REVOLUTION CO.,LTD.

The Real Estate Business and Crowdfunding Business, the Company's core businesses, are highly susceptible to economic trends, interest rate trends, land price trends, and housing tax systems. If economic outlook deteriorates, land prices decline sharply, or unprecedented natural disasters occur, the real estate market could deteriorate, potentially affecting operating results. In addition, increases in the purchase cost of business land and construction costs are also factors that could put pressure on business profit. As macroeconomic factors play a large role, the Company's policy is to continuously monitor trends in the materialization of this risk.

The Company raises funds through borrowings in the Real Estate Business, Investment Business, Real Estate Credit Business, and Crowdfunding Business, and fluctuations in interest rate levels resulting from changes in monetary policy or economic conditions could affect operating results and financial condition. As countermeasures, the Company seeks to mitigate this risk through thorough inventory management, securing a cash position, and maintaining and improving favorable business relationships with multiple financial institutions.

The Company acquires and holds confidential information and personal information of customers, business partners, and Crowdfunding members, and if such information were to leak for any reason, the Company could face damages claims or a decline in credibility, potentially affecting operating results and future business development. The Company assesses the risk of personal information leakage as low, and has implemented measures such as setting data access permissions, establishing personal information protection regulations, thorough compliance enforcement by the Compliance Committee, and education and training.

The Company is subject to a wide range of laws and regulations, including the Building Lots and Buildings Transaction Business Act, the Financial Instruments and Exchange Act, the Act on Specified Joint Real Estate Ventures, the Money Lending Business Act, and the Interest Rate Restriction Act, and the abolition or revision of these regulations, or the establishment of new regulations, could affect operating results and future business development. The Company's policy is to closely monitor trends in related new regulations and respond proactively in advance.

If demand for funds increases in the course of developing each business, the Company may raise funds through the issuance of shares, and an increase in the number of shares of common stock issued could dilute share value and affect the market price. The need for fundraising arises in connection with business expansion, raising concerns about the impact on existing shareholders.

Class A shares carry a put option and a call provision under which common stock is delivered as consideration, and if Class A shares are converted into common stock in the future, the resulting increase in the number of shares issued could dilute share value and affect the market price of common stock. Depending on the timing and scale of conversion, there is a risk that the ownership ratio of existing shareholders could decline significantly.

At the Board of Directors meeting held on November 21, 2024, the issuance of the 8th Series Stock Acquisition Rights was approved, and if these stock acquisition rights are exercised, the number of shares of common stock issued will increase, potentially diluting share value and affecting the market price of common stock. While the issuance is believed to be for stock-based compensation and incentive purposes, depending on the scale of exercise, an impact on the market could occur.

If investors incur a loss of principal in a fund arranged under the Crowdfunding Business, the Company may become subject to legal proceedings from such investors. It is difficult to predict the occurrence of litigation or other legal proceedings or their outcomes, and should such events occur, they could affect business performance and financial condition.