Slogan Inc.

The Group's major clients are companies in new industrial fields, primarily startups and venture companies, and if an economic downturn or a slowdown in the growth of emerging markets occurs, the recruitment activities of these client companies may contract, potentially affecting business performance. As a countermeasure, the Group has built a structure that minimizes the impact of economic fluctuations by concentrating on companies related to digital transformation and focusing on job seekers with a strong desire to challenge themselves in new industrial fields.

If competition intensifies in the human resources-related business market due to existing operators expanding their share or the emergence of new entrants, this could adversely affect the Group's business performance. The Group's sources of competitiveness are its expertise specializing in new industrial fields since its founding and a high-quality community of people and organizations, but there is a risk that these advantages could be eroded.

The Company has received a license as a paid employment placement business operator from the Minister of Health, Labour and Welfare (License Number: 13-U-302267), and if it falls under any of the disqualifying grounds stipulated in Article 32-9 of the Employment Security Act, the revocation of the license could cause significant disruption to business operations. In addition, strengthened legal regulations could impose restrictions on the business. As of the date of submission, the Company is in the process of renewing the license ahead of its expiration date (May 31, 2025).

Due to the nature of the recruitment placement and job advertisement businesses, the Group holds the personal information of a large number of registered users. If an information leak occurs due to a violation of regulations or an unforeseen event, it may cause significant disruption to business operations through claims for damages and loss of social credibility. As a countermeasure, the Group has established a personal information protection policy based on its Privacy Mark certification (obtained in 2018), conducts regular education and guidance, and performs periodic checks by internal audit personnel.

In the course of operating each service, the Group handles customer information and confidential information, including personal information, and there is a risk that information could be leaked or lost due to intentional or negligent actions by employees or contractors, or attacks by malicious third parties. If an information leak occurs, it could result in loss of social credibility, a decline in competitiveness, claims for damages, and significant costs to improve the security environment. The Group addresses this through employee education, improvements to security systems, and enhanced access management.

Due to the nature of the recruitment placement business, securing job seekers is fundamental to business performance. However, if unexpected changes occur in corporate recruitment needs due to a decline in the working population from the declining birthrate and aging population or changes in the labor market, providing matching services may become difficult. The Group has built a structure that is less susceptible to the impact of declining generational population by focusing on talent with a strong desire to challenge themselves in new industrial fields, but this risk cannot be completely eliminated.

As of the end of the fiscal year under review, the number of potential shares from stock acquisition rights was 266,500 shares, representing 9.69% of the total number of issued shares of 2,751,375 shares. If these rights are exercised, the value per share may be diluted, potentially affecting the future share price. The Group has taken measures to disperse the impact of dilution by attaching conditions that allow the rights to be exercised in stages during the exercise period.

Services aimed at new graduate students, which account for the largest proportion of sales, are affected by the government's job-hunting and recruitment activity schedule rules (public relations activities starting from March 1, recruitment selection starting from June 1, job offer date from October 1) and agreements from the Council on Employment Issues. If these policies change significantly beyond the Group's forecasting and understanding, it may be forced to adjust its business activities, which could affect its business performance.

In order to capture business opportunities arising from the expansion of the new industrial fields market, it is essential to recruit and develop personnel who can proactively respond to change. However, if recruitment and development do not proceed as planned, or if there are frequent vacancies due to employee turnover, this could affect business activities and performance. The Group is engaged in proactive recruitment activities, establishing optimal personnel management, and building training systems, among other efforts.

Because the main business, "Goodfind", recognizes revenue based on the joining date of new graduate students, sales and operating profit are structurally concentrated in the first quarter (April joiners). In the fiscal year under review (FY2025, ending February 2025), first-quarter sales were ¥542,088 thousand with operating profit of ¥231,581 thousand, while second-quarter sales fell sharply to ¥231,560 thousand with an operating loss of ¥67,570 thousand. It should be noted that quarter-to-quarter performance comparisons are not suitable for assessing trends in operating results.