System Location Co.,Ltd.

In connection with the development of new operational support services for automobile-related businesses and entry into new business areas, the Company may make upfront investments. If the initially projected revenue is not achieved within a certain period, this may adversely affect business performance and financial condition. The Company continues to promote the development of new services to secure growth.

Maintaining and improving the quality of comprehensive operational support services for automobile-related businesses requires a development organization staffed with excellent personnel. If the Company is unable to secure necessary personnel in a timely manner, or if key personnel unexpectedly resign, this may adversely affect service quality and business development plans. Personnel investment costs may also increase in the future. The Company continues to work on ongoing recruitment and development of human resources.

As the business is founded on computer systems and networks, if system trouble occurs due to human error or natural disasters, this may lead to the occurrence of damages claims and a decline in service reliability, adversely affecting business performance and financial condition. The Company has implemented measures such as strengthening security, establishing data backup systems, and enhancing hardware capacity.

The Company outsources system development to companies outside the group depending on scale. If issues arise in the business environment of an outsourcing partner, this may disrupt the development schedule and affect business performance. The Company secures multiple outsourcing partners to avoid dependence on a specific partner and strives to maintain good relationships.

The Company is subject to various laws and regulations in conducting its business. If lawsuits or legal proceedings occur, this may result in substantial litigation costs and payment of damages, adversely affecting business performance and financial condition. The Company strives to ensure thorough compliance through the establishment of internal systems and employee training.

As the Company handles customers' confidential information and personal data, if information leakage occurs due to unauthorized access or other unforeseen events, this may damage the Company's reputation and adversely affect business performance and financial condition. The Company is working to establish an information management system, including the establishment of an Information Security Committee and obtaining Privacy Mark certification.

It is difficult to fully grasp third parties' patent rights and other intellectual property rights in the Company's business fields. Due to the existence of unrecognized patent rights or the establishment of new patent rights, the Company may face claims for damages or injunctions against use. In such cases, this may adversely affect business performance and financial condition. The Company believes it is not infringing on any intellectual property rights, but states that it is difficult to completely eliminate this risk.

If the Company's facilities are damaged by natural disasters such as earthquakes, typhoons, or tsunamis, or by accidents such as fires, operations may be partially or entirely suspended, making it impossible to provide services. In addition, if damage to server storage locations disrupts system provision, this may adversely affect the revenue of the systems business.

In expanding the business model overseas, unforeseen circumstances such as changes in laws and regulations in each country, changes in political and economic conditions, exchange rate fluctuations, credit risk arising from differences in business customs, labor dispute risk, difficulty in securing personnel, and outbreaks of disease may occur. These may delay the planned recovery of invested capital or lead to withdrawal from operations, adversely affecting business performance and financial condition.