FORCIA,Inc.

Founders and Representative Directors Hiroko Yashiro and Tetsuro Yashiro play important roles in formulating management policy and strategy, and if either becomes unable to perform their duties for any reason, this could significantly impact business operations and results. The Company seeks to reduce this dependence through delegation of authority for routine operations, introduction of a collegial decision-making system at management meetings, and development of successor personnel.

In FY2025 (ended February 2025), the top three customers (Club Tourism 20.4%, JTB 11.4%, Nippon Travel Agency 10.0%) accounted for 41.8% of net sales. Changes in business policy or reduction of transactions by major customers could lead to a significant decline in sales. The Company addresses this through building collaborative frameworks with external partner companies and maintaining relationships with key personnel.

Sales to the travel industry accounted for 77% of total net sales in FY2025 (ended February 2025), indicating high dependency on a specific industry. Changes in the competitive environment, such as increased share by overseas OTAs entering the market, could affect customers' business operations and consequently spill over to the Company's business results. The Company is diversifying by expanding its web Connect customer base to railway companies and non-travel companies.

The Company is actively promoting proprietary product development centered on its SaaS product "web Connect," but if the expected results are not achieved as planned due to environmental changes or other factors, this could result in a sales shortfall or impairment of software assets. Risk-return review at management meetings, resolutions for asset capitalization at the Board of Directors, and progress management through monthly comparison of budget versus actual results are implemented.

Competition for highly skilled engineers essential to business continuity and expansion is intensifying year by year, and failure to meet recruitment plans or turnover of core personnel could lead to a decline in software development capability. In addition to ongoing new graduate and mid-career hiring, the Company implements measures to prevent turnover, including alumni recruitment, referral recruitment, and a bonus system designed to be perceived as fair.

As the Company's business primarily serves corporate customers, a decline in IT investment appetite due to economic deterioration domestically or overseas could lead to sluggish new customer acquisition or reduced orders from existing customers. The Company aims to diversify this risk by diversifying its customer base within the travel and tourism industry (expanding sales to railway operators and new market entrants) and expanding into the wholesale and manufacturing industries.

In the software development market, the pace of technological innovation and changes in customer needs is rapid, and failure to respond in a timely manner, or an increase in response costs (system investment and personnel expenses), could affect business results and financial condition. The Company maintains its response capability through monitoring trends in its technology division, verifying new technologies, encouraging certification acquisition, and participating in and hosting external events.

If confidential customer information handled in the course of business is lost or leaked, or if unauthorized external intrusion occurs, this could affect business results through claims for damages or loss of trust. The Company has obtained Privacy Mark (JIS Q 15001) and ISMS (ISO/IEC27001:2013) certifications, and implements multi-layered organizational, personnel, physical, and technical safety management measures.

The two Representative Directors hold a majority of voting rights, and as of February 28, 2025, the tradable share ratio remained at 29.4%, with the market capitalization of tradable shares approaching the listing maintenance criteria for the Tokyo Stock Exchange Growth Market. Should liquidity decline further, trading stagnation or worsening supply-demand balance could occur in the market. The Company plans to improve liquidity by requesting major shareholders to sell a portion of their shares.

In development using "Spook" and initial web Connect development, changes in development timing or specifications due to customer circumstances could cause sales and profit recognition to shift to the following quarter or fiscal year. The likelihood of this occurring is explicitly stated as high, and the Company addresses this through timely reflection of project status in its core system and a rapid budget revision framework.