Material doubt regarding the going concern assumption due to the termination of NHK operations

「Since its founding, the Group had centered its operations on contract collection services for broadcast reception fees entrusted by the Japan Broadcasting Corporation (NHK). However, it has sought to withdraw completely from the NHK business and has made a major transformation of its business model. Accordingly, as of the end of the first quarter of the current consolidated fiscal year, the Group recognizes that events or circumstances exist that raise substantial doubt about its ability to continue as a going concern. At the same time, the Group had already been pursuing a transformation of its business model based on media platforms, outsourcing and energy, as well as expanding its market coverage, and had worked as a unified organization to expand its business and diversify the previously concentrated business risks and customer base. Through these initiatives, the Group believes that it has established a new business model to replace the NHK business and that the risk of losing major business partners is being reduced. Accordingly, it has determined that there are no concerns about the continuity of its business activities for the foreseeable future and that no material uncertainty exists regarding the going concern assumption.」

「As a result of these measures, for the fiscal year ended February 2024, revenue was ¥3,938,768 thousand, operating profit was ¥119,772 thousand, and net income attributable to owners of the parent was ¥88,788 thousand. … Accordingly, we have determined that there are no particular concerns about the continuity of business activities for the foreseeable future and that no material uncertainty related to the going-concern assumption exists.」

「In terms of profitability, the company had recorded operating losses for 3 consecutive fiscal years since the fiscal year ended February 2020, partly due to the impact of COVID-19. However, after reviewing costs, including optimizing human capital in line with its business strategy, and selectively allocating and concentrating management resources, it recorded operating profit of ¥269,175 thousand and net income attributable to owners of the parent of ¥201,756 thousand for the fiscal year ended February 2023. During the cumulative second quarter, it recorded operating profit of ¥72,785 thousand and net income attributable to owners of the parent of ¥40,798 thousand. Accordingly, we have determined that there are no concerns about the continuity of business activities for the foreseeable future and that no material uncertainty related to the going-concern assumption exists.」

「Accordingly, we have determined that there are no concerns about the continuity of business activities for the foreseeable future and that no material uncertainty related to the going-concern assumption exists.」

「Accordingly, at the end of the third quarter of the current consolidated fiscal year, we recognize that events or conditions exist that may raise material doubt about the going-concern assumption.」