RACCOON HOLDINGS, Inc.

In the accounts receivable guarantee service, if guarantee performance exceeding expectations occurs due to sudden economic changes or other factors, it may have a material impact on business performance and financial condition. As of the end of April 2025, the guarantee balance was 62,998,644 thousand yen, of which the portion retained as the company's own risk was 38,320,404 thousand yen. As countermeasures, the company implements ongoing review of screening criteria, utilization of reinsurance contracts, and timely revision of guarantee fees; however, the risk of unexpected guarantee performance remains.

If the management conditions of companies using the services or companies subject to guarantees deteriorate due to worsening domestic and overseas economic conditions or trends, it may affect the performance of both the EC business and the Financial business. In particular, in the Financial business, a sharp rise in default rates due to sudden economic changes poses a risk of impeding business growth. Currently, the company recognizes that default occurrences are controlled within a normal fluctuation range, but vulnerability to sudden economic changes remains.

The Group's business foundation presupposes growth of the BtoB-EC market and the penetration of corporate DX (digital transformation), and if market expansion slows or stagnates, it may affect the expansion of business scale. There is also a risk that situations impeding market growth, such as the introduction of new regulations, may occur. Although the market environment is expected to continue expanding, there is no guarantee that penetration will progress in the same manner as before.

If competition intensifies with existing competitors and new entrants in each of the service areas of "information," "settlement," and "accounts receivable guarantee," it may affect the Group's business and performance. The Group works to improve usability and differentiate itself based on know-how of business practices unique to business-to-business transactions, but the risk that competitive advantage cannot be maintained cannot be eliminated.

URIHO and Paid are not currently subject to regulation under laws such as the Insurance Business Act, the Servicer Act (claims management and collection business), the Financial Instruments and Exchange Act, the Money Lending Business Act, or the Installment Sales Act, and no supervisory authority exists; however, they may become subject to regulation due to the enactment of new laws or changes in the interpretation of existing laws. If they become subject to regulation, it may impede business continuity and have a material impact on performance. While it has been confirmed that the company is currently not subject to such laws and regulations, there is a risk of costs arising from responding to changes in the legal system.

Quasi-drugs, cosmetics, processed foods, alcoholic beverages, and branded goods handled on "Super Delivery" are subject to a wide range of regulations, including the Pharmaceuticals and Medical Devices Act, the Food Sanitation Act, the Food Labeling Act, the Liquor Tax Act, and intellectual property-related laws. Future tightening of regulations or changes in legal interpretation may require new countermeasures and could impede the sale of these products. The company has implemented measures such as special provisions in exhibitor agreements, requests for submission of certification documents, and ongoing checks of advertising expressions, but there is a risk of decline in social credibility if a legal violation occurs.

Due to the nature of its business, the Group handles a large amount of business partner information, including personal information, and is subject to the Personal Information Protection Act. The company has implemented management and operational measures such as access restrictions, access history management, and employee training, but if information were to leak externally, it could impede business operations. Information leakage also carries the risk of decline in social credibility and the occurrence of legal liability.

Much of the Group's business depends on communication networks, and if a system failure occurs due to natural disasters, accidents, computer viruses, unauthorized access, or other causes, all or part of the business may be interrupted, causing significant disruption. In addition, service degradation at outsourced data centers or server downtime due to concentrated access pose similar risks. The company has implemented security measures and countermeasures against unauthorized access, but complete elimination of such risks is difficult.

Business growth requires the continuous acquisition and development of personnel who combine IT and industry knowledge, particularly talented engineers, but there is a risk that the necessary personnel cannot be secured due to intensifying competition for engineering talent. If it becomes difficult to secure personnel, delays in system development and deficiencies in operations and management may occur, potentially impeding business operations.

Stock options have been granted to directors, executive officers, and representative directors of group companies, and the exercise of these options may result in the issuance of new shares, causing dilution of share value. As of April 30, 2025, the number of potential shares was 193,500, equivalent to 0.9% of the total number of issued shares. The dilution rate remains at a limited level.