YAMADA SERVICER SYNTHETIC OFFICE

Due to the nature of its business, the Group handles large volumes of personal information. Should customer information or confidential information be leaked as a result of unauthorized access or error by insiders or outsiders, the Group could face direct damages such as compensation claims, as well as deterioration of its business environment due to reputational damage. As countermeasures, the Group has formulated a "Personal Information Protection Compliance Program" based on JIS Q 15001:2023, obtained Privacy Mark certification, thoroughly educates all officers and employees, and conducts regular internal audits.

The Company operates under a license from the Minister of Justice (License No. 20) based on the Act on Special Measures Concerning Claim Management and Collection Businesses (the Servicer Act), and is also subject to multiple legal regulations including the Building Lots and Buildings Transaction Business Act, the Worker Dispatch Act, and the Employment Security Act. Amendments to existing laws or the enactment of new laws may affect the Group's business performance and operations. The Group strives to respond promptly and appropriately to legal amendments, while also diversifying risk through expansion of its business domains and optimization of its business portfolio.

Regarding receivables purchased from financial institutions and others, if additional allowances for doubtful accounts must be recorded due to deterioration in the creditworthiness of debtors, this could adversely affect the Group's business performance. As countermeasures, the Group conducts careful pricing at the time of purchase and subsequent verification of appropriateness, and has established a system whereby transactions exceeding a certain amount undergo multi-faceted deliberation by the Investment Committee before being referred to the Board of Directors.

If real estate held by the Group, or real estate serving as collateral for receivables held by the Group, experiences a significant decline in price due to changes in the real estate transaction market or economic conditions, this could affect the Group's business performance and financial condition. The Group continuously monitors real estate price trends and strives to minimize the impact through timely and appropriate handling.

Most dispatched workers are placed with companies within the Yamada Group, such as Yamada Godo Judicial Scrivener Corporation, Yamada Godo Land and House Investigator Corporation, and Yamada Escrow Trust Co., Ltd. If these major dispatch destinations were to terminate their dispatch contracts, this could have a material impact on the Group's business performance and operations. As a countermeasure, the Group is strengthening efforts to diversify dispatch destinations, including dispatching to external judicial scrivener offices, financial institutions, and general business companies, as well as dispatch related to business revitalization services.

Providing the "one-stop service for real estate and receivables" requires highly specialized and capable personnel. If rapid changes in the recruitment and employment environment make it difficult to hire new staff or lead to an increase in employee turnover, this could have a material impact on the Group's business performance and operations. The Group strives to establish a system for continuous talent acquisition by enhancing its personnel, education, and training programs and utilizing a diverse range of recruitment media.

If an unknown infectious disease such as COVID-19 were to spread globally, difficulties in meeting directly with debtors, delays in repayment or rehabilitation plans due to reduced debtor income, and stagnation in the disposal of collateral real estate could occur, potentially affecting the performance of the Servicer Business. The Group considers it difficult to reasonably foresee the likelihood of this risk materializing.

If the spread of infectious disease reduces the volume of work at major dispatch destinations, or if business suspensions or shortened working hours are implemented to prevent the spread of infection, this could reduce dispatch hours and the number of dispatched staff, thereby affecting the performance of the Staffing Business. The Group considers it difficult to reasonably foresee the likelihood of this risk materializing.

If the spread of infectious disease makes it difficult to hold direct meetings with sellers, buyers, and other related parties, real estate transactions could stagnate, preventing the Group from carrying out real estate acquisition and sales activities as planned, which could affect the performance of the Real Estate Solutions Business. The Group considers it difficult to reasonably foresee the likelihood of this risk materializing.