Notes on Matters Related to the Going-Concern Assumption
SEKIDO CO.,LTD. (filing company)
Beauty business (Korean cosmetics brands, devices such as facial beauty devices, and the company's own-brand cosmetics); fashion business (GINZA LoveLove and &choa!)
The decline in revenue resulting from the discontinuation of the core brand in the beauty business in the previous fiscal year continued in the current fiscal year, resulting in an operating loss and negative operating cash flow for 2 consecutive fiscal years, together with a breach of financial covenants under agreements establishing security by transfer of title entered into with certain lending financial institutions.
Notes to the earnings report for the fiscal year ended March 2026. However, the impact of the significant doubt has not been reflected in the financial statements.
To strengthen its business base and stabilize its financial base, the company will make the device business, including new products such as facial beauty devices, and its own-brand cosmetics the focus of efforts to strengthen sales, while optimizing the store strategies for GINZA LoveLove and &choa!. It will also use funds raised through the exercise of the 18th and 19th series of stock acquisition rights to advance measures to strengthen sales. Regarding the financial covenants, the company will respond to requests for corrective measures deemed reasonable and plans to obtain support from its lending financial institutions.
| Item | Details |
|---|---|
| Event name | Notes on Matters Related to the Going-Concern Assumption |
| Date of occurrence | 7 May 2026 (the date on which the Board of Directors decided to include the note) |
| Subject Entity | SEKIDO CO.,LTD. (filing company) |
| Target Locations / Products | Beauty business (Korean cosmetics brands, devices such as facial beauty devices, and the company's own-brand cosmetics); fashion business (GINZA LoveLove and &choa!) |
| Cause | The decline in revenue resulting from the discontinuation of the core brand in the beauty business in the previous fiscal year continued in the current fiscal year, resulting in an operating loss and negative operating cash flow for 2 consecutive fiscal years, together with a breach of financial covenants under agreements establishing security by transfer of title entered into with certain lending financial institutions. |
| Accounting period in which recognized | Notes to the earnings report for the fiscal year ended March 2026. However, the impact of the significant doubt has not been reflected in the financial statements. |
| Outlook | To strengthen its business base and stabilize its financial base, the company will make the device business, including new products such as facial beauty devices, and its own-brand cosmetics the focus of efforts to strengthen sales, while optimizing the store strategies for GINZA LoveLove and &choa!. It will also use funds raised through the exercise of the 18th and 19th series of stock acquisition rights to advance measures to strengthen sales. Regarding the financial covenants, the company will respond to requests for corrective measures deemed reasonable and plans to obtain support from its lending financial institutions. |
Items this document does not state (18)
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.Revenue from the core brand of the beauty business, which was discontinued in the previous fiscal year, continued to decline in the current fiscal year, resulting in an operating loss and negative operating cash flow for 2 consecutive fiscal years. In addition, the company breached financial covenants under agreements establishing security by transfer of title with certain lending financial institutions. There is also uncertainty regarding the feasibility of strengthening the business base and raising funds from the market.