MFS,Inc.

If the residential mortgage market, the Group's core business area, experiences slower growth or contraction due to a shift in the Bank of Japan's monetary policy or changes in the government's tax system, this could materially affect operating results and financial condition through a decline in the number of mortgage screening applications and a decrease in investment real estate brokerage transactions. As a countermeasure, the Group monitors medium- to long-term trend changes through business plan tracking and promotes diversification of revenue sources.

The Group handles a large amount of personal information in the course of providing its services, and if a leak, loss, or unauthorized use of important information assets occurs for any reason, this could materially affect operating results and financial condition through loss of trust and claims for damages. The Group seeks to reduce this risk by establishing a basic information security policy and developing and operating related regulations.

The Group holds licenses such as a Real Estate Brokerage License (valid until February 4, 2027) and Money Lending Business Registration (valid until June 29, 2027), and if these licenses are revoked due to amendments or new enactments of related laws and regulations, or due to the occurrence of disqualifying events, this could hinder core business activities and materially affect operating results and financial condition. The Group continuously strives to comply with various conditions and related laws and regulations.

As of the end of the current consolidated fiscal year, tax loss carryforwards exist, and if performance progresses steadily leading to the resolution of these carryforwards, or if they expire, corporate tax, resident tax, and enterprise tax will be recorded based on the normal tax rate, potentially affecting net income and cash flow for the period. The likelihood of this materializing is considered high, and the impact is expected to occur over the medium term.

If search algorithms of Google, Yahoo! JAPAN, and others undergo significant changes, existing SEO measures may become ineffective, potentially reducing customer acquisition capability through decreased display frequency of advertising and service sites, which could affect performance. In addition to continuing SEO measures through obtaining algorithm change information, monitoring ranking fluctuations, and site analysis, the Group has established offline customer acquisition through real estate companies and insurance agencies as an alternative measure.

With a small organization of 66 employees (as of June 30, 2025), if the Group is unable to sufficiently secure, develop, and retain excellent personnel necessary for business expansion, or if there is significant turnover of personnel, this could hinder business operations and expansion, potentially affecting operating results and financial condition. The Group continuously conducts recruitment and training activities and measures to improve retention rates, and plans to hire a small number of new employees in FY2026 (ending June 2026).

While the Group holds trademark registrations for "Mogechecku," "INVASE," and others, there is a risk of infringement by third parties, as well as a risk that the Group may unknowingly infringe on the intellectual property rights of other companies, which could affect operating results and financial condition through claims for damages, injunctions against use, and loss of social credibility. The Group continues to conduct investigations and take countermeasures in cooperation with specialists, but recognizes that it is difficult to fully grasp the intellectual property rights of third parties in its business domain.

If relationships with the banks to which Mogechecku and INVASE refer customers deteriorate for any reason, this could result in requests to change fee rates or difficulty continuing transactions, potentially affecting operating results and financial condition. The Group strives to build favorable relationships with banks by improving its loan approval probability scoring model to enable higher-quality customer referrals and by strengthening web marketing.

Representative Director and founder Akira Nakayamada plays a central role in creating the business model and formulating management policies and strategies, and if he becomes unable to perform his duties for any reason, this could affect operating results and financial condition. The Group is working to establish a system that eliminates excessive dependence on any specific individual through information sharing at Board of Directors meetings and regular management meetings and through strengthening its management organization.

While there are currently few technology-driven competitors in the mortgage proposal service field, if other companies with similar business models enter the market in the future and differentiation becomes difficult, this could impact performance through rising advertising placement costs and a decline in the number of mortgage screening applications. The Group seeks to reduce this risk by building barriers to entry through patent acquisition, continuous service improvement, and diversification of revenue sources.