Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)
Issued: 12/13/2021● SummaryAlpha-Win Capital Inc. Research Dept.
http://www.awincap.com/

Business Description
・YRGLM Inc. (hereinafter referred to as the “Company”) is a technology company that plans, develops, and sells
software related to Internet marketing. President Iwata started the business during his college years and then founded
the Company in 2001. Its main product is an Internet advertising effect measurement system (AD EBiS) that it hadoriginally developed. It is a leading company in a niche field.
・ Its services are provided in cloud format to mid-tier and large companies. Its main business is based on a
subscription-based business model (about 90% of total sales). Under this model, initial costs associated withcustomer acquisition are offset as revenue is gained from flat-rate payment by customers, resulting in a continuousand stable accumulation of profit.
・The Company has been working on business model transition and the selection and concentration of its businessportfolio, strengthening its business foundation for the next level of growth. Currently, by leveraging its accumulated
know-how and assets (data), it is beginning to enter a phase of earning power improvement.
・It became listed on TSE Mothers in September 2014 (will move to “Growth” under the new market segments). Its
name was changed from LOCKON CO., LTD., to YRGLM Inc. in August 2019.
Past Trends in Financial Performance・After becoming listed on the Mothers market, the Company had increased sales and stayed in the black. However,from FY 2017 (note that the Company’s fiscal year is September-ending), although sales had continued to grow,profit had declined consecutively due to upfront investment for business expansion and expenses related to businessrestructuring. In FY 2018, a net loss was posted despite a sales growth, and dividend payment was stopped.
・Then, in FY 2019, the Company posted an operating profit in a turnaround thanks to the structural reforms. However,
due to litigation-related expenses that were recorded as extraordinary loss, a net loss was posted again. Since Q2 of
FY 2019 (Jan-Mar 2019), though, the Company’s profit has been recovering under a clear, V-shaped curve,
continuously posting a net profit for 11 consecutive quarters. Upfront investment costs in new areas of business havebeen absorbed, and a stably profitable structure has been maintained.
・In the previous fiscal year (FY 2021), sales were Y2,957 million (+12.9% YoY), operating profit was Y365 million(+32.0% YoY), and net profit was Y239 million (+30.7% YoY). Solid financial results with high growth rates wereachieved. In the main Marketing PF (platform) business, the increase in the unit price of AD EBiS contributed to theresults, and in the EC PF business, the EC market has been experiencing a boom, resulting in sales and profit growthfor both business segments. Although the sales were 1.4% lower than the target announced during the fiscal year,with progress made in cost reduction, each profit exceeded the forecasted values. Record-high sales were achieved
for the 12th year in a row at least, and record-high profit was achieved for the first time in six fiscal years.

Competitiveness・The Company's strengths are the data that it has accumulated over many years, the management skill of the president
with expertise in leading-edge technologies of the field, products and support systems with proven and strong
functions, its stable subscription-based business model, and an agile business strategy including M&As. Its two main
products (AD EBiS and EC-CUBE) both have the top share in the Japanese market. Its Internet ad effect measurement
system is especially strong, having established an extremely solid position in the market.
Business Strategy
・Under the “MXP Strategy,” the Company aims to contribute to the DX of customers by supporting data integration,
analysis, and utilization. It plans to thus become a “comprehensive marketing DX support group” andcomprehensively expand its business scope from ad effect measurement to other areas. In the new medium-termbusiness plan, it has set goals of “sales of Y5 billion, operating margin of 15%, and DOE of 3% or more (all on aconsolidated basis)” for the final year of this plan or FY 2023. It intends to accelerate its growth by continuing to
1/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or
fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from theuse of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

evolve and expand its core businesses and creating new businesses including businesses for advertising agencies andplatform businesses in new fields.
・In the rapidly changing market, the Company aims to further strengthen its products/services and expand its businessthrough the development of original products as well as active engagement in M&As, business acquisitions, andbusiness alliances, thus increasing synergy within its group.

Financial Forecast for This Fiscal Year
・For the past six years, the Company had not announced its financial forecast at the beginning of the fiscal year under
the reason that it was difficult to make a rational forecast, but this fiscal year (FY 2022) it announced a forecast (thefirst-half forecast was not disclosed though). In the current fiscal year, the Company plans for sales of Y3,600 million(+21.7% YoY), operating profit of Y470 million (+28.6%), net profit of Y320 million (+33.5%), and dividend of 7.5
yen (+2.3 yen/share YoY). The Company expects double-digit increases in sales and profits due to an increase insales and profit margins of the advertising agency DX (which is in the upfront investment stage) and the new services.
As with the previous fiscal year, it plans to achieve record-high sales and profits.
・Alpha-Win Research Department reviewed the financial forecasts for the three fiscal years starting this fiscal year
upon taking into consideration the results of the previous fiscal year and the current situation. Our sales forecast forthe current fiscal year remains unchanged at Y3,500 million (+18.3% YoY; -Y100 million compared to theCompany's plan), while we raised operating profit from Y400 million ⇒ Y470 million (+28.6% YoY), net profit
from Y260 million ⇒ Y320 million (+33.5%), and dividend from 7.0 yen/share ⇒ 7.5 yen/share, which is thesame as the Company.
Financial Forecast for Next Fiscal Year Onwards and Over the Medium Term
・In the next fiscal year (FY 2023), which is the final year of the current medium-term business plan, the Company
plans to achieve high targets: sales of Y5,000 million (+38.9% compared to the Company's forecast for this fiscal
year), operating profit of Y750 million (similarly, +59.6%), and operating margin of 15% (13.1% forecasted for thisfiscal year). To achieve this, it plans to expand business through M&As and new services.
・In the next fiscal year and the fiscal year after the next, we expect that sales, profit, and dividend will increase due
to growth of AD EBiS in the Marketing PF, contribution of new businesses in terms of both sales and profits,
continued effects of cost reduction, additional contributions from new M&As, and the expected product enhancement
and positive effects of alliances in the EC PF despite intensifying competition. However, for the next fiscal year, we
made a somewhat conservative forecast compared to the Company’s upon considering the risks of the current
businesses including M&As and the new services.
・With the large growth potential of Internet-marketing-related fields, an annual sales growth rate of 10-20% is
expected over the medium to long term. Also, we expect that the Company will continue with ambitious upfront
investments as it selects, focuses, and expands (through active M&As) its business portfolio so that it can achieve
growth while also adapting to changes.
・It has also been conducting a strict cost control, which has been helping to improve the profit margins. Therefore,(under normal conditions without the impact of COVID-19,) we believe that the Company will be able to achieve a
profit growth of about 20-30% per year, a higher rate than its sales growth rate.

Stock Price and Key Points to Watch Going Forward
・ It is recognized as an AdTech-related, domestic-demand-oriented, and small-cap growth stock. After theannouncement of Q3 results in August, stock price has been outperforming the TOPIX and the TSE Mothers Index
in response to the solid financial improvements, positive outlook, upward revision of profit, and increase in dividend.
The Company’s stock price currently does not seem cheap compared to the TOPIX based on our prediction of its
P/E, P/B, and dividend yield for this fiscal year. However, based on the comparison of valuation with similar
companies, the forecasted P/E for the fiscal year after the next, and the PEG ratio that takes into account the
anticipated profit growth rate over the medium to long term, the Company’s stock appears to be a possible candidate
for investment at its current price.
・Thanks to the establishment of the subscription-based business model, there has still been a clear, increasing trend
for sales and profit after earnings had recovered in a V-shaped curve. Its likelihood of achieving profit growth overthe medium to long term is also becoming greater. Going forward, medium/short-term changes in financial
performance are expected to be reflected in the stock price and cause fluctuations. We should continue to closely
watch the following factors: tightening of regulations related to personal information protection; trends in monthly
sales; quarterly trends in profit/loss; announcement of M&As, alliances, or new functions; business performance of
2/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or
fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from theuse of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

the new businesses and acquired subsidiaries; and its key indicators (KPIs) directly linked to financial performance(unit price, number of active accounts, and churn rate of AD EBiS).
Return of Profit to Shareholders
・Dividend was resumed at 4.0 yen/share in FY 2020 and was increased to 5.2 yen/share in FY 2021. In both fiscal
years, dividend was revised upward during the fiscal year. The Company also conducted a share buyback in
November of this year, indicating its proactive attitude toward returning profit to shareholders.
・In the current medium-term business plan, the Company has announced a dividend policy that it will determine
dividend based on the consolidated dividend on equity (DOE). It raised its target DOE from 2% of the previous fiscal
year to 2.5% for the current fiscal year, and plans to achieve 3% or more in the next fiscal year. Since profits are also
expected to increase, there is a high chance that dividend will be raised again consecutively.
・The Company is in its growth phase, but it plans to increase shareholder value by returning profit to shareholders
and by achieving greater financial results while continuing to invest in growth.
【3690 YRGLM Inc.

Sector: Information & Communication 】 Figure A

FY

Sales

YoY

O.P.

YoY

R.P.

YoY

N.P.

YoY

EPS

BPS

Dividend(million Y)(%)(million Y)(%)(million Y)(%)(million Y)

(%)

(Y)

(Y)

(Y)

To loss-14.02184.97

0.00

2018

A

1,804

5.0

-98

To loss-115

To loss

-88

2019

A

2,204

22.1

84

To profit79

To profit-34 Smaller loss

-5.54

168.68

0.00

2020

A

2,618

18.8

276

226.1

261

230.5

183

To profit

29.09

202.20

4.00

2021

A

2,957

12.9

365

32.0

364

39.5

239

30.7

37.96

257.52

5.20

2022

CE

3,600

21.7

470

28.6

460

26.3

320

33.5

49.98

2022

E

3,500

18.3

470

28.6

460

26.3

320

33.5

50.68

2023

Medium-term CE

5,000

38.9

750

59.6 OPM=15%

2023

E

4,600

31.4

650

38.3

620

34.8

420

31.3

66.51

361.99

10.90

2024

E

5,300

15.2

780

20.0

750

21.0

510

21.4

80.77

431.8513.00

7.50
302.98

7.50

DOE≧3%(Note) A: actual results. CE: the Company’s estimate (forecast). E: estimate (forecast) by Alpha-Win Research Dept.
Note that the Company’s fiscal year is September-ending. For example, FY 2022 ends in Sept. 2022.
【 Stock Price and Valuation Indicators: 3690 YRGLM Inc.】
Item
Stock Price (Y)Stock Price on 12/10

Figure B
Item

P/E

P/B

Dividend Yield

Dividend Payout Ratio

1,089

Last FY (actual)

28.7

4.2

0.5%

13.7%

Shares Outstanding (thou.)

6,372This FY (est.)

21.5

3.6

0.7%

14.8%

Market Capitalization (million Y)

6,940

Next FY (est.)

16.4

3.0

1.0%

Dilutive Shares (thou.)

0.0

Equity Ratio at End of Last FY

51.8%

Last FY's ROE

16.4%
16.5%

(Note) Forecasts/estimates in Figure B were made by Alpha-Win Research Dept.

【 Stock Chart (end-of-week prices): 3690 YRGLM Inc.】

Figure C

(Y)

3,000
2,500

1.20
Stock price (left axis)
Price relative to TOPIX (right axis)

1.10
1.00
0.90

2,000

1,500

0.80
0.70

(Note) Prepared by Alpha-Win Research
Dept. Reflects stock price and TOPIX
values through the closing price on
12/10/2021 (most recent value). In thecalculation of performance for each period,
the stock price and TOPIX at the end of
the last month of each period wascompared with their most recent values.

0.60
1,000

0.50
0.40

16
/8
16
/1
2
17
/4
17
/8
17
/1
2
18
/4
18
/8
18
/1
2
19
/4
19
/8
19
/1
2
20
/4
20
/8
20
/1
2
21
/4
21
/8

500

0.30
(MM/YY)

Period1 month
3 months
6 months
12 months【Performance】
Returnvs. TOPIX
-7.5%
-8.9%
2.2%
5.9%
-12.3%-13.0%-33.1%-38.3%(Note) From the fourth week of Aug 2016 to the second week of Dec 2021 (most recent value: Dec 10)(Note) Since values used in this Report have been rounded to the nearest unit, and due to processing during calculations, values for thesame item may differ from the official values disclosed by the Company and other values in this Report.

3/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or
fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from theuse of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Contents
1．Company Overview ........................................................................................................................ P5
A Leading Company in a Niche Market ............................................................................................ P5
Business Philosophy .......................................................................................................................... P8
2．Business Contents and Business Model ........................................................................................ P9
Providing Originally Developed Products and Services ................................................................... P9
Restructuring and Strengthening of Business Portfolio .................................................................. P10
Business Details: I. Marketing Platform ......................................................................................... P11
Business Details: II. EC Platform .................................................................................................... P20
Subscription-Based Business Model (supplemental description) ..................................................... P22
3．Shareholder Composition ............................................................................................................ P24
Change in Composition by Shareholder Type ................................................................................. P24
Major Shareholder Composition ..................................................................................................... P24
4．ESG .................................................................................................................................................. P26
Environment, Society, and Governance .......................................................................................... P26
5．History of Growth ......................................................................................................................... P27
Past Transition in Financial Results ................................................................................................ P27
6．Market Environment .................................................................................................................... P28
Trends of Japan’s Advertising Market ............................................................................................ P28
Competitors ..................................................................................................................................... P29
Impact of COVID-19 and the Company’s Response ...................................................................... P30
Impact of Strengthened Regulations on Personal Information Protection and the Company’s
Response ................................................................................................................................ P30
7．Last Fiscal Year’s Results, the Company’s Forecast for This Fiscal Year, and Medium-TermBusiness Plan .................................................................................................................................. P31
Financial Results for FY 2021 (last fiscal year) ................................................................................ P31
The Company’s Financial Forecast for FY 2022 (this fiscal year) ................................................. P35
Medium-Term Business Plan and Strategy ..................................................................................... P37
8．Alpha-Win Research Dept.’s Forecast for This Fiscal Year and Over the Medium Term ... P39
Alpha-Win Research Dept’s Forecast for This Fiscal Year .............................................................. P39
Alpha-Win Research Dept.’s Forecast for Results Over the Medium Term ................................... P41
9．Analyst’s View ............................................................................................................................... P44
SWOT Analysis ............................................................................................................................... P44
Return of Profit to Shareholders ...................................................................................................... P45
Stock Price, Characteristics, and Factors that May Affect Stock Price ........................................... P46

Note: Upon translating to English, when the page numbers differed from the original Japanese version, they were adjusted to those of the
English version of this Report. Note that the Company’s fiscal year is September-ending (i.e. FY 2022 ends in September 2022).

4/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

1. Company Overview
w Providing marketing DX
support services(1) DX (Digital Transformation)：transformation and innovations ofbusinesses and lifestyles using
digital technologies(2) Internet advertising effectmeasurement tool: Software forcomprehensively measuring andevaluating the effect of various
Internet ads and SEO strategies.

w Currently, its main service

is SaaS (cloud) for Internet
ad effect measurement.
Evolving into acomprehensive marketing
DX support group throughactive engagement in
M&As.

(3) SaaS (software as a service): A
service where software is used via
the Internet (mostly synonymouswith the cloud). Does not needpurchasing of packaged products.
Only the necessary functions,contents, and quantity of service
are used via the Internet and paidfor.
w Founded in Osaka in 2001.
Became listed on TSE
Mothers in 2014.
w Changed its company nameand logow The Company’s group iscomposed of six companies
including the Company.
w Acquired Spoo and
TOPICA as consolidated
subsidiaries in the previous
fiscal year

◆ A Leading Company in a Niche Market
Overview
YRGLM Inc. (hereinafter referred to as “the Company”) is a marketing DX1
support company that plans, develops, and sells software related to Internet
advertising and e-commerce.
With its originally developed software, it has grown through the full-scale
development of the business of improving marketing efficiency. The
Company has an extremely high share in the Internet ad effect measurement
tools2 market and is a leading company in the niche field.
Currently, the main service is the Internet advertising effect measurement
system, provided as SaaS3 (≈ cloud), but it has been evolving into acomprehensive marketing DX support group through active engagement in
M&As in addition to in-house development. It is working on the “MXP(Marketing Transformation Platform) Strategy” under which it aims tocontribute to its customers’ DX through data integration, analysis, andutilization support.

History
Susumu Iwata, the Company’s president, started a web design business inOsaka as a college student. Following business expansion, he established theCompany in 2001. The Company became listed on TSE Mothers in
September 2014. In April 2022, it will move to the new market segment“Growth.” Currently, it has two headquarters, one in Osaka and one in Tokyo.

Change in Company Name
On August 1, 2019, the Company changed its name from the previous“LOCKON” (CO., LTD.) to “YRGLM Inc.” It renewed its company logo at
the same time.

Consolidated Companies and Trends in Consolidated Financial
Results
The YRGLM Group consists of a total of six companies: the Company, four
consolidated subsidiaries, and one equity-method affiliate.
Four Consolidated Subsidiaries
In the previous fiscal year, it newly acquired the two companies Spoo! inc.
(hereinafter, “Spoo”) and TOPICA Inc. (hereinafter, “TOPICA”).
・Spoo (headquartered in Chiyoda-ku, Tokyo; founded in March 2000;
wholly owned by the Company) was acquired in December 2020 as aconsolidated subsidiary. It conducts planning, editing, and production of
web media. Results are not disclosed.
・TOPICA (headquartered in Shinjuku-ku, Tokyo; founded in June 2016;
about 60% of shares owned by the Company) was acquired in July 2021 for
Y220 million as a consolidated subsidiary. It provides one-stop services
from planning and production of video contents to operation services for
SNS.
・YRGLM Vietnam Co., Ltd. (Vietnam Socialist Republic. An offshoredevelopment site. Conducts software development outsourced from theCompany. Wholly owned by the Company.)
5/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Its other key consolidated
subsidiary is EC-CUBE Co.,
Ltd. which works on the EC
platform business. In
November 2020, Oricoacquired a stake in thissubsidiary and formed analliance.

・EC-CUBE Co., Ltd. (established in Osaka City in October 2018; theCompany currently owns 89.5% of its shares): The EC-CUBE business wastransferred from the parent company's EC platform business segment to thissubsidiary in January 2019. It started out as a wholly owned subsidiary, but
in November 2020, 10% of its shares were sold to Orient Corporation (TSEFirst Section; securities code 8585; hereinafter “Orico”) to form a capital andbusiness alliance.
One Equity Method Affiliate
・SAI Co., Ltd. (the Company acquired 20% of the shares in September 2015
and transferred its EC contract development business)
The parent company’s sales and profit both used to account for an extremely
high proportion of the total until FY 2018. The consolidated-to-parentcompany ratios had stayed around 1 and the total recurring profit/loss of theconsolidated companies excluding the parent had been close to zero (Figure1).
Note that LOCKON Marketing of U.S.A. (founded for information-collecting
purposes) had previously been a nonconsolidated subsidiary, but thiscompany was closed and removed from consolidated accounts.

w Financial performance ofconsolidated companies(excluding the parent) has
also recovered and has beensolid.

