Interworks Confidence Inc.

In M&A and capital alliances aimed at acquiring management resources and creating synergies, there is a risk that if the economic environment deteriorates after acquisition, market growth slows, talent or customers are lost, or PMI does not proceed smoothly, the expected synergies may not be realized and the investment amount may not be sufficiently recovered. As of March 2026, the Group recorded goodwill of ¥1,574 million (arising from, among others, the consolidation of Let's-I Co., Ltd. in April 2025 and BRAISE Co., Ltd. in July 2025), and there is also a risk of significant goodwill impairment. The Group strives to identify investment risks through prior due diligence and careful investigation of the target company's shareholders.

The Group holds licenses from the Minister of Health, Labour and Welfare to operate a worker dispatching business under the Worker Dispatching Act and a fee-charging employment placement and recruitment information provision business under the Employment Security Act. If the Group's license is revoked or a business suspension order is issued, this could have a material impact on business operations. In addition, if related laws and regulations are amended in response to changes in the labor market, this could result in increased compliance costs or force a review of the business model. The Group strives to ensure thorough legal compliance through its Compliance Committee, Risk Management Committee, internal audits, and regular compliance training.

In the HR business, employees may come into contact with confidential information of client companies (such as new product development), while the Media & Solutions Business and the HR Solutions Business: Recruitment Placement hold large amounts of job seekers' personal information and information on recruiting companies. If confidential information or personal information is leaked or misused due to negligence, intentional misconduct, or cyberattacks, this could result in a loss of social credibility, deterioration of corporate image, termination of business relationships, or litigation, which could have a material impact on the Group's business and performance. The Group addresses this through the establishment of personal information protection regulations, operation under the Privacy Mark system, and strengthening of information management systems such as firewalls and database encryption.

Various services such as recruitment media and internal operations depend on job listing and job seeker information stored on servers. If a large-scale system failure or network disconnection occurs due to natural disasters, concentrated access, unauthorized external access, computer viruses, or similar causes, service provision may be suspended, potentially causing damage to users and client companies. This could result in a loss of trust and claims for damages, which could affect the Group's business and performance. The Group strives for stable operations through 24-hour server monitoring, regular backups, and the establishment of business continuity plans.

If a major earthquake, typhoon, or other natural disaster or accident occurs in the Kanto region, where the head office is located, resulting in facility damage or power supply restrictions, or if a large number of employees become infected or subject to movement restrictions due to a pandemic, business operations at the head office could become difficult. It may also become difficult for temporary staff to work at their assigned workplaces, which could have a material impact on performance. The Group has formulated a business continuity plan and has established a system to promptly set up an emergency response headquarters in the event of such occurrences.

Securing, developing, and retaining specialized talent (including freelancers) in areas such as gaming/entertainment and manufacturing is a prerequisite for business expansion. If intended talent acquisition cannot be achieved due to intensifying competition for talent in the labor market or changes in employment conditions, or if talent attrition proceeds beyond expectations, this could affect the Group's business and performance. As countermeasures, the Group is working to enhance engagement by improving employee benefits, supporting reskilling, and expanding flexible work arrangement systems.

The rapid evolution of AI and generative AI technology poses a risk of decreasing or shifting demand for staffing and placement talent in certain occupations within the gaming industry and other sectors. At the same time, if the Group falls behind in securing and developing advanced talent capable of handling AI technology, or falls behind competitors in introducing AI into services such as recruitment media, it could lose competitiveness. In addition, if copyright infringement, information leaks, or ethical issues arise from the use of generative AI, there is also a risk of a decline in social credibility.

In job seeker recruitment for the HR Solutions Business: Recruitment Placement, the Group utilizes databases provided by other companies, creating a risk that changes in the provider's policies or terms of use could prevent continued use as before. If the Group is unable to secure a sufficient number of job seekers as a result, this could directly affect the business and performance of the placement business. As a countermeasure, the Group is working to diversify its information sources through partnerships with multiple companies and to accumulate its own proprietary job seeker data.

The largest shareholder, Amuse Capital Co., Ltd. (holding 22.45%), together with a related shareholder group (Amuse Capital Investment Co., Ltd. 17.60%, Hayao Nakayama 6.50%, and A.C. Kikaku Co., Ltd. 1.64%), holds a combined 48.19% stake. If these shareholders sell their shares, this could affect the market price. In addition, if shares are transferred to a specific third party, the transferee's policies could affect the Group's business strategy. Although it is currently understood that these shares are held as a medium- to long-term net investment, the possibility of future sales depending on stock price movements cannot be ruled out.

The Group's staffing services and recruitment media services are heavily dependent on client companies' hiring plans, and are therefore affected by macroeconomic trends in Japan. If client companies' hiring appetite declines significantly due to an unexpectedly sharp economic downturn, or if terminations of staffing contracts increase, this could affect the Group's business and performance. As a countermeasure, the Group is pursuing customer development that avoids excessive dependence on specific industries or companies, and is expanding into sectors such as the gaming and entertainment industry, which are relatively resilient to economic fluctuations.