Safie Inc.

The company has continuously recorded operating losses from FY2018 (ended December 2018) through FY2025 (ended December 2025), resulting in accumulated losses. Because its subscription-based recurring revenue model requires customer acquisition costs and R&D expenses to be incurred in advance, short-term losses tend to persist by structural design. If the cost burden associated with user acquisition and organizational expansion continues to grow, the company may be unable to achieve sustained profitability.

The company holds and manages highly sensitive information, including customers' personal information such as addresses and names, as well as recorded video footage and facial recognition data, creating a risk of leakage due to unauthorized access or internal negligence. Although the company has obtained ISO/IEC 27001, 27017, and 27701 certifications and implemented encryption measures, any leakage that occurs could damage trust and result in compensation and indemnification costs, affecting business performance. There is also an inherent risk of leakage occurring via outsourced business partners.

Although the company maintains the No. 1 market share in the domestic cloud video platform market, there is a risk of intensifying competition from existing players and the emergence of similar services from new entrants. There is also a possibility that overall demand in the cloud business could fall significantly short of expectations, and either scenario could have a wide-ranging impact on business performance. The company seeks to maintain its competitiveness through continuous development of proprietary technology and strengthening of its sales network.

The company continues to make upfront investments in the development of new services such as image analysis, device integration, and partner-linked solutions, but monetization is still at an early stage. There is a trade-off in that scaling back upfront investment would affect new order intake and user acquisition, while continuing the investment would lead to expanded losses. If monetization does not proceed as expected, or if the business becomes subject to new regulations, an impact on business performance is anticipated.

The company generates a certain proportion of its sales through major sales partners, with whom it has built close relationships including capital and business alliances. However, changes in a partner's management policy, sales strategy, or transaction terms could directly affect the business and its performance. The company has set a policy of expanding direct sales from new customers in order to reduce dependence on specific partners.

In addition to existing regulations such as the Telecommunications Business Act, new or strengthened privacy-related laws and internet business regulations may be introduced both domestically and overseas. Because the internet transcends national borders, the company may also be affected by legal regulations in foreign countries. If costs of complying with new regulations arise or business constraints are imposed, this could affect business performance.

The servers supporting the business are managed on a cloud service platform, and while measures such as redundancy, backups, and recovery drills have been implemented, unforeseen events such as large-scale natural disasters or human error could force a service outage. Because a service outage would directly lead to customer attrition, loss of trust, and reduced sales, it constitutes a significant risk to business continuity.

Actively hiring engineering personnel is essential for business expansion, but if recruitment does not proceed as planned or engineers leave the company, reduced development capability could constrain business growth. Amid intensifying competition in the IT talent market, securing excellent personnel has become an industry-wide challenge. The company is working to expand its workforce through in-house training and enhanced recruitment, but there is no guarantee that sufficient personnel can be secured.

The Group owns proprietary software and programs, and has established an in-house intellectual property organization to file and manage patents and trademarks; however, it is difficult to fully identify third parties' intellectual property rights. If the company infringes on another company's patent or trademark rights, this could result in claims for damages, injunctions, or payment of usage fees, affecting business performance. Conversely, if the company's own intellectual property is infringed, legal response costs would also be incurred.

The company has adopted a policy of promoting overseas expansion in order to achieve high growth, but this entails higher risks than domestic operations due to differences in business customs, business environment, and legal regulations. If market development and monetization do not proceed as expected, overseas investment could become a source of losses and affect business performance. At present, specific details of countermeasures have not been disclosed.