Nomura System Corporation,Ltd

In the fiscal year ended December 2025, the ratio of SAP ERP-related revenue reached 98.8%, meaning that business revenue is extremely heavily dependent on the market competitiveness of SAP products. If SAP products lose competitiveness or the Company fails to respond promptly to new products, this could have a material impact on the Company's financial position and operating results. The Company continues to acquire the latest technical information and develop personnel through its partner agreement with SAP Japan Co., Ltd., but the high degree of dependence itself constitutes a risk factor.

The Company has entered into an "SAP PartnerEdge Channel Reseller Agreement" (VAR) with SAP Japan Co., Ltd., which serves as the foundation for obtaining the latest technical information and for internal personnel development. If the terms of this agreement are changed or the agreement is terminated for any reason, this could disrupt access to technical information and the personnel development framework, potentially affecting business operations, financial position, and operating results. While the agreement currently does not restrict the ERP implementation consulting business, since it is a non-exclusive agreement, the risk of future changes in terms cannot be ruled out.

The Company's ERP Solutions Business primarily serves corporate clients, and its structure is such that a downturn in the domestic economy or a reduction in client companies' IT-related capital expenditure directly leads to a decline in demand. In economic downturns, clients tend to curtail IT investment early, which could result in lost order opportunities and decreased revenue. The Company has not disclosed specific countermeasures for this risk in its securities report.

The agreement with SAP Japan Co., Ltd. is non-exclusive, and multiple competing companies have entered into similar agreements. If competitors' sales capabilities and technical capabilities improve, price competition and competition for customer acquisition could intensify, potentially reducing the Company's order opportunities and profitability. While the Company positions high quality and short implementation periods as its competitive advantages, specific details of its differentiation strategy are not disclosed in the securities report.

When undertaking ERP implementation consulting on a lump-sum contract basis, the Company bears liability to clients for non-conformity with contracts. Since services are primarily provided at client sites or remotely, it can be difficult to track progress, and when quality issues arise, personnel must be deployed for free-of-charge remediation, which could affect the Company's financial position and operating results. The Company conducts quality management through regular meetings with project managers and phase management, but the difficulty of grasping the actual situation in a remote work environment remains a residual risk.

Expansion of the ERP consulting business requires securing, developing, and retaining highly skilled consultants and sales personnel. In a market environment with intense competition for specialized talent, if the Company is unable to secure sufficient personnel, this could lead to a decline in service quality and lost order opportunities, potentially affecting the Company's financial position and operating results. While the Company recognizes personnel development as an important issue, specific details of its recruitment and retention measures are not disclosed in the securities report.

The Company outsources work to partner companies as needed in order to respond promptly to client requests and prevent the loss of order opportunities, but the inability to secure appropriate engineers or outsourcing partners could constrain business expansion. In an environment of continued tight supply and demand for IT personnel, maintaining stable business relationships with partner companies and developing new partnerships becomes increasingly important. If it becomes difficult to secure outsourcing partners, this could result in lost order opportunities and delivery delays, potentially affecting the Company's financial position and operating results.

In the course of its business, the Company handles clients' confidential information and personal information, and if an information leak occurs, this could result in a loss of social credibility and liability for damages. The Company has obtained ISO/IEC 27001 (ISMS) certification and established an Information Security Committee to implement countermeasures, but the risk of leakage due to human error cannot be completely eliminated. In particular, the fact that operations are primarily conducted in a remote work environment constitutes an additional risk factor in information management.

The "Act on Promotion of Fair Trade for Specified Subcontracting Transactions" (Subcontracting Fair Trade Promotion Act) may apply to the Company's outsourcing contracts with businesses and individuals, and if a violation of legal obligations occurs, there is a risk of loss of social credibility and administrative sanctions. While the Company adopts legal compliance as a basic policy, the possibility that violations may occur due to operational deficiencies cannot be denied. If a legal violation becomes apparent, this could affect the Company's financial position and operating results, as well as adversely affect business relationships with clients and partners.

As of December 31, 2025, the Company's organizational structure is small in scale, comprising 8 directors (excluding audit and supervisory committee members), 4 audit and supervisory committee members, and 130 employees (excluding 6 officers concurrently serving as employees), and its internal control system remains commensurate with this scale. As the business expands, increases in personnel and enhancement of the internal control system will be necessary; if these measures are not implemented in a timely and appropriate manner, governance issues or operational errors could arise, potentially affecting the Company's financial position and operating results. While the Company has adopted a policy of strengthening its organizational structure, a specific implementation schedule is not disclosed in the securities report.