Recognition of an extraordinary loss associated with the disposal of inventories and the possibility of additional losses
Our company (AXEL MARK INC.). The OEM transactions relate to the liquidation of its wholly owned subsidiary アクセルメディカ株式会社.
Products and raw materials related to the company's own brand "≒4.7", as well as cosmetics OEM transactions in which it was involved
Establishing the personnel structure, quality control and post-marketing safety management systems required to obtain a cosmetics manufacturing and marketing business license would require considerable time and expense, and there is no clear prospect of obtaining the license. There is also no expectation that the inventories could be monetized at a reasonable price through a transfer to a third party. With respect to the OEM transactions, orders may not be cancellable, advance payments may have to be refunded, and previously unidentified liabilities or claims may come to light.
Extraordinary loss (inventory valuation loss): ¥12 million. As additional losses, the order amount of ¥3 million is expected to become a total loss, there is a possibility that ¥10 million in advance payments will have to be refunded, and other previously unidentified liabilities or claims may arise.
The fiscal year ending September 2026 (consolidated and non-consolidated financial statements)
The impact of the additional losses on the consolidated and non-consolidated earnings forecasts for the fiscal year ending September 2026 is currently under review. If it becomes necessary to revise the earnings forecasts, the company will disclose the revision promptly.
Company response
Sales of the relevant inventories of cosmetics and other products (which the company is unable to sell)
The company will promptly disclose any developments once the timing of obtaining the cosmetics manufacturing and marketing business license and resuming the Beauty & Wellness Business becomes clear. The additional losses will be reviewed together with losses from business restructuring and other related losses.
The company will promptly disclose any developments if it becomes necessary to revise the earnings forecasts or once the timing of obtaining the license and resuming the business becomes clear.
| Item | Details |
|---|---|
| Event name | Recognition of an extraordinary loss associated with the disposal of inventories and the possibility of additional losses |
| Subject Entity | Our company (AXEL MARK INC.). The OEM transactions relate to the liquidation of its wholly owned subsidiary アクセルメディカ株式会社. |
| Target Locations / Products | Products and raw materials related to the company's own brand "≒4.7", as well as cosmetics OEM transactions in which it was involved |
| Cause | Establishing the personnel structure, quality control and post-marketing safety management systems required to obtain a cosmetics manufacturing and marketing business license would require considerable time and expense, and there is no clear prospect of obtaining the license. There is also no expectation that the inventories could be monetized at a reasonable price through a transfer to a third party. With respect to the OEM transactions, orders may not be cancellable, advance payments may have to be refunded, and previously unidentified liabilities or claims may come to light. |
| Amount of Impact on Business Performance | Extraordinary loss (inventory valuation loss): ¥12 million. As additional losses, the order amount of ¥3 million is expected to become a total loss, there is a possibility that ¥10 million in advance payments will have to be refunded, and other previously unidentified liabilities or claims may arise. |
| Accounting period in which recognized | The fiscal year ending September 2026 (consolidated and non-consolidated financial statements) |
| Impact on Earnings Forecast | The impact of the additional losses on the consolidated and non-consolidated earnings forecasts for the fiscal year ending September 2026 is currently under review. If it becomes necessary to revise the earnings forecasts, the company will disclose the revision promptly. |
| Suspended operations | Sales of the relevant inventories of cosmetics and other products (which the company is unable to sell) |
| Outlook | The company will promptly disclose any developments once the timing of obtaining the cosmetics manufacturing and marketing business license and resuming the Beauty & Wellness Business becomes clear. The additional losses will be reviewed together with losses from business restructuring and other related losses. |
| Planned follow-up disclosure | The company will promptly disclose any developments if it becomes necessary to revise the earnings forecasts or once the timing of obtaining the license and resuming the business becomes clear. |
Items this document does not state (15)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.This is because establishing the personnel structure, quality control and post-marketing safety management systems required to obtain a cosmetics manufacturing and marketing business license would require considerable time and expense, and there is no clear prospect of obtaining the license. In addition, there is no expectation that the inventories could be monetized at a reasonable price through a transfer to a third party, and the OEM transactions may not permit order cancellations or may require the refund of advance payments.