Trenders, Inc.

The internet advertising market grew 10.8% year on year in 2025, but there is a risk that market growth could slow in the short term due to economic stagnation caused by external factors such as the spread of COVID-19, or restraint in advertising expenditure by client companies. As the Group's Marketing Business is centered on SNS marketing-related business, deterioration in the market environment could directly affect business performance.

The internet industry sees active development of new technologies and services, and companies are required to continue providing client companies with more valuable offerings than competitors. The Group is working to strengthen its services through the introduction of new technologies and utilization of know-how, but if its existing services and know-how become obsolete or it becomes unable to respond to changes in client needs, a decline in competitiveness could affect business performance.

In the Investment Business, the Group held corporate bonds with a balance of ¥500 million as of the end of March 2026, and if redemption does not occur for any reason, this could affect business performance and financial condition. The Group also invests in unlisted companies, and if the value of operational investment securities declines significantly due to deterioration in the performance of investee companies, this could adversely affect business performance. Corporate bonds are primarily short-term with redemption periods of around six months, and the Group continuously monitors the financial condition of issuing companies.

The Group recorded goodwill of ¥3,617,924 thousand as of the end of FY2026 (ending March 2026), and if business does not progress as originally planned due to deterioration in the operating environment or other factors, impairment of goodwill may become necessary. The Group conducts thorough due diligence and risk assessment for M&A transactions, but if impairment occurs, it would have a material impact on business performance and financial condition.

Securing and developing excellent talent is a critical challenge for business expansion and sustained growth. If recruitment and development do not proceed as planned, or if key personnel leave the company, this could reduce competitiveness and constrain business expansion. The Group positions talent acquisition and development as an important management priority, but there is a risk that intensifying competition in the labor market could make achieving these plans difficult.

The Group operates membership organizations and handles personal information subject to the Act on the Protection of Personal Information, as well as confidential information of client companies due to the nature of its business. Should information leakage or unauthorized use occur, this could have a material impact on business performance through damage compensation, loss of social credibility, and termination of transactions with client companies, and the Group strives to strengthen its information management systems.

The Group is subject to regulations such as the Act against Unjustifiable Premiums and Misleading Representations, the Act on the Protection of Personal Information, and the Copyright Act, and business operations could be constrained by violations or by new legislation or changes in the interpretation of existing laws. The Group thoroughly complies with laws and various guidelines in conducting its business operations, but there is a risk that changes in the regulatory environment could affect business performance.

If a system failure occurs due to a large-scale program defect, natural disaster, accident, fire, or other cause, it could cause significant damage to development operations and system facilities, affecting business performance. The Group pays close attention to system management and has established a system for rapid recovery in the event of a failure, but there are limits to responding to events beyond expectations.

If the establishment of internal management systems fails to keep pace with rapid business expansion or other factors, appropriate business operations could become difficult, affecting business performance and financial condition. The Group positions the enhancement of corporate governance as an important management priority and has established, developed, and operates internal control systems to ensure the appropriateness of operations and the reliability of financial reporting.

The Group grants stock acquisition rights as incentives to directors, statutory auditors, and employees. As of the end of March 2026, the number of shares underlying stock acquisition rights was 120,000 shares (1.5% of the total number of issued shares of 8,101,000 shares). If these existing and future granted stock acquisition rights are exercised, share value may be diluted.