NIX, INC.

While the Group holds a certain market share in the precision plastic components market, particularly in the field of plastic fasteners for office equipment, multiple competitors have entered the market. If competition intensifies, there is no guarantee that the current market share can be maintained, which could adversely affect the Group's operating results and financial condition. The Group is addressing this by aiming to improve market share through the launch of new products and by expanding its business scope.

The Group actively conducts overseas business operations centered on the United States, Hong Kong, China, and Thailand, and there is an inherent risk of unexpected changes in laws or regulations in each country, as well as adverse political or economic factors. Should these risks materialize, they could affect the Group's operating results and financial condition. The Group states that it will strive to avoid the occurrence of such risks and respond appropriately if they occur.

In its overseas business operations through subsidiaries in the United States, Hong Kong, China, and Thailand, there is a risk that fluctuations in exchange rates directly affect profits. Exchange rate movements such as yen appreciation or local currency depreciation could worsen the Group's overall operating results when the overseas subsidiaries' results are translated into yen. The Group states that it will make diligent efforts to avoid the occurrence of such risks and respond appropriately if they occur.

There is an inherent risk of social disruption arising from war or other factors at overseas locations, including the United States, Hong Kong, China, Thailand, and the joint venture company Zhuhai Ligao Precision Technology Co., Ltd. A sudden change in local conditions could make business continuity difficult and could have a material impact on the Group's operating results and financial condition. The Group states that it will strive to avoid the occurrence of these risks and respond appropriately if they occur.

Difficulty in hiring local personnel at each of the Group's sites in the United States, Hong Kong, China, and Thailand is cited as a risk factor. If suitable personnel cannot be secured, local production and sales activities could be hindered, which could affect the Group's operating results and financial condition. The Group states that it will strive to avoid the occurrence of such risks and respond appropriately if they occur.

There is a risk that Zhuhai Ligao Precision Technology Co., Ltd. (China), a joint venture established to strengthen local production, may face difficulty operating as planned due to differences in policy with the joint venture partner or changes in local conditions. Deterioration in the joint venture's operating results could affect the overall performance of the Group. The Group states that it will make diligent efforts to avoid the occurrence of such risks and respond appropriately if they occur.