CanBas Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Operating Income: ¥-360M
• Net Income: ¥-348M
• EPS: ¥-17.69

Income Statement

Balance Sheet

Profitability Ratios

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Canvas Co., Ltd. (45750) reported FY2026 Q1 standalone JGAAP results characterized by pre-revenue operations and a modest quarterly net loss typical of an R&D-stage biotech. Reported revenue was undisclosed (presented as 0), with operating income at -360 million yen and net income at -348 million yen, indicating R&D and operating expenses as the primary drivers of losses. Ordinary loss matched net loss at -348 million yen, suggesting minimal non-operating items, leverage, or financial income/expense effects. The positive income tax line (312 thousand yen) likely reflects local minimum taxes or non-deductible items rather than taxable income. The balance sheet shows total assets of 2,672 million yen and total liabilities of 106.9 million yen, implying a very conservative capital structure with liabilities/equity of roughly 0.04x. Reported current assets of 2,956.9 million yen and current liabilities of 106.9 million yen imply an exceptionally strong liquidity position (current ratio ~27.7x), with working capital of 2,850.0 million yen. Note that reported current assets exceed total assets, which likely reflects classification or disclosure scope differences; our analysis uses the provided totals while acknowledging this anomaly. Equity is reported at 2,595 million yen, yielding financial leverage of approximately 1.03x (assets/equity), consistent with a largely equity-financed balance sheet. DuPont components based on the disclosed metrics are not meaningful due to the absence of revenue and average balance data, but the very low leverage and continued losses point to negative ROE in practice. Cash flow statements were not disclosed (shown as zero), limiting direct assessment of operating cash burn and free cash flow conversion; however, the P/L suggests an operating cash burn on the order of mid-300 million yen for the quarter. With current assets near 3.0 billion yen and quarterly losses of ~0.35 billion yen, the implied cash runway could approximate 8–9 quarters, subject to the cash composition of current assets and the trajectory of R&D spend. No dividends were declared (DPS 0), consistent with typical pre-revenue biotech capital allocation norms. The company’s solvency and liquidity appear robust for a development-stage entity, but sustained negative earnings will necessitate future funding absent partnering or milestone inflows. Key risks remain clinical development execution, financing/dilution, and regulatory timelines, offset by the strong near-term liquidity buffer. Overall, the quarter is operationally steady for a clinical-stage biotech: no revenue, controlled losses, and a very strong balance sheet to support pipeline progress. Data limitations (notably undisclosed cash flow details, revenue, and share count) necessitate caution in ratio interpretation and cash burn precision.

Profitability Analysis

ROE decomposition is constrained by the absence of revenue and average equity data. Conceptually, net profit margin cannot be computed (revenue undisclosed), asset turnover is effectively nil in a pre-revenue period, and financial leverage is very low at ~1.03x (2,672m assets / 2,595m equity). Operating loss of 360m yen versus net loss of 348m yen suggests negligible non-operating burden this quarter. The gap between operating and ordinary loss indicates small net non-operating income (~12m yen), possibly interest income on cash or minor items, given interest expense is undisclosed and liabilities are small. Margin quality is not assessable via gross or EBITDA margins because cost of sales, depreciation, and EBITDA are undisclosed; however, the cost structure is dominated by OPEX (R&D and SG&A) consistent with development-phase biotech. Operating leverage is present structurally—future revenue should flow at high incremental margins once commercialization occurs—but currently it depresses profitability due to fixed costs without offsetting sales. Effective tax rate is not meaningful due to the loss position; the small tax expense likely comprises non-income-based taxes. Overall profitability remains negative but controlled, with losses commensurate with early-stage pipeline investment and minimal financial drag.

