Open Up Group Inc.

In the staffing and job placement business, which operates under regulations such as the Worker Dispatching Act, the Employment Security Act, and the Labor Standards Act, if a violation occurs, there is a risk that the company could have its license revoked or be subject to a business suspension order. In addition, if client companies reconsider their use of staffing or contracted services due to amendments to relevant laws or strengthened guidance policies from regulatory authorities, this could affect operating results and financial condition through a decline in demand. In response, the Group implements checks and controls within its business processes and conducts regular monitoring through compliance meetings.

Given the nature of the business, which handles a large amount of personal information, if information leakage or unauthorized use occurs, this could have a material impact on operating results and financial condition through damages claims or loss of social credibility. In response, the Group has established personal information protection regulations, obtained Privacy Mark certification, and implements employee training as well as access control and leakage prevention measures for IT equipment.

Staff dispatched or contracted by the Group have opportunities to access highly confidential information at client companies' workplaces, and if a leakage or unauthorized use of confidential information occurs, this could affect operating results and financial condition through damages claims or loss of social credibility. In response, the Group provides guidance and training on the handling of confidential information to all employees at the time of joining and on a regular basis thereafter.

The Group actively pursues M&A (including alliances) as a management strategy, and while it carefully examines the business content, contractual relationships, and financial condition of investment targets, if the initially expected results are not achieved, goodwill impairment may occur, potentially affecting operating results and financial condition. Although the Group has established a system to carefully assess the investment effects of target companies, the possibility that risks may materialize due to changes in the business environment or other factors cannot be ruled out.

In providing services under contracting arrangements, unlike staffing, the Group bears responsibility for work instruction and supervisory management, and if quality deterioration, delivery delays, or defects in deliverables occur, this could lead to suspension of transactions with client companies or claims for damages. Although the Group provides services after conducting risk assessment and preparation in advance, unforeseen circumstances could affect operating results and financial condition.

If employees working at various client company worksites through staffing or contracted services encounter unforeseen industrial accidents, this could affect operating results and financial condition through damages claims or loss of social credibility. The Group works with client companies to conduct safety and health education and training at the time of assignment and otherwise, striving to prevent industrial accidents before they occur.

As the Group does not have a global supply chain or resource/parts procurement, the direct impact is limited; however, if client companies change or relocate their development and production operations in response to the international situation, this could affect operating results and financial condition through changes in personnel needs. The Group continues to closely monitor the impact of rising geopolitical risks related to economic security on client companies' business strategies.

There is a possibility that business operations at the Group's widely deployed domestic and overseas business locations could be suspended due to natural disasters such as earthquakes, tsunamis, or typhoons, or that employees could become unable to work due to damage to client companies' facilities. If a large-scale disaster occurs, this could affect operating results and financial condition, and the Group addresses this by continuously updating its backup systems (including digitalization) using other locations.

Given the nature of the business, which involves extremely minimal direct use of natural capital and emissions, no risk has materialized at present; however, if a carbon tax is introduced or if client companies increasingly require carbon neutrality as a criterion for selecting business partners, this could affect operating results and financial condition. The Group implements CO2 reduction measures such as selecting purchased goods and promotional materials based on environmental performance, reducing company vehicles, and reusing materials, while also conducting an annual climate change risk assessment and reporting to the Board of Directors and management meetings.