INTLOOP Inc.

The Group's business requires the continuous securing of highly specialized personnel such as consultants and IT engineers, and failure to secure personnel as planned could have a material impact on business and results. As countermeasures, the Group is strengthening contact points with and retention of freelance personnel, enhancing recruitment of dedicated staff, and actively expanding its HR department.

The Group is subject to regulations such as the Worker Dispatching Act, the Employment Security Act, the Subcontract Act, the Personal Information Protection Act, and the Freelance Protection Act, and new legislation or strengthening of existing laws could impose constraints on the business. The Group addresses this by working with external experts such as lawyers and certified social insurance labor consultants, monitoring trends in legal amendments, and building internal education and systems.

Representative Director Hirofumi Hayashi, his spouse, and relatives within the second degree of kinship hold 72.6% of the total number of issued shares, forming a major shareholder structure, and if liquidity declines for some reason, it could result in stagnant trading and deteriorating supply-demand balance in the market. The Group has adopted a policy of improving liquidity through cooperation from major shareholders in secondary offerings and through public offerings of new shares to raise growth capital.

Since major clients are large domestic and overseas companies, restraint of business and IT investment due to economic downturns or deterioration in clients' business performance directly affects the Group's results. As countermeasures, the Group is pursuing diversification of client industries, strengthening relationships as a substitute for clients' personnel procurement departments, and diversifying job types within its services.

Because entry barriers into the Professional Human Resource Solutions & Consulting Business are relatively low, intensified competition due to new entrants with strong capital resources or advanced business operators could affect business and results. As countermeasures, the Group continues to secure specialized personnel, accumulate expertise and personnel databases, provide training to improve quality, and enhance recognition through web marketing.

Hirofumi Hayashi, the founder and Representative Director, plays a crucial role in formulating and deciding management policy and business strategy, and if he becomes unable to continue his duties, it could affect business and results. The Group is working to eliminate reliance on individual judgment by building a system in which outside officers constitute a majority of the Board of Directors, establishing a business execution structure led by each business division, promoting delegation of authority, and advancing KPI management.

If corporate governance fails to function effectively amid the rapid expansion of the business, appropriate business operations could become difficult, affecting business and results. The Group addresses this through appropriate development and operation of its internal control system and thorough compliance with laws, its articles of incorporation, and internal regulations.

Since internal systems and various services are operated on AWS, if a service failure occurs due to disasters, computer viruses, hacking or other external attacks, or software defects, it could affect business and results. The Group aims for stable service operation through system redundancy, strengthened security measures, and establishment of internal systems in the event of a failure.

The Group holds a worker dispatching business license (valid until January 31, 2030) and a fee-charging employment placement business license (valid until December 31, 2029), and if such licenses are suspended or revoked due to legal violations or other reasons, it could affect business operations. Currently, the proportion of revenue based on these licenses is minimal relative to total revenue, and the Group continues to build internal education and systems to ensure legal compliance.

Since the Group handles highly confidential information such as clients' business strategies and core systems in consulting and system development support, an information leak could damage social credibility and affect business results. In addition to guidance and training at the time of joining/registration and periodically thereafter, the Group has established a system for detecting fraudulent behavior through monitoring of access logs on information systems.