WEBTOON Entertainment Inc

This Report contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

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expected operating results, such as revenue growth and earnings;

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economic and industry trends;

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the demand for our platform in general;

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our ability to continue to attract and empower creators to create engaging content;

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our ability to grow and retain our user base and strengthen our brand;

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our ability to increase engagement with users and strengthen our community;

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our ability to attract and retain our senior management team or key personnel;

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our ability to continue to innovate and expand our advertising business;

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our ability to increase paying ratio and strengthen our monetization capability;

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our ability to increase revenues from our intellectual property operations;

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our beliefs about and objectives for future operation;

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future acquisitions or investments;

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our ability to continue to grow across our current markets and expand into new markets;

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our ability to continue to innovate and enhance our offerings;

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the functionality and economics of our platform on mobile operating systems;

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our ability to obtain, maintain, protect and enhance our intellectual property;

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our business model and expectations and management of future growth, including expansion in international markets and expenditures associated with such growth; and

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our ability to compete with existing and new competitors in existing and new markets.

Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to risks, uncertainties and changes that are difficult to predict and many of which are outside of our control. You should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, our actual results and financial condition could vary materially from expectations and projections expressed or implied in our forward-looking statements. Risks and uncertainties include:

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we have experienced rapid growth in recent periods, and our historical growth rates may not be indicative of our future performance;

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our growth depends on our ability to attract and empower creators and our ability to properly support and incentivize our creators to create compelling, engaging and interactive content;

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our growth depends on our ability to retain, attract and engage with our users, and our ability to anticipate, understand and respond appropriately to market trends and rapidly changing user preferences in a timely manner;

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if we fail to retain or increase our paying users or if we fail to maintain or continue to increase our paying ratio, our business, financial condition or results of operations could be adversely affected;

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we operate in highly competitive markets, and we face significant competition to attract and empower our creators and users;

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maintaining and enhancing the market recognition and reputation of our brands is a critical component of our relationship with creators, users and other third parties;

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our growth depends on our ability to innovate and expand our advertising business and to develop effective advertising products;

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we intend to continue to diversify our monetization strategy and increase revenues from IP Adaptations, which may not be successful;

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we intend to continue to expand our presence in existing and into new geographic markets and execute upon our growth initiatives, and our international expansion efforts may not be successful;

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we face a variety of risks associated with conducting business around the world, and these risks will increase as we continue to expand our presence into new geographic markets;

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our future growth depends on our ability to continue innovating our platform to offer attractive features and safe and civil experiences for our creators and users;

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we depend on effectively operating with mobile operating systems, hardware, technologies, products, standards and networks that we do not control, and changes to any of these or our platform could adversely affect our user retention, growth, engagement and monetization;

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we have a history of net losses, and we anticipate increasing expenses in the future, and we may not achieve or maintain profitability;

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if we fail to control our content-related costs, the expenses we incur may exceed the increase in revenues;

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the future success of our business relies heavily on our sales and marketing efforts, and if we fail to maintain sales and marketing efficiency, the marketing expenses we incur as we grow may exceed the increase in revenues;

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we are, and could become, subject to significant legal proceedings and regulatory investigations that may result in significant expenses, fines and reputational damage;

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the success of our growth strategy depends on our ability to provide a safe online environment for children;

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we are subject to complex and evolving federal, state and international laws, regulations, rules, standards and contractual obligations regarding privacy, data protection and cybersecurity, which could result in investigations, claims, changes to our business practices, increased cost of operations and declines in user growth, retention or engagement, any of which could adversely affect our business;

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claims by others that we infringe, misappropriate or otherwise violate their intellectual property rights through the activities of our creators or users or the content on our platform could subject us to liability;

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our defenses to claims of infringement, misappropriation or other violations of third-party intellectual property rights are costly and may not be successful;

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failure to obtain, maintain, protect and enforce our proprietary and intellectual property rights could adversely affect our business;

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there are special risks involved with investing in companies operating in Korea, including the possibility of restrictions being imposed by the Korean government in emergency circumstances, accounting and corporate disclosure standards that differ from those in other jurisdictions, and the risk of direct or vicarious criminal liability for executive officers of our Korean affiliates;

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NAVER WEBTOON’s transactions with its subsidiaries and affiliates may be restricted under Korean fair trade regulations;

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NAVER controls a significant percentage of our voting power and may have interests that conflict with the interests of other stockholders; and

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we are “controlled company” and, as a result, qualify for exemptions from certain corporate governance requirements.

You should also carefully read the risk factors described in the section entitled “Risk Factors” in this Report for a description of the material risks that could, among other things, cause our actual results to differ materially from those expressed or implied in our forward-looking statements. You should understand that it is not possible to predict or identify all such factors and you should not consider the risks described above to be a complete statement of all potential risks and uncertainties. Any forward-looking statement made by us in this Report is based only on information currently available to us and speaks only as of the date on which it is made. We do not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments, except as required by law.

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