gremz,Inc.

There is a risk that changes in contract terms by electricity suppliers or changes in the mechanism of basic electricity rates could reduce the benefit to customers of changing contract types. In addition, if electricity unit prices decline significantly due to falling fuel prices or the operation of nuclear power plants, the cost reduction effect for customers achieved through the Group's Basic Electricity Rate Reduction Consulting may be diluted, potentially affecting business performance. The Group operates its business while closely monitoring industry trends, but details of countermeasures against regulatory changes have not been disclosed.

In the Retail Electricity Business, the Group procures electricity through bilateral transactions with power generation companies, always-on backup arrangements, and via JEPX. If the procurement price from JEPX rises due to fluctuations in fuel prices, exchange rates, or weather-driven changes in electricity demand, procurement costs will increase, potentially adversely affecting business performance. Since fluctuations in procurement prices depend on external factors, this is a risk that is difficult to control.

Retail electricity providers are obligated under the simultaneous supply-demand matching system based on planned values to match demand plans with actual demand in 30-minute increments, and if a discrepancy arises in the supply-demand balance, settlement of imbalance charges with the general transmission and distribution utility becomes necessary. The Group seeks to mitigate this risk through participation in balancing groups and outsourcing of supply-demand management to intermediary operators, but if discrepancies in adjustment occur, substantial imbalance charges may arise, potentially affecting business performance.

The Retail Electricity Business does not have high barriers to entry, and there is a risk that competition will intensify as new entrants increase. Although the Group's Retail Electricity Business currently faces relatively little substantive competition, as it mainly targets existing customers acquired through the Energy Solutions Business, an increase in new entrants could slow the pace of new contract acquisition and affect business performance.

The Group operates its business in accordance with the Electricity Business Act, and if unexpected regulatory changes occur due to amendments to this law, it could hinder business operations and affect business performance. Reform of the electricity system is under continuous discussion, and the impact of changes in the regulatory environment on the business model cannot be disregarded.

The Group adopts sales methods through leasing companies and credit companies, so the direct impact of customer credit risk is limited. However, if delinquencies on lease/credit obligations increase due to deterioration in customers' creditworthiness, or if credit approval rates decline due to tightened regulations under industry laws applicable to leasing companies and others, this could reduce sales opportunities and affect business performance.

The Group procures products from trading companies, manufacturers, and others for sale to customers. Although multiple suppliers are secured, fluctuations in exchange rates or shortages of raw materials could lead to increased procurement prices or disruptions in product procurement. Since increases in procurement costs directly affect profitability, changes in the procurement environment constitute a business performance risk.

The Group sells Residential Solar Power Systems / Storage Batteries and other products through business alliances with housing manufacturers and others, and securing business partners is directly linked to sales scale. Although the Group is working to expand its business partners, if it is unable to secure partners and the number of sales targets decreases, this could affect business performance.

The Group is subject to the Act on the Protection of Personal Information, the Act on Specified Commercial Transactions, the Consumer Contract Act, the Act against Unjustifiable Premiums and Misleading Representations, and other laws. If personal information leaks or legal violations occur, administrative sanctions, claims for damages, and loss of social credibility could have a material impact on business performance. In response, the Group has established personal information handling regulations, conducts compliance training, and strictly manages sales activities, and has never been subject to administrative sanctions to date.

The Group operates power generation and electricity sales businesses using solar power generation facilities. If solar irradiance or hours of sunshine decrease due to unfavorable weather, power generation volume will decline, reducing electricity sales revenue and potentially affecting business performance. Weather risk in the renewable energy business is an external factor and constitutes a structural risk that is difficult to control.