General Oyster,Inc.

The Group operates oyster bars featuring oysters as the primary ingredient, and there is a risk that food poisoning incidents caused by norovirus or other pathogens could result in the revocation of business licenses, suspension of operations, or claims for damages. Given the nature of the business, which centers on raw oysters as a core product, reputational damage is highly likely to directly reduce consumer purchasing intent and thus sales. While the Group addresses this through strict management based on hygiene control manuals and the assignment of food hygiene managers at all stores, it is difficult to completely eliminate this risk.

The Group depends on a single ingredient, oysters, for the majority of its sales, and there is a risk that food hygiene issues or damage to brand image could lead to a significant decline in sales volume. There is also a procurement risk that adverse natural environmental changes—such as abnormal weather, changes in marine environments, or contamination—could make it impossible to secure the necessary volume of oysters. While the Group addresses this through collaboration with producers and diversification of suppliers, high dependence on a specific ingredient represents a structural vulnerability.

Due to the demand characteristics of oysters, sales and profits tend to be concentrated in the winter months from November to March. In the results for the 26th fiscal period, an operating loss of ¥87,569 thousand was recorded in the first half, followed by an operating loss of ¥4,707 thousand in the second half, resulting in a full-year operating loss of ¥92,276 thousand. The earnings structure, in which first-half losses are offset in the second half, is susceptible to winter demand fluctuations and abnormal weather. Although the Group is working to smooth this pattern through the use of seasonal products such as rock oysters and its processing business, the structural seasonal skew persists.

Many of the Group's leases are fixed-term building lease agreements, and there is a possibility that stores may be forced to close upon contract expiration even if they are profitable. Store closures carry the risk of impairment losses, penalty payments, and restoration costs exceeding expectations, which would directly affect the financial position. As of March 31, 2026, the Group operated 30 stores, of which 19 were concentrated in the Kanto region, entailing a regional concentration risk as well.

If the profitability of fixed assets declines due to sluggish store performance or weak sales of processed oyster products, the Group may need to recognize impairment losses under impairment accounting. In the 26th fiscal period, the Group recorded a full-year operating loss of ¥92,276 thousand, making impairment risk a real concern amid declining profitability. Although the Group states it will strive to continuously improve profitability, specific countermeasures are described only in limited detail.

Of the Group's 30 stores in total, 19 are concentrated in the Kanto region, creating a risk that multiple stores could be forced to suspend operations simultaneously in the event of an earthquake, typhoon, or other natural disaster. Restrictions on economic activity due to the spread of infectious diseases, including operational restrictions, could also lead to a decline in sales. In the renewable energy business as well, construction delays caused by natural disasters could affect the timing of sales recognition.

Against the backdrop of labor shortages in the restaurant industry, there is a risk that difficulty in continuously securing and developing capable personnel could delay new business development or lower the quality of in-store customer service. In addition, since the Group employs a large number of part-time workers, an expansion of the scope of social insurance coverage could increase the burden of social insurance premiums, affecting business results. While the Group addresses this through recruitment system enhancements and various training and education programs, the labor shortage across the restaurant industry as a whole remains a structural challenge.

In the development of franchise stores under franchise agreements, there is a risk that inappropriate operations by franchisees, beyond the reach of the Group's guidance and support, could damage the brand image. As consumer trust in the safety of oysters as an ingredient forms the foundation of the Group's brand value, hygiene issues at franchise stores could spill over to affect the overall credibility of the business, including directly operated stores. While the Group provides store operation guidance and management support through supervisors, it is difficult to fully control the actions of franchisees.

If new businesses such as the e-commerce/mail-order business, the processing business (a processing plant in Otsuchi Town, Iwate Prefecture), and the renewable energy business fail to progress as planned, the Group may be unable to diversify its revenue sources, affecting business results. As the core store business is susceptible to seasonal fluctuations and intensifying competition, revenue diversification through new businesses is an important management issue. While the Group aims to achieve early profitability in each business, the accumulation of track record and know-how in business areas outside of dining remains in a developmental stage.

The Group holds personal information of members through its membership point service and other offerings, and there is a risk that internal control issues or unauthorized external access could lead to a leak of personal information, resulting in a decline in social credibility and liability for damages. The Group addresses this through compliance with the Personal Information Protection Act, implementation of access restrictions and unauthorized intrusion prevention measures, establishment of personal information management regulations, and ongoing training for officers and employees. Given the increasing sophistication of cyberattacks, continued strengthening of technical and organizational measures is required.