Kamakura Shinsho, Ltd.

The three sites "Ii Sogi", "Ii Butsudan", and "Ii Ohaka" accounted for approximately 51.0% of net sales for FY2026 (ending March 2026), indicating a high degree of dependence on specific sites. If an unforeseen event causes a decline in user numbers or difficulty in operating these sites, there is a risk of a significant direct impact on business performance. There is also a risk that if service improvements are not well received by users, it could lead to user attrition.

Customer acquisition for the Group's sites is generally conducted via search engines, and the decision-making authority over display rankings rests with each search engine operator. There is a risk that changes in ranking policies by search engine operators could reduce the effectiveness of customer acquisition. As a countermeasure, the Group is promoting branding initiatives to increase the ratio of direct traffic and implementing SEO measures; however, the Group's scope for intervention remains limited.

There is a risk that competition with existing competitors and new entrants will intensify in the field of end-of-life planning information and services. Intensified competition could lead to a decline in user numbers and reduced fees, potentially adversely affecting business performance. The Group seeks to enhance its competitiveness through the expansion of information volume and the provision of new services, but maintaining differentiation remains a challenge.

The Group receives personal information related to end-of-life planning from users via the internet and provides such information to business partners; information management is positioned as a critical matter in business operations. If personal information is leaked due to unauthorized external access or deficiencies in internal management systems, there is a risk of significant impact on business performance due to claims for damages and loss of social credibility. The Group addresses this through the establishment of personal information management regulations and information security management regulations, as well as thorough employee training, but it is difficult to completely eliminate this risk.

The Group's business is fundamentally dependent on the stable operation of its internet systems. If communication disruptions, software malfunctions, unauthorized access, or computer virus infections occur due to natural disasters, accidents, or surges in access, there is a possibility of disruption to business continuity. The Group takes countermeasures through sequential data backups and security assurance, but it is not possible to completely prevent unforeseen circumstances. If a system outage were to become prolonged, there is a risk of user attrition and loss of trust among business partners.

The internet-related field is a rapidly changing industry in which new technologies and services are introduced in succession, and hardware-related changes such as the spread of smartphones are also progressing rapidly. If the Group encounters difficulty in acquiring technology, knowledge, and know-how, or if its response to technological innovation is delayed, this could lead to a decline in competitiveness and affect business performance. The Group is focusing on acquiring internet-related technologies and knowledge, but keeping pace with the speed of change remains an ongoing challenge.

The Group is subject to legal regulations including the Act on the Protection of Personal Information, the Act on Specified Commercial Transactions, the Act against Unjustifiable Premiums and Misleading Representations, and the Act on the Prevention of Delay in Payment of Subcontract Proceeds, etc. to Subcontractors. Future amendments to these laws or the introduction of new regulatory subjects could restrict business operations or increase compliance costs, potentially affecting business performance. The Group addresses this through employee training and the development and strengthening of compliance systems, but continuous monitoring of the regulatory environment is necessary.

The Group continuously develops new businesses in response to the diversifying needs of users in the end-of-life planning market; however, if development man-hours increase beyond expectations or fail to result in user acquisition, this could adversely affect business performance. There is also a risk that new business development through business alliances with other companies may not achieve the anticipated synergies. The Group proceeds with development after fully considering the probability of success of new businesses, but it is not possible to completely eliminate uncertainty.

Securing and developing excellent personnel is essential to providing competitive information and services, and the Group's policy is to secure and develop personnel in line with its business plans. If personnel cannot be secured and developed as planned, this could lead to a decline in service quality and delays in business expansion, affecting business performance. In enhancing and strengthening internal management systems, timely and appropriate staffing in line with business expansion remains a challenge.

The number of potential shares from stock acquisition rights granted as incentives to officers, employees, and business partners stood at 667,500 shares as of the end of the current consolidated fiscal year, equivalent to 1.6% of the total number of issued shares of 41,194,972. If these stock acquisition rights are exercised, there is a possibility that the value of shares held by existing shareholders and their voting rights ratio could be diluted. The current dilution rate remains at 1.6%, but the risk could expand due to additional grants in the future.