property technologies Inc

Purchasing motivation may be affected by economic fluctuations, interest rate trends, land price trends, etc., potentially adversely affecting business performance and financial condition. The "Chobo Mansion" (scenic view condominium) series relies partly on inflows of people and funds from China as one of its sales channels, making changes in international circumstances an additional risk factor. In response, the Company is diversifying its customer base through expanding its network of locations and brokerage company partners, promoting direct transactions via portal sites, and expanding its product lineup.

The Company primarily procures funds for purchasing used homes through borrowings from financial institutions. As of the end of the fiscal year ended November 2025, the balance of interest-bearing debt was ¥31,168,547 million (note: as stated in the original disclosure in thousands of yen; equivalent to approximately ¥31,168 million), with an interest-bearing debt dependency ratio of 71.5%, a high level. Since purchase funds are generally procured through short-term borrowings of approximately one year, if a large number of properties cannot be sold within the assumed period during a downturn in the real estate market, there is a risk that refinancing may become impossible, causing disruptions in cash flow. Further increases in market interest rates also raise concerns about deteriorating performance due to increased interest expenses.

If property sales stagnate due to deterioration in the real estate market or other factors, this could lead to extended holding periods, recognition of valuation losses on inventory, and an increase in interest-bearing debt due to higher working capital requirements, potentially affecting business performance and financial condition. In response, the Company works to shorten sales periods through careful selection of purchases and expansion of sales channels, maintains inventory levels appropriate to the average sales period, and has established a system of confirming long-term inventory at internal meetings held twice a month, with monthly reporting to the Board of Directors.

In the used home market in the greater Tokyo area and major regional cities, there is a risk of declining purchase and sales volumes and price competition due to the entry of competitors. In the detached housing business in regional cities (Akita Prefecture and Yamaguchi Prefecture), companies handling low-cost standardized housing continue to expand nationwide, raising concerns about intensifying competition in land acquisition and pricing, as well as deteriorating supply-demand balance due to rising market inventory. In response, the Company is developing attractive products, enhancing after-sales services, and conducting flexible purchasing and sales activities through monitoring of competitor trends.

The Company is subject to legal regulations including the Building Lots and Buildings Transaction Business Act, the Building Standards Act, the City Planning Act, the Construction Business Act, and the Architects Act, and revisions or abolition of related laws, the establishment of new regulations, or the emergence of requirements for qualified personnel could affect business performance and business development. Group companies (Homenet, First Home, and Sanko Home) hold licenses and registrations such as real estate brokerage licenses, construction business licenses, and architectural design office registrations, and if grounds for revocation of these licenses arise, it could seriously impede business continuity. The Company states that, at present, no grounds for revocation of licenses have occurred.

The Company offers services such as "AI-based real estate price appraisal" and "direct real estate transactions via portal sites," but the number of companies providing solutions utilizing AI and IT technology is increasing, and intensifying competition could affect business performance and business development. Although the Company has been certified as a DX-certified business operator, the pace of technological innovation is rapid, and there is a risk that delayed response could lead to a decline in service evaluation. The Company is advancing information gathering and technology adoption through participation in the DX Real Estate Promotion Association (a general incorporated association) and joint industry-academia development with university research laboratories.

A substantial portion of the services provided through the iBuyer platform "KAITRY" are internet-based services delivered via portal sites, and if service provision is disrupted due to system failures or other issues, this could affect business performance and business development. Because the business model is highly dependent on internet infrastructure, there are concerns about customer attrition and lost business opportunities in the event of a failure. The securities report does not contain specific descriptions of redundancy measures or business continuity plan (BCP) countermeasures.

Much of the renovation construction work on acquired used homes is outsourced to external construction partner companies. If sufficient outsourcing partners cannot be secured when the number of purchased properties increases, or if construction delays occur due to deteriorating financial conditions at outsourcing partners, early sales activities may become impossible, potentially affecting business performance. The structure of dependence on outsourcing to control fixed costs is the underlying cause of this risk. In response, the Company is working to expand its network of external construction partner companies and increase capacity through process optimization.

In connection with real estate sales contracts, the Company acquires and holds sensitive personal information such as customers' identification documents, asset information, and financing plans. In the event of a leak, this could result in loss of trust and damages liabilities, potentially affecting business performance. The Company is working on the establishment and operation of personal information management regulations and information management regulations, thorough employee training, and strengthening of system security measures.

Yuta Hamanaka, the founder and Representative Director, plays a critical role across the Company's overall business activities, including determining management policy and business strategy. If he were to become unable to continue carrying out his duties, this could affect the Company's business and performance. The Company states that it is working to reduce this risk through the development of its management structure and human resource development, but the current level of dependence on a specific individual remains high.