Risk of Loss of the Benefit of Time Due to Financial Covenants
First written in FY2016. 4 of 15 entries say "Restated". Latest entry: FY2027-H1.
Shirohato moved to the "Worse" side of this theme in 2021, 2 years before the typical company in this theme (2023).
43 other companies' latest entry also says "Restated".
- FY2027-H1RestatedAnnual report
「The ¥1,641.275 million borrowed by the Company from Sumitomo Mitsui Banking Corporation is subject to financial covenants. The covenants are as follows, and there have been no changes to their content since the end of the previous fiscal year.」
The financial covenants attached to the borrowings remain in effect, requiring maintenance of the interest coverage ratio, avoidance of losses for 2 consecutive fiscal years, avoidance of a negative net worth, and maintenance of 株式会社歯愛メディカル's ownership interest at 50.3% or more. - FY2026-H1ReframedAnnual report
「As a result, the syndicated loan agreement entered into on 28 March 2023 was terminated as of the same date, and the related financial covenants also ceased to apply.」
The former syndicated loan agreement and its related financial covenants ceased to apply following the refinancing. The new special overdraft agreement and term loan, however, include financial covenants requiring the maintenance of an interest coverage ratio, avoidance of losses for 2 consecutive fiscal years, avoidance of a negative net worth, and maintenance of 株式会社歯愛メディカル's ownership interest at 50.3% or more. - FY2025MitigatedAnnual report
「Regarding the sale of the former head office property, the Company fulfilled on 31 March 2025 its obligation to sell the property, which had arisen from failure to satisfy the financial maintenance requirements under the syndicated loan agreement.」
The Company fulfilled on 31 March 2025 the obligation to sell the former head office arising from the breach of the financial maintenance requirements. While the obligations arising from the financial covenants have been addressed, the covenants following the refinancing remain in effect. - FY2025-H1MitigatedAnnual report
「The Company has entered into a syndicated loan agreement covering ¥2,952.462 million in borrowings, and the agreement specifies financial maintenance requirements. As these requirements were breached in the previous fiscal year, an obligation arose to sell the former head office by late May 2025. The Company also submitted a business improvement plan to the relevant financial institutions in August 2024. The breach of the financial maintenance requirements does not, however, cause the Company to lose the benefit of time under the loan agreement.」
While the obligation to sell the former head office arising from the breach of the financial maintenance requirements remains in effect, the Company has completed submission of the business improvement plan to the relevant financial institutions, and it was expressly stated that the breach itself does not constitute a loss of the benefit of time. - FY2024MaterialisedAnnual report
「The forecast for the fiscal year ending February 2025 is net sales of ¥6,018 million, an ordinary loss of ¥28 million and a net loss of ¥31 million. This forecast would result in a breach of the above financial covenants at the end of the fiscal year ending February 2025. If the Company is unable to return to profitability, it may lose the benefit of time under the loan agreements, making it necessary to secure funds for immediate repayment of its debt and potentially having a material impact on its business operations. …As the financial maintenance requirements were breached at the end of the fiscal year, an obligation to sell the former head office arose. The Company is also required to submit a business improvement plan to the financial institutions.」
The obligation to sell the former head office arose as a result of an actual breach of the financial maintenance requirements, and the possibility of breaching the financial covenants also became concrete due to the forecast ordinary loss and net loss for the fiscal year ending February 2025. - FY2024-Q1ReframedAnnual report
「Maintain, as of the end of each fiscal year, the amount of net assets in the net assets section of the unconsolidated balance sheet at or above 75% of the greater of the amount of net assets in the net assets section of the unconsolidated balance sheet as of the end of the immediately preceding fiscal year or as of the end of the fiscal year ending in February 2022. With respect to ordinary income or loss in the unconsolidated income statement for each fiscal year, do not record an ordinary loss for 2 consecutive fiscal years. With respect to net income or loss in the unconsolidated income statement for each fiscal year, do not record a net loss for 2 consecutive fiscal years.」
In connection with the termination of the capital and business alliance with Odakyu Electric Railway and the refinancing of the existing syndicated loan, financial covenants were established for the new commitment line and term loan, expressly requiring the maintenance of net assets at 75% and the avoidance of losses for 2 consecutive fiscal years. - FY2023MitigatedAnnual report
「As a result, ordinary income for the current fiscal year was ¥33.178 million, compared with an ordinary loss of ¥67.827 million in the year-earlier period, while net income was ¥73.891 million, compared with a net loss of ¥223.123 million in the year-earlier period.」
The company recorded ordinary income and net income in the current period, improving from consecutive losses through the previous period. However, the syndicated loan's financial covenants and the risk of losing the benefit of time continue to be disclosed. - FY2022WorsenedAnnual report
「As we recorded ordinary losses and net losses for 3 consecutive periods in the current fiscal year, we breached the financial covenants under the syndicated loan agreements entered into with all relevant financial institutions.」
The breach of the financial covenants worsened from the previous situation involving ordinary losses and net losses for 2 consecutive periods to the current situation involving losses for 3 consecutive periods. Consent has been obtained not to demand the loss of the benefit of time. - FY2021MaterialisedAnnual report
「As we recorded ordinary losses and net losses for 2 consecutive periods in the current fiscal year, we breached the financial covenants under the syndicated loan agreements entered into with all relevant financial institutions.」
The company actually breached the syndicated loan's financial covenants after recording ordinary losses and net losses for 2 consecutive periods. It also states that it obtained the financial institutions' consent not to demand the loss of the benefit of time. - FY2020RestatedAnnual report
「The agreements relating to syndicated loans entered into by the company with multiple financial institutions contain financial covenants.」
The company reconfirms the syndicated loan's financial covenants and the risk of losing the benefit of time if the specified levels are not met. - FY2020-Q3RestatedAnnual report
「The agreements relating to syndicated loans entered into by the company with multiple financial institutions contain financial covenants. If our net assets, ordinary income or net income falls below the levels specified in the financial covenants, the lending financial institutions may demand that we lose the benefit of time with respect to the relevant borrowings.」
The company reconfirms the financial covenants attached to the syndicated loan and the risk of losing the benefit of time if net assets, ordinary income or net income falls below the specified levels. - FY2020-Q2RecurringAnnual report
「The agreements relating to syndicated loans entered into by the company with multiple financial institutions contain financial covenants. If our net assets, ordinary income or net income falls below the levels specified in the financial covenants, the lending financial institutions may demand that we lose the benefit of time with respect to the relevant borrowings.」
The risk under the financial covenants, which had ceased to exist after all borrowings from financial institutions were repaid, arose again when the syndicated loan agreement was entered into. - FY2019-Q1DroppedAnnual report
「The sections titled “(8) Impact of Financial Covenants” and “(9) Dependence on Borrowings from Financial Institutions and the Impact of Interest Rate Fluctuations,” included in the securities report for the previous fiscal year, no longer apply.」
The company explicitly stated that the risk of losing the benefit of time under the financial covenants ceased to exist after all existing bank borrowings were repaid. - FY2017RestatedAnnual report
「If our net assets or ordinary income or loss falls below the levels specified in the financial covenants, the lending financial institutions may demand that we lose the benefit of time with respect to the relevant borrowings.」
The company reiterates the risk of losing the benefit of time as a result of breaching financial covenants. - FY2016First statedAnnual report
「If our net assets or ordinary income or loss falls below the levels specified in the financial covenants, the lending financial institutions may demand that we lose the benefit of time with respect to the relevant borrowings.」
The company identifies as a risk the loss of the benefit of time and significant effects on business operations if net assets or ordinary income or loss falls below the levels specified in the agreements.