ART VIVANT CO.,LTD.

The Group is implementing scrap-and-build measures to improve store profitability, and losses may arise from the closure of unprofitable stores. This carries the risk that changes in store policy could directly affect business performance. The Annual Securities Report does not disclose specific closure plans or the scale of potential losses, and this is recognized as an ongoing management issue.

The Group holds a large volume of personal information, including that of Tomonokai membership club members, event sales customers, and store sales customers. Should an information leak occur, it could lead to a decline in sales due to loss of credibility and the incurrence of damages compensation costs. Although the Group has established a management system based on internal rules, it recognizes that the risk of leakage due to unforeseen circumstances cannot be eliminated.

The Group purchases paintings and artworks for future sale, and a decline in winning bid prices (including a decline in market value) due to worsening economic conditions may affect business performance. In addition, since the Group conducts overseas transactions with the United States, Europe, China, and other regions, foreign exchange fluctuations also directly affect earnings. These are external factors dependent on market conditions and are risks that are difficult to control.

For prints, the Group's main product, the number of prints struck is limited for each work, and a rich product lineup is a prerequisite for business development. Purchases from other publishers and sales agents are made on a per-work order basis, and since no continuous supply contracts are concluded, stable procurement is not guaranteed. Deterioration in relationships with suppliers or a stoppage in supply could lead to the risk of lost sales opportunities.

The Group's installment sales brokerage business is subject to the "Installment Sales Act," and the amended act, which took effect in December 2009, strengthened business regulations and legal responsibilities for credit purchase brokerage operators. Should further legal amendments lead to changes in business regulations in the future, this may affect business performance. If the Group's registration as an "Individual Credit Purchase Brokerage Operator" with the Kanto Bureau of Economy, Trade and Industry were to be revoked, it would impede the continuation of the business.

The Group's lending business is subject to the "Money Lending Business Act," and changes in business regulations due to legal amendments may affect business performance. If the Group's registration as a "Money Lender" with the Tokyo Metropolitan Government cannot be renewed, or if grounds for revocation arise, continuation of the lending business would become difficult. As of the disclosure, no grounds for revocation of the registration have occurred.

In the past, the impact of the COVID-19 pandemic led to the cancellation of print exhibition and sales events and to closures or reduced operating hours at Hot Yoga Studio "Amida" locations. If restrictions on holding events or on facility usage due to states of emergency or similar measures were to occur again, sales may decline. In the Health Industry Business, membership numbers have remained in a challenging state, and a resurgence of infectious disease poses a particular risk of affecting this business.

The Group is not subject to the cooling-off system under Article 9 of the "Act on Specified Commercial Transactions," but has introduced a voluntary cooling-off period of eight days from the date of contract. In addition, the Group has adopted a policy of not selling to customers seeking resale for the purpose of speculative gain or investment, and these voluntary restrictions may constrain sales opportunities. Should amendments to laws and regulations impose additional business restrictions, this may affect business performance.