Cookbiz Co.,Ltd.

The recruitment services industry has low barriers to entry, and numerous operators ranging from major companies to sole proprietors compete in the market. In recent years, competition for blue-collar talent acquisition has intensified across the board, and in addition to competitors specializing in the food service industry, blue-collar recruitment service providers in general are increasingly becoming competitors. In the DX field as well, new entrants continue to emerge amid the rapid expansion of the cloud-related market, and changes in the competitive environment may affect business results and financial position. The Group is seeking to differentiate itself by expanding its product lineup, including the "Comprehensive Recruitment Package," and by providing training services.

The Group has obtained a paid employment placement business license under the Employment Security Act (valid through February 28, 2026 for both the Company and World in Worker Co., Ltd.). If either company falls under grounds for disqualification or revocation, business suspension or license revocation could seriously impede business activities. Consolidated subsidiary Maruhiro Ota Foods Co., Ltd. is also subject to regulations under the Food Sanitation Act, the Act against Unjustifiable Premiums and Misleading Representations, and the Product Liability Act, while World in Worker Co., Ltd. is subject to regulations under the Immigration Control Act (as a registered support organization). Strengthening of regulations or violations thereof could lead to additional costs or business suspension. Although no such violations have occurred to date, future legal amendments or unforeseen regulatory tightening may affect business results and financial position.

The Specified Skilled Worker Placement business operated by World in Worker Co., Ltd. is based on bilateral agreements with sending countries. If such agreements are revised or terminated due to a change of government, policy changes, or deterioration in international relations, there is a risk that the relevant market could disappear. In addition, if the requirements for obtaining a Specified Skilled Worker visa are eased, market competition may intensify and profitability may decline, while if the requirements are tightened, the existing business may stagnate. Social disruptions such as terrorism, conflict, or pandemics could also lead to business interruption or increased costs.

Revenue from the Recruitment Placement Service and Job Advertising Service depends on the continuous acquisition of job seekers through the job information website "cookbiz." If such acquisition becomes insufficient, matching functionality may decline and advertising effectiveness may decrease. Because a certain proportion of traffic is driven by specific search engines (Yahoo! Japan and Google), changes in search algorithms pose a risk of significantly reducing acquisition effectiveness. Furthermore, it is impossible to accurately predict the effectiveness of advertising, which is centered on internet advertising, and a marked decline in advertising effectiveness or an increase in advertising costs may affect business results and financial position.

The marine products and agricultural products that serve as the main raw materials for consolidated subsidiaries Kyuichi Co., Ltd. and Maruhiro Ota Foods Co., Ltd. face the risk of reduced yields and soaring raw material prices due to changes in ocean and land environments caused by climate change, overfishing and illegal fishing of marine resources, and large-scale outbreaks of pests and diseases affecting agricultural products. Furthermore, a shortage of seafood resulting from tightened international fishing restrictions could disrupt market prices and the supply-demand balance, leading to higher procurement prices or difficulty in procurement. Deterioration in the political and economic situation and rising energy costs due to terrorism or conflict are also factors that could increase procurement risk.

In the course of its business operations, the Group handles a large volume of personal information related to registered job seekers. Should a leak or unauthorized use occur, trust in the Group's business services could be significantly undermined, and customers could file claims for damages. As countermeasures, the Group has established a "Personal Information Protection Policy," conducts employee training, and has obtained Privacy Mark certification, among other efforts to strengthen its information management system; however, these measures do not guarantee complete prevention.

The HR Business is provided via websites on the internet. Should a system failure occur due to a natural disaster, human error, disruption of communication lines, software defects, or an external cyberattack, the continuous provision of services could be impeded. In the event of such a failure, the resulting loss of revenue opportunities, decline in trust in the systems and business operations, and occurrence of complaints could affect business results and financial position. The Group has established a system management framework, performs regular backups, and monitors operational status, among other measures, to prevent such failures and enable rapid recovery.

To expand its business, the Group needs to secure personnel with advanced management capabilities and skills in the systems and technology field. If the Group is unable to sufficiently secure and develop the personnel it seeks, or if the outflow of personnel progresses, this could impede ordinary business operations and the expansion of new businesses. Although the Group is promoting the development of training systems and personnel retention measures, difficulty in securing personnel amid intensifying competition in the labor market may affect business results and financial position.

The Company has entered into a term loan agreement with a commitment period totaling ¥148 million with Tokushima Taisho Bank, Ltd. for purposes including M&A funding for subsidiaries. If operating income results in a loss for two consecutive fiscal periods starting from the fiscal year ending November 2026, the Company may violate the financial covenants attached to this agreement. A violation of these covenants could result in financial constraints such as loss of the benefit of time, which may affect business results and financial position. In addition, the Group has not paid any dividends since its establishment and intends to prioritize the enhancement of retained earnings for the time being; the timing of any future dividend payment remains undetermined.

Sales of consolidated subsidiary Maruhiro Ota Foods Co., Ltd. depend mainly on regional specialty product exhibition (event sales) channels at domestic department stores and similar venues. If consumer spending is curtailed due to an economic downturn, if the ability of such exhibitions to attract customers declines, or if events are cancelled due to the spread of infectious disease, the profitability of the subsidiary could decline, which may affect the Group's business results and financial position. In addition, should a quality issue arise with food products manufactured and sold by the subsidiary, this could damage the brand image, result in product recall costs, and lead to a decrease in sales and profit due to business suspension. The subsidiary works to maintain its stores and factories and to manage its manufacturing processes in accordance with various laws and regulations, but these measures do not guarantee complete prevention.