CLIP Corporation

The Group's core businesses, the Cram School (Keisetsu Seminar) (Education Business) and sports clubs (Sports Business), both target children, and there is a risk that student numbers will decline over the long term as the birthrate continues to fall. A structural contraction in demand could lead to a long-term decline in sales and profitability. No specific countermeasures by the company are disclosed in the securities report.

New entry by competitors into operating areas or deterioration in employment conditions could lead to a decline in student numbers, potentially affecting business performance. Intensifying competition also carries the risk of price competition and rising costs to acquire students. No specific countermeasures by the company are disclosed in the securities report.

If textbooks or teaching content are changed following revisions to the Courses of Study Guidelines, changes or revisions to teaching materials used at the Cram School may be required, generating additional costs that could squeeze profits. Depending on the frequency and scale of such changes, temporary cost increases could affect business performance. No specific countermeasures by the company are disclosed in the securities report.

The company follows a store opening policy that prioritizes profitability, and if no properties meeting its opening criteria are available, it may change its planned number of new store openings, which could affect its business performance outlook. In FY2025 (ended March 2025), there was a net decrease with 17 closures against 6 openings, and the number of classrooms at fiscal year-end fell to 120. The company continues its policy of closing and withdrawing from classrooms with low management efficiency.

Since all stores are held under lease agreements, even classrooms with strong business performance may be forced to withdraw due to reasons attributable to the landlord. In addition, if a landlord becomes insolvent, there is a risk that all or part of security deposits paid may become unrecoverable. These risks could lead to unexpected loss of revenue opportunities or impairment of assets.

The Soccer School in the Sports Business operates using local parks and grounds, and there is a possibility of unexpected trouble arising with other park users or nearby residents. If such trouble becomes prolonged, the school may be forced to temporarily suspend operations, relocate, or close, which could affect operating results or financial condition through a decline in student numbers. The company operates with the utmost care, but recognizes that complete avoidance is difficult.

The Group holds personal information relating to a large number of students, and if an information leak were to occur, it could affect business operations and financial results. No problems arising from information leakage have occurred to date, but risks such as cyberattacks and internal misconduct remain latent. Specific security measures are not disclosed in the securities report.