RIBOMIC Inc.

Due to substantial upfront investment associated with pharmaceutical development, the company has recorded net losses continuously since its founding (except for FY2015 (ended March 2015)) through FY2026 (ending March 2026), giving rise to circumstances that raise material doubt about the going concern assumption. Operating loss for FY2026 (ending March 2026) was ¥1,207,132 thousand, and operating cash flow was negative ¥1,110,863 thousand. In August 2025, the company issued stock acquisition rights through a third-party allotment, securing ¥923 million upon completion of exercise of the 18th series of stock acquisition rights. As of the fiscal year-end, the company held cash and deposits of ¥1,927 million and securities of ¥900 million, totaling ¥2,827 million, and has secured funds for more than one year; however, fundraising risk continues until a stable revenue source is established.

During the period of upfront investment prior to establishing a stable revenue source, the company's structure entails continued operating losses and negative operating cash flow. If funds cannot be secured at the necessary timing, serious concerns regarding business continuity may arise. The company's policy is to address this through changes to partnership terms, obtaining subsidies, and issuing new shares, among other measures. In addition, fundraising through capital increases carries the risk of diluting per-share value.

There are numerous hurdles, including confirmation of efficacy and safety, that a drug candidate compound must clear before approval and launch as a pharmaceutical product, and the probability of success is low. If a serious adverse event occurs during a Phase 1 clinical trial resulting in discontinuation of development, it typically takes 4 to 6 years and several hundred million yen in additional costs to progress from aptamer discovery for a new target protein, through nonclinical studies, to reaching a new Phase 1 clinical trial. The company seeks to diversify risk by preparing backup candidates and holding multiple independent pipelines, but for a small company, the impact of losing a pipeline candidate is significant.

The company's main sources of revenue are upfront license payments, milestone income, and royalties; however, obtaining these is premised on smooth progress of development by licensees and their obtaining regulatory marketing approval. Development may be terminated midway due to circumstances beyond the company's control, such as deterioration in a licensee's business environment or changes in policy, and even after commercialization, sales may be discontinued due to issues with drug pricing or marketability that prevent profitability from being secured. If licensing-out of subsequent pipeline candidates or securing new joint research agreements does not proceed as planned, the timing at which retained earnings turn positive will be delayed.

The company is listed on the TSE Growth Market, and as 10 years have passed since its listing, it is now required to comply with market capitalization criteria. Depending on future stock price levels, the company may fail to meet the market capitalization criteria and could be delisted, which would have a significant impact on fundraising. The company's policy is to stabilize its shareholder base through timely information disclosure to existing shareholders and by securing new investors such as institutional investors and strategic partner companies.

Manufacturing and marketing of new pharmaceutical products requires approval and authorization based on the pharmaceutical-related laws and regulations of the relevant country, and strict pharmaceutical regulations also apply to the initiation of clinical trials. During the lengthy process of new drug development, approval standards, pharmaceutical regulations, the healthcare insurance system, and pricing trends may change significantly, potentially affecting the company's business plans. The company monitors the latest regulations in Japan and the United States on a timely basis and reflects them in its R&D plans, but cannot completely eliminate the risk of such changes.

Because aptamer drugs have mechanisms of action and administration methods similar to antibody drugs, depending on the target disease, development competition and market competition with antibody drugs developed by major pharmaceutical companies may arise. Competitors include numerous major domestic and international pharmaceutical companies with superior marketing power and financial strength compared to the company. In addition, the patents for the SELEX method, the foundational technology for aptamer drug discovery, expired in Japan and Europe in 2011 and in the United States in 2014, making it easy for new entrants to enter the field.

As of the fiscal year-end, the company was a small organization with 9 officers and 25 employees. If Representative Director and President Yoshikazu Nakamura becomes unable to carry out management execution, or if excellent R&D personnel resign, this could have a material impact on business performance and business development. The administrative department also remains at a scale of 9 persons (including 1 director serving concurrently), and if the company is unable to secure personnel as planned, this could also affect the business. While the company is working on developing successors and recruiting personnel, the risk associated with reliance on a small, elite team is high.

The company outsources the manufacturing of active pharmaceutical ingredients and investigational drugs, as well as the conduct of nonclinical and clinical trials, to external institutions. In particular, if natural disasters, unforeseen circumstances, or unexpected contract terminations occur at the contractor responsible for manufacturing active pharmaceutical ingredients and investigational drugs, stable supply of active pharmaceutical ingredients may become unavailable. Given the recent increase in activity in nucleic acid drug development, there is a risk that the company may not be able to promptly secure an appropriate alternative contractor, which could affect the business. The company strives to maintain good relationships with contractors and to secure alternative contractors.

Important data held by the pharmaceutical industry is a target of cyberattacks, and increasingly sophisticated and diverse attack methods may cause IT system failures or the leakage of confidential data, including personal information. The company's knowledge, technology, and know-how obtained through ongoing research and development constitute important confidential business information, and its leakage would directly affect competitiveness. The company has implemented measures such as deploying and monitoring IT security services, conducting regular backups, establishing information management regulations, and providing training to officers and employees, but the risk cannot be completely eliminated.