During FY 2019 (note that the Company’s fiscal year is September-ending),
the EC-CUBE business was separated from the Company (parent company)
in a carve-out (became a consolidated subsidiary after the carve-out).
Following this, the balance between the parent company’s results andconsolidated results has changed. Due to the profitability and solid financial
performance of EC-CUBE Co., Ltd. as well as due to the acquisition ofseveral companies and their business expansion, overall sales growth andprofit have been observed for the consolidated companies excluding theparent (consolidated minus parent company) since FY 2019.

[Figure 1] Comparison of Consolidated vs. Parent Company’s Results by Fiscal Year (Sales andRecurring Profit)
A
B
A-B＝C
C/B
A/B
A
B
A-B＝C
C/B
A/B

Unit: million yen, %Consolidated sales
Parent company sales
Consolidated sales - parent company sales
Subsidiaries' sales / parent company sales
Consolidated sales / parent company sales
Consolidated R.P.
Parent company R.P.
Consolidated R.P. - parent company R.P.
Subsidiaries' R.P. / parent company R.P.
Consolidated R.P. / parent company R.P.

FY 2014
1,360
1,360
0
0.0%
1.00
234
245
-12
-4.7%
0.95

FY 2015
1,437
1,437
0
0.0%
1.00
352
359
-7
-1.9%
0.98

FY 2016
1,613
1,613
0
0.0%
1.00
250
252
-2
-0.7%
0.99

FY 2017
1,719
1,719
0
0.0%
1.00
106
107
-1
-0.5%
1.00

FY 2018
1,804
1,804
0
0.0%
1.00
-115
-110
-5
-

FY 2019
2,204
2,010
194
8.8%
1.10
79
19
60
315.9%
4.16

FY 2020
2,618
2,317
301
11.5%
1.13
261
165
96
58.2%
1.58

FY 2021
2,957
2,532
425
14.4%
1.17
364
278
86
30.9%
1.31

(Ref) Prepared by Alpha-Win Research Dept. based on the securities report(Note) Consolidated results starting in FY 2014.

Financial Standing
The Company had stayed debt-free for many years after becoming listed, but
in FY 2018, it raised about Y800 million in short/long-term debt for future
investment. This capital was raised for investment in the development of theMarketing PF and AI-related fields and for future M&As.

6/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Essentially debtless. FCF(free cash flow) turned
positive.

w Sound financial standing
w Goodwill increased andsoftware assets wererecorded, resulting in
intangible fixed assets ofabout Y900 million, but still
smaller than the net assets.

w Share value of the unlistedcompany EC-CUBE Co., Ltd.,
which the Company owns, isestimated to be Y1.3 billion.
The Company also has Y1.4
billion in cash & deposits,
indicating its sufficientliquidity in terms of assets.

Accumulation of capital and improvement in finance have progressed due tothe solid surplus maintained with regards to both profit/ loss and FCF, and asof the end of FY 2021, its short/long-term debt totaled about Y980 million
while its cash and deposits were about Y1,390 million. Therefore, theCompany is essentially debtless.
Its total assets are about Y3.1 billion and market capitalization is about Y6.8
billion (based on the closing price of Y1,066 on 9/30/2021), both relatively
small. However, its equity ratio is 51% and current ratio is 203% so there
does not seem to be an issue with its financial standing.
With the increase in goodwill due to M&As (Y316 million as of the end of

the fiscal year before the previous ⇒ Y450 million as of the end of theprevious fiscal year) and in the amount transferred to software assets,intangible fixed assets became Y900 million and deferred tax assets became
Y130 million, totaling Y1,030 million. However, since this total is smaller
than the Company’s net assets of Y1,650 million, there does not seem to be
an issue at this moment.

Share Value of Unlisted Subsidiary
The Company currently holds an 89.5% stake in its subsidiary EC-CUBE Co.,
Ltd. In December 2020, the Company sold 10% of the shares of EC-CUBE
Co., Ltd. to Orico for Y155 million. Simply estimating from the sale price atthe time, the value of remaining shares held is equivalent to a market valueof about Y1.3 billion. At the time of sale, the subsidiary was valued at amarket value of about 5.2x of its sales. If business continues to expand in the
future, the Company’s asset value is expected to further increase.

Awards and Recognitions
w Has earned a highreputation from externalorganizations. Chosen as the“Great Places to Work
Certified Company.”(4) Great Place To Work®
Institute: An organization that
conducts surveys and presents“Great Places to Work” in about
50 countries around the world
every year.

w Its main products have also
earned top-level, highreputations.

In December 2021, the Company was chosen as the “Great Places to Work
Certified Company” by the Great Place to WorkⓇ Institute4 Japan in the“Best Workplaces Ranking Japan 2022.”
In February 2021, the Company also won the Best Companies Award in the“Great Place to WorkⓇ Best Workplaces Ranking for Medium-Sized
Companies (100 to 999 employees)” from the same institute for the nineth
year in a row (total of ten awards).
The Company has also won various other awards from external organizationsin the past. This high reputation is valuable since it helps attract talents, which
are crucial to the Company’s type of business.
Its products have also earned a high reputation. AD EBiS won the “Leader”
award for three times in a row in the “Access Analysis and Attribution”
division of the “ITreview Grid Award 2021 Fall” by the IT product review
platform “ITreview” (review site for real users of IT products and cloudservices targeting corporations) operated by ITclowd Corp (headquartered in
Minato-ku, Tokyo). The Company has been chosen for the “ITreview Grid
Award” for the fifth time in a row.
Furthermore, its EC open platform “EC-CUBE,” which is the main businessof the EC platform segment, was ranked as “the most used shopping cartsystem by online stores with monthly sales of 10 million yen or greater” in asurvey of online store trends conducted in October 2020 by EC&Marketing
Co., Ltd. (headquartered in Minato-ku, Tokyo) (a high evaluation, winningby a large difference from 2nd place – by more than 2.5x).
7/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

w 同社の経営理念：Impact On

the World

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Business Philosophy
Under its mission, “Impact on the World,” the Company aspires to realize asociety in which companies can grow together with the society by creating
unique values. This philosophy encompasses the Company’s idea that “Weshall continue to impact to each and every thing that we are involved in,because the accumulation of small impacts that move people’s heart will
eventually create a large momentum that will move the entire world.”
Also, the Company’s vision (for the future) is to “become a company that
supports corporate marketing activities around the world through data andtechnology to bring happiness to both the sellers and the buyers.”

8/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

2．Business Contents and Business Modelw B2B business model,
providing originallydeveloped tools (software)in cloud format.

◆Providing Originally Developed Products and Services

w Its main business is theMarketing Platformbusiness. Both theMarketing and the EC PF
businesses have been
profitable.

The Company's marketing DX support business consists of two segments: I.
Marketing Platform and II. EC Platform. The Marketing Platform businesssegment accounted for about 87.9% of the total sales in the previous fiscal
year and is the growth driver for sales (Figures 2 and 3).

The Company’s concept is that tools for solving issues efficiently and quickly
are also necessary in the field of Internet marketing as the population ages
and declines. Based on this concept, the Company has been providing
originally developed software mainly as cloud-based software to corporate
customers (B2B).

The transition in operating profit for each segment is shown below in Figure
4. Excluding FY 2017 and FY 2018, during which business restructuring was
conducted, both segments have been posting operating profits for each full
fiscal year.

[Figure 2] FY 2021 Sales Breakdown
by Business Segment[Figure 3] Transition in Sales by Business Segment(Unit: million yen)
Marketing Platform

EC Platform
Segment

EC Platform

358
301

12.1%

253

Marketing Platform Segment

465

539

477

526

883

911

FY 2014

FY 2015

422

87.9%

666
FY 2013

1,255

1,074

FY 2016

FY 2017

275
1,951

1,530

FY 2018

FY 2019

2,318

FY 2020

2,599

FY 2021(Ref) Figures 2-4 were prepared by Alpha-Win Research Dept. based on the Company’s financial results summary and financial results briefing materials.

[Figure 4] Transition in Operating Profit by Business Segment(Million yen)

300

Marketing Platform

250

EC Platform

200
150

214

100

142

50
0

75

107

210
136

247

199

153
38

22

46

39

78

119

-1

-50

-60

-100

-121

-150
FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

9/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Restructuring and Strengthening of Business Portfolio
w Has been working on

restructuring its businessportfolio.

w Concentrating businessresources on AD EBiS of theMarketing PF

w The EC PF business wascarved out to a consolidated
subsidiary.

Since FY 2016, the Company has been actively restructuring andstrengthening its business portfolio. It has been increasing its focus on its corebusinesses (shifting to AD EBiS of the Marketing PF) and separating its noncore businesses (EC PF) (Figure 5).
In the Marketing PF segment, the Internet advertising effect measurement
system AD EBiS is especially significant, having accounted for about 78%of the total sales in the previous fiscal year. Over many years, the Company
has concentrated business resources on AD EBiS and related products andhas been strengthening this business as its growth driver.
Since the second quarter (Q2) of FY 2019, the Company (parent company)
has been primarily focused on the Marketing PF. However, since the ECCUBE business was transferred to a consolidated subsidiary, on aconsolidated basis, the Company’s business is still classified into the sametwo segments as before.

[Figure 5] Business Restructuring and Segments
Segment Name

Main Service

Business Category(1) Advertising effect measurement(2) Advertising agency DX(1) Marketing
Platform①AD EBiS➁THREeWithdrew (end of March 2020)①AdRepoBusiness acquisition (August 2018)➁Ad-Knowledge(1) EC-CUBE(2) EC Platform(2) SOLUTION → withdrew

Parent company

Started service in May 2020; changed name to ADHOOP in Jan 2021

②eZCX

Official version released in July 2021

③Spoo

Acquired as a wholly owned subsidiary (Dec 2020)④TOPICA*Other

Notes

Started service in July 2020

①AD HOOP (former "Advertising agency referral service")(3) New services

Changes
ADPLAN business (acquired in Jan 2020; merged) was closed in March 2021

Acquired as subsidiary with about a 60% stake (July 2021)

Former "Professional Service" (DMP business)(EC-CUBE) (ec-cube.co)①EC contract dev. + consulting, etc.
(Of which is DMP business)(Former "SOLUTION"; transferred from SOLUTION and scaled down)

Consolidated
Parent company

Transferred to EC-CUBE Co., Ltd., in Jan 2019; about 10% of shares sold to Orico

Consolidated

Transferred to SAI Co., Ltd. (equity method; kept) and Radical Opti Co., Ltd.
(removed from equity method after transfer)

Equity method

Transferred to Marketing Platform's *Other

Parent company(Ref) Prepared by Alpha-Win Research Dept. from the Company’s securities report and interview. Information as of the end of Nov 2021.
(Note) Gray highlight indicates businesses from which the Company withdrew. Words in red indicate changes since the previous fiscal year.

w Currently, the Marketing PF
segment is composed of thethree business categories ofadvertising effectmeasurement, advertising
agency DX, and newservices.
(5) Paid-listing ads: A type ofprogrammatic advertising. Also
referred to as search advertising.
A method of displaying ads
related to keywords searched orbrowsed by Internet users.
Effectively displays ads in theusers’ areas of interest. A highly
effective method for corporate
advertising.
(6) DMP (Data Management
Platform): A method by which a
corporate client can analyze its
own website

Changes in recent years are as follows (the numbers in parentheses and circles
match the numbers in Figure 5).
Starting in the previous fiscal year, the Company’s Marketing PF segment (I)has been composed of the following three categories, which are further
composed of seven businesses: (1) advertising effect measurement, (2)advertising agency DX, and (3) new services.
I. (1) ① In January 2020, ADPLAN was acquired from OPT, Inc., aconsolidated subsidiary of DIGITAL HOLDINGS, for Y315
million and was merged with AD EBiS.
② Withdrew from the THREe business (operating platform for paidlisting ads5; withdrawal completed at the end of March 2020).
I. (2) Created the advertising agency DX category, which is composed of thetwo businesses AdRepo and Ad-Knowledge
I. (3) Created the new services category and transferred AD HOOP fromadvertising agency DX to the new services in consideration of futurebusiness area expansion. The two acquired subsidiaries and eZCX werealso placed in this category.
I. (Other) The DMP6-related business was transferred from the EC PF andscaled down.
10/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

II. (1) As with before, the EC PF segment is composed only of the EC-CUBE
business.
As a result of the above restructuring of business, the current business portfolio
is as shown in Figure 6.

【Figure 6】Composition of the Marketing DX Support Business
Marketing DX Support Business
I. Marketing Platform Segment(1) Advertising
EffectMeasurement(2) Advertising
Agency DX(3) New Services(1) EC-CUBE

③

①

①

①

II. EC Platform Segment

Creative Agency

EC open platform

Programmatic ad automatic
Advertising effectreport generation tool

Advertising agency

measurement platform“AdRepo”

matching platform1
Cloud-based EC platform

No. 1 sales share in
Japanʼs ad effectmeasurement
market2④②②
Project management tool foradvertising agencies

EC-specialized CXDecentralized video media
operation service

improvement platform

No.1 EC
construction opensource software in
Japan by number ofusers3“Ad-Knowledge”*1: AD HOOP was transferred from advertising agency DX to the new services in consideration of future business area expansion.
*2: ITR’s “ITR Market View: Mail/Web Marketing Market 2020”; share of sales (in amount) of the advertising effect measurement market
by vendor (prediction for 2015 – 2019)*3: From Information-technology Promotion Agency, Japan’s “3rd Open-Source Software Utilization Business Survey”(Ref) Prepared by Alpha-Win Research Dept. from the financial results briefing materials.

◆ Business Details: I. Marketing Platform
The transition in the sales and profit of the Marketing PF business segmentby fiscal year is shown below in Figure 7.

[Figure 7] Change in the Sales and Operating Profit of the Marketing Platform Business Segment
Sales (million yen)
I. Marketing Platform(1) Advertising Effect Measurement(1) ➀AD EBiS + former ADPLAN (business acquired in Jan 2020)①AD EBiS's sales growth rate (YoY: %)② THREe (withdrew)(2) Advertising Agency DX(2) ①AdRepo➁Ad-Knwoledge(3) New Services(3) ①AD HOOP, ②EZCX, ③Spoo, ④TOPICA*Other: Professional Service (DMP)
Segment's Operating Profit
Segment's Operating Margin (%)

FY 2012parent
545
545
499
46

-61
-11.2%FY 2013parent
666
648
567
13.7%
81

FY 2014consolidated
883
883
722
27.3%
161

FY 2015
consolidated
911
911
822
13.9%
89

FY 2016
consolidated
1,074
1,074
1,012
23.1%
62

FY 2017
consolidated
1,255
1,254
1,200
18.6%
54

FY 2018
consolidated
1,530
1,445
1,402
16.8%
43

FY 2019
FY 2020
FY 2021
FY 2022 CE FY 2023 CE
consolidated
consolidated consolidated consolidated consolidated
1,951
2,318
2,599
3,220
4,590
1,775
2,135
2,313
2,520
1,747
2,127
2,313
2,520
24.6%
21.8%
8.8%
8.9%
28
8
0
0
124
152
182
196
(Business acquired in Oct 2018 →)
124
149
3
89
504
1,500
(Spoo acquired in Dec 2020; TOPICA acquired in July 2021; ADHOOP transferred from advertising agency DX starting in FY 2021 →)3(Professional Service, transferred from EC PF →)
84
51
27
-1
142
214
210
153
-121
46
199
247
-0.1%
16.1%
23.5%
19.5%
12.2%
-7.9%
2.4%
8.6%
9.5%

(Ref) Prepared by Alpha-Win Research Dept. from the Company’s financial results summary, financial results briefing materials, and interview. CE: theCompany’s estimates. A part of the segment sales for the past as well as this fiscal year is based on Alpha-Win’s estimates.

The Marketing PF segment’s sales are disclosed for the following three
categories, which are further composed of seven subcategories.
（1）Advertising effect measurement: ①AD EBiS accounts for 89% of thesales of this category (Figure 8 on page 12).
11/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18(2) Advertising agency DX: accounts for 7% of sales but most of its sales arefrom ①AdRepo.
(3) New services: still in the start phase and currently accounts for only 4%of sales.

w Sales of advertising effectmeasurement is 89% of
the total sales ofMarketing PF and about
78% of entire sales of theCompany (both in FY2021).

“*Other” consists of the previous Professional Service (DMP, etc.), but since
its sales are very small, it is not defined as a category.

【Figure 8】Breakdown of Sales of the Marketing PF Segment (FY 2021)*Other(3) New Services(1) Ad Effect Measurement

7％(2) Ad Agency DX
AdRepo4％MarketingPF

Ad-Knowledge

89％

Sales
Breakdown(FY 2021)*ADHOOP was transferred from (2) Advertising Agency DX to (3) New Services in line with business area expansion.

(Ref) Figure 8-9 were both prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

The flow chart in Figure 9 shows the relationship between the provided
services and customers of each business of the Marketing PF segment. It is a
B2B business in which advertising agencies and corporate advertisers are thecustomers. In terms of sales in the previous fiscal year, the cloud services
accounted for about 97% of this PF segment.

w B2B business. The cloudservice accounts for mostof the Company’s entire
sales.

【Figure 9】Marketing PF Segment’s Business Flow Chart
Provide cloud services (ad effect measurement)①

Advertising agencies(sales agencies/customers)
Ad service(3) New Services

Provide cloud services(CX improvement)②
Provide personal services(website creation / video production / SNS account operation)③④(Matching service)①

Referral(2) Advertising Agency DX

Provide cloud services(report creation / project management)①

AdRepo②Ad-Knowledge

Advertising agencies(customers)

Advertising agencies(customers)

Ad service

Corporate advertisers(non-customers)

Receive orders

Corporate advertisers (customers)(1) Ad Effect Measurement

12/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

I. (1) Advertising Effect Measurement
With the withdrawal from THREe, the advertising effect measurement
category currently consists of only AD EBiS.

I. (1) Advertising Effect Measurement: ① AD EBiSw Its core product is AD

EBiS, an originallydeveloped product. It isan Internet ad effectmeasurement system forunderstanding the costeffectiveness of ads.

AD EBiS, the Company’s Proprietary Product
AD EBiS is the Company’s main product (78% of the Company’s total sales).
It was originally developed and is an Internet advertising effect measurement
system that allows the collective management, measurement, analysis, andvisualization of the effect of Web ads, etc., to help users assess the costeffectiveness of ads.
It comprehensively provides a one-stop marketing environment where users
can “utilize” marketing data accumulated by the “measurement” function to
maximize sales or acquire prospective customers in proactive marketing.
With the increasingly diversified and dispersed consumer behavior of today’s
Internet society, marketing and advertising over the Internet have also become
more sophisticated and complicated, increasing the necessity of incorporating
technology in their operation. The Company offers, at a reasonable price,software that can accurately evaluate and leverage the effect of Internet ads
through various methods of analysis, including various functions (admeasurement, analysis, evaluation, etc.). It also provides full software support.

