b-style holdings, Inc.

The majority of costs in the Group's staffing-related business consist of personnel expenses for dispatched staff. If the company's burden increases due to revisions to social insurance premium rates or expansion of coverage scope through system reforms, this would directly compress profits. Reviews of social insurance enrollment requirements also affect workers' employment types and working hours, which could have ripple effects on demand for the Group's services, which target housewives.

The staffing services industry is susceptible to a variety of external factors, including economic fluctuations, social conditions, deregulation, and legal amendments. In particular, the services targeting housewives, on which the Group focuses, are sensitive to changes in employment conditions. A decline in corporate hiring demand or government employment policies (such as reviews of income tax and social insurance enrollment requirements) could affect workers' employment types and working hours, potentially leading to reduced service demand and deteriorating profitability. The Group closely monitors market trends on a daily basis and strives to reflect them in management strategy and build a flexible response framework.

The Group currently maintains a competitive advantage in staffing services for housewives and flexible workers as an early entrant, backed by its track record, customer base, and the customer acquisition power of "Shufu JOB". However, against the backdrop of a declining working population, the number of competitors offering similar services may increase going forward. If intensifying competition leads to price competition or difficulty securing personnel, this could affect the Group's business performance.

The Group makes extensive use of IT systems for business activities such as billing operations and attendance management, and strives to strengthen information security and backup systems. However, if a large-scale system failure occurs, it could disrupt overall operations. Given the high degree of reliance on systems, the potential impact on business performance in the event of a failure is considered significant.

The Group's operations are premised on maintaining worker dispatch business licenses (Bstyle Smart Career: valid until October 31, 2025; Bstyle Value Technologies: valid until March 31, 2028). If the Group falls under disqualification or revocation grounds, it may be ordered to suspend all or part of its business. In addition, the Worker Dispatch Act has undergone repeated amendments regarding eligible dispatch operations, dispatch period regulations, and strengthening of dispatching agency management systems, and future legal amendments may affect the Group's business operation policies and financial results. As a countermeasure, the Group works with retained attorneys and labor and social security attorneys to conduct internal training and build a legal compliance framework.

The Group has obtained paid employment placement business licenses under Article 32-4 of the Employment Security Act (held by three companies: Bstyle Smart Career, Bstyle Media, and Bstyle Value Technologies). If the Group falls under disqualification or revocation grounds, license revocation or business suspension may be ordered, which could disrupt core business activities. Although the Group implements measures such as internal training and building a legal compliance framework, the impact on business results from legal violations, should they occur, would be significant.

The Group handles personal information for a large number of dispatched staff. Bstyle Smart Career and Bstyle Value Technologies have obtained Privacy Mark certification and have implemented measures such as access authorization settings and log monitoring. However, if an unforeseen incident results in information leakage or loss, this could lead to loss of social trust and substantial costs from damages, potentially having a material impact on business performance.

President and Representative Director Kunihiko Mihara is the founder and a major shareholder, and plays a central role across the full range of business activities, from formulating management policy and business strategy to overall operations. If he becomes unable to continue his duties for any reason, this could have a material impact on business performance and future business strategy. As a countermeasure, the Group is developing organizational structures for delegation of authority, division of duties, rules on authority and responsibilities, and internal human resource development.

In raising funds from financial institutions, some of the Group's loan agreements include financial covenants. If these conditions are breached, it could result in higher borrowing interest rates or loss of the benefit of time (acceleration of repayment obligations), affecting operating results and cash flow. Although the Group maintains a policy of stable fund management, the risk of breaching financial covenants could materialize in the event of a sudden change in the business environment.

In the recruitment placement service, the Group has entered into contracts based on the industry practice of refunding placement fees, on a pro-rated basis, if a placed job seeker voluntarily resigns within three months of their start date. The Group records a refund liability based on past refund experience, but if actual refunds exceed the assumed refund rate, this could affect business performance.