FIXER Inc.

The majority of the public cloud services handled by the Group are Microsoft Azure, and a contraction of that service's market or a change in the management strategy of Microsoft Corporation (U.S.) would directly affect the business. As a countermeasure, the Group is promoting non-dependence on a specific cloud through the use of containerization technology, and is advancing multi-cloud adoption through obtaining AWS Select tier certification and AWS Public Sector Partner certification; however, there remains a risk that utilization of AWS may not progress as planned.

Many of the Group's services are provided based on a partner network agreement with Microsoft Japan Co., Ltd., and if the agreement were terminated, a decrease in Resale incentives and a decline in profit margins would be expected. At present, no facts constituting grounds for termination have arisen, and a favorable relationship is maintained; however, in the event of termination, the Group's policy is to limit the impact by procuring Microsoft Azure through another company or considering migration to another cloud.

The Group has expanded its cloud business against the backdrop of active IT investment by client companies aimed at DX, but if client companies' IT investment contracts due to deterioration in domestic and overseas economic conditions or business climate, this could affect business development, operating results, and financial condition through a slowdown in growth of the cloud market. No specific countermeasure by the Group is explicitly stated, but the Group is working to stabilize revenue by expanding stock-type and recurring-type revenue.

In the cloud services market, an increase in new entrants is expected against the backdrop of growing DX needs, and there is a risk that competition will intensify due to the entry of major capital and improvements in the technological capabilities and services of competitors. The Group is seeking to differentiate itself through providing added value such as technical support and educational services for Resale, accumulating construction and operation automation technology in Managed Services, and expanding recruitment of young engineers, but profit levels may deteriorate due to intensifying price competition.

In the IT industry, the pace of technological innovation is rapid, and industry standards and user needs change quickly; if technological innovation occurs at a pace exceeding the Group's response capability, there is a risk of obsolescence of the products and services offered and a decline in competitiveness. In particular, in the generative AI business, the pace of technological change is fast and business fluidity is high, and additional development expenditure to respond to this may increase. The Group is responding through actively gathering the latest information, accumulating technology, and engaging in product development, as well as creating business opportunities through hospital collaborations.

The Group's growth and profits depend heavily on securing and developing excellent personnel with specialized expertise such as IT skills, and if recruitment and development do not proceed as expected, this will affect business development, operating results, and financial condition. For new graduate recruitment, the Group is strengthening relationships with schools with a track record of hiring; for mid-career recruitment, it utilizes employee referrals; and for development, it has established an OJT system led by young senior employees, but the risk remains that securing personnel may become difficult due to intensifying competition in the IT talent market.

Because confidential information such as client companies' personal information and system technology information is handled in the process of providing services such as cloud integration, if information leakage or falsification occurs due to computer viruses or unauthorized access, this could result in damage claims from customers and loss of trust. As countermeasures, in addition to establishing the "Information Security Management Regulations," the Group has obtained ISO/IEC 27001, ISO 9001, ISO/IEC 20000, ISO/IEC 27017, and Privacy Mark certifications and has established an information management system.

Seiichi Matsuoka, the founder and Representative Director and President who holds 65.09% of the voting rights of the total issued shares, plays an extremely important role in the determination and execution of management policy and business strategy, and if he were to become unable to perform his duties, this could affect business development, operating results, and financial condition. The Group is working to build an organizational business management structure that is not excessively dependent on a single individual, but at present the degree of dependence remains high.

In Project-based Services, estimates are prepared based on the man-hours and difficulty anticipated at the time of order receipt; however, if unforeseen circumstances occur after receiving an order and man-hours increase significantly, unprofitable projects may arise, affecting operating results and financial condition. In addition, transactions with public institutions and similar entities may require contract-based agreements, and delays until contract conclusion or changes in project scale or content may cause the timing of revenue recognition to deviate from the original schedule, creating a risk of fluctuation in quarterly and annual performance.

The Group positions M&A, capital and business alliances, and the establishment of new companies as effective means of responding to needs in the cloud market and enhancing corporate value; however, if contingent liabilities or off-balance-sheet liabilities that could not be identified through prior due diligence arise, or if business development does not proceed as planned, recovery of the investment may become difficult, affecting financial condition and operating results. The Group's policy is to conduct detailed prior due diligence on the target company's financial condition, contractual relationships, and other matters and to fully consider the risks before proceeding, but it is difficult to completely eliminate potential risks.