PLAT'HOME CO.,LTD.

Although operating profit/loss turned positive, the Company recorded significant negative operating cash flow due to an increase in inventory in anticipation of soaring raw material prices, creating a situation that raises significant doubt about the going-concern assumption. As of the end of the consolidated fiscal year under review, the Company had no borrowings and held cash and deposits of ¥212 million, securing working capital, and therefore has determined that no material uncertainty exists; however, on June 23, 2026, the Company executed additional borrowing to strengthen liquidity. The Company aims to resolve this situation through the implementation of various measures for medium- to long-term growth.

The Group's products rely heavily on open source software, the development of which is undertaken by communities of independent engineers around the world and cannot be controlled by the Group itself. There is no guarantee that open source technology will continue to meet market needs and maintain its reputation, nor is it always possible to maintain good relationships with these communities. Such uncertainties could affect the Group's continued growth.

The computer products market is characterized by rapid technological innovation and frequent introduction of new products, and the Group's products could become rapidly obsolete due to competitors' introduction of new technology products or the emergence of new industry standards. Developing and improving new products requires long development and testing periods and the securing of technically skilled personnel, necessitating substantial investment in R&D expenses and development staff. If a newly developed product fails to gain market acceptance, there is a risk that only the cost burden will increase.

In each of the Group's business areas, including computer manufacturing and sales, network-related products, and system integration, competition from new entrants both domestic and overseas as well as from major companies is intense, which could lead to reduced price competitiveness and difficulty in winning orders. Major competitors possess greater management resources and more diverse sales channels, and many companies are actively engaged in open source, raising concerns about the impact on demand for the Group's own products. The Group also faces competition in strategic alliances with suppliers, and if a key supplier or partner merges or forms an alliance with a competitor, business opportunities could be impeded.

The Group relies heavily on outsourced manufacturers and external parts suppliers for the manufacturing and procurement of its products, and many of these contracts are subject to renewal over short periods. If the Group is forced to terminate or amend such contracts, a decline in supply volume or an increase in cost burden may occur, which could adversely affect management and productivity. If parts delivery delays or increases in procurement prices occur due to supply shortages in the raw materials market, stable supply at appropriate cost may become difficult, adversely affecting profitability.

Because the scale of business is small and the products and technologies are highly sophisticated and complex, the sustainability of business performance depends heavily on retaining capable management and employees. Highly skilled personnel are scarce, and competition for talent within the industry is intensifying; since the Group has not entered into employment contracts that would prevent core employees from resigning immediately, there is always a risk of turnover. The loss of core employees could have a material impact on operations, and there is no guarantee that the Group will continue to be able to hire capable personnel in the future.

Intellectual property rights for open source software belong to the developers, and the possibility that rights holders may claim license fees in the future cannot be ruled out. In addition, most of the Group's products and services are not protectable as exclusive intellectual property, and the Group may not be able to prevent imitation by competitors. Furthermore, if a third party files a lawsuit alleging infringement of intellectual property rights, regardless of the outcome, substantial time and costs may be incurred, and in the event of an unfavorable ruling, the Group may need to pay royalties or develop alternative technology.

As a manufacturer, software development contractor, and service provider, the Group faces risk of being held liable under product liability laws and regulations both in Japan and overseas. If a defect is found in a product, it could have a significant impact on the brand and result in substantial correction costs, and the Group could be subject to claims for damages from customers. If insurance coverage is insufficient for such claims, expenses exceeding the insurance coverage may be incurred, which could adversely affect the Group's financial condition.

In the course of its business activities, the Group holds confidential business information and personal information of itself and its business partners, and there is a risk of information leakage or the suspension of critical information systems due to deficiencies in management, cyberattacks, unauthorized access, or other causes. Should an information leak occur, it could have a significant impact on the Group's reputation, and could adversely affect its financial condition and business performance through claims for damages or disruption of business activities. The Group strives to protect information through the formulation of handling policies, internal dissemination, and thorough compliance, but the risk cannot be completely eliminated.

Natural disasters such as earthquakes, tsunamis, typhoons, and floods, as well as outbreaks of new infectious diseases, could cause damage to employees and facilities, as well as the suspension of information systems and disruption of the supply chain, making it difficult to conduct business activities. If the impact on economic activity is significant, it could adversely affect the Group's financial condition and business performance. As the Group is a small-scale business operator, there are concerns about limitations in its ability to continue business operations in the event of a large-scale disaster.