Open Door Inc.

The Group's business is based on the travel comparison site "Travelko," and any decline in the site's competitiveness or reduction in the number of users would directly affect business performance. Concerns also include a decline in travel demand due to global price increases, persistently high travel costs, and sharp fluctuations in financial markets. If the site's convenience relatively declines due to the introduction of new regulations, the impact on business performance would be significant given the lack of alternative revenue sources.

Since the internet advertising market is affected by economic trends and the business performance of advertisers, revenue would be impacted in the event of sharp economic fluctuations. As the Company provides services specialized in travel, there is a risk that the travel-related advertising market could shrink due to deterioration of the travel-related market or advertisers' revisions to their advertising strategies. A decline in users' willingness to travel due to natural disasters, the spread of infectious diseases, and similar factors would also directly affect the performance of the Travel-Related Business.

There are multiple competing companies offering similar services in the travel comparison site market, and competition to acquire users could intensify due to the entry of major companies or the expansion of similar sites by competitors. The Company seeks to maintain its competitiveness through enhanced content and other measures, but failure to respond to changes in the competitive environment could lead to a decline in the number of users. Since a shrinking user base directly affects advertising revenue, the impact on business performance would be significant.

In the internet-related market, the pace of technological innovation and changes in customer needs is rapid, and unexpected technological innovation could require substantial system-related investment. Failure to respond appropriately to technological innovation would reduce the competitiveness of services and affect business performance. The Company is taking measures such as human resource development and system updates centered on its systems department, but there is a risk that it may not be able to keep pace depending on the speed of change.

The Group's business centers on providing services via the internet environment, and is exposed to risks such as surges in access, power outages due to natural disasters, unauthorized access, and software malfunctions. Although the Company has implemented measures such as the use of earthquake-resistant data centers, dual power sources, and firewalls, provision of services could become difficult in the event of circumstances exceeding expectations. In addition, continued inadequate development or operation of core systems could result in overstatement or understatement of net sales or in system remediation costs.

As a business handling personal information, the Group obtains users' names, addresses, email addresses, and other information, and there is a possibility of personal information leakage due to unauthorized access or human error. Although the Company has established systems such as obtaining Privacy Mark certification, restricting access rights, and conducting internal training, if a leak occurs, the burden of response costs and loss of credibility would affect business performance. Continued compliance with the Act on the Protection of Personal Information and other related laws is also required.

The Group is subject to numerous laws and regulations, including the Act on the Protection of Personal Information, the Act against Unjustifiable Premiums and Misleading Representations, the Travel Agency Act, and the Unfair Competition Prevention Act, and business operations could be constrained if regulations are strengthened through the enactment or revision of new laws. In transactions with outsourcing partners, compliance with the Subcontract Act is also required. There is a risk of increased costs to comply with stricter regulations or of being forced to change the business model.

Daisuke Sekine, the founder and Representative Director and President, plays an extremely important role in management and business operations, including leading business strategy, and if he becomes unable to be involved in management, business performance could be affected. The Company seeks to reduce this dependence through information sharing at board meetings, delegation of authority, and recruitment of external personnel, but the risk cannot be completely eliminated. While the depth of the management team is increasing, developing successors remains an ongoing challenge.

The Group positions M&A as a means of complementing and strengthening existing businesses and expanding the scale of its operations, and conducts due diligence using experts; however, if the expected effects are not achieved due to undetectable issues or changes in the market environment, impairment losses may be required. The profit and loss status of the consolidated subsidiary Hotel Skip Co., Ltd. also affects the consolidated financial statements, and deterioration in the subsidiary's performance directly impacts the financial position of the Group as a whole. Investment securities may also be affected if their investment value is impaired due to a sharp deterioration in market conditions or similar factors, which would affect business performance.

The Group is actively pursuing new services and new businesses, including the crafts-related business, but advance investment in systems and additional expenditures such as personnel costs could reduce profit margins. If circumstances differ from initial forecasts and development does not proceed as planned, there is a risk that the investment cannot be recovered, affecting business performance. There is also a concern that if the development of internal control systems fails to keep pace with business expansion, appropriate business operations could become difficult.