FRUTA FRUTA INC.

Under its basic transaction agreement with CAMTA (current agreement runs through October 2026), the Company is obligated to purchase all of its frozen Amazon fruit pulp, including açaí, from CAMTA. In FY2026 (ending March 2026), purchases from CAMTA accounted for over 60% of material costs within cost of products sold and over 90% of merchandise purchases within cost of goods sold. If planned procurement becomes difficult due to changes in the relationship with CAMTA, reduced transactions, price increases, natural disasters in the region, or other factors, this could have a material impact on the Company's business and results of operations. The Company seeks to strengthen the relationship and stabilize prices through several visits per year and by concluding individual purchase agreements annually.

In FY2026 (ending March 2026), sales from açaí-related businesses accounted for over 70% of the Company's total sales, indicating an extremely high degree of dependence on a specific product. If the açaí-related market were to contract significantly due to changes in consumer preferences or other factors, this could have a serious impact on the Company's business performance and financial condition. The Company is working to diversify its business by developing and selling products using Amazon fruits other than açaí.

If açaí prices surge or quality deteriorates due to unfavorable weather or other factors, it may become difficult to procure at appropriate prices, which could affect the Company's business and results of operations. The Company is working to reduce this risk by investing locally in irrigation equipment and other facilities to secure a stable açaí supply, as well as by considering increasing the sales ratio of other Amazon fruits. However, risks arising from the natural environment cannot be completely avoided.

Payments for products and merchandise to CAMTA and overseas OEM factories are denominated in US dollars, making the Company's business structure directly exposed to foreign exchange fluctuations. While the Company strives to mitigate exchange rate risk through the use of spot exchange transactions and other means, there is no guarantee that all foreign exchange risk can be hedged as the business expands, and sharp exchange rate movements over a short period could affect the Company's business performance.

Regarding the 11th to 15th stock acquisition rights issued pursuant to the resolution of the Board of Directors on November 13, 2023, 284,250 unexercised stock acquisition rights remained outstanding as of the end of March 2026, and up to 28,425,000 shares could be issued by the exercise deadline (December 17, 2030). This could dilute the value per share and the equity ownership ratio, potentially having an adverse effect on the share price.

Founder and Representative Director Makoto Nagasawa plays a critical role across the Company's overall business activities, including management policy and strategy, resulting in a high degree of dependence on him. If, for any reason, he becomes unable to perform his duties, this could affect the Company's business and results of operations. The Company is working to reduce this dependence by delegating authority, including through the introduction of an executive officer system.

As of the end of the fiscal year, the Company is a small organization consisting of 4 directors, 3 auditors, and 33 employees. If the Company is unable to secure sufficient personnel to match business expansion, or if officers or employees unexpectedly leave, there is a risk that the internal management and business execution systems may not function effectively. The current internal management system is sized for this scale of operations, and its capacity to respond to rapid business expansion is limited.

If a large-scale product recall occurs, or if negative reputation arises regarding the food industry as a whole or Brazilian food products and açaí in general—even when there is no direct problem with the Company's own products—this could affect the Company's business and results of operations. CAMTA implements integrated quality control from cultivation through manufacturing, and the Company also confirms labeling and consults with health authorities and other bodies; however, reputational risk arising from external factors cannot be completely eliminated.

In the beverage market, including fruit beverages, many companies, including major corporations, are conducting business, and if competition intensifies due to new market entrants or other factors, this could affect the Company's business development and operating results. The Company is working to popularize and expand Amazon fruits under its corporate concept of realizing a green economy, but maintaining differentiation remains a challenge.

The Company holds a large amount of customer personal information and confidential management information. If information leakage, tampering, or loss occurs due to unauthorized access, computer virus infection, or other causes, this could damage the Company's reputation and affect its business activities, thereby adversely affecting its results of operations. While the Company has obtained the JAPHIC mark and implements measures such as employee training and system management, risks from unforeseen cyberattacks and similar threats remain.