Sales of AD EBiS
Number of
Accounts

×

Average
Unit Price(monthly)

w Service is provided as a
SaaS based on a
subscription-based
business model.

w AD EBiS’s number ofaccounts and average unit
price are the KPIs.
(7) Subscription-based businessmodel: A business model whereusers pay for the provided
service based on the durationof use. See page 22 for details.
w Well-known companies
are among customers too.
w Changed to packagedplans with new pricing,
resulting in significant
rise in unit price.

Merged ADPLAN with AD EBiS
After acquiring the ADPLAN business, the Company had continued its service
for a while. However, to improve the efficiency of system development andupdates, it had shifted and merged the business with AD EBiS in December
2020. Afterwards, ADPLAN’s customers were migrated to AD EBiS andADPLAN was discontinued in March 2021 after complete integration into one
business.
Business Model
AD EBiS is provided as SaaS based on a subscription-based business model7(details shown in Figure 16 on page 22). It is a business model based on flatrate, periodic payments. Its sales are determined by average unit price ×
number of active accounts. Both numbers are key performance indicators(KPIs) for AD EBiS as well as for the entire company.
Customers
It is a B2B business. AD EBiS’s main customers include WOWOW, Lion,
Kracie, sansan, Lifenet Insurance, Zwei, Z-KAI, and Bridgestone Cycle. The
number of ADPLAN’s accounts were estimated to be a little more than 100
companies at the time of merger, many of which are large, blue-chip companies
that sell branded products throughout the country.
Price System
AD EBiS’s pricing plan used to be a pay-per-use based on multiple parameters.
However, in June 2018, the Company introduced a new price plan based on aflat-rate price table with basic functions and support packaged together.
Options (various external linkage functions for reporting, etc.) can be added toa plan. New contracts have already been migrated to this new price system,and pricing has also been again changed after this.
13/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Change in the Average Unit Price
Change in the average unit price at of the end of each quarter (end of the final
month of each period) is shown in Figure 10. There used to be a significant
seasonal variability between quarters, but after the transition to thesubscription-based business model, an upward and linear trend has been
maintained. The average unit price has been rising for 14 consecutive quarters
since Q2 of FY 2018. The average unit price has grown by about 2.5x over the
past five years.

w Due to the version
upgrade, change inpricing due to theaddition of new
functions, and acquisitionof new customers withhigh unit price, AD
EBiS’s unit price per
customer has been
increasing for 14
consecutive quarters. It
grew by about 2.5x overthe past five years.

From the end of FY 2019 to the end of FY 2021, the monthly average unit price(average as of the end of the month; the same applies below) changed from
Y107,143 ⇒ Y126,825 (+18.4% or +Y19,682 YoY) ⇒ Y152,136 (+20.0%
or +Y25,311 YoY). In the previous fiscal year, the average unit price increased
due to the cancellation of low-priced contracts, the acquisition of new andhigh-priced customers, and price revision following the change to higher
functionality.

w Last fiscal year, theaverage unit price rose by
20%.

[Figure 10] Change in the Average Unit Price of
AD EBiS[Figure 11] Change in the Number of Active Accountsof AD EBiS

Thanks to rise in unit price of new customers due to the change in price system,
monthly average unit price has been rising for 14 quarters in a row(Y)160,000

152,136

140,000

146,310ADPLAN acquired

126,825 141,086
135,930

120,000
120,070

Change inprice system

80,000ADPLAN

Change inprice system

1,600

acquired

1,569

1,500

1,518
1,400

1,513

1,300

124,032
100,000

Number of accounts still decreasing(# of accounts)

1,516

1,543

1,433 1,438
1,425

1,451

1,464

1,291
1,413
1,363
1,311

1,200

111,587
1,100

Q4→Q1
seasonal
variability

107,143
1,000

102,262
98,042900

86,62160,000800

84,91879,525700

40,000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2021(Ref) Figures 10-11 were prepared by Alpha-Win Research Dept. based on the financial results briefing materials. The former ADPLAN’s values
are also included in AD EBiS after the acquisition.

w AD EBiS’s number ofactive accounts is still on
a net decline trend
decline partly due to theimpact of COVID-19. The
challenge will be to
implement measures torealize a net increase.

Number of Active Accounts
On the other hand, based on end-of-the-quarter figures, the number of active
accounts had been consecutively increasing until the end of Q1 of FY 2019(end of Dec 2018), but then declined after this for three quarters in a row due
to contract cancellations in response to the price revision.
However, in FY 2020, the number of accounts slightly increased in Q1 to 1,438
companies (+13 companies or +0.9% QoQ). In Q2, the number increased to1,543 companies (+105 companies or +7.3% QoQ), partly due to theincorporation of ADPLAN’s customers.
Then, due to the impact of COVID-19 which caused a temporary suspensionof services and contract cancellations, the net number of accounts decreased
for six quarters in a row to 1,290 by the end of Q4 of the previous fiscal year
(Figure 11 on page 14).
14/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Sales
The rise in unit price and decline in the number of accounts so far reflect theCompany’s strategy to prioritize high unit price over the number of accounts.
Since Q3 of FY 2018, due to the transfer of existing customers to the newprice system, cancellations of low-priced contracts and contracts made via
sales agencies have increased.

w Decline in the number ofaccounts of AD EBiS has
been offset by the rise in the
average unit price. Sales (inamount) of AD EBiS has
been continuing to grow at a
double-digit rate.

However, the rise in the unit price has more than compensated for the sluggish
progress with the number of accounts so that the sales of AD EBiS have beenable to continue to grow each year at a rate of about 10-20% YoY (Figure 7
on page 11).
Churn Rate
The monthly average churn rate of AD EBiS over the last 12 months (monthly
average churn rate = current month's churn amount ÷ previous month's sales)
was newly set as a KPI and has been disclosed. The rate has been decreasing
on a quarterly basis, but was 2.5% in Q4 of the previous fiscal year (Figure
12).

w Average monthly churn rateof AD EBiS is currently
2.5%. Aims to improve thisto 2.0% by the end of thisfiscal year.

If we estimate the monthly sales of AD EBiS to be Y196.4 million based on
the unit price and the number of accounts at the end of the previous fiscal
year, the decrease in sales due to cancellation would be Y4.9 million permonth and Y58.8 million per year. This is equivalent to about 32.3 accounts
per month and 387 accounts per year when calculated from the number ofaccounts at the same point in time, or 1,290.
(8) Onboarding： A series ofprocesses to support new users (ofAD EBiS) in learning how to use
and operate the software, thereby
increasing satisfaction andencouraging continued use.

According to the Company's analysis, about 40% of cancellations are madewithin one year of contract. The main reason for cancellation is that
customers started using the software but could not use it effectively.
Therefore, the Company aims to strengthen onboarding8 to reduce earlycancellations. It aims to reduce the churn rate by 0.5% (by about Y1 million
or about 6.5 account cancellations per month) to 2.0% (Y3.9 million or about
25.8 account cancellations per month) in one year or by Q4 FY 2022.

【Figure 12】Change in Monthly Average Churn Rate of AD EBiS
3.5%
3.0%

2.8％

2.7％

2.9％

Definitions
2.7％

2.5%

2.5％

2.0％

2.0%
1.5%
1.0%
0.5%
0.0%
Q4
FY 2020Q1Q2Q3FY 2021

Q4

Q1

Q2

Q3

Q4

・Monthly churn rate =churn amount during themonth ÷ previous
month's sales
・Since there is seasonalvariability in cancellations
due to when fiscal years
end for corporate
customers, etc., 12-months
moving average was used
to understand trends.

FY 2022 Forecast(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

15/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w AD EBiS: top share in
Japan’s Internet ad effectmeasurement system
market for 5 years in a row(source: ITR’s “ITR Market
View: Mail / Web
Marketing Market 2020,”
prediction for 2015-2019). In
the most recent later survey,
its share was extremely highat 86.7%.

Market Share
Since its release in 2004, AD EBiS has been used by more than 10,000 users
in total and has gained the top share in Japan’s Internet advertising effectmeasurement system market from 2015 to 2019 for five years in a row.
Furthermore, its share has been increasing year by year, and an extraordinary
share of 86.7% as the solid No.1 player was acquired according to the mostrecent market research, partly thanks to the acquisition of the ADPLAN
business (Figure 13).

[Figure 13] Share of Sales (in amount) of the Advertising EffectMeasurement Market by Vendor

YRGLM
86.7％
・Nol 1. sales share・No.1 software used in Japan・No. 1 software used in EC market
・No. 1 B2B SaaS used by companies

w Sequential, full update of
AD EBiS starting in Jan
2021. Plans to strengthen
product and expand sales.
(9) UI: Abbreviation for userinterface. The part directly
accessed by the user.
(10) D2C (Direct to Consumer):selling directly to consumers(model)(11) API (Application
Programming Interface): A
protocol that defines procedures,
data formats, etc., for accessing
and using functions and managed
data of computer programs fromexternal programs.
w AdRepo enables automatic
creation of reports for
programmatic advertising.
Customers are advertising
agencies. The Company
intends to actively expand
this business to createsynergy with AD EBiS.

(Ref) Researched by the Japan Marketing Research Organization; summary of June 2021 survey oncompetition in designated areas. Prepared by Alpha-Win Research Dept. based on the notice ofconvocation of general shareholders meeting.

Major Update of AD EBiSThe Company had announced that it will sequentially release a major (full)
update of AD EBiS starting in January 2021. In this full update, the Company
has provided a complete renewal of the UI9 as well as more than 20 additional
functions, including an LTV (Customer Lifetime Value) analysis function
specialized for D2C10/subscription-based business models, and the renewal of
the API11 for connecting AD EBiS with external services. Through this update,users can analyze and utilize data "easier and faster."With the update, the Company also renewed AD EBiS’s product logo andservice design. By strengthening its product, the Company hopes to expand
sales through the acquisition of new customers, upselling, and cross-selling.

I. (2) Advertising Agency DX: ①AdRepo
In August 2018, the Company acquired AdRepo, an automatic reportgeneration tool for programmatic advertising. It has been developing thisbusiness in full scale since the beginning of FY 2019. AdRepo is a tool thatfully automates the creation of reports in linkage with major advertising
platforms. It is a cloud service that has been developed to reduce the workloadof advertising agencies in creating reports for programmatic ads.
Its sales at the time of acquisition were about Y150 million. By acquiring newcustomers and creating synergy with AD EBiS, the Company plans to develop
and strengthen this business as its growth business.

16/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Third largest share in themarket.
w Added functions(12) Customer success: Activities
aimed at maximizing LTV byproactively working on leading
customers to success.

It is a latecomer product and its market share in Japan is third from the top,
behind ATOM (SO Technologies, Inc.: wholly owned subsidiary of SoldOut,
Inc [TSE First Section 6553] and previously called TechLoCo Co., Inc.) andglu (ATALA LLC: not listed; one of the Company’s partners).
In addition, in July 2021, the Company started the "Smart Analysis Function"(a function that automatically outputs analysis of programmatic ad reports thatused to take much time and workload) to improve the efficiency of reporting
operations and support DX at advertising agencies. Going forward, it will aim
to reduce costs and improve profitability by improving the products,
strengthening customer success12 management, and renovating the basic
programs.

I. (2) Advertising Agency DX: ②Ad-Knowledge
w Started Ad-Knowledge, acloud-based project
management system/service
for advertising agencies.
Will support improvement
and streamlining ofoperations of advertising
agencies.
(13) Programmatic advertising: An
advertising method where
optimization of ads is conducted
automatically or supported
immediately. After submitting anad, optimization is conducted,
leading to better results.

The Company newly developed this cloud-based project management system
for advertising agencies and launched the service in July 2020. Through thisservice, it supports the improvement and streamlining of the operation ofadvertising agencies who work with programmatic advertising13.
In Japan, the mainstream for Internet ads is programmatic advertising with aflexible control of budget limit, distribution period, and distribution method,and many companies are indeed using this type of advertising. However, since
its operation requires expertise, experience, time, and much workload,
companies often ask advertising agencies to manage the ads for them.
However, since advertising agencies normally manage a wide range ofadvertising projects at the same time, they have been experiencing muchworkload in project management, including the timely checking and tuning ofadvertising results, progress management, and invoice processing.
Therefore, utilizing the know-how gained from its years of experience with the
AD EBiS business, the Company offers Ad-Knowledge as a solution to theseissues and aims to contribute to the customer success of advertising agencies.
Like AD EBiS, this service is offered as a subscription-based service (SaaS).

I. Other: Former Professional Service BusinessThis category has only one client and sales are very small. The private DMP
business is recorded under this “*Other” category that does not belong to theother three categories of the Marketing PF.

17/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

I. (3) New Services
w The new services arecomposed of fourbusinesses.

The new services are the four businesses of ①AD HOOP, ②eZCX, ③Spoo,and ④TOPICA. ① and ② are cloud services that have been developed inhouse, and ③ and ④ are professional services by companies acquired throughM&As.

I. (3) New Services: ①AD HOOP
w AD HOOP’s category waschanged to the newservices.

w AD HOOP is a service
that introduces the mostsuitable advertising
agency to advertisers.
w A business model inwhich referralcommissions are received
from advertising agencies.

(Previously, “Advertising Agency Referral Service”; name changed in Jan 2021)

AD HOOP is an advertising agency matching platform. Its category has beenchanged from advertising agency DX to the new services in consideration of
future business area expansion.
In May 2020, it was started as a new service in which the most suitable
advertising agencies are introduced to Internet advertisers. Using its networkof more than 300 advertising agencies and information that it uniquely
possesses, the Company selects and introduces a candidate agency that suits
each advertiser in a one-stop support system. Through this service, advertisers
can efficiently find agencies with the best matching and improve theperformance of Internet advertising.
Advertisers can use the service for free, but the Company receives
consideration from the advertising agency when an appointment is madebetween the two matched parties.
The service content was renewed in the previous fiscal year, and sales
increased by 8x compared to the fiscal year before the previous. Going forward,
the Company plans to provide new functions (creating new registration site,etc.) for corporate advertisers and increase areas of matching to improvematching efficiency and speed, and thus achieve high growth.

I. (3) New Services: ②eZCX
w Launched the originallydeveloped, ECspecialized CX
improvement platform“eZCX”(14) CX or Customer
Experience: the customer
experiences a product orservice, and evaluates the valueof the experience.

The CX14 market has been growing annually by 30%, and “eZCX” is an ECspecialized CX improvement platform based on the concept of “anyone caneasily use.”
In July 2021, the Company started providing the official version of “eZCX,” anew service that supports sales expansion by customers through the
improvement of CX on websites. By providing EC-specific preset functions,effective implementation of customer experience strategies and measurements
can be done using simple settings.
Using the user behavior data that the Company has accumulated through its
AD EBiS business, the service will analyze the users’ feelings to provide themost suitable experience to users at the most appropriate timing, and thus help
improve the acquisition of new customers.
The service has received positive feedback from its early corporate users, who
experienced a maximum of 10% improvement in CVR (conversion rate; rateof successful contracts made). The full contribution of this business to theCompany’s sales is expected to start this fiscal year.

18/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

I. (3) New Services: ③Spoow Acquired Spoo! inc., a
web media and design
company. Plans toleverage its creativity andhuman resources.

On December 30, 2020, the Company acquired Spoo as a wholly owned
subsidiary (consolidated subsidiary). Spoo was founded in March 2000 and isin the business of web media and design.
Its customers include ADK Marketing Solutions and Sapporo Real Estate.
Going forward, the Company plans to integrate Spoo’s creativity and humanresources with the Company’s data and technology to create new values,
expand into more areas of business, and strengthen its competitive edge andcross-selling.
Also, through a joint project with Spoo, the Company started providing the"Jirei Zamurai (Case Study Samurai)" (B2B service that creates contents forsharing actual cases of software implementation) in November 2021.

w Also acquired TOPICA
Inc., which works on amarketing support
business utilizing SNS
and videos.

I. (3) New Services: ④TOPICA
On July 30, 2021, the Company acquired a 60% stake in TOPICA Inc.
(headquartered in Shinjuku-ku, Tokyo; Shunsuke Fumoto as representative
director; founded in May 2016; capital of approximately Y37 million;
hereinafter, “TOPICA”) for about Y220 million (market capitalization of
TOPICA was about Y350 million). Since the fourth quarter of the previous
fiscal year, it has been the Company’s consolidated subsidiary.
TOPICA’s results for FY 2021 (ended April 2021; the most recent fiscal year)
were as follows: sales of Y156 million, net profit of Y4 million, and net assets
of Y83 million. Based on these actual values, P/E is 87.5, P/B is 4.2, and P/S(price-to-sales ratio = market capitalization / annual sales) is 2.2. Compared to
the Company's consolidated results (for FY 2021), TOPICA’s sales are 5%,
net profit is 2%, and net assets are 5% of the total.

w Expecting synergy with
the Company throughcross-selling and newservice development.

TOPICA works on a marketing support business that utilizes SNS and videos
and provides a series of services ranging from the planning and production ofvideo contents to operation services for SNS accounts. With the acquisition,
the YRGLM Group will expand its business domain to the rapidly growing
social media marketing market and cross-sell TOPICA’s services to its current
corporate customers (around 1,300 companies).
In addition to this, the Company plans to integrate its data and technology
businesses with TOPICA’s SNS marketing business to develop and provide
new services.

19/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Business Details: II. EC PF Segment

w EC PF Segment is now
specialized in EC-CUBE.

Until FY 2018, the EC PF Segment had been composed of (1) EC-CUBEand (2) the previous SOLUTION business.

w The EC-CUBE business ismanaged by EC-CUBE Co.,
Ltd., the Company’s
consolidated subsidiary.

Currently, the EC PF segment only consists of the EC-CUBE business, which
is managed by the consolidated subsidiary EC-CUBE Co., Ltd. (Figure 14).

