Medical Data Vision Co.,Ltd.

The Group receives confidential information such as medical treatment records, which constitute sensitive personal information, from medical institutions and pharmaceutical companies. In the event of information leakage or destruction due to computer viruses, unauthorized access, or other causes, this could result in loss of social credibility and liability for damages. Although the Group has implemented control measures through ISO/IEC 27001 certification and ISMS operation, new types of viruses proliferate daily, making complete protection difficult. Additionally, if the Personal Information Protection Act is revised, abolished, or subject to stricter regulation, additional response costs may arise, potentially affecting business performance.

Data utilization services derive their primary revenue from analysis and research outsourcing commissioned by pharmaceutical companies, making the business structure highly susceptible to the economic environment of the pharmaceutical industry and the management policies of individual companies. If pharmaceutical companies scale back operations or experience deteriorating management conditions, orders may decrease, directly affecting the Group's business performance. For services targeting medical institutions as well, there is a risk that market expansion may not proceed as planned depending on trends in laws, regulations, and healthcare system reforms.

The Group's products and services are directed at the healthcare industry, and responding to the medical fee schedule system, which is revised once every two years, is positioned as the most critical issue. Should the Group fail to complete its response to a revision in time, or fail to conform to the new medical fee schedule, this could lead to loss of credibility and deteriorating business performance. Furthermore, if the medical fee schedule is revised downward, this would place pressure on the revenues of client medical institutions, potentially leading to the suspension or postponement of the Group's service implementations.

The Group's data network business for medical institutions is based on the DPC system, which as of June 1, 2025 covers 1,761 hospitals, and the Group provides management support systems and other offerings for this system. If the government fundamentally changes the structure of the DPC system through policy measures, or if the system itself is abolished, the Group's business foundation could be significantly impaired. While the continuation of the system is anticipated, the risk of policy change lies outside the Group's control.

In services for medical institutions, the Group competes with major computer manufacturers and medical information system companies, while in services for pharmaceutical companies, the Group recognizes that its strength in large-scale clinical data presents a relatively high barrier to new entrants. However, as the market expands, there is a possibility that well-known major companies may enter the market. Intensifying competition may also create downward pressure on product prices, which could affect business performance. The Group is responding by strengthening its technology development, sales, and maintenance systems, but maintaining competitive advantage remains an ongoing challenge.

The Group provides ASP-based services to medical institutions and pharmaceutical companies. If servers or systems fail to operate normally due to natural disasters, computer viruses, communication troubles, human error, or other causes, service interruptions may occur. Although the Group has adopted a redundant configuration environment on a major cloud platform and established a backup system, any failure that occurs could affect business performance. Given the nature of services provided to medical institutions, the credibility risk in the event of a failure is particularly significant.

The Group has undertaken investments such as M&A for business expansion, resulting in recorded goodwill. Going forward, new goodwill may arise, increasing amortization expenses, and if the performance of investee companies continues to fall short of initial plans, impairment losses may need to be recognized, potentially affecting the Group's business performance and financial condition. There are limits to predicting investment effects in advance, and this entails inherent financial downside risk.

The Group has entered into strategic capital and business alliances with advanced companies, including startups, but it is difficult to fully predict the effects of such alliances in advance, and there is no guarantee that the anticipated benefits will be realized as expected. If the management condition of an investee company deteriorates, a revaluation of the shares may be required, which could affect the Group's operating results and financial condition. Investments in startups in particular carry high uncertainty and entail the risk of recognizing valuation losses.

Representative Director and President Hiroyuki Iwasaki is deeply involved in sales and development activities, and the Group's degree of dependence on him is currently high. Should he become unable to perform his duties for any reason, and if the recruitment and development of successor management personnel has not progressed sufficiently, this could affect the Group's business and performance. While the Group is working to ensure thorough decision-making through its committee structures and to recruit and develop management personnel, reducing this dependence remains a work in progress.

The Group is actively pursuing new businesses, and increased spending such as system investments may reduce profit margins. If circumstances differ from expectations and the development of new businesses does not proceed as planned, the Group may be unable to recover its investments, potentially affecting business performance. The uncertainty associated with new businesses is higher compared to existing businesses, and the accuracy of investment decisions is an important factor in fluctuations in business performance.