GLAD CUBE Inc.

Securing excellent personnel has become an important management issue accompanying business expansion and new business development, but intensifying competition for recruitment may prevent the Company from securing the necessary personnel. If personnel development does not proceed as planned, or if rapid personnel increases cause significant disruption to business operations, this could affect business development and performance. The Company continues to implement various measures related to recruitment and development, but the likelihood of occurrence is assessed as high and the impact as large.

Sales in the Internet Advertising Business depend on advertisers' budget allocation, exhibiting a seasonal pattern of increases in December and March and decreases in August. In recent years, this fluctuation has tended to ease due to the normalization of digital marketing investment, but sales and profit may temporarily fluctuate due to changes in advertisers' budget policies or market conditions. The likelihood of occurrence is assessed as high and the impact as large, requiring attention to swings in quarterly performance.

In the Internet advertising business, three companies—Google LLC (dependency ratio 57.7%), Meta Platforms, Inc. (25.5%), and LINE Yahoo Corporation (8.4%)—account for a combined 91.6%, representing a high-dependency structure. Changes in these media operators' management policies, sales practices, or transaction terms, or the suspension of transactions, could directly damage the Group's business foundation. The Company aims to reduce this dependency ratio by expanding transactions with other media operators, but finding a short-term substitute is difficult.

In addition to the strengthening of privacy protection regulations such as Japan's Act on the Protection of Personal Information, GDPR, and CCPA, major platforms are rapidly advancing the abolition of third-party cookies and the restriction of tracking technologies. Such regulatory tightening could impose significant constraints on the targeting accuracy and effectiveness measurement methods of internet advertising, directly impacting the profitability of the Internet Advertising Business, the Company's main revenue source. The Company continues to strengthen its management system based on Privacy Mark certification and ISMS certification, but increased costs for new system responses and compliance are also anticipated.

The Group's business foundation rests on the operation of SiTest and the Internet advertising agency business, with continued development of the internet usage environment being a premise for growth. If the internet usage environment changes rapidly due to new regulations or other unforeseen factors, this could disrupt business operations and affect financial condition and performance. The likelihood of occurrence is assessed as medium and the impact as large, and this is recognized as a risk that could materialize in the short term.

If important data is erased or improperly leaked due to computer virus infiltration, unauthorized external intrusion, or negligence by officers or employees, this could cause direct and indirect damage as well as a decline in trust in the Company's services. Regarding personal information leakage, if an incident occurs due to unauthorized external access or operational negligence, this could lead to a loss of social credibility. The Company has obtained Privacy Mark certification and ISMS certification and has established a management system, but the impact of information security risk is assessed as large.

SPAIA Keiba and the StableGenius currently under development procure data through paid contracts with multiple data suppliers, but if a contract is not renewed for some reason or contract terms are changed, this could affect the content provision system and performance. The Company strives to build a procurement system involving multiple suppliers, secure alternative data sources, and develop new suppliers, but the likelihood of occurrence is assessed as medium and the impact as large.

In addition to existing regulations such as the Act on Specified Commercial Transactions, the Unauthorized Computer Access Law, the Act against Unjustifiable Premiums and Misleading Representations, and the Copyright Act, changes in fee rates related to public sports gambling, legal amendments, and changes in state-by-state legal and gambling regulations in the horse racing market where the US subsidiary SPAIA, Inc. operates could affect the business. This also includes the risk of loss of social credibility if the Company is deemed to have facilitated an advertiser's illegal activities. The Company has established a legal compliance checklist and a verification system by responsible officers, but while the likelihood of occurrence is low, the impact is assessed as large.

The combined shareholding of Representative Director and CEO Hiroki Kanashima, Director Yuki Kanashima, and asset management company Gold Island Co., Ltd. reaches 65.9% of the total number of issued shares. Sales in the market could affect the stock market price, and transfers to specific parties could affect the status of voting rights exercise and management strategy. While the likelihood of occurrence is assessed as low, the impact is assessed as large, and combined with the low liquidity represented by a tradable share ratio of 30.9% (as of December 31, 2025), this constitutes an important risk factor for investors.

SiTest, SPAIA Keiba, SPAIA, StableGenius, and the internal sales system are provided relying on the cloud platforms of Google LLC and Amazon Japan G.K. If a large-scale service outage occurs at these infrastructure providers, the Group's services could be entirely suspended. In addition, changes in the infrastructure providers' management policies or significant changes in usage fee structures could lead to unexpected cost increases or the need for system reconstruction.