IKK Holdings Inc.

According to estimates by the National Institute of Population and Social Security Research, the population of marriageable age is projected to continue declining, and the market size may shrink due to an increase in couples who forgo wedding ceremonies and receptions as well as the trend toward later marriage. If the market contracts faster than anticipated and orders do not progress as planned, this could affect the Company's financial position and business performance. The Company is working to provide memorable ceremonies and receptions by enhancing its customer service and planning/proposal capabilities.

In the wedding industry, the competitive environment is becoming increasingly severe year by year, driven by growing demand for Guest House Wedding services, new entrants of specialized wedding venues, hotel renovations, and intensifying price competition. If multiple strong competitors open stores in areas where the Company operates, this may affect order intake and thereby impact the Company's financial position and business performance. This trend is expected to continue going forward.

Due to changing attitudes and preferences regarding wedding styles among customers in their 20s and 30s, a new wedding style may emerge as the mainstream alternative to Guest House Wedding. If the Company is slow to respond to such changes, this could affect its financial position and business performance. The Company has adopted a policy of identifying and responding to the needs and trends of the times.

Recruiting, training, and retaining excellent human resources is recognized as an important factor for differentiation from other companies, and if this does not proceed as planned, it may become a constraint on competitiveness and business expansion. The Group is actively engaged in systematic training based on its management philosophy as well as new graduate and mid-career recruitment activities; however, if the results fall short of plan, this may affect the Company's financial position and business performance.

The Company comprehensively examines location conditions, trade area trends, and profitability for candidate store sites; however, if suitable properties cannot be found, planned store openings may not proceed, which could affect the Company's financial position and business performance. When store openings are concentrated in a short period, upfront costs may cause short-term deterioration in performance, and there is a risk that impairment losses may arise if profitability significantly declines after opening.

The Nursing Care Business, which commenced in December 2012, is subject to regulations under the Act on Social Welfare for the Elderly, the Long-Term Care Insurance Act, and other laws, and is affected by system revisions resulting from legal amendments and revisions to the standard amounts of long-term care benefits. Depending on the content of such system revisions and fee schedule changes, this may affect the Company's financial position and business performance. In addition, if an accident or infection occurs within a facility that jeopardizes the safety of residents, there is also a risk of a decline in the number of users due to a loss of trust.

The Company is subject to regulations under the Food Sanitation Act in connection with the provision of food and beverages at ceremonies and receptions, meal provision in the Nursing Care Business, and confectionery manufacturing in the Food Business. Should a food-related accident such as food poisoning occur, the Company could face revocation of its business license or a suspension of operations. A decline in social credibility and the occurrence of damage claims could have a material impact on the Company's financial position and business performance. The Company strives to prevent food-related accidents by obtaining ISO22000 certification and establishing a hygiene management system based on HACCP.

In the Wedding Business, the Company handles the personal information of grooms, brides, relatives, and guests, and in each of its businesses it handles customers' personal information. If an information leak occurs, this could result in reputational damage as well as recommendations, orders, or penalties from regulatory authorities. A decline in social credibility and the occurrence of damage claims could affect the Company's financial position and business performance. The Group has established its "Personal Information Management Regulations" and pays close attention to confidentiality and handling of such information.

Since February 2017, a local subsidiary has been conducting business operations in Jakarta, Republic of Indonesia, providing planning and management services related to wedding ceremonies and receptions. If business activities are disrupted by unforeseen events such as changes in war, terrorism, or political, social, or economic conditions in the relevant region, this may affect the Company's financial position and business performance.

The Company operates in 21 cities and their surrounding areas in Japan as well as one city overseas. If business operations must be suspended due to natural disasters such as earthquakes or wind and flood damage, or due to a large-scale outbreak of a serious infectious disease, this may affect the Company's financial position and business performance. While the Company has insurance coverage against natural disasters, additional financial impact may arise if the amount of damage exceeds the insured amount. As measures against infectious diseases, the Company implements alcohol disinfection, installation of sterilization equipment, and health management of employees.