Direct Marketing MiX Inc.

The worker dispatching business, which is the core business of the Onsite Business, is operated based on a license granted by the Minister of Health, Labour and Welfare. If this license is revoked due to violations of the Worker Dispatching Act, the Employment Security Act, or other regulations, it would directly affect the majority of the Onsite Business's revenue. The Fee-charging Employment Placement Business faces similar licensing risk, and the license expiration dates for the various subsidiaries are concentrated between 2027 and 2029. Although the Company states that no facts currently exist that would constitute grounds for revocation, the risk of business suspension in the event of a compliance violation is high.

The Marketing Business and Onsite Business are subject to a wide range of laws and regulations, including the Act against Unjustifiable Premiums and Misleading Representations, the Act on Specified Commercial Transactions, the Telecommunications Business Act, the Worker Dispatching Act, and the Employment Security Act. With respect to insurance-related operations, there is additional oversight from the Financial Services Agency and guidance from partner insurance companies, resulting in a high degree of layered regulation. Unpredictable changes to or the introduction of new laws and regulations could affect the operating results of each business.

As the Company applies IFRS, goodwill is not amortized, and goodwill accounts for a high proportion of total assets. The majority of goodwill arises from capital contributions received through LBOs involving the AP Fund and funds related to Integral Corporation. An impairment loss could occur if the pre-tax discount rate for the Marketing Business rises by 8.4 percentage points, or if the estimated future cash flows, including terminal value, decrease by 54.9%, either of which could have a material impact on operating results.

The loan agreements entered into with multiple financial institutions dated December 25, 2025 contain financial covenants requiring the maintenance of total equity at each fiscal year-end (at least 75% of the most recent year-end balance) and prohibiting two consecutive fiscal years of operating losses. A breach of these covenants would trigger an obligation to repay the borrowings in full, which could have a material impact on the financial condition of the Group.

Operating call centers and BPO centers requires the stable securing of a large number of communicators; however, due to labor market tightening driven by population decline, the falling birthrate and aging population, and economic improvement, the Group may be unable to continuously secure sufficient labor. In addition to increases in recruitment costs and personnel expenses, increases in employee costs are also expected due to amendments to labor-related laws and regulations, which could affect operating results.

The Group acquires and collects large volumes of personal information in the course of its business, and any leakage would directly result in a loss of social trust. As countermeasures, the Group has established its "Personal Information Protection Regulations" and has obtained ISO27001 certification and the Privacy Mark at each subsidiary; however, should a leakage occur, it could have a material impact on operating results.

The Group is highly dependent on information systems for call operation management and end-user information management. If a system failure occurs due to a program defect, computer virus, cyberattack, or other cause, call operations themselves could be halted. The Group also anticipates the possibility of leakage of important data and the incurrence of response costs, which could have a significant impact on its business, financial condition, and operating results.

The Marketing Business and Onsite Business transact with client companies across a diverse range of industries, but sudden changes in the volume of operations may occur due to economic fluctuations or deterioration in client companies' business conditions or shifts toward insourcing. In particular, the information and communications industry is currently the Group's main client sector, resulting in a structure in which performance is readily influenced by marketing trends in that industry. Although the Group implements countermeasures such as reassigning dispatched employees and fixed-term employees or terminating contracts, an impact on financial condition and operating results may nonetheless be unavoidable.

Integral Corporation and funds managed by the Integral Corporation group are major shareholders of the Company, and two of the Company's directors concurrently hold positions at Integral Corporation. Depending on the fund's policy regarding the holding or disposal of the Company's shares, the liquidity and share price formation of the Company's stock could be affected. This also entails risk with respect to independence from a governance perspective.

A large number of part-time and fixed-term employees are engaged in contact center operations, requiring the Group to respond to the conversion-to-indefinite-term-employment rule under the amended Labor Contract Act (conversion to indefinite-term employment after more than five years of cumulative service) and the expansion of social insurance coverage to short-hour workers. Future changes in labor-related laws and regulations may make it difficult to employ excellent personnel and may lead to rising personnel costs, either of which could affect operating results.