【Figure 14】Change in Sales and Operating Profit of the EC Platform Segment
Sales(million yen)
II. EC Platform(1) EC-CUBE
EC-CUBE sales growth rate (YoY: %)①Shopping settlement fee②Subscription③Other(2) SOLUTION (transferred / withdrew)① EC contract development, EC website consulting, etc.
Of which is DMP (transferred)
Segment's operating profit
Segment's operating margin

FY 2012parent
323
150

174
174
98
30.5%

FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
FY 2022 CE FY 2023 CE
parentconsolidated consolidated consolidated consolidated consolidated consolidated consolidated consolidated consolidated consolidated
422
477
526
539
465
275
253
301
358
380
410
207
245
230
219
208
254
253
301
358
380
410
38.1%
18.3%
-6.1%
-4.8%
-5.2%
22.2%
-0.4%
19.0%
18.9%
6.1%
7.9%
290
12
54
214
232
296
319
257
20
0
0
0
214
232
296
319
257
20
0
0
0
104
75
107
136
38
-60
22
39
78
119
17.8%
22.5%
25.8%
7.1%
-12.9%
8.2%
15.4%
26.1%
33.1%

(Ref) Prepared by Alpha-Win Research Dept. from the Company’s securities report, financial results briefing materials, and interview. Includes estimates.

w In terms of the number ofusers, EC-CUBE is the No.1
shopping cart system usedby online stores withmonthly sales of Y10
million or greater.

(15) Open source software: The
source code, which is basically the
blueprint for software, is madeavailable free of charge, letting
anyone revise and redistribute it.
(16) Freemium Model:“Freemium” is a coined word thatcombines “free” and “premium.”
Refers to a business model thatgenerates revenue by offering
basic services free of charge whilecharging fees for moresophisticated or specially added
related services.

II. (1) EC-CUBE
EC-CUBE is an open source software15 platform whereby users can create
and manage EC (e-commerce) websites on their own. The Company provides“EC-CUBE (download version)” as free packaged software for web design
to companies that will begin selling and providing products and services
online. It is a long-selling shopping cart product with 15 years of history,
estimated to be used at 35,000 stores.
Characterized by low cost, high customization, and user-friendly interface, it
has the largest share in the Japanese market and is currently the standard
platform.
EC-CUBE Co., Ltd. has set up a Freemium Model16 in which it offers thesoftware for free but in return earns revenue from peripheral services.
Revenue is made through shopping settlement fees from official partners inInternet businesses (payment agencies, etc.), function addition fees, and eccube.co’s subscription income (Figure 15).

【Figure 15】Breakdown of Sales of the EC PF Segment (FY 2021)
Subscription sales

Subscription-based revenue
from "ec-cube.co," the cloudversion of EC-CUBE

4％
15％

Sales from shopping
settlement fee

EC PF
Other

Sales
Breakdown(FY 2021)

81％

Fees received from partnered
shopping settlement agencies for
shopping settlement plugins for ECCUBE

Sales of plugins and templates at
Owners' Store and advertising
revenue(Ref) Prepared by Alpha-Win Research Dept. from the Company’s financial results briefing materials.

20/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

The development of the new version “EC-CUBE4” was released in October
2018 and has gone through several updates. Its cloud version “ec-cube.co(paid version)” was also released in February 2019. As the EC market
expands, financial performance has been improving at a solid pace with theincrease in payment agency fees, etc..
w Orico acquired shares of
EC-CUBE Co., Ltd. to form
an alliance. Plans to take in
EC- and DX-related demand
to expand business.

With the capital and business alliance with Orico that was started in
December 2020, the Company plans to expand the sales of “ec-cube.co,”increase customers, and expand business through Orico’s customer networkand sales power. Business is also planned to be expanded by providing
support for Orico’s 830,000 member stores in starting EC.
For Orico, this alliance will allow it to effectively take in the rising EC
demand and thereby increase revenue from shopping settlement fees, etc.
Therefore, this alliance seems to be a win-win situation for both companies.
Going forward, the Company plans to expand the EC PF business too, withalliances with other companies included as a strategy.

w The EC PF’s maincompetitors are listed
corporate groups.

w With Shopify entering themarket, competition isintensifying.

Also, as described on paged 7-8, EC-CUBE has earned a high score in an
online store trend survey. In the EC platform market (packaged software fordevelopment of EC websites), the following listed companies seem to beproviding similar services (in the order of product/service name, operatingcompany or group, market, and securities code). EC-CUBE Co., Ltd. targets
high-end customers, and mainly competes with ecbeing and Commerce21.
・BASE: BASE, TSE Mothers, 4477
・ecbeing: SOFT CREATE HD, TSE First Section, 3371
・Commerce21: Estore, JASDAQ, 4304
・ebisumart: Interfactory, TSE Mothers, 4057
・futureshop: Commerce One Holdings, TSE Mothers, 4496
In addition, Shopify Inc.* listed on New York and Toronto’s stock exchanges
seems to be beginning to compete with EC-CUBE Co., Ltd., as it makes afull-scale entry into the Japan market (*multinational e-commerce company
based in Canada, hereinafter referred to as “SHOP”; ticker SHOP, market
cap of $116 billion, P/E of 547, and P/B of 28).
Shopify, the world's largest EC website production platform provided by
SHOP, is expanding as a platform with abundant customization functions andpayment methods, simple and easy-to-use interface, and excellent cost
performance.

II. (2) Former SOLUTION Business
w The Company transferred
the SOLUTION business(EC contract development)
to its equity-method
affiliates and has
withdrawn from thebusiness.

The former SOLUTION business had been composed of several businesses.
However, with the restructuring of business, its main EC contractdevelopment business had been transferred to affiliated companies that theCompany owned 20% of shares each, even though the business had been
profitable. Then, the Company withdrew from the business (reflected in nonoperating profit/loss as profit or loss accounted for by the equity method).
This business is no longer among the segments that are reflected in the
consolidated sales.

21/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Subscription-Based Business Model (supplemental
description)
w The subscription-based
business model enables
continuous and stable
generation of profit bycharging fees for every
certain period of use.

Overview

w Initial costs are incurred
immediately after new
contracts are made but aregradually offset over thecourse of time, so that profit
begins to accumulate
steadily.

Although expenses will precede at the beginning of a new contract, including
marketing and sales activity expenses for customer acquisition and R&D
expenses, over a customer’s lifetime (the period from the start to the end oftransaction with a customer), revenue is accumulated continuously,
increasing the customer lifetime value (LTV: cumulative profit generated
within a contract period). Therefore, it is a business model that enables stable
growth.

In the Marketing PF segment, which accounts for approximately 88% of theCompany's total sales, 89% of its sales (78% of the Company’s entire sales)
are from the SaaS (cloud), flat-rate billing model (subscription model).
In the subscription-based business model, users pay a predetermined,
packaged price for the service contents or the use of system services such as
AD EBiS during a certain contract period, enabling continuous generation ofrevenue until the contract becomes cancelled. In addition to the core business
AD EBiS, a similar business model is also used in the EC-CUBE and theadvertising agency DX businesses, although their sales are small.

Change in the LTV (cumulative profit/loss) per Customer
Figure 16 shows the model for the change in the Company's cumulative profit
and loss over the average subscription contract period of three years.

[Figure 16] Model of the Change in LTV per Customer (cumulative profit and loss)

LTV

 for
 Change


Model
in LTVper
Customer

1

2

3

4

5

6

7

8

9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

TimeFirst year

Investment phase
Expenses for customer
acquisition precede

Second year

Third year

Return phase

After investment payback, profit steadily accumulates over thelong term(Ref) Financial results briefing materials

In the month that a new contract is made, all expenses become recorded, sothat an overall loss is recorded for that particular month. However, since theCompany can then earn an almost fixed amount of sales revenue every monthstarting in the first month of contract, the cumulative break-even point (zero)is reached after eight months. From the ninth month, the cumulative
profit/loss (LTV) turns into a surplus and profit accumulates until the 36thmonth when cancellation is expected.

22/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

In other words, it is a model with a time lag; during the phase that the numberof contracts is increasing at an accelerating speed, there will be little
contribution to profit in the first year, but profit will then accumulate on acontinual and stable basis from the second year until the end of contract.
The Company sets the upper limit of the initial cost to be about 30% of theLTV (the final cumulative profit; the rightmost end of the graph in Figure 16
on page 22) and controls the initial cost related to new contract acquisitions
accordingly.

23/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

3．Shareholder Composition◆ Change in Composition by Shareholder Typew Individuals hold anextremely high proportionof shares: about 91%.

Regarding shareholder composition by shareholder type as of the end of
September 2021 (Figure 17), compared to one year ago, the proportion of“individuals, etc.” has increased from about 83% to about 91% of the total.
On the other hand, “financial institutions, etc.” has decreased from about 8%
to about 4% and “overseas corporate entities, etc.” too has decreased from
3% to a little more than 1%.

[Figure 17] Change in Shareholder Composition by Shareholder Type (unit = %)
(%)

100
95
90
Individuals, etc.

85
80

~

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

10
9
8
7
6
5
4
3
2
1
0

Financial
institu tion s, etc.
Overseas corporate
entities, etc.
Other corporate
entities
Financial
instruments
business operators
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021at year-end(Ref) Prepared by Alpha-Win Research Dept. based on the Company’s securities report, etc.

◆ Major Shareholder Composition

w No significant changes tothe major shareholders.
Parties affiliated with theCompany (former andpresent executive officers
plus the employee stock
ownership plan) possess
about 60% of all shares intotal.

The major shareholders as of the end of September 2021 are shown in Figure
18 on page 25. The following is supplementary information. Compared withpast periods, the major shareholders have essentially not significantly
changed.
・The largest shareholder owning greater than 40% of the shares is Susumu
Iwata, the current president, founder, and owner.
・The second and third largest shareholders are both former executive officersof the Company (they have been continuing to gradually sell their shares).
The shares of the former and present executive officers of the Company,
plus the employee stock ownership plan at sixth place, amount to greaterthan 60% of the total shares.
・The fourth and the fifth largest shareholders are the Custody Bank of Japan.
Its final investors are unknown since it is a custodian (financial institutionthat manages securities on behalf of investors), but it has been owning theCompany’s shares since when it used to be trust banks. The Custody Bankof Japan was founded in July 2020 through the merger of the threecompanies JTC Holdings, Japan Trustee Services Bank, and Trust &Custody Services Bank. It is now the largest bank specialized in asset
management in Japan.
According to the Report of Possession of Large Volume (the “5%-rule”
report) submitted on July 31, 2019, 328.4 thousand shares (5.15% of
outstanding shares) were mainly incorporated in the “MHAM Emerging
24/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Growth Stock Open” portfolio (also called “J-Frontier”) managed by AssetManagement One (hereinafter, “AMO”). Some of these shares were later soldand the portfolio had 246.2 thousand shares (3.9% of outstanding shares) as
of February 25, 2020, and 100 thousand shares (approx. 1.7% of outstanding
shares and 0.37% of the fund’s portfolio) as of February 4, 2021.

w Invested by several
investment trusts

The Company’s stock is also incorporated in the “Japan Emerging Equity
Open” managed by Nikko Asset Management and “The 2020 Vision”
managed by Commons Asset Management (as of 12/18/2020, 103.5 thousand
shares and 49.9 thousand shares were owned, respectively). These
investments are most likely being conducted under the names of custodiansthat are among the major shareholders, although this cannot be confirmed.
・The seventh largest shareholder is Hakuhodo DY Media Partners Inc., theCompany’s sales agency.
・ The final investors and purpose of the ninth largest shareholder
J.P.MORGAN SECURITES PLC is unknown.
・The eighth and tenth shareholders are individual investors who are also
investing as major shareholders in several Japanese listed companies.
・Currently, there seems to be no activist among the investors.

w Individual investors arealso among the major
shareholders.

At the end of September 2018, the number of treasury shares owned by theCompany was 983 shares. Then, the Company bought back some of its sharesin February and March of 2019 (a total of about Y100 million at an averagestock price of Y1,363), increasing its treasury shares to about 81.4 thousand
shares by the end of September 2019. Following this, the Company used a
portion of the shares as transfer-limited, stock-based compensation for its
executives and employees, and as of the end of September 2021, it owned
about 57.8 thousand treasury shares (about 0.9% of all outstanding shares).
In November 2021, it bought back 53 thousand common shares (0.8% of
outstanding shares) for Y69 million (average purchase price of Y1,311 pershare). The Company may also potentially use the treasury shares for M&A
and alliance strategies as well as stock-based compensation for its executives
and employees.

w As of the end of September,it owned about 0.9% (about
58 thousand shares) of all
outstanding shares astreasury stock. In
November, it purchased an
additional 53 thousand
shares (0.8% of all
outstanding shares) in ashare buyback.

[Figure 18] Current Major Shareholders (units: thousand shares, %)End of Sept.
2015

End of Sept.
2016

End of Sept.
2017

2,851
1,071
415
―
―
76
60
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
39
―
―
62
―
30
34
26

2,817
1,021
415
―
―
39
60
―
―
―
―
―
―
59
―
―
―
―
―
―
―
―
29
―
―
62
36
35
―
―

2,817
1,021
352
―
―
48
60
―
―
28
―
―
―
―
60
―
60
―
―
―
―
―
29
28
24
―
―
―
―
―

Susumu Iwata (president and CEO)Hiroichi Fukuda (former executive vice president)
Kanako Mataza (former director and senior executive officer)
Custody Bank of Japan (trust account)
Custody Bank of Japan (securities investment trust account)
YRGLM Employee Stock Ownership Plan
Hakuhodo DY Media Partners Inc.
Yoshihisa Yamashita (indiv.)
J.P. MORGAN SECURITIES PLC
Tomonori Yamada (indiv.)
UEDA YAGI TANSHI Co., Ltd.
au Kabucom Securities
Mitsubishi UFJ Morgan Stanley Securities
Japan Trustee Services Bank (former name)
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)
SBI SECURITIES Co., Ltd.
Trust & Custody Services Bank (former name)
Rakuten Securities, Inc.
GOLDMAN SACHS INTERNATIONALUEDA YAGI TANSHI Co., Ltd.
Katsuyuki Ito (indiv.)
Akiko Takashima (indiv.)
Kenichiro Wade (former outside director)
Yoshio Takayama (indiv.)
Kayoko Nagano (indiv.)
SEPTENI CO., LTD
Matsui Securities Co., Ltd.
Japan Securities Finance Co., LTD
Yoichi Nishikawa (indiv.)
Akio Shiojiri (former director: audit committee member)End of Sept.
2018

2,819
961
354
―
―
69
60
―
―
―
―
―
―
60
―
―
29
72
―
―
52
29
―
―
―
―
―
―
―
―

End of Sept.
2019

2,822
801
353
―
―
68
60
―
―
―
―
―
―
333
―
―
123
64
284
113
―
―
―
―
―
―
―
―
―
―

End of Sept.
2020

2,825
781
352
221
169
71
60
―
―
―
86
62
58
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―

End of Sept.
2021

2,827
817
329
128
82
66
60
54
35
33

←Shareholding %

44.7
12.9
5.2
2.0
1.2
1.0
0.9
0.8
0.5
0.5

←Ranking

1
2
3
4
5
6
7
8
9
10

(Ref) Prepared by Alpha-Win Research Dept. based on materials including the shareholder convocation notice and securities report. Words in red
indicate groups and individuals affiliated with the Company.

25/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

4．ESG
There has been no large change over the past year.

◆ Environment
Company’s business is not the kind that harms the environment. It is working
on conserving energy by saving electricity, etc.

◆ Society
The Company’s business contributes to improved operation efficiency andbusiness expansion of its users through its Internet marketing tools.

Social Initiatives
w Actively engaged in CSR.
Supporting future
entrepreneurs, nextgeneration human resources
development, and women
working in the technology
industry.

As measures against the COVID-19 crisis, the Company has set up a working
environment in which its employees can incorporate remote work, so that it
can ensure safety and smooth operations. Currently, most of its businessactivities are conducted and continued online. Also, the Company has been
actively engaged in CSR (corporate social responsibility) and has been
undertaking the following social initiatives.
・Osaka to the World, an initiative for the development of the local regions:
Osaka Startups – providing a support program for startup companies based in
Osaka and for those aiming to start a company in Osaka.
・ Promotion of Women's Active Participation in Society: supporting theimprovement of the status of women working in the technology industry basedon the philosophy of Girls in Tech Japan (Japan branch of the nonprofit
organization launched in 2007 in San Francisco, USA).
・Next-Generation Human Resources Development: providing opportunities
for students to learn the programming skills necessary for leading-edge
technologies through actual job experience in order to foster a young
generation of talents.

◆ Governance
The Company has adopted a company system with an audit and supervisorycommittee and delegates board decisions on executions of important businessmatters to directors to enable quick decision-making. Also, by incorporating
an executive officer system and separating business execution fromsupervision, the Company aims to improve management efficiency and speed.

w Half of the directors areoutside directors.

There are a total of six directors, of which three are outside directors who arealso audit and supervisory committee members (from Kobe Steel, Ltd. and
MUFJ Bank, Ltd.; certified public accountants). There is currently no woman
among the directors or the four executive officers.
As an incentive, the Company has a program in which shares are allotted todirectors (including directors who are audit and supervisory committee
members), executive officers, employees, etc., as transfer-limited, stock-based
compensation.
The Company has not adopted any anti-takeover measures.

26/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

5．History of Growth◆ Past Transition in Financial Results
Sales

w Developed and released
unique products that can bedifferentiated from othercompanies. Has grown
rapidly by predicting andmeeting the needs ofsociety ahead of others.
Currently hitting recordhigh sales every fiscal year.

From FY 2010 to FY 2013, during which account settlement wasnonconsolidated, the Company had increased sales for four consecutive fiscal
years. From FY 2014, when consolidated account settlement began, to FY
2021, the Company had achieved record-high sales consecutively for sevenfiscal years (according to the available disclosure materials, sales have been
hitting record highs for at least 12 consecutive fiscal years). During thisperiod, sales had increased by about 4.1x from Y730 million to Y2,960
million.
The Company has grown rapidly by developing and releasing uniqueproducts that can be differentiated from other companies and by predicting
and meeting the needs of society ahead of others. The consecutive
achievement of record-high sales was due to the rapid growth of theMarketing PF’s AD EBiS as well as the steady growth of the EC PF’s ECCUBE and former SOLUTION business.

w In FY 2015, record-highprofit was recorded.
w Since FY 2016, the Company
had been conducting
business restructuring andupfront investments,
prioritizing accelerated
future business growth overcurrent profit. A net loss
was recorded in FY 2018.

ProfitRegarding profit, the Company had stayed profitable both on anonconsolidated and consolidated basis up through FY 2017. In FY 2015, a
record-high operating profit of Y350 million and a record-high net profit ofY231 million were achieved. However, since FY 2016, the Company’s active
business restructuring and upfront investments had been increasing theexpenses, leading to a consecutive decline in profit despite increasing sales.
In FY 2018, the Company recorded a net loss (of Y88 million) for the firsttime since becoming listed on the market, due to upfront investments mainly
to hire more employees for development and sales (Figures 19 and 20).

w In FY 2019, operating andrecurring profits wereachieved in a turnarounddue to large sales growth. In
FY 2020 too, sales andprofits increased again, net
profit was posted in aturnaround with no more
extraordinary loss, anddividend was resumed. In
FY 2021, record-high sales
and profits were achieved.

