MT GENEX CORPORATION

The Company receives orders for parking lot operation and management, interior construction, building management, and non-life insurance contracts from its parent company, Mori Trust Co., Ltd., and other companies within the Mori Trust Group, which support a stable revenue base. If the Mori Trust Group revises its business or transaction structures in the future, this could have a material impact on the Company's business performance. This represents a structural risk arising from the high degree of revenue dependence on a specific parent company group, whereby changes in transaction terms or a decrease in orders could directly lead to a deterioration in business performance.

The parking lots and real estate operated and managed by the Group are concentrated within Tokyo, without geographic diversification. If a large-scale earthquake or other natural disaster or unforeseen event occurs in or around Tokyo, the parking lots and real estate operated and managed by the Group could be damaged or forced to close, resulting in a severe impact on business performance. The issue is that measures to reduce business continuity risk through regional diversification have not been implemented.

The Company (the filing company) has a small workforce of 38 employees (including temporary employees) and adopts an operating structure that emphasizes efficiency. In the event of rapid business expansion or entry into new business areas, it may become difficult to respond promptly, appropriately, and sufficiently from an organizational standpoint, which could hinder the pace of business development. This carries the inherent risk that the constraints on personnel and organizational structure could become a limiting factor for business growth.

The Group regards M&A as an important management strategy and conducts detailed due diligence on target companies covering financial, legal compliance, and contractual matters, among others. However, unforeseen contingent liabilities or changes in the business environment may arise after an acquisition. If the anticipated synergies or business expansion outcomes are not achieved, there is a risk that recording impairment losses or other measures could adversely affect business performance. Although the Company maintains a policy of exercising careful investment judgment, the inherent uncertainties specific to M&A cannot be entirely eliminated.