GOOD LIFE COMPANY,INC.

In Fukuoka, Kumamoto, Okinawa, and the Greater Tokyo Area, which are the Group's main business areas, a decline in rental market rates or deterioration in occupancy rates would lead to a decrease in rental income. In addition, if investors' willingness to invest declines due to rising market interest rates or changes in financial institutions' lending trends, this would directly affect sales in the Real Estate Investment Management Business. The real estate industry is highly susceptible to economic conditions such as the economy, interest rates, land prices, construction costs, and taxation systems, and multiple complex risk factors exist.

The Group relies on borrowings from financial institutions for funds to acquire land for investment real estate and condominium development, funds for rental apartment construction, M&A funds, and capital expenditure funds for the Energy Business. If financing becomes unavailable due to changes in financial conditions, the Group's business may not be able to be developed as planned. In addition, in a rising market interest rate environment, fund procurement costs such as interest expenses may increase, potentially affecting the Group's financial position and business results.

The Group acquires land in advance for the planning and sale of new investment whole-building rental apartments, and if demand for investment real estate declines due to a sharp economic downturn, rising interest rates, or changes/abolition of the tax system, it will become difficult to execute the sales plan, resulting in a deterioration of cash flow. A similar risk exists at the consolidated subsidiary Develop Design Co., Ltd. due to the bankruptcy of developer sales partners or the cancellation of projects. Furthermore, if valuation losses are recognized on real estate for sale and other inventory items based on inventory valuation standards, this may affect the Group's financial position and business results.

In the Real Estate Investment Management Business, the amount per transaction is large, and the average annual number of completed buildings over the most recent three fiscal years was only 22, indicating a limited number of transactions. If delays occur in the timing of building confirmation approval, land handover, or completion handover due to natural disasters or unforeseen circumstances, revenue may not be recognized at the planned time, affecting the Group's financial position and business results. For the same reasons, semi-annual business performance fluctuates significantly, making it difficult to judge the full-year outlook based solely on a particular half-year's performance.

The Group undertakes construction work for rental apartments and other properties as the prime contractor, and if a serious construction accident, quality incident, or industrial accident occurs, it could lead to a loss of social trust and a decline in competitiveness. In addition, if additional costs arise from design changes or rework, or if increases in construction materials and labor costs exceed expectations, this would affect the Group's financial position and business results. If a subcontracted construction company goes bankrupt or fails to fulfill its warranty obligations after completion of construction, the Group may be obligated to perform repairs, etc., creating a risk of unexpected costs.

The Group is subject to numerous laws and regulations, including the Building Lots and Buildings Transaction Business Act, the Construction Business Act, the Architects Act, the Liquefied Petroleum Gas Act, and the Gas Business Act, and holds licenses and registrations such as a real estate transaction business license, a specific construction business license, registration as a first-class registered architect office, and registration as a liquefied petroleum gas sales business. If these licenses or permits are revoked for any reason in the future, business activities would be significantly restricted. In addition, disputes with nearby residents over issues such as noise or sunlight obstruction during construction could result in construction delays, additional construction work, or project cancellations.

Hayato Takamura, Representative Director and President, has played an important role in determining management policies and strategies since the company's founding, and the Group is highly dependent on him. Although the Group is promoting information sharing and delegation of authority to officers and senior staff, if an unforeseen event were to prevent him from performing his duties, this could affect the Group's financial position and business results.

Cyberattack techniques are becoming increasingly sophisticated and diversified day by day, and the Group utilizes IT systems across its overall operations, including customer management, rental management, cost management, and accounting systems. If unauthorized access or cyberattacks on IT systems cause malfunction or shutdown of critical systems, or leakage of confidential information, this could result in a loss of social trust, disruption to business activities, and compensation to business partners and others. The Group implements information security measures such as the introduction of IT asset management tools, but these do not guarantee complete protection.

The Group has adopted a stock option system to provide incentives to directors and employees, and as of February 28, 2026, the number of shares underlying the stock acquisition rights was 1,407,200, equivalent to 7.50% of the total number of issued shares including potential shares. If these stock acquisition rights are exercised, the value of existing shareholders' holdings may be diluted.

In February 2026, the Group announced its "Medium-Term Management Plan 2026-2028," setting goals of listing on the Prime Market of the Tokyo Stock Exchange and achieving a market capitalization of ¥100 billion. Its basic strategy includes full-scale entry into the Tokyo area, transformation into a general contractor through strengthened construction capabilities, entry into the hotel business, and execution of M&A; however, if it becomes difficult to formulate and execute appropriate strategies when the assumptions made at the time of plan formulation change, the Group may fail to achieve its target figures. Since many risk factors interact in a complex manner, there is uncertainty regarding the feasibility of the plan.