CCReB Advisors Inc.

In the CRE Solutions business, transaction amounts and success fees vary significantly depending on deal size, causing performance to fluctuate substantially depending on the presence of large-scale deals and revenue recognition timing. Brokerage and advisory operations are largely success-fee based, so delays in deal closing beyond the fiscal period-end have a pronounced impact on performance. As countermeasures, the Group is working to diversify customer concentration risk through business scale expansion and to refine deal progress management for early detection of fluctuations.

As of August 31, 2025, the Company had only 15 employees, a small organization in which each officer and employee bears a heavy workload, raising the possibility that accidents, disasters, or increased statutory disclosure and IR work associated with listing could impede business operations. There is also an inherent risk that the development of internal management systems may fail to keep pace with business scale expansion. As countermeasures, the Group is promoting business automation through real estate tech systems such as "CCReB AI" and "CCReB CREMa," visualizing and articulating know-how using generative AI, and strengthening personnel recruitment.

The Group employs a fabless management approach that relies on outsourcing and subcontracting for the development of real estate tech services. If external partner companies cannot be secured in a timely manner, or if fraud or inadequate management occurs, there is a risk of defects in development services or delays in development schedules. Under a management policy that prioritizes fixed cost reduction and organizational flexibility, dependence on external parties is structurally high. As countermeasures, the Group is strengthening relationships with outsourcing partners, hiring systems engineers, and regularly selecting alternative subcontractors.

Both the CRE Solutions and real estate tech businesses require securing personnel with advanced expertise and experience, and if timely hiring cannot be achieved due to changes in the employment environment, or if mass attrition or delays in talent development occur, it may become difficult to continue providing competitive services. Given the small organizational size, the impact per person is particularly significant. As countermeasures, the Group is promoting the visualization and articulation of know-how using generative AI, enhancing employee benefit programs, and utilizing stock option programs to improve personnel retention.

The Group positions M&A targeting real estate M&A and real estate tech-related companies as a pillar of its growth strategy, but this entails a wide range of risks, including goodwill impairment due to failure to achieve post-acquisition business plans, the emergence of contingent or unrecognized liabilities not identified during due diligence, recognition of extraordinary gains/losses associated with integration, increased interest burden on borrowings, delays in the consolidated accounting system, and the failure of the M&A itself to be completed. If an M&A transaction does not close as planned, the Group may bear related costs alone, and the share price could fluctuate significantly. As countermeasures, the Group is conducting thorough due diligence and developing subsidiary management systems.

President and Representative Director Yukihiro Miyadera possesses extensive experience and knowledge regarding CRE, real estate, and real estate finance, and plays a critical role across overall business activities, including determination of management policy and business strategy. If he becomes unable to perform his duties for any reason, this could have a material impact on the Group's business results and financial condition. As countermeasures, the Group aims to reduce dependency by promoting the sharing of know-how through real estate tech systems and by developing executive personnel and promoting talented individuals.

The Group is subject to numerous legal regulations, including the Building Lots and Buildings Transaction Business Act, the Financial Instruments and Exchange Act, the Building Standards Act, the City Planning Act, the Act on Securitization of Assets, and the Act against Unjustifiable Premiums and Misleading Representations. If violations of laws occur or new laws are enacted or amended, business activities may be constrained. Because the Group operates a combined real estate, finance, and tech business, the scope of applicable regulation is broad. As countermeasures, the Group maintains compliance manuals, conducts internal audits, and continuously provides compliance training for officers and employees.

In the real estate tech systems business, if service provision matching customer needs is delayed, or if services provided differ from customer needs, this could lead to increased cancellations of subscription services, potentially impacting business results and financial condition. Given the nature of the subscription-based revenue model, a rise in the cancellation rate directly impairs recurring revenue. As countermeasures, the Group is continuously identifying customer needs, including latent needs, and considering the provision of added value through the use of the latest IT and AI technologies (such as generative AI).

Through its business activities, the Group acquires and holds confidential information and personal information of customers and business partners. If an unforeseen event results in external leakage of such information, this could give rise to liability for damages and damage the Group's credibility, potentially impacting business results and financial condition. Due to the nature of operating real estate tech services, the Group has a structural risk of managing large volumes of customer information as digital data. As countermeasures, the Group maintains manuals related to personal information, conducts internal audits, and continuously provides personal information protection training for officers and employees.

Rising real estate prices due to the recent active real estate investment market are occurring simultaneously with increasing construction costs driven by global resource price hikes and domestic labor shortages. If land acquisition and development that meet budget plans become difficult, there is a risk that fund formation deals themselves may fail to materialize. This leads to restrained proactive investment by corporations, directly affecting deal formation in the CRE Solutions business. As countermeasures, the Group carefully selects investment properties, controls investment amounts through co-investment, and offers cost-reduction solutions through proposals utilizing renovation.