Going-Concern Risk Associated with Losses and Negative Operating Cash Flow
First written in FY2022. 7 of 15 entries say "Mitigated", first in FY2023-Q2. 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
「Meanwhile, as a result of the initiatives undertaken by the group's companies, the earnings structure steadily improved. Although revenue decreased slightly from the previous fiscal year, operating profit increased.」
Operating profit was ¥106 million, reducing the going-concern risk from an earnings perspective after the company had previously remained in an operating-loss position. However, an ordinary loss and negative operating cash flow remain. - FY2026-H1RestatedAnnual report
「In addition, the interim net loss attributable to owners of the parent was ¥149 million, compared with an interim net loss attributable to owners of the parent of ¥361 million in the same period of the previous year.」
The company continued to record an operating loss, ordinary loss, interim net loss attributable to owners of the parent, and negative operating cash flow in the interim period. Although the loss narrowed from the same period of the previous year, the circumstances related to going-concern risk from an earnings and funding perspective remain. - FY2025MitigatedAnnual report
「In the previous consolidated fiscal year, we implemented structural reforms. As a result of a major improvement in our earnings structure through measures including the closure of unprofitable stores, we achieved profitability in operating income and ordinary income in the current consolidated fiscal year and established a structure capable of generating stable profits.」
After 3 consecutive fiscal years of operating and ordinary losses, the company recorded operating profit and ordinary profit in the current fiscal year, reducing the going-concern risk from an earnings perspective. However, a net loss and negative operating cash flow remain. - FY2025-H1WorsenedAnnual report
「Amid a decline in the handicrafts population due to the declining birthrate, population aging, and increasingly diverse hobbies, the group saw customer numbers decrease as consumers became more selective amid rising consumer prices. It has recorded an operating loss, ordinary loss, net loss attributable to owners of the parent, and negative operating cash flow for 3 consecutive fiscal years since the fiscal year ended June 2022, and also recorded an operating loss, ordinary loss, interim net loss attributable to owners of the parent, and negative operating cash flow in the current interim consolidated accounting period.」
Losses and negative operating cash flow were recorded for 3 consecutive full fiscal years and continued in the current interim period, making the circumstances surrounding the going-concern risk more concrete. Funding measures, including a private placement of shares, are being pursued separately. - FY2024-Q3RestatedAnnual report
「Accordingly, we determined that no material uncertainty exists regarding the going-concern assumption.」
Although cumulative losses and negative operating cash flow have continued, the company has maintained its determination that no material uncertainty exists, based on the commitment line and the intention to provide funding support. - FY2024-Q2MitigatedAnnual report
「With respect to funding, the company entered into a term-out commitment line agreement, with the company as borrower, enabling the stable and flexible procurement of working capital. The facility has a commitment limit of ¥2.9 billion, of which ¥1.1 billion was drawn at the end of the current quarterly consolidated accounting period, leaving an undrawn amount of ¥1.8 billion. We believe that no short-term liquidity problem will arise. In addition, we confirmed that Keystone Partners Co., Ltd. (KSP) and Rubi LLC, with which the company has entered into a capital and business alliance agreement, intend to collaborate on business alliances with companies that can contribute to improving the quality of products and services, and that the Japan Revival Sponsor Fund No. 5 Investment Limited Partnership, managed and operated by KSP, intends to provide funding support to the company as circumstances warrant.」
Although losses and negative operating cash flow have continued, the company clarified its response to short-term liquidity needs through the commitment line, including the ¥1.8 billion undrawn amount, and the intention of the KSP-managed fund to provide funding support as circumstances warrant. - FY2024-Q1RestatedAnnual report
「The company recorded an operating loss, ordinary loss, net loss attributable to owners of the parent, and negative operating cash flow in both the fiscal year ended June 2022 and the fiscal year ended June 2023. In the current first-quarter consolidated cumulative period, it also recorded an operating loss, ordinary loss, and quarterly net loss attributable to owners of the parent. In light of these circumstances, events or conditions exist that raise substantial doubt about its ability to continue as a going concern.」
The company continued to record operating, ordinary, and net losses in the current first quarter, as in previous fiscal years, and continued to state that material events or conditions related to going concern exist. At the same time, it maintained its determination that no material uncertainty exists, citing the commitment line. - FY2023MaterialisedAnnual report
「In both the fiscal year ended June 2022 and the fiscal year ended June 2023, the company recorded an operating loss, ordinary loss, net loss attributable to owners of the parent, and negative operating cash flow, and therefore events or conditions currently exist that raise substantial doubt about its ability to continue as a going concern.」
The company recorded an operating loss, ordinary loss, net loss, and negative operating cash flow for 2 consecutive fiscal years and explicitly identified the existence of material events or conditions related to going concern. At the same time, it determined that no material uncertainty exists, citing a ¥2.9 billion commitment line. - FY2023-Q3RestatedAnnual report
「The group was materially affected not only by the subsiding stay-at-home demand but also by the deterioration in consumer sentiment resulting from changes in the macroeconomic environment, including rising prices. Revenue had declined substantially as of the end of the previous consolidated fiscal year, and the group recorded an operating loss, ordinary loss, net loss attributable to owners of the parent, and negative operating cash flow. In the current third-quarter consolidated cumulative period, it also recorded an operating loss, ordinary loss, and quarterly net loss attributable to owners of the parent. In light of these circumstances, events or conditions exist that raise substantial doubt about the group's ability to continue as a going concern.」
The company continued to record an operating loss, ordinary loss, and quarterly net loss in the third-quarter cumulative period and continued to state that circumstances exist that raise substantial doubt about its ability to continue as a going concern. At the same time, it maintained its determination that no material uncertainty exists, based on its funding arrangements. - FY2023-Q2MitigatedAnnual report
「With respect to funding, Fujikyu Co., Ltd., a consolidated subsidiary of the company, entered into a term-out commitment line agreement on 25 March 2020 for the stable and flexible procurement of working capital. We believe this means that no short-term liquidity problem will arise. Accordingly, we determined that no material uncertainty related to the going-concern assumption exists.」
Although the operating loss, ordinary loss, net loss, and negative operating cash flow continued, the company stated that it had determined that no material uncertainty related to the going-concern assumption exists, citing its management plan and funding arrangements through the commitment line. - FY2023-Q1MaterialisedAnnual report
「The group was materially affected not only by the subsiding stay-at-home demand but also by the deterioration in consumer sentiment resulting from changes in the macroeconomic environment, including rising prices. Revenue had declined substantially as of the end of the previous consolidated fiscal year, and the group recorded an operating loss, ordinary loss, net loss attributable to owners of the parent, and negative operating cash flow. It also recorded an operating loss and ordinary loss in the current first-quarter consolidated cumulative period. In light of these circumstances, events or conditions exist that raise substantial doubt about the group's ability to continue as a going concern.」
The company recorded an operating loss and ordinary loss in the first quarter as well as in the previous consolidated fiscal year, and stated that events or conditions exist that raise substantial doubt about its ability to continue as a going concern. - FY2022MaterialisedAnnual report
「Because revenue declined substantially during the current consolidated fiscal year and the company recorded an operating loss, ordinary loss, net loss attributable to owners of the parent, and negative operating cash flow, events or conditions currently exist that raise substantial doubt about the company's ability to continue as a going concern.」
For the full year, the company recorded an operating loss of ¥2,174 million, an ordinary loss of ¥2,154 million, a net loss attributable to owners of the parent of ¥2,692 million, and negative operating cash flow of ¥2,333 million, and explicitly identified these as material events or conditions.