Thinca Co.,Ltd.

Existing competitors exist for each function provided by "Kaiküra" such as call recording, voice-to-text conversion, and SMS transmission, and there is a possibility of intensifying competition due to new entrants. For "Kaiküra Phone" released in January 2025, competition is also expected from competitors offering similar cloud telephone services. While the Company aims to maintain its competitive advantage through volume discounts and service development promotion, an intensification of the competitive environment could affect its business results and financial position.

With the advancement of generative AI and low-code/no-code tools, services with similar functions can now be developed relatively easily, creating a risk that the competitive environment will change. The Company recognizes that its "Kaiküra" service, which includes mechanisms such as hardware adapters, is not easily imitated in a simple manner; however, if the competitive environment changes beyond the Company's expectations, this could affect its business operations. The Company is working on improving service functions and developing new services utilizing generative AI.

"Kaiküra" is provided as a subscription-based service, and continued use by existing users is directly linked to the stable generation of monthly usage fees and usage-based revenue. If cancellations significantly exceed expectations due to a decline in service appeal, the emergence of competitors, deteriorating support satisfaction, or other factors, the Company's revenue base would be impaired. The Company seeks to maintain and improve the retention rate through enhanced onboarding activities and user follow-up.

In FY2025 (ending December 2025), the Company's revenue is derived from "Kaiküra," resulting in an extremely high degree of dependence on a single service. If revenue from "Kaiküra" declines significantly, there is no alternative revenue source, which could have a direct and material effect on the Company's business results and financial position. The Company is working to maintain and strengthen its competitiveness through the expansion of service functions and the release of "Kaiküra Phone."

In providing the "Kaiküra" service, the Company receives personal information and other confidential information from users, and if leakage, tampering, unauthorized use, or the like occurs, it could result in claims for damages or loss of credibility, materially affecting business operations. The Company strives to prevent information security incidents in advance through the establishment of various security regulations, systematic countermeasures, employee training, and acquisition of the Privacy Mark, among other measures.

"Kaiküra" relies on internet communication networks as its foundation, and there is a possibility that service provision could be suspended due to network failures caused by large-scale natural disasters, terrorism, war, etc., or due to server downtime or service malfunctions resulting from access volumes exceeding expectations. Service suspension is directly linked to customer attrition and the risk of damages claims, and would affect business results and financial position. The Company has implemented measures such as system and server redundancy, operational monitoring, and the establishment of data backup systems.

Takahiro Ejiri, the founder and Representative Director and President, plays an extremely important role in determining sales strategy, development, and management policy, and if he becomes unable to perform his duties, this could cause significant disruption to business operations. The Company is working to establish a management structure that eliminates excessive dependence on a specific individual by expanding and developing executive personnel and building a division-of-labor system through delegation of authority.

The Company is subject to legal regulations such as the Telecommunications Business Act, the Act on the Protection of Personal Information, and cloud security-related regulations, and amendments to or tightening of these regulations could impose constraints on the content of services provided, affecting business operations. The Company seeks to reduce the risk of legal violations by establishing and operating internal regulations such as compliance rules and risk management rules.

Since revenue recognition for "Kaiküra" begins upon completion of adapter installation at a user's site, delays in installation work or insufficient procurement of adapters directly lead to delays in recording revenue. The Company seeks to mitigate this risk by securing its own installation personnel, establishing a system for outsourcing to external construction contractors, and securing inventory based on market supply and demand while exploring next-generation adapters.

The recruitment, development, and retention of highly specialized personnel in business development, engineering, corporate management, and other areas is a critical requirement for business continuity and growth; if the Company is unable to secure personnel as planned, this could become a constraint on business operations and affect business results. In addition to strengthening mid-career hiring, the Company is working to improve employee job satisfaction through enhanced training programs, revisions to the personnel evaluation system, provision of incentives, and improvements to the working environment.