TECHNOLOGIES,Inc.

The Renewable Energy Solutions business is subject to regulations such as the Construction Business Act, the Electricity Business Act, and the Act on Special Measures Concerning Renewable Energy, and amendments to laws or the application of new regulations may constrain business operations. In addition, changes in the purchase price under the Feed-in Tariff (FIT) system may directly affect the profitability of this business. As a response, the Group continuously acquires legal knowledge by participating in various seminars and reflects relevant trends in its management strategy.

In the IT Solutions Business, the market for developing video software for gaming machines has been affected by a combination of factors: a decline in the user population due to regulations in the gaming machine industry, domestic economic stagnation caused by the COVID-19 pandemic, and difficulty in procuring hardware due to the global semiconductor shortage, resulting in a decline in unit sales by gaming machine manufacturers. If the market contracts further or remains stagnant over the long term, it could materially affect the Group's business performance. As a response, the Group is working to reduce its dependence on this area by strengthening system and application development utilizing digital technologies such as AI.

While the contracted software development market, to which the core IT Solutions Business belongs, is expected to continue growing, if the market contracts or stagnates over the medium to long term due to deterioration of the economic environment or an economic downturn, it could affect the Group's business performance. As a response, the Group closely monitors market trends on a daily basis, reflects them in its management strategy as appropriate, and strives to build a system capable of flexible response.

Highly skilled personnel in design, project management, marketing, and other advanced skill areas are in high demand across many industries, and if intensifying recruitment competition prevents the Group from securing the necessary personnel, or if recruitment and personnel costs increase, this could hinder business expansion and the provision of added value to customers. As a response, the Group employs a recruitment approach combining multiple channels such as referrals and recruitment agencies, and strengthens its development system by providing technical skill-improvement training and opportunities for the exchange of opinions both within and outside departments.

In the course of its business, the Group handles confidential information held by clients, and if an information leak occurs due to computer viruses, unauthorized access, human error, or other causes, it could result in claims for damages from clients and loss of trust, thereby affecting the Group's business performance. As a response, the Group implements security measures to prevent information leaks to outside parties and to block unauthorized external intrusions, and conducts regular security training for officers and employees to raise awareness.

Services in the SaaS Business are provided over the internet using Amazon Web Services (AWS), and the stable operation of AWS and internet connectivity is a critical matter for business operations. If these services are disrupted due to natural disasters, malicious acts, unexpected failures, or other causes, it could cause damage to customers and undermine the reliability of the services, thereby affecting the Group's business performance. As a response, the Group implements system redundancy, strengthens security measures, and has established an internal response system for use in the event of a failure.

The pace of technological innovation is extremely rapid in the fields to which digital technologies such as AI and SaaS products belong, and if the Group fails to respond in a timely and appropriate manner to changes in the market environment, including the emergence of new business models, this could result in a decline in competitiveness and affect its business performance. As a response, the Group continuously monitors trends in technological innovation and promotes the acquisition of new technical know-how and its incorporation into development processes through the recruitment and development of personnel, primarily development staff, and the improvement of the internal environment to enhance development productivity.

Hiroki Yoshihara, the founder and Representative Director and President, has played a central role in formulating, deciding, and executing management policy and business strategy since the Company's establishment, and if he becomes unable to continue performing his duties for any reason, this could have a material effect on the Group's business performance. As a response, the Group is strengthening its management structure through information sharing among directors via the Board of Directors and the discussion and sharing of important matters at biweekly management meetings, and is working to build a system that eliminates excessive dependence on this individual.

There are multiple competitors for "jobs," the business management system for staffing companies, and if price competition intensifies or major companies with capital strength and brand power, or operators with new business models, enter the market, causing the Group to lose its competitive advantage in terms of service content or price, this could affect its business performance. As a response, the Group strives to enhance its competitive advantage by improving the quality of customer support, accumulating its personnel database, and making continuous investments in training.

Both the business management system for staffing companies, "jobs" (launched in February 2019), and the Sales Enablement tool, "Circle" (launched in July 2021), have limited operating track records, and the SaaS Business segment recorded a loss in the fiscal year under review (February 1, 2025 to January 31, 2026). Given the characteristics of a recurring-revenue business model, an increase in the number of contracted accounts is key to achieving profitability, and if this does not proceed as expected, it could affect the Group's business performance. As a response, the Group will continue to implement measures to grow the number of contracted accounts and, through monitoring by the Board of Directors and other bodies, will take additional measures as necessary.