SIGMAXYZ Holdings Inc.

The source of value in consulting services lies in the advanced knowledge and expertise held by individual consultants. If the recruitment and development of excellent talent does not proceed as planned, or if talent attrition occurs due to job changes or other reasons, this may affect business performance. There is also a risk that talent investment costs may increase in the future. As countermeasures, the Company is developing appropriate position and compensation systems and continuously working on recruitment and capability development.

The Company provides consulting services utilizing new technologies such as AI, some of which involve fields awaiting further elucidation. If unexpected malfunctions occur, this may result in delays in service provision or damage to customers, potentially causing a decrease in net sales or the occurrence of damages liability. The Company aims to reduce risk and minimize its impact by acquiring and developing talent well-versed in new technologies and by establishing appropriate contractual terms with customers.

In providing services, it is necessary to obtain and utilize confidential and personal information of customers. If such information is leaked externally for any reason, this may result in a decline in the Group's credibility and the occurrence of damages liability. While the Company has entered into confidentiality agreements and thoroughly enforces confidentiality obligations and information management among officers and employees, complete prevention cannot be guaranteed.

In July 2025, the Company absorbed and merged with SIGMAXYZ Investment Ltd., and the Company now manages the risk of the succeeded investment assets. Depending on the business development and performance of investee companies, there is a possibility that investments may not be recovered. Sales may also be restricted due to reduced stock liquidity or the existence of lock-up provisions, and unrealized capital gains, uncollected investment funds, and losses on sale or valuation losses may affect the Group's financial position and operating results.

The Company's main customers are primarily large corporations that are leading companies in their respective industries. If domestic and overseas economic conditions deteriorate due to factors such as the situation in the Middle East, and this significantly affects the management conditions or performance of these customers, it may also affect the Group's business performance. As a countermeasure, the Company adopts a policy of minimizing the impact on performance by curbing various expenses.

The internal system infrastructure aggregates important information such as customer information, financial data, and personnel data. If severe damage or a large-scale system failure occurs due to natural disasters, accidents, fires, etc., and recovery takes time, this may result in delays in consulting services or the suspension of internal operations, potentially causing a decrease in net sales and significant recovery costs. The Company is strengthening its system infrastructure through the construction and utilization of a digital workplace environment.

With the advancement of globalization and information networks, the scale of damage in the event of unforeseen circumstances such as large-scale disasters, epidemics, or major system failures is expanding year by year. While the Company judges the probability of occurrence to be extremely low, if special circumstances that cannot be controlled by a single company occur, business continuity may become difficult. The Company addresses this through the establishment of a crisis management system and the development of a digital workplace environment.

The Company has established a legal compliance framework through the formulation of compliance action guidelines and the appointment of a Chief Compliance Officer. However, if officers or employees engage in conduct that violates compliance, this may lead to a decline in the Group's credibility and a decrease in net sales, among other effects. At present, no particular risk is stated to have materialized.

The Company outsources part of its consulting operations. If unexpected circumstances occur at an outsourcing partner, this may result in increased costs to maintain quality or damages liability to customers due to delivery delays, potentially affecting business performance. The Company strives to secure stable, high-quality outsourcing partners through regular reviews of quality standards and management systems and improvement guidance as necessary.

The Company holds assets such as bonds that are subject to price fluctuations as part of its fund management. If the price of any managed asset declines significantly with no prospect of recovery, this may result in the recognition of valuation losses through impairment processing, which could affect the Group's financial position and operating results. Investment decisions are made in accordance with internal regulations, and risk management is maintained even after holdings are acquired.