Adventure, Inc.

There is a risk that consumers' willingness to travel may decline due to external factors such as the outbreak and spread of infectious diseases, terrorism, war, natural disasters, or sharp exchange rate fluctuations. The Group operates on the premise of the medium- to long-term expansion of the travel market in Japan and Asia and worldwide, and such external shocks have a direct impact on transaction volume and net sales. While the Group benefits from market expansion measures led by the Japan Tourism Agency, it also has a structural vulnerability to sudden changes in the external environment.

The outbreak and spread of a serious novel infectious disease poses a risk of causing a sharp decline in travel demand. If entry/exit restrictions in various countries or requests to refrain from domestic travel are implemented, as occurred during the global spread of COVID-19, the Group's Travel Business would be severely affected. Furthermore, if a highly virulent infectious disease spreads and causes mass infection among employees, business continuity itself could be impaired.

As of the end of June 2025, the Group has recorded goodwill of ¥2,214 million. If the profitability of an acquired company or business declines significantly, an impairment loss may need to be recognized, which could have a material impact on the Group's business performance. In particular, in light of the findings of an investigation concerning the consolidated subsidiary Ryokoubo Co., Ltd., no year-end dividend was paid for FY2025 (ended June 2025), raising concerns about the stability of the Group's earnings base.

The Group seeks to recover its investments by selling shares after investee companies go public, but there is a risk that the price of held shares may decline or liquidity may decrease due to a downturn in the stock market, deterioration in investee company performance, or reduced trading volume. In addition, investments in early-stage venture companies often involve unstable management foundations, which carries the risk of decline in corporate value or bankruptcy. It is also possible that profit maximization cannot be achieved due to share price declines during the mandatory holding period set by stock exchanges.

Airlines have continued a trend of increasing their direct sales ratio, and there is a possibility that commission structures for sales through travel agencies may change in the future. The Group receives commission payments through supplier travel agencies, which contribute to operating revenue, so a reduction in commissions would have a direct impact on the Group's financial position and business results. A significant decrease in the distribution volume of discounted airline tickets would also lead to a decline in profitability.

The Group's services are primarily built on the internet environment, and if a system failure or interference by computer viruses or hackers occurs, service provision could be suspended, affecting the Group's business and performance. Although security measures are in place, it is difficult to implement countermeasures against every conceivable threat, and there are limits to responding to unexpected attacks or failures. Service disruption could also directly lead to customer attrition and loss of trust.

The Group records and manages customers' personal information, including names, email addresses, addresses, phone numbers, and purchase history, on its servers. While the Group has established a "Privacy Policy" and "Personal Information Protection Management Regulations" and exercises the utmost care in management, if information were to leak externally for any reason, it could damage the Group's credibility and have a material impact on its business and performance. Given the nature of the online travel business, the volume and sensitivity of personal information handled are both high, and the reputational risk in the event of a leak is significant.

The Group operates its business having obtained a Type 1 Travel Agency license (valid until July 2, 2027) and a secondhand dealer's license, and if it falls under any disqualifying grounds under the Travel Agency Act or the Secondhand Articles Dealers Act, its registration could be revoked or its business operations suspended. In addition, the amendment or introduction of various laws and regulations, including the Intellectual Property Act, the Act on Specified Commercial Transactions, and the Financial Instruments and Exchange Act, could also affect business operations. While the Group currently recognizes no facts that would constitute grounds for revocation, the risk of legal violations or changes in administrative regulations remains ongoing.

Representative Director Shunichi Nakamura, as the founder, plays an extremely important role in determining and executing management policy and business strategy, and if he were to become unable to perform his duties, this could have a material impact on the Group's business and performance. While the Group seeks to reduce this dependence through information sharing at board meetings and regular departmental meetings and by strengthening its management organization, given its small organizational size, building an alternative management structure remains a work in progress.

The Group is a small organization, and its internal control systems remain commensurate with its scale. If personnel reinforcement to respond to business expansion and diversification does not proceed as planned, or if existing talented personnel leave the Group, this could affect business operations and performance. For the Group, which is still in a growth stage, whether it can secure and develop talented personnel at the appropriate time is an important challenge for business continuity.