In FY 2019, thanks to the structural reform as well as the significant sales
growth achieved in the Marketing PF business due to the rise in the average
unit price of AD EBiS and other factors, the Company posted both anoperating profit and a recurring profit for the full year in a turnaround. In FY
2020, too, carried-forward loss was entirely eliminated thanks to consecutive
growth of sales and profit, and dividend was also resumed. Then, in FY 2021,
it posted record-high sales and profits and entered a new growth stage.

【Figure 19】Transition in Past Financial Results andForecast (Units: million yen, %)【Figure 20】Change in the Number of Employees(Unit: persons)
200

Sales (left axis: million yen)
Operating margin (right axis: %)6,000

Operating profit (left axis: million yen)

5,000
4,000

30.0%

180

25.0%

160

20.0%

140

15.0%

120

3,000
10.0%

100

5.0%

80

0.0%

60

-5.0%

40

-10.0%

20

2,000
1,000
0
-1,000FY 2011

FY 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022CE

FY 2023
CE(Ref) Prepared by Alpha-Win Research Dept. based on the Company’s securities report.
CE: the Company’s estimate/forecast.
(Note) Consolidated results starting in FY 2014; nonconsolidated prior to this.

Development

184

Other

167
141

149

122
98

67

83

102

120

58

68

71

33

33

35

38

FY 2014

FY 2015

42

56

64

74

66

65

64

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 20210(Ref) Prepared by Alpha-Win Research Dept. from the Company’s
financial results briefing materials. Includes estimates.

27/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

6． Market Environment◆ Trends of Japan’s Advertising Market
Total Advertising Expenditure
Since the Great East Japan Earthquake, total advertising expenditure in Japan
had been growing for eight years in a row from 2012 to 2019 (calendar year;
the same applies to this entire chapter). However, over the long term, themarket has been flat. In 2020, the impact of COVID-19 had been large andcaused the market size to decrease by 11.2% YoY to about Y6.2 trillion.

Internet Ad Market
As the Internet is rapidly becoming used by more people for more purposes,
Internet advertising expenditure (sum of medium cost and production cost)has also been rapidly increasing and driving the growth of the entire
advertising expenditure. Internet advertising expenditure had increased
significantly from 2005 (point of comparison, set at 100) to 2020 by about
5.9x (annual growth rate of about 12.8%, on a simple average). In 2020, total
advertising expenditure had decreased YoY at a double-digit rate, but due toaccelerating digitalization of the society, Internet advertising expenditure had
maintained growth, growing by 5.9% YoY (Figure 21). Internet advertisingexpenditure, which is about Y2.3 trillion (continuing to grow for at least 16
years in a row since the beginning of the survey), accounts for about 36% of
the total advertising expenditure (source: Dentsu Inc.’s “2020 Advertising
Expenditures in Japan”). Its share in the market has been increasing byseveral percent every year, becoming the largest advertising medium andsurpassing the share of television (27% share).

w Internet advertisingexpenditure grew by about
5.9x from 2005 to 2020. The
average annual growth rate
(simple average) was about
12.8%. Growth wasobserved in 2020 as well.
Surpassed TV advertising as
the largest advertising
media.

[Figure 21] Change in Advertising Expenditure by
Medium (Index: the year 2005 has been set to 100)

[Figure 22] Change in Monthly Sales of Internet Ads(100 million yen)

（％）

600%

1,600

50

550%

1,400

40

500%

Internet ads

450%

1,200

30

The four mass media

400%

1,000

Total advertising expenditure

20

Promotional media

350%

800
10

300%

600

250%

0

400

200%
150%

Internet sales (left axis)
YoY growth (right axis)
YoY decline (right axis)

200

100%

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2013

2014

2020年

Jan
Apr
July

2010

2019年

Jan
Apr
July
Oct

2009

2018年

Jan
Apr
July
Oct

2008

2017年

Jan
Apr
July
Oct

2007

2016年

Jan
Apr
July
Oct

2006

2015年

Jan
Apr
July
Oct

2005

2014年

Jan
Apr
July
Oct

2013年

0%

-10

1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月 9月 11月 1月 3月 5月 7月

Jan
Apr
July
Oct

50%

Jan
Apr
July
Oct

0

2015

2016

2017

2018

2019

2020

2021

2021年

(Ref) Figure 21: prepared by Alpha-Win Research Dept. from Dentsu Inc.’s “2020 Advertising Expenditures in Japan” (published every February).
Figure 22: prepared by Alpha-Win Research Dept. from the “Survey of Selected Service Industries” by the Ministry of Economy, Trade, and Industry.

w Significant recovery iscurrently observed for theInternet ad market.
w Internet advertising is
expected to return todouble-digit growth overthe medium to long term.

Current Situation
Although EC-related businesses have been experiencing a boom with thestay-at-home trend, the COVID-19 crisis had caused the Internet advertisingmarket as a whole to shrink on a year-on-year comparison (based on the salesof the advertising industry announced by the Ministry of Economy, Trade,and Industry). However, since October 2020, the market has been growing
YoY again, and since April 2021 it has been growing by more than 30% YoY(Figure 22). Since Internet usage is predicted to still expand with thedevelopment of technology, once the society becomes adapted to the newnormal, Internet advertising expenditure will likely continue to grow annuallyat a double-digit rate.
28/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

-20

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w No competitor among major
corporations with a similar
service price range. Gained
greater competitive edge
through businessacquisition.

◆ Competitors
There seems to be no similar Japanese listed company that could be directlycompared with the Company. Its biggest rival product used to be ADPLAN,
but the Company has already acquired this business, so there is currently nomajor competitor with a similar service price range, and the Company isgaining a greater price advantage and stronger appeal toward potential
customers.

Similar Services in Japan(17) Google Analytics: A website
access analysis tool provided by
Google targeting SME users.
Analysis is only conducted within
Google’s website, and mostly thefree version is popular. The highspec, paid version seems to belong
to a high price zone.
(18) Adobe Analytics: An accessanalysis tool used by many large
websites. It can analyze
complicated and large data, ishighly customizable, and has
multiple and high-quality
functions, but the price is rather
high.

For advertising effect measurement and analysis tools, competing and similar
products are Google Analytics17 and Adobe Analytics16 widely used bydomestic SMEs (small/medium-sized enterprises) and Web Antenna (used bymore than 600 companies, including major companies as well as ventures)provided by the private company beBit, Inc. However, these other companies
are not specialized in the field, and their products’ function, measurementtarget, analysis content, and support system are limited. In comparison, theCompany's products are superior in terms of specifications, development
system, and support system, giving it a high competitive edge.
The Company’s target customer zone is the middle zone, encompassing midtier companies as well as listed companies. This is different from the highend zone targeted by the paid versions of Google Analytics and Adobe
Analytics (with price settings that are estimated to be about ten times greater
the Company’s).

Overseas Company as Reference

w The Company can becompared with the US-based
company HubSpot, Inc.,
which has rapidly grownthrough a similar
subscription-based model.

Although it is not a competitor, the US-based company HubSpot, Inc.
(NYSE: HUBS) is a listed company with a similar subscription-based
business model. HUBS is a company that develops marketing software andglobally provides marketing platforms that include functions such as sales
management, CRM, analysis, and reporting. Although it has beenconsecutively posting a net loss due to upfront investment costs, over theseyears its sales have been sharply increasing and profit/loss margins have been
improving significantly (Figures 23 and 24). Since its listing on the market in
October 2014 (closing price of $30.10), its stock price has increased by 24.0x
in anticipation of strong future business performance (closing price as ofDecember 10). During this period, SP500 rose by 2.4x, but HubSpot’s stock
return was 10x of the SP500 return. The rapid growth and high reputation of
the US company HUBS, who started the cloud and subscription model aheadof the Company, may be helpful in analyzing the Company’s prospects.

[Figure 23] Change in HubSpot, Inc.’s Financial Results (1) [Figure 24] Change in HubSpot, Inc.’s Financial Results (2)(# of customer:
companies or persons)(ratios)(USD 1 million)

1,000
800

0.0%

100.0%-10.0%

90.0%-20.0%

600-30.0%

400
200

40.0%

-90.0%

80,000

60.0%
50.0%

-80.0%

-200

70.0%

-50.0%-70.0%

0

100,000

80.0%-40.0%-60.0%

120,000

60,00040,000

30.0%
20.0%

20,000

10.0%
0.0%

0
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Sales (left axis)

Operating Profit (left axis)

Operating Margin (right axis)

Number of customers (right axis)

Sales & marketing expenses ratio (left axis)

R&D expense ratio (left axis)

General and administrative expenses ratio (left axis)

Gross margin (left axis)(Ref) Prepared by Alpha-Win Research Dept. based on financial results materials

29/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Conducting business on
remote work, targeting all
employees◆ Impact of COVID-19 and the Company’s Response
Response
The Company has prepared the environment for all employees to be able towork from home. Almost all business activities including sales, customer
success, customer support, development, and management are being
continued online. So far, its operation has been smooth and there have been
no issues since the Company is highly compatible with remote work due tothe nature of its business. The Company believes that it can sustain growtheven in situations like this.

Impactw Only minimal impact fromCOVID-19

w Some customers of travel,
restaurant, and other service
industries were impacted
by COVID-19 and hadcancelled AD EBiS.
Meanwhile, there has beenhigh stay-at-homeconsumption, and contracts
with customers in ECrelated businesses havebeen solid.

Financial results in the previous fiscal year were strong, indicating no large
impact due to COVID-19. Some cancellations of AD EBiS contracts wereseen among customers in industries such as travel, restaurants, entertainment,
worker dispatching, and bridal services that were impacted by the COVID19 crisis. Meanwhile, due to the high stay-at-home consumption, contracts
with companies in the EC industry and SaaS-related businesses had beensteady.
Recently, there has been increasing concern over the global outbreak of the
new mutant strain and its impact. However, the Company’s flagship product
AD EBiS is a tool for optimizing costs through ad effect measurement.
Therefore, the current situation may be more of a business chance since,amidst the COVID-19 crisis, the EC market has been strong and there isgreater demand for ad effects that can more efficiently appeal to customers.

◆ Impact of Strengthened Regulations on Personal
Information Protection and the Company’s Response
Response(19) Tightened regulations: To
strengthen privacy protection,
the EU adopted the GDPR
(General Data Protection
Regulation).
(20) Browser: software to view
websites.
(21) Third-party cookie: Cookies
issued by a domain other than
the website visited by the user.
(22) Tracking: Identifying
visitors of websites or users of
online services on the Internet
to record and track their visiting
history or activities within
websites.
(23) First-party cookie: Cookies
directly issued by the domain(website) visited by the user.
w Tighter regulation is insome way a business
opportunity for theCompany.

With the global trend of strengthening regulations on personal information
protection19, Japan too strengthened the Personal Information Protection Law(the amended Personal Information Protection Law will become effective on
April 1, 2022). Google and Apple have also placed or will place regulations
on their browsers20 against the use of third-party cookies21 (cookies issued
by domains other the website that a user is visiting) which enable thetracking22 of a user’s browsing history across websites. As a result,measurement of ads through those means has become difficult. Third-party
cookies have already been blocked by default (blocking function) in Safari,Apple's standard browser, starting in March 2020. By the latter half of 2023,
their use will also be terminated in Google Chrome. In Microsoft's Internet
Explorer and other browsers, the treatment of cookies can be selected throughthe privacy setting. In response to this, the Company has already begun
providing a measurement method for AD EBiS where measurements using
first-party cookies23 can be made on behalf of customers. Since its release,about 700-800 companies seem to have already started using it. In the newmeasurement method, highly accurate measurements of advertising
effectiveness can be made without using third-party cookies, which haveraised many issues, while protecting user privacy.

ImpactThere seem to be many companies in general, as well as competitors, that will
not be able to meet the demands of the strengthened regulations on personal
information protection. Specialized in advertising effect measurement, theCompany’s ability to develop technology and adjust to changes is strong.
Therefore, we believe that the Company will gain a greater competitive edge
relative to other companies in this business area.
30/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

7．Last Fiscal Year’s Results, the Company’s
Forecast for This Fiscal Year, and MediumTerm Business Plan
◆ Financial Results for FY 2021 (last fiscal year)
Summary
w Solid results last FY. Sales
and profit growth. Sales hit
a record high for the 12th
year in a row.

w SG&A expenses ratio
improved significantly, andprofits hit record highs forthe first time in six years.

Consolidated financial results for FY 2021 (October 2020 to September 2021)
showed a significant increase in sales and profits, with sales of Y2,957
million (+12.9% YoY) and operating profit of Y365 million (+32.0% YoY).
Both platform segments posted sales and profit growth, overall sales haveincreased for the 12th year in a row, and each profit reached their record highs
for the first time in six years.
The gross margin had worsened by 1.1 percentage points from 70.0% in thefiscal year before the previous to 68.9% in the previous fiscal year, while the
SG&A expenses to sales ratio had improved by 2.8 percentage points from
59.4% to 56.6%. As a result, the operating margin increased by 1.8
percentage points from 10.6% to 12.4% (Figure 25 on page 32). The SG&A
expenses were Y119 million, having increased by 7.6% YoY, but grew at amuch lower rate than the sales growth rate of 12.9%.
In addition, profit/loss accounted for by the equity method had turned positive,
and the non-operating profit/loss had also improved. With no significant
extraordinary gain or loss, net profit had increased significantly to Y239
million (+30.7% YoY).

Progress
w Sales fell slightly short ofthe company forecast (=Alpha-Win’s forecast)w Underachievement of sales
was due to contract
cancellation by some of thecustomers which caused thenumber of accounts of AD
EBiS to decrease and salesof EC-CUBE to be weaker.

w Profit was higher than the
Company’s forecast, andended up being about thesame as our forecast.
Dividend was also revised
upward.
w In the last three fiscal years,
profit has tended to behigher than the initial
forecast.

The Company had announced its full-year forecast at the same time as thedisclosure of Q1 results on February 5, 2021. Compared to this company
forecast, sales were slightly lower by -Y43 million (-1.4%), while operating
profit was +Y35 million higher (+10.6%) (Figure 26 on page 32). Dividend
had been announced as 4.5 yen/share at the beginning of the fiscal year, but
was increased to 5 yen/share in May and then to 5.2 yen/share in November.
Our research department had expected sales to be Y3,000 million, the sameamount as the Company’s plan. The difference from the actual result (Y2,957
million) is most likely due to the following two points.
・ While the number of new contracts from companies that are engaged in
non-face-to-face businesses such as EC has been increasing, the number of
AD EBiS accounts fell short of the forecast due to the suspension orcancellation of services by users in businesses such as restaurants and travelthat were impacted by the COVID0-19 outbreak.
・ Due to intensifying competition, some EC-CUBE customers had canceled
their contracts.
On the other hand, we expected operating profit to be Y370 million, which
exceeded the Company's plan, but it turned out to be about the same as theactual result (Y365 million). Although sales were slightly underachieved,
profit exceeded the Company's forecast due to the progress in reducing
SG&A expenses (transportation expenses, advertising expenses, etc.) thanks
to the online shift of business activities in general.
In the last three fiscal years, sales have tended to be revised slightly
downward and profits have tended to be revised upward compared to theinitial company forecast (Figure 26 on page 32).
31/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18[Figure 26] Transition in Results over the Past Seven Fiscal
Years and Comparison with Forecast[Figure 25] Transition in Margins and Ratios(Unit: %)Gross margin

（％）

80.0
70.0

66.5

63.8

64.7

O.P. margin
65.3

60.0
50.0
40.0
30.0
20.0

59.9
45.4
18.3

42.1

71.4
65.9

FY

SG&A expenses ratio
70.8
66.9

49.3

70.0

68.9

68.0

FY 2015

56.6

55.0

FY 2016

10.6

12.4

13.1

FY 2020

FY 2020

FY 2022 CE

59.4

24.4
15.4
5.4

10.0

3.9

FY 2017

-5.5

0.0
-10.0
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2018

FY 2019(Ref) Figures 25 and 26 were prepared by Alpha-Win Research Dept. basedon the financial results summary.
(Note) Gross margin and SG&A expenses ratio in Figure 25 are estimates
made by Alpha-Win based on the Company’s forecasts.

FY 2020

FY 2021w Marketing PF’s sales growth
was the growth driver for
overall sales. Both PF
segments contributed almost
equally to profit growth.

Initial forecast (announced date)/results
Initial forecast (11/10/2014: millon yen)
Actual result (million yen)
Difference (%)
Difference (million yen)
Initial forecast (5/12/2016: million yen)
Actual result (million yen)
Difference (%)
Difference (million yen)
Initial forecast (5/9/2017: million yen)
Actual result (million yen)
Difference (%)
Difference (million yen)
Initial forecast (5/8/2018: million yen)
Actual result (million yen)
Difference (%)
Difference (million yen)
Initial forecast (2/6/2019: million yen)
Actual result (million yen)
Difference (%)
Difference (million yen)
Initial forecast (2/7/2020: million yen)
Actual result (million yen)
Difference (%)
Difference (million yen)
Initial forecast (2/5/2021: million yen)
Actual result (million yen)
Difference (%)
Difference (million yen)

Sales
1,545
1,437
-7.0
-108
1,600
1,612
0.75
12
1,650-1,700
1,719
1.1-4.2
19-69
1,800
1,804
0.2
4
2,250-2,350
2,204-6.2 - -2.0
-146 - -46
2,700
2,618
-3.0
-82
3,000
2,957
-1.4
-43

O.P.

R.P.

350
350
0.0
0
200
247
23.5
47
10-10092-8.0 - 820.0
－8-82
-150
-98
0.2
52
0-50
85
∞- 70.0
35-85
200
276
38.0
76
330
365
10.6
35

N.P.
350
352
0.6
2
201
250
24.4
49
106
-115
79
190
261
37.4
71
320
364
13.8
44

Financial Trend by Business Segment: Marketing PF
By business segment, sales of the Marketing PF business had increased by
Y281 million from Y2,318 million in the fiscal year before the previous toY2,599 million in the previous fiscal year. This accounts for 83% of theoverall increase in sales. Meanwhile, operating profit had increased by Y48
million from Y199 million to Y247 million, accounting for 54% of the total
profit growth (Figure 27).

