EIKEN CHEMICAL CO.,LTD.

In global expansion, economic and business cycle fluctuations, pandemics, and geopolitical risks may cause delays, interruptions, or discontinuations of colorectal cancer screening programs related to Fecal Occult Blood Test Reagents, the Company's core products, as well as delays in regulatory approval for new products. In addition, if the reduction in Global Fund funding scale associated with the closure of USAID leads to a prolonged decline in demand for medical products and reagents in developing countries, this may affect the Company's financial position and business results. As a countermeasure, the overseas sales department works with distributors and other strategic partners to rapidly gather and share information by country and region, and to coordinate with international organizations.

Uncertainty in research and development (delays, interruptions, discontinuations) may make it difficult to recover R&D investment, and if outcomes fail to align sufficiently with market trends, this may affect medium- to long-term business plans and thereby impact the Company's financial position and business results. Delays or interruptions in new business plans pose similar risks. As a countermeasure, the Company formulates business strategies based on a business portfolio utilizing new technologies and new fields, sets investment recovery criteria, and evaluates progress at management meetings and Board of Directors meetings.

If healthcare cost containment measures resulting from healthcare system reforms in various countries, stricter pharmaceutical regulations, changes in the operation of colorectal cancer screening programs, or stricter environmental regulations on diagnostic reagents and medical devices occur, this may affect product pricing, usage methods, regulatory applications, and bidding conditions, thereby impacting the Company's financial position and business results. As a countermeasure, the Company has established a system to quickly grasp trends in healthcare systems, pharmaceutical regulations, and environmental regulations in each country and respond appropriately in a timely manner.

Although the Company has established a quality control system based on ISO13485 and MDSAP certification, if quality issues occur in the core product group or high-profitability product group resulting in an extended inability to supply products, this may have a significant impact on the Company's financial position and business results. As a countermeasure, the Company is working to strengthen production technology capabilities to stabilize quality, appropriately operate its quality management system, and enhance monitoring and quality assurance through surveys and analysis of product quality evaluations in the market.

If the Company or its suppliers experience an extended operational shutdown due to large-scale earthquakes, wind and flood damage, or other natural disasters, major accidents such as fires, cyberattacks, pandemics, geopolitical risks, or other factors, this may make it impossible to maintain product supply, thereby affecting the Company's financial position and business results. As a countermeasure, the Company is working to secure safety stock, avoid risk through securing inventory of key raw materials and purchasing from multiple suppliers, and continuously improve business continuity management, and has obtained National Resilience Contribution Organization certification (Resilience Certification).

If system failures due to disasters or other causes, or business disruption or external information leakage due to cyberattacks occur and require an extended response period, this may affect the Company's financial position and business results. As a countermeasure, the Company builds appropriate information security measures, conducts education and training for all employees aimed at addressing targeted attack emails and improving IT literacy, and regularly conducts training on initial response to cyberattacks and business continuity management.

If raw material prices surge due to changes in economic conditions, pandemics, geopolitical risks, or other factors affecting market prices, transportation costs, or exchange rate fluctuations, or if energy prices remain elevated due to prolonged conflict between the United States and Iran, product costs may rise, thereby affecting the Company's financial position and business results. As a countermeasure, the Company allocates management resources based on product portfolio classifications, monitors the situation at management meetings, and continuously improves production efficiency to reduce manufacturing costs and enhance profitability.

On the consolidated balance sheet for FY2026 (ending March 2026), inventory is recorded at ¥7,992 million (12.8% of total assets), and if the market for products and merchandise declines significantly due to a sharp deterioration in the supply-demand balance or other factors, valuation losses on inventory may affect the Company's financial position and business results. As a countermeasure, the Company is working to improve the accuracy of supply-demand forecasting and refine production planning through the promotion of DX, set safety stock and order-production conditions through item grouping, and manage inventory turnover at an appropriate level as a capital efficiency indicator.