NIFTY Lifestyle Co., Ltd.

Changes in app stores such as Google or in SEO logic pose a risk that customer acquisition via search engines could decline, leading to reduced user numbers and revenue. The Group is working to reduce its dependence on platforms by shifting toward added value in areas difficult to replace with AI and by strengthening branding, but the structural dependence on external platforms is difficult to resolve in the short term.

In the Behavioral Support Service Business, sales dependence on the top customer by sales amount reached 37.9% in the consolidated fiscal year under review. If the relationship with this business partner deteriorates, resulting in termination of the transaction or unfavorable changes to terms, the impact on business results would be significant. The Group is working to reduce this dependence by acquiring new business partners and expanding to multiple platforms, but concentration risk remains at present.

There is a high degree of revenue dependence on "Nifty Fudousan" in the real estate domain, creating a risk that deterioration in the profitability of this service would directly affect the Group's overall business results and financial condition. The Group is promoting expansion of its business domains and diversification of sales, but excessive dependence on a specific service continues at present.

Various cyber threats, including ransomware infections, targeted attacks, unauthorized external access, and DDoS attacks, pose a risk of business disruption, information leakage, and decline in social credibility. The Group implements antivirus software and conducts information security education and awareness activities, but complete defense against increasingly sophisticated cyberattacks is difficult.

If personal information is leaked due to inadequate account management, unauthorized access, or internal misconduct, this could lead to a decline in social credibility and deterioration of business results. The Group works to prevent this through strengthened system security measures and the establishment of internal rules and information security training regarding information management, but it is difficult to completely eliminate this risk.

Delays in responding to the latest technology trends, including AI, or delays relative to competitors, pose a risk of losing opportunities for service launches, improvements, and revenue. The Group strives to optimize IT investment and thoroughly manage development and quality, but the pace of technological innovation is rapid and there is a possibility that the Group's response may not keep up.

Additional system investment arising from adding new features to existing services or responding to specification changes by platform operators poses a risk of declining profit margins. The Group strives to optimize and monitor IT investment, but if the rollout of new services and new businesses does not proceed as planned and the investment cannot be recovered, this may affect business results and financial condition.

As of the end of March 2026, the consolidated balance sheet recorded goodwill of ¥874,126 thousand and customer-related assets of ¥440,555 thousand. If the assessed value of these assets falls significantly below their book value due to divergence from the business plan or other factors, an impairment loss would be recorded, affecting business results and financial condition. At present, the assessed value is expected to sufficiently exceed the book value, but the situation could change due to future changes in the business environment.

The Group's organizational structure is small in scale, creating uncertainty as to whether sufficient personnel can be secured and developed in line with business expansion, as well as risks of personnel turnover and difficulty in hiring. The Group is working to improve treatment and working conditions and to expand training, but if personnel with the necessary skills cannot be secured, this may hinder business operations and affect business results.

Nifty Corporation holds 65.3% of the Company's issued shares, giving it the potential to exert significant influence over resolutions at shareholders' meetings. In addition, the "Nifty" trademark is used based on a trademark license agreement with Nifty Corporation, and if the Company ceases to be a subsidiary or affiliate of Nifty Corporation, use of the trademark may become impossible or its terms of use may change, posing a risk to brand value and business results.