Aoyama Zaisan Networks Company,Limited

The Asset Consulting Business is highly dependent on revenue related to real estate transactions, and a deterioration in the real estate market directly affects business performance. In addition, if real estate acquired for structuring the ADVANTAGE CLUB (Fractionalized Real Estate Product) cannot be transferred to the anonymous partnership as planned due to war, large-scale economic shocks, or similar events, risks such as the recognition of valuation losses may arise. As a countermeasure, property selection is limited to high-quality real estate in central Tokyo, but there are limits to what can be done in the face of sudden changes in the external environment.

Tax systems such as inheritance tax and the Act on Special Measures Concerning Taxation are fundamental elements underpinning the Asset Consulting Business, and if tax reforms change the tax treatment involved, customer demand for consulting services may decline, potentially affecting business performance. As current measures, the Company seeks to avoid the occurrence of major problems by obtaining opinion letters from tax accountants and lawyers and through prior consultations with tax authorities, but future tax system change risk cannot be completely eliminated.

The Company Group conducts business under licenses, permits, and registrations based on the Building Lots and Buildings Transaction Business Act (Tokyo Governor License (8) No. 62476), the Act on Specified Joint Real Estate Ventures (Commissioner of the Financial Services Agency and Minister of Land, Infrastructure, Transport and Tourism License No. 59), and the Financial Instruments and Exchange Act (Director-General of the Kanto Local Finance Bureau (Kinsho) No. 1017). If these related laws and regulations are abolished, amended, or if new legal regulations are established, business activities may be restricted. The Company currently recognizes no grounds for revocation of its licenses or registrations, but as a financial instruments business operator, it is continuously required to maintain a highly sophisticated legal compliance system.

The competitiveness of the Asset Consulting Business depends on personnel with advanced specialized knowledge and high interpersonal skills, and if the Company is unable to recruit and develop personnel as planned, this may affect business performance. The Company is focusing intensively on securing talented personnel and on developing training and systems utilizing technology, but competition for recruiting specialized personnel is intense, requiring ongoing measures.

Representative Director and President Masazumi Hasumi possesses extensive knowledge and experience in asset consulting and plays an important role across the Group's overall corporate activities, including the determination of management policies and strategies. If he were to retire or leave management due to unforeseen circumstances, this could have a material impact on management strategy and business performance. At present, no retirement is anticipated, but there is no specific description of countermeasures such as successor development.

As cyberattack methods become increasingly complex and sophisticated day by day, if personal information or confidential information handled by the Company Group were to leak externally, this could affect business performance through costs incurred for compensating business partners, administrative sanctions, and a decline in social credibility. Continuous strengthening of countermeasures is planned, but complete defense against increasingly sophisticated attack methods remains difficult.

The Company obtained ISMS certification (JIS Q 27001) in 2009 and transitioned to the revised standard in 2014, strengthening its information management system, but if important information were to leak externally, this could affect business performance through a decline in social credibility, substantial costs, and damage to brand value. Given the nature of the Asset Consulting Business, the Company holds a large amount of highly confidential information such as customers' asset information, and the impact of an information leak could be particularly severe.

In addition to borrowings from financial institutions and corporate bonds, the Company strives for stable fundraising through long-term commitment line agreements, but if there is turmoil in financial markets or a deterioration in business performance, this may affect cash flow. Dependence on external funding, including for raising funds to acquire real estate for structuring fractionalized real estate products, is an important risk factor in business operations.

The Company Group relies mainly on referrals from partner financial institutions and accounting firms as its primary means of customer acquisition, and is highly dependent on these channels. If partner firms were to bring comprehensive asset consulting services in-house, customer acquisition activities could cease to function effectively, potentially affecting business performance. Given the highly specialized nature of the services, the Company recognizes the likelihood of such in-house provision as low, but it is explicitly identified as a risk.

In addition to physical damage from natural disasters and abnormal weather associated with climate change, costs related to the transition to a decarbonized and low-carbon society may affect business performance. The Company is advancing measures such as promoting clean energy use for the ADVANTAGE CLUB (Fractionalized Real Estate Product) and establishing a Sustainability Committee for information disclosure utilizing the TCFD framework, but the risk of stricter regulations and increasing transition costs remains an ongoing challenge.