Aidma Holdings, Inc.

The sales support service market includes competitors of various sizes, and barriers to entry cannot be described as notably high. If large companies with financial strength and brand power enter the market and erode the Group's differentiating factors—such as crowdworker utilization know-how and securing extensive resources—this could affect the Group's business and results of operations. As a countermeasure, the Group is promoting improved service quality and strengthened competitive advantage through the accumulation and utilization of IT know-how.

The Group's business expansion is based on rising outsourcing needs for corporate sales operations, driven by a declining working population and increasing labor mobility. However, deterioration in domestic and overseas economic conditions or economic trends could cause client companies' investment sentiment toward sales and marketing to decline in the short term. A decline in outsourcing needs poses a risk of directly reducing sales.

The Group's principal revenue depends on sales support services, and if sales of this service decline significantly due to intensifying competition or other factors, the impact on business results would be substantial. The Company judges the likelihood of this risk materializing to be low, but is working to reduce dependence through the expansion of human resources support services and other services.

The Group handles a large volume of highly sensitive information, including clients' management information and new product data through the sales support business, personal information of Mama Works members, and confidential information related to the meet in service. If information leakage, loss, or unauthorized use occurs due to unauthorized external access, system defects, human error, or intentional acts by employees, this could lead to reputational damage or claims for damages. The Group has strengthened its management framework through measures such as obtaining ISO/IEC 27001:2013 certification and introducing access restriction and log-recording systems.

While recruiting and developing specialized personnel is essential for business expansion, if intensifying competition for talent makes hiring difficult, or if significant outflow of existing personnel occurs, this could affect the Group's business and results of operations. The Group is promoting active and ongoing recruitment and training activities, but the competitive environment in the labor market remains challenging.

While technological development capability is a source of competitiveness, new technologies and services are frequently released in the market, and customer needs are also changing rapidly. If the Group is slow to respond to unexpected and rapid technological innovation, or if unplanned system investments become necessary to address new technologies, this could affect the Group's business and results of operations. The Group continuously works to gather, accumulate, analyze, and acquire information on new technologies.

Yohei Miura, the founder and Representative Director and President, plays a critical role in determining management policy and business strategy and in driving business operations. If he were to become unable to continue his duties, this could affect the Group's business and results of operations. The Group is working to reduce this dependence through information sharing at the Board of Directors and other bodies and by strengthening its management organization, but the degree of dependence remains high at this time.

In M&A and capital/business alliances aimed at strengthening service provision capabilities and expanding into new business areas, the Group conducts detailed due diligence covering financial, tax, legal, and business aspects. However, unforeseen events or failure to achieve expected synergies could affect business results and business development.

The Group is subject to regulations such as the Telecommunications Business Act, the Employment Security Act, the Subcontract Act, and the Act on Improving Transactions with Specified Business Entrusted Persons. If new laws regulating internet-related businesses or laws related to work-from-home arrangements are enacted or strengthened, this could impose certain restrictions on operations and affect the Group's business and results of operations. The Group is not currently aware of any plans for stricter regulation, but maintains a policy of conducting business operations in compliance with laws whenever they are amended.

The number of potential shares from stock acquisition rights granted as incentives to officers and employees is 408,960 shares (as of the date of submission of this document), representing 2.7% of the total number of issued shares of 15,313,240 shares. If these rights are exercised, the value of shares held by existing shareholders and their voting ratio could be diluted, and additional grants of stock acquisition rights are planned going forward.