UNIVA Oak Holdings Limited

The Company has recorded operating losses, ordinary losses, and net losses attributable to owners of the parent for eight consecutive fiscal periods since FY2019 (ending March 2019), giving rise to material events that raise substantial doubt regarding the going concern assumption. At the end of the current consolidated fiscal year, the Group's cash and deposits stood at only ¥743 million, and ¥197 million on a non-consolidated basis. The Company cannot definitively assert the ability to raise short-term funds for additional support to consolidated subsidiaries, nor is the early realization of sales of held real estate certain, and the Company recognizes material uncertainty in this regard. While the Company is promoting the strengthening of the revenue base of each business under the Second Medium-Term Management Plan (FY2026 (ending March 2026) to FY2028 (ending March 2028)), multiple subsidiaries have yet to achieve profitability, and the risk of deteriorating cash flow continues.

The Company relies on borrowings from UNIVA CAPITAL Group and financial institutions for working capital and capital expenditure, and there is a risk that the fundraising environment may become unstable due to external environmental changes such as rising interest rates, increased credit costs, geopolitical risks, and stricter screening by financial institutions. If such risks materialize, the Company may be forced to stagnate business operations, revise investment plans, or scale down business operations. With the Group's overall cash and deposits balance at a limited level of ¥743 million, deterioration of the fundraising environment could have a direct impact on the financial position.

At North Energy Corporation and UNIVA Energy Co., Ltd., projects for High-voltage Solar Power Systems / Grid-connected Storage Batteries required time for coordination with partners due to increasing project complexity and did not result in order acquisition, and combined with the postponement of orders from existing customers, both companies failed to achieve profitability. If delays in securing land, grid connection constraints, rising procurement material and construction costs, rising interest rates, and changes in laws, regulations, or subsidy schemes occur in combination, this could lead to delays in the development schedule or deterioration in project profitability. The Company is responding through the restructuring of its organizational framework and strengthening of Group collaboration, but the timing of profitability remains uncertain.

At UNIVA Fusion Co., Ltd., new customer acquisition and purchaser retention have been sluggish due to restrained sales promotion expenses, and the new product "WATERLESS LIFTY SERUM" also failed to achieve sufficient market recognition, resulting in the company falling short of planned new member acquisition and failing to achieve profitability. There is a risk that sales plans will not be achieved due to changes in consumer needs, intensifying competition with other companies, and declining advertising effectiveness. The Company aims for early profitability through expanding the WATERLESS series lineup and strengthening marketing activities, but it is expected to take time for market recognition to penetrate.

At UNIVA Securities Co., Ltd., delays in matching negotiations for M&A and fundraising deals, and time required for coordination with relevant authorities toward the launch of the "UNIVA FUND," resulted in progress falling short of the original plan and failure to achieve profitability. If investor solicitation does not proceed as planned due to changes in the financial market environment, declining investor appetite, or changes in interest rate trends, the Company may be unable to secure the anticipated fund size. The Company is promoting the construction of an ecosystem centered on the "UNIVA FUND," whose formation began in March 2026, but the timing of its contribution to earnings remains uncertain.

UNIVA Hong Kong Trading Limited engages in wholesale sales of Hong Kong-made kampo (traditional Chinese) medicines and health-related products to major e-commerce platforms in mainland China, and if intensifying competition in the Chinese market, changes in consumer needs, changes in e-commerce platform sales policies, exchange rate fluctuations, rising logistics costs, or supply chain disruptions occur, this may affect sales plans and profitability. In addition, there is a risk that quality control issues or brand damage could lead to a decline in credibility. In the current fiscal year, the Company obtained a kampo medicine wholesale license and began wholesale sales to Tmall, JD.com, and Alibaba Health, but the business foundation is still in development.

The Company holds foreign-currency-denominated shares of affiliated companies and loan receivables related to overseas golf course operating companies, and fluctuations in exchange rates may affect business performance and financial position. The Company is considering monitoring exchange rates, minimizing holdings of foreign-currency-denominated assets, and utilizing hedging transactions as necessary, but states that it is difficult to completely eliminate foreign exchange risk. Foreign exchange fluctuation risk also exists in the Trading Business in connection with transactions with China and Hong Kong.

The Company conducts business activities across various fields both domestically and internationally, and is subject to laws and regulations of each region and field. If a material violation of laws or regulations occurs, this may lead to a decline in creditworthiness or litigation risk. There are also business-specific regulatory change risks, such as changes to subsidy schemes and the power market environment in the Renewable Energy Business, and changes to pharmaceutical regulations in the Trading Business. The Company is strengthening its compliance framework through the implementation of compliance training and the establishment and operation of internal whistleblowing channels, but states that it cannot completely avoid risks, including those involving personal misconduct.

The Company holds personal information and confidential information of customers and business partners, as well as confidential business and technical information. If information is leaked due to cyberattacks, unauthorized access, computer virus intrusion, or other events exceeding expectations, or if important data is destroyed, tampered with, or systems are shut down, this may affect business performance and financial position due to a decline in creditworthiness. The Company implements appropriate security measures covering both hardware and software aspects of its information systems, along with employee training, but complete defense against increasingly sophisticated threats is difficult.

As part of "horizontal expansion of Group businesses" under the Second Medium-Term Management Plan, the Company is promoting multiple new businesses, including the Digital Marketing Business (UNIVA Gyro-n Co., Ltd.'s preparation for listing on the TOKYO PRO Market). If administrative costs and personnel acquisition costs increase in connection with listing preparation, or if delays occur in developing the internal management framework, this may affect business operations and profitability. If new businesses incorporated into the Group fail to contribute to Group performance as planned, this may also affect business performance and financial position, and currently, multiple subsidiaries have yet to achieve profitability.