CAREER CO., LTD.

The Group operates a general worker dispatching business under the Worker Dispatching Act (license number: Haken 13-304437, valid until June 30, 2027) and a fee-charging employment placement business under the Employment Security Act (license number: 13-Yu-304348, valid until October 31, 2027), both licensed by the Minister of Health, Labour and Welfare. If officers or employees violate applicable laws, the licenses could be revoked or business suspension orders could be imposed. Given the Group's specialization in senior human resources, the risk of legal amendments is said to be relatively smaller than for competitors, but depending on the content of any revisions, business performance could still be affected.

The Group engages in staffing and placement services targeting qualified personnel such as nurses and care workers, and amendments to related laws such as the Act on Social Workers and Certified Care Workers and the Act on Public Health Nurses, Midwives and Nurses directly affect the business. If the qualification requirements or scope of duties for these professions change, it could affect the scope of work available to registered staff and recruitment costs. The Group does not disclose specific countermeasures, and continuous monitoring of legal amendment trends is required.

The Group thoroughly enrolls all dispatched staff who meet the eligibility requirements in social insurance, and if insurance premium rates are raised or the scope of coverage is expanded, the company's burden of premium payments will increase, putting pressure on profitability. Since the staffing business has a cost structure in which personnel expenses account for the majority of costs, fluctuations in social insurance premium rates have a direct and significant impact on business performance. As institutional reforms in response to social conditions continue to be implemented, this risk is a persistent one.

The Group specializes in staffing services for senior human resources and long-term care facilities, and securing quality senior staff, nurses, and care workers is fundamental to the continuity of the business. If the Group's credibility or brand strength declines relative to competitors, it could lead to a decrease in staff registrations and deterioration in matching efficiency, potentially affecting business performance. The Group seeks to maintain and enhance its brand strength through understanding staff intentions via surveys, interviews, and counseling, combined with appropriate skill matching.

The staffing services industry can be entered with relatively little capital, resulting in the presence of numerous competitors. If new entrants increase in the Group's business field (specialization in senior human resources), intensifying price competition could deteriorate profitability. The Group states that it possesses a track record and expertise built up since its founding through specialization in senior human resources, but the industry structure with low entry barriers creates ongoing competitive pressure. Maintaining competitive advantage requires continuous improvement in differentiated service quality.

The staffing services industry to which the Group belongs is susceptible to social conditions, economic trends, and employment conditions, and factors such as a rapid rise in recruitment costs due to a tight labor market amid rising prices, sharp increases in minimum wages, and wage increase demands accompanying revisions to medical and long-term care fee schedules may affect business performance. In particular, fee revisions in the medical and long-term care fields directly affect client companies' recruitment budgets and dispatch unit prices, which can have a ripple effect on the Group's revenue and profit structure. Responding to these macro-environmental changes remains an ongoing management challenge.

The Group holds and manages large volumes of personal information of registered staff and others in its business management systems, and if an information leak occurs, it could have a significant impact on business activities through damage claims and loss of social credibility. As countermeasures, the Group has obtained Privacy Mark certification and JISQ 27001:2023 (ISO/IEC 27001:2022) certification, and has established a management framework in accordance with the Personal Information Protection Act. However, the risk of leakage due to unforeseen circumstances cannot be completely eliminated.

The Group has business locations nationwide and relies heavily on computer systems and networks for its business activities. If a large-scale natural disaster or a system failure due to human error occurs, it could disrupt operations such as staff attendance management, salary payments, billing to clients, and credit management. If such disruptions persist for an extended period, it could lead to a decline in service reliability and affect business performance. The Group has implemented measures such as strengthening security and establishing backup systems, but states that there are limits to its ability to respond to unforeseen circumstances.

The Group is pursuing new business initiatives aimed at expanding its business scale and diversifying revenue sources, but since it takes a certain period of time for these to generate stable earnings, overall profit margins may decline. If new businesses do not progress as planned due to future changes in the business environment, there is a risk that investments will not be sufficiently recouped. The specific content and scale of investment in new businesses are not disclosed in the securities report, making it difficult to quantitatively assess this risk.

Ichiro Kawashima, Representative Director, Chairman and President, holds 50.3% of the total issued shares, and any sale of shares by him could affect the market price and trading volume. In addition, BH Co., Ltd., of which he serves as representative, has invested in staffing service-related companies (holding a 91.1% stake in AS Staff Co., Ltd. and a 35.2% stake in WML, Ltd.), creating a risk of conflicts of interest with competing businesses. The Group manages this risk by entering into a tripartite agreement with BH Co., Ltd. and Mr. Kawashima to prevent new investments in competing businesses in advance, and by establishing a governance framework involving highly independent outside officers.