IBJ,Inc.

The entrenchment of trends toward non-marriage and later marriage, along with the diversification of values regarding marriage, could impede the growth of the marriage-hunting market or cause it to contract. While the Group positions the marriage-hunting market as a growth market, a market contraction would directly impact the sales and profitability of its core businesses. Although the Group currently judges the market to be expanding, external factors such as changes in social acceptance are difficult to address.

Since businesses related to marriage-hunting, with the exception of the real estate business and insurance agency business, do not require special licenses or permits, barriers to entry are relatively low, creating a risk of new entry by large companies with capital strength, marketing power, and brand recognition. Intensifying competition could lead to customer attrition and increased costs to counter competitors. The Group seeks differentiation through the accumulation of systems, know-how, information management, and customer base, but while imitation in a short period is considered difficult, complete prevention of new entrants cannot be guaranteed.

Given the nature of marriage-hunting services, the Group holds the personal information of numerous members, and any external leakage or falsification could result in claims for damages as well as significant impact on business continuity through damage to brand and trust. The Group has implemented measures such as establishing a management system based on JISQ15001 and obtaining confidentiality agreements, but complete prevention of leakage cannot be guaranteed. As an entity subject to regulation under the Act on the Protection of Personal Information, ongoing compliance efforts are required.

The Group's services presuppose the stable operation of systems and internet connectivity environments, and system outages or data loss caused by natural disasters, software defects, unauthorized access, computer viruses, or similar events could impede business operations. The Group has implemented measures such as daily backups, distributed data storage, and quality control through in-house development, but unforeseen troubles cannot be completely eliminated. Damage to the reliability of the information management system carries the risk of directly leading to customer attrition.

The Group has pursued business expansion through the acquisition of shares in companies such as K Village Co., Ltd., Sun Marie Co., Ltd., and ZWEI Co., Ltd., and as of the end of the current consolidated fiscal year, goodwill accounts for approximately 15% of consolidated total assets. If expected results are judged not to have been achieved due to changes in the business environment or competitive landscape, impairment losses may arise, adversely affecting business performance and financial condition. There is also an inherent risk of difficulty in post-acquisition organizational integration, securing personnel, and applying internal controls.

In-person matchmaking services fall under "specified continuous services" and marriage-hunting sites fall under "mail order sales" under the Act on Specified Commercial Transactions, imposing obligations such as handling cooling-off periods and disclosing statutory information. Failure to respond promptly to legal amendments, changes in interpretation, or the enactment of new regulatory legislation, or any inadvertent violation of applicable regulations, could result in damage to the brand and adverse effects on business performance. The Group must also simultaneously comply with multiple other regulations, including the Act on Regulation of Soliciting Acts Using Dating Sites, the Act against Unjustifiable Premiums and Misleading Representations, the Pharmaceuticals and Medical Devices Act, and the Medical Care Act, creating a risk of increasing compliance costs.

If the expansion of systems to prevent inappropriate conduct fails to keep pace with the rapid increase in the number of users, or if such conduct cannot be completely prevented even when response systems are functioning, the reliability and brand of the service could be damaged. The Group has established stricter identity verification and a monitoring system staffed by dedicated personnel, but strengthening these systems in proportion to business scale expansion remains a challenge. Damage to the brand directly affects member acquisition capability, which is fundamental to the marriage-hunting business.

While the Group positions human resources as its most important asset, if the securing and development of personnel, in both quality and quantity, fails to keep pace with the speed of business growth, or if officers and employees leave the company, this could affect the Group's business, performance, and financial condition. In operations requiring specialized expertise, such as marriage-hunting counseling, it is difficult to find substitutes for immediately effective personnel, and intensifying competition for recruitment is also a concern.

In the housing and housing loan business operated by consolidated subsidiary IBJ Financial Advisory Co., Ltd., a stagnation or decline in the real estate market due to economic downturn or oversupply of condominiums could result in decreased occupancy rates, reduced rental income, and a decline in the value of held assets. There is also a risk that fund procurement for real estate acquisition could increase interest-bearing debt and lower the current ratio, and depending on future interest rate levels and operating cash flow trends, this could affect the Group's financial condition.

Prolonged economic stagnation and restrictions on outings caused by the spread of various infectious diseases could result in stagnation or decline in revenue through restrictions on member activity, and the spread of infection among employees could also restrict business operations. Natural disasters such as earthquakes and typhoons, as well as emergencies such as terrorism and international conflicts, could cause IT system failures, potentially leading to difficulty in providing internet-related services. The Group continuously gathers information, monitors impacts, and builds a flexible response system, but unforeseen risks cannot be completely eliminated.