TOKYO ICHIBAN FOODS CO.,LTD.

The core format "Oyogi Torafugu Ryori Senmonten Torafugu-tei" experiences extreme differences in sales and profit between the peak season (H1: October to March) and the off-peak season (H2: April to September). In FY2025 (ended September 2025), H1 net sales were ¥4,197,443 million with operating income of ¥313,768 million, while H2 net sales were ¥3,053,427 million with an operating loss of ¥118,367 million, resulting in a chronic operating loss in H2. While improvements are being pursued through off-peak sales promotion measures and menu composition reviews, there is a possibility that this structural seasonal fluctuation will continue.

The Group procures only domestically produced torafugu as its main ingredient, and securing a stable supply volume is fundamental to business continuity. Although a planned procurement system has been established through additional investment in aquaculture operations and information exchange with producers, if the supply volume cannot be secured for any reason, the Group may become unable to fulfill store orders or orders for Migaki Fugu (Detoxified Processed Product), which could affect operating results and business development.

The market price of torafugu, the main ingredient, is susceptible to fluctuation due to supply-demand conditions, and a sharp rise in price could worsen the cost ratio. While the Group seeks to diversify risk through additional investment in aquaculture operations, networking with producers, and expanding suppliers, significant price fluctuations could affect operating results and business development.

The Group operates aquaculture businesses domestically, but if difficult-to-prevent fish diseases or natural disasters occur, or if fishing right contracts cannot be continued, production as planned in the aquaculture plan may become impossible. Since in-house aquaculture is also a measure to stabilize ingredient procurement, a suspension of operations could be linked to procurement risk and affect operating results and business development.

The Group employs a large number of part-time and temporary staff, and if it becomes unable to secure an appropriate workforce due to a declining labor population, recruitment costs are expected to increase. In addition, if various labor laws are amended or if legal reforms are made regarding the treatment of part-time and temporary employees, such as the expansion of eligibility for enrollment in employees' pension insurance, the resulting increase in personnel and administrative costs could affect operating results and business development.

The Group's Food & Beverage Business is concentrated in the Kanto region, and if a large-scale earthquake or other disaster occurs in this region, the Group could incur repair costs due to damage to stores, processing plants, and distribution centers, as well as a reduction in operating days and hours and changes in customer behavior. Because geographic diversification is limited, a single disaster carries the risk of impacting the entire business.

Handling fugu as an ingredient requires certification of fugu handling establishments and fugu chef licenses by prefectural governors, which affects the feasibility of executing store opening plans. If there is a shortage of licensed fugu chefs in areas where store openings are planned, planned openings may not be carried out, which could affect operating results and business development. The Group is focusing on having employees obtain and register licenses in consideration of its store opening plans and target regions.

As a restaurant operator, the Group is subject to regulation under the Food Sanitation Act, and violations such as the occurrence of food poisoning, serving of spoiled food, or use of unapproved additives could result in revocation of business licenses or business suspension orders by public health authorities. Given the business characteristic of focusing on fugu cuisine in particular, the occurrence of food poisoning carries the risk of having a material impact on operating results and business development.

The Group has established Ichiban Foods Inc. and Ichiban Foods Broadway Inc. in New York, USA, operating Japanese seafood restaurants and selling fresh fish, Japanese tableware, and other goods. Significant changes in the US economic situation, political and social systems, exchange rate fluctuations, legal regulations, and business practices could constrain business development, and in such cases, this could have a material impact on operating results.

The Group leases its offices and most of its stores, and if a lease is canceled due to circumstances on the lessor's side, continuing operations may become difficult. In addition, as of the end of FY2025 (ended September 2025), the Group had deposited security deposits totaling ¥459 million with lessors, and if a portion becomes unrecoverable due to the lessor's bankruptcy or other reasons, this could affect operating results and financial condition.