CHANGE Holdings,Inc.

While the NEW-IT Transformation Business is expected to see rapid expansion of its related markets, there is a risk that the business environment could deteriorate due to restrained investment in various new technologies or a worsening economic climate. As a countermeasure, the Group monitors market trends and new technologies to enable prompt management decisions and optimal allocation of management resources.

The Hometown Tax Donation-related services provided by Trust Bank Inc. rely on the donation deduction system based on the Income Tax Act and the Local Tax Act, and future tax reforms may affect the business and results of operations. As a countermeasure, the company works to enhance the sustainability of the system by establishing its own voluntary guidelines for return gifts and offering disaster relief and Government Crowdfunding services.

If acquired subsidiaries, etc. fail to meet business plans, or if discount rates rise due to a sharp increase in interest rates, the Group may recognize impairment losses, which could affect its performance. As a countermeasure, the Board of Directors and the Management Committee examine the appropriateness of acquisition prices, and the Group focuses on PMI (post-merger integration) after acquisitions.

Most products related to the NEW-IT Transformation Business, including security software, are purchased in U.S. dollars from overseas vendors, and if increased procurement costs cannot be passed on to sales prices amid a depreciating yen, performance could be adversely affected. As a countermeasure, the Group utilizes forward exchange contracts for trade payables and periodically reviews domestic sales prices.

In the course of system development, operations, and service provision, the Group handles confidential and personal information of customers, and also has access to personal information of officers and employees. Any external leakage or loss of such information could result in a significant loss of social trust and affect performance. As a countermeasure, the Group has established an information security framework through ISO/IEC 27001 (JIS Q 27001) certification, ongoing operation and improvement of its ISMS, and Privacy Mark certification.

If the Group is unable to secure the necessary human resources due to an increase in employee turnover or difficulties in recruitment, its business operations and performance could be affected. As a countermeasure, the Group actively and strategically recruits talented personnel while implementing measures such as enhancing internal systems and training programs.

Daishi Fukutome, Representative Director and President & Executive Officer, plays an extremely important role in determining management policy and conducting business operations, and if he becomes unable to perform his duties for any reason, the Group's business and performance could be affected. As a countermeasure, the Group strives to recruit and develop capable management talent.