Globalway,Inc.

In the internet-related market to which the Career Innovation Business and Sharing Business belong, service innovation and changes in the industry environment occur rapidly, and new services are frequently developed and offered. If the Group is unable to respond to changes in customer needs, this may affect its business operations, financial position, and operating results. The Group strives to identify and respond to customer needs, but the speed of change can present a barrier to timely response.

The Group operates the Digital Solutions Business (system development support) and the Career Innovation Business (DX talent recruitment support), centered on the DX market. If client companies restrain their system investment due to changes in economic conditions, this could disrupt the business activities of both businesses and affect the Group's financial position and operating results. While the DX market is expected to expand, corporate investment appetite tends to be susceptible to economic conditions.

In FY2026 (ending March 2026), foreign currency transactions accounted for 31.2% of net sales (equivalent to ¥1,250 million), and fluctuations in foreign exchange rates directly affect net sales and earnings after conversion into yen. In particular, a sharp appreciation of the yen could adversely affect business performance. The Group currently does not employ hedging instruments such as foreign exchange forward contracts, and the risk may increase as transaction volumes expand going forward.

Approximately half of consolidated net sales is composed of roughly the top 10 clients, resulting in a high degree of dependence on specific clients. If transactions with these clients decrease or are lost for any reason, this could have a material impact on the Group's business performance. While favorable relationships are currently maintained, there is a risk of changes in clients' business environments or of clients switching to competitors.

The Career Innovation Business holds large volumes of personal information, including member information and job seeker information, and is subject to the Act on the Protection of Personal Information. If a leak occurs due to intent or negligence, or as a result of unauthorized external access, this could damage social credibility and affect business activities, financial position, and operating results. The Group has implemented measures such as obtaining ISMS (ISO/IEC 27001) certification and conducting internal training and audits, but such risk cannot be completely eliminated.

In the Career Innovation Business, the Group has obtained a Fee-Charging Employment Placement Service license (Minister of Health, Labour and Welfare license 13-Yu-300923) and a general worker dispatching business license (Haken 13-301400), and operates its business under the regulations of the Employment Security Act and the Worker Dispatching Act. If the Group falls under grounds for disqualification or revocation, or if legal regulations are changed, its license could be revoked or a business suspension order issued, causing material disruption to its business activities. While the Group currently recognizes no facts constituting a violation, the risk of legal amendments continues to exist.

The Group provides media, sharing, and cloud-based business software services over the internet, and if a system failure occurs, providing these services could become difficult. If service is suspended for a long period due to computer viruses, hacker intrusion, or accidents, this could undermine trust in the services and affect financial position and operating results. While measures such as firewall installation have been implemented, complete defense is difficult given the increasing sophistication of cyber threats.

In the Digital Solutions Business, the Group provides implementation support for cloud-based business software, and if expenses exceed expectations due to major changes in customer specifications or the occurrence of defects, project profitability could deteriorate. The Group strives to improve estimation accuracy and thoroughly manage man-hours and quality, but the risk of specification changes cannot be completely eliminated. If profitability deteriorates across multiple projects, this would affect financial position and operating results.

In the skill-sharing business operated by subsidiary TimeTicket, upfront costs take time to translate into sales growth, making securing operating funds a challenge; if this leads to difficulties in cash flow, it could affect financial position and operating results. In addition, with respect to equity investments, if investment gains fail to materialize due to a downturn in the stock market or deterioration in the performance of investee companies, this could similarly affect financial position and operating results. While the Group conducts thorough research and monitoring of companies, certain aspects of market risk cannot be controlled through internal measures.

As the scale of business expands, it is necessary to enhance and strengthen internal control systems; however, if the Group is unable to secure and develop personnel as planned, or if personnel attrition occurs, it may become difficult to respond in a timely manner to business expansion. In addition, if an event occurs that violates corporate governance or compliance standards, this could affect business operations and operating results. The Group has a policy of continuously recruiting and developing employees, but securing personnel remains difficult amid intensifying competition in the labor market.