AI storm CO.,LTD

In its ERP Solutions Business, the Company has entered into multiple partner agreements with Oracle Corporation Japan (JD Edwards, NetSuite), Cornerstone OnDemand, Box Japan, Entrust, and others, providing license sales and implementation support. Changes in partner companies' management policies or organizational changes resulting from M&A could cause significant shifts in the market appeal of each product or in business policy within the Japanese market. While the Company strives to maintain stable business relationships with its partner companies, it is difficult to fully control such external factors.

In addition to expanding its systems consulting field, the Company has set forth a policy of entering the management consulting field and expanding its handling of cloud product services. While the Company conducts risk assessments through market research when expanding its business domains, there is a possibility that plans may not progress as scheduled due to changes in market trends, human resource shortages, entry of competitors, and other factors. Failure to achieve such plans could affect the Company's business results.

Demand for LED displays and other products handled by the Company may fluctuate due to the influence of regional political and economic conditions and policies. In addition, there is a risk of price competition arising from competition with leading domestic and overseas companies, and if the Company is forced to sell at prices below anticipated levels, its business results could be affected. While the Company addresses this through selecting markets where quality, safety, and added value are appreciated and continuously reviewing its products and services, it states that it is difficult to completely avoid demand fluctuations and price declines.

In the used truck re-lease business operated by the Company, since credit is extended over a relatively long period, there is a risk that business partners may fall into arrears or become insolvent due to economic fluctuations or other causes. Should such circumstances occur, the burden of bad debt losses or provisions for allowance for doubtful accounts may increase, potentially affecting the Company's business results. Due to the nature of the business, which involves long-term credit extension, the risk tends to become more apparent during economic downturns.

The Company is pursuing capital and business alliances, M&A, and changes in organizational structure such as the establishment of subsidiaries and affiliated companies, with the aim of entering new business areas, expanding the scale of existing businesses, and securing human resources. While the Company carefully examines the financial condition, business results, and business risks of target companies when making decisions, if the target company's situation deteriorates and a valuation loss arises on securities held, this could affect the Company's business results or cash flow.

Revenue from the Company's consulting business depends on the provision of services by consultants with specialized knowledge in accounting, human resources, and IT, and securing excellent talent on an ongoing basis is essential for business expansion. As IT demand expands with the advancement of IT technology, the shortage of IT talent is on an expanding trend, and the Company recognizes that recruiting, retaining, and developing highly capable personnel is not easy. If the Company is unable to secure the necessary personnel, or if key personnel leave en masse, this could affect the Company's business results.

At present, the Company has not been subject to any lawsuits alleging infringement of intellectual property rights by third parties, nor has it received any such notifications. However, the possibility cannot be ruled out that a third party may assert infringement of intellectual property rights in connection with the Company's future business activities. Should this occur, costs associated with responding to litigation and restrictions on business activities could affect the Company's business results.

In its accounting, human resources, and IT consulting businesses, the Company handles confidential information, including personal information of client companies, and is obligated to maintain confidentiality under non-disclosure agreements while implementing strict information management. However, if confidential information is leaked due to unauthorized computer intrusion from outside parties or errors by officers or employees, this could lead to a decline in the Company's credibility and the filing of damages lawsuits. Given the nature of the consulting business, which handles highly sensitive data such as clients' management and financial information, the impact on the business in the event of an information leak would be significant.

The Company strives to thoroughly comply with laws and regulations through the establishment of a standing Compliance Committee and regular training programs; however, should compliance fail, this could affect the Company's social credibility and business results. In particular, in the AI & Mortar Business, outdoor installation of displays and Ad Truck Operation are subject to regulations such as outdoor advertising ordinances established by each prefecture. In addition, future revisions or abolition of related laws and regulations, or the establishment of new legal regulations, could affect the Company's business development and business results.