Fulltech Co.Ltd.

New orders for automatic doors are affected by domestic economic trends and fluctuations in private and government construction investment, and a decline in orders is expected during economic downturns. In addition, if the creditworthiness of business partners deteriorates due to economic decline and accounts receivable, notes receivable, and other claims deteriorate, an increase in the allowance for doubtful accounts may become necessary, potentially affecting business performance and financial condition. As a countermeasure, the company strengthens credit management through periodic credit investigations of business partners.

In the Fittings-Related Business, stainless steel, steel, and other steel materials are used as main raw materials. If the prices of these materials rise sharply due to various factors and the company is unable to pass on the increase to product prices in a timely manner, profitability may be squeezed, potentially affecting business performance and financial condition. The company strives to secure a stable supply of raw materials through diversification of suppliers and other measures, but it is difficult to completely eliminate the risk of market fluctuations.

Price competition with competitors in the automatic door market is inevitable, and if such competition intensifies further, it may lead to a decrease in orders, potentially affecting business performance and financial condition. The company leverages its strength of an integrated in-house system covering sales, design, manufacturing, construction, and maintenance services, and seeks to differentiate itself through the development of new products and services, but the risk of intensifying price competition continues to exist.

Since both public works and private facility projects tend to see an increase in completions in March, business performance shows a seasonal fluctuation with a greater weighting in the first half of the fiscal year than in the second half. This imbalance can make appropriate staff allocation difficult, potentially leading to reduced operational efficiency and lost business opportunities. As a countermeasure, the company is working to strengthen personnel allocation in the Tokyo metropolitan area, where construction demand is robust.

Both the Automatic Door-Related Business and the Fittings-Related Business operate under a fittings construction business license (general construction business license, valid from October 13, 2025 to October 12, 2030) based on the Construction Business Act, and are subject to numerous legal regulations including the Product Liability Act. If a legal violation occurs, it could result in disposition or suspension of business by regulatory authorities, litigation, or loss of social credibility, potentially having a material impact on business performance and financial condition. Furthermore, future amendments, repeals, or introduction of new regulations may also affect business performance.

Natural disasters such as earthquakes and tsunamis, or accidental disasters such as fires and power outages, could damage or disable production facilities at branches, sales offices, and factories. If a large-scale disaster such as the Great East Japan Earthquake were to occur, the suspension of production and construction activities could seriously affect business performance and financial condition. As a countermeasure, the company has formulated a business continuity plan (BCP) and is working to establish a risk management system.

While the company has established a quality control system, including ISO9001 certification, for the production of Stainless Steel Sash and other products, it is not possible to completely eliminate the occurrence of defects in all products. If an accident occurs due to a product defect, costs will be incurred for notifying customers, inspecting products, and recalling products, potentially affecting business performance and financial condition. The Quality Assurance Department continuously works to enhance product quality and safety through verification and testing of products.

The risk of accidental accidents occurring due to contact with automatic doors, caused by various factors such as pedestrian inattention, cannot be completely ruled out. If a serious accident occurs, even if it is not attributable to a quality defect in the company's products, the brand value and credibility may be damaged due to negative rumors, potentially affecting business performance and financial condition. The company addresses this through continuous enhancement of product safety by the Quality Assurance Department.

The company handles personal information of customers and business partners in the course of its business activities, and should an information leak occur, it could lead to a significant loss of trust, potentially affecting business performance and financial condition. While the company is advancing measures and considerations for personal information protection, risks such as cyberattacks and internal misconduct continue to exist. The company addresses this by enhancing information security education for all officers and employees.

If a serious infectious disease such as the novel coronavirus occurs and spreads, requiring the voluntary curtailment of business activities, orders may decrease, potentially affecting business performance and financial condition. The company has established a system enabling the rapid establishment of a task force and the use of telework and remote conferencing, but depending on the scale and duration of the infectious disease, it is difficult to completely avoid an impact on business activities.