[Figure 27] Transition in Financial Results by Segment(Units: million yen, %)Total Sales
Marketing Platform
EC Platform

Gross Profit
Gross Margin
SG&A Expenses
SG&A Expenses Ratio
Operating Profit (segment)
Marketing Platform
EC Platform

Operating Margin
Marketing Platform
EC Platform

Recurring Profit
Net profit

FY 2020
Amount
2,619
2,318
301
1,832
70.0%
1,555
59.4%
277
199
78
10.6%
8.6%
26.1%
261
183

FY 2021
AmountDiff. in Amount/Rate% Change
2,958
339
12.9%
2,599
281
12.1%
358
58
19.2%
2,039
207
11.3%
68.9%
-1.0%
1,674
119
56.6%
-2.8%
365
89
32.0%
247
48
24.2%
119
40
51.5%
12.4%
1.8%
9.5%
0.9%
33.1%
7.1%
364
103
39.5%
240
56
30.7%

% of Total Diff.
100.0%
83.0%
17.0%
100.0%
54.3%
45.7%
-

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summaryw Thanks to AD EBiS,
operating margin improved.
w On an annual average, thenumber of AD EBiS accounts
decreased by 9% but its unit
price increased by 19% and asales growth was maintained
for the ad effect measurementbusiness.

In addition, the operating margin of this PF improved from 8.6% to 9.5%.
This was largely due to the increase in sales of AD EBiS.
Partly due to the impact of COVID-19, on an annual average (≈ average ofthe numbers at the end of each quarter), the number of accounts of AD EBiS
decreased by 131 accounts or -9% from the fiscal year before the previous⇒ the previous fiscal year, from 1,475 accounts ⇒ 1,344 accounts. On theother hand, the average unit price (in the same order) increased by +Y23,237
or +19.3%, from Y120,629 ⇒ Y143,866 on an annual average.

32/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

203
230
13.3
27
130
168
29.2
38
72
-88
-35
130
183
40.8
53
210
239
13.8
29

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
This was due to the polarization caused by the COVID-19 crisis as described
w Rise in unit price was due toabove, with cancellation of contracts in the low price range mainly by
replacement of customers,
upselling with function
companies that were negatively impacted by the crisis, while contracts in theenhancement, etc.
high price range were gained from well-performing companies, resulting in

improved contract mix. The pricing system that was changed along with thefunction enhancements and the increase in upselling and cross-selling had
also been key factors. As a result, the increase in unit price had compensatedfor the decrease in the number of accounts, and sales of the advertising effectmeasurement business increased significantly (Figure 7 on page 11 andFigures 10 and 11 on page 14).
In the Marketing PF segment other than AD EBiS, the advertising agency DX
and the new services other had posted losses, but contributed to the increasein sales by a small amount.

Financial Trend by Business Segment: EC PF

w In EC PF, too, sales and profit
grew. The EC market boom
increased sales fromshopping settlement fee.
Profit margin also improved.

Sales of the EC Platform, the other business segment, increased by Y58
million from Y301 million in the fiscal year before the previous to Y358
million in the previous fiscal year. Since it is a business with a high marginal
profit ratio, operating profit also increased by Y41 million from Y78 million
to Y119 million along with the increase in sales. With the EC market boom
due to the stay-at-home consumption brought by the COVID-19 crisis, sales
from the main shopping settlement fee had increased, resulting in both sales
and profit growth. The operating profit margin of this segment also improvedby 7 percentage points from 26.1% to 33.1% (Figure 27 on page 32).

Factors Contributing to Increase/Decrease in Profit

Figure 28 shows the factors behind the increase/decrease in overall operating
profit. The major factor behind the increase in profit was the sales growth of
the Marketing PF segment. This, in addition to cost reduction due to thereview of the sales agency fee system, offset the increase in costs such as
personnel costs due to the increased number of employees in new areas
including those of the M&As, as well as the increased cost due to the decreasein the transfer of in-house developed software to assets and increased M&A・新領域の人
goodwill amortization. As a result, profit grew by Y89 million.
トップラインの拡大

w Upward profit revision was
mainly due to cost
reduction/suppression.
w Sales growth and reduced
sales agency fees were themain factors behind the
profit growth.

[Figure 28] Factors that Affected Operating Profit in FY 2021 (Unit: million yen)(million yen)

700

57

600

Goodwill
amortization
increased due to
M&A in last FY's Q2

26

291

500

-97

400

300

276

With the revisionof the sales agency
system, fees paiddecreased YoY

-85

-35

-23

Decreased due tochange in targets oftransfer to software
assets200

Decrease
FY 2020
operatingprofitMarketing EC PF
PF sales
sales
growth growth

Decrease infees paid tosales
agencies

Increased Decrease in Increasd
personnel transfer to depreciation
expense proprietary expense andgoodwill
assetsamortization

-16

365
-14

-2

-1

Rise in server
management
cost held down
due to program
rennovation

Increase

1000System expenses,
etc., increased
due to shifting
business online

Increasein otherexpenses

Increase Increase in Increasedin
expensesserversupplies accompanying mgmt.
expensestock
cost
acquisition

Decreased FY 2021
advertisingexpense operating

profit(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary, with partial edits.

33/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Quarterly Transition in Results
On a quarterly basis (YoY), sales increased and operating profit was posted
in all quarters of the previous fiscal year. Q4 set a new record for quarterly
sales. Although profit decreased in Q4 of the previous fiscal year in reaction
to the increased profit of the fiscal year before the previous due to the transfer
to assets related to a large-scale function development, profit increased in theother three quarters.

w Last FY, profit was posted for
all quarters.

w Through businessrestructuring and shift to the
fixed-billing business model,
business structure became
stable with little seasonalvariability.

From Q4 of FY 2017 (July - Sept 2017) to Q1 of FY 2019 (Oct - Dec 2019),
the Company had posted an operating loss for six consecutive quarters. In Q2
of FY 2019, the Company posted a profit in a turnaround, and has continued
to post an operating profit for eleven consecutive quarters (Figure 29).
Although quarterly profit fluctuates depending on the amount of asset
transfers for software development, both PF segments have been becoming
stably profitable. This quarterly recovery in profit can be explained by the
improvement in profit margin caused by the sales growth of the core business
AD EBiS, the restructuring of the business portfolio, the transformation ofbusiness model, the recovery of EC-CUBE due to various measures to bolster
this business, and cost control.

[Figure 29] Quarterly Transition in Operating Profit(million yen)

Strategic Investment Phase

140
120
100

43
35

80
41

60
40
20

24

22 19

33

11
67 69

36 41 35 41
28 35

77

4
36

-40

Changedcompany
nameAcquired
AdRepo

35
38

19
46 30

21

13

45 50

-1

-8

17

17

60 52
25

0
-20

Acquired
ADPLAN922Growth Phase

Stepwise
withdrawal
from EC
contract dev.
business

15

14 12

-11

Marketing Platform Business Segment-38

EC Platform Business Segment30-44 -37-23 -15 -21
-1

9

33

8

79
51 51

65

15

3

-4

-5

-3

-60

80
47 53

Profit increased due
to transfer to assets ofthe major function
development

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary and the financial results briefing materials

w FCF had been negative, butturned and stayed positive
for three half-year periods.

Semi-Annual Transition in Cash Flow
Looking at semi-annual results, we can see that free cash flow (FCF) had been
negative for six consecutive quarters through the first half of FY 2020 (Figure30). One of the Company’s challenges had been to turn FCF positive, but thiswas achieved in the second half of FY 2020 thanks to the improvement inearning power and the completion of investments. In FY 2021, although it
had conducted M&As, positive FCF was maintained in both the first and thesecond half.

[Figure 30] Semi-Annual Transition in Cash Flow
Unit: million yen
Operating CF ①
Investing CF ②
Financing CF
FCF（①+②）
Cash and Deposits (on B/S)FY 2015
H1
H2
15
148
-5
-27
-3
0
9
121
666
787

FY 2016
H1
H2
48
93
-80
-69
-16
3
-32
24
738
762

FY 2017
H1
H2
121
23
-88
-106
-31
-0
33
-83
764
681

FY 2018
H1
H2
7
9
-94
-118
169
542
-88
-110
760
1,194

FY 2019
H1
H2
99
109
-368
-158
162
-262
-269
-50
924
774

FY 2020
H1
H2
92
429
-409
-101
391
-56
-317
328
847
1,119

FY 2021
H1
H2
241
333
-35
-313
-1
-23
206
20
1,342
1,392

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary. H1: first half. H2: second half.

34/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ The Company’s Financial Forecast for FY 2022 (thisfiscal year)
w This FY, financial forecast
was announced at the
beginning of the fiscal year.
w Planning for double-digit
sales and profit growth aswell as dividend hike.
w Aiming for consecutive
achievement of record-highsales and profitsw Significant sales growth
expected in the Marketing PF,
especially in the newservices.

Overview
For the past six years, the Company had not announced its financial forecast
at the beginning of fiscal year due to the difficulty in making a rational
forecast (most recently due to the impact of COVID-19), and had insteadannounced it during the fiscal years (Figure 26 on page 32).
However, this fiscal year (FY 2022), it announced the full-year forecast at the
beginning of the fiscal year, although first-half forecast is still undisclosed.
Its forecast is as follows: sales of Y3,600 million (+21.7% YoY), operating
profit of Y470 million (+28.6%), net profit of Y320 million (+33.5%), anddividend of 7.5 yen (dividend hike of +1.7 yen/share) (Figure 32 on page 36).
If these values are achieved, then record-high sales and profits would beachieved again consecutively from the previous fiscal year.

Sales
By platform, the Marketing PF’s sales are expected to increase to Y3,220
million by Y630 million (+24.3% YoY), and EC PF’s sales are expected toincrease to Y380 million by Y30 million (+8.6% YoY). Furthermore, in theMarketing PF segment, full contribution by the two acquired companies is
expected to raise sales of the new services significantly by Y415 million from
Y89 million in the previous fiscal year to Y504 million. The total sales of theremaining AD EBiS and the advertising agency DX are expected to increaseby Y215 million from Y2,501 million in the previous fiscal year (of which
Y2,313 million was from AD EBiS and Y182 million was from theadvertising agency DX) to Y2,716 million in the current fiscal year
(breakdown not disclosed).

Profitw Due to sales growth of the
new services, which are in the
upfront investment phase, theamount of loss is expected toshrink and profit margin is
expected to improve.

The Company believes that it will continue to be in the earnings expansion
phase in FY 2022. Due to the increase in sales of the advertising agency DX,
which is in the upfront investment stage, and the new services, as well as
improvement of the profit margin due to this, the Company expects an
improvement of the overall profit margin by 0.7 percentage point from 12.4%
in the previous fiscal year to 13.1% in the current fiscal year and a doubledigit profit growth YoY.
Similarly, EBITDA is also expected to increase by Y132 million (+20.7%)
YoY from Y638 million to Y770 million. The EBITDA margin is expected
to drop slightly from 21.6% to 21.4%. The sum of "software and goodwill
amortization + depreciation expenses" is expected to increase by Y27 million
from Y273 million to Y300 million.

w Priority measures are planned
to be implemented for eachsales category. Decline in thechurn rate of AD EBiS andgreater investment in the newservices are the key themes.

Priority Measures by Service Category
Priority measures of each service category for this fiscal year are shown in
Figure 31 on page 36. In particular, the Company will focus on "reducing thechurn rate of AD EBiS" and "developing the new services through greater
investment." It aims to pursue synergy among services, strengthen crossselling, and maximize group assets. Active engagement in M&As is expectedfrom this fiscal year to the next.

35/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 31】This Fiscal Year’s Priority Measures by Service Category

MPF ①

MPF ②

Advertising
Effect Meas.

Advertising
Agency DX

Strengthen
customersuccess
supportStrengthen
products

MPF ③
New Services

Establish
foundation forcontinuous
growthReduce churnrate

Strengthen
products

Strengthen investment
Focus

Focus

EC PF

Further develop
the new
services started
in FY 2021

Improveconveniencefordevelopers

Create newservices throughin-housedevelopment andM&As（出所） 決算説明会資料(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

【Figure 32】 Financial Forecast for This Fiscal Year and Over the Medium Term(the Company and Alpha-Win’s forecasts)(Million yen)

FY 2018 A

FY 2019 A

FY 2020 A

Sales
1,805
2,204
2,618
I. Marketing PF
1,530
1,951
2,318
II. EC PF
274
253
301
Gross Profit
1,190
1,561
1,832
Gross Margin
65.9%
70.8%
70.0%
SG&A Expenses
1,289
1,476
1,555
Ratio to sales
71.4%
66.9%
59.4%
Operating Profit
-98
85
276
Ratio to sales
-5.5%
3.9%
10.5%
Recurring Profit
-115
79
261
Ratio to sales
-6.4%
3.6%
10.0%
Net Profit
-89
-35
183
Ratio to sales
-4.9%
-1.6%
7.0%
Sales (YoY growth rate)
5.0%
22.1%
18.8%
I. Marketing PF
21.9%
27.5%
18.8%
II. EC PF-41.1%-7.6%
18.8%
Gross Margin (diff. from last FY)
-0.3%
4.9%
-0.8%
SG&A Expense (growth rate)
25.1%
14.5%
5.4%
Operating Profit (growth rate)
To loss
To profit
225.0%
Recurring Profit (growth rate)
To loss
To profit230.3%Net Profit (growth rate)
To loss
Smaller loss
To profit
EBITDA
5
247
513
KPI
Annual Average (A) Annual Average (A) Annual Average (A)AD EBiS: # of active accounts
1,476
1,486
1,475
% change for the above
0.7%
-0.7%
AD EBiS: average unit price (yen)78,93898,517
120,629% change for the above
24.8%
22.4%
1,402
1,747
2,127
I. (1) Ad Measurement (AD EBiS): Actual/Forecasted Sales
I. (2) Advertising Agency DX: Sales
I. (3) New Services: Sales
I. Sum of Sales of (1) Ad Measurement + (2) Advertising Agency DX
1,530
1,951
2,318
I. Marketing PF (1) + (2) + (3)FY 2021 CE
3,000

330
11.0%
320
10.7%
210
7.0%
14.6%

19.6%
22.6%
14.8%
610

FY 2021 Previous E
3,000
2,620
380
2,080
69.3%
1,710
57.0%
370
12.3%
360
12.0%
235
7.8%
14.6%
13.0%
26.3%
-0.6%
10.0%
34.1%
37.9%
28.4%
Annual Average (E)
1,350
-8.5%
143,700
19.1%
2,328

2,620

FY 2021 A
2,957
2,599
358
2,039
69.0%
1,673
56.6%
365
12.3%
364
12.3%
239
8.1%
12.9%
12.1%
19.2%
-1.0%
7.6%
32.2%
39.5%
30.6%
638
Annual Average (A)
1,344
-8.9%
143,866
19.3%
2,313
182
89
2,495
2,599

FY 2022 CE
3,600
3,220
380
2,450
68.0%
1,980
55.0%
470
13.1%
460
12.8%
320
8.9%
21.7%
23.9%
6.0%

FY 2022 Previous E
3,500
3,050
450
2,370
67.7%
1,970
56.3%
400
11.4%
390
11.1%
260
7.4%
16.7%
16.4%
18.4%
-1.6%
15.2%
8.1%
8.3%
10.6%

FY 2022 New E

3,500
3,150
350
2,460
70.3%
1,960
56.0%
470
13.4%
460
13.1%
320
9.1%
18.4%
21.2%
-2.3%
1.3%
17.2%
28.8%
28.8%
26.4%
26.4%
33.9%
33.9%
770
770
Annual Average (E) Annual Average (E)
1,360
1,355
0.7%
0.8%
162,000
157,000
12.7%
9.1%
2,520
2,644
2,550
196
200
504
400
2,716
2,750
3,220
3,050
3,150

FY 2023 CE
5,000
4,590
410

FY 2023 Previous E

FY 2023 New E

FY 2024 New E

3,950
3,450
500
2,680
67.8%
2,200
55.7%
480
12.2%
470
11.9%
320
8.1%
12.9%
13.1%
11.1%
0.1%
11.7%
20.0%
20.5%
23.1%

4,600
5,300
4,220
4,900
380
400
3,220
3,710
70.0%
70.0%
2,570
2,930
55.9%
55.3%
750
650
780
15.0%
14.1%
14.7%
620
750
13.5%
14.2%
420
510
9.1%
9.6%
38.9%
31.4%
15.2%
42.5%
34.0%
16.1%
7.9%
8.6%
5.3%
-0.3%
0.0%
31.1%
14.0%
38.3%
20.0%
34.8%
21.0%
31.3%
21.4%
1,000
1,140
Annual Average (E) Annual Average (E) Annual Average (E)
1,380
1,400
1,450
1.5%
3.3%
3.6%
180,000
168,000
178,000
11.1%
7.0%
6.0%
2,981
2,820
3,100
250
300
1,500
1,150
1,500
3,090
3,070
3,400
4,590
3,450
4,220
4,900

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary.
(Note) CE is the Company’s forecast, E is Alpha-Win’s forecast, and A is actual result. “Previous” is the previous forecast (as of August 20, 2021) and“New” is the current forecast. A part of the company-estimated (CE) gross profit (margin), SG&A expenses (ratio), and sales of ad effectmeasurement, advertising agency, and new services for this fiscal year, as well as the past segment sales, are estimates calculated by Alpha-Win. In
Alpha-Win’s forecasts and the results, the average unit price and number of active accounts of AD EBiS are based on annual averages (= average ofthe values at the end of each quarter). Also, the former ADLPAN has been summed together with AD EBiS.

‘
36/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Medium-Term Business Plan and Strategy
At the beginning of the previous fiscal year, the Company announced its new
medium-term business plan, "VISION2023," for the three fiscal years fromFY 2021 to FY 2023.
w In the medium-term plan, it
plans to focus on Japan’s DX
market, expand its businessarea, and also focus on the
new services.

DX Support
The Company is developing its business by concentrating its businessresources on the platform business for supporting the marketing DX ofJapanese corporate customers amidst the COVID-19 crisis. Seeing theaccelerated progress of DX as a business chance, it plans to expand its
business domain by utilizing data and technology.

Group-wide Synergy
Through M&As and its in-house developed services that utilize the strengths
gained through its years of operation of AD EBiS, the Company plans to
expand its current areas of business (accelerating growth) as well as creating
and cultivating new areas of business. It plans to increase its assets as acorporate group and pursue synergy within its group (Figure 33).

w Using M&As too, it plans to
expand business and pursue
synergy. Will become acomprehensive marketing DX
support group.

It plans to not just provide single services to corporate customers, but alsotransform into a comprehensive marketing DX support group that provides
optimal, multiple services. Through this, it aims to maximize the LTV(lifetime value).

【Figure 33】Providing Value and Maximizing LTV through Group Synergy

ExploreDeepenAd agency DX

AdRepoAd-Knowledge

New
services

Data

HR

Maximize
providedvalue

Customerbase

CapitalMaximize
LTV

Technology
EC
construction

New areadevelopment

Benefit for the corporate customer

Comprehensive marketing
consultation becomes
possible(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

w In the final year of themedium-term plan or next
fiscal year, three numericaltargets have been set: sales ofY5 billion, operating marginof 15.0% (Y750 million), and
DOE of 3% or greater.

