Axel Mark announced on the 22nd that it would increase the total number of authorized shares from 77 million to 200 million. The proposal will be submitted to the annual general meeting scheduled for 23 December, and the loan agreement with the parent company will also be terminated.
Axel Mark announced on the 22nd that it would amend its Articles of Incorporation and increase the total number of authorized shares from the current 77 million to 200 million.
The company has determined that it needs to raise additional funds because of prolonged operating losses and deteriorating cash flow. Its subsidiary in the beauty and wellness sector, which had been positioned as the core of its growth strategy, is set to be dissolved and placed into special liquidation.
Although raising the authorized share limit does not mean that new shares will be issued immediately, if shares are issued up to the limit, existing shareholders' ownership ratios could decline by a maximum of approximately 32.7%.
The company terminated on the same date its commitment-type term loan agreement with its parent company, Convano, which was entered into in May and had a loan commitment limit of ¥3 billion. The company said there had been no borrowings and that terminating the agreement would have no direct impact on earnings. It said that the loss of the funding facility could lead to the re-inclusion of a going-concern note.