Material Doubt Regarding Going Concern Arising from Breach of Financial Covenants
First written in FY2021-Q2. 4 of 10 entries say "Mitigated", first in FY2021-Q3. Latest entry: FY2023.
The whole theme swung hardest in 2022: 4 of 13 companies on the "Worse" side.
1 other company's latest entry also says "Achieved".
- FY2023AchievedAnnual report
「Accordingly, we determined that the events or conditions that had raised substantial doubt about the going concern assumption had been resolved.」
The company stated that it determined the events and conditions that had raised substantial doubt about the going concern assumption had been resolved, based on the return to ordinary profitability, measures addressing financial covenant breaches, secured liquidity, and the improvement in the financial position from the sale of the Regus business. - FY2023-Q3MitigatedAnnual report
「As the economy has progressed from the large-scale stagnation at the beginning of the spread of COVID-19 toward reopening, and as product development adapted to circumstances at each stage and reductions in fixed costs during the pandemic also contributed, ordinary income for the nine months ended the third quarter of the current consolidated fiscal year improved significantly to ¥2,306 million. Based on these circumstances, we determined at the end of the third quarter that the events or conditions that had raised substantial doubt about the going concern assumption had been resolved.」
The company stated that it determined the events or conditions that had raised substantial doubt about the going concern assumption had been resolved, based on the return to ordinary profitability, product development, reductions in fixed costs, stabilization of the financial base, and the expected improvement in the financial position from the sale of a business. - FY2023-Q2MitigatedAnnual report
「As the economy has progressed from the large-scale stagnation at the beginning of the spread of COVID-19 toward reopening, and as product development and reductions in fixed costs during the pandemic also contributed, ordinary income for the six months ended the second quarter of the current consolidated fiscal year improved significantly to ¥1,651 million. Accordingly, we determined that no material uncertainty related to the going concern assumption exists.」
Although breaches of financial covenants and the expected waiver by financial institutions of their right to demand the loss of the benefit of time remain, the company continues to determine that no material uncertainty exists based on the return to ordinary profitability, product development, reductions in fixed costs, and stabilization of the financial base. - FY2023-Q1MitigatedAnnual report
「As the economy has progressed from the large-scale stagnation at the beginning of the spread of COVID-19 toward reopening, and as product development and reductions in fixed costs during the pandemic also contributed, ordinary income for the first quarter improved significantly to ¥1,056 million. On the financial front, we have also established a stable financial base by pursuing flexible real estate development structures that control fixed costs and store-opening costs, including through percentage rent, and by entering into syndicated loan and commitment line agreements with our relationship banks. Accordingly, we determined that no material uncertainty related to the going concern assumption exists.」
Although the significant events involving breaches of financial covenants and the recording of an ordinary loss remain, the company stated that it determined no material uncertainty related to the going concern assumption exists based on the return to ordinary profitability, reductions in fixed costs, flexible real estate development, and bank agreements. - FY2022RestatedAnnual report
「During the current consolidated fiscal year, our group recorded an ordinary loss of ¥1,585 million due to the spread of COVID-19, and, having breached financial covenants attached to certain syndicated loans at the end of the fiscal year, events or conditions exist that raise substantial doubt about the going concern assumption. However, we expect to receive a waiver from the financial institutions of their right to demand the loss of the benefit of time.」
While the significant events involving an ordinary loss and breaches of financial covenants continue, the company has reaffirmed its determination that no material uncertainty related to the going concern assumption exists based on the response of financial institutions, secured liquidity, and the recovery in orders. - FY2022-Q3RestatedAnnual report
「During the nine months ended the third quarter of the current consolidated fiscal year (1 March 2021 to 30 November 2021), our group recorded an ordinary loss of ¥1,437 million due to reduced demand for rental meeting rooms caused by the spread of COVID-19, and events or conditions exist that raise substantial doubt about the going concern assumption. At the end of the second quarter, we breached financial covenants attached to certain syndicated loans, but obtained consent from the financial institutions that they would not exercise their right to demand the loss of the benefit of time.」
Although the significant events involving an ordinary loss and breaches of financial covenants continue, the company has reaffirmed that the consent of financial institutions means their right to demand the loss of the benefit of time will not be exercised. - FY2022-Q1RestatedAnnual report
「Accordingly, we determined that no material uncertainty exists regarding the going-concern assumption.」
Although the ordinary loss, breaches of financial covenants, and events that raise substantial doubt about the going concern assumption remain, the company has reaffirmed its determination that no material uncertainty exists based on the consent of financial institutions, secured working capital, and continued positive EBITDA. - FY2021RestatedAnnual report
「Accordingly, we determined that no material uncertainty exists regarding the going-concern assumption.」
While describing the significant events involving an ordinary loss and breaches of financial covenants, the company has reaffirmed its determination that no material uncertainty exists based on the response of financial institutions, secured liquidity, and the expected recovery in operating performance. - FY2021-Q3MitigatedAnnual report
「During the nine months ended the third quarter of the current consolidated fiscal year, our group recorded an ordinary loss of ¥2,114 million due to the impact of the spread of COVID-19, and events or conditions exist that raise substantial doubt about the going concern assumption. At the end of the second quarter of the fiscal year ending February 2021, we breached financial covenants attached to certain syndicated loans, but obtained consent from the financial institutions that they would not exercise their right to demand the loss of the benefit of time. Accordingly, we determined that no material uncertainty related to the going concern assumption exists.」
Although events that raise substantial doubt about the going concern assumption remain, the company stated that it determined no material uncertainty exists based on the consent of financial institutions, the securing of funding capacity and cash and deposits, and the expected recovery in operating performance. - FY2021-Q2First statedAnnual report
「During the six months ended the second quarter of the current consolidated fiscal year, our group recorded an ordinary loss of ¥2,119 million due to the impact of the spread of COVID-19. As a result of breaching financial covenants attached to certain syndicated loans, events or conditions exist that raise substantial doubt about the going concern assumption.」
The company explicitly identified for the first time events and conditions that raise substantial doubt about the going concern assumption as a result of the ordinary loss caused by COVID-19 and breaches of financial covenants. However, based on the expected waiver by financial institutions of their right to demand the loss of the benefit of time, among other factors, it determined that no material uncertainty related to the going concern assumption exists.