Broad-Minded Co.,Ltd.

Life insurance agency commissions accounted for 71.6% of net sales in FY2026 (ending March 2026), and the Company has a highly dependent structure in which a single insurer, MetLife Insurance K.K., accounts for 34.7% of net sales. If an insurer changes its sales policy or commission structure, its financial condition deteriorates, or it becomes insolvent, there is a risk that agency commission income could decline significantly. Although the Company intends to diversify, its degree of dependence remains high at present.

If competitors such as multi-insurer agencies, IFA firms, and mortgage loan sales companies emulate the Company's life-planning-based one-stop service, its competitive differentiation could be lost. In addition, the increase in registered operators under the financial services intermediary business system established in November 2021 and the rise of fintech companies could fundamentally transform consumer financial behavior, reducing the relative value of existing financial services providers. Should these risks materialize, they could affect the Company's financial condition and operating results.

The Company operates its business while maintaining multiple licenses and registrations, including insurance solicitor qualifications, securities representative qualifications, financial instruments intermediary business registration, and banking agency permits. If a violation of laws and regulations or a regulatory infringement occurs, the Company could be subject to administrative dispositions such as business improvement orders, partial suspension of operations, or termination of agency contracts. Although the Company has established a monitoring and PDCA cycle framework through its compliance and internal audit departments, should any infringement occur, it could affect the Company's financial condition and operating results through, among other things, a slowdown in new business solicitation.

The Company holds large volumes of personal information in the course of providing consulting services. Should an external leakage, loss, or unauthorized use of such information occur, there is a risk of loss of trust among customers and business partners, as well as substantial costs arising from lawsuits and claims for damages. The Company has implemented measures such as access rights management for its CRM system, remote device locking, and data deletion functions, and has obtained Privacy Mark certification; however, these measures do not guarantee complete prevention.

In a business model in which consulting sales serve as the source of value provided, the recruitment, training, and retention of excellent personnel form the foundation of business continuity. Although the Company has diversified its recruitment methods and established systematic training programs through its education department, if it is unable to secure and develop personnel as planned due to changes in the recruitment market or other factors, this could lead to a decline in service quality and a slowdown in business expansion, which could affect the Company's financial condition and operating results.

The CRM system, which centrally manages customer information, and the Company's proprietary digital product, Money Pass, rely heavily on the internet environment. Should a system failure occur due to a natural disaster, unauthorized external access, malware, or other cyberattacks, there is a risk that the smooth conduct of operations could be impaired and trust from external providers could be undermined. The Company has implemented measures such as compliance with FISC security standards, ISMS certification (JIS Q 27001:2023), regular backups, and cloud migration of in-house systems; however, in the event of a prolonged failure, its financial condition and operating results could be affected.

In the real estate development and sales business conducted through a subsidiary, if the volume of property acquisition and sales declines due to changes in market conditions or customer needs, there is a risk that sales revenue could fail to materialize due to price declines or cancellations, resulting in valuation losses on inventory. The Company's policy is to avoid early sales at reduced exit prices in order to secure the originally planned profit level, maintaining profitability through rental income until the properties are sold; however, in the event of a sudden change in market conditions, this could affect the Company's financial condition and operating results.

The Company holds tangible and intangible fixed assets as well as investment securities held for the purpose of building business relationships. If future changes in the environment make it unlikely that the investment will be recovered, or if the substantive value declines due to deterioration in the issuer's creditworthiness or failure to achieve business plans, there is a risk that impairment losses and valuation losses on investment securities could increase. As further investments to accelerate growth are anticipated going forward, this risk may expand as fixed assets increase. In response, the Company continuously examines the net assets, business plan progress, and future prospects of its investees.

The Company regards corporate acquisitions and capital alliances as effective means for expanding into new businesses and services, and aims to mitigate various risks through detailed due diligence. However, the expected results may not be achieved due to the occurrence of unforeseen events not anticipated during the investigation stage or changes in the environment. If the expected results are not achieved, there is a risk of impairment of invested funds and an adverse impact on the Company's financial condition and operating results.

The number of potential shares from stock acquisition rights granted as incentives to directors and employees reached 183,800 shares (3.1% of total issued shares) as of the end of the current consolidated fiscal year, creating a risk of dilution of shareholder value for existing shareholders if these rights are exercised. As the Company anticipates continuing this program to boost the morale of officers and employees and secure excellent personnel, the number of potential shares may increase further.