Our corporate group is a consumer electronics retail group centered around EDION Corporation Sales of some of the products we sell are affected by seasonal factors, and prolonged rainy seasons in the summer, cool summers, warm winters, and other factors could affect the business performance and financial position of our corporate group.

For products whose sales are affected by seasonal factors, such as air conditioners, we adjust our inventory, delivery and installation systems based on the medium- to long-term forecasts issued by the Japan Meteorological Agency.

Additionally, if sales are actually affected by a cool summer or warm winter, we will change our product and sales policies to minimize the impact, such as by strengthening sales promotions for products that are less affected by seasonal factors.

Our corporate group operates mainly in Hokkaido, Hokuriku, Kanto, Chubu, Kinki, Chugoku, Shikoku, and Kyushu regions. However, in some areas where our corporate group has stores, there are many other companies' stores that sell similar products, and competition is intensifying.

Furthermore, even if there are currently no competing stores in the vicinity of our Group's stores, competition will intensify as other companies open new stores in the future. In an environment where companies are repeatedly merged and reorganized, competition for new store openings and price competition could intensify, which could affect our Group's performance and financial condition.

To ensure the safety of our customers from natural disasters and accidents, our Group implements thorough disaster prevention measures, including strict compliance with laws and regulations such as the Fire Service Act and strengthening the earthquake resistance of our stores. However, if our stores are damaged by a large-scale natural disaster such as an earthquake or typhoon, or if a fire breaks out at a store, we may be forced to suspend business at the affected stores, be liable for damages to those affected, lose human resources, or suffer damage to fixed assets and inventory, which could affect our Group's business performance and financial position. In addition, if damage to our business partners makes it difficult to supply products as usual, this could affect our Group's business performance and financial position.

In particular, our corporate group has stores mainly in western Japan, and it is expected that the areas where we have stores will suffer relatively greater damage if a typhoon or earthquake occurs.Our corporate group has introduced a safety confirmation system that allows each employee and store's status to be reported quickly by email or app, and we are working to ensure the safety of our employees under our business continuity plan, such as by quickly confirming the damage situation and issuing evacuation orders as necessary.

Additionally, as a company that sells essential disaster prevention supplies such as batteries and flashlights, we will strive to continue operations as long as possible and strive to support local residents.

The Group handles a lot of personal information, such as cardholder information and customer purchase history data. In addition, we hold a lot of confidential information, etc. regarding the technology and sales of each group company. This information is strictly managed by the EDION Group Information Security Management Regulations. However, in the unlikely event that information is leaked due to unforeseen circumstances, etc., the performance and financial position of the Group May be affected.

In today's world, there is a constant risk of cyber attacks, so we are strengthening our monitoring of unauthorized access to our corporate group and are also focusing on educating our employees on how to handle information.

The Group has a large amount of fixed assets such as tangible fixed assets and intangible fixed assets related to stores. If the book value of each store cannot be recovered due to the decline in profitability of the store, or if there is a change in the “Accounting Standard for Impairment of Fixed Assets,” etc., an impairment loss is recorded for the store and the Group May affect the business performance and financial position of the company.

When profitability declines at a store or other facility and signs of impairment losses are recognized, we strive to restore profitability by providing support such as sales promotions using flyers and reviewing pricing strategies.

When selecting locations for new stores, the Group places the utmost importance on the profitability of the store. The Group selects properties that meet certain conditions, such as the investment recovery period and expected profits based on preliminary location surveys of store opening conditions such as security deposits and rent, trade area population, competitive situation, and foot traffic in front of the store.

Therefore, if the number of properties that meet our store opening conditions does not reach the planned number of store openings, it may affect the business performance and financial position of our corporate group.We regularly collect information on potential store locations and consider target properties and store opening formats at meetings attended by our directors.

In conducting its business activities, the Group contracts with external companies to outsource some of its operations, such as the management of information system equipment, delivery, installation and repair of products, and disposal of industrial waste.The Group selects these outsourced companies after conducting strict screening in accordance with its internal "Outsourcing Management Regulations" and various regulations related to information management, and always pays close attention to compliance.However, if an outsourced company violates the laws, regulations and guidelines that it must follow in carrying out its work, it may have an impact on the Group's business performance.

In addition, the Group constantly monitors the creditworthiness of its outsourced contractors. However, if a contractor goes bankrupt or otherwise interferes with planned transactions with the contractor, or if accounts receivable from the contractor become uncollectible unexpectedly, this could have an impact on the Group's business performance.