Manabi-aid Co., Ltd

Due to the growth of "Manabi Aid for Enterprise," sales tend to concentrate at the fiscal year-end and the beginning of the next fiscal year (March and April), skewing toward the fourth quarter (February to April). In Q4 of FY2024 (ending April 2024), sales were ¥240,291 thousand, accounting for approximately 38% of the total, while in Q4 of FY2025 (ending April 2025), sales significantly decreased to ¥94,288 thousand year-on-year, highlighting the impact of timing shifts on business performance. The company aims to mitigate this risk by strengthening its sales structure to secure early orders and enhancing content production and system development.

In FY2025 (ending April 2025), three services—"Manabi Aid Master," "Manabi Aid Master for School," and "Manabi Aid for Enterprise"—accounted for 96.7% of total sales, indicating an extremely high degree of dependence on specific services. If serious problems arise with these services or customer attrition occurs due to intensified competition, it would have a direct and significant impact on overall business performance. The company seeks to diversify this risk by enhancing the content of its core services while simultaneously developing new services.

Growth of the three core services requires both the acquisition of new customers and the maintenance of contract renewal rates and increased customer unit prices among existing customers. However, there is a risk that contracts may not be renewed, or expected unit prices may not be achieved, due to poor business performance of customers or declining satisfaction with content and management functions. If new customer acquisition falls short of expectations, this would similarly affect business performance and financial condition. The company addresses this through strengthened advertising and sales activities and improvements in features and content quality.

The company handles personal information of cram schools, students, and others, and in the event of an information leak, there could be significant damage to social credibility, potentially having a material impact on business performance and financial condition. The company obtained Privacy Mark certification in August 2022 and undergoes renewal reviews every two years, in addition to establishing information system management regulations and personal information protection regulations, conducting employee training, and implementing access control and log management measures. However, the risk of external leakage of information assets due to cyberattacks or system failures remains.

The company's core services operate on the premise of an internet environment, and if the communication network or systems are disrupted due to system failures or external cyberattacks, this would have a material impact on service operations. The company is working to ensure system safety through security measures and vulnerability assessments conducted by external organizations, but in the event of a failure, there is a possibility of impact on business performance through customer attrition and liability risk.

In FY2025 (ending April 2025), the company recorded an operating loss of ¥297,060 thousand, negative operating cash flow of ¥218,387 thousand, and cash and cash equivalents of ¥29,956 thousand, giving rise to events that cast material doubt on the going concern assumption. As countermeasures, the company completed a third-party allotment of new shares to Inayoshi Capital Partners Inc. (ICP) on June 16, 2025, and is seeking to expand sales channels and achieve sales growth through a capital and business alliance with NOVA Holdings. However, if these measures fail to be effective, there is a possibility of material impact on business continuity.

As of April 30, 2025, the company failed to meet the TSE Growth Market listing maintenance criterion of a tradable share market capitalization of ¥500 million or more, and submitted a "Plan for Compliance with Listing Maintenance Criteria" on July 29, 2025. If the company fails to meet the criteria within the improvement period, it will be designated as a securities under supervision/securities to be delisted for a six-month period, resulting in delisting on November 1, 2026, which would have a material impact on the stock price and liquidity. The company aims to achieve compliance through securing a stable financial base, recovering business performance, and strengthening IR activities.

Shares held by venture capital firms and others amount to 548,300 shares (16.1% of the total number of issued shares), and sales of these shares after listing could temporarily worsen the supply-demand balance, affecting the market price formation of the stock. Additionally, if the shareholdings of the largest shareholder, ICP (33.38%), and the representative director, Shuichi Hiromasa (23.73%), were to decrease significantly, this could affect the market price of the shares and the exercise of voting rights. At present, both are recognized as stable shareholders.

The company's main customers, education-related businesses such as cram schools, face the structural issue of a declining school-age population resulting from a long-term decrease in birthrate. If the declining birthrate progresses rapidly, this could impact the company's business performance and financial condition through decreases in student numbers at client cram schools, increased closures, and deteriorating business performance. The company aims to mitigate this impact by supporting the management improvement of its customers through expanded services and additional features.

At the end of the current fiscal year, the company has tax loss carryforwards. If business performance improves steadily and the loss carryforwards are exhausted, or if tax law amendments disallow such deductions, corporate tax, resident tax, and business tax would be recorded based on standard tax rates, potentially affecting business performance and financial condition. This is expected to occur within a few years; at present, the tax burden is being suppressed through the utilization of the loss carryforwards.