toridori Inc.

The Group's business centers on marketing over major SNS platforms such as TikTok, Instagram, Facebook, and X, and a delayed response to changes in user usage trends or the rise of emerging SNS platforms would directly affect business results. There is also a risk that changes to advertising-related terms and regulations could render conventional advertising methods unusable, and concerns exist regarding a decline in reliability due to platform security deficiencies. The Group continuously gathers information on SNS trends and works to reconstruct its influencer network in a timely manner.

The flagship service "toridori base" is a monthly subscription model, and since there are cases where customers cancel after achieving their objectives, continuously acquiring new customers is key to business continuity and sustained growth. If the Group fails to adequately provide services in response to customer and influencer demand, or if marketing strategies fail to achieve the expected effect, this could affect business results and financial condition. The Company is working to expand new customer acquisition channels, review sales plans, and increase customer unit prices by expanding optional menus.

Based on its medium-term management plan, the Group is considering M&A in the "Product domain" and "Marketing partner domain," and if a business plan does not progress as scheduled after an acquisition, this could affect financial condition and business results through goodwill impairment and other factors. There is also a risk of share dilution from new financing and increased interest expense on borrowings. Although the Group conducts due diligence to examine business, financial, and legal risks in advance, uncertainties remain.

Representative Director, President and CEO Takayuki Nakayama is a founding member and major shareholder, and plays a central role in determining management policy and business strategy. Should he step down and it prove difficult to secure a successor, this could have a material impact on business results and financial condition. He has provided a personal guarantee for the Company's borrowings from financial institutions, for which the Group pays no guarantee fee, and the Group intends to work toward eliminating this guarantee through negotiations with the financial institutions.

In the internet advertising market, technological innovation and new services emerge daily, and if the Group's services and technologies become obsolete or it becomes difficult to respond to changing customer needs, this could lead to a decline in competitiveness. The Group continuously works on introducing new technologies, strengthening and expanding service functions, and securing engineers, but given the rapid pace of change in the market environment, this risk is assessed as medium.

Malware, unauthorized intrusion, system defects, and errors by officers and employees could result in the leakage of important data, unauthorized alteration of programs, system outages, and similar incidents. This carries the risk of third-party damage claims and reputational decline, affecting business results and financial condition. The responsible department continuously works to strengthen security.

The Group holds personal information, and if such information is leaked due to information security issues or deficiencies in the collection process, this could result in damages such as claims for compensation and reputational decline, affecting business results and financial condition. The Group has formulated and operates a privacy policy based on the Act on the Protection of Personal Information and has established an appropriate management system.

The Group has a policy of actively pursuing new business development with the aim of expanding business scale and increasing profitability, but new businesses carry higher risk than existing businesses, and if circumstances differ from projections despite careful market analysis and business planning, the Group may be unable to recover invested capital, affecting business results and cash flow.

As the business expands, continuously securing and developing the necessary personnel is an important challenge, and if this does not proceed as planned, it could become a factor constraining competitiveness and business expansion. The Group is working to actively recruit and build training systems for early skill development, but given the intensifying competition in the labor market, this risk is assessed as medium.

The Group is subject to regulations including the Act against Unjustifiable Premiums and Misleading Representations, the Pharmaceuticals and Medical Devices Act, the Act on the Protection of Personal Information, and the Copyright Act, and business activities could be constrained by violations or by the enactment of new laws or changes in their interpretation. In particular, if an influencer's post is regarded as stealth marketing or provokes a social media backlash, there is a risk of damage to brand image and a decline in social credibility. The Group has established an advertising review system and a screening system to exclude problematic influencers, and strives to thoroughly comply with laws and guidelines.