Numerical Targets
As shown in Figure 34 on page 38, the numerical targets of the medium-termbusiness plan for the final year or FY 2023 are sales of Y5 billion andoperating margin of 15.0% (Y750 million). Compared to the forecast for thecurrent fiscal year, sales and profit are planned to be increased significantly
by Y1.4 billion (+38.9%) and Y280 million (+59.6%), respectively. In
addition, the goal for dividend on equity (DOE) is 3.0% or greater (+0.5%
increase).
37/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 34】
Financial Targets of the Medium-Term Business
中期経営方針『VISION2023』

Plan “VISION2023”
Consolidated sales

FY 2020 Results

Y2.61 billion

FY 2021 Results

Consolidated
operating margin

DOE

10.6％

2.0％

Y2.95 billion

12.4％

2.3％

FY 2022 Forecasts

Y3.6 billion

13.1％

2.5％

FY 2023 Goals

Consolidated
sales

Consolidated
operating margin

DOE

Y5 billion

15％3％ or more

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

For the operating margin, compared to 12.3% of the previous fiscal year, it istargeted to be 13.1% (+0.8% YoY) in the current fiscal year and 15.0%(+1.9% YoY) in the next fiscal year. This is because the Company expects
the profit margin of the Marketing PF's advertising measurement business tocontinue to increase. It also expects that, this fiscal year, the increase in salesof this PF's advertising agency DX and new services will lead to an
improvement of the amount of their losses, which had been posted due toupfront investment costs, and make the businesses profitable by the next
fiscal year.

w Plans to improve operating
margin through sales growthof advertising agency DX andnew services.

New KPIw Proportion of new services in
the consolidated sales has
been set as a KPI. Aims toraise the proportion from last
FY’s 3% to 30% in the next FY.

The Company has also recently set the "proportion of new services in the
consolidated sales" as its new KPI (Figure 35). By working on thedevelopment of the new services (classified under Marketing PF), it plans toincrease this proportion from 3% in FY 2021 to 14% in FY 2022, andfurthermore to 30% in FY 2023 through expansion of business area by M&As.
In terms of the amount of sales, sales are expected to grow at a high rate from
Y89 million to Y504 million to Y1,500 million (in the same order; allnumbers are estimates).

【Figure 35】New KPI of the Medium-Term Busines Plan (proportion of new services in
consolidated sales)% of New Services(including M&As)

30％% of New Services

14％% of New Services

3％
FY 2022(Forecast)

FY 2021(Result)

Y2.95
billion
MPF: Y2.59 billion
EC PF: Y350 million

Y3.6

FY 2023(Goal)

Y5

billionbillion
MPF: Y3.22 billion
EC PF: Y380 million

MPF: Y4.59 billion
EC PF: Y410 million

MPF ①Ad Effect Meas.
MFP ②Ad Agency DX
MPF ③New Services
EC PF(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

38/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

8．Alpha-Win Research Dept.’s Forecast for This
Fiscal Year and Over the Medium Term
◆ Alpha-Win Research Dept.’s Forecast for This Fiscal
Year
w Alpha-Win Research Dept.
updated the financial forecast
for the medium-term period.

We added a new forecast for FY 2024 (fiscal year after the next) and reviewed
the forecasts for this fiscal year and the next fiscal year (Figure 32 on page36).

New Forecast for This Fiscal Year (FY 2022)
w We predicted sales somewhat
conservatively, but raised
profit to the same level as theCompany’s forecast.
Expecting increases in sales,
profit, and dividend.

In the previously made forecast, we had predicted that sales will be Y3,500
million (-Y100 million compared to the company plan), operating profit willbe Y400 million, and net profit will be Y260 million. We kept the sales
forecast the same, but raised profits to Y470 million and Y320 million,
respectively, which are the same as the Company's forecasts. Similarly, weraised the dividend forecast from 7.0 yen/share to 7.5 yen/share.
Compared to our previous forecast, the Company's plan for the current fiscal
year is Y100 million greater for sales, Y70 million higher for operating profit,
and Y60 million greater for net profit. This difference in profit compared toour previous forecast is due to the difference in sales, as well as the differencein the operating margin which we had previously predicted to be 11.4%, while
the Company expects 13.1% (previous fiscal year: 12.3%). Also, theCompany's profit forecast for this fiscal year is almost the same as our(previous) forecast for FY 2023, so profit will most likely be achieved one
year ahead of what we had forecasted.
The reason that we kept the sales forecast unchanged in our current forecast
is that we saw the Company’s forecast for this fiscal year’s sales as being
somewhat ambitious considering the monthly sales in October and Novemberthat were released after the start of this fiscal year (details will be describedlater). We mainly conservatively forecasted the sales of the Marketing PF’s
AD EBiS and new services and the EC PF.

w Looking at past results, too,cost control seems to tend to
be conducted steadily.

On the other hand, we revised profit upward because the cost structure of themain Marketing PF segment is being steadily controlled according to themedium- to long-term targets, and the profit margin is being improved morethan expected. More control seems possible this fiscal year too, so even if
sales fall somewhat short of the goal, achieving the profit goal seems possible.
However, it is important to note the risk of business performance fluctuations
depending on the execution and scale of M&As, the success or failure of the
new businesses, recruitment situation, and the situation with COVID-19(mutant strains, etc.).

Current Situation
Non-face-to-face businesses such as EC have been strong due to the stay-athome demand, but the boom is starting to settle down. Also, due tointensifying competition in open-source EC website construction systems(shopping cart systems), monthly sales of the EC PF business have beenfalling compared to the previous year since June 2021. On the other hand,Marketing PF has been maintaining double-digit sales growth and is
supporting the overall sales, thanks to the increase in unit price of AD EBiS
and increased sales of the new businesses and advertising agency DX.
39/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
Monthly company-wide sales in October and November, which are the first
w Sales continued to grow YoY
two months of this fiscal year, have both shown positive YoY growth, but theoverall in October andNovember too, but did notsales growth rate has somewhat slowed down (Figure 36). There is areach the Company’s
difference of greater than 10% compared to the Company's estimated annual
forecasted annual sales growthsales growth rate of 21.7% for the current fiscal year (cumulative sales growth
rate.

rate from October to November was +8.0% YoY).

The Company had commented in the financial results briefing that "it would
be possible to achieve the sales target for this fiscal year without an M&A,"
and the Company seems be expecting sales to rise at a faster rate in the second
half. At the current pace, if there is no M&A during the fiscal year, sales may
possibly fall short of the target.

【Figure 36】Change in Recent Monthly Sales (preliminary values)(Upper row: sales in thousand yen) (Lower row: YoY change in %)Calendar Year
Fiscal Year
Monthly Sales(thousand yen)
MarketingPlatform

2020

2021

2021
FY 2022

FY 2021

This Fiscal YearYTD (Oct 2021 Nov 2021)

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

203,942205,256

212,307

206,412

216,511

226,457

214,535

212,076

214,294

217,719

229,621240,117233,052

231,281

121.8

118.5

116.0

102.8

109.8

112.7

108.3

107.2

108.0

110.0

114.0

119.2

114.3

112.7

113.5

35,69936,38628,356

39,511

29,247

26,297

34,582

23,95923,87733,66323,74623,08831,47323,73955,212

464,333

EC Platform
136.4

206.7

157.4

151.4

181.4

311.2

186.2

161.3

41.4

77.4

93.2

81.8

88.2

65.2

76.6

239,641

241,642

240,664

245,924

245,758

252,755

249,118

236,036

238,171

251,383

253,368

263,205

264,526

255,021519,547

123.8

126.6

119.7

108.4

115.2

120.7

115.0

111.0

93.0

104.2

111.6

114.6

110.4

105.5

108.0

Entire Company(Ref) Prepared by Alpha-Win Research Dept. based on the Company’s news release on its website.
(Note) Values shown are preliminary values that have not been audited by an auditor and may be revised in the future,

Estimates/Assumptions for Sales

w We expect AD EBiS’s sales
growth rate to be 10% for thisfiscal year. Its unit price is
expected to rise by 13%, while
the number of accounts is
expected to rise by 1%.

w We made a conservative
forecast of sales growth forthe new services.

・The number of accounts of AD EBiS has not recovered to a net increase
trend, and new contracts gained or cancellations made in response to positiveor negative impacts of COVID-19 on companies are expected to mostly offset
each other.
・The average number of accounts during the fiscal year has been estimatedto increase slightly by a little less than 1% compared to the previous fiscal
year due to product enhancement of AD EBiS through continued updates andthe Company’s focus on strengthening onboarding and reducing the churnrate.
・On the other hand, the unit price is expected to increase by about 9% on
average annually due to upselling and cross-selling, including enhancements
and additions of functions. In fact, the average unit price of AD EBiS seems
to be increasing since October 2021, too, although at a gradual pace.
・Based on the above, we expect sales of AD EBiS (advertising effectmeasurement) to increase by 10% YoY to Y2,550 million.
・In general, in the sales forecast, we have not included sales growth due tofuture new M&As except for the amount that would come from the fullcontribution by the companies and businesses that have already been acquired.
・We conservatively predicted the amount of expansion of the new services
in considering the risks (predicted sales growth: company plan is about Y400
million and our forecast is about Y300 million). Sales of advertising agency
DX are expected to increase by around 10%, and sales of the Marketing PF
business as a whole is expected to increase by about 21.2% YoY to Y3,150
million (-Y70 million compared to the Company's plan).
40/49This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

w Slight sales decline predicted
for the EC platform.

・In the EC PF business, sales are currently on a YoY decline trend, so we
predict its sales to decrease by 2.3% to Y350 million (-Y30 million comparedto the Company's plan). For the second half of the fiscal year, we also
reflected the effects of the improvement measures based on investment ofbusiness resources and the effect of the alliance with Orico.

Estimates/Assumptions for Profit
w We expect the profit margin
to improve YoY.

・Although costs such development costs and personnel costs will increase,
we predict that they will be compensated by sales growth as well as the profit
margin improvement of the new services and other businesses, resulting in ahigher gross margin (70.0% in the fiscal year before the previous → 69.0%
in the previous fiscal year → 70% forecasted for this fiscal year). The
SG&A expenses are also expected to be managed well, so that the operating
margin will improve from 12.3% in the previous fiscal year to 13.4%.
Although the Company's profit plan is a somewhat ambitious goal, since there
seems to be room for cost control, we raised our profit forecast to the valuesof the Company's plan. We also do not anticipate any significant nonoperating profit/loss or extraordinary gain/loss.

◆ Alpha-Win Research Dept’s Forecast for Results Over

the Medium Term
Forecast for Next Fiscal Year (FY 2023)

w We also revised our forecast
for FY 2023 upward.
Expecting record-high profit
to be achieved consecutively.

w However, the Company’s
goals for FY 2023, the final
year of the medium-term
plan, are ambitious and arehigh goals to achieve.

For the next fiscal year, too, we predict that both platform businesses will
increase their sales and improve costs, assuming that the economy will
normalize, so we have revised the forecast upward. In the order of theprevious forecast ⇒ current forecast, we revised sales from Y3,950 million⇒ Y4,600 million (+31.4% compared to our forecast for FY 2022),
operating profit from Y480 million ⇒ Y650 million (similarly, +38.2%),
and net profit from Y320 million ⇒ Y420 million (+31.3%). We expect thatsales and profits will increase, and record-high sales and profits will beachieved consecutively (Figure 32 on page 36).
As mentioned above, FY 2023 is the final year of the Company's new
medium-term plan, by which the Company aims to achieve "sales of Y5
billion, operating margin of 15% (equivalent to Y750 million), and dividendon equity (DOE) of 3% or more” as its numerical targets. These are high andambitious goals, and would require business expansion through thedevelopment of the new areas of business and M&As to achieve.
At this stage, since there are some uncertainties, we made a conservative
forecast in consideration of the risks.

w Should watch changes in AD
EBiS’s pricing strategy andchanges in the trend for thenumber of accounts.

w Estimated the sales growthrate of AD EBiS as 10%

Regarding the sales of AD EBiS, which account for the majority of theCompany’s sales, the unit price growth rate is expected to gradually slow
down, although it would depend on the balance between the KPIs of unit priceand number of accounts. Measures for continuously increasing the number ofaccounts would be the key challenge. The Company also seems to beconsidering increasing the number of accounts by providing services in the
middle price range, and we would like to closely watch changes in future
pricing strategies. For the next fiscal year onward, we made forecasts basedon the estimates that the annual price increase rate will be 6-7%, the accountincrease rate will be about 3%, and the sales growth rate will be about 10%.
The Company has set DOE of 3% or more as its goal for the next fiscal year.
If we assume that the DOE will be 3%, based on our forecasts for financial
41/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Consecutive dividend hike is
expected. Considering thedividend payout ratio andother factors, there is muchroom for dividend hike.

results and net assets, dividend is expected to be 10.9 yen/share with aconsecutive dividend hike. We estimate that the expected dividend yield willbe 1.0% and the dividend payout ratio will be 16.4%. When the Company's
forecasted dividend yield and dividend payout ratio are compared with themarket average, there still seems to be room for increases in dividend.

Forecast for the Fiscal Year after the Next (FY 2024)

w In FY 2024 (new forecast), we
also expect sales and profit
growth as well as consecutive
record highs for sales andprofit.

Under basically the same rationale as the next fiscal year, we expect that there
will be a relative decline in the expense ratio (decrease in server cost, etc.)
due to the increase in sales, and that there will be an increase in sales andprofits, as well as consecutive achievements of record-high sales and profits(Figure 32 on page 36). Assuming that there will continue to be multiple
M&As of a certain scale every fiscal year, we predict that sales will be Y5,300
million (+15.2% compared to our forecast for FY 2023), operating profit willbe Y780 million (+20.0%), net profit will be Y510 million (+21.4%), anddividend will be 13.0 yen after a 2.1 yen increase from FY 2023 (assumingthat DOE of 3% will be maintained).

Forecast of Growth Rate over the Medium to Long Termw Expecting annual sales
growth rate of 10-20% overthe medium termw Business model with highmarginal profit ratio. Overthe medium to long term, theprofit growth rate (on anormalized basis) is expected
to be greater than the sales
growth rate and will be about
20-30% per year.

w Consecutive achievements ofrecord highs also possible
over the medium term.

w Success or failure of M&As
and new businesses are thefactors that may causechanges in the results.

As DX progresses and the Internet ad market expands, the growth potentialof the Marketing PF business is expected to be large, since it is based on
AdTech tools and expertise and can also incorporate related areas of business.
Similarly, steady growth can also be expected for the EC PF business due tothe expansion of the EC market. Consequently, over the medium to long term,
we predict that the Company’s overall sales will grow by about 10-20% per
year.
In terms of profit and loss, since the Company will likely start to see positive
results from the upfront investments, business restructuring, and cost
structure reform, and since its business has a high marginal profit ratio(estimated to be 70%), we expect that there will be a sales growth that will
also lead to a high profit growth rate.
Since there will likely continue to be upfront investment costs for businessexpansion, we are expecting an annual profit growth rate (on a normalizedbasis) of about 20-30%, which would be about the same as or greater than thesales growth rate.
Over the medium to long term, there are expected to be changes in businessperformance depending on the timing of M&As and upfront investments, but
as a general trend, the Company is expected to consecutively achieve recordhigh sales and profits.
Although the business restructuring has been completed, the Company is stillin its growth stage and is actively pursuing greater competitiveness,
expansion of business through new customer acquisition, and expansion into
new and related areas of business. Since it has an ambitious attitude withregards to conducting M&As, business alliances, and business acquisitions
for synergy and business expansion, the Company’s sales and profit will most
likely be impacted over the medium to long term by whether it will execute
and/or succeed in these initiatives.
In addition, since the Company’s business is small and specialized in a nichefield, and its financial performance will be influenced by its cost control, theeffort put into achieving the bottom line of its target, and the management
topics that it will prioritize, some aspects are inevitably hard to predict.
42/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Over the medium to long term, with the current trend of strengthening
personal information protection, we believe that the key point in assessing theCompany’s future financial performance will be whether it can shift from its
specialization in ad effect measurement to a more comprehensive expansionof business for each of its platform business segments (including new areasof business) through data integration, analysis, and utilization support, while
also leveraging groupwide synergy and maintaining a certain level of profit.
Another key point will be the amount of impact of future, new M&As on
earnings (rate of return on investment).

43/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

9． Analyst’s View
◆ SWOT Analysis
The Company's SWOT analysis result is shown on Figure 37 (below is
supplementally information).

w The Company's strengths
are the data collected overmany years, the president's
management skills,
product strength, support
system, business model,
and business strategy ofactively conducting M&As.

w Risks: tightening of
regulations related topersonal information
protection, COVID-19, andintensifying competition

Strengths
The Company’s main strengths are the following: data that it has collected
over many years through the operation of AD EBiS; its president’s
management skill and expertise in leading technologies of the Internet
marketing field; its main products and support system with proven and strong
functions (technological expertise, development speed, and responsivenessto changes that only specialized major players like the Company canachieve); position in the market (No. 1 in the Internet ad effect measurement
market with an extremely high share); stable, subscription-based businessmodel; and business strategy to actively engage in M&As, businessacquisitions, and business alliances.

Risk Factors
On the other hand, the main risks include new regulations pertaining to thecollection and use of personal information due to strengthened privacy
protection (with regards to conducting Internet ad effect measurement), theemergence of alternative products due to the development of advanced AI
technologies, the impact of COVID-19, staff shortage, and intensifying
competition.

Change in Management Structure
w Chikara Miyamoto joined
the Company as executive
officer and COO and willoversee the AD EBiS
business.

We have previously pointed out that one of the issues faced by the Company
is its dependency on President Iwata in management. However, in October
2021, Chikara Miyamoto was appointed as COO to oversee the advertising
effect measurement business (the entire AD EBiS business). Meanwhile,
President Iwata will oversee the advertising agency DX, new services, andnew areas of development as CEO, and shift to focus on the creation of
growth drivers. Dividing and decentralizing duties within the management
team for Marketing PF are expected to lead increased speed and reduced risks
in management. Miyamoto has expertise and managemental experience increative businesses and had joined YRGLM in June 2021.

