TalentX Inc.

The Company handles confidential information and personal information of client companies, and in the event of an external leak of such information, this could result in a loss of social credibility and claims for damages, potentially having a material impact on the Company's business and results of operations. The Company strives for appropriate management and protection of information assets through obtaining Privacy Mark certification, obtaining ISO/IEC 27001:2022 certification, establishing an information security policy, and conducting internal training.

As the business grows, developing appropriate corporate governance and internal control systems has become an important issue, and if the establishment of such systems lags behind the pace of business expansion, this could affect the Company's business and results of operations. The Company intends to continuously advance the development of its internal control systems in line with business expansion and employee growth.

The Company's services are provided via the internet, and if the system becomes inoperable due to natural disasters, accidents, access congestion, program failures, unauthorized access, or other causes, service provision may become impossible, potentially significantly damaging the credibility of the service. The Company strives to provide stable services by strengthening information security and establishing a system management framework.

The Company is subject to legal regulations such as the Act on the Protection of Personal Information, the Employment Security Act, and the Telecommunications Business Act, and new legislation or the tightening of existing regulations could constrain its business. In particular, continuation of its paid employment placement business license under the Employment Security Act and compliance with laws and regulations pertaining to services associated with the MyTalent Platform are important, and if the compliance system fails to function properly, this could affect the Company's business and results of operations.

Although corporate IT investment sentiment is currently on an upward trend, if client companies' investment appetite declines due to deterioration in economic conditions or business climate, this could affect the Company's business and results of operations. The Company is working to mitigate this risk through diversification of service lines within the MyTalent Platform and by diversifying its customer base across large enterprises and multiple industries.

In the human resources services and recruitment marketing market, new entrants may emerge in addition to existing competitors with strong financial resources and brand power. If intensifying competition leads to price competition or rising customer acquisition costs, this could affect the Company's business and results of operations. The Company seeks to differentiate itself by strengthening product competitiveness leveraging its experience, track record, and in-house know-how.

Advances in AI technologies, including generative AI, may change corporate recruitment activities, talent acquisition strategies, and human capital investment policies, potentially causing significant shifts in demand for the Company's services and the functions required of them. There is also a risk that a shift in investment toward AI-related fields and AI feature enhancements by competitors could transform the market environment. The Company is promoting the use of AI and feature development across its products to realize "AI-native recruitment," but if its response is delayed, this could affect its results of operations.

Securing, developing, and retaining excellent personnel to support business expansion is an important issue, and if recruitment does not proceed as planned or internal development is delayed, appropriate staff allocation may become difficult, potentially affecting the Company's business and results of operations. The Company is promoting various measures such as strengthening recruitment activities and enhancing post-hire training.

The Company is promoting M&A as part of its growth strategy, but if contingent liabilities arise after an acquisition or if the acquired business does not develop as planned, this could affect results of operations due to additional costs incurred or impairment of goodwill, among other factors. The Company intends to proceed with M&A after considering market trends, customer needs, and the target company's business performance, financial condition, and risk analysis.

The Company is actively promoting new business development to expand its business scale and diversify its revenue sources, but research and development investment until revenues stabilize may lower the Company's overall profit margin. If new businesses do not progress as planned due to future changes in the business environment or other factors, making it difficult to recoup the investment, this could affect the Company's business and results of operations.