Mirai Works Inc.

Continuous business operation and expansion require the ongoing securing of highly specialized personnel, including freelance consultants, and retention of such personnel is recognized as an important issue. As countermeasures, the Company is promoting enhanced communication with freelance consultants and the recruitment and development of staff in charge; however, if these initiatives do not proceed as planned, this could affect business results and financial condition.

The Company is subject to regulation under the Worker Dispatching Act (dispatch business license valid from November 1, 2021 to October 31, 2026), the Employment Security Act (fee-charging employment placement business license valid from July 1, 2025 to June 30, 2030), the Act on the Protection of Personal Information, the Subcontract Act, the new Freelance Act, and other relevant laws. If the Company falls under grounds for disqualification or violates applicable laws, there is a risk that business operations could become impossible due to business suspension or license revocation. In addition, legal amendments or changes in interpretation resulting from changes in the social environment surrounding the labor market could have an adverse effect on the business.

Because the market for services for professional human resources is expected to grow in the future, there is a possibility that domestic and overseas operators will enter the market as new competitors. If new entrants invest heavily in sales and advertising expenses, there is a risk of price declines and loss of opportunities to secure projects. Additional expenditures may also become necessary to respond to changes in client companies' needs for professional human resources.

The Company recognizes the need to launch new services in response to the growing market, but there is a risk that services which fail to meet customer and personnel needs and are unprofitable will increase. When launching new services, temporary costs are incurred, such as personnel recruitment and development costs, outsourcing and advertising expenses, and software development and capital expenditures, and there is a possibility that the originally planned investment recovery will not be realized due to changes in the market environment or unforeseen circumstances.

In the Professional Human Resources Business, the Company's main business, highly confidential information is handled at client companies, including business strategy formulation, business reform support, and large-scale system construction PMO. The Company conducts guidance and education on the handling of confidential information for all employees and professional human resources at the time of joining, registration, and commencement of work, as well as on a periodic basis; however, if a leak of a client company's confidential information occurs due to negligence or carelessness, this could damage social credibility and affect business results.

The Worker Dispatching Act, the Employment Security Act, and the Act on the Protection of Personal Information require the proper management of personal information, and the Group is thorough in ensuring strict compliance with its management rules. If personal information is leaked for any reason, this could result in a loss of social credibility and adversely affect business results.

Although measures such as load balancing of web servers, redundancy of database servers, monitoring of server resources, regular backups, and security diagnostics have been implemented, if trouble occurs in service management servers or delivery systems, there is a possibility that failures will occur in service operations. In the event of a failure, in addition to the impact on business results, there is also a risk of litigation and claims for damages.

Yoshiharu Okamoto, the founder and Representative Director and President, has demonstrated leadership in management policy, business strategy, and service concepts as the representative since the Company's founding. The Company is working to reduce this dependence by delegating authority to each business division; however, if any unforeseen event occurs affecting him, this could affect business results.

In accordance with accounting standards for impairment of fixed assets, the Company periodically calculates future cash flows and other factors related to its held assets and recognizes and measures impairment losses. It is anticipated that impairment losses may be recorded due to changes in the business environment and other factors, which could affect the financial condition and business results.

The Company has established compliance with domestic and international laws and regulations, as well as internal rules and regulations, as a code of conduct, and confirms the status of compliance through internal audits and other means. However, the possibility of situations arising that violate laws and regulations, or of misconduct by related parties occurring, cannot be completely ruled out, and if such events occur, this could affect business results.