Writeup .Co.,Ltd.

In the AI Solutions Business, technological innovation in the internet-related industry is rapid, requiring the continuous supply of new products. If appropriate products cannot be supplied due to a decline in development capability at the company or outsourcing partners, it may become difficult to meet partner companies' needs and expand the scale of the business. The Company addresses this through in-house development and collaboration with partner companies to offer a diverse range of products, primarily in the marketing field.

The Group's main sources of revenue are registration fees and product sales from partner companies, and an increase in the number of partner companies is a prerequisite for business expansion. If the number of partner companies does not increase, both registration fee revenue and product sales revenue may stagnate, potentially directly affecting business performance. The development and retention of partner companies remains an ongoing management challenge.

Many of the partner companies with which the Company transacts are relatively small in scale and carry high credit risk. If a large number of partner companies experience simultaneous deterioration in their business conditions due to major economic changes, there is a risk that collection of payments may become difficult. Currently, the Company addresses this by keeping the transaction amount per partner small and, in the event of a payment delay, suspending transactions and resuming them only after collection; however, there is a possibility that this approach may not be sufficient in the event of a large-scale economic downturn.

The human resources recruitment and training services business and businesses such as J Consul target small and medium-sized enterprise customers that utilize public support programs such as subsidies, grants, and loans. If such support programs are reduced or abolished due to policy changes by the national government or local governments, customers' purchasing intent may decline, potentially affecting business performance. Amid a deteriorating business environment for small and medium-sized enterprises due to rising energy and raw material costs, the business structure's high dependence on public support programs is a risk factor.

In the internet-related industry, technological innovation and changes in customer needs occur rapidly, and delays in responding to new technologies or customer needs may lead to a decline in competitiveness and affect business performance. While the Company has adopted a policy of flexibly responding to new technologies and changing needs, the risk of delayed response is always present. For the Company, with the AI Solutions Business at its core, maintaining technological superiority is fundamental to business continuity.

The Company provides services using hardware such as servers, and system downtime may occur due to concentrated access, natural disasters, unauthorized external access, and other causes. If important data is lost or leaked, or if service provision becomes impossible, this may lead to damages claims or a decline in credibility, potentially affecting business performance. Although the Company has implemented measures to prevent unauthorized external intrusion, since it uses external hosting services, there is also a risk of failures occurring at external providers.

The Company manages personal information of registered creators, including names, addresses, ages, occupations, and email addresses, as data. If such data is leaked externally due to deficiencies in the information management system or unauthorized access from outside the company, this may lead to a decline in credibility or claims for damages, potentially affecting business performance. While the Company complies with the Personal Information Protection Act and has implemented information security measures such as access control settings for its database, complete prevention is difficult.

Representative Director and President Takashi Shiraishi plays a central role in decision-making on important matters and in driving core businesses. If he becomes unable or finds it difficult to perform his duties for any reason, this may have a significant impact on business performance. Combined with the fact that the organization is small in scale, the structure carries a high risk of dependence on a specific individual. While the Company is working to develop a more organized management structure, establishing a substitute framework remains an ongoing challenge.

Because the organization is small in scale, it depends on a small number of personnel in each business area and for internal management, and there is uncertainty as to whether sufficient personnel can be secured and developed in line with business expansion. If employees encounter difficulties in performing their duties or leave the Company, this may hinder business execution and expansion, potentially affecting business performance. Securing talented creators and outsourcing partners is also an important issue for business execution, and any shortage may result in quality decline or additional costs.

There are numerous competitors in the internet-related industry, and if it becomes difficult to differentiate in terms of quality, technology, or price in content planning and production, this may affect business performance. In addition, the content planning and production business is premised on the expansion of the social media market, and if the current social media market experiences slowing growth or contraction due to the emergence of new media markets, there is a risk that the business foundation could be shaken. There is also a possibility that business activities may be constrained by the strengthening of internet-related legal regulations.