MAEZAWA KYUSO INDUSTRIES CO.,LTD.

There is a risk that sluggish domestic public investment and private-sector housing investment will significantly reduce demand for the Company's products, leading to a decline in sales. The Housing & Building Equipment field is highly susceptible to housing-related policy, taxation, personal consumption, and land price trends, and changes in these factors may affect operating results and financial position. As a countermeasure, the Company is implementing cost reductions through operational efficiency improvements and striving to maintain a strong financial base.

For key raw materials such as copper and resin, if procurement difficulties arise due to abnormal weather, conflicts, terrorism, disease, etc., or if purchase prices rise sharply due to price surges or exchange rate fluctuations, and these cost increases cannot be appropriately passed on to selling prices, operating results and financial position may be affected. As countermeasures, the Company is raising inventory levels, diversifying production sites, and using multiple suppliers.

Each business is exposed to intense competition with rival companies, and if the Company fails to secure an advantage in quality, performance, transaction terms, etc., operating results and financial position may be affected. As a countermeasure, the Company is working to secure competitive advantage through the development of high-value-added products.

If a serious defect or flaw occurs in a product or service, the Company may become liable for substantial damages, and if such damages cannot be covered by product liability insurance, operating results and financial position may be materially affected. As a countermeasure, the Company thoroughly implements quality control, including reviews of production processes and inspection methods.

For securities, fixed assets, and other assets held by the Company, if impairment or valuation losses are recorded due to declines in fair value, etc., operating results and financial position may be affected. As a countermeasure, the Company regularly checks fair values and considers the continued holding of assets.

If system troubles, including network issues, occur due to disasters such as large-scale earthquakes or fires, or due to computer viruses or cyberattacks, production and sales operations may stagnate, affecting operating results and financial position. As countermeasures, the Company outsources system operations to external organizations, diversifies network lines, and thoroughly implements security education.

If a dispute concerning intellectual property rights arises and a ruling unfavorable to the Company is made, the Company may become liable for substantial damages, among other consequences, which may affect operating results and financial position. As a countermeasure, the Company regularly monitors the activities of other companies through platforms such as the Patent Information Platform.

If a major supplier experiences problems such as bankruptcy, production delays or disruptions may occur, resulting in lost sales opportunities and other effects that may affect operating results and financial position. As a countermeasure, the Company strives to identify and gather information on suppliers' financial conditions at an early stage.

If a serious compliance violation or other scandal occurs, sanctions from regulatory authorities or a loss of social trust may affect operating results and financial position. As countermeasures, the Company strives to strengthen its management structure through compliance education and internal audits.

If the Company's response to reducing CO2 emissions is insufficient, increased energy costs resulting from the introduction or tightening of greenhouse gas emission control policies such as carbon taxes, as well as reduced operational efficiency due to rising temperatures, may affect operating results and financial position. As countermeasures, the Company is promoting the installation of solar power generation equipment, the utilization of renewable energy, and the introduction of energy-saving equipment.