Jimoty,Inc.

Jimoty (Classified Site) relies heavily on user acquisition from specific search engines such as Google and Yahoo! JAPAN. Although SEO measures have been implemented, there is a risk that changes in search engine operators' logic or policy shifts could reduce user acquisition effectiveness. The Company has no ability to influence search rankings, and a decline in user acquisition capability may directly lead to a decrease in advertising revenue and service users.

For the fiscal year ended December 2025, 27.3% of net sales were concentrated with a single company, Google Asia Pacific Pte. Ltd. If transaction terms or contract details with this company are changed, it could have a direct and material impact on the Company's earnings. Although a favorable business relationship is currently maintained, the means available to respond to changes in the business partner's strategy are limited.

The Company relies on the App Store (Apple Inc.) and Google Play for the distribution of its smartphone applications, and pays a portion of in-app sales to both companies as payment processing fees. Changes in the platform operators' business strategies, fee rates, or app distribution policies could affect the Company's service provision and revenue structure.

The Company operates under the single segment of the Classified Site Operation Business (Single Segment), with the majority of revenue dependent on this business. If this business contracts due to changes in the business environment or intensifying competition, there is a risk of a direct and significant impact on business performance, as there is no alternative revenue source. Intensifying competition is also anticipated from entry into similar services by companies with strong capital resources and brand recognition.

Jimoty (Classified Site) is a platform for transactions between users, and while the Company has established terms of use, guidelines, and a posting monitoring system, it is difficult to completely eliminate malicious transactions, defamation, intellectual property infringement, and other inappropriate posts. If disputes between users are not resolved appropriately, this could lead to a decline in brand image and social credibility, potentially affecting the business and performance.

Jimoty (Classified Site) is a service provided via the internet, and stable system operation is a prerequisite for business continuity. If a system failure or information leak occurs due to increasingly sophisticated and complex cyberattacks, unauthorized access, computer viruses, natural disasters, or other causes, this could result in substantial costs and a decline in social credibility. Although a response framework has been established through continuous network monitoring, maintenance management, and ongoing system development, the risk cannot be completely eliminated.

Jimoty (Classified Site) collects and manages users' personal information such as address, name, and phone number, and is subject to obligations under the Act on the Protection of Personal Information. If unauthorized access from outside parties or intentional or negligent acts by related parties or business partners result in leakage, falsification, or unauthorized use of such information, this could lead to response costs, claims for damages, a decline in social credibility, and other significant impacts on the business and performance. Although the Company has established a privacy policy, conducts internal training, and performs internal audits, the risk remains.

The Jimoty Spot (Jimospo) business is subject to regulation under the Secondhand Goods Business Act and the Waste Management Act. Delays or deficiencies in complying with these regulations could result in administrative dispositions such as business suspension orders or revocation of permits. Intensifying competition from an increasing number of new entrants into the reuse sector may also make it difficult to secure sufficient quantity and quality of merchandise. Unexpected regulatory tightening or new compliance costs could affect business performance.

The Company has a small organizational scale, and securing and developing capable personnel is an important challenge for business growth. If the Company fails to secure sufficient personnel in a timely manner, or if officers or key personnel depart, this could hinder business operations. In addition, if the development of internal management systems fails to keep pace with rapid business expansion, there is a risk that appropriate business operations may become difficult.

As of the end of the fiscal year under review, the Company has tax loss carryforwards and has recorded deferred tax assets on the premise that future taxable income will be generated. If the timing or amount of actual taxable income deviates from estimates based on the business plan, this could have a material impact on the amount of deferred tax assets in the financial statements for subsequent fiscal years. In addition, the Company has not paid dividends since its founding, and the timing and possibility of future dividend payments remain undetermined at this time.