ROXX.inc

The market for non-desk workers earning less than ¥4 million annually, on which the company focuses, is an area that has traditionally been underserved by the conventional recruitment market, and the company has established a competitive advantage through a platform that includes partner referral agencies nationwide. However, if traditional recruitment agencies, along with domestic startups and job information service providers, focus on this same market, competition could intensify and affect performance.

The company's core service, Z Career, operates under a paid employment placement business license (License No. 13-Yu-307543, valid until January 31, 2029) based on the Employment Security Act. If grounds for revocation arise, the service could be suspended. The company has established a compliance framework through terms of service disclosures and in-service notifications, but delays in responding to regulatory developments or legal amendments could materially affect its business performance and financial condition.

In operating its recruitment support services, the company handles large volumes of personal information and is subject to obligations under the Personal Information Protection Act. The company has obtained ISMS (ISO/IEC 27001) and Privacy Mark certifications and established a management framework, but if a leak, falsification, or unauthorized use occurs, it could affect performance and financial condition through damage claims, response costs, and loss of credibility.

The company's services are provided over the internet, and if a system failure or network disconnection occurs due to a major program defect, natural disaster, unauthorized access, or similar causes, service provision could be disrupted, potentially leading to a loss of social credibility. The company has taken measures such as enhancing server infrastructure, strengthening security, and building a system management framework, but it cannot completely eliminate the risk of unforeseeable trouble.

Of net sales of ¥4,513,177 million in FY2025 (ending September 2025) (the equivalent amount stated in units of thousand yen in the securities report is approximately ¥4,513 million), Z Career accounted for 85.9% (approximately ¥3,878 million), indicating a high degree of dependence on a specific service. If the expansion of new services does not proceed as planned, fluctuations in Z Career's sales will have a direct and significant impact on overall performance, given this structure. The company is pursuing expansion of new services in parallel to support medium- to long-term growth.

The company has recorded operating losses as a result of continuing aggressive investment to prioritize gaining market share in the non-desk worker recruitment market. If acquiring new customers or recruiting and developing employees proves difficult, losses may continue to be recorded, with the likelihood of materialization explicitly stated as within one year. While the company is focusing on operational efficiency and customer acquisition to achieve stable generation of operating profit, uncertainty remains regarding the outlook for investment recovery.

In the internet and technology sector, where service life cycles are becoming markedly shorter, the company is actively investing in new businesses to achieve continued growth. Additional expenditures on advertising, systems investment, and personnel costs may temporarily reduce profit margins, and if progress does not proceed as planned, the company may be unable to recover its investments, potentially affecting performance and financial condition.

The company recognizes the acquisition, development, and retention of talented personnel as its most critical challenge for continued business expansion and new business promotion. If it is unable to secure or develop sufficient personnel when needed, or if personnel attrition progresses, this could disrupt routine business operations and the expansion of new businesses. With only 305 employees (as of September 30, 2025), the organization remains small in scale, and there is also a risk that increased employee workload during periods of sharply rising business volume could affect operational efficiency.

The number of potential shares underlying stock acquisition rights granted as incentives to officers and employees is 695,500 shares, equivalent to 9.6% of the total issued shares of 7,273,170 shares. If these stock acquisition rights are exercised, the value of shares held by existing shareholders and their voting ratio could be diluted. The company has taken measures such as staggering the exercise periods, but the likelihood of occurrence is explicitly stated as high.

In FY2023 (ended September 2023), the company received a written notice from a competitor alleging a violation of the Unfair Competition Prevention Act. Although legal counsel has indicated that the likelihood of the company being held liable for damages is relatively low, the possibility that the competitor may file a lawsuit cannot be ruled out. In addition to the costs of responding to litigation and a decline in credibility and brand image, in a worst-case scenario, service suspension or similar outcomes could occur, potentially affecting performance. The company has already conducted employee training and confirmed and strengthened legal compliance through internal investigations.