ATOMIX CO.,LTD.

Trends in capital investment and personal consumption, as well as the status of implementation of traffic safety measures by the government and local authorities, may affect operating results. In addition, fluctuations in petroleum-based raw material prices, foreign exchange rates, and stock market conditions are also factors influencing performance. Because multiple external environmental factors act in combination, there is an inherent risk to the stability of business results.

Many of the company's major raw materials are petroleum-related products, and trends in crude oil and naphtha prices directly affect operating results. While stable procurement is sought through purchasing from multiple suppliers, some specialty raw materials depend on a limited number of suppliers, making alternative procurement difficult in times of sharp price increases.

If a supplier is affected by a disaster, accident, or bankruptcy, or if a supply shortage occurs due to a sudden surge in demand, it may become difficult to secure the raw materials necessary for production activities, which could adversely affect operating results. This risk is particularly elevated for specialty raw materials, for which procurement sources are limited and alternative means are scarce. While stable procurement is pursued through purchasing from multiple suppliers, complete avoidance of this risk is difficult.

Laws and regulations concerning the environment, chemical substances, and occupational health and safety tend to become stricter, and significant legal changes or regulatory tightening could affect operating results. The company thoroughly ensures compliance with each set of regulations, but there is a risk that this could lead to increased compliance costs and constraints on business activities.

Given the nature of the business, which handles hazardous materials and chemical substances, a large-scale fire or explosion accident could force a temporary suspension of operations, potentially having a material impact on operating results and financial condition. While safety systems are being strengthened thoroughly, it is difficult to completely eliminate the risk of accidents occurring.

Large-scale natural disasters such as major earthquakes, heavy rain, and floods raise the risk of factory damage and operational disruption due to power outages, as well as supply disruption risk due to damage at raw material and parts suppliers. The company has formulated a business continuity plan (BCP) and conducts employee training and disaster drills, but depending on the extent of damage, continuation of normal business activities may become difficult, potentially affecting operating results and financial condition.

Intentional acts, including cyberattacks, or negligence could result in information leakage, loss, or various system failures, potentially causing a temporary suspension of business activities. While information security is being strengthened through clarification of authority and responsibility, measures against external intrusion, and employee training, it is difficult to fully respond to increasingly sophisticated cyber threats.

In the event of a product defect, although the company holds liability insurance, a product defect that cannot be covered by insurance could result in a substantial financial burden and a decline in corporate trust, potentially affecting operating results. Manufacturing is conducted in accordance with quality control regulations, but it is difficult to completely eliminate the risk of defects.

Against the backdrop of growing awareness of environmental issues, delays in responding to greenhouse gas emission reduction could lead to a decline in stakeholder trust and a decrease in orders received. The company is promoting energy conservation and the development and improvement of new products, and aims to eventually achieve 100% adoption of renewable energy, but there is an inherent risk of increased response costs and reduced competitiveness during the transition period.