Livesense Inc.

The recruitment-related business accounted for 88% of consolidated net sales in FY2025 (fiscal year ended December 2025), indicating an extremely high degree of dependence on a specific business. If competition intensifies in the recruitment advertising market or an economic downturn leads to a decrease in the number of postings and lower unit prices, this would have a direct and significant impact on the group's overall performance. The company is seeking diversification through the launch of new businesses, but the risk will persist if such plans do not proceed as expected.

The sites operated by the group rely heavily on customer acquisition from specific search engines, and there is a risk that SEO may cease to function effectively due to changes in search result display logic or shifts in users' acquisition channels. A decline in customer acquisition capability would directly affect the number of postings and revenue, and the impact on the business is recognized as material. The company is diversifying risk through various customer acquisition measures such as web advertising, but a complete substitute remains difficult to achieve.

The internet advertising market is sensitive to corporate economic trends, and a sharp change in the economy could cause a decline in advertising demand. If client companies in the recruitment and real estate domains change their budget policies, this would affect group performance through a decrease in the number of postings and lower unit prices. Although the market itself is on an expanding trend, the risk of short-term demand fluctuations due to economic cycles cannot be ruled out.

The group acquires and manages large volumes of personal information, such as job applicants' application data, and if a leak, falsification, or unauthorized use occurs, this could result in claims for damages, loss of trust, and response costs. The company has implemented measures such as establishing basic regulations for the protection of personal information and providing internal training to all employees, but it is explicitly stated that the risk cannot be completely eliminated. Continued compliance with relevant laws and regulations, including the Act on the Protection of Personal Information, is required.

The group's business is subject to numerous legal regulations, including the Telecommunications Business Act, the Act on Countermeasures against Information Distribution Platforms, the Employment Security Act, and the Building Lots and Buildings Transaction Business Act, and the enactment of new regulations or changes in the interpretation of existing laws could affect business operations. In particular, if the company loses its license as a fee-charging employment placement business operator under the Employment Security Act, there is a risk that the relevant business could not be continued. As a

In the internet industry, the cycle of technological innovation and changing customer needs is extremely fast, and new entrants based on new technologies have been emerging one after another. If the company faces difficulty acquiring knowledge and expertise in advanced technologies, this could lead to a decline in technological superiority and service competitiveness, as well as substantial costs for technology investment and personnel recruitment and development. The company is promoting the active recruitment of excellent engineers and the accumulation of knowledge in advanced technologies, but the risk of delayed response to rapid change continues to exist.

The group is promoting business expansion through business alliances, investments, and M&A with other companies, but if control and monitoring of investee companies are insufficient or if the initially expected synergy effects are not realized, this could adversely affect performance. There is also a risk of recording impairment losses on goodwill due to performance fluctuations, or of discovering contingent or unrecognized liabilities after an acquisition. The company conducts careful due diligence, but ex post risks cannot be completely eliminated.

Taichi Murakami, Representative Director and President, plays an extremely important role as founder in determining and executing management policy and business strategy, and there are concerns about the impact on the business and performance if he were to become unable to continue his duties. The company is working to reduce this dependence through information sharing via the Board of Directors and the Executive Officers' Meeting and by strengthening its management organization, but dependence on him remains high at present.

Much of the group's business and operations depend on cloud services, and if a network failure or server outage occurs due to a disaster or accident, or if unauthorized access by a third party occurs, this could seriously impede business continuity. Since such failures originate on the cloud service provider's side, there are limits to the complete preventive measures the group can implement on its own. This is recognized as a structural risk stemming from dependence on communication networks.

In the success-fee-based business model, there is a risk of fraudulent activity, such as concealing facts even when fee-triggering criteria have been met. The company has implemented measures such as system-based prevention, prohibitions under terms of use, and the establishment of fraud detection mechanisms, but if the methods of fraud become more malicious than anticipated, this could affect performance. Given the structure of the charging model—free use of the service combined with success-fee billing—the environment is prone to creating incentives for fraud.