Logizard Co., Ltd

Amid rapid changes in IT and internet-related technologies, including AI, the Company provides cloud services, and there is a risk of adverse effects on its business and performance if it fails to respond to environmental changes in a timely manner. The Company is engaged in the continuous development of new technologies and services and the training and securing of talented personnel, but it cannot be denied that the speed of technological innovation may exceed its capacity to respond.

The technical barriers to entry into the inventory management system and logistics cloud service market are not necessarily high, and there is a risk that entry by competitors, including major companies with financial strength and brand power, could intensify price competition and lead to the provision of services with strong customer appeal. The Company strives to improve customer satisfaction by providing services that meet customer needs, but a deterioration in the competitive environment could directly affect its business performance.

There is a risk that system failures could occur due to increased server load from concentrated access, hardware or software malfunctions, human error, computer viruses, natural disasters, cyber-attacks, etc., disrupting the provision of cloud services. The Company has implemented a 24-hour monitoring system and measures to ensure stable system operation, but in the event of a failure, this could lead to a loss of customer trust and a decline in business performance.

In providing cloud services, the Company handles personal information of business partners, shippers, and others, and there is a risk of leakage, loss, or unauthorized use of personal information due to unauthorized external access, human error in system operation, or intentional acts by employees. The Company has taken measures such as obtaining Privacy Mark certification and establishing a personal information protection management system, but if a leak occurs, it could seriously affect business performance and operations through loss of trust and claims for damages.

The training and securing of IT engineers, systems engineers, and sales personnel with knowledge of logistics operations is essential for business expansion, but there is a risk that business performance could be affected if recruitment and internal training do not proceed as planned, or if personnel in key roles leave the Company. The Company is actively promoting recruitment and training and working to improve employee engagement, but securing personnel remains highly challenging amid intensifying competition in the IT talent market.

In contracted development such as software customization and the addition of new features, there is a risk that profitability could deteriorate due to defects occurring after delivery, changes or additional requests to specifications from customers, additional man-hours, or unforeseen circumstances during development. The Company aims for efficient system construction through appropriate estimates and thorough project management, but if unforeseen circumstances arise, this could directly affect business performance.

There is a risk that if a serious defect or malfunction occurs in the software of the Company's cloud services, the provision of services could be suspended while corrections are made, and the Company could face claims for damages from customers. The Company has established an inspection system within its development department and implements thorough quality testing, as well as a system for promptly providing fixes when defects occur, but serious malfunctions could significantly affect business performance.

There is a risk that shortages in the supply of raw materials such as semiconductors could make equipment difficult to obtain, extend delivery times, or increase procurement prices, making procurement forecasts uncertain. The Company procures equipment necessary for providing its services, and if procurement difficulties materialize, this could affect its service delivery system and business performance.

It is difficult for the Company to verify and identify all patent rights, copyrights, and other intellectual property rights established in each country where it conducts business, and it cannot be completely ruled out that technologies used in the Company's products may infringe on the intellectual property rights of third parties. If infringement is determined, this could affect business performance through loss of credibility, claims for damages, or injunctions against product sales.

If decoupling progresses due to worsening conflict and division between nations, there is a risk that the Company could be forced to reconsider its supply chain and the regions in which it provides services, affecting its business performance. While some de-risking trends are also observed, rising geopolitical risk is bringing uncertainty to the Company's business environment.