Ricksoft Co., Ltd.

In the fiscal year under review, sales of Atlassian licenses accounted for 78.4% of net sales, indicating that the majority of the business depends on the sale and servicing of Atlassian products. If competitiveness declines due to the emergence of competing products or product obsolescence, or if Atlassian changes its management strategy or terminates its partner agreement, this could have a material impact on the Group's financial position and operating results. As a countermeasure, the Group is working to increase the proportion of tools other than Atlassian, such as Workato and Miro, that it offers.

The Group's main customers are corporations, and the Group has expanded its business against a backdrop of rising IT investment appetite among customer companies. If customer companies' appetite for IT investment declines due to deteriorating economic conditions or business trends in Japan or overseas, this could lead to a slowdown in new customer acquisition or a decrease in orders from existing customers. The Group strives to reduce risk by diversifying its businesses, customers, and regions, and by providing high-value-added services.

Competitors, both large and small, exist domestically and internationally, and many similar products exist overseas. If competition intensifies due to improvements in competitors' technology and services or the entry of similar overseas products into the domestic market, this could result in the loss of sales opportunities and a decrease in product sales and service contracts. The Group responds by continuously providing products and services that reflect customer needs and by proactively accumulating and analyzing the latest information.

In the IT industry, new technology development and new product introductions occur frequently, and changes in customer needs are also rapid. If the Group's response to these changes is delayed for any reason, the competitiveness of its services could decline, and unplanned additional investment may become necessary, potentially affecting business performance. The Group aims to respond quickly by building a system to constantly monitor the latest technology trends and by securing and training excellent personnel.

Securing and developing excellent personnel, particularly engineers, is a key challenge for business expansion, and securing personnel with certified technical qualifications is also essential for maintaining partner rank with Atlassian and other tool vendors. If the Group is unable to stably secure the necessary personnel, this could affect its financial position and operating results. The Group is working to improve employee retention rates through continued proactive recruitment activities and the promotion of work style reforms.

In the course of business, the Group handles information assets of numerous customer companies. If important information assets are leaked externally for any reason, this could damage the Group's social credibility and give rise to liability for damages, potentially affecting its financial position and operating results. The Group strives to strengthen its information management system through obtaining ISO27001 and ISO27017 certifications, formulating a basic information security policy, and conducting education and training for officers, employees, and partner companies.

Hiroshi Onuki, the founder and Representative Director, plays a key role in everything from determining management policy and business strategy to building and commercializing the business model, and the Group remains highly dependent on his management capabilities across operations as a whole. If, for any reason, he becomes unable to continue carrying out his executive duties, this could affect the Group's financial position and operating results. The Group is working to move away from excessive dependence on a specific individual by strengthening information sharing among officers and department heads at board meetings and other venues, and by improving its management organization.

In M&A transactions and capital/business alliances aimed at accelerating growth, if contingent liabilities or unrecognized liabilities that could not be identified in prior due diligence come to light, or if business development does not proceed as planned, recovery of invested capital may become difficult. The Group conducts detailed prior due diligence on the financial condition and contractual relationships of target companies, but the timing and likelihood of occurrence are uncertain. The Group addresses this risk through thorough pre-investment due diligence and sufficient examination of the rationality of business plans.

The Group has established a subsidiary in the United States to plan, develop, sell, and support its proprietary software, but if business development does not proceed as expected, this could affect the Group's financial position and operating results. While the Group intends to expand its business through appropriate organizational scale and staffing, it also faces risks specific to overseas operations. The Group strives to reduce risk by regularly monitoring and managing business progress and issues.

The Group's business is conducted via the internet and is highly dependent on communication networks. If a major system failure occurs due to a sudden surge in access load, an external cyberattack, a natural disaster, an accident, or other unforeseen trouble, this could affect the Group's financial position and operating results. The Group strives to provide stable services by strengthening its system management framework, including server equipment and security enhancements.