As mentioned in last month’s “Frequently Asked Questions and Answers,” the number of visits made by rounders (field merchandisers), who visit locations to collect cash and restock prizes, continues to show an improving trend.

Driven by measures such as close management oversight from our North American headquarters, the introduction of an incentive system tied to rounder activity, and the full completion of our transition to the new system, the number of visits reached 16,300 in July. This marks the highest monthly visit count since the system integration issues arose in November 2025.

Along with these operational gains, financial performance also improved, and in July, our North American business achieved single-month profitability for the first time since November 2025 (on a preliminary, simple aggregation basis before consolidated adjustments).

Furthermore, as stated in last month’s “Frequently Asked Questions and Answers,” we expect cost synergies arising from the integration to materialize from the third quarter onward. Moving forward, we will remain focused on embedding these improved operations and creating engaging retail spaces for our customers, while striving to further expand our North American business.

Since our founding in 2018, we have completed over 60 M&A transactions. The core of these deals has been centered on our primary business domains, notably our flagship amusement arcade and karaoke operations.

On the other hand, in transactions where we acquire entire companies through share acquisitions rather than purchasing individual business units, we sometimes inherit operations outside our core domain.

We have consistently proceeded with divesting non-entertainment businesses in the past as well (page 23 of “FY2025/1 Full-year Earnings Presentation).

More recently, we decided to divest the parking garage business originally operated by the former ONTSU Co., Ltd. (now ENNE Co., Ltd.) – a karaoke equipment distributor – prior to its integration into GENDA, and we have already completed a portion of the sale. These divestments are strategic decisions resulting from our continuous review of our business portfolio. Going forward, we will treat business acquisitions through M&A and business divestments aimed at portfolio optimization as two sides of the same coin, and by reallocating capital and personnel toward our core domains, we will strive to further improve our capital and operational efficiency.