BIKE O & COMPANY Ltd.

If the supply-demand balance of the motorcycle market is disrupted due to a significant decline in domestic new vehicle sales, deterioration in manufacturers' management, or changes in business policy, this could affect business performance and financial condition. Since the Company operates its business with motorcycles as its sole product, its business structure is highly vulnerable to changes in market conditions. There is currently no description of specific countermeasures in the securities report.

The Motorcycle Purchasing business is structured to stimulate appraisal and purchase demand through advertising activities, and if advertising effectiveness declines significantly, this could lead to a decrease in the number of units purchased and an increase in the ratio of advertising expenses. In addition, if an incident, accident, or unexpected event related to the core brand "Bike-O" damages brand value, the trust relationship with customers could be undermined, potentially having a material impact on business performance. The Company is addressing this through efforts to improve brand recognition and advertising efficiency, but risks arising from external factors remain.

The expansion of Retail (Store & Web Sales) results in a certain holding period for inventory compared to the traditional wholesale model, and if a large volume of inventory with a long holding period arises, this could affect business performance and financial condition through a decline in asset value. The Company is addressing this by strengthening its inventory monitoring functions, but the structure makes it prone to inventory risk materializing during sudden changes in market conditions.

The Company performs maintenance on purchased motorcycles for retail sale, and if an accident or damages lawsuit arises due to maintenance defects, this could affect business performance and financial condition. Maintenance quality control is a prerequisite for business continuity, but there is no detailed description of a specific quality control system in the securities report.

The Company holds fixed assets such as store facilities, and if profitability declines significantly due to changes in the business environment or other factors, it may become necessary to recognize impairment losses, which could affect business performance and financial condition. The Company strives to improve management efficiency by periodically assessing signs of impairment at each store, but the risk materializes in the event of a sudden deterioration in the external environment.

Since operations from purchasing to sales are managed using a proprietary core system, if an information security incident occurs, the system is halted due to a natural disaster such as an earthquake, or a malfunction or delay occurs on the website, this could cause significant disruption to business continuity and customer touchpoints, potentially affecting business performance. The Company continuously works to build and strengthen its information security framework, but complete preparedness for unforeseen events is difficult.

Human resources are positioned as the foundation of management, and if recruitment, development, and appropriate staff allocation do not proceed as planned, this could affect business performance and financial condition from a long-term perspective. The Company promotes the utilization of diverse human resources, including women, foreign nationals, and mid-career hires with varied work histories, but the risk continues to exist amid an increasingly competitive recruitment market.

If there is a legal violation due to excessive work hours or inappropriate labor management, or if the Company is slow to respond to the enactment or revision of new laws and regulations such as those related to work-style reform, business activities could be constrained, affecting business performance and financial condition. The Company continuously works to enhance and improve the workplace environment and to properly manage working hours and curb overtime, but the risk of delayed response to legal revisions remains.

The Company is subject to the Act against Unjustifiable Premiums and Misleading Representations in its advertising and sales promotion activities, and if inappropriate representations are made, this could affect business performance and financial condition. In addition, the Company is subject to the Act on Specified Commercial Transactions in its motorcycle purchasing and mail-order sales operations, and if it violates regulations such as those on unsolicited solicitation or the cooling-off period, there is a risk that administrative penalties or public disclosure of the company name could reduce social credibility.

The Company operates its business under a wide range of regulations, including environment-related laws, laws and regulations concerning the sale and safety of motorcycles, laws and regulations concerning corporate transactions, and tax laws, and if unforeseen changes in laws and regulations occur, this could affect business performance and financial condition. Since the scope and timing of regulatory changes depend on external factors, complete advance preparation is difficult.