NEO MARKETING Inc.

If the recruitment of marketing consultants does not proceed as planned, or if multiple employees resign within a short period, this could lead to a decline in competitiveness or constraints on business expansion. In particular, if the company fails to replace specialized personnel in time—given the time and cost required for their training—the impact on business and performance could be significant. As countermeasures, the company is actively promoting new graduate, referral, and mid-career hiring, along with implementing an internal job posting system to enhance the motivation of existing employees.

The company secures consumer panels through its proprietary i-Research site, but if it loses its competitive advantage relative to competitors' sites, maintaining panel registration numbers could become difficult, potentially leading to a decrease in orders received and a decline in net sales and gross profit. There is also a risk that the service provision base could become vulnerable if cooperation with partner companies is discontinued. The company addresses this by building a mutual procurement framework with multiple partner companies.

The company acquires personal information such as names, gender, age, and residential area through member registration, and there is a risk of information leakage due to increasingly sophisticated and elaborate cyberattacks, malware infections, or errors by officers and employees. If an information leak occurs, it could result in a decline in social credibility and a material impact on business and financial results. The company addresses this through obtaining Privacy Mark and ISO27001 certification, establishing a dedicated internal organization, and promoting information security education.

If human or physical damage occurs due to natural disasters such as earthquakes or fires, or due to war or terrorism, or if failures occur in external communication infrastructure or computer networks, business operations could be disrupted, potentially making business continuity itself difficult or impossible. Since organizing and utilizing consumer panels nationwide is a core pillar of the business, the impact of infrastructure failures is particularly significant. The company is promoting the formulation of a business continuity plan and other countermeasures in the event of an emergency, but complete prevention cannot be guaranteed.

There is a tendency for sales to concentrate around February and March, near the fiscal year-end month for many companies, with the second quarter (January to March) of FY2025 (ending September 2025) accounting for 32.7% of net sales, significantly higher than other quarters. If there is a decline in customers' demand for marketing support or factors that impede sales activities during the second quarter, this poses a risk of significantly affecting full-year performance. The company is working to level out its services by developing a broad customer base including customers with different fiscal year-end months, but the tendency toward seasonal fluctuation has not been resolved at this time.

A deterioration in economic conditions in Japan and overseas, or reductions in marketing budgets by companies, could reduce demand for the group's services. In addition, as personnel expenses (fixed costs) are expected to increase with the expansion of business scale, there is a risk that a sharp contraction in demand due to economic fluctuations could increase the relative burden of personnel expenses and impair profits. The company continuously monitors the impact of government and Bank of Japan policies and global economic trends on personal consumption and corporate activity.

The group's organization is small in scale, and its internal management structure remains commensurate with its current size, so as business scale expands, it may become unable to respond appropriately and sufficiently through organizational means. Excessive dependence on specific personnel could be a factor increasing management risk. The company's policy is to reduce management risk through securing and developing excellent personnel, and to further enhance its internal management structure in anticipation of business expansion.

As part of its growth strategy, the company considers and implements M&A in fields related to its existing businesses. If, after implementing an M&A, there is a rapid deterioration in the business environment or an unexpected situation arises, the profit and loss of the acquired business may not progress as targeted, and the recording of extraordinary losses such as impairment of goodwill could impact business performance and financial condition. There are no publicly announced M&A plans at this time, but this is disclosed from a risk management perspective in preparation for future implementation.

New services and new businesses typically take about six months to a year to generate stable revenue, and additional investments such as personnel recruitment and system development are required during this process. If progress does not proceed as planned, the company may fail to record the expected net sales and may be forced to record losses on unrecoverable investment amounts, potentially leading to a decline in net sales and gross profit and the recording of extraordinary losses. The company conducts cross-organizational risk identification, evaluation, and consideration of countermeasures, and there are currently no new business plans that would affect performance.

Since the business foundation depends on internet communication networks, if a large-scale system failure or system downtime caused by a cyberattack occurs, it could disrupt the provision of services to customers and impact the business and performance. The company strives to reduce the risk of failures occurring by monitoring operational status, among other measures, but complete prevention cannot be guaranteed.