DIJET INDUSTRIAL CO., LTD.

Tungsten and cobalt, which account for the majority of the raw materials used in the Company's products, are rare metals whose production sites are extremely concentrated in a limited number of regions. This poses a risk that production may become difficult and manufacturing costs may rise due to difficulties in stable procurement or sharp increases in procurement prices. As countermeasures, the Company works to mitigate this risk through continuous information gathering from suppliers, diversification of procurement sources, and maintenance of appropriate inventory levels.

If demand for either standard or special products exceeds the Group's forecasts, the Group may be unable to sufficiently adjust its production capacity. The Group strives to mitigate this risk by securing production capacity through appropriate capital expenditure and by grasping customer demand trends through sales activities.

Approximately 50% of net sales are generated overseas, of which approximately 10% are denominated in US dollars and approximately 15% in euros, meaning that fluctuations in foreign exchange rates may cause net sales and profits to decline. The Company seeks to mitigate this risk through cost reductions centered on productivity improvements, but no financial measures such as foreign exchange hedging are mentioned.

The Group has business sites both in Japan and overseas, and its operations may be disrupted by natural disasters such as earthquakes, typhoons, and tsunamis, by global epidemics or pandemics of infectious diseases, or by criminal acts such as terrorism. The Group endeavors to avoid this risk through the geographic dispersion of its factories and the development of a Business Continuity Plan (BCP).

In FY2026 (ending March 2026), borrowings amounted to ¥4,125 million (short-term borrowings of ¥1,664 million and long-term borrowings of ¥2,461 million), representing 23.9% of total assets, and there is a risk that future changes in financial conditions may affect business performance and cash flows. The Group seeks to mitigate this risk by reducing borrowings and improving its financial structure through the reduction of inventory assets and the strengthening of profitability.