Cocorport, Inc.

The Company holds personal information of users and guardians, including names, addresses, and occupations, and if such information were to be leaked, it could affect net sales, profit and loss, and financial condition due to loss of social trust. The Company obtained Privacy Mark certification in 2020 and has implemented security and technical measures to prevent unauthorized access, as well as internal training for all employees. However, the risk of information leakage occurring due to human error or unauthorized external access cannot be eliminated.

The fee system based on the Comprehensive Support for Persons with Disabilities Act, provided by the national government, prefectures, and municipalities, is revised once every three years, and if a revision exceeding expectations occurs, it will materially affect the fee unit prices. Each facility must receive designation renewal from prefectures, etc. every six years, and if legal violations such as exceeding capacity continue, there is a risk of designation revocation. The Company conducts its business while appropriately liaising and confirming with regulatory authorities to comply with laws and regulations, but there is a possibility that legal amendments or changes in municipal operational policies may make continuing operations as before difficult.

In FY2025 (ended June 2025), the proportion of net sales attributable to Employment Transition Support Services was as high as 81.8%, indicating an extremely high degree of dependence on a specific service. If a designation revocation or business suspension occurs at an Employment Transition Support facility, it may materially affect net sales, profit and loss, and financial condition. The Company is working to lower this proportion by expanding the Independence Training (Life Training) Service, but dependence remains high at this time.

The proportion of facilities located in the Kanto region relative to the total number of facilities is high at 80.0% (as of the filing date of this document), and if a natural disaster such as a typhoon, earthquake, or tsunami, or a large-scale outbreak of infectious disease occurs in the Kanto region, it may affect business results and financial condition due to users' difficulty commuting or facility closures. The Company has established and maintained a BCP and a system for immediate switching to at-home training, but if the situation becomes prolonged, an impact on net sales, profit and loss, and financial condition is unavoidable.

In the designated disability welfare services industry, service content tends to be strongly influenced by the quality of human resources, and there are signs of intensifying competition in service provision areas. If the Company's competitive advantage is undermined by business expansion or new entrants of competitors, it may affect net sales, profit and loss, and financial condition. The Company is working to secure competitive advantage through its medium- to long-term strategy of broad acceptance, individualized support, and dominant expansion.

Providing specialized services targeting developmental and psychiatric disabilities requires personnel with specialized knowledge and instructional skills, including qualified staff, and securing such personnel has become an urgent matter as new locations are opened. If the securing and development of human resources fails to keep pace with the speed of facility openings, or if existing personnel leave, business growth may slow, which could affect net sales, profit and loss, and financial condition. The Company is working to expand its workforce through a combination of year-round recruitment, hiring of new graduates and inexperienced personnel, and development through its training department.

The three full-time directors, comprising the President and Representative Director and two other directors, each play important roles in management policy, administrative functions, and business promotion, and if any of them becomes unable to perform their duties, it may affect net sales, profit and loss, and financial condition. Through a resolution at the 14th Annual General Meeting of Shareholders held on September 19, 2025, the Company increased the number of full-time directors by one to strengthen its management structure, but the dependence risk has not been completely resolved. The Company is working to reduce dependence through the recruitment and development of core employees and delegation of authority.

Facilities are operated under leased arrangements, and properties matching the Company's needs cannot always be secured. Even if a property matching the plan is secured, if the planned number of users cannot be secured, new openings may not proceed as planned, potentially slowing business growth. The Company works to secure properties and users through broad information gathering from business partners, but risks affected by the external environment remain.

The balance of fixed assets, such as interior construction and fixtures, is increasing due to the aggressive opening of new facilities, and depending on the performance of facilities, loss processing associated with the application of impairment accounting may occur, which could affect net sales, profit and loss, and financial condition. The Company thoroughly manages the profitability of each location and takes measures to improve performance at unprofitable locations, but impairment risk remains due to changes in the external environment and other factors.

If stock options granted as incentives to officers and employees are exercised, the issuance of new shares may dilute the share value and voting rights ratio of existing shareholders. As of the end of June 2025, the number of potential shares was 74,000, equivalent to 2.0% of the total number of issued shares of 3,695,550. The Company may continue to grant stock options to officers and employees in the future, and dilution risk continues to exist on an ongoing basis.