Synchro Food Co.,Ltd.

Recruitment advertising revenue generated from "Kyujin Inshokuten.com" in the Media Platform Business accounts for 61.8% (¥3,424,262 thousand) of consolidated net sales, indicating a high degree of dependence on a specific service. If growth in this service slows due to economic trends, changes in the employment situation in the food service industry, competitor activity, or other factors, there is a risk that profitability could decline significantly. The Group is working to expand services beyond recruitment advertising revenue in order to diversify its revenue sources.

The Group operates a Media Platform Business specialized in the food service industry as its core business, and its performance is heavily influenced by trends in Japan's restaurant support market. Although the Group has built a revenue-earning portfolio covering both store openings and closures, if the overall market shrinks, growth in the number of users may not be achievable, which could affect the business and performance. The Group is diversifying risk by developing services that cover all phases of a restaurant's lifecycle.

Multiple competitors already offer similar services to "Kyujin Inshokuten.com," the Group's recruitment service specialized for the food service industry. If major companies with financial strength and brand power develop similar services in the future, competition for user acquisition could intensify, leading to lower profitability. The Group is pursuing differentiation through the provision of total services, but maintaining a competitive advantage remains a challenge.

The Group acquires and manages personal information of restaurant operators, real estate operators, interior contractors, job seekers, and others, and there is a risk of information leakage due to unauthorized external access or unforeseen circumstances. Should an information leak occur, it could result in legal liability for damages, a decline in user trust, and customer attrition, potentially having a material impact on the business and performance. Since April 2007, the Group has obtained ISMS (JIS Q 27001) certification and is working to build and continuously improve its personal information protection management system.

Because the primary infrastructure of the business is the internet environment, a system failure caused by a surge in access, human error, unauthorized access, natural disasters, or other factors could result in the suspension of business activities and the risk of damage claims. In addition, since the process from order receipt to revenue recognition is centrally managed through an internal management system, a system failure could also make it impossible to record sales accurately. The Group strives for stable operations through security measures, server enhancements, and the establishment of information security regulations.

The Group acquires users largely dependent on traffic from specific search engines such as "Yahoo! Japan" and "Google," and if changes to search algorithms render its SEO measures ineffective, there is a risk that traffic to its sites could decline significantly. The Group is working to diversify risk by diversifying its customer acquisition measures (web advertising, smartphone app advertising, etc.), but the structural risk of dependence on search engines remains.

New technologies and services are continually emerging in the internet industry, and if the Group fails to respond promptly to unexpected technological changes, it may incur significant costs for improving existing systems or developing new ones, which could affect the business and performance. In addition, if user demand for paid registration or business demand for advertising placement changes significantly due to technological developments or the emergence of alternative services, there is also a risk that profitability could decline.

Securing and developing excellent human resources is an important challenge for business expansion and maintaining competitiveness. If the Group is unable to secure human resources in a timely manner due to intensifying competition for talent or changes in market needs, or if it experiences a mass exodus of personnel, this could affect the business and performance. While the Group does not currently recognize any material impediment to securing personnel, given its relatively small organizational structure, the impact of human resource risk tends to be relatively large.

The Group may carry out business investments such as acquisitions of domestic and overseas companies, establishment of subsidiaries, joint ventures, and alliances. If such investments do not proceed as planned due to changes in the business environment or unforeseen circumstances, impairment losses on goodwill or valuation losses on shares could occur, potentially affecting performance and financial condition. The Group conducts due diligence prior to making investments to assess risks and recoverability in advance, and monitors discrepancies between the financial condition and business plans of investees after the investment is made.

The Group is subject to multiple laws and regulations, including the Act on the Protection of Personal Information, the Act on Prohibition of Unauthorized Computer Access, the Act on Specified Commercial Transactions, and the Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers. Future amendments to laws, the emergence of new regulatory targets, or administrative dispositions could affect the business and performance. In addition, there are also risks of litigation arising from infringement of third-party intellectual property rights and risks of liability for damages to users caused by system failures and other issues. The Group strives to ensure legal compliance by developing and strengthening its internal systems, but it cannot completely eliminate the possibility of unforeseen circumstances.