Dream Incubator Inc.

Since the Business Produce business primarily serves globally operating leading companies as its main clients, domestic and overseas economic fluctuations affect project content and order frequency through changes in the management conditions of client companies. As countermeasures, the Company is working to extend the duration of contracted projects by deepening relationships with clients, expanding its service menu, and diversifying its client base to reduce risk.

Continued growth of the Business Produce business requires the recruitment, retention, and development of highly skilled and knowledgeable talent. However, intensifying competition for talent in the consulting industry may make it difficult to secure personnel as planned. If human resource outflow occurs due to job changes or other factors, there is a risk that it could constrain the expansion of the Business Produce business.

Since the incubation business involves underwriting equity, fluctuations in stock market conditions and unlisted stock valuations directly affect the acquisition and sale prices of shares. In addition, for overseas investments denominated in foreign currencies, there is a risk that the value of held assets may be affected by exchange rate fluctuations.

In transactions and investments with overseas companies, changes in the political and economic conditions of the relevant country may make it difficult to execute business or recover funds. Currently, investments in Indian companies account for a large proportion of the incubation business, and the impact of changes in India's political and economic conditions on the financial position of the Company's group is relatively significant.

If the Company's group is subject to damages claims or litigation, it may be affected not only directly through impacts on its financial position but also indirectly through reputational damage. Depending on the content and scale of litigation, it could have a material impact on business performance.

The Business Produce business is premised on obtaining confidential information from client companies, and the Company bears confidentiality obligations under non-disclosure agreements. Although strict information management and thorough enforcement of confidentiality obligations among employees are implemented, if confidential information is leaked externally for any reason, it could have a material impact on business performance through loss of trust.

As the Company operates group companies domestically and overseas, it strives to instill thorough compliance awareness not only among its own employees but also among the employees of group companies. Should any officers or employees of the group commit a compliance violation, it could affect the business performance of the Company's group through loss of trust and other consequences.