KANMONKAI Co., Ltd.

The core business "Genpin" relies on a single ingredient, torafugu (tiger pufferfish), and fluctuations in procurement prices or supply shortages directly affect operating results. While the Group strives for stable procurement and quality maintenance through strengthened collaboration with aquaculture operators and its proprietary freezing/thawing technology, risks of supply disruption due to weather, disease, and other factors remain.

Torafugu is a toxic ingredient, and if hygiene management issues such as food poisoning occur, significant damage to the brand and material impact on operating results are a concern. The Group has strengthened safety management through HACCP certification, thorough guidance to aquaculture operators, and enhanced inspection systems, but the absence of past incidents does not guarantee the elimination of future risk.

Sales of "Genpin" are concentrated in the winter season (November to March), and in FY2026 (ending March 2026), second-half sales are expected to account for 64.1% of full-year sales. While the Group seeks to develop demand during the off-peak season through offering alternative ingredients such as eel and leveraging takeout and delivery services, revenue instability due to seasonal fluctuation continues as a structural risk.

If store performance deteriorates, the Group may recognize impairment losses on fixed assets, which would adversely affect operating results. Given the characteristics of the multi-store restaurant business, the risk that deterioration in the profitability of individual stores triggers impairment is ever-present, making the accuracy of performance management important.

As of the end of the consolidated fiscal year, the balance of short-term borrowings and the current portion of long-term borrowings due within one year exceeded cash flows from operating activities, raising concerns about securing funds for repayment. While the Group states that it has obtained a certain degree of understanding from its client financial institutions, there is a risk that deteriorating business performance or changes in the financial environment could tighten cash flow.

Handling fugu as a business legally requires the registration of licensed fugu chefs and business establishments with the relevant prefectural governor, and a shortage of licensed personnel in areas where stores are opened could constrain new store openings and the operation of existing stores. Although the Group is focused on obtaining licenses and completing registrations, securing personnel may be difficult in certain regions, which could become a barrier to business expansion.

As a restaurant operator and food manufacturer/distributor, the Group is subject to regulation under the Food Sanitation Act, and violations of laws or administrative sanctions could result in significant impacts such as business suspension. While no food poisoning or similar incidents have occurred in the past, there is also a risk that stricter regulations or the introduction of new hygiene standards could increase compliance costs.