Negative Net Worth and Material Uncertainty Regarding Going Concern
First written in FY2019-Q2. 7 of 21 entries say "Mitigated", first in FY2020-Q3. Latest entry: FY2026.
The whole theme swung hardest in 2020: 30 of 71 companies on the "Worse" side.
38 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「Because the Group has secured the funds necessary to continue operating at its current business scale, it considers its short-term capital resources and liquidity to be adequate.」
Repayment of the syndicated loan reduced short-term and long-term borrowings to zero, and the Group secured cash and cash equivalents of ¥1,083 million. The financial uncertainty relating to the going-concern assumption disclosed in the past was substantially reduced. - FY2026-H1WorsenedAnnual report
「The syndicated loan agreement entered into with the financial institutions runs through March 2026, and discussions are under way regarding the agreement thereafter. Accordingly, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern. However, the Group has built good relationships with the financial institutions, and during the current interim consolidated accounting period, the results of initiatives to develop new customers and expand sales became apparent. As immediate funding concerns had been resolved, the Company has determined that no material uncertainty relating to the going-concern assumption exists.」
Because the syndicated loan agreement runs through March 2026 and the agreement thereafter is under discussion, circumstances raising substantial doubt were again explicitly disclosed. At the same time, the Company stated that no material uncertainty existed, citing its relationships with financial institutions and the results of its initiatives. - FY2025MitigatedAnnual report
「As a result, sales for the current consolidated fiscal year were ¥2,640 million, up 9.4% year on year, and operating income was ¥7 million, compared with an operating loss of ¥532 million in the previous year.」
The Group moved from a position in which its operating loss in FY2024 resulted in a breach of the financial covenants to operating income of ¥7 million in FY2025. Debt also declined by ¥613 million, partially reducing the financial risk relating to the going-concern assumption, although the syndicated loan terms remain in place. - FY2024WorsenedAnnual report
「Under this agreement, the Group was in breach of the financial covenants for the fiscal year ended March 2024 because it recorded an operating loss, and borrowing rates are scheduled to increase for the fiscal year ending March 2025. Although the earnings forecast for the fiscal year ending March 2025 projects operating income, failure to return to profitability would result in the loss of the benefit of time under the loan agreement and could affect the Group’s operating performance and financial position.」
Although the capital deficit had been eliminated, the Group breached the syndicated loan’s financial covenants because of its operating loss in FY2024. The planned increase in borrowing rates in FY2025 and the risk of loss of the benefit of time if profitability is not achieved were explicitly disclosed. - FY2023-Q3RestatedAnnual report
「The structural reforms that the Group has continued to undertake since the fiscal year ended March 2019 remain incomplete. In addition, the agreement on revised terms, primarily involving changes to the repayment method for borrowings from financial institutions, runs through March 2023. Accordingly, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern. However, during the cumulative nine months of the current fiscal year, as in the fiscal year ended March 2022, the Group generated operating and ordinary income, reflecting the results of the structural reforms implemented to date. As immediate funding concerns had been resolved, the Company has determined that no material uncertainty relating to the going-concern assumption exists.」
Circumstances raising substantial doubt continued because the structural reforms were incomplete and the agreement with financial institutions on revised terms had an expiration date. However, the determination that no material uncertainty existed was maintained in light of operating and ordinary profitability and the improved funding position. - FY2023-Q2RestatedAnnual report
「The structural reforms that the Group has continued to undertake since the fiscal year ended March 2019 remain incomplete. In addition, the agreement on revised terms, primarily involving changes to the repayment method for borrowings from financial institutions, runs through March 2023. Accordingly, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern. However, during the cumulative second quarter of the current fiscal year, as in the fiscal year ended March 2022, the Group generated operating and ordinary income, reflecting the results of the structural reforms implemented to date. As immediate funding concerns had been resolved, the Company has determined that no material uncertainty relating to the going-concern assumption exists.」