Growth Assessment

Revenue sustainability cannot be evaluated as revenue was undisclosed and likely nil for the quarter. Profit quality is driven by operating expense discipline; the stable difference between operating and net loss implies clean earnings without material one-offs or financial distortions. With ordinary loss nearly equal to net loss, core operating performance is the key driver of quarterly results. Outlook hinges on clinical/regulatory milestones and potential partnering rather than near-term sales growth. If the company secures collaboration income or milestone payments, near-term ordinary income could improve without product revenue. Absent such events, losses are likely to persist in line with R&D progress. Given the strong liquidity, management appears positioned to maintain or modestly scale R&D investment over the next several quarters. Any disclosure of pipeline advancement (e.g., trial initiations/readouts) would be the primary leading indicator of medium-term growth potential. In sum, growth is milestone-dependent rather than driven by current commercial activity.

Financial Health

Liquidity is very strong: current assets 2,956.9m yen vs. current liabilities 106.9m yen yields a current ratio of ~27.7x and quick ratio similar given no inventories. Working capital stands at 2,850.0m yen, providing a substantial buffer for ongoing R&D. Solvency is solid, with total liabilities of 106.9m yen versus equity of 2,595.0m yen, implying a debt-to-equity ratio of ~0.04x and low financial risk. Financial leverage at ~1.03x reflects an equity-heavy capital structure. The reported equity ratio of 0.0% should be treated as undisclosed rather than literal, given equity is clearly positive. There is an internal inconsistency whereby current assets exceed total assets; this likely reflects reporting scope/classification differences rather than genuine balance sheet weakness. Overall, the balance sheet quality is high for a pre-revenue biotech, with ample liquidity and minimal leverage.

Cash Flow Quality

Cash flow data were not disclosed (Operating/Investing/Financing CF presented as zero), so direct assessment of earnings-to-cash conversion is not possible. Given the development-stage profile and lack of revenue, operating cash outflow likely approximates the operating loss (360m yen) adjusted for non-cash items and working capital movements; depreciation is undisclosed and presumably small. Free cash flow cannot be computed from the provided data; however, with current assets near 2.96bn yen and low liabilities, liquidity appears sufficient to fund several quarters of operations. Working capital is strongly positive (2.85bn yen), suggesting limited short-term cash constraints. The OCF/Net Income ratio shown as 0.00 should be treated as not available rather than indicative of cash earnings quality. Overall, earnings quality analysis is limited by non-disclosure, but the balance sheet suggests a comfortable near-term cash runway.

Dividend Sustainability

The company did not declare dividends (DPS 0.00) and recorded a net loss of 348m yen, making distributions inappropriate at this stage. Payout ratio metrics are not meaningful in a loss-making, pre-revenue context. With likely negative free cash flow and a strategic focus on R&D, cash is best preserved for pipeline advancement. Coverage of any hypothetical dividend by free cash flow cannot be assessed due to lack of CF disclosure but would be weak given ongoing losses. Policy-wise, initiation of dividends appears unlikely until commercialization or recurring partnership income materializes and profitability is achieved sustainably.

Risk Assessment

Business Risks:

• Clinical development risk: trial delays, failures, or suboptimal data readouts
• Regulatory approval risk and timing uncertainty
• Concentration risk if the pipeline is focused on a limited number of assets
• Commercialization and market access risks post-approval
• Partnering risk: dependence on securing collaborations or milestones

Financial Risks:

• Funding/dilution risk if cash runway shortens and capital markets are adverse
• R&D cost escalation increasing burn rate
• Foreign exchange exposure if trial costs or CMC are USD/EUR denominated
• Going concern risk over the medium term if losses persist without new funding

Key Concerns:

• Sustained operating and net losses with no current revenue
• Limited disclosure of cash flow data, constraining visibility on burn and FCF
• Apparent balance sheet classification anomaly (current assets > total assets)

Investment Implications

Key Takeaways:

• Pre-revenue, R&D-driven quarter with operating loss of 360m yen and net loss of 348m yen
• Very strong liquidity: current assets 2,956.9m yen; working capital 2,850.0m yen; current ratio ~27.7x
• Low leverage: liabilities/equity ~0.04x; financial leverage ~1.03x
• Cash runway likely extends for roughly 8–9 quarters at the current loss pace, subject to spend trajectory and asset mix
• Earnings quality appears clean with minimal non-operating distortion
• Dividend unlikely near term given losses and R&