KABUKI-ZA CO., LTD.

The Group's core business is the ownership and leasing of real estate. In the event of unforeseen circumstances such as large-scale natural disasters or accidents, the Group's owned properties could be damaged, potentially having a material impact on its financial condition and operating results. Given the business structure's high dependence on real estate as fixed assets, physical damage would directly impair the revenue base. The securities report does not describe specific avoidance measures, merely indicating recognition of the risk and efforts toward an appropriate response.

The Group provides food and beverage services, and if a serious hygiene issue such as food poisoning were to occur, it could have a material impact on the Group's financial condition and operating results. While the Group recognizes the importance of hygiene management and thoroughly instructs employees on hygiene control, complete elimination of such risk is difficult, and secondary losses such as business suspension or reputational damage are also anticipated in the event of an incident. Since dining services are closely linked to the visitor experience at KABUKI-ZA, there is also an accompanying risk of brand damage.

The Group has entered into lease agreements with various tenants, but if a lease is canceled due to deterioration in a tenant's financial condition, relocation, or other reasons, there is a risk that rental income will decline until a new tenant is secured. In addition, if this coincides with a decline in market rent levels, it would become a dual pressure factor on earnings, potentially having a material impact on the Group's financial condition and operating results. Since real estate leasing income is a core revenue source for the Group, tenant trends are directly linked to the fundamentals of its business performance.

The Group leases its theater to Shochiku Co., Ltd., which operates theatrical performances, resulting in a high degree of dependence on Shochiku Co., Ltd. If a performance were to be canceled due to an unforeseen accident or other event, theater leasing income would be lost, potentially having a material impact on the Group's financial condition and operating results. This represents a concentration risk inherent in the business structure's dependence on a single major tenant, whereby changes in Shochiku Co., Ltd.'s business conditions or performance schedules directly affect the Group's operating results.

A resurgence of COVID-19 or the emergence of a new infectious disease, among other factors, could affect the Group's financial condition, operating results, and cash flows. Given the Group's business structure of theater operations, dining, and real estate leasing, which depend on the flow of people, a decline in visitor numbers or the cancellation of performances due to infectious disease would directly impact revenue. The Group continues to recognize the impact of infectious diseases as a risk to business execution, and an ongoing response is required.