Circumstances raising substantial doubt continued because the structural reforms were incomplete and the agreement with financial institutions on revised terms ran through March 2023. However, the determination that no material uncertainty existed was maintained in light of operating and ordinary profitability and the improved funding position. - FY2023-Q1RestatedAnnual report
「The structural reforms that the Group has continued to undertake since the fiscal year ended March 2019 remain incomplete. In addition, the agreement on revised terms, primarily involving changes to the repayment method for borrowings from financial institutions, runs through March 2023. Accordingly, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern. However, during the cumulative first quarter of the current fiscal year, as in the fiscal year ended March 2022, the Group generated operating and ordinary income, reflecting the results of the structural reforms implemented to date. As immediate funding concerns had been resolved, the Company has determined that no material uncertainty relating to the going-concern assumption exists.」
Circumstances raising substantial doubt continued because the structural reforms were incomplete and the agreement with financial institutions on revised terms ran through March 2023. However, the determination that no material uncertainty existed was maintained in light of the return to operating and ordinary profitability and the improved funding position. - FY2022-Q2RestatedAnnual report
「During the cumulative second quarter of the current fiscal year, as in the fiscal year ended March 2021, the Group generated operating and ordinary income, reflecting the results of the structural reforms implemented to date. As immediate funding concerns had been resolved, the Company has determined that no material uncertainty relating to the going-concern assumption exists.」
Although circumstances raising substantial doubt remained because the structural reforms were incomplete and the revised borrowing terms had an expiration date, the determination that no material uncertainty existed was maintained in light of the return to operating and ordinary profitability and the improved funding position. - FY2022-Q1RestatedAnnual report
「During the cumulative first quarter of the current fiscal year, as in the fiscal year ended March 2021, the Group generated a profit, reflecting the results of the structural reforms implemented to date. As immediate funding concerns had been resolved, the Company has determined that no material uncertainty relating to the going-concern assumption exists.」
Although substantial doubt remained because the structural reforms were incomplete and the revised borrowing terms ran through March 2022, the determination that no material uncertainty existed was maintained in light of the return to profitability and improved funding position. - FY2021MitigatedAnnual report
「Interest-bearing debt had declined to ¥3,133 million at the end of the same period, and immediate funding concerns had been resolved, so material uncertainty relating to the going-concern assumption was considered to have been eliminated. However, the Group’s structural reforms remain incomplete, and the agreement on revised terms, primarily involving changes to the repayment method for borrowings from financial institutions, runs only through March 2022. Accordingly, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern.」
The elimination of the capital deficit, the decline in interest-bearing debt and the return to profitability were cited as having eliminated material uncertainty. However, events raising substantial doubt remained because the structural reforms were incomplete and the revised terms had an expiration date. - FY2021-Q3WorsenedAnnual report
「In addition, regarding the transfer of diamond-wire production equipment to 江蘇三超社 as part of the structural reforms, completion of the transfer is expected to be delayed until the next fiscal year, as stated above, and the completion timing remains uncertain. In light of these circumstances, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern.」
Although the capital deficit was eliminated and interest-bearing debt declined, completion of the equipment transfer project was delayed until the next fiscal year and its completion timing remained uncertain. Material uncertainty relating to the going-concern assumption continues. - FY2021-Q2RestatedAnnual report
「Although the capital deficit had been eliminated as of the end of the previous consolidated fiscal year, the Group recorded an operating loss of ¥49 million, an ordinary loss of ¥52 million, and a quarterly net loss attributable to owners of the parent of ¥153 million during the cumulative second quarter of the current fiscal year. As of the end of the current second quarter, the Group’s interest-bearing debt was ¥3,207 million, exceeding the Group’s sales in the previous fiscal year.」
The Group maintained its position without a capital deficit, and interest-bearing debt also declined. However, losses and interest-bearing debt exceeding the previous fiscal year’s sales remain, and material uncertainty relating to the going-concern assumption continues. - FY2021-Q1MitigatedAnnual report
