Cash management and the going-concern assumption are the key issues for FY2026-Q3

The financial foundation at the end of FY2026-H1 is at an extremely challenging level for purposes of assessing the going-concern assumption. Disclosed net assets were ¥205 million and the equity ratio was 3.5%, down sharply from net assets of ¥3,076 million and an equity ratio of 55.2% at the end of FY2025. Cash and deposits were stated as ¥281 million in the disclosure, while cash and cash equivalents were ¥187.718 million in the financial summary. The next results announcement will therefore need to clarify the difference in definitions and the amount of cash that is actually freely available for use.

Cash outflows are also substantial. Operating cash flow in FY2026-H1 was negative ¥2,753.49 million, following negative ¥5,750 million for FY2025 as a whole. Based on its cash management plan for the year following the day after the interim period-end, the company expects net operating cash outflows of approximately ¥10 billion after offsetting operating receipts and expenditures. On this basis, it would be difficult to continue operations using only the cash available at the end of H1. In Q3, the amount of financing actually executed, as well as liquidity after financing and the monthly cash-flow outlook, will be important.

In addition, following discussions with certain business partners, the company has obtained payment deferrals for liabilities totaling approximately ¥2.1 billion whose payment deadlines had arrived. This is not merely a future funding requirement, but indicates that changes to payment terms are already necessary. Although financing cash flow of ¥1,136.921 million was recorded in FY2026-H1, it is not clear from the disclosure which liabilities or research and development expenses those funds were used for, or whether liabilities subject to payment deferrals decreased or increased in Q3, while cash and deposits remained at a low level.

At the next results announcement, it will be necessary to check whether the disclosure of material uncertainties related to the going-concern assumption is maintained, whether the approximately ¥10 billion cash-outflow assumption in the cash management plan has changed, and whether the method, amount and timing of additional financing have become more specific. In particular, unless the repayment schedule for deferred-payment liabilities, the repayment terms for short-term borrowings and bonds, and the status of renegotiations with business partners are disclosed, the risk of cash depletion will remain unresolved on a quantitative basis.