AMBITION DX HOLDINGS Co., Ltd.

In the sublease business of the Rental DX Property Management Business, rent is guaranteed to property owners regardless of vacancy status, so an increase in the vacancy rate or a decline in sublease rents directly pressures net sales, operating profit, and operating cash flow. The Company seeks to reduce this risk by analyzing surrounding rent market conditions and competing property supply trends, and by incorporating rent review clauses and guarantee cancellation clauses into contracts.

In the Sales DX Investment Business, if the market price of held real estate declines due to a combination of factors such as economic trends, interest rate conditions, demographic changes, oversupply, and disasters, this may result in impairment losses on real estate for sale, losses on sales, and constraints on fundraising, which could have a material impact on operating results and financial position. The Company addresses this through price assessments that consider the use, location, and scale of properties, maintaining property value through renovation, and continuous analysis of the real estate market.

Since funds for acquiring real estate for sale are primarily raised through borrowings from financial institutions, a rise in interest rate levels due to changes in monetary policy or economic conditions may affect operating results and financial position. The Company is promoting diversification of fundraising methods to avoid excessive dependence on specific financial institutions, and strengthening its financial base by enhancing equity capital.

In the development of investment studio apartments under the Sales DX Investment Business, there is a risk that securing land under planned conditions may become difficult due to intensifying competition for land acquisition in prime locations, soaring land prices, rising interest rates, and changes in laws and regulations. Furthermore, if soil contamination, buried structures, boundary issues, or other problems are discovered after acquisition, this may lead to development delays, additional costs, and deteriorating profitability. The Company addresses this through market research and land price trend analysis by a dedicated department, strengthened collaboration with real estate brokers and financial institutions, and the implementation of due diligence.

In the Sales DX Investment Business, rising construction costs due to soaring prices of construction materials and labor costs may become a factor that deteriorates the profitability of development projects, potentially affecting financial position and operating results. The Company strives to secure project profitability through cost optimization by obtaining quotes from multiple construction companies and appropriately passing costs through to sales prices in line with market conditions.

Founder and Representative Director and President Tsuyoshi Shimizu plays an extremely important role in determining management policies and strategies and in promoting business operations, and if unforeseen circumstances make it difficult for him to continue his duties, this could affect business performance and future business development. The Company aims to move away from excessive dependence and strengthen its organizational structure by establishing a voluntary nomination committee and advancing the development and discovery of successors.

As the business depends on computer systems and communication networks, if unauthorized access, virus damage, or communication network disconnection due to natural disasters occurs, this may result in delays in sales activities and business processing, loss of credibility due to personal information leaks, decreased net sales, and the occurrence of damages compensation costs. The Company is enhancing its security environment through annual inspections, log management, introduction of detection systems, cyber insurance enrollment, and e-learning training.

The Company positions M&A and strategic investments/capital and business alliances as effective means for business expansion, but if the planned results are not achieved due to changes in the business environment or if unexpected business issues arise, this may affect financial position and operating results. The Company strives to reduce risk through thorough due diligence on target companies and comprehensive verification of investment effects, synergies, and corporate culture compatibility.

If it becomes difficult to acquire excellent talent in the highly competitive labor market, or if the turnover rate of existing employees rises, this may hinder the realization of sustainable growth and affect operating results and financial position. The Company seeks to reduce this risk through strengthening strategic recruitment activities, enhancing education and training systems, fair evaluation systems, and welfare benefits, and improving operational efficiency and productivity through DX promotion.

As the number of officers and employees increases with business expansion, the risk of fraudulent acts such as bribery, embezzlement, and insider trading is rising, and it cannot be denied that the establishment of internal management systems may fail to keep pace with business expansion. If fraudulent acts occur, this may result in a decline in social credibility, financial losses, and pursuit of legal liability. The Company implements the establishment of compliance-related regulations and awareness raising through e-learning, the development of internal control systems, strengthening of internal audits, operation of an internal reporting system, and oversight and monitoring by the Compliance Committee.