SystemSoft Corporation

The internet market, which is the Group's primary business domain, has continued to grow due to the spread of smartphones and the increase in internet users. However, a future slowdown in the pace of growth, deterioration in economic sentiment, or economic fluctuations could affect the Group's business performance and financial position. No structural countermeasures against changes in the market environment are explicitly disclosed in the securities report.

Competition among entrants in the cloud services market is expected to intensify, and business performance could be affected if other companies introduce groundbreaking products or services, or if cloud demand falls significantly short of the Group's forecasts. While cloud services are becoming established as a new method of software sales, maintaining differentiation remains an ongoing challenge.

For the Group, whose primary business focus is internet-related businesses, the internet usage environment constitutes a fundamental business condition. If significant changes occur in the internet usage environment due to the introduction of new regulations, the emergence of adverse effects, or other unforeseen factors, it could affect business performance.

The Group strictly complies with laws and regulations applicable to its business domains; however, if new laws and regulations are enacted or legal interpretations change due to shifts in social conditions, the content and services provided by the Group could be affected by such regulations, impacting business performance and corporate image. The Group also continuously strengthens its efforts to prevent information leakage, unauthorized acquisition, and virus infection via the internet.

The Group may collect personal information from service users, and if a leak or unauthorized use of personal information occurs due to computer viruses, unauthorized intrusion, or intentional or negligent acts, business performance and business development could be affected through claims for damages, loss of trust, and deterioration of corporate image. As a countermeasure, the Group implements strict management based on the Act on the Protection of Personal Information, and has renewed its Privacy Mark certification, first obtained in May 2006, eight times since then.

The Group's businesses provide services via computer systems and communication networks. If the communication network is disconnected or disrupted due to unforeseen accidents, including human factors both internal and external, or if the system becomes inoperable due to server overload from a surge in access or a power supply outage, service suspension, deteriorating business performance, and damage to brand image could result. The Group works to prevent system troubles through server distribution, regular backups, and monitoring of operational status.

Securing excellent human resources is extremely important for business expansion and the smooth execution of corporate operations. If the Group is unable to secure the necessary personnel in a timely and appropriate manner, or if capable personnel within the company leave, this could disrupt routine business operations and business development, affecting business performance. The securities report does not disclose specific details of recruitment and retention measures.

The Group is promoting the strengthening of its management foundation and the development and enhancement of its internal control management system in line with the expansion of its business scale. However, if the development of an adequate internal control management system fails to keep pace with rapid business expansion, this could affect business performance and business development. The Group has adopted a policy of continuously strengthening its organizational structure with the aim of achieving sustainable growth and enhancing corporate value over the medium to long term.

APAMAN Co., Ltd. directly holds 10.25% of the Company's total issued shares and indirectly holds an additional 5.07% through its subsidiary Apaman Network Co., Ltd., making it a major shareholder with a combined effective holding of over 15.32%. While the APAMAN group's investment is stated not to be aimed at gaining management control, any change in its holding policy could affect the Company's management.

The Technology Business and Open Innovation Business experience seasonal fluctuations, with business performance concentrated in the fourth quarter accounting period due to the timing of client companies' budget execution. If, due to client circumstances or unforeseen events, orders, development, or service provision cannot proceed as planned in the fourth quarter, this could affect the overall business results for the fiscal year including that quarter.