FreeBit has agreed with its former president to treat the price of its CountUp acquisition as ¥1, and expects to receive the difference from the fixed price on October 27. The TSE Prime-listed company announced the agreement, together with an extra executive pay return, in a TDnet disclosure dated October 26.
Why the price was reset
FreeBit bought CountUp shares from its former president on September 30, 2025, for a fixed price of ¥493mn plus contingent consideration tied to CountUp's results through the fiscal year ending September 2030. The valuation rested on a business plan that assumed CountUp had developed or acquired its two patents itself.
FreeBit's special investigation committee report, the company says, found that FreeBit held at least a statutory non-exclusive licence over both patents under Article 35(1) of the Patent Act when the shares were bought. The report also raised the possibility that the patents do not belong to CountUp. FreeBit concluded that the premise of the share valuation was mistaken.
What changes hands
The company and its former president agreed that the price at the time of the purchase was ¥1. FreeBit expects to receive the difference from the fixed price, ¥492,999,999, on October 27. The two sides also agreed that FreeBit has no obligation to pay the earnout, which was capped at ¥430mn.
Separately, FreeBit put the total of acquisition-related costs, CountUp office rent the report questioned, committee and adviser fees, legal fees and extra audit costs at ¥373.7mn as of the end of September 2026. The former president agreed to pay ¥117.6mn as a settlement: 50% of the acquisition-related costs (¥34.8mn), 100% of the office rent (¥27.5mn) and 20% of the remaining costs (¥55.3mn). FreeBit also expects to receive that payment on October 27, and said it will begin insurance claims.
The refund and the settlement are separate payments, and the earnout release is an avoided obligation, not cash. The disclosure presents them as separate items and does not combine them. FreeBit decided after consulting an internal review committee of outside directors and outside auditors and an external adviser with no interest in FreeBit or its former president.
Accounts to be corrected
FreeBit plans to book the refund and the recoverable costs as receivables in the fiscal year ended April 2026, then treat the October 27 receipt as collection in the second quarter of the year ending April 2027. It will correct the related consolidated statements in its already-filed semiannual report, second-quarter earnings summary and third-quarter earnings summary for the year ended April 2026. Earlier years are not being restated because the effect was slight; the cumulative effect will go through current-period profit.
Pay returns
A director who was vice president and CFO as of October 5 will return a further 50% of pay for two months, bringing the total to 50% of pay for five months. The company cited the report's finding that there was a problem in the oversight function of the administrative department. The October 6 list covers other directors at 5% to 10% for three months.
October 27 is the date FreeBit expects to receive the payments; the disclosure does not confirm receipt.