RECOMM CO.,LTD.

In the Domestic Solutions Business and Overseas Solutions Business, sales through partner leasing companies constitute the main sales channel, so fluctuations in lease rates and changes in the credit screening practices of leasing companies directly affect business performance. Changes in laws and regulations or accounting standards related to lease transactions could make sales through lease contracts significantly more difficult. No specific countermeasures by the Company are explicitly stated in the Annual Securities Report.

The ability to propose solutions to customers is fundamental to the existence of the business, making it essential to secure and develop specialized personnel. While the Company is actively promoting new graduate and mid-career hiring, developing HR systems, and implementing training programs and on-the-job training, if planned staffing levels are not achieved or personnel development is delayed, this may adversely affect business performance.

Hidehiro Ito, the founder and Representative Director, plays a central role in overall management, including the creation of business models, management strategy, sales, and capital policy, resulting in a high degree of dependence on him. If he becomes unable to perform his duties for any reason, this could have a material impact on business performance. Although the Company is focusing on personnel development to avoid excessive dependence, the establishment of a substitute management structure remains a work in progress.

Recam Business Solutions (Dalian) Co., Ltd., a consolidated subsidiary, serves as the headquarters function of the BPR Business and plays an important role as the core of four BPO centers and as an outsourcing destination for intra-group indirect operations. If country risks in China—such as deterioration in the political situation, changes in economic conditions, or revisions to laws and tax regulations—significantly affect the company's management and operations, this may adversely affect the performance of the group as a whole.

Due to the nature of its business, the Company holds personal and confidential information of customers and business partners, and in recent years the risk of unauthorized external access through cyberattacks and similar threats has been increasing. If an information leak occurs, it could result in a loss of trust and liability for damages to customers and others, adversely affecting business performance. The Company is working to strengthen controls through enhanced information security management, security training for employees, and the implementation of assessments.

The Company utilizes M&A and alliances as part of the Group's growth strategy for the purpose of externally acquiring sales networks, products, technology, and business territories, taking into account market trends, financial condition, synergies, and risk analysis when implementing such transactions. However, if unrecognized problems surface after an M&A transaction or if expected results are not achieved, impairment of goodwill may become necessary, which could adversely affect business performance.