Succeed co.,ltd.

The recruitment placement business (Employment Security Act) and staffing dispatch business (Worker Dispatching Act) require permits from the Minister of Health, Labour and Welfare, with the current permit period running from June 1, 2025 to May 31, 2030. If disqualifying events or legal violations occur, the Company may be subject to permit revocation or business suspension orders, making it difficult to continue operations. A system has been established whereby the Compliance and Risk Management Committee determines and monitors risk countermeasures.

The absolute decline in the number of children and students is leading to a decrease in home tutoring membership and a contraction of cram schools and educational institutions, threatening the revenue base of the Education Personnel Support Business and Private Tutoring School Business. In the Private Tutoring School Business, there is also a risk that new store opening plans may not proceed as expected. The Welfare Personnel Support Business may also be affected by the decline in the number of nursery schools and after-school childcare facilities.

During an economic downturn, companies may curb hiring, causing the job-offer-to-applicant ratio to decline, which poses a risk of decreased sales in the recruitment placement and staffing dispatch businesses. In the Private Tutoring School Business, a reduction in household spending on education could lead to a decrease in the number of students. The Company is concerned about the impact of a prolonged situation in Ukraine and rising prices spreading to the overall economy, and plans to respond by creating new businesses.

The Group relies on search engines for customer acquisition across its services, creating a risk that changes in ranking policies or system troubles could reduce the effectiveness of customer acquisition. Furthermore, the spread of AI-generated summary displays is increasing cases where users complete their objectives without visiting individual websites, potentially reducing website traffic. A dedicated department has been established to respond to changes in search engine specifications.

The Group holds a large amount of personal information on customers and registrants, as well as confidential business information. Should an information leak occur, it would damage the Group's credibility and brand value and adversely affect business performance and financial condition. The Group has established Information Security Management Regulations and Network Management Regulations, and its core operational systems utilize cloud services to enhance security.

Representative Director and President Tsuyoshi Takagi plays a critical role in formulating overall management policy and business strategy, and any unforeseen event affecting him could have a material impact on the Company's business results. While the Company is working to build a management structure that eliminates excessive dependence on him, the current level of dependence remains high.

In the recruitment placement service, there is an industry practice of refunding placement fees according to the retirement period if a job seeker voluntarily resigns within three months of joining a company. The Company records a refund provision based on past results, but if the refund rate exceeds expectations, it could affect business results and financial condition.

The Private Tutoring School Business records tangible fixed assets such as school buildings and classrooms. If profitability declines due to deteriorating business performance, concerns over investment recovery, or changes in the business environment, the Company may need to recognize an impairment loss. In accordance with the "Accounting Standard for Impairment of Fixed Assets," when undiscounted future cash flows fall below book value, the book value is written down to the recoverable amount.

The Education Personnel Support Business and Welfare Personnel Support Business concentrate personnel at the head office, while the Private Tutoring School Business operates classrooms concentrated in Kanagawa Prefecture. If a major disaster such as a Tokyo metropolitan earthquake or Nankai Trough earthquake occurs, facilities could be damaged and operations forced to halt, potentially causing a material impact on business results and financial condition.

Administrative changes to education-related systems occur frequently, including revisions to the Courses of Study, the school attendance support fund system, the Osaka City cram school fee subsidy program, and structural reform special zones and national strategic special zones, all of which affect the Education Personnel Support Business and Private Tutoring School Business. Failure to detect such institutional changes early and respond appropriately could result in missed business opportunities or a decline in customer acquisition.