Notice of Incorporation Subsidiary and Mergers between our Subsidiaries

SHIFT Inc. (Head Office: Minato-ku, Tokyo; CEO and Representative Director: Masaru Tange; hereinafter “SHIFT”,  ), which supports customers in creating software services and products that sell, hereby announces that its Board of Directors resolved the following three matters at a meeting held today:

(1) The incorporation of Secure One Co., Ltd. , as a wholly owned subsidiary company by SHIFT (a consolidated subsidiary; hereinafter “Secure One”)

(2) The absorption-type merger of SHIFT SECURITY, Inc. (a consolidated subsidiary wholly owned by SHIFT; *Note 1; hereinafter “SHIFT SECURITY”), into Secure One

(3) The absorption-type merger into Secure One of KRAF inc. (*Note 2; hereinafter “KRAF”) and MAS Lab inc. (*Note 3; hereinafter “MAS Lab”), both of which are consolidated subsidiaries wholly owned by SHIFT SECURITY

*Note 1: Head Office: Shibuya-ku, Tokyo; Representative Director: Shinobu Kaneuchi
*Note 2: Head Office: Miyazaki City, Miyazaki Prefecture; Representative Director: Masashi Fujisaki
*Note 3: Head Office: Shibuya-ku, Tokyo; Representative Director: Toshihiko Takei

1.Reasons for the Incorporation of the Subsidiary and the Organizational Restructuring
With the advancement of AI and IoT technologies and the increasing sophistication and complexity of cyberattacks, cyberattacks in Japan have become more active. According to a survey conducted by the National Institute of Information and Communications Technology (NICT) (*Note), the number of cyberattack-related communications observed by the institute in 2024 increased by more than tenfold compared with ten years earlier (2015), reaching a record high.

(*Note) National Institute of Information and Communications Technology, “NICTER Observation Report 2024”

Under these circumstances, companies are facing a shortage of personnel with specialized knowledge and skills in the field of cybersecurity. At the same time, given the rapid pace of technological evolution in this field, it is difficult to say that systematic and continuous methods for human resource development have been sufficiently incorporated, making it challenging for companies to train and secure such personnel internally.

Since its incorporation in 2016, SHIFT SECURITY has provided cybersecurity services, including vulnerability assessments, across a wide range of industries, including the enterprise sector. By incorporating SHIFT’s expertise in business standardization and systemization cultivated through its quality assurance business, SHIFT SECURITY has incorporated a framework for developing individuals with no prior IT or security experience into cybersecurity professionals and has grown to employ more than 250 security assessors, making it one of the largest in the industry.

In addition, in 2017, SHIFT SECURITY made KRAF a wholly owned subsidiary to serve as its business operations center, and in 2021 incorporated MAS Lab as a group company to provide professional services in the cybersecurity field, where standardization is difficult, thereby strengthening its business foundation and expanding its operations.

Furthermore, in April 2024, SHIFT SECURITY began offering system diagnostics for generative AI usage ahead of the rest of the industry. By actively developing and providing services that incorporate SHIFT’s accumulated know-how in AI utilization, the group has been working to further expand its business.

In light of these developments, SHIFT has decided to incorporate Secure One and carry out an organizational restructuring with the aim of further improving management efficiency and strengthening its business foundation and expertise.

As AI becomes more widely adopted, it is expected that unknown threats and new vulnerabilities will continue to emerge. Accordingly, companies are required not only to enhance their cybersecurity measures but also to incorporate systems that enable continuous monitoring of their security posture.

At Secure One, we will provide services delivered by highly skilled professionals to address complex and high-difficulty security challenges that are difficult to resolve using AI alone. At the same time, with an eye toward future automation, we will actively promote the use of AI in vulnerability assessments to enhance the added value of our services.

In particular, by applying the knowledge that SHIFT has cultivated through the use of AI test agents to the cybersecurity domain, Secure One will advance initiatives to leverage AI in vulnerability assessments. This will enable not only our traditional enterprise customers but also small and medium-sized enterprises to introduce and enhance cyber-security measures, thereby helping to create an environment in which advanced security practices are more widely accessible.

The SHIFT Group aims to realize a safe and secure society by further enhancing its technological capabilities and expertise in the era of collaboration between humans and AI, and through its initiatives in the field of cybersecurity.

Notice of Incorporation Subsidiary and Mergers between our Subsidiaries