OTSUKA CORPORATION

Although the Company Group has a broad customer base ranging from large enterprises to mid-sized and small businesses and its dependence on any specific customer is low, if IT investment trends across many companies shift in the same direction due to unforeseen changes in economic conditions, this could affect the Company Group's business results. While the broad diversification of the customer base is a strength, in the event of macroeconomic deterioration there exists a risk that IT investment could be suppressed simultaneously across all industries and company sizes.

The Company Group receives products, services, and technology from a large number of suppliers, and strives for stable procurement by building close relationships with suppliers and continuously gathering information on new products. However, if the Company Group is unable to obtain sufficient supply of products due to circumstances at suppliers and is also unable to secure substitutes, the provision of products and services to customers may be delayed, which could affect the Company Group's management.

In the course of its business, the Company Group holds large volumes of personal information and corporate information, and in addition to obtaining Privacy Mark certification, ISMS certification, and ISO27017 (cloud security) certification, it has implemented organizational, personnel, physical, and technical safety control measures. However, if information is leaked due to cyberattacks, system failures, human error, or other causes, this could give rise to liability for damages and loss of social trust, potentially having a material impact on the Company Group's management.

As measures against infectious disease, the Company Group has developed an environment for online sales and service activities, strengthened sales through its call center, and expanded web-based sales. However, if an infectious disease outbreak occurs that has a major impact on overall economic and social activity, complex effects may arise, including constraints on sales and service activities, a decline in consumption of office supplies and copy usage volume, and supply shortages due to a sharp increase in demand for certain products, potentially worsening the Company Group's business results.