Bestone.Com Co.,Ltd

If consumer willingness to travel declines due to the outbreak or spread of infectious diseases, terrorism, war, natural disasters, sharp exchange rate fluctuations, or other factors, the number of customers referred to cruises and overall travel demand may decline substantially. The Group has previously experienced a significant impact on its business performance due to the global spread of COVID-19, and in the event of a new infectious disease outbreak, there is a high risk that overlapping factors such as movement restrictions, suspension of operations, and entry restrictions could adversely affect business performance and financial condition. While conditions have largely normalized at present, the structural vulnerability to sudden changes in the external environment persists.

If major comprehensive travel agencies or emerging venture companies fully enter the cruise product sales business by leveraging their capital strength, sales capabilities, and technological capabilities, the Group's competitive advantage may decline. The Group seeks to differentiate itself through cruise specialization, proprietary procurement channels, and specialized support, but if competition intensifies beyond expectations, it could affect the Group's business and performance. There is also a concurrent risk that as travelers become more experienced with cruises and increasingly purchase directly from cruise line websites, the significance of the Group's role as an agency could diminish.

The Group positions the operation of Charter Cruise (Proprietary Product) offerings and the buyout of cabins on cruises hosted by cruise lines as one of its growth strategies, and has recently been increasing the proportion of such activities. If sales fall significantly short of plan due to unpredictable changes in market conditions or other factors, procurement costs may not be recovered, which could directly and adversely affect business performance. The Group addresses this through planning based on past sales statistical analysis and marketing know-how, but complete risk avoidance is difficult.

As the Group's main business is overseas travel, it conducts a large volume of foreign currency-denominated transactions, and exchange rate fluctuations affect both procurement prices and sales/gross profit. When the yen appreciates, gross profit converted into yen tends to decrease while overseas travel bookings tend to increase; when the yen depreciates, gross profit tends to increase while bookings tend to be sluggish, resulting in complex, compounded effects. The Group takes risk mitigation measures such as fixing travel prices based on the exchange rate at the time procurement prices are determined, but complete avoidance of this risk is stated to be impossible.

The Group's services are provided mainly via the internet environment, and if a system failure or hacking-related disruption occurs, continuing to provide services could become difficult. Although the Group implements security measures and antivirus countermeasures, it is difficult to prepare for every possible contingency, and an unforeseen failure could affect the Group's business and performance. Additionally, if a personal information leak occurs due to a cyber attack, unauthorized access, or human error, there is a risk of damage to corporate credibility and customer attrition.

The Group manages customers' personal information, including names, email addresses, dates of birth, addresses, and phone numbers, on servers, and if an information leak occurs, it could damage the Group's credibility and adversely affect business performance. The Group addresses this through the establishment of a privacy policy and personal information protection regulations, as well as Privacy Mark certification (obtained in May 2019 and continuously renewed), but the risk of leakage due to cyber attacks or human error cannot be completely eliminated. Information leakage is a compound risk that can also lead to litigation risk and administrative sanctions.

The Group operates as a Type 1 Travel Agency (registration number 1980, valid until December 13, 2025) under the Travel Agency Act, and if it falls under grounds for registration refusal or revocation, it could face business suspension or registration revocation. The Group is also subject to regulations under the Intellectual Property Act, the Act against Unjustifiable Premiums and Misleading Representations, the Act on Specified Commercial Transactions, and other laws, and there is a risk that legal violations or regulatory abolition, revision, or new enactment by administrative authorities could affect the business. The Group has established a legal compliance system through internal management structures, but continuous response to changes in the regulatory environment is required.

Mr. Shuta Sawada, the younger brother of the founder, has for many years played a central role in shaping management policy and business strategy as Representative Director, but following the 20th Annual General Meeting of Shareholders held on October 27, 2025, he transitioned from Chairman and Representative Director to Chairman of the Board of Directors. While the Group is working to reduce excessive dependence on a specific individual through strengthening the functions of the Board of Directors and establishing information-sharing systems, future changes in the business environment or management structure could result in changes in the degree of his involvement, which could affect business operations and performance. As the organization is small in scale, changes among management executives have a relatively large impact.

The Group is a small-scale organization, and its internal management structure remains commensurate with its size. If personnel reinforcement to respond to business expansion and diversification does not proceed as planned, or if existing personnel leave the company, this could directly affect business operations and performance. Securing and developing excellent talent at the appropriate time is an important management issue for the Group as a growing company, and intensifying competition for recruitment and rising personnel costs are also potential risk factors.

The Group's policy is to expand its business through adding functions to existing websites, partnering with other companies, strengthening its domestic travel business, and entering new fields through M&A, but it may take a certain amount of time before stable earnings generation is achieved, and in the near term, increased investment burden could cause a temporary deterioration in earnings. Additionally, as of the end of July 2025, the Group recorded goodwill of ¥29,254 thousand, and if the profitability of the business declines significantly, an impairment loss may need to be recognized, which could affect business performance. This also carries the risk of downside to performance if new businesses or partnerships do not progress as expected.