Filing of an application to commence bankruptcy proceedings for a consolidated subsidiary
Monstarlab Information Technology LLC (MLK, the Company's consolidated subsidiary)
MLK in Riyadh, Kingdom of Saudi Arabia, and its digital consulting business in the Middle East
The transfer of customer contracts to MLK did not progress and losses accumulated; MLK has had no employees and has suspended operations since September 2024; and as of the end of December 2025 it had negative net worth of approximately ¥1.43 billion and was unable to repay its liabilities independently. Obligations and costs, including statutory audits and tax filings, would also continue as long as it remained in existence.
A gain of approximately ¥150 million to ¥200 million is expected to be recognized as other income included in operating profit. The amount may change depending on exchange rates, the timing of commencement of the proceedings, and other factors.
The consolidated financial results for the fiscal year ending December 2026 (when the application is accepted and the proceedings commence)
This has not been incorporated into the full-year consolidated earnings forecast for the fiscal year ending December 2026 released today.
¥1,327 million (the Company's receivable from MLK; the necessary allowance was recognized in prior fiscal years)
Related procedures
Liquidation proceedings under the bankruptcy laws of the Kingdom of Saudi Arabia (equivalent to bankruptcy proceedings in Japan)
Commercial Court of the Kingdom of Saudi Arabia
Company response
MLK's digital consulting business (suspended since September 2024)
MLK is expected to be excluded from consolidation when the application is accepted and the proceedings commence. The removal of MLK's external liabilities and other items from the consolidated statement of financial position is expected to result in recognition of a gain of approximately ¥150 million to ¥200 million. There will be no impact on the business of the Company Group.
The Company will promptly announce any matters that require disclosure.
| Item | Details |
|---|---|
| Event name | Filing of an application to commence bankruptcy proceedings for a consolidated subsidiary |
| Date of occurrence | 13 November 2026 (date of resolution to file the application; the actual filing is scheduled for mid-November 2026) |
| Subject Entity | Monstarlab Information Technology LLC (MLK, the Company's consolidated subsidiary) |
| Target Locations / Products | MLK in Riyadh, Kingdom of Saudi Arabia, and its digital consulting business in the Middle East |
| Cause | The transfer of customer contracts to MLK did not progress and losses accumulated; MLK has had no employees and has suspended operations since September 2024; and as of the end of December 2025 it had negative net worth of approximately ¥1.43 billion and was unable to repay its liabilities independently. Obligations and costs, including statutory audits and tax filings, would also continue as long as it remained in existence. |
| Amount of Impact on Business Performance | A gain of approximately ¥150 million to ¥200 million is expected to be recognized as other income included in operating profit. The amount may change depending on exchange rates, the timing of commencement of the proceedings, and other factors. |
| Accounting period in which recognized | The consolidated financial results for the fiscal year ending December 2026 (when the application is accepted and the proceedings commence) |
| Impact on Earnings Forecast | This has not been incorporated into the full-year consolidated earnings forecast for the fiscal year ending December 2026 released today. |
| Type of litigation or proceeding | Liquidation proceedings under the bankruptcy laws of the Kingdom of Saudi Arabia (equivalent to bankruptcy proceedings in Japan) |
| Court or authority | Commercial Court of the Kingdom of Saudi Arabia |
| Amount of receivables at risk of non-collection or delayed collection | ¥1,327 million (the Company's receivable from MLK; the necessary allowance was recognized in prior fiscal years) |
| Suspended operations | MLK's digital consulting business (suspended since September 2024) |
| Outlook | MLK is expected to be excluded from consolidation when the application is accepted and the proceedings commence. The removal of MLK's external liabilities and other items from the consolidated statement of financial position is expected to result in recognition of a gain of approximately ¥150 million to ¥200 million. There will be no impact on the business of the Company Group. |
| Planned follow-up disclosure | The Company will promptly announce any matters that require disclosure. |
Items this document does not state (11)
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.Losses accumulated because the transfer of customer contracts to MLK did not progress, and the business has been suspended since September 2024 without any employees. As of the end of December 2025, MLK had negative net worth of approximately ¥1.43 billion and was unable to repay its liabilities independently. In addition, statutory audit and tax filing obligations and costs would continue as long as it remained in existence, so the Company determined that it was appropriate to wind it up through court proceedings without providing additional support.