COACH A Co., Ltd.

Given the nature of coaching services, the Company acquires and holds confidential information of client companies as well as large amounts of personal information, giving rise to risks from increasingly sophisticated and routine cyber attacks, including ransomware, as well as information leakage due to intentional acts or negligence by employees. Should a leak occur, in addition to compensation costs and damages, there is a possibility of significant impact on the fundamentals of the business, including contract terminations by business partners, difficulty in obtaining new orders, and reputational damage. As countermeasures, the Company continuously conducts information security education, has established the "Basic Regulations on Information Systems," has set up an Information Security Committee, and continues to make IT investments.

Management, as providers of Executive Coaching (EC), possess coaching know-how, networks with executive-level individuals, and industry knowledge, and play a core role in business execution. If such management personnel became unable to perform their duties due to illness, accident, or other causes, there is a possibility of a temporary decline in orders received and net sales, as well as a decline in sales capability. While the Company is working to reduce this risk through the enhancement of the management structure, delegation of authority, and strengthening of next-generation talent development, resolving the degree of dependence will take time.

In the course of coaching sessions and research, there are opportunities to come into contact with undisclosed material facts of client companies, giving rise to a risk of insider trading by employees. If insider trading were to be discovered, it could damage the credibility and reputation of the Group and result in costs associated with administrative and legal responses, potentially having a significant impact on the business and results of operations. The Company strives to prevent such occurrences through the establishment of insider trading prevention regulations and continuous related education for employees.

Recruiting and developing personnel who can acquire coaching skills and build good relationships with client companies is a key issue in human resources strategy, and there is a risk that recruitment will not proceed as planned due to the progressing labor shortage in Japan. If personnel outflow occurs due to job changes to competitors or independence, it may become temporarily difficult to secure earnings, and insufficient development of next-generation management could lead to a decline in competitiveness. The Company is working to attract and retain talent by building an organization and corporate culture centered on empathy with its purpose.

While the Company's organizational development services based on Systemic Coaching™ are grounded in a unique philosophy, there is a risk that the competitive environment could change due to the emergence of low-price strategy players in the Executive Coaching (EC) field, the development and spread of alternative technologies, or market penetration of organizational development services based on new concepts. At present, the Company recognizes that there are only a limited number of operators capable of providing coaching at a certain scale to large enterprises, but there are other coaching service providers, corporate training support providers, and business consulting operators in adjacent fields. Changes in the competitive environment may affect the Group's business and results of operations.

The Group's net sales tend to have a relatively high proportion attributable to major client companies, and if contracts with major clients with large order amounts are not renewed, or if transactions shrink or end due to the completion of organizational transformation or generational change in management, there could be a significant impact on results of operations. Delays in the progress of coaching sessions may similarly affect the business and results of operations. The Company takes these risks into account in formulating its sales strategy.

The likelihood of a global economic crisis triggered by pandemics, conflicts, global inflation, financial crises, heightened geopolitical risk, and other factors is increasing, and since the Group's business is centered on transactions with Japanese companies, there is a risk that order trends could deteriorate if client companies are strongly affected. In fact, there was a period from February 2020 onward in which demand for services temporarily declined and results of operations deteriorated due to the impact of COVID-19. Subsequently, the Company has built a service delivery structure less susceptible to geographical constraints by strengthening its online delivery capabilities and working to ensure quality equivalent to in-person sessions.

While the Group has expanded overseas primarily in Asia and the United States, there have been past instances in which overseas operations failed to develop as planned, mainly due to insufficient relationship-building with local business leaders, resulting in negative net worth and closure of offices. Going forward, if difficulties arise in securing personnel to drive overseas business, sudden fluctuations in exchange rates occur, political and economic conditions in the countries of expansion change, troubles arise due to differences in business customs, or changes occur in laws and regulations, this could affect the business and results of operations through a decrease in net sales or profit. While the Company intends to continue promoting overseas expansion, this involves an inherent risk of failing to achieve planned targets.

As of the end of December 2025, the shareholding ratio of Director Mamoru Ito and his asset management company, Ito Holdings Co., Ltd., accounted for 53.0% of voting rights. If the Company's shares were to be sold for any reason in the future, this could affect the market price and trading conditions of the shares. In addition, Discover 21, Inc., which is wholly owned in substance by Mamoru Ito, is a related party, and conducts transactions involving the provision of coaching services and the publication and purchase of coaching-related books; such transactions are subject to prior approval by the Board of Directors in accordance with the Related Party Transaction Management Regulations.

At present, there are no laws in Japan that directly regulate the coaching business, but various laws such as the Civil Code, the Companies Act, the Consumer Contract Act, and the Act on the Protection of Personal Information apply, and violations could result in civil liability for damages, criminal penalties, or administrative sanctions. If these laws are amended, or if new laws affecting the business are enacted or amended in Japan or overseas, additional compliance costs may be incurred, which could affect the business and results of operations. The Company has established a Risk Management and Compliance Committee that regularly evaluates the likelihood and impact of risks.