Japan M&A Solution Incorporated

The Company is a single-business entity engaged in the M&A Advisory Business, which accounts for a large proportion of its operating results. If M&A demand contracts sharply due to major changes in economic conditions or the business environment, this may lead to a decrease in the number of companies seeking to sell and a decline in the acquisition appetite of companies seeking to buy, resulting in a decrease in the number of advisory contracts and completed deals, which could have a material effect on business strategy and operating results.

Securing and developing personnel with expertise in corporate management and finance, or with experience in M&A operations, is a critical issue for business expansion. If the Company is unable to secure personnel in a timely manner, if education and training are delayed, or if personnel leave the Company, it may become difficult to provide sufficient services to partners and clients. As a result, this could lead to a decline in the Company's reputation, a decrease in the number of referrals from partners, and a decrease in the number of new advisory contracts and completed deals, potentially affecting operating results and financial condition.

Toru Mihashi, Representative Director and President, possesses extensive knowledge and experience in the M&A Advisory Business and plays an important role in overall corporate activities, including the formulation and execution of management policy and business strategy. If he were to resign as a director for any reason or due to unforeseen circumstances, this could have a material effect on business strategy and other areas. As countermeasures, the Company is promoting the acquisition and development of talented personnel, delegating authority through organizational strengthening, and building a business structure that is not excessively dependent on any single individual.

In the event of unforeseen circumstances due to a natural disaster, damage to the assets of a company seeking to sell in an M&A deal under contract may occur, potentially leading to the suspension or interruption of the deal. In addition, the spread of an infectious disease may also cause delays or cancellations of deals. These impacts may affect the Company's operating results and financial condition.

Securing deals is a critical issue for business continuity and growth, and the Company relies on deal referrals from its network of partners such as financial institutions and professional service providers. If securing partners does not proceed as planned, or if the priority given to referrals from partners declines, this may affect business strategy and operating results through a decrease in the number of new advisory contracts and completed deals. As countermeasures, the Company is deepening relationships with partners through regular meetings and sharing of successful deal examples, and is promoting further expansion of its partner network.

The M&A Advisory Business does not require licenses or permits and has low barriers to entry, resulting in numerous competitors including not only major operators but also individual practitioners such as accountants, lawyers, and consultants. If the competitive environment intensifies due to new market entry by influential competitors, this may affect the Company's business and operating results. As countermeasures, the Company is differentiating itself by securing talented personnel, enhancing education and training programs, and building a network of partnerships with accounting firms, tax accountant offices, and financial institutions nationwide.

Deals may not proceed as scheduled due to difficulties in negotiating terms or delays in due diligence work. Shifts in the timing of deal completion may cause deviations from the Company's expected timing of revenue recognition, potentially affecting quarterly and fiscal year results. The Company manages the progress of deals in a timely manner and works to ensure smooth matching between the two parties.

Given the nature of M&A closings, which involve the movement of large sums of money, there is a possibility that litigation or similar actions may be brought against the Company due to some cause attributable to the acquiring or transferring company, regardless of whether the Company has violated any laws or regulations. Depending on the outcome of such litigation, this could have a material effect on operating results and financial condition. As countermeasures, the Company has established regulations for managing claims, built an organizational management system through the Board of Directors and the Risk Management Promotion Committee, ensures multiple personnel are involved in each case, holds weekly case review meetings, and maintains ongoing coordination with retained legal counsel.

While no legal regulations currently directly restrict the M&A Advisory Business, if any legal regulations are introduced in the future, this may affect operating results and financial condition. There is also a risk that changes to registration requirements or strengthened guidelines under the Small and Medium Enterprise Agency's M&A Support Institution Registration System could significantly increase operational burden. The Company strives to comply with guidelines and regulations through registration under the M&A Support Institution Registration System and membership in the M&A Support Institution Association (a general incorporated association).

Rapid technological innovation has led to an increase in new services, such as M&A platforms, that do not involve M&A advisors. If new technologies are developed that enable accurate and rapid understanding of client intentions and proposal-making, this may affect the Company's operating results and financial condition. While the Company's strength lies in the added value provided by advisors in adjusting terms and conditions in SME M&A, responding to technological innovation remains a challenge.