Will Smart Co.,LTD.

The company operates a business specialized in the mobility industry, and during periods of restricted human mobility such as during the COVID-19 pandemic, deteriorating performance among public transportation customers could create pressure to curtail investment, potentially affecting the company's financial condition and operating results. While industry specialization is a source of competitive advantage, it also entails a structural vulnerability in which performance is affected by the business conditions of a specific industry. The company is working to mitigate this impact through increasing recurring (stock-type) revenue and expanding its customer base.

The company is a small organization with 50 employees (as of the end of December 2025), and while business expansion requires securing additional engineering, sales, and administrative personnel, high labor mobility in the internet-related business sector could make it difficult to secure and retain personnel as planned. Additionally, if internal management systems fail to keep pace with rapid business expansion, appropriate business operations could become difficult, potentially affecting financial condition and operating results. The company addresses these risks by establishing personnel development programs, setting up incentive plans, and reinforcing personnel in administrative departments.

Because the company's BtoB services are affected by customers' investment budgets, order volumes could decline during economic downturns as customers cut investment budgets amid deteriorating business performance. In particular, one-time (shot-type) revenue is derived from order-based business involving hardware provision and software development projects, and if lost orders exceed expectations, this could have a material impact on operating results. The company is working to mitigate this impact by securing stable earnings through increased recurring (stock-type) revenue and expanding its customer base.

In the services the company provides, it manages systems through which customers acquire personal information, and should a leakage of personal information occur, this could undermine trust fundamental to the business and have a material impact on financial condition and operating results. While the company implements measures to prevent leakage, including information encryption, access restrictions, establishment of personal information protection policies, and employee training, external threats such as cyberattacks cannot be completely eliminated.

The company's business relies on internet communication networks as its foundation, and if a large-scale system failure occurs due to computer virus infection, unauthorized intrusion, cyberattack, natural disaster, or other causes, and recovery is delayed, this could have a material impact on financial condition and operating results. While the company implements preventive measures such as server management and monitoring systems through external vendors and backups, risks inherent in its infrastructure-dependent structure remain.

Representative Director and President Yasuhiro Ishii plays a central role in formulating and determining management policy and business strategy, as well as in creating new business models, and if he becomes unable to continue his duties for any reason, this could affect the company's business and operating results. While the company strives to establish a management structure not dependent on any single individual through delegation of authority and other measures, it currently remains highly dependent on him.

The company differentiates itself through solutions combining IoT technology, web system development technology, and operational expertise in the mobility industry, but the entry of large competitors with financial strength and brand recognition could further intensify price competition, potentially having a material impact on financial condition and operating results. While the company strives to establish its position through problem-solving capabilities based on industry experience accumulated since its founding, the risk of large-company entry remains an ongoing threat.

ZENRIN CO., LTD. holds 43.86% of the company's voting rights and has significant influence over matters resolved at shareholders' meetings. While the company makes its own independent management decisions and has not accepted officers from its major shareholder, future changes in the business strategy of the ZENRIN Group could affect the company's operating results and financial condition. The company ensures the soundness and appropriateness of related party transactions through an approval process based on internal regulations.

The company applies the input method (based on estimated total costs) for revenue recognition on contracted development projects, and because each contract is highly individualized, if a review of estimated total costs becomes necessary due to specification additions or changes, or if development delays occur, this could affect operating results and financial condition. While the company is working to improve the accuracy of cost estimates and development progress management, the risk of changes in customer-requested specifications cannot be completely eliminated.

Operating losses and negative operating cash flow have continued, and net assets at the end of the fiscal year under review have been impaired to ¥3,183 thousand, giving rise to conditions that raise material doubt about the company's ability to continue as a going concern. The company plans to strengthen its capital base through discussions with existing shareholders and others in the early part of the first half of FY2026, but this remains undetermined at present, and depending on the outcome of fundraising efforts, this could have a material impact on cash flow. The company achieved a single-month operating profit in December 2025 and is implementing measures to improve profitability and reduce costs, but these measures are still in progress.