VISION INC.

If deteriorating global conditions such as terrorism, conflicts, or war, or large-scale natural disasters disrupt transportation infrastructure including air networks, this would directly reduce demand in both the core Global WiFi Business and the Glamping & Tourism Business. Specific risks cited include the prolonged situations in Ukraine and the Middle East, US-China tensions, and geopolitical tensions in East Asia. Given that the majority of business revenue depends on travel demand, the impact could be extensive. The company states it will strive for agile information gathering and countermeasure planning, but fundamental avoidance is difficult since this is an external factor.

In the Global WiFi Business, communication services are procured from telecom carriers around the world, and changes in carrier management policy could force the company into less favorable procurement terms than before. In the Information & Communications Services Business as well, there is a risk that significant changes to commission terms resulting from telecom carrier policy changes could directly affect business performance. Both risks depend on the unilateral decisions of business partners, making securing alternative means a challenge.

In the Global WiFi Business, foreign currency-denominated revenues, expenses, assets, and liabilities arise, and fluctuations in exchange rates may affect business results and financial position. Although risk hedging is implemented through forward exchange contracts and other means, there remains a risk that hedging may not function sufficiently in the event of sudden exchange rate fluctuations. Both yen depreciation and appreciation can have asymmetric effects on procurement costs and revenue.

In the mobile Wi-Fi router rental market, in addition to existing competitors, new entrants from other industries also exist, raising concerns about declining profitability and increased advertising expenses due to intensifying competition. The company seeks to differentiate itself through the number of service areas, pricing, communication quality, and value-added services, but if price competition intensifies, pressure on profit margins is unavoidable. In the information and communications equipment field as well, it is noted that performance could be affected if the rise in procurement unit costs worsens beyond expectations.

The Group positions M&A as an effective means of business expansion and actively pursues it, but if business does not proceed as planned due to changes in the business environment, or if problems not identified during due diligence emerge afterward, there is a risk of goodwill impairment losses or valuation losses. The company states it conducts thorough due diligence, but it is difficult to fully predict future changes in the business environment, raising concerns about the impact on financial position.

Since the business infrastructure depends on internet communication networks, if a system failure or cyberattack causes a system outage affecting databases or sales websites, this would directly hinder service provision. Although preventive measures through operational status monitoring and a fully offline-capable system are in place, the impact on business performance and financial position in the event of a large-scale failure cannot be ruled out.

As the company holds personal information while providing services to numerous customers domestically and internationally, a large-scale information leakage incident could damage credibility and result in compensation costs, affecting business results and financial position. The company strives to comply with relevant laws and regulations and has established a personal information protection policy, but risks from external and internal factors such as cyberattacks or internal misconduct cannot be completely eliminated.

If a resurgence occurs due to the emergence of new COVID-19 variants, or if a new infectious disease for which no established treatment exists spreads, and movement restrictions or various regulations are imposed, both the Global WiFi Business and the Glamping & Tourism Business, which depend on travel demand, could be seriously affected. The business contracted significantly during the past COVID-19 pandemic, and if a similar situation recurs, the impact on performance could be substantial.

The average service life of Wi-Fi routers, which are rental assets, is approximately two years. If the rate of deterioration accelerates or the development cycle shortens due to technological innovation, additional procurement costs and early asset depreciation may become necessary. In addition, inventory management may become more complex as procurement increases based on sales forecasts, potentially hindering proper management. Both the risk of lost sales opportunities due to stockouts and the risk of excess inventory must be managed simultaneously.

To support business expansion, the company has adopted a policy of strengthening recruitment of new graduates, specialized personnel, and global talent with language proficiency. However, if recruitment plans and talent development do not proceed as planned, or if employee turnover increases beyond expectations, business operations could be hindered. The company strives to prevent turnover through transparent and fair evaluations and by establishing reporting and consultation channels, but the difficulty of securing talent is increasing amid intensifying competition in the labor market.