Cytori Cell Research Institute,Inc.

The Group is in a period of upfront investment, and continued operating losses and negative operating cash flows have given rise to material events that raise substantial doubt about its ability to continue as a going concern. As a countermeasure, the Group accepted financial support from HG Capital Co., Ltd., consisting of a debt waiver of ¥400 million and the maintenance of a commitment line with an upper limit of ¥500 million, dated March 27, 2026; however, material uncertainty regarding the going concern assumption remains at this time.

The development of pharmaceuticals, medical devices, and similar products requires substantial investment and long development periods, and there is a possibility that development may be postponed or discontinued if useful clinical trial results are not obtained or if development does not proceed as planned. If the Group is unable to recover its R&D investment and fails to generate expected revenue, this could have a material impact on the Group's business performance and financial condition.

Clinical trials and sales of medical devices and similar products in Japan are subject to legal regulations including pharmaceutical affairs-related laws, and strict review is required to obtain manufacturing and marketing approval prior to launch and application for insurance reimbursement. There is a risk that approval may not be obtained, or that launch and insurance coverage may not be achieved within the planned timeframe, which could result in the inability to recover invested R&D funds. The Group is currently proceeding with procedures aimed at obtaining insurance coverage for the treatment of male stress urinary incontinence (SUI).

The Group procures funds through external borrowing, and if the current level of interest rates rises more than expected, this could affect the Group's business performance and financial condition. In particular, during the upfront investment period, the Group's reliance on external funding is high, making it susceptible to the effects of interest rate fluctuations.

If the recruitment and development of specialized personnel does not proceed as planned, this could hinder business expansion and the maintenance of competitiveness. In addition, since the Group conducts its business activities with a relatively small number of employees, an unforeseen event affecting employees who form the core of the business, or the departure of existing personnel, could affect the Group's business performance.

The Group conducts its business activities with a relatively small number of employees and is highly dependent on core employees. If an unforeseen event affects employees who form the core of the business, or if existing personnel depart, this could cause significant disruption to business continuity and promotion, which could affect the Group's business performance.

If cyberattacks, system failures, or similar incidents cause business suspension or information leakage, this could lead to a decline in the Group's credibility and claims for damages. In the Medical Business, personal information is managed in a database, and in the event of an information leak, the Group could suffer a loss of credibility and be held liable for damages, which could affect its business results and financial condition.

In the Medical Business, the Group manages personal information in a database on a computer system and has implemented measures such as access rights management; however, if information is leaked for any reason, the Group could suffer a loss of credibility and be held liable for damages. Although the Company has established handling rules that all employees are required to comply with, the risk cannot be completely eliminated.

ADR Therapeutics Co., Ltd. obtained manufacturing and marketing approval for the treatment of male stress urinary incontinence (SUI) in February 2022, but is currently at the stage of proceeding with procedures toward insurance coverage. If insurance coverage is not realized as planned, revenue generation could be delayed, making it difficult to resolve the uncertainty regarding the going concern assumption.

The Neocella (formerly: CrymEX Business) business is a new venture involving a liquid containing high-concentration exosome components, and following the recognition of development expenses in FY2026 (ending March 2026), the Group expects to transition to a revenue-generating phase. As this represents an expansion into a new field, if market penetration and collaboration with partner institutions do not proceed as planned, the Group may fail to achieve the expected revenue, which could affect the overall business recovery scenario for the Group.