BEING HOLDINGS CO., LTD.

In the fiscal year ended December 2025, Kusuri no Aoki Co., Ltd. accounted for 35.5% of consolidated operating revenue and Best Logistics Partners Co., Ltd. (Mitsubishi Shokuhin) accounted for 11.7%, with the top two clients together reaching approximately 47%, resulting in a highly concentrated dependency structure. If a business partner changes its business strategy, the Group may be forced to accept a significant decrease in handled cargo volume or scale down business locations, which could have a material impact on its financial position and operating results. While the Group strives to maintain the relationships by preserving and strengthening its competitiveness, the high degree of dependence remains a structural risk.

As of December 31, 2025, the balance of interest-bearing debt stood at ¥6,784 million, with a debt dependence ratio of 33.4%, a high level. Continuous capital expenditure for establishing new business locations and replacing vehicles is mainly funded through borrowings from financial institutions, some of which are at variable interest rates, creating a risk that interest payment burdens will increase when market interest rates rise. Although the Group is working to convert borrowings to fixed rates, interest rate fluctuations may affect its financial position and operating results.

Under the point-based penalty system administered by the Ministry of Land, Infrastructure, Transport and Tourism, if violations of laws and regulations such as overloading accumulate, there is a risk of administrative sanctions including suspension of vehicle use, business suspension, or revocation of permits. The Group holds multiple licenses and permits, including for general motor truck transportation business, warehousing business, and taxi/bus business; if a license is revoked, operating revenue would decline during the suspension period, potentially having a material impact on the Group's financial position and operating results. The Group strives to maintain proper business continuity through monthly safety and health meetings, an in-house licensing system, and safety education for partner companies.

For the Group, which operates a labor-intensive business, securing high-quality human resources amid a future decline in the working population is a prerequisite for business expansion. If the Group is unable to secure appropriate human resources, or if the cost of securing human resources increases significantly, it could affect its financial position and operating results. The Group is preparing to reduce labor requirements through measures such as introducing robots into logistics centers and responding to autonomous driving technology, but these measures have limited immediate effectiveness.

In truck delivery operations on public roads, if a major accident or legal violation occurs—whether involving the Group's own vehicles or those of partner companies to which operations are outsourced—there is a risk of lawsuits from victims, loss of customer trust and social credibility, and administrative sanctions such as suspension of vehicle use, business suspension, or revocation of licenses. While the Group implements measures such as operation management using digital tachographs and safety recorders, as well as safe driving education, maintaining a broad management system that includes partner companies remains a challenge.

When the client is a retail company, the Group competes not only with other logistics operators but also with wholesale companies. Furthermore, the expansion of online sales is blurring the boundaries between retail, wholesale, and logistics, and competition is expected to intensify due to entry from other industries and the emergence of new commercial and distribution styles. If the Group is slow to respond to such diversification of competitors, it could affect its financial position and operating results through a decline in operating revenue.

In the logistics industry, warehouse enlargement and automation, as well as autonomous driving of trucks, are advancing, and the Group has adopted a policy of developing and introducing proprietary equipment and facilities centered on equipment that "assists people." While investment associated with proprietary development and introduction is increasing, if the Group is unable to recoup such investment or achieve profitability, it could affect its financial position and operating results. Because the Group has chosen a proprietary path that differs from industry standards, there is also an inherent risk regarding the appropriateness of its technology choices.

Jin'ichi Kita, the President and Representative Director, is a controlling shareholder who, together with his asset management company and relatives within the second degree of kinship, holds 60.86% of the Company's shares. If he sells shares in the market, or if the possibility of such a sale arises, it could affect the market price of the Company's shares. In addition, if shares are transferred to a specific party, the transferee's policies could have a material impact on the Group's management strategy and other matters.

Because the Group handles clients' product information and other data when receiving logistics business orders, there is a risk of loss of customer trust, decline in social credibility, and claims for damages in the event of information leakage or data corruption. In addition, if the computer system that centrally manages all business locations experiences unexpected downtime or is destroyed, it could lead to a broad suspension of operations, including logistics center operations and transportation services, potentially affecting the Group's financial position and operating results. While the Group implements measures such as access restrictions and a system requiring permission to remove information equipment, responding to external threats such as cyberattacks remains an ongoing challenge.

The Group uses large quantities of diesel fuel and gasoline as fuel for its business vehicles, and fluctuations in crude oil prices and exchange rates directly affect fuel procurement costs. If increased delivery costs cannot be passed on through pricing, profitability could deteriorate, affecting the Group's financial position and operating results. Although the Group strives to manage costs, the ability to pass on price increases depends on negotiating power with business partners, creating a structure in which this risk is amplified in combination with the high degree of dependence on specific business partners.