Atrae, Inc.

Of the net sales of ¥7,634 million (as stated in the original disclosure) for FY2025 (ending September 2025), the job placement service "Green" accounted for 58.0% (equivalent to ¥4,426 million), indicating a high degree of dependence. If monetization of new businesses such as "Wevox" does not proceed as planned, fluctuations in Green's sales will directly affect overall performance. The Company is pursuing the expansion of Wevox and the monetization of new businesses in parallel to achieve medium- to long-term growth.

In addition to existing recruitment agencies and job media, the competitive environment includes many new entrants due to low barriers to entry. If technologically sophisticated startups enter the market, overseas companies with similar models expand into Japan, or major recruitment agencies shift to technology-driven business models, the Company's advantage derived from big data analysis and improved document screening pass rates may be eroded. The Company seeks to differentiate itself through its registered user base of engineers in the IT/Web industry and the data assets accumulated over many years.

The Company's core business is supporting corporate hiring, and its performance is directly linked to the recruitment needs of client companies. If a global economic downturn exceeding expectations occurs and employment levels at client companies stagnate, there is a risk of a significant decline in net sales. Currently, the sense of IT talent shortage remains high (per IPA's "DX White Paper 2025"), and recruitment needs are expected to remain solid, but the structure remains vulnerable to sudden changes in the external environment.

In the internet and HR Tech domain, technological innovation and changes in customer needs occur extremely rapidly. If the Company is slow to respond when innovative technologies emerge, there is a risk that its technological advantages built through big data analysis and AI utilization may decline. Additionally, responding to new technologies may require significant additional system development costs, which could pressure profitability. The Company aims to address this through advance development of the latest technologies and securing talented personnel.

All services are provided via the internet, and the calculation of sales for both Green and Wevox relies on automated processing through a proprietary sales system. If a system failure occurs due to a major program defect, natural disaster, unauthorized access, or access concentration, there is a risk of service disruption damaging customer trust and errors in sales recording processes. The Company is taking countermeasures such as server capacity enhancement, security reinforcement, and establishment of a system management framework.

The Company holds large volumes of sensitive personal information, including users' work histories and application details. If unauthorized access from outside or intentional or negligent information leakage by internal personnel occurs, there is a risk of damage claims and loss of social credibility. As countermeasures, the Company has obtained ISO/IEC 27001:2022 certification and has clarified workflows and authority structures while implementing training for officers and employees. However, complete defense remains difficult given the increasing sophistication of cyberattacks.

The Company operates its business with a small organization consisting of 8 directors and 124 employees (full-time), making the acquisition, development, and retention of talented personnel fundamental to business continuity. If the Company is unable to secure necessary personnel or experiences talent turnover, it may face difficulties in ordinary operations and the expansion of new businesses. Additionally, given the organizational composition centered on new graduate hires (new graduate ratio of approximately 39%, average age of 33.0 years), there is a risk that a lack of experience among officers and employees could affect business performance.

To respond to the shortening of service life cycles, the Company is actively investing in new businesses, and additional expenditures for advertising, system investment, and personnel costs may lead to a temporary decline in profit margins. If new businesses do not progress as planned, there is a risk that investments may not be recovered, adversely affecting business performance and financial condition. Overseas expansion is also under consideration, which entails potential geopolitical and regulatory risks.

The Company operates its business based on laws and regulations such as the Telecommunications Business Act, the Act on the Prohibition of Unauthorized Computer Access, the Act on the Protection of Personal Information, and the Act on Regulation of Transmission of Specified Electronic Mail. New enactments or amendments to these laws and regulations could restrict business activities. There is also a risk of claims for damages, injunctions against use, or requests for royalty payments if the Company infringes on third-party intellectual property rights. The Company continues to strengthen its monitoring and management of intellectual property rights and its legal compliance framework in cooperation with legal counsel.

As stock options for directors and employees, as of the end of November 2025, there were stock acquisition rights corresponding to 2,047,900 potential shares outstanding (equivalent to approximately 9.0% of the total issued shares of 22,827,141 shares). If these rights are exercised, there is a risk of dilution of existing shareholders' share value and voting ratio. The Company continues its policy of granting these rights for incentive purposes and may make additional grants in the future.