OBIC BUSINESS CONSULTANTS CO.,LTD.

The Company's On-Premises Products (Solution Technology) and cloud services are both developed specifically for the Microsoft platform, and the Company has adopted Microsoft Azure. Changes in the lifecycle of Microsoft products may affect the Company's product development schedules and business performance. As a countermeasure, the Company places emphasis on its partnership agreement with Microsoft and strives to obtain the latest information; however, if the partnership choice proves mistaken or if another platform becomes mainstream, this could affect the Company's business results and financial condition.

Profit plans are formulated and disclosed based on domestic and overseas economic and market trends and past performance trends. However, if major sales partners do not handle products as expected, if market conditions change more abruptly than anticipated, or if product release timing is delayed due to defects, this may affect the Company's business results and business development. Since the Company relies primarily on sales activities conducted through partners, a distinctive risk factor is its high degree of dependence on partner behavior.

Because the Company's products are business software for corporate core operations, when changes occur in accounting standards, tax laws, or various other systems, the Company is obligated to provide the latest programs for its cloud services and to send program updates to users under On-Premises Maintenance Service contracts. If the content of such regulatory changes is complex or wide-ranging, there is a risk of increased development cost burden, delayed response, or inability to respond, which may affect business performance. Maintaining a system capable of rapid response remains an ongoing challenge.

Because revenue from cloud services is recognized on a pro-rata basis over the contract period, even if abnormal transactions or returns occur, the impact on revenue figures may not be immediately apparent, making it difficult to identify the timing of such anomalies. This creates a risk of affecting accurate management decision-making and diminishing the substantiveness of transactions, which may affect the Company's business results and financial condition. As countermeasures, the Company is pursuing improvements from both the internal operations and systems perspectives, including routine and periodic internal audits and automation of business procedures.

In the course of business operations, the Company handles personal information and confidential information, and if such information is lost or leaked, this could result in a loss of social trust and brand image as well as the payment of damages, which may affect business performance and financial condition. While the cloud services leverage Microsoft Azure's world-class security standards, continuous strengthening of the information management framework is required.

Rapid technological innovation or intensifying competition could have a significant impact on the Company's development structure. The Company anticipates obtaining the latest information ahead of other companies through its partnership with Microsoft; however, if the partnership choice proves mistaken or if another platform becomes mainstream, this could affect product development schedules as well as business results and financial condition. The strategy of concentrating on a specific platform is itself also a factor contributing to risk concentration.

In managing surplus funds, the Company follows a policy of selecting financial instruments based on a comprehensive consideration of safety, liquidity, and profitability; however, it is exposed to risks from fluctuations in market prices and foreign exchange rates. A portion of the Company's securities are managed through investment trusts aimed at generating gains from fair value fluctuations, and adverse market conditions could have a negative impact.

While the Company has sales offices across the country, its production and shipping facilities are concentrated solely in the Kanto region, and a large-scale natural disaster could disrupt procurement of raw materials as well as product production and shipping. Although the increasing proportion of cloud service revenue has reduced the scale of necessary facilities, some provision of physical items such as disks remains, meaning the risk has not been completely eliminated. Continued review and development of business continuity plans is recognized as an ongoing challenge.