Material Doubt Regarding the Going Concern Assumption and Early Resolution
First written in FY2018. 3 of 9 entries say "Mitigated", first in FY2019-Q1. Latest entry: FY2025.
The whole theme swung hardest in 2022: 4 of 13 companies on the "Worse" side.
14 other companies' latest entry also says "Mitigated".
- FY2025MitigatedAnnual report
「For the current consolidated fiscal year, consolidated revenue was ¥6,099.403 million, operating income was ¥527.550 million, and ordinary income was ¥543.866 million.」
The significant events relating to the going concern assumption explicitly disclosed in FY2024 were not reiterated in this filing, and the company recorded operating income, ordinary income and net income attributable to owners of the parent for the current fiscal year. - FY2024WorsenedAnnual report
「The company recorded ordinary losses for 2 consecutive fiscal years in its non-consolidated and consolidated statements of income. ... It was in breach of financial covenants, and events or conditions existed that raised substantial doubt about its ability to continue as a going concern.」
The significant events relating to the going concern assumption were again explicitly disclosed, together with ordinary losses for 2 consecutive fiscal years, a breach of financial covenants, and a decline in net assets due to impairment losses at the U.S. subsidiary and elsewhere. At the same time, the company determined that no material uncertainty existed based on the policies of financial institutions and the securing of funds. - FY2021-Q3MitigatedAnnual report
「The Group had been in breach of a financial covenant requiring it to maintain net assets at 75% of the net assets at the base fiscal year for borrowings or at the end of the fiscal year before the previous consolidated fiscal year, among other matters. However, during the third quarter of the current consolidated fiscal year, the Group implemented measures including a private placement in connection with a business and capital alliance and the execution of a syndicated loan, effectively renewing the M&A loan executed in December 2015. As a result, its financial position improved substantially, and the significant events relating to the going concern assumption were resolved as of the end of the third quarter.」
The company disclosed that its financial position improved through the private placement and renewal of the syndicated loan, resolving the significant events relating to the going concern assumption at the end of the third quarter. - FY2021-Q2RestatedAnnual report
「The Group was in breach of a financial covenant requiring it to maintain net assets at 75% of the net assets at the base fiscal year for borrowings or at the end of the fiscal year before the previous consolidated fiscal year, among other matters, in the previous consolidated fiscal year. Such events or conditions that raised substantial doubt about the Group's ability to continue as a going concern also existed in the second quarter of the current consolidated fiscal year.」
The company explained that the breach of financial covenants and significant events relating to the going concern assumption continued to exist. At the same time, it aims to resolve the matter promptly through support from financial institutions and an increase in net assets through a private placement. - FY2020WorsenedAnnual report
「The Group was in breach of a financial covenant requiring it to maintain net assets at 75% of the net assets at the base fiscal year for borrowings or at the end of the previous consolidated fiscal year, due to consolidated ordinary loss of ¥992.013 million and restructuring costs of ¥184.634 million at the U.S. subsidiary. Events or conditions existed that raised substantial doubt about the Group's ability to continue as a going concern.」
The significant events relating to the going concern assumption were again explicitly disclosed, together with a full-year consolidated ordinary loss and a breach of financial covenants. At the same time, the company stated that it had determined that no material uncertainty existed based on support from its banks. - FY2020-Q2RestatedAnnual report
「(Matters Related to the Going Concern Assumption) There are no applicable matters.」
Although the company recorded consolidated operating and ordinary losses for the quarter, no note on the going concern assumption was included. - FY2019-Q2RestatedAnnual report
「However, as a result of the decisions by the financial institutions, an agreement had been reached not to exercise their right to demand the loss of the benefit of time for repayment. The company therefore determined that no material uncertainty existed regarding the going concern assumption, and the matter did not fall under the notes on the going concern assumption.」
The breach of financial covenants was explained, but the company continued to determine, based on agreements with financial institutions, that no material uncertainty existed regarding the going concern assumption. - FY2019-Q1MitigatedAnnual report
「The company determined that no material uncertainty existed regarding the going concern assumption. Accordingly, the matter did not fall under the notes on the going concern assumption.」
Although the significant events arising from 2 consecutive years of consolidated ordinary losses and a breach of financial covenants continued, the company determined that no material uncertainty existed as a result of agreements with financial institutions and therefore concluded that no note on the going concern assumption was required. - FY2018First statedAnnual report
「The Group was in breach of financial covenants under its loan agreements as a result of recording consolidated ordinary losses for 2 consecutive fiscal years, and events or conditions existed that raised substantial doubt about the Group's ability to continue as a going concern.」
The company first explicitly disclosed substantial doubt about going concern due to 2 consecutive years of consolidated ordinary losses and a breach of financial covenants. It stated that it aims to resolve the matter promptly through discussions with its principal banks, restructuring of the legal tech business, and expansion of the AI and healthcare businesses.