MarkLines Co., Ltd.

The Information Platform Business accounted for 68.8% of consolidated net sales for FY2025 (ending December 2025), remaining at a high level, and there is a risk that revenue plans could deviate downward if this business does not progress as planned. Although the degree of dependence has been on a declining trend in recent years, the structure whereby trends in this stock-type business directly affect the overall financial position, business performance, and cash flows remains unchanged. The Company is working to diversify its revenue structure by expanding sales in other businesses.

The core Information Platform Business is specialized in the automotive industry, and if conditions in this industry, which is undergoing transformation driven by EVs, SDVs, autonomous driving, and other trends, deteriorate significantly, there is a risk that this could lead to a slowdown in new contracts or an increase in cancellations of existing contracts. Since contracting companies span not only finished-vehicle and parts manufacturers but also a diverse range of industries, dependence on specific customers is low; however, a substantial decline in automotive demand could have wide-ranging effects on business performance and cash flows. The Company is working to diversify risk by broadening the industry mix of its contracting companies.

Overseas fees are provided in four currencies: US dollar, euro, British pound, and Chinese yuan, and if a rapid appreciation of the yen occurs immediately after a fee revision, it may be difficult to respond. In addition, a fee revision itself could amount to a substantial price increase for overseas companies, potentially leading to a slowdown in new contracts or an increase in cancellations. Although the Company's policy is to convert foreign currency receipts into yen each time they are received, thereby avoiding long-term holding of foreign currency, the impact on financial position, business performance, and cash flows cannot be completely eliminated in the event of a rapid yen appreciation.

Representative Director Makoto Sakai currently has a significant influence on management policy and strategy formulation as well as the overall promotion of business across the Group, and if he becomes unable to continue his duties for any reason, there is a risk of a material impact on the business and business performance. The Company is working to build a structure that does not depend on him, but at present a high degree of dependence continues. Establishing a succession framework remains an ongoing challenge.

Some content, such as unit sales statistics, is obtained through purchase from or partnerships with external parties, and if continued acquisition becomes difficult due to rising acquisition costs, termination of partnerships, natural disasters, or other factors, there is a risk of disruption to the continuity of information provision services. If the Company is unable to develop alternative sources in time, this could lead to a decline in service evaluation, affecting both new and existing contracts. The Company is continuously working to develop and diversify its information sources.

The information platform is required to operate stably 24 hours a day, 365 days a year, but there is a risk that services could be suspended due to unforeseen system failures caused by natural disasters, power outages, computer viruses, unauthorized access, and other factors. Although exemption clauses are included in the terms of service, if a damages claim is filed and the exemption provisions are not upheld, this could affect the financial position, business performance, and cash flows. The Company addresses this risk through the use of highly reliable data centers, server redundancy, ongoing capital investment, and maintenance management.

If advances in information search technology using AI and other means make it easier to obtain information related to the content the Company provides on a paid basis, there is a risk that this could lead to a decrease in free registered members or a slowdown in growth of new paid contracts. Although the Company's information platform is composed of proprietary research and high-value-added information, the fact that improved search technology could serve as a substitute represents a structural threat to the business model. The Company is pursuing differentiation through the continuous strengthening of the quality, quantity, and coverage of its content.

The Company Group holds and manages personal information, including member information, and there is a possibility that such information could be deleted or improperly obtained due to unauthorized external access or employee error. If an information leak occurs, in addition to a loss of social trust, the Company could face a burden of damages, posing a risk of material impact on its business and business performance. The Company has implemented preventive measures such as establishing internal regulations in line with the Personal Information Protection Act, restricting access, and providing training for new employees.

While the Company currently recognizes that no fully comparable business exists in Japan or overseas, there is a risk that a temporary decline in profitability could occur if partially competing companies expand their business domains, or if competitors emerge that imitate the Company's business model. A member base of over 500,000 and a track record of use by all Japanese finished-vehicle manufacturers form a high barrier to entry, but changes in the competitive environment cannot be ruled out. The Company is pursuing differentiation through the continuous improvement of the quality, quantity, and convenience of its information.

Securing excellent personnel to support business expansion and service diversification is an important challenge, and if changes in the employment environment prevent the planned expansion of necessary staff, or if personnel leave the Company, this could constrain business expansion and affect the business and business performance. In particular, increased demand in the labor market for personnel with specialized knowledge, skills, and experience could intensify competition for recruitment. The Company is working to promote retention through human resource development and the sharing of its corporate vision.