CYND Co., Ltd.

Existing competitors are present in the internet services market for the beauty and hair salon field, and intensified competition due to new entrants is anticipated. If competitors' sales policies, pricing, and service content affect the market and the Group is unable to achieve effective differentiation, the Group's intended business development may become difficult, potentially affecting business results and financial position. The Group intends to continue providing services that reflect customer needs.

The Beauty & Hair Salon Solutions Business is centered on industry-specific SaaS and anticipates growth premised on the expansion of the online reservation market for beauty and hair salon services. If market growth stagnates or contracts for any reason, or if the Group's response to market trends is delayed, this could have a material impact on business results and financial position. The Group strives to continuously monitor market trends and develop countermeasures.

In internet-related markets, technological innovation and changes in customer needs occur very rapidly, requiring flexible response. If the Group is unable to respond to such changes in a timely manner, or if substantial costs such as system investment and personnel expenses are required to respond, this may affect business results and financial position. The Group seeks to address this by establishing a system for grasping the latest technology trends and by securing and developing excellent personnel.

The Group's services are provided via the internet, and if a system failure or network disconnection occurs due to large-scale programming defects, natural disasters, unauthorized access, or other causes, this could result in loss of social credibility and liability for damages to customers. The Group strives to prevent failures through server equipment enhancement, security reinforcement, and system management structure development, but unforeseeable troubles cannot be completely eliminated.

Dependence on the platforms of Apple Inc. and Google Inc. for providing smartphone applications is an important precondition for the business. The Group also has functions linking with external providers' services such as centralized reservation management, and changes in these providers' trends, business strategies, or relationships with the Group may affect business results and financial position. There is currently no specific stated countermeasure for securing alternative means.

The Group is a personal information handling business operator that handles personal information in connection with providing services, and if leakage, falsification, or unauthorized use occurs, this could result in claims for damages, loss of credibility, and the burden of response costs. The Group works to protect personal information by limiting access privileges, thoroughly conducting internal training for all employees, and complying with relevant laws and guidelines, but recognizes that the risk cannot be completely eliminated.

Representative Director and President Takashi Okuwaki and Representative Director and Senior Vice President Naoya Takahashi play central roles in formulating management policy and business strategy, and if either becomes unable to continue performing their duties, this may affect business results and financial position. The Group is working to build a structure that reduces dependence on these two individuals through enhanced information sharing at Board of Directors meetings and strengthening the management organization, but dependence remains high at this time.

Securing, developing, and retaining excellent personnel is recognized as the most critical issue for continued business expansion, but if the Group cannot secure or develop sufficient personnel when needed, or if personnel turnover progresses, this may impede business operations and expansion. Recruitment costs may also diverge from plans, raising concerns about the impact on business results and financial position.

The Group is pursuing business development through M&A and business alliances, but if expected effects are not achieved or previously unrecognized problems are discovered after investment, impairment of the target company's shares or business assets may become necessary. The Group's policy is to conduct due diligence and make careful decisions at Board of Directors meetings, but realization of synergies and achievement of strategic objectives are not guaranteed.

As of the end of March 2026, Representative Director and President Takashi Okuwaki (35.9%) and Representative Director and Senior Vice President Naoya Takahashi (29.3%) together hold 65.3% of shares, resulting in low stock liquidity. If, for any reason, these two individuals' shareholdings are sold and their ownership ratio declines, this may affect the market value of the shares and the exercise of voting rights. In addition, an increase in the total number of issued shares through the exercise of stock options may dilute the per-share value.