Risk of System and Software Defects and Development Delays

「In the DX business, because we decided during the consolidated fiscal year to discontinue sales of part of our internally developed software, we reduced its carrying amount to its recoverable amount and recorded an impairment loss of ¥14,212 thousand.」

「Because the Company decided to discontinue future sales of some internally used software in the DX business, it recognized an indication of impairment, reduced the carrying amount to the recoverable amount and recorded the impairment loss as an extraordinary loss at the parent company.」

「Because no sales plan was expected for the next fiscal year for some software under development in the business intelligence field, development was suspended temporarily. As the timing of resuming development is currently undecided, the carrying amount was written down to its recoverable amount, and an impairment loss of ¥23.165 million was recorded.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「If users suffer losses because a defect occurs in a product developed by our group or because development does not proceed as scheduled, among other reasons, the payment of damages could affect the performance of our group.」