p-ban.com Corp.

As the spread of internet sales has made price comparison easier, if competitors expand online sales of printed circuit boards and indirect factory materials, price competition could intensify, potentially reducing profitability. The Company is pursuing product expansion and price differentiation leveraging its first-mover advantage, but there is a risk that existing services could become obsolete if a new entrant with a superior business model emerges.

In connection with the development of new businesses such as GUGEN Hub, AI and development support services, and overseas-oriented services, additional expenditures for system investment, personnel recruitment, advertising, and external partner collaboration costs may arise, potentially lowering profit margins in the short term. If user base expansion, cross-selling, and the shift toward subscription-type services do not proceed as expected, there is a risk that the investments cannot be recouped, adversely affecting business performance.

There is a risk that P-ban.com's services could be disrupted due to natural disasters, unauthorized access, or unexpectedly concentrated access exceeding capacity. In addition, in the currently ongoing complete overhaul of the system infrastructure, if development delays, migration-related defects, unexpectedly high development costs, or inadequate integration with existing operations occur, this could reduce customer convenience and operational efficiency and result in additional costs, potentially affecting the Company's financial condition and business results. The Company has implemented measures such as backup systems and enhanced network security, but complete avoidance is considered difficult.

There is a risk that, due to the increasing sophistication of cyberattacks (such as targeted attacks exploiting generative AI, phishing, and malware), customer personal information and design information, purchasing information, inventory information, etc. handled through GUGEN Hub and AI development support services could be leaked, tampered with, or misused. If an information leak occurs, it could have a material impact on the business and financial performance through loss of public trust, damage claims, service suspension, and increased security-related costs. The Company has implemented measures such as protecting information on highly reliable external servers, establishing internal regulations, and conducting employee training.

The Company relies on external outsourcing partners for operations such as printed circuit board design, manufacturing, and assembly, and if a partner fails to perform as expected, this could impede business operations. The Company's logistics network, consisting of two locations—the head office (Kanto region) and Nagano Prefecture—reduces concentration risk to some extent, but a large-scale disaster, simultaneous suspension of both locations, or deterioration in a partner's financial condition could affect business performance. The Company continues to implement risk diversification measures such as establishing procedures for switching between domestic and overseas suppliers and securing alternative logistics locations.

The products handled by the Company use metal raw materials such as copper, and since the Company depends on overseas imports, sudden changes in procurement conditions due to shifts in global affairs, economic conditions, or supply-demand tightness could lead to requests from outsourcing partners for price increases. Rising logistics costs due to increased delivery fees and driver shortages could also compound this and squeeze profitability. The Company addresses this by diversifying its outsourcing partners and building an efficient order-receiving and placing system through improved platform convenience.

Imported products account for approximately 50% of total procurement, and a significant depreciation of the yen could raise product procurement costs, potentially affecting the Company's financial condition and business results. While settlements are mainly denominated in yen, the risk of fluctuating procurement costs due to exchange rate movements remains. As overseas business expands, the scope of foreign exchange risk management may further widen.

In connection with business expansion into the ASEAN region, centered on Thailand, changes in local political and economic conditions, differences in laws and business customs, and changes in tariff policy (such as the introduction of protectionist measures or revisions to FTAs) could result in additional costs and reduced price competitiveness in local markets. Increasingly complex or delayed customs procedures and additional non-tariff barriers could also negatively affect the efficiency of the entire supply chain. The Company has established an Overseas Business Promotion Office directly under the President and Representative Director, building a risk management structure in coordination with related departments.

The Company is subject to legal regulations such as the Act against Unjustifiable Premiums and Misleading Representations, the Act on Specified Commercial Transactions, the Product Liability Act, and the Unfair Competition Prevention Act. If safety or labeling issues arise in products sold or in advertising expressions, this could result in substantial costs and a decline in sales due to damage to the Company's image. There is also a risk of facing damage claims, injunctions, or royalty payment demands due to infringement of intellectual property rights. The Company has established a legal compliance framework through thorough employee training, compliance system development, and collaboration with retained counsel, but there is also a possibility of increased burden in responding to legal amendments or new legislation.

As of March 31, 2024, the Company fell short of the tradable share market capitalization criterion for the TSE Standard Market. Following the disclosure and implementation of an improvement plan, the Company met all listing maintenance criteria as of both March 31, 2025 and March 31, 2026. However, there remains a risk that the Company could again fail to meet the listing maintenance criteria in the future due to fluctuations in business performance, changes in market conditions, stock price movements, or declining share liquidity. The Company states that it will continue to strengthen IR activities, maintain shareholder returns, and work to enhance corporate value.