Riskmonster.com

The Company holds a large volume of member company information and confidential information, and if such information is leaked due to unauthorized external access or deficiencies in internal control systems, this could have a material impact on business performance through claims for damages or loss of social credibility. As countermeasures, the Company has obtained ISO/IEC27001 and ISO/IEC27017 certifications and the Privacy Mark, and conducts regular employee training and internal audits.

Service suspension may occur due to unauthorized external communication interference, core network failures, malfunctioning equipment or programs, natural disasters, and other causes. In addition, since AWS is used as the Company's main infrastructure, malfunctions or unforeseeable events on the AWS side could also affect business operations. The Company has implemented countermeasures such as 24-hour, 365-day monitoring, system duplication, regular recovery testing, and obtaining ISO/IEC20000 and ISO9001 certifications.

While the Credit Management Services business enjoys first-mover advantages, there are concerns that an increase in new entrants could lead to a decrease in the number of member companies and deterioration in profitability due to intensifying competition. In the groupware service "J-MOTTO" as well, the number of competitors has increased, and product value has tended to decline, making differentiation a challenge. The Company seeks to differentiate itself through customization of proprietary functions and follow-up activities such as call centers and operation briefing sessions, but changes in the competitive environment could have a material impact on business performance.

The groupware service "J-MOTTO" is provided based on a software license agreement with Neo Japan Co., Ltd., and if the license agreement is not continued for any reason, providing the service would become difficult. Although the relationship with Neo Japan is currently favorable, this, combined with profitability deterioration due to intensifying competition, could affect the continuation of the service.

Amid rapid changes in internet-related technologies and business models, if the Company fails to timely and effectively adopt and apply new technologies and business models, existing services could become obsolete, potentially having a material impact on business performance. The Company plans to actively invest in adding functions to its ASP/cloud systems and strengthening security, but responding to these changes may require considerable time and expense.

The Company is developing new businesses utilizing know-how cultivated in the Credit Management Services business, but these include unfamiliar fields with uncertain elements. If business alliances or new business development encounter obstacles, or if investment costs exceed expectations, this could affect business performance. The possibility of unforeseeable events occurring cannot be denied at present.

The Company's officers and employees cooperate with subsidiaries by concurrently serving as officers or being seconded to them, but if competition arises between the Company's business and subsidiary businesses, or for other reasons, synergies may no longer be realized. In such a case, despite the concurrent-service and secondment arrangements, this could adversely affect the Company's business results and financial condition.

It is difficult to fully grasp the patent rights and other intellectual property rights held by other companies in the business fields of the Company's group, and there may be intellectual property rights that have not been identified. If a third party's patent rights are newly established in the future and the Company receives a claim for damages or an injunction against use, this could affect business performance. To date, the Company has not received any claims alleging infringement of other companies' intellectual property rights.

The organization is small in scale, with 185 employees on a consolidated basis and 117 on a non-consolidated basis, and timely acquisition of talented personnel amid business expansion is a challenge. If the Company is unable to hire the necessary personnel, hiring is delayed, or training after hiring is insufficient, this could hinder efficient business operations. If a significant number of employees resign within a short period, this could also adversely affect business operations.

Given the nature of the service that provides corporate credit rating information, there is a possibility that companies subject to ratings may file lawsuits objecting to the rating information. While the Company believes the risk of lawsuits from third parties is limited due to confidentiality agreements with member companies, if disputes become prolonged, this could adversely affect business performance.