Aidma Marketing Communication Corporation

The Group's sales are heavily dependent on the domestic distribution and retail industry, and if economic conditions deteriorate or personal consumption remains sluggish, this could lead to a decrease in the number of client companies and a reduction in sales promotion expenditures. As a countermeasure, the Group is developing new clients such as food manufacturers to shift away from dependence on a specific industry, but the structural degree of dependence remains high.

The proportion of sales to Valor Co., Ltd. exceeds 20%, resulting in a high degree of dependence on a specific client. If problems arise in the business relationship with this company or if there are changes in its sales promotion policies, this could have a direct and material impact on the Group's business performance. While a stable trading relationship is currently maintained, structural countermeasures against concentration risk remain limited.

Numerous competitors have entered the field of planning and production of promotional materials centered on inserted flyers, and the competitive environment is severe. The Group seeks to differentiate itself by providing an integrated, end-to-end service covering planning, proposals, design, and production, but if competition intensifies further, price pressure and a decline in orders received could adversely affect business performance.

Takashi Ebitani, the founder and Representative Director, plays a central role across overall management, including management policy, sales strategy, and new service development, resulting in a high degree of dependence on him. Although the Group is working to strengthen its management structure, if he becomes unable to perform his duties, this could cause material disruption to business continuity and decision-making.

As the business expands, securing and developing capable personnel is essential; however, if the necessary personnel cannot be secured at the appropriate time, or if capable personnel leave the company, this could disrupt business operations and development. Against the backdrop of intensifying competition in the labor market, the difficulty of recruitment and retention is increasing.

The Group handles important information such as clients' POS data, and if unauthorized access or intentional or accidental information leakage occurs, this could adversely affect business performance through claims for damages and loss of social credibility. Measures such as establishing information security regulations, conducting education and training, and obtaining Privacy Mark certification have been implemented, but risks continue to exist amid the increasing sophistication of cyber threats.

Promotional materials such as inserted flyers are subject to regulations including the Act against Unjustifiable Premiums and Misleading Representations, the Unfair Competition Prevention Act, the Act on Securing Quality, Efficacy and Safety of Products including Pharmaceuticals and Medical Devices, the Copyright Act, and the Trademark Act. Although the Group is not directly subject to these regulations since it is not a product supplier, because it is involved in the planning and production of promotional materials, if inappropriate representations occur, this could affect social credibility and business development.

The Group holds fixed assets, including tangible fixed assets, and if the value of these assets declines due to changes in the business environment or other factors, the recognition of impairment losses could adversely affect business performance. Since the occurrence of impairment can significantly worsen profit and loss on a one-time basis, this is a risk that requires financial attention.

The Group holds investment securities for management and sales strategy purposes, and if the market value or substantial value of these securities declines significantly due to deterioration in the business performance or financial condition of the issuing companies, this could adversely affect the Group's financial condition and business results.

As of March 31, 2024, the Group fell short of the tradable share market capitalization criterion for the Standard Market of the Tokyo Stock Exchange. As a result of formulating and implementing an improvement plan, as of March 31, 2025, the Group met all criteria, including the number of shareholders, the number of tradable shares, tradable share market capitalization, and the tradable share ratio. However, depending on future fluctuations in business performance and stock price trends, there is a possibility of falling short of the listing maintenance criteria again, and continued efforts to strengthen compliance and governance and enhance corporate value are required.