Jorudan Co.,Ltd.

In the fiscal year under review, the Transfer Guide Business accounted for 82.7% of net sales, meaning that the performance trends of this segment directly affect the Group's overall financial position and operating results. Based on the "Norikae Annai" service for mobile and PC internet, the Group operates travel sales, restaurant information, MaaS businesses, and other services, and this level of dependence is expected to remain high going forward. Although the Group will continue to implement measures such as enhancing functionality and improving usability, depending on trends in access numbers and user numbers, there is a possibility of a material impact on business performance.

The rapid advancement of AI technologies, including generative AI, may change users' information-gathering styles, potentially reducing access numbers and user numbers for the services and content provided by the Group. In addition, some existing services may be replaced by AI technology, potentially reducing their value and competitiveness. On the other hand, the use of AI technology also represents an opportunity to develop new services and expand business, and the Group's skill in responding to this trend will affect business performance.

In the route search market, strong competitors exist, including Val Laboratory Inc.'s "Ekispert," Ekitan Co., Ltd.'s "Ekitan," and NAVITIME JAPAN Co., Ltd.'s "NAVITIME," and major internet companies are also enhancing the functionality of their route search services. The convergence of route search and map services is expanding the competitive landscape, and numerous competitors have also entered the travel sales, restaurant information, and MaaS businesses. The Group continues to implement ongoing functional enhancements and differentiation measures, but if these do not proceed as expected, there is a possibility of an impact on business operations and results of operations.

For the timetable data that forms the foundation of the Transfer Guide Business, the Group receives digital data mainly under a contract with The Transportation News Co., Ltd. If this contract is terminated or changed, or if the counterparty's policy changes, delays in updating "Norikae Annai," information errors, or increased costs may occur. In addition, for corporate products and services, sales are highly dependent on a small number of IT system development companies, local governments, and specific corporate groups, and there is a risk that sales could decline due to changes in the policies of these counterparties. The Group has a policy of diversifying its sales destinations, but its current dependence on specific counterparties remains substantial.

Services for smartphones and tablets depend on the OS and distribution platforms of two companies, Apple Inc. and Google Inc. Access numbers and user numbers for these applications are very large, and the proportion of revenue based on this foundation has been trending upward. If changes occur in the conditions for providing applications due to policy changes by either company, this may result in decreased access numbers and user numbers, reduced profitability, and increased cost burdens. Although the Group is implementing countermeasures, a structural risk exists in that the Group depends on the decision-making of platform operators.

The Group holds personal information such as registration information and purchase history of "Norikae Annai" customers and customer information for the travel business, and there is a possibility of data leakage, system failure, or service suspension due to unauthorized external access, computer viruses, or errors by officers or employees. In the event of a personal information leak, there is a risk of claims for damages, sanctions by authorities, criminal penalties, and loss of social credibility. Although the Group has implemented measures such as obtaining ISMS certification and building redundancy in data centers, it is difficult to reduce this risk to zero.

The outbreak or spread of infectious diseases, deterioration of the international political situation, wars, regional conflicts, and exchange rate fluctuations may lead to decreased demand for travel-related services (particularly overseas travel), decreased use of various "Norikae Annai" internet services, decreased demand for travel-related advertising, and deteriorated performance of investees. As of the time of preparing the annual securities report, risks related to the international situation had already materialized, causing a significant impact on business operations and results of operations. Although the Group is implementing measures such as fixed cost reductions and provision of new services, if the spread of infectious diseases exceeds the assumed scale or duration, these measures may not be effective.

Toshikazu Sato, Representative Director and President, holds 50.00% of total issued shares (as of September 30, 2025) and has significant influence over management policy, strategic decisions, and matters resolved at shareholders' meetings, so if he becomes unable to perform his duties, there could be a significant impact on management policy and business performance. In addition, the Group's total number of consolidated employees is small at 178 (as of September 30, 2025), so illness, death, or resignation of key engineers could directly affect business performance. Although the Group is strengthening corporate governance and promoting the sharing of technology and human resource development, its dependence remains high at this stage.

As of September 30, 2025, the Company and its consolidated subsidiaries have made investments in a total of 9 companies for business alliance purposes, in addition to contributions to investment limited partnerships, holdings of shares in 6 non-consolidated subsidiaries and affiliated companies, and loans to affiliated companies. If the performance of investees deteriorates, it may become necessary to record valuation losses or provisions, which would affect the Group's financial position and results of operations. The Group intends to continue making investments and loans in the future, including through M&A, establishment of subsidiaries, and participation in joint ventures, but it is difficult to reliably predict the outcomes of such investments and loans, and there is a risk that losses may occur.

With respect to internet use and MaaS, there is a possibility of expansion of the scope of application of existing laws and regulations, enactment of new laws and regulations, or voluntary regulation among operators, which could restrict the Group's business activities. Regarding travel-related businesses, the Company is registered as a Type 1 Travel Agency and J MaaS Co., Ltd. is registered as a Type 2 Travel Agency; revisions to the Travel Agency Act and related laws could introduce new regulations that restrict business activities, or deregulation could intensify competition. Changes in related laws and regulations, including the Act on the Protection of Personal Information, may also lead to increased compliance costs and a contraction of business areas.