Emergency Assistance Japan Co., Ltd.

The Group's core business is assistance services for overseas residents and travelers, and if the number of travelers declines sharply due to recession, rapid yen depreciation, regional conflicts, pandemics, or similar factors, this would materially affect business performance through a decrease in the number of services provided. The level has not yet fully recovered to that seen before the spread of COVID-19, and the risk of this situation persisting over the long term remains. At present, the Group continues to operate its business while closely monitoring the normalization of travel between Japan and other countries and the trend toward an increase in the number of travelers.

The one-stop consultation counter business and the EMIS (Emergency Medical Information System) Service Business are awarded through general competitive bidding by national and local government bodies, and if the Group fails to win such bids, the resulting loss of related business revenue would affect performance. Similarly, if budget execution does not proceed as planned and contracted operations are scaled back, a similar impact would occur. Due to this reliance on the bidding structure, there is an inherent risk that revenue stability is affected by external factors.

Due to the nature of its operations, the Group holds a large amount of personal information (including sensitive personal information), and in the event of an external leak, the resulting cancellation of contracts by major clients, reduction in the scope of business, and associated decline in sales, as well as the occurrence of damages compensation costs, would materially affect performance and trust. As countermeasures, the Group has obtained Privacy Mark certification, restricts room access eligibility and records via video cameras, strictly manages server access privileges, and conducts regular training for employees. However, the risk of leakage due to unforeseen causes cannot be completely eliminated.

If unexpected large-scale disasters or human-caused accidents cause trouble in the core business systems, the resulting system repair costs and damages compensation costs would affect performance. As countermeasures, the Group has outsourced its database servers and web servers to an external data center, implemented redundancy, and conducts regular backups. However, it remains difficult to completely prevent failures that exceed anticipated scenarios.

Advance payments to insurance companies and others arise in connection with upfront payments made to physicians and medical institutions, and the amount of such advance payments tends to increase as the business expands. In the event of a delay in recovery or non-recovery of a large amount of advance payments, this would affect the Group's financial position and performance. As countermeasures, for clients other than insurance companies, the Group collects advance receipts or obtains letters of payment guarantee and applies credit management standards, but the risk of non-recovery cannot be completely eliminated.

Currently, there is no specific licensing system in the industries related to the Group, but new self-regulatory rules may be established, or the acquisition of public or quasi-public qualifications may be made mandatory in the future. If legal regulations or self-regulatory rules exceeding the Group's expectations are established, this would affect the Group's business model and operations. The Group addresses this through continuous monitoring of industry trends.

In the Medical Assistance Business, assistance coordinators who can respond in two or more languages and possess deep knowledge of medicine and insurance are essential, and in the Life Assistance Business, employees with extensive knowledge and experience in concierge services are essential; such personnel constitute an important asset of the Group. If it becomes difficult to secure and develop the necessary personnel in a timely manner, this may affect the pace of business development. As countermeasures, the Group conducts broad-based recruitment activities regardless of age or gender, and strengthens internal training.

The Group has subsidiaries in the United States, China, Thailand, Singapore, and Canada, and a branch in the United Kingdom, and conducts business with service coverage areas spanning countries around the world. If military coups, civil unrest, national economic collapse, or major changes to legal systems occur in these countries, business operations would be disrupted, and similar events in regions with large numbers of Japanese residing overseas would affect performance through a decline in the number of travelers. As the Group expands its global business operations, continuous attention to geopolitical risk is required.

If a Group business location is affected by a major natural disaster, this may disrupt smooth business execution and affect performance. As countermeasures, the Group has introduced a highly functional telephone system connecting assistance centers in Japan and six other countries, establishing a system in which, even if a particular center is affected by a disaster, other centers can receive calls and provide services. In addition, computer servers are outsourced to a server center equipped with safety measures, ensuring business continuity in the event of a disaster.

To date, no material litigation related to domestic or overseas business has occurred, but if material litigation or claims arise concerning the services provided, this may affect the Group's financial position and performance. As countermeasures, the Group hedges risk through appropriate insurance coverage and has entered into an advisory contract with a law firm employing prominent attorneys, focusing on preventing the materialization of risk.