A-tie Co.,Ltd.

The Company's revenue is heavily dependent on Japan's life-ending market, including graves, funerals, and Buddhist altars, and unit prices for each product and service tend to decline due to the diversification of needs related to funerals and graves. In particular, the Company's core Eternal Memorial Grave business has lower prices compared to conventional graves, and a market contraction caused by declining unit prices or other factors could adversely affect the Company's business, financial position, and operating results. The Company is addressing this through new product development, provision of high-quality services, and proactive business development.

Through its business activities, the Company holds personal information and confidential information of customers, temples, and business partners, and if information leakage or destruction/tampering of important data occurs due to computer virus infection, unauthorized access, or other causes, this could adversely affect the Company's business, financial position, and operating results. The Company strives for strict information management through ISMS certification, strengthening of its security environment, and thorough restriction of employee access.

The Company holds personal information, including registration information of customers and temples, and is subject to the Act on the Protection of Personal Information. Should personal information be leaked or misused externally for any reason, this could affect not only the Company's financial position and operating results but also its social credibility as a company. The Company addresses this through Privacy Mark certification, strengthening of its security environment, access restrictions, internal training, and establishment of a management framework.

If a natural disaster such as a major earthquake, storm, or flood occurs, particularly in the Kanto region where a large number of partner temples with memorial grounds are located, this could adversely affect the Company's business, financial position, and operating results. The Company seeks to stabilize revenue by diversifying the development areas of its partner temples; however, the risk of concentration in specific areas remains.

In the life-ending market, competition exists with companies and religious corporations that provide grave and memorial-related services, and an increase in companies and corporations offering similar services or intensifying new entrants could result in a decline in customers or falling prices. The Company seeks to strengthen its competitiveness through service provision that emphasizes ongoing relationships with customers and partner temples, as well as proactive business development; however, deterioration of the competitive environment could adversely affect its business, financial position, and operating results.

The Eternal Memorial Grave Recruitment Agency Services must comply with laws and regulations such as the Act on Cemeteries, Burial, etc. and various local government ordinances, and changes in such laws and regulations could result in changes to the methods by which temples and the Company construct and operate eternal memorial graves. In addition, while funds received by temples are currently treated as religious activity income and are not subject to corporate tax, if such income becomes taxable under future tax reforms, the incentive for temples to enter into business partnerships could decrease, potentially leading to the termination or slowdown of business partnerships. The Company strives to ensure thorough legal compliance through cooperation with its retained attorney, outside officers (attorneys), and local governments.

In pursuing proactive business expansion, the Company must continuously secure and develop excellent personnel, and if the securing and development of personnel fails to keep pace with the speed of business expansion, this could adversely affect the Company's business, financial position, and operating results. The Company addresses this through active recruitment activities throughout the year based on its hiring plan and enhancement of its training programs.

Founder Shinichi Kabayama, his asset management company, and his son Genki Kabayama collectively own 61.2% of the total number of issued shares, and there is a possibility that a conflict of interest may arise in which the pursuit of interests by the controlling shareholders harms the interests of minority shareholders. In addition, if the controlling shareholders sell part or all of their held shares, depending on the method, timing, and scale of such sales, this could affect the supply-demand balance and market price of the Company's shares.

Since customers visiting partner temples with memorial grounds are susceptible to seasonal factors such as outside air temperature, demand increases in the first quarter (September to November) and third quarter (March to May) and decreases in the second quarter (December to February) and fourth quarter (June to August), resulting in seasonal fluctuations in net sales and profit. This fluctuation is structural in nature, and seasonality must be taken into account when evaluating quarterly business results.

Business partnerships with temples are essential for securing the Company's growth and profitability; however, if the support provided through consulting fails to achieve the initially expected effects, or if the acquisition of future temple partnerships does not proceed as planned, this could adversely affect the Company's business, financial position, and operating results. The Company focuses on gaining the trust of temples through new product development, provision of high-quality services, and meticulous customer service.