Sumasapo Inc.

The Company obtains personal information such as residents' names, addresses, and contact details from real estate management companies and utilizes it in call center operations. The Company recognizes as an extremely important risk the possibility that, in the event of information leakage, unauthorized use, or falsification, the application of penalties under the Personal Information Protection Act or loss of credibility could have a serious impact on its business, operating results, and financial position. As countermeasures, the Company has obtained ISMS certification (ISO27001) and Privacy Mark certification, and thoroughly implements the establishment of regulations for handling specified personal information, internal audits, and employee training.

In "Sumasapo Thank You Call," the Company solicits residents by telephone for internet and lifeline services, and the Company recognizes as an extremely important risk the possibility that, if acts in violation of the telephone solicitation regulations under the Act on Specified Commercial Transactions occur, this could have a serious impact on business continuity, operating results, and financial position. Since the regulations of this act also extend to outsourced call centers, the Company strives to conduct regular training and raise compliance awareness, including management of outsourcing partners.

The Company's main customers are real estate management companies, and its core service "Sumasapo Thank You Call" depends on the number of new resident information provided. The Company recognizes as a particularly important risk the possibility that a decline in new residents due to a cooling of real estate market conditions could directly lead to a decrease in the number of resident information provided, significantly impacting the Company's business and performance. As a countermeasure, the Company is diversifying risk by expanding the sales share of the resident app "totono," which is less susceptible to real estate market conditions.

The Company receives contract referral fees from service providers or higher-tier agencies through outsourcing partners, and the Company recognizes as a particularly important risk the possibility that, if transaction terms are significantly changed due to changes in the business policies of service providers, this could affect its business and performance. The Company aims to reduce risk by maintaining transactions with multiple outsourcing partners and service providers, and through contract design that allows for handling changes in customer referral fees from real estate management companies.

The Company recognizes as a particularly important risk the possibility that the competitive advantage of "totono" and "Sumasapo Thank You Call" could decline, or competition could intensify, due to imitation by competitors with capital strength, marketing capabilities, and broad customer bases, or entry by companies from other industries. The Company strives to expand solutions for real estate management companies and establish a differentiated position by strengthening relationships with real estate management companies, strengthening its organizational structure, and enhancing the development capabilities of "totono."

The Company recognizes as a particularly important risk the possibility that, if the system goes down due to a surge in access, power outages, software malfunctions, computer viruses, unauthorized external intrusions, natural disasters, or other causes, this could hinder service provision, and could also result in loss of trust, suspension of transactions, or claims for damages. Although all servers have been migrated to cloud services, the risk of failures in the cloud service itself remains, and the Company strives to reduce the impact through the establishment of an internal response structure in the event of a failure.

In its rent guarantee products, the Company makes subrogated payments when tenants default on rent. The Company recognizes as an important risk the possibility that, due to deterioration in domestic and overseas economic and employment conditions, subrogated payments could increase, and since full recovery of the acquired indemnity claims is not guaranteed, uncollected amounts could arise and affect performance and financial position. The Company has established a credit management structure utilizing an accumulated customer database of tenant attributes and rent payment history, and strives to curb the occurrence of rent defaults.

Securing IT personnel is an important issue for expanding the functionality of "totono," but due to the scarcity of IT personnel, securing them in the market is becoming difficult, and the Company recognizes as an important risk the possibility that, if it cannot secure the personnel it envisions, this could affect its business and performance. The Company aims for stable, continued employment of excellent personnel by improving the workplace environment, utilizing external evaluations such as White Company Award certification and Excellent Health Management Corporation certification.

Management, including President and Representative Director Shinzo Oda, is well-versed in the real estate management industry and plays an important role in determining management and business strategies. The Company recognizes as an important risk the possibility that, if such individuals resign or retire, this could affect its business and performance (although the Company recognizes the likelihood of this manifesting as low). The Company is promoting the delegation of authority to other employees and the organizational systematization of know-how, and strives to build a structure that can mitigate the impact.

The Company was a wholly owned subsidiary of TAKUTO INVESTMENT Co., Ltd. (formerly Takuto Holdings Co., Ltd.) until September 2019, and transactions with that company and its group companies still qualify as related party transactions. The Company recognizes as an important risk the possibility that, if transaction terms are determined arbitrarily, misstatements could arise in the financial statements. The Company ensures the appropriateness of transactions through board approval at the time transactions arise and ongoing annual deliberation regarding the necessity of transactions and the reasonableness and rationality of their terms.