Area Quest Inc.

If the economic environment deteriorates in the real estate industry, the business environment surrounding the Group could become more challenging, potentially affecting performance. The real estate market tends to move in tandem with economic conditions, and there is a risk that declining demand for leasing brokerage and a decrease in the number of contracts concluded could put pressure on revenue. No specific countermeasures are disclosed in the securities report.

The consolidated subsidiary Area Quest Tenpo & Office Co., Ltd. engages in leasing brokerage for income-producing real estate, which requires a license from the Minister of Land, Infrastructure, Transport and Tourism or a prefectural governor under the Building Lots and Buildings Transaction Business Act and related laws and regulations. In the event of a violation of such laws and regulations, administrative sanctions, including license revocation, could be imposed. Sanctions such as license revocation would directly impede business continuity and could have a material impact on the Group's overall performance. The Group addresses this risk through thorough employee education on legal compliance and the establishment of a compliance system.

The Group accumulates and manages customer information obtained through sales activities in an in-house developed system, but there is a risk that customer information could leak externally due to unauthorized server intrusion or similar incidents. If an information leak occurs, the Group's creditworthiness could decline, potentially leading to customer attrition and the occurrence of legal liability, which could adversely affect operating results. The Group states that it takes care in managing customer information, but details of specific security measures are not disclosed in the securities report.