Kohjin Bio Co., Ltd.

Most of the company's production facilities are concentrated at the Sakado head office plant. In the event of a disaster such as fire or earthquake, a major equipment accident, or a disruption to the supply of raw materials used, business activities could be suspended. Although measures such as the preparation of disaster response manuals and disaster drills have been implemented, damage cannot be entirely avoided, and the impact on business performance is assessed as significant.

Representative Director and President Takato Nakamura, as founder, has played a central role in formulating and determining management policy and business strategy for over 40 years. While efforts are being made to reduce this dependence through the delegation of authority to directors and executive officers, if he were to become unable to continue his duties, this could have a material impact on business performance, and the impact is assessed as significant.

The company has a holding company in Hong Kong and a manufacturing and sales base in Shanghai, China. If unforeseen events occur, such as political instability, anti-Japanese sentiment, deterioration of the economic environment, labor disputes, terrorism, natural disasters, or the spread of infectious disease, this could lead to the suspension of production and sales activities or the loss of local assets. While the company strives to continuously monitor local conditions, the impact is assessed as significant.

In providing cell processing contract services, the company handles customer data and personal information. If information leakage or falsification occurs due to unauthorized access or human error, this could result in a loss of social trust or claims for damages. Although the company strives for appropriate management based on its "Personal Information Protection Policy," the impact is assessed as significant.

If quality issues such as contamination or foreign matter contamination occur in core products such as cell culture media and bacterial testing media, this could result in large-scale product recalls or product liability claims. Although the company has established a GMP-compliant quality control system and has taken out product liability insurance, the insurance may not fully cover the amount of damages, and the impact is assessed as moderate.

In new product development and improvement of existing products, including joint research with academia and companies, progress may not proceed as planned, or obtaining manufacturing and marketing approval may take longer than expected. Extension or discontinuation of development could require additional investment or make it impossible to recover previously incurred R&D costs, and the impact is assessed as moderate.

Responding to changing customer needs requires securing and developing highly specialized personnel, but the industry tends to have relatively high labor mobility. If the company is unable to sufficiently secure and develop appropriate personnel, this could impact business performance, and the impact is assessed as moderate.

The cell processing contract service business is highly dependent on the number of inbound patient visits, and during the COVID-19 pandemic, revenue declined significantly due to a sharp drop in inbound patients. If the number of inbound patients fluctuates in the future due to infectious diseases or other factors, this could impact business performance, and the impact is assessed as moderate.

Loan agreements with financial institutions include financial covenants, and if these covenants are breached, the company could lose the benefit of term extension upon demand from lenders, requiring immediate procurement of funds to repay debt. This could impact cash flow, and the impact is assessed as moderate.

The company is subject to relevant laws and regulations including the Act on the Safety of Regenerative Medicine and the Pharmaceuticals and Medical Devices Act, and has previously received an administrative sanction under the Act on the Safety of Regenerative Medicine. While corrective measures and recurrence prevention measures are ongoing, if compensation costs or quality improvement investments exceeding expectations arise in the future, this could impact business performance. The company reviews the matter monthly at its Risk and Compliance Committee to maintain and strengthen its management system.