i-plug,Inc.

The HR Platform Business is highly dependent on the single service "OfferBox," and fluctuations in that service's sales directly affect the group's overall business performance. The Company is pursuing differentiation from competitors and investment in new services, but if such initiatives do not proceed as planned, this dependence will persist. Until diversification of the existing business is achieved, there is a risk that any decline in OfferBox's competitiveness will directly impact business results.

In the new-graduate direct recruiting market, if technologically advanced startups or major HR-related companies enter the market, the Group's market share and profitability could decline. While the Company has an advantage in business scale from being an early entrant, the impact could be significant if competing services emerge that leverage the massive new-graduate recruitment data held by major companies. Continued execution of differentiation measures is required.

The Group's main business is supporting corporate recruitment, and if corporate employment levels decline due to an economic downturn, recruitment needs could sharply decrease, directly affecting business performance. The recruitment market is sensitive to the economic cycle, and downside risk would be significant if a downturn beyond expectations occurs. While the recruitment market is currently solid, a structural vulnerability to changes in the macro environment remains.

Due to the declining birthrate, the younger population, including students who are OfferBox's primary target, is gradually decreasing. The Company assumes that overall growth in demand in the direct recruiting market will offset this, but if the decline in the target population exceeds expectations, it could adversely affect business development and results. Trends in the number of university graduates seeking private-sector employment represent a structural risk that caps medium- to long-term growth.

In the HR field, big data analytics and AI utilization are advancing, and if the Company's response is delayed when innovative technologies emerge, there is a risk that its technological advantage will decline. Responding to such changes could also require substantial additional system costs, potentially pressuring profitability. The Company is working on developing the latest technologies, including AI and smart device compatibility, and securing talented personnel, but the pace of technological change is difficult to predict.

The Group handles large volumes of personal information for both students and companies, and if unauthorized access or intentional/negligent acts by insiders result in an information leak, it could significantly damage customer trust and give rise to liability for damages. The Company obtained ISO/IEC 27001:2022 certification in November 2025 and has established and provided training on personal information protection regulations, but the increasing sophistication of cyberattacks makes complete protection difficult.

Services are provided via the internet, and if a system failure occurs due to a large-scale program defect, natural disaster, unauthorized access, or other causes, service provision could be suspended, affecting business performance. The Company has implemented countermeasures such as server enhancement, strengthened security, and establishment of a system management framework, but unforeseeable troubles cannot be completely eliminated.

In addition to existing regulations such as the Employment Security Act, the Act against Unjustifiable Premiums and Misleading Representations, and the Telecommunications Business Act, new legislation or amendments could bring the Company's services under regulation. In particular, changes to the government's guidelines on the new-graduate recruitment activity schedule would directly affect demand for the Early Fixed-Fee Plan service, risking a further worsening of seasonal skew in sales. The Company maintains a service design consistent with the intent of the guidelines, but it is difficult to completely avoid the impact of regulatory changes.

If recruitment and development of talented personnel for business expansion does not proceed as planned, or if officers or employees leave unexpectedly, it could hinder business operations and affect business performance. Competition to acquire specialized personnel such as engineers and data scientists is intense in the HR field, and rising recruitment costs or personnel shortages could constrain growth. The Company is working to strengthen its internal control and business execution systems, but the competitive environment in the labor market remains severe.

The Group positions M&A as an effective means of business expansion, but if contingent or unrecognized liabilities are discovered after an acquisition, or if expected synergies fail to materialize, impairment of goodwill or shares in affiliated companies could occur, adversely affecting the Group's financial position. Although the Company conducts prior due diligence, there are limits to identifying all risks in advance. There are currently no specific acquisition plans, but attention to financial impact will be necessary when future deals are executed.