「Although the capital deficit had been eliminated as of the end of the previous consolidated fiscal year, the Group recorded an operating loss of ¥25 million, an ordinary loss of ¥29 million, and a quarterly net loss attributable to owners of the parent of ¥76 million during the cumulative first quarter of the current fiscal year. As of the end of the current first quarter, the Group’s interest-bearing debt was ¥3,248 million, exceeding the Group’s sales in the previous fiscal year.」
The capital deficit was eliminated at the end of the previous consolidated fiscal year, and interest-bearing debt also declined, partially reducing the factors contributing to uncertainty. However, losses and a high level of interest-bearing debt remain, and material uncertainty relating to the going-concern assumption continues. - FY2020-Q3MitigatedAnnual report
「During the cumulative nine months of the current fiscal year, the Group recorded an operating loss of ¥483 million, an ordinary loss of ¥633 million, and a quarterly net loss attributable to owners of the parent of ¥1,318 million. The capital deficit was ¥284 million. In addition, the Group’s interest-bearing debt stood at ¥6,318 million, a high level relative to its available liquidity.」
The capital deficit narrowed from ¥1,134 million in the previous quarter to ¥284 million, and interest-bearing debt also declined from ¥6,477 million to ¥6,318 million. However, material uncertainty relating to the going-concern assumption remains. - FY2020-Q2WorsenedAnnual report
「During the cumulative first half of the current fiscal year, the Group recorded an operating loss of ¥453 million, an ordinary loss of ¥574 million, and a quarterly net loss attributable to owners of the parent of ¥931 million. Cash and cash equivalents in the consolidated cash flow statement decreased by ¥268 million from the end of the previous consolidated fiscal year, and the capital deficit was ¥1,134 million. In addition, the Group’s interest-bearing debt stood at ¥6,477 million, a high level relative to its available liquidity.」
Although the loss narrowed from the same period of the previous year, the capital deficit increased from ¥983 million in the previous quarter to ¥1,134 million, and material uncertainty relating to the going-concern assumption continued. - FY2020-Q1Capital deficit narrowed, but uncertainty continuedAnnual report
「During the cumulative first quarter of the current fiscal year, the Group recorded an operating loss of ¥255 million, an ordinary loss of ¥323 million, and a quarterly net loss attributable to owners of the parent of ¥361 million, resulting in a capital deficit of ¥983 million. In addition, the Group’s interest-bearing debt stood at ¥7,364 million, a high level relative to its available liquidity. In light of these circumstances, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern.」
Losses, interest-bearing debt and the capital deficit all narrowed from FY2019, but substantial doubt and material uncertainty relating to the going-concern assumption continued to exist. - FY2019WorsenedAnnual report
「During the current consolidated fiscal year, the Group recorded an operating loss of ¥4,193 million, an ordinary loss of ¥4,263 million, and a net loss attributable to owners of the parent of ¥9,721 million, resulting in a capital deficit of ¥1,329 million. In addition, the Group’s interest-bearing debt stood at ¥7,707 million, a high level relative to its available liquidity, and the Group was in breach of the financial covenants under its syndicated loan agreement.」
The capital deficit and uncertainty relating to the going-concern assumption continued through the full fiscal year, after persisting at the quarterly stage, and the capital deficit increased to ¥1,329 million. The breach of the financial covenants was also explicitly stated. - FY2019-Q3WorsenedAnnual report
「During the cumulative nine months of the current fiscal year, the Group recorded an operating loss of ¥3,361 million, an ordinary loss of ¥3,437 million, and a quarterly net loss attributable to owners of the parent of ¥8,738 million, resulting in a capital deficit of ¥816 million. In addition, the Group’s interest-bearing debt stood at ¥7,666 million, a high level relative to its available liquidity.」
The capital deficit increased from ¥428 million in Q2 to ¥816 million, and uncertainty relating to the going-concern assumption deepened as losses continued to be reported. - FY2019-Q2First statedAnnual report
「In light of these circumstances, events or conditions exist that raise substantial doubt about the Group’s ability to continue as a going concern.」
An operating loss of ¥3,053 million, negative operating cash flow of ¥1,086 million, a quarterly net loss of ¥8,354 million, a capital deficit of ¥428 million, and interest-bearing debt of ¥8,102 million were reported, and material uncertainty relating to the going-concern assumption was disclosed for the first time.