Asgent, Inc.

With the launch of new products and the rollout of smart security services, unforeseen risks such as excessive staffing or equipment procurement may materialize. In addition, if the profitability of investees in overseas security-related startups, including those in Israel, declines, impairment processing may become necessary, which could adversely affect the Company's financial condition and operating results. The Company is promoting the acceleration of services by combining the launch of one-and-only products with security know-how, but continuous investment is indispensable for realizing this.

In the internet security and cloud computing markets, fierce development and sales competition takes place on a daily basis, and new models or products with revolutionary technology that surpass the Company's products, as well as low-priced competing products and services, may emerge. If the Company is unable to take effective countermeasures, its business performance could be materially affected. Rapid technological innovation in the market carries the risk of quickly rendering competitive advantages obsolete in a short period of time.

It is considered impossible to completely eliminate bugs in advanced software. The Company conducts thorough testing by specialized personnel, but limits test items from a cost-effectiveness perspective. Bugs in products from overseas vendors are handled at the vendor's expense, so direct losses to the Company are limited, but this may lead to a decline in sales of the relevant products. For in-house developed products, the Company bears direct responsibility, and if a significant bug is discovered, it may cause direct damage to business performance.

The Company takes care not to infringe on the intellectual property rights of third parties, but the possibility of infringement due to force majeure cannot be excluded. It is difficult to predict how third parties' patents, utility models, trademarks, copyrights, etc. may apply in the Company's business fields, and if patents or other rights of which the Company is unaware are established, there is a risk of being sued for damages or an injunction against use. If litigation occurs, it may adversely affect business performance.

In the course of MSS (Managed Security Services), consulting, and customer maintenance support operations, the Company has opportunities to handle customer information, and if an information leak occurs, it may bear liability for damages. The Company mandates the establishment of detailed regulations and their appropriate operation, but even with such measures in place, the risk of leakage cannot be completely eliminated. If an information leak occurs, in addition to financial losses, there are concerns about business deterioration due to loss of customer trust.

Securing excellent personnel in the fields of sales, technology, and business management is an important challenge for achieving growth, and in particular, in security services, hiring capable engineers with the latest technology is essential. If the Company fails to secure excellent personnel, it may affect its business development and performance. In addition, hiring excellent engineers pushes up recruitment costs and personnel expenses, which may affect the Company's overall financial condition.