Reskill Corp.

Approximately 55% of annual net sales and approximately 72% of operating profit are concentrated in the first quarter (April to June), reflecting a strong dependence on the seasonality of demand for training of new hires and young employees. If demand declines during this period, the impact on operating results would be particularly significant. As a countermeasure, the Company aims to cover fixed costs through stable provision of training services throughout the year.

Recruiting and developing excellent employees for business expansion, along with securing outsourcing contracts with instructors who meet quality standards, are important challenges. If intensifying competition for domestic human resources prevents progress as planned, this could lead to reduced competitiveness, deteriorated service quality, and constraints on business scale expansion. The Company addresses this through diversifying recruitment methods, knowledge sharing via internal training, and quality-standardization training for instructors.

Wataru Matsuda, President and Representative Director, is the founder and a major shareholder holding 70.1% of total issued shares, and plays a central role in determining management policy and business strategy. If for any reason he becomes unable to continue his duties, this could have a material impact on the Company's financial position and operating results. The Company is working to reduce this dependence by strengthening information sharing among directors on the Board and reinforcing its management organization.

In providing training services, the Company handles customers' confidential information and personal information including that of instructors; if an information leak occurs, damage to social credibility and response costs would affect the Company's financial position and operating results. The Company addresses this through obtaining and operating Privacy Mark certification, establishing information security management regulations, and conducting regular compliance testing.

In some cases, customer companies utilize government subsidies related to human resource development; if policy changes such as reductions in subsidies occur, this could change customer demand for training and affect the Company's performance. The Company mitigates this risk by not relying on subsidies as a primary sales appeal, instead emphasizing the intrinsic value (high convenience) of its training services.

The Company operates only domestic training services; if demand for this service does not grow as expected, this would directly affect the Company's financial position and operating results. To diversify and stabilize its business, the Company plans to pursue globalization, including expansion into overseas training markets, as a management strategy.

Since customers are mainly domestic companies, restraint of training and education expenditures due to economic fluctuations directly affects the Company's performance. In addition, since marketing is the primary means of acquiring new customers, a decline in customer acquisition effectiveness due to external factors is also a business risk. The Company addresses this by maintaining a diverse customer base across industries and sizes and continuously monitoring marketing effectiveness.

The training services business has low entry barriers, requiring no licenses or large-scale capital investment, resulting in numerous competitors ranging from major firms to individual proprietors. If intensifying competition leads to price competition or customer attrition, this could affect the Company's financial position and operating results. The Company differentiates itself through over 1,000 types of training content and standardization and DX (digital transformation) initiatives.

As of the end of the fiscal year under review, the tradable share ratio stood at 29.3%, only slightly above the Tokyo Stock Exchange's listing maintenance standard of 25% or higher. The representative director holds 70.1% of issued shares, and if liquidity declines for any reason, this could lead to stagnant trading in the market and a deterioration in supply-demand balance. The Company plans to improve liquidity through measures such as public offerings and secondary offerings by major shareholders.

The Company's services rely on external cloud services such as Amazon Web Services, Zoom, and Google Workspace; system outages caused by failures, cyberattacks, natural disasters, or other events could disrupt business operations. Such disruptions could lead to a loss of social credibility and affect the Company's financial position. The Company addresses this through strengthening security measures and establishing an internal response system for outages.