rakumo Inc.

rakumo employs a subscription-based recurring revenue model, and the average monthly churn rate for FY2025 remained low and stable at 0.67%. However, if the deterioration of economic conditions or the business climate causes customer companies to curtail their IT investment, there is a risk that new and additional orders will stagnate and the churn rate will rise. While the stock-type business model offers stability, in phases where the number of cancellations exceeds the number of new contracts, revenue may fall below the previous fiscal year's level. The Company has established a risk management framework through its Risk and Compliance Committee to work toward preventing such occurrences.

The Group provides its principal services—rakumo, aloop, gamba!, SmartVision IR, STARTRE CMS, and AGENT SHARE—in cloud form, and plans its business development on the premise of continued growth in the cloud market. However, if growth in the cloud market slows due to curtailed corporate IT investment or the introduction of unforeseen regulations, this could affect the Group's operating results and financial position. The Group anticipates continued market growth and plans to further expand its business within this market.

The Group's applications are built on the cloud platforms of Google, Salesforce, and Microsoft, and the Company has also entered into reseller agreements with Google Cloud Japan G.K. and Salesforce Japan Co., Ltd. If any of these companies discontinues or suspends its platform due to changes in corporate strategy, experiences functional failures or major functional changes, loses competitive advantage, raises usage fees, or terminates its contract, this could have a material impact on the Group's business operations, operating results, and financial position. While the Company currently judges that it maintains smooth relationships with each company, the high degree of dependency constitutes a structural risk.

The Group's services are provided via the internet and are highly dependent on communication networks and infrastructure. If a large-scale system failure occurs due to unforeseen factors such as natural disasters, accidents, program defects, or unauthorized access, this could result in service suspension and damage to customers, affecting operating results and financial position. The Group seeks to mitigate this risk by adopting the highly reliable cloud platforms of Google, Salesforce, and Microsoft.

The Group handles a large volume of customer company information and personal information, and strives to protect information assets by establishing and operating a basic information security policy and related regulations. However, if a leakage, loss, or unauthorized use of important information assets occurs for any reason, this could result in a loss of trust and claims for damages, affecting business activities, operating results, and financial position. As a cloud service provider entrusted with customer data, this risk could pose a serious problem fundamental to the business.

The internet industry to which the Group belongs is characterized by rapid development of new technologies and the emergence of new services, with customer needs also changing rapidly. If the Group is slow to respond to technological innovation or customer needs, or if it must make investments exceeding expectations to respond to new technologies, this could affect its business operations, operating results, and financial position. The Group is actively working to gather information on the latest technology trends and accumulate know-how through securing and training excellent personnel.

There are multiple competitors in the corporate groupware market, and with the spread of the cloud market, new entrants of various sizes are expected. Some competitors possess greater capital strength, technological capability, sales capability, and customer base than the Group. If intensifying competition prevents the Group from developing its business as planned, this could affect its operating results and financial position. The Group strives to maintain its competitiveness by strengthening its product development capabilities and continuously improving its products and service quality.

The Company acquired all shares of gamba Inc. in June 2022, iVision Inc. in July 2023, STARTRE Inc. in July 2025, and Agent Share Inc. in August 2025, and has recorded goodwill and customer-related assets on its consolidated balance sheet. If the future profitability of these companies declines due to changes in the business environment or other factors, an impairment of goodwill or other assets may become necessary, which could affect the Group's business operations, operating results, and financial position. As the Group continues its business expansion strategy through M&A, the business performance trends of acquired companies are structurally linked directly to financial risk.

The Group's consolidated number of employees is small, at 124 (as of December 31, 2025), and securing, developing, and retaining excellent personnel is essential for business expansion. If the Group is unable to sufficiently secure and develop excellent personnel when needed, or if the outflow of personnel progresses, this could hinder ordinary business operations and business expansion, affecting operating results and financial position. In addition to continuous recruitment and training measures and measures to improve retention rates, the Group is working to build a stable structure by strengthening cooperation with external partners.

If the 8th Series Stock Acquisition Rights and the 1st Series Unsecured Convertible Bond-type Bonds with Stock Acquisition Rights, issued in May 2023, are all exercised or converted, 1,432,700 new shares will be issued, resulting in a dilution rate of 24.58% relative to the total number of issued shares of 5,829,500 as of December 31, 2025. This could cause fluctuations in the supply-demand balance in the stock market and affect the share price. The Company judges the scale of this dilution to be reasonable, as it believes this fundraising will lead to enhanced corporate value through the growth and expansion of existing businesses, thereby contributing to an increase in shareholder value for existing shareholders over the medium to long term.