Collection risk for convertible subordinated loans due to Sensimed AG’s failure to complete a capital increase

「Net income attributable to owners of the parent declined to ...¥252 million, down 73.8% year on year, due in addition to the recognition of a loss on step acquisitions associated with the acquisition of Sensimed AG, the Swiss company engaged in the smart contact lens business.」

「During the first quarter, the company recognized an impairment loss and an extraordinary loss on loans and investments in SENSIMED AG of Switzerland, which develops and manufactures the sensor-embedded contact lens “Triggerfish System,” because of the deterioration in its financial position and other factors. From the perspective of long-term business growth, the company had increased its voting rights to 90.6% of the company's issued shares by acquiring shares from existing shareholders in December 2019, among other actions.」

「During the current second quarter cumulative consolidated period, the company converted receivables and other claims against Sensimed AG, an investee, into shares. As the company's financial position had not improved, the company estimated the intrinsic value of the shares and recognized an investment securities valuation loss of ¥25.604 million as an extraordinary loss.」

「During the current first quarter cumulative consolidated period, Sensimed AG, an investee, planned to eliminate its negative net worth through funding from a capital increase. However, the funding was taking time to materialize, and the company judged that the likelihood of raising the desired amount was low. After considering the recoverability of its receivables from Sensimed AG, the company recognized a ¥482.556 million provision for doubtful accounts as an extraordinary loss.」