Fitcrew Inc.

In the highly private environment of personal training gyms, if power harassment, sexual harassment, or similar incidents occur, this could cause physical and psychological harm to customers, in addition to a significant decline in trust and reputation resulting from the matter becoming a social incident. The Company has implemented measures such as harassment training for all employees, installation of surveillance cameras in each training booth, and establishment of a customer consultation desk, but complete prevention cannot be guaranteed.

Operating and expanding personal training gyms requires securing and developing specialized personnel, including trainers, and if the Company is unable to secure and develop necessary personnel due to intensifying competition for recruitment, this could hinder its business expansion plans. The Company is expanding planned recruitment and hiring activities, implementing training curricula combining classroom instruction and practical training, and developing store managers and supervisors based on an annual education plan, but the risk of intensifying competition in the recruitment market continues.

In new store openings, which are a pillar of business expansion, there is a risk that sales and profits at new stores may fall short of plans due to difficulty securing candidate locations, failure to achieve customer acquisition targets after opening, or changes in the surrounding environment. Prior to opening a store, the Company conducts detailed calculations of revenue plans and investment payback periods based on data such as passenger volume at the nearest station, surrounding population, competitor surveys, and leased property information, but responding to changes in the environment after the fact remains challenging in some respects.

The Company relies on internet advertising as its primary means of acquiring new customers, and if advertising effectiveness falls below expectations, this could affect business results through a decrease in new membership sign-ups. The Company is working to diversify its customer acquisition methods by establishing a system for daily verification of advertising results and rapid response, as well as focusing on referrals and other channels not dependent on internet advertising, but the risk of fluctuations in the digital advertising market remains.

For the current fiscal year, the Company has recorded deferred tax assets of ¥79,753 thousand on the premise that the carryforward deduction system under the wage increase promotion tax system will apply, and as a result, the effective corporate tax burden rate is below the statutory effective tax rate. From FY2026 (ending November 2026) onward, the normal corporate tax rate will apply, which is expected to affect net income, and if forecasts and assumptions regarding taxable income change and all or part of the deferred tax assets are determined to be unrecoverable, this could have an additional adverse effect on business results and financial position.

The personal training gym business has low barriers to entry, and increased competition is expected due to a rise in new entrants. Additionally, because it is a consumer-facing service, demand is subject to fluctuation risk due to economic trends, trends, and changes in customer preferences. The Company strives to maintain competitive advantage by leveraging its years of accumulated know-how, but if the market environment changes significantly, this could affect its business results and financial position.

The Company holds personal information of customers, employees, and others, and if an information leak occurs due to an unforeseen event, this could affect business results and financial position through loss of social trust and claims for damages. The Company has obtained Privacy Mark certification, established regulations concerning personal information, conducted employee training, and implemented regular checks by the internal audit office, but risks such as cyberattacks and internal misconduct cannot be completely eliminated.

The Company is subject to a variety of legal regulations, including the Act against Unjustifiable Premiums and Misleading Representations, the Personal Information Protection Act, the Fire Service Act, and the Subcontract Act, and the occurrence of violations or amendments to laws and enactment of new regulations could restrict its business activities. The Company strives to establish a compliance framework through regular training for officers and employees, establishment of a Risk and Compliance Committee, and strengthened cooperation with external experts, but if the Company is slow to respond to changes in the regulatory environment, this could affect its business results.

If the outbreak of a new infectious disease results in failure to achieve membership sign-up plans, an increase in membership suspensions or cancellations, or an increase in employee absences, this could affect business results and financial position. The Company implements hygiene measures such as thorough disinfection and cleaning of training equipment after use, along with employee training, but it is difficult to control the occurrence of infectious disease outbreaks itself.

The Company considers strategic M&A aimed at expanding business scale and developing new business formats as an option, but if contingent liabilities or unrecognized liabilities are discovered after an M&A transaction, or if business integration or expansion does not proceed as planned, this could affect business results and financial position. In implementing M&A, the Company strives to reduce risk through due diligence including advice from external experts, but the subsequent emergence of risks cannot be completely prevented.