Takachiho Co.,Ltd.

The Souvenir Wholesale, Retail, and Manufacturing Businesses, Outdoor Equipment Business, and Bathing Facility Business all target general consumers, and changes in the economy and consumption trends directly affect sales. If an economic downturn or deterioration in consumer sentiment occurs, it may affect operating results and financial position across multiple segments. No specific countermeasures are disclosed in the Annual Securities Report.

Legal regulations such as the Food Sanitation Act and the Public Bathhouse Act apply to business activities, and if violations occur, corporate activities may be restricted. Increased costs of regulatory compliance may also affect operating results and financial position. The Company states that it makes maximum efforts to avoid risks such as food safety management, but risk remains in the event of situations that exceed the scope of these efforts.

If the number of tourists decreases due to inclement weather or natural disasters, sales in the Souvenir Wholesale, Retail, and Manufacturing Businesses may decline, which could affect operating results and financial position. If a large-scale natural disaster or accident occurs, there is a risk of significant disruption to the business activities of the Group as a whole. The Company addresses this by establishing internal systems for emergencies and educational systems to prevent accidents, but there are limits to complete preparedness against large-scale disasters.

In the Souvenir Wholesale Business, transactions are conducted under credit management, but if an unexpected bankruptcy of a business partner disrupts the collection of receivables, it may affect operating results and financial position. The Company prepares for this risk by actively collecting information through daily sales activities and the use of private research agencies, and by recording estimated uncollectible amounts as an allowance for doubtful accounts. However, complete avoidance is difficult in the case of unexpected events.

Competition with other companies in the same industry is intensifying in the Outdoor Equipment Business, and sales may decline due to new store openings in nearby areas even in regions where the Company maintains a competitive advantage. Intensifying competition directly leads to a decline in the profitability of existing stores, which may affect operating results and financial position. Specific countermeasures against competition are not disclosed in the Annual Securities Report.

The Company applies accounting standards for impairment of fixed assets, and further impairment losses may occur in the future on certain business-use assets due to deterioration in store performance and other factors. The recording of impairment losses carries the risk of temporarily having a material impact on financial position and operating results. No specific countermeasures are disclosed in the Annual Securities Report.