HOTEL NEWGRAND CO.,LTD.

In the event of a large-scale earthquake, typhoon, or other natural disaster, damage to the buildings and facilities owned by the Company could result in temporary suspension of operations, leading to reduced sales and the burden of repair costs. Given the facility-dependent nature of the hotel business, physical damage inherently carries the risk of directly translating into lost revenue opportunities. As of now, no specific countermeasures are disclosed in the securities report.

If an infectious disease such as a new strain of influenza emerges and spreads, restrictions on long-distance travel and group activities could cause a significant drop in demand for accommodation, banquets, and dining, adversely affecting the Company's performance. Because the hotel business directly depends on the movement and gathering of people, it has a structural vulnerability to infectious disease risk. No specific countermeasures against infectious diseases are disclosed in the securities report.

If issues related to food hygiene and food safety arise, such as norovirus-related food poisoning or BSE outbreaks, this could have a material impact on the Company's performance. Although the Company holds monthly meetings of its "Food Safety and Hygiene Countermeasures Committee" to build a food hygiene management system, it is difficult to completely eliminate externally derived risks (such as ingredient safety). There is also a risk that reputational damage leading to customer attrition and administrative sanctions could prolong the deterioration in performance.

If customers' personal information were to leak externally, this could damage the Company's overall credibility and result in the burden of costs such as damages, affecting performance. While the in-house information management staff take the lead in implementing measures to prevent external leaks, there is no guarantee that risks such as cyberattacks or internal misconduct can be completely eliminated. Because the hotel business holds large volumes of personal information, including reservation and membership data, the impact of any leak could be extensive.