounted for by major media platforms such as Google, Facebook, and Yahoo! JAPAN is at a high level, and if changes to these operators' advertising placement criteria or shifts in their policies reduce advertising delivery volume, this may affect the Group's business and performance. The Group is also working to strengthen relationships with other platform providers, including LINE and Shopify, in order to mitigate this risk.

In providing cloud services such as Social PLUS, if unauthorized external access, unexpected incidents leading to the external leakage of information, or unauthorized account use were to occur, this could lead to claims for damages and a loss of social credibility, potentially affecting the Group's business and performance. The Group strives to ensure information security through internal training, setting access permissions, retaining access logs, and appropriate information management at data centers, among other measures.

The Group's services rely on internet communication networks as their foundation, and if the system were to stop due to unforeseen events such as a surge in access, computer viruses, or natural disasters, this could result in lost revenue opportunities and a loss of social credibility. The Group strives to prevent system failures through strengthening system infrastructure, monitoring and providing redundancy for equipment and networks, and performing regular data backups.

Koji Tsukada, Chairman and Representative Director, has served as Representative Director since the company's founding in 2006 and plays an important role in formulating and executing management strategy. If he were to become unable to perform his duties, this could affect the Group's business and performance. The Group is working to resolve excessive dependence on him by bringing in personnel with extensive experience and knowledge to join the management team and delegating authority to the leaders of each business division.

While the Group's policy is to actively pursue new services and new businesses, there are many uncertainties regarding profitability in new businesses, and if the anticipated revenue is not achieved and the business becomes unprofitable, this may affect the Group's business and performance.

The Group has recorded goodwill and customer-related assets arising from business combinations on its consolidated balance sheet, and if the expected cash flows are not generated due to divergence from future business plans or other factors, this may affect the Group's financial position and results of operations. Because impairment of goodwill and similar assets can lead to a significant one-time loss, ongoing monitoring of business integration and progress toward plan achievement after M&A is important.