MIC CO.,LTD.

The Company is subject to legal regulations such as the Technical Intern Training Act, the Subcontract Act, and the Act against Unjustifiable Premiums and Misleading Representations, and future legislative amendments may impose new regulations related to its business fields. While the Company currently believes there are no regulations that would make it difficult to continue its business, if regulations are strengthened, this may affect its financial position and operating results.

The Company holds customer information and employees' personal information, and there is a risk of information leakage due to computer viruses, unauthorized access, system failures, and other causes. The Company has implemented measures such as obtaining ISO27001 certification and conducting information security training, but if a system outage or cyberattack occurs due to unforeseeable factors, this may have a material impact on its business, financial position, and operating results.

The Company has a high degree of dependence on certain major clients, and if orders received decrease significantly or order terms deteriorate due to changes in industry conditions or changes in the clients' sales strategies, there is a risk that net sales could decrease significantly. The Company continues to quantitatively manage the ratio of top clients on a monthly basis and conducts sales activities to expand its client base, but a deterioration in relationships with major clients may have a direct impact on business performance.

The Company plans large-scale capital investments, including the Phase 2 construction of Runopalette (with total planned investment of ¥2.3 billion), and if demand does not expand as expected, there is a risk that the burden of depreciation expenses could put pressure on profitability. Accurate forecasting of economic and market trends is difficult, and if equipment retirement or impairment occurs, this may have a material impact on the Company's financial position and operating results.

Mitsuhiro Mizukami, Representative Director and Chairman, and M2 Co., Ltd., in which he holds a majority of the voting rights, are major shareholders holding a combined 63.42% of the Company's shares, and if the relationship with him and related parties deteriorates, this may affect the Company's business, financial position, and operating results. The Company is working to reduce its dependence on the largest shareholder through the transfer of shares to the Representative Director and President and others, but at present, he and related parties hold significant influence as the largest shareholder group.

In the event of unforeseen circumstances such as a large-scale disaster or the spread of an infectious disease, there is a risk that business activities could be disrupted and the manufacturing of sales promotion materials could become impossible due to raw material supply shortages or rising procurement prices from business partners, resulting in lost business opportunities. The Company has taken measures such as formulating a BCP and establishing a remote work system, but if direct damage occurs to its business sites or manufacturing facilities, net sales and profit may decrease significantly.

If a sharp rise in prices of key raw materials or a disaster affecting suppliers causes procurement delays or stoppages, the Company may be unable to respond through cost reductions or price pass-through to sales prices. The Company is currently reviewing suppliers and purchase lot sizes and advancing price pass-through measures, but in the event of significant market fluctuations, this may affect its financial position and operating results.

As the Company's core business is consulting services, a delay in responding to changes in technology trends could lead to reduced competitiveness and a decline in orders received. As countermeasures, the Company develops services with a 10-year outlook and continuously monitors technology trends, including market demands and regulatory changes, but if its response is delayed, this may affect business performance.

The Company's business is highly susceptible to economic conditions, and the market size may shrink due to client companies reducing outsourcing or shifting to in-house production. The Company seeks to reduce this risk by diversifying business resources according to client attributes such as service providers, retailers, and manufacturers, but if market conditions deteriorate in the business fields to which its clients belong, this may lead to a decrease in orders received and sluggish development of new clients.

Securing and developing personnel in sales, creative, systems engineering, and management is key to business growth, and amid expected increases in labor costs, there is a risk that it may become difficult to recruit and retain necessary personnel. The Company actively recruits new graduates and experienced professionals and conducts measures such as systematic management of working hours and health management training, but if personnel recruitment is insufficient, this may lead to long working hours, occupational accidents, and constraints on business expansion.