Ligua Inc.

If the business performance of client orthopedic clinics deteriorates due to excessive competition arising from an increase in the number of orthopedic clinics or reductions in medical expense reimbursements resulting from revisions to the medical fee schedule, there is a risk that the Group's sales will decline. The same impact could also arise if amendments to laws such as the Health Insurance Act or the Judo-Seifukushi (Orthopedic Practitioner) Act introduce regulations disadvantageous to orthopedic clinics. Because the Group's core business foundation is concentrated in services for orthopedic clinics, changes in the industry environment are structurally linked directly to overall business performance.

The Wellness Business is subject to regulation under the Pharmaceuticals and Medical Devices Act, while the Financial Business is subject to regulation under the Insurance Business Act, the Financial Instruments and Exchange Act, the Act on Provision of Financial Services, and other laws. The introduction of new regulations or the strengthening of existing regulations could have a material impact on business operations. In addition, violations of the Act against Unjustifiable Premiums and Misleading Representations, the Pharmaceuticals and Medical Devices Act, or similar laws in advertising could lead to a loss of social credibility. Although the Group has established a cross-group advertising review system, it is difficult to completely eliminate the risk of legal violations.

There is a risk that personal information and other data acquired and managed in connection with the Billing Agency (Medical Expense Claim Processing, Early Payment) service and the Financial Business could be leaked, damaged, or lost due to unauthorized access or inadequate internal controls. In particular, because user information remains within the system for a certain period in the Billing Agency (Medical Expense Claim Processing) service, measures such as access restrictions and the installation of surveillance cameras have been implemented, but the risk of leakage cannot be entirely eliminated. Should a leak occur, it could result in claims for damages, litigation, or loss of social credibility, potentially having a material impact on the Group's business results and financial position.

Major products such as Health Support (IFMC. Products), Equipment & Consumables (EMS, etc.), Inject Energy, and Thomson Beds depend on procurement from specific suppliers, creating a risk that stable procurement could become difficult due to natural disasters, infectious diseases, country risk, or supplier bankruptcy. These products account for a certain proportion of the Company's sales, and if procurement becomes impossible, the impact on business results would be significant. In addition, if a quality issue arises during the manufacturing process, sales suspension or product recalls may be required, and there is also a risk of liability that product liability insurance may not fully cover.

The Group operates its business based on multiple licenses and registrations, including sales and rental businesses for specially controlled medical devices, medical device manufacturing and marketing/manufacturing registration, money lending business registration, and Insurance Agency registration. If violations of licensing or registration requirements occur, the Group could be subject to revocation, business suspension orders, or business improvement orders. In particular, if the revocation of Insurance Agency registration were to result in the termination of most agency contracts, this could have a material impact on the Group's business results and financial position. Although the Group strives to promote compliance, the administrative burden is heavy because it is subject to oversight by multiple regulatory authorities.

In the Billing Agency (Medical Expense Claim Processing, Early Payment) service, failure to submit or delays in submitting application forms could delay payment of medical expenses to orthopedic clinics and other clients, creating a risk of loss of social credibility. Because part of the operation is outsourced to external contractors, a management framework that includes oversight of these contractors is necessary. In addition, the early payment service for medical expenses is a registered business under the Money Lending Business Act, and if the registration were revoked due to a legal violation, continuation of this service would become impossible.

In the leasing business, which centers on equipment for orthopedic clinics, if non-performing receivables exceeding expectations arise due to deterioration in the business performance of clients, this could affect the Group's business results and financial position. Although the Group carefully assesses the creditworthiness of lessees to mitigate risk, this risk is linked to the deterioration of clients' financial condition caused by worsening external conditions such as excessive competition in the orthopedic clinic industry and reductions in medical expense reimbursements. While no material bad debts have occurred to date, this latent risk could materialize depending on future changes in the industry environment.

In addition to the granting of stock options and restricted stock, a third-party allotment of new shares (100,000 shares) to TBM Co., Ltd. was completed in January 2026, already resulting in dilution of 6.6% relative to the total number of issued shares. There is a risk that further issuances of new shares for fundraising purposes, such as to expand collaboration related to IFMC., could occur in the future, and additional dilution could affect share price formation. Although the Group aims to enhance corporate value over the medium to long term, the possibility that continued dilution could harm the interests of existing shareholders cannot be ruled out.

Directors and executive employees possessing specialized knowledge, technical skills, and experience play an important role in business execution, and the know-how accumulated by these personnel is a source of the Group's competitive strength. If such officers or employees resign, retire, or are absent for an extended period, and it becomes difficult to secure successors, this could affect the Group's business results and financial position. In addition, if the recruitment and development of talented personnel for business expansion does not proceed as planned, or if fixed costs increase in connection with securing personnel, this could also affect business results.

The Group positions M&A as an effective means of expanding new businesses and services, and intends to maintain this policy going forward. Although due diligence is conducted to mitigate risk, issues that could not be identified during prior investigation, such as the emergence of contingent liabilities or the discovery of previously unrecognized liabilities, may arise after an acquisition. If business development does not proceed as planned, the initially expected contribution to business results may not be realized, creating a risk that could affect the Group's business results and financial position.