Verite Co.,Ltd.

Since the company depends largely on overseas imports for raw materials such as diamonds and precious metals, fluctuations in foreign exchange rates may increase procurement costs. Higher procurement costs would directly affect the company's business performance. Specific countermeasures such as foreign exchange hedging are not disclosed in the securities report.

The company enters into lease agreements with corporations or individuals when opening new stores, but if the counterparty falls into bankruptcy or other crisis, continuation of the contract may become difficult, potentially disrupting store operations. As this directly affects the maintenance of the store network, there is a risk of impact on business performance. Specific contract management and risk mitigation measures are not disclosed in the securities report.

Regarding operating deposits and security deposits paid at the time of new store openings, if the corporation or individual receiving the payment becomes insolvent, recovery of these funds may become difficult. If recovery becomes impossible, this would adversely affect not only business performance but also the financial condition. Specific protective measures are not disclosed in the securities report.

Securing and training sales staff is necessary in connection with new store openings, but since developing capable sales staff takes time, the ability to secure store personnel may affect business performance. The company has established a system for timely hiring and a dedicated employee training department, but difficulty in securing immediately effective staff remains a challenge.

The company has established an information management officer to manage customer and other personal information, but if an information leak occurs due to unforeseen causes, this could lead to a loss of social trust. Damage to reputation could affect business performance and financial condition through customer attrition and litigation risk.

Store and office facilities held domestically may suffer damage from natural disasters or crime, and depending on the severity, this could affect business performance and financial condition. Given the nature of the retail business handling jewelry and precious metals, crime risk must also be considered. Specific disaster prevention and crime prevention measures are not disclosed in the securities report.

The company has built a VPN for use at stores and offices for business operations, but if a network failure or equipment damage due to a disaster occurs, business continuity may be disrupted. Depending on the severity of the system failure, there is a risk of impact on business performance and financial condition. Specific backup systems and recovery plans are not disclosed in the securities report.

If a pandemic occurs domestically, logistics disruptions or forced closures of retail stores may occur, affecting the company's operating results. Since the company relies primarily on domestic retail stores as its main sales channel, store closures would have a direct negative impact on sales. Specific business continuity plans (BCP) are not disclosed in the securities report.