Advance Create Co., Ltd., the Osaka-based insurance agency and technology platform operator listed on the Tokyo Stock Exchange, has filed a correction to its first-quarter results for the year ending September 2025, and the corrected numbers are worse than a routine restatement. Net assets at the end of December 2024 stood at negative ¥6.11bn, meaning liabilities exceeded assets by that amount against total assets of just ¥6.17bn. The equity ratio came in at -99.1%, effectively insolvency on a book-value basis.
The correction follows an earlier restatement covering the year ended September 2024, when the company reworked how it recognizes insurance-agency commission revenue and booked impairment and deferred-tax charges, turning that year into a ¥1.81bn net loss. The freshly corrected first quarter adds to the damage: sales fell 34.0% year on year to ¥1.48bn, the operating loss widened to ¥374.9mn from a ¥22.9mn profit a year earlier, and the quarter's net loss attributable to shareholders came in at ¥721.0mn, more than triple the ¥191.2mn loss booked in the same quarter a year before.
| Metric | Oct-Dec 2024 (restated) | Oct-Dec 2023 |
|---|---|---|
| Net sales | ¥1.48bn | ¥2.24bn |
| Operating profit/loss | -¥374.9mn | ¥22.9mn |
| Ordinary profit/loss | -¥441.4mn | ¥0.3mn |
| Net profit/loss (parent) | -¥721.0mn | -¥191.2mn |
Part of the swing traces to an accounting estimate change: Advance Create refined how it calculates the present value of variable consideration on insurance-agency commissions, a revision that cut receivables by ¥384.1mn and trimmed sales, operating profit and ordinary profit by ¥349.2mn each.
The filing also discloses that Advance Create has breached financial covenants attached to receivables-securitization contracts held with some of its lending banks. The company says the breached clauses do not themselves trigger acceleration of repayment, and it has obtained lender consent to keep the contracts running while it briefs the banks on its business plan.
Taken together, the losses, the negative net worth and the covenant breach led the company to state that material uncertainty regarding the going-concern assumption exists. The company's independent auditor's review report on the corrected statements, dated August 14, 2026, records the same uncertainty but does not qualify its conclusion, meaning the reviewer found no reason to believe the restated figures depart from Japanese accounting standards.
Advance Create's stated remedies include a capital-raising plan built around an extraordinary shareholders' meeting, for which the board set a May 2, 2025 record date and said the meeting would follow within three months, alongside cost cuts that trimmed selling, general and administrative expenses 13.2% year on year to ¥1.49bn. The company also drew ¥319.1mn in short-term borrowing during the quarter and a further ¥815.9mn between January and mid-May 2025 to shore up cash. Some of those measures had not yet secured final agreement with relevant parties as of the filing date, which the company said leaves material uncertainty about the going-concern assumption in place.
The company's full-year forecast still projects sales of ¥7.4bn and a swing back to a ¥50mn operating profit, but an ordinary loss of ¥270mn and a net loss of ¥840mn for the year ending September 2025.