Fukui Computer Holdings,Inc.

Sales related to CAD software accounted for 95.4% of total sales in the consolidated fiscal year under review, and since the Group specializes in the architecture, surveying, and civil engineering fields, its performance is significantly affected by trends in the construction industry. In addition, because the Group utilizes a nationwide sales agency network, deterioration in relationships with agencies could affect performance. The Group is working to reduce this risk through the formulation of its medium-term management plan and initiatives on priority measures.

While the Group's core products are centered on software for Windows, there is an urgent need to support iOS, Android, and other operating systems, cloud services, wearable devices, and multiple browsers. Changes in the construction industry's business systems due to the spread of BIM/CIM are also anticipated, and delays in responding to these changes or a temporary increase in development costs associated with technological innovation could affect performance. The Group is proceeding with the development of a system capable of responding to these changes, but recognizes the risk of delays in completion.

In the software industry, numerous patent applications have been filed, and there is a possibility that the Group's products may infringe on other companies' patent rights, as well as a possibility that the Group's own patent rights may be infringed upon by others. The Group addresses this through investigations by its retained patent attorney and deliberations by the Risk and Compliance Committee, but depending on the case, resolution may require significant time and expense, potentially affecting performance.

Through the provision of applications via SaaS, the Group holds personal data of other companies in the cloud, and if an information leak were to occur, it could have a material impact on performance. Although the Group has taken measures such as formulating and publishing a personal information protection policy and establishing an ISMS-compliant information security system, risk remains despite these measures.

The Group makes investments in startups and venture companies, but depending on the business conditions of investee companies, valuation losses on held securities may occur, which could affect operating results and financial condition. There is no guarantee that such investments can be sold at a price exceeding their acquisition cost, and there is a possibility that expected capital gains may not be realized or that invested funds may not be recovered.