[Figure 37] SWOT Analysis (Words in red have been added/revised)
Strength

Weakness

Opportunity

Threat・Data and know-how that it has accumulated since foundation, and their potential usage as big data
・Recognition, strong customer base, proven track record, and product strength (No. 1 in the Internet ad effect system tool market with anextremely high share)
・The main marketing platform business is subscription-based; stable revenue can be expected
・ Rising unit price through upselling and cross-selling; potential to expand customer base・ The president's management skills and expertise in leading-edge technologies of the industry
・Enhanced working environment; talents with specialized, leading-edge technological expertise; accumulation of know-how (competitive edge asa major, specialized company with high development capability and ability to respond to needs)
・Specialized in a niche market; small in scale
・Business management is largely dependent on the president (although authority and responsibility have become divided with the appointment of
a new COO)
・ AD EBiS's monthly churn rate in the high 2% range and declining number of accounts
・Employee shortage (engineers and sales reps)・Funding power (upfront investment costs and risks related to asset capacity and equity financing for large-scale M&As)
・Internet ad marketing market's growth potential and potential for accelerated growth of current products
・Business opportunities with the expanding EC market
・Business expansion and groupwide synergy through M&As and business acquisitions; utilization of resources of external partners; alliances
・Development of new products and services
・Impact of COVID-19 (cancellation by users with deteriorated financial performance, suspended services, etc.)
・Intensification of competition (esp. EC-CUBE-related businesses), launch of competing or alternative products/services, emergence of rivals,
decline in competitiveness of existing products
・Tighter regulations related to stronger privacy protection in the use of personal information
・Defects in products/services and delays in development or in providing services with new function
・Large system troubles such as computer system stoppage(Ref) Prepared by Alpha-Win Research Dept.

44/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Return of Profit to Shareholders
Dividend History
w Started paying dividend
after becoming listed on themarket. Had paid no
dividend during a period in
the past due to worsened
financial performance.

In the second fiscal year after becoming listed on the market (FY 2015), theCompany’s dividend was 4.5 yen/share. Dividend was then increased by 0.5
yen in FY 2016 to 5.0 yen/share per year. In FY 2017, dividend was paid forthe third year in a row, again at 5.0 yen/share (Figure 38).
However, in FY 2018 and FY 2019, no dividend was paid since net losses
had been posted consecutively during those years, and it also abolished theshareholder benefit program. The Company had decided to continue with nopayment of dividend in order to recover its financial performance by focusing
on investments for future growth, rather than letting its cash flow out throughdividend and benefit programs, and thus increase shareholder value.

w Held down the outflow ofcash and instead used
resources on investments
for future growth.

Thanks to its structural reform, the Company achieved a net profit in aturnaround and eliminated its carried-forward loss, and was able to resume
dividend in FY 2020 for the first time in three fiscal years (dividend of 3.8
yen was first announced during the fiscal year, and then was increased to 4
yen).

w Dividend was resumed in
the fiscal year before theprevious thanks to thestructural reform.

[Figure 38] Change in Dividend and Dividend Payout Ratio
Dividend (left axis)
Dividend payout ratio (right axis)
DOE (right axis)

(Y)

14.00
43.2

（％）

13.00

50.0
45.0

12.00

10.90

40.0

10.00

35.0

8.00

30.0

7.50

25.0
6.00

5.00

5.20

5.00

4.50
4.00

13.8

12.2
2.00
0.00

20.0

4.00

18.7

2.1

2.8

2.6

FY 2015

FY 2016

FY 2017

0.00

0.00

0.0

0.0

0.0

0…

FY 2018

FY 2019

14.8

13.7

2.0

2.3

FY 2020

FY 2021

2.5

16.4

16.1

15.0
10.0

3.0

3.0

5.0
0.0

FY 2022 E FY 2023 E FY 2024 E(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary. E: AlphaWin’s forecast/estimate.

w In the medium-term plan, it
has set a policy to pay
dividend based on the levelof DOE. The profit growthand sequential increase in
DOE are expected to lead to
dividend hikes.

Dividend Policy and Goals
In the current medium-term business plan, the goal for dividend on equity(DOE) is set for each fiscal year, and the amount of dividend is determinedaccordingly. The plan is to raise the DOE in stages, and so far, dividend has
been on the rise due to an increase in the net assets in response to the increasein profits and the upward profit revisions during the fiscal year.
In the previous fiscal year, which was the first year of the medium-term plan,
the DOE had been set at 2%. The dividend forecast was initially 4.5 yen/share
but was revised to 5.0 yen/share during the period, and then finally raised to
5.2 yen/share. In this fiscal year, which is the second year of the plan, thetarget DOE is 2.5%, and the Company plans to increase dividend by 1.7
yen/share YoY to 7.5 yen/share. This would raise the dividend payout ratio
from 13.7% in the previous fiscal year to 15.0% in the current fiscal year. It
has also announced that in the final year of the plan or FY 2023, it is planning
for a DOE of 3% or greater.
45/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Conducted a stock buyback
Although the Company is in the growth stage, it intends to continue investingin growth while returning profit to shareholders and to increase shareholder
value also through growth in business performance. Also, in November 2021,
it conducted a stock buyback (about 53 thousand shares for Y69 million;
about 0.8% of all outstanding shares), and the total shareholder return ratio
for this fiscal year is expected to be 35%.

Forecasted Dividend and Return of Profit to Shareholders
w Even if DOE is fixed, profit
growth is expected to lead toincreasing dividend.

From the fiscal year after the next and beyond, after the DOE target isachieved and unless the DOE target become changed, dividend will be linked
with the amount of net assets which will depend on changes in the profit.
Since we expect that profit growth will continue over the medium term, we
believe that dividend hikes will continue for the time being, although the paceof increase may slow down. In the future, although it would depend on thelevel of stock price, further return of profit to shareholders such as stock splits
and additional share buybacks is possible.

◆ Stock Price, Characteristics, and Factors that May
Affect Stock Pricew Small-cap, AdTech stock withhigh volatility in stock price(24) AdTech (ad technology): A
generic term for information
technology used in advertisingbusiness, it refers to the digitaltechnology used in Internet ads,
etc. Specifically, it is thetechnology for efficiently selling/buying/distributing Internet ads
and measuring advertising effects.
Maximizes advertising effects forInternet advertisers andmaximizes profit for media
owners.
w Past 5 years’ stock price has
been within a boxed range ofY1,000-2,000.
w Stock price had been
underperforming TOPIX
and TSE Mothers since thebeginning of the year, but
started outperforming after
the announcement of Q3
results in the previous fiscal
year.

w US’s HubSpot is a similar
company that could be used
as reference.
w HUBS’s valuation isextremely high.

Characteristics
The Company’s stock is a small-cap, AdTech24-related stock listed on TSE
Mothers. Since becoming listed, the volatility of stock price has been high(max of 5,260 yen in May 2016 and min of 677 yen in August 2015).

Stock Price
Figure C on page 3 of this Report shows the stock price and relative stock
price against TOPIX for the past approximately five years. Stock price wasbearish during the period that the Company’s financial performance had been
worsening. Then, with the recovery in profit, it bottomed out and has been
fluctuating within a boxed range of 1,000 to 2,000 yen.

Performance
Since the beginning of this year, stock price had been underperforming
compared to major indices, but since the announcement of Q3 results on
August 5, it has been outperforming the TOPIX and the TSE Mothers Index
by about 7% and 12%, respectively (as of the closing price of Y1,089 on
December 10, 2021). In addition to the solid financial results of the previous
fiscal year, this seems to reflect the anticipation of large profit growth overthe medium term in response to the forecast of significant increases in sales
and profits as well as dividend hikes for the current and the next fiscal year.

Valuation Comparison with Competitors and Similar Companies
In Japan, there are no listed companies that provide similar AdTech tools andare based on a subscription model like the Company.
In the US, though, HubSpot described on page 29 can be seen as a similar
company. HUBS has a market capitalization of $34.2 billion (about Y3.9
trillion) based on the closing price on December 10, 2021, and its stock price(market capitalization) has more than doubled compared to about a year ago.
The valuation of HUBS based on the actual results for the fiscal year ended
December 2020 is extremely high, with P/S25 of 43.0 and P/B of 48.6 (no P/E
due to posting of net loss).
46/49

This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18(25) P/S (Price to Sales Ratio):
As reference, we compared the size, business contents, and valuations of 24
Ratio of stock price to sales. A
listed Japanese AdTech companies with business partly similar to thevaluation indicator where market
Company and the five companies that compete with the Company in the EC
capitalization is divided by
platform business (page 21; packaged software for construction of websites
annual sales. P/S is often used as
for EC stores, etc.) (Figure 39).
an indicator for the stock value of
emerging companies with a highIn this comparison, although the average values are not very meaningful due
growth potential or a net loss.
w Comparison with similar
Japanese companies showsthat the Company’svaluation is somewhat
underpriced.
w Comparison with theaverage of TSE First
Section shows that its stock
price does not currently
seem underpriced.

to the large disparity between companies, we can see that as far as P/E, P/B,
P/S, and dividend yield for this fiscal year are concerned, the Company's
valuation is relatively generally low and somewhat underpriced.

Valuation Comparison with Average of TSE First Section
Compared to the average of the companies listed on the First Section of theTSE (for the current fiscal year, based on the closing price on December 10,
2021: forecasted P/E of 15.3, actual P/B of 1.3, and forecasted, weighted
average dividend yield of 2.0%), all indicators show that the Company’svaluation is high. This is perhaps because of the anticipation of high profit
growth as an AdTech-related, mid/small-cap growth stock which is beingreflected in the stock price.

[Figure 39] Comparison with Similar Companies (24 AdTech-related companies + 5 EC-platform-related companies)
AdTech-Related Companies
Code
2159
2389
2461
2491
3134
3655
3688
3690
3853
3923
4293
4395
4751
4784
6038
6045
6081
6094
6175
6533
6553
6562

Markets: TSE1=TSE 1st Section, TSE2=TSE 2nd Section, TM=TSE
Mothers, JQS=JASDAQ Standard

Company NameBusiness Area

Full Speed

Internet marketing / AdTech (Internet Ad distribution tech)

DIGITAL HD

Internet ad agency / ad measurement tool

F@N Communications

Affiliate (pay-per-performance) ad

ValueCommerce

Affiliate (pay-per-performance) ad

Hamee

Mobile accessories / EC cloud support

BrainPad

Internet marketing / data analysis

CARTA HD

Ad platformYRGLM Inc.

Internet ad measurement tool

Asteria

Packaged software

RAKUS

Cloud service / Email delivery / IT engineer dispatching

SEPTENI HD

Internet ad agency / smartphone marketing support

AccreteSMS delivery service

CyberAgentInternet ad agency / smartphone / games

GMO AD Partners

Internet ad agency and related platform

iiD

Contents marketing platform

Rentracks

Pay-per-performance Internet ad service

Allied Architects

SNS-related marketing support

FreakOut HD

Internet ad delivery (DSP)

Net Marketing

Pay-per-performance ad agency

Orchestra HD

Digital marketing for companies

SoldOut

Web marketing support for mid-tier companies/SMEs

GenieeAutomatic trading of media ad space / AdTech biz

Simple average of 22 AdTech-related companies (which have not forecasted a net loss)

Unit: million yen

Market Market Cap.
TSE2
6,042
TSE1
34,274TSE132,157TSE1
163,737TSE1
17,699TSE137,614TSE153,840
TM
6,940
TSE1
14,011
TM
550,897
JQS
66,402
TM
7,925
TSE1
1,003,321
JQS
7,005
TM
4,056
TM
5,495
TM
11,084
TM
28,356
TSE1
6,678
TSE1
37,167TSE1
12,198TM
14,168100,328

Sales
15,400100,000
28,90032,70014,0008,500
25,0003,600
2,900
20,387ND
2,722
ND
35,500
5,700
2,346
5,500
28,0005,785
15,62022,60013,582
19,437

Ratio

%
O.P.
640
12,000
2,720
7,400
2,250
1,020
4,500
470
1,000
1,341
ND
387
ND
460
530
746
600
1,050
500
1,131
340
740
1,991

O.P. Margin
4.2
12.0
9.4
22.6
16.1
12.0
18.0
13.1
34.5
6.6
14.2
1.3
0.1
31.8
10.9
3.8
8.6
7.2
1.5
5.4
11.7

P/S
0.39
0.34
1.11
5.01
1.26
4.43
2.15
1.93
4.8
27.02
2.91
0.20
0.7
2.34
2.02
1.01
1.15
2.38
0.54
1.04
3.14

P/E
14.97
16.22
51.16
10.72
158.37
17.14
21.79
15.5
604.37
36.18
21.33
11.48
12.85
17.80
52.94
122.0174.05-300-1,320

-7.5
-94.6

0.50
-

15.26
-4.83
-

Average of TOPIX (closing price on 12/10/2021)
6026
6550

GMO TECH (net loss)

App-installation-type charging ad / SEO

Unipos (net loss)

Internet ad service; media monetization support

4477

2,003
2,931

4,000
1,395

Markets: TSE1=TSE 1st Section, TSE2=TSE 2nd Section, TM=TSE
Unit: million yen
Mothers, JQS=JASDAQ Standard
Company NameBusiness Area
Market Market Cap.
Sales
EC website dev. package / selling merchandise to companies
SOFT CREATE HD
TSE2
61,23019,200EstoreEC website development / online shopping support
JQS
8,500
5,900
Cloud commerce platform
Interfactory
TM
3,868
2,577
EC website mgmt support for mid-tier/SME EC website mgmt companies
Commerce One Holdings
TM
10,224
2,841
Simple average of 4 EC-platform-related companies (which have not forecasted a net loss)
20,956
7,630
E commerce platform / online settlements
BASE (net loss)
TM
74,048
10,143EC-Platform-Related Companies
Code
3371
4304
4057
4496

TM
TM

%
O.P.
O.P. Margin
3,550
18.5
1,020
17.3
159
6.2
632
22.2
1,340
16.0
-1,181
-11.6

Ratio
P/S
3.19
1.44
1.50
3.60
2.4
7.30

P/E
29.53
35.48
23.64
29.55
-61.64%
P/B
Dividend Yield
1.28
0.92
0.00
1.53
4.55
10.10
0.91
2.42
1.88
8.83
0.00
2.22
2.36
4.23
0.69
2.12
67.89
0.06
3.28
5.44
0.71
7.78
1.28
2.34
1.14
0.00
2.21
1.45
4.73
5.66
0.00
2.13
1.34
7.83
0.21
3.91
5.23
6.92
1.10
1.28
2.60
1.02

Closing Price（ 12/10 ）Stock Price
388
1,439
418
4,750
1,088
5,060
2,120
1,089
801
3,040
478
1,404
1,984
418
807
689
784
1,574
447
3,795
1,153
785

1.96
0.00
0.00
%

P/B
Dividend Yield
4.46
0.90
3.10
2.12
4.02
0.00
5.16
0.00
4.2
0.76
4.68
0.00

1,975.48
1,820
226
Closing Price（12/10 ）Stock Price
4,445
1,508
969
1,359
666

(Ref) Prepared by Alpha-Win Research Dept. from the companies’ websites, securities reports, financial results summaries, and financial results briefing materials.
(Note) Generally, each company’s forecasted values from the latest financial results disclosure (latest quarterly financial results) or the most recent actual results(BPS, etc.) were used (based on disclosed data available as of December 10). For forecasts disclosed as ranges, as a general rule, the median was used for
calculations. For the Company, Alpha-Win Research Dept.’s forecast was used. For other companies, values not disclosed are marked by “ND” (not determined),“UD” (undisclosed), or “-”. The average was calculated using only valid figures.

47/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

The Company’s Valuation
w The forecasted P/E for thisFY is 21.5. The forecasted
P/E for the FY after the next
is 13.5.

w The PEG ratio is around alittle less than 1 to 2(26) PEG Ratio (Price Earnings
Growth Ratio): A valuation
indicator for stock value thattakes into consideration acompany's medium-term profit
growth rate. It is calculated by
dividing the expected priceearnings ratio (P/E) by the
expected medium-term profit
growth rate (%) per share.
Generally, a PEG ratio of lessthan 1 means the stock isundervalued, and overvalued if it
is more than 2.

w Should closely watch thetightening of personal
information protection
regulations, financial
performance, changes in
KPIs, and M&As as factorsthat may impact stock price

IT companies, and especially AdTech companies, tend to be valued at apremium in anticipation of high growth. Concerning the Company’svaluation, though, its P/E based on our forecasted EPS is expected to dropfrom 21.5 in the current fiscal year to 16.4 in the next fiscal year and 13.5 in
the fiscal year after the next, and these levels seem to be within an acceptable
range.
If the Company's normalized EPS growth rate over the medium term isassumed to be 25%, its PEG Ratio26 comes out to be a little less than 0.9 forthis fiscal year (2.0 if the annual average profit growth rate is assumed to beabout 10.8%). If a PEG of up to about 2 can be seen as acceptable for growing
companies, then the Company’s stock price may make it a possible
investment candidate regarding the balance against the anticipated profit
growth rate.
If the likelihood of achieving the targets for financial performance andconducting another dividend hike increases, then its stock may possibly rise
to a higher level.

Key Points that May Impact Future Stock Price
As factors that may affect stock price, we should continue to closely watch
the situation concerning tightened regulation on the protection of personal
information, the trends in monthly sales (YoY), the quarterly changes in
profit growth and profit growth rate, the level of dividend, financial trend of
the advertising agency DX and new services in which growth is expected,
M&As and business acquisitions or alliances, future announcements of new
products and services, and the trends of the entire Internet ad market.
In addition, as the most important management indicators (KPIs) in judging
the Company’s growth potential in profit, we should continue to follow thechange in the unit price (pricing strategies) and the number of active accountsof AD EBiS, in addition to the churn rate of AD EBiS and the proportion of
the new services in the consolidated sales which the Company has newly
introduced as KPIs.

Medium- to Long-Term Outlook
w Future growth may be
anticipated as a defensive,
AdTech-related, domesticdemand-related, and smallcap growth stock.

Over the medium to long term, the Company's Marketing Platform businesshas a large growth potential in the Internet advertising market, and theCompany also seems to be placed in a good position with regards to reaping
benefits from this growth potential.
We would like to follow the Company’s growth as an AdTech-related,
domestic-demand-related, and small-cap growth stock.

48/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Mothers)

Issued: 12/13/2021

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊

Disclaimers
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital
Inc. (hereinafter “Alpha-Win”) on the request of the company presented in this Report.
This Report is not to be construed as a recommendation or solicitation of investment. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the useof or reliance on this Report. Investors who read this report must make their own decisions on allinvestment matters and take full responsibility regarding their investment.
This Report has been prepared with a focus on objectivity and neutrality based on the analysis of generally
accessible public information and supplemental information including interview(s) by the analyst. Alpha-Win, thewriter, and/or other persons involved in the publication of this Report may already hold, or buy and sell in the
future, the stock of the company presented in this Report.
Contents of this Report are based on information current as of the issue date and are subject to change
without notice. For the latest (updated) report, please see our website (http://www.awincap.com/). We also
do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability.
Copyright of this Report belongs to Alpha-Win and no part of the publication may be copied, photocopied, cited, ortranslated without our consent. For inquiries regarding this Report, please send us an e-mail to info@awincap.com.
However, Alpha-Win and the writer of this Report do not have any obligation to reply to inquiries.
FV2021-1220-1700

49/49
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete,appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage
resulting from the use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding theirinvestment. Intellectual property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.