Medix Inc.

Since the Group provides services primarily using internet communications, communication network failures may occur due to equipment malfunctions, computer viruses, human error, and other causes. Service outages could reduce customer trust and lead to claims for damages, which may have a material impact on business activities, financial position, and operating results. The Group continuously implements measures for stable operation, such as system reinforcement and strengthening of backup systems.

The internet advertising industry is highly susceptible to economic fluctuations, and there is a risk that market size will fall short of expectations during economic downturns. In addition, if the sophistication and increasing complexity of the managed/programmatic advertising market make it difficult to respond to customer needs, this could lead to contract cancellations or reduced transaction volume. Furthermore, changes in the business strategies of mega platform operators such as GAFAM could make it difficult to continue providing services.

Depending on the content of advertisements, client advertisers may be subject to regulations such as the Act against Unjustifiable Premiums and Misleading Representations or the Pharmaceuticals and Medical Devices Act, which could also lead to reputational risk for the Group. In addition, if amendments to laws, the enactment of new legislation, or the establishment of industry self-regulation result in changes to the interpretation of existing laws, this could have a material impact on business activities, financial position, and operating results. As countermeasures, the Group has established manuals, a legal check system using outside attorneys, risk management regulations, and compliance regulations.

In the course of conducting its business, the Group has opportunities to handle confidential customer information and personal information. If an information leak occurs due to unforeseen circumstances, it could result in claims for damages and reputational risks such as revocation of Privacy Mark certification, which may have a material impact on business activities, financial position, and operating results. The Group has implemented measures such as establishing information security management regulations, strengthening access control and network management, and obtaining Privacy Mark certification.

If unforeseen events such as natural disasters (earthquakes, typhoons, etc.) or a pandemic caused by a new infectious disease occur on a scale far exceeding expectations, business operations may be temporarily or medium-to-long-term suspended, which could have a material impact on business activities, financial position, and operating results. The Group has implemented measures such as establishing an employee safety confirmation system and introducing a work-from-home system, but it may be difficult to respond to disasters of an unexpectedly large scale.

The pace of technological innovation in internet-related fields is remarkable, and in particular the rapid advancement of generative AI technology is increasingly affecting business areas such as content production, marketing automation, and customer service. If the Group fails to respond appropriately to these changes, its competitiveness may decline, which could have a material impact on business activities, financial position, and operating results. The Group regularly conducts information-gathering activities on the latest technology and industry trends, as well as training activities aimed at acquiring AI technology skills.

Securing, retaining, and continuously developing excellent human resources is important for further growth. If the Group is unable to secure excellent human resources due to increased employee turnover or poor recruiting activities, or if educational activities fail to function effectively, this could affect business execution. The Group is addressing this by actively promoting recruiting activities, developing and improving employee training systems, and strengthening efforts to create a workplace environment where employees can thrive.

The Group positions M&A as an effective means of expanding its domestic and overseas business operations and intends to continue this policy going forward. However, there is a possibility that matters not identified or anticipated during due diligence may arise or come to light after an M&A transaction is executed, or that business development may not proceed as planned. In such cases, in addition to failing to achieve the initially expected contribution to performance, impairment of the investment value of the target company may become necessary, which could have a material impact on business activities, financial position, and operating results.

Google, LINE Yahoo, and Meta, the top three companies, accounted for the majority of annual procurement value in FY2026 (ending March 2026), resulting in a high degree of dependence on specific media operating companies. If, for any reason, changes occur in these business relationships, this could result in the inability to continue transactions or changes in transaction terms, which may have a material impact on business activities, financial position, and operating results. The Group strives to maintain good relationships with media operating companies.

The Group conducts overseas business primarily in the Asia region, and there is a risk that international political risks such as war and terrorism, risks of regulatory revisions or new regulations, economic risks such as exchange rate fluctuations and trade imbalances, and social risks such as labor issues arising from differences in culture and business customs may occur at levels exceeding expectations. If these risks materialize, the Group may be forced to scale back, suspend, or stagnate its business, which could have a material impact on business activities, financial position, and operating results.