PRONI Inc.

In the matching platform market, competitors both domestic and international are increasing, and there is a risk that the Company's competitiveness will decline and customer attrition will progress as new entrants and existing competitors expand market share through technological innovation and price competition. The Company may be forced to revise its service offerings and pricing, which could affect profitability. As countermeasures, the Company is strengthening competitor analysis, improving services through technology implementation such as AI utilization, and pursuing business expansion by leveraging its first-mover advantage as a comprehensive platform.

The pace of technological innovation in the IT services field is rapid, and there is a risk that the Company's competitiveness, service quality, and industry standing could decline if it becomes difficult to acquire advanced technological know-how or if competitors develop superior services. There is also a possibility that additional expenditures such as system investments and personnel costs could increase in order to respond to new technologies. As countermeasures, the Company is considering regularly monitoring industry technology trends, establishing a system for early adoption, improving employee skills, and strengthening collaboration with startups and research institutions.

As the number of user companies increases, there is a risk that an increase in difficult-to-manage user companies could undermine transaction reliability, leading to a decline in user satisfaction and reputation. If inappropriate conduct cannot be sufficiently policed, the safety and integrity of the platform could be compromised, potentially making it more difficult to acquire new customers and causing existing users to migrate to other platforms. As countermeasures, the Company is working to improve customer satisfaction on both sides by developing and disseminating terms of service, establishing a support team for contractor companies, and introducing a dedicated account manager system for client companies through the DX Concierge Service team.

Sustainable growth requires the deployment of excellent personnel across various fields, and if the Company is unable to smoothly develop or recruit talent, it could affect business and performance. Intensifying competition for talent in the IT and platform industries is increasing the difficulty of recruitment. As countermeasures, in addition to utilizing recruitment agencies and matching platforms, the Company is strengthening referral-based hiring and implementing various talent development measures such as one-on-one meetings, external training, and support programs for obtaining qualifications.

Deterioration in domestic and international economic conditions or in the Company's financial condition could make it difficult to obtain loans from banks and financial institutions or to raise funds from capital markets. Additionally, in a rising interest rate environment, there is a risk that the financial burden could increase due to higher interest expense. As countermeasures, the Company strives to maintain and strengthen financial soundness, such as cash and deposits held and its equity ratio, and to secure low-cost, stable funding by diversifying its fundraising methods.

Deferred tax assets recognized against tax loss carryforwards may fluctuate in recoverability if actual taxable income differs from estimates, which could affect the Company's financial position and results of operations. In addition, the Company currently benefits from tax measures for small and medium-sized enterprises with capital of ¥100 million or less (such as full deduction of loss carryforwards), but there is a risk that this preferential treatment could be lost if the Company fails to respond appropriately upon an increase in capital, or if such tax measures are abolished or changed. Furthermore, if negative media coverage were to arise regarding the use of capital reduction to qualify for small and medium-sized enterprise measures, there are concerns that this could also affect the Company's reputation.

The Company's revenue is concentrated in the matching platform business, and if the business does not develop as planned due to regulatory changes or other unforeseeable factors, the impact on business performance could be significant. Since diversification of revenue sources is limited, there is a risk that stagnation in a specific business could directly lead to financial deterioration. As countermeasures, the Company is considering expansion into new services and markets, while advancing service improvements and new service development through regular risk assessments and customer needs surveys.

As a company handling personal information subject to the Act on the Protection of Personal Information, there is a risk that if an information leak occurs due to unauthorized access or other causes, it could lead to a decline in social trust and adversely affect the Company's business and performance. Although the Company has obtained ISO/IEC 27001 certification and conducts regular vulnerability assessments, complete defense is difficult due to the increasing sophistication of cyberattacks and other factors. As countermeasures, the Company has established personal information management regulations, thoroughly implemented internal training for all employees, and introduced a mechanism for continuous security enhancement based on its ISMS.

The Company's services rely on public cloud services such as Amazon Web Services (AWS), and if a system failure or network disconnection occurs due to an AWS outage, natural disaster, cyberattack, or other cause, it could affect the Company's business and performance through a loss of social credibility, among other effects. The continuity of service provision being heavily dependent on the stable operation of AWS constitutes a structural risk. As countermeasures, the Company is strengthening security measures and building an internal response framework for when failures occur.

Regarding relevant laws and regulations such as the Certified Social Insurance Labor Consultant Act and the Judicial Scrivener Act, the Company determined that it could not entirely rule out an interpretation that the fixed monthly fees it has collected could be in violation of these laws, and decided on a policy to suspend fee collection for the social insurance labor consultant matching service from August 2025 onward. Sales from social insurance labor consultant matching were ¥4,681 thousand in FY2025 (ending December 2025), while judicial scrivener matching recorded zero sales in FY2025 (ending December 2025), indicating that the impact of service downsizing has already materialized. Should further ambiguous regulatory interpretation issues arise in the future, the Company plans to respond by consulting external law firms and relevant authorities, but the possibility of new legal risks emerging remains.