Brangista Inc.

As of September 30, 2025, accounts receivable accounted for 22.4% of total assets (¥1,967,730 thousand), with an average collection period of 138.2 days, which is relatively long. Many customers are in the restaurant, lodging, and small and medium-sized enterprise sectors, which are highly susceptible to changes in economic conditions, and there is an ongoing risk of uncollectibility due to the deterioration of clients' business environment. Although an allowance for doubtful accounts has been recorded, if actual uncollectible amounts exceed this allowance, it could affect business results and financial condition.

As of September 30, 2025, the parent company, NEXYZ.Group Co., Ltd., holds 53.00% of the Company's voting rights. Changes in the parent company's management policies could affect the Group's business performance, business strategy, and capital structure. The Group operates as an independent organization and makes its own decisions under the judgment of management centered on dedicated directors; however, the influence of the parent company as a major shareholder always exists. The Group recognizes that this risk could materialize at any time.

In the internet industry, new technologies and services are frequently introduced, and a delayed response to such changes could lead to the obsolescence of services or a decline in competitiveness. In addition, significant investment may be required to respond to these changes, which could affect business results and financial condition. The Group monitors industry trends and seeks to differentiate its services through the introduction and optimization of its own services.

Corporate internet advertising spending is classified as advertising and sales promotion expenses, which tend to be reduced during economic downturns. Natural disasters, the spread of infectious diseases, and deteriorating economic conditions could affect the Group's business results and financial condition. As a countermeasure, the Group is working to create services that can approach various markets and industries in line with economic trends.

The Group provides services such as digital magazines and "Axel Japan" that feature numerous celebrities and talents. If a celebrity's image deteriorates or competitors launch similar services, this could lead to a decline in existing and new clients. The Group has been producing digital magazines since 2007 and has offered "Axel Japan" since October 2022; if the uniqueness of these services is impaired, it could affect business results and financial condition. The Group addresses this risk by strengthening collaboration with each celebrity and their talent agency and by pursuing service uniqueness.

A large proportion of users of the Group's various services, particularly the digital magazine "Tabiiro," come via search sites, creating a risk that changes in search engine operators' ranking policies could reduce user acquisition effectiveness. Since search engine operating policies are determined by external operators, the Group cannot directly control them. As a countermeasure, in addition to promoting SEO measures, the Group is working to increase the number of spontaneous visitors who do not depend on search or advertising, through enhanced segmented content distribution and travel plan distribution.

The Group handles customers' personal information, and if a leak of personal information occurs due to a deliberate external attack or human error, it could damage external credibility and lead to litigation, affecting business results and financial condition. The subsidiary Brandista Media Inc. has obtained Privacy Mark certification (since September 14, 2020) and has implemented security measures such as centralized access log management, data server redundancy, and entry/exit control systems. In addition, the company requires officers, employees, and temporary staff to attend Privacy Mark training to reduce the risk of human error.

The Group operates a diverse range of businesses and must comply with a wide variety of laws and regulations. In particular, laws and regulations concerning advertising are becoming increasingly complex, and if regulations are strengthened through legal amendments or violations occur, there are concerns about damage to social credibility and impact on business results and financial condition. Since the Group mainly provides its own services, it is able to respond quickly to legal amendments, and it addresses this risk through employee training and the development of a compliance framework.

Securing personnel and expanding the ranks of management are essential for expanding business both domestically and internationally. However, if rising labor costs or trends in the recruitment market prevent the Company from securing appropriate personnel as planned, or if experienced personnel leave the Company, this could affect sales in existing businesses and the development of new businesses. In particular, developing management-level personnel takes considerable time, making this an ongoing risk. The Company addresses this through mid-career hiring, securing personnel overseas, annual recruitment of new graduates, and enhancement of its personnel and training systems, and assesses the likelihood of this risk materializing as low.

The Group utilizes communication networks for service provision and data management, and outsources important operations such as server management to external specialized vendors. If data leakage or loss, or system failures, occur due to natural disasters, access concentration, viruses, hacking, or human error, this could result in lost revenue opportunities, a decline in trust, and liability for damages, affecting business performance. While certain measures have been taken through outsourcing to external specialized vendors, risks arising from external factors cannot be completely eliminated.