ALiNK Internet, INC.

The Company and the Japan Weather Association have concluded a business alliance agreement concerning the operation of "tenki.jp," and the agreement may be terminated by giving notice and holding discussions up to one year prior to the expiration of the contract term. If the agreement is terminated, the name "tenki.jp" belongs to the Japan Weather Association and can no longer be used, and the Company would lose the revenue currently generated by the tenki.jp Business. As an alternative, the Company plans to establish a different media platform utilizing the system copyrights it owns, but since it will take time to raise awareness, this could have a material impact on the Company's financial position and business results.

The majority of the Group's sales are derived from revenue from the tenki.jp Business, and sales to its major business partner, Google Japan G.K., accounted for 35.2% of total sales in the current consolidated fiscal year (45.2% in the previous fiscal year). If advertising and marketing expenditures contract due to economic conditions, or if transactions decrease significantly due to changes in Google Japan G.K.'s policies, this could have a significant impact on the Group's financial position and business results. The structure entails a high concentration risk in both the business segment and business partner.

"tenki.jp" provides information to users through its website and app, with its main revenue derived from advertising placements. If platform operators such as Apple Inc. and Google LLC change their business policies and introduce new regulations, this would directly affect both user acquisition and advertising revenue. The Group has not disclosed any specific countermeasures, and this is recognized as a structural risk stemming from platform dependence.

Domestic internet advertising media expenditure continued to grow, reaching ¥29,611 million in 2024 (110.2% year-on-year), but there is a risk that demand for native advertising could shrink due to the introduction of legal regulations or innovations in ad delivery technology. The Group operates the tenki.jp Business centered around an advertising trading desk, and its competitiveness could decline if innovative sales menus or delivery technologies emerge. A delayed response to changes in the market environment could affect the Company's financial position and business results.

The Group operates its business centered around an advertising trading desk and continues to make human and capital investments to acquire new technologies. However, if the Group is slow to respond to new technologies and services, or if competitors develop innovative technologies, there is a risk that its competitiveness could decline. Furthermore, if the Group is unable to secure engineers capable of responding to rapidly changing user needs as planned, its relative value as a media platform could decline. These factors could affect the Company's financial position and business results.

The Group recognizes and amortizes goodwill arising from corporate acquisitions, which accounts for a high proportion of 11.8% of consolidated total assets. If the expected results are not achieved due to changes in the business environment or other factors, an impairment loss may need to be recognized, which could affect business results and financial position. While the Company currently judges that the goodwill appropriately reflects future earning power, the financial impact would be significant in the event of a deterioration in the external environment.

The Group promotes business development through M&A and business alliances, and has established a system for conducting due diligence and careful deliberation by the Board of Directors. However, if the expected effects are not achieved, or if unrecognized liabilities or issues come to light after an investment, an impairment of the target company's share value or business assets may be required, which could affect the Group's financial position and business results. In new business development as well, if progress does not proceed as planned, the Group may be unable to recover its invested funds, affecting cash flow.

The Group's services are premised on 24-hour operation and employ a redundant configuration using data centers operated by SAKURA internet Inc. However, if facilities or networks become unusable due to external attacks such as computer viruses or hacking, software malfunctions, natural disasters, or other causes, this would directly lead to service outages and the loss of advertising revenue. Given the nature of a media service that operates 24 hours a day, the financial impact of system downtime is significant.

Hiroto Ikeda, the Representative Director, possesses knowledge and experience in the internet advertising industry as well as a weather forecaster qualification, and plays an important role in formulating management strategy. While the Company is working to establish a management structure that does not overly depend on him, if for some reason he becomes unable to perform his duties, this could affect the Company's financial position and business results. The fact that the organization is small, with 35 employees, further heightens this dependence risk.

The Group grants stock acquisition rights to officers and employees, and as of the filing date of this document, the number of potential shares stood at 201,700 shares, equivalent to 9.44% of the total number of issued shares of 2,136,900 shares. If these stock acquisition rights are exercised, the value per share would be diluted, potentially affecting the share price. While the grants are intended to provide incentives to officers and employees, it should be noted that the dilution rate is at a relatively high level of approximately 10%.