BENEFIT JAPAN Co.,LTD.

The Company provides services by procuring lines from multiple telecommunications carriers. If a supplier changes its policy or suspends supply, providing services may become difficult. This could lead to higher usage fees or a decline in service quality, affecting customer satisfaction and adversely impacting business performance. Although the Company seeks to reduce risk to some extent by diversifying its suppliers, there is a risk that the impact could become prolonged if securing alternative suppliers proves difficult.

If supply of equipment provided to customers, such as WiFi routers and communication robots, is suspended, delivery is delayed, or defects occur, providing services may become difficult, hindering customer acquisition and retention. Additional costs may also arise from changing suppliers, potentially affecting business performance. When dependence on a specific supplier is high, there is a risk that securing alternative suppliers may require significant time and cost.

The Company relies heavily on sales partners for acquiring new customers. If the Company is unable to develop new partners or maintain and expand transaction volume with existing partners, its customer acquisition capability may decline, potentially affecting business performance. If relationships with partners deteriorate or partners withdraw, securing alternative means in a short period may be difficult, raising concerns about a direct impact on sales.

The Company has recorded a substantial amount of goodwill arising from corporate acquisitions on its consolidated balance sheet. If expected results are not achieved due to changes in the business environment or other factors, an impairment loss may be recorded. Goodwill impairment could result in a significant one-time loss, potentially having a material impact on the Group's business performance and financial position. While the Company currently judges that the goodwill appropriately reflects future earning power, continuous monitoring of changes in the external environment is necessary.

The Company holds accounts receivable and loans, and bad debt losses or provisions for allowance for doubtful accounts may arise due to the bankruptcy of business partners or deterioration in their creditworthiness. Allowances are recorded based on the actual bad debt ratio for general receivables, past uncollectible experience for installment receivables, and individual assessment for doubtful receivables; however, there is a risk that the Company may be unable to respond in time to a sudden deterioration in the financial condition of a major business partner. Although the Company seeks to reduce the risk of non-collection through credit limit settings and receivables preservation procedures, it is difficult to eliminate the risk entirely.

The Company acquires and holds a large amount of personal information in the course of providing its services, and there is a possibility that such information may be leaked due to system malfunctions, internal misconduct, human error, or management errors by outsourcing partners. In the event of a leak, the Company could face civil liability, loss of social credibility, and termination of contracts with major business partners, which could have a material impact on business performance. Although the Company has implemented measures such as obtaining Privacy Mark certification, establishing a basic information security policy, conducting internal training, and performing internal audits, it is not possible to completely eliminate this risk.

The Company uses a customer management system developed to suit its operations and has adopted a highly secure cloud service. However, if the system malfunctions or a serious problem occurs with the internet itself, continuing operations may become difficult, potentially affecting business performance. Since the customer management system forms the core of business operations, the scope of impact from a failure would be wide-ranging, with risks of disruption to customer support, billing processes, and overall service provision.

The Company is subject to a wide range of legal regulations, including the Telecommunications Business Act, the Act on Specified Commercial Transactions, the Consumer Contract Act, the Act on the Protection of Personal Information, and the Installment Sales Act. If complaints or legal violations occur in sales activities, including those conducted through agencies, this could lead to administrative sanctions, suspension of sales activities at commercial facilities, or invalidation of contracts. Although the Company has increased the frequency of compliance training and conducts regular coordination with its retained attorney and deliberations at the Compliance Committee, it is difficult to fully control the conduct of agencies. There is also a risk that business activities could be constrained if the Company fails to respond promptly to legal amendments.

The Company registers trademarks as necessary for its business operations and takes measures such as commissioning patent attorneys to conduct investigations to avoid infringing on third parties' intellectual property rights. However, there remains a possibility that the Group could become involved in a dispute with a third party or receive a warning regarding patent infringement of which it was previously unaware. Should such a dispute arise, it could affect business performance through increased response costs, constraints on business activities, and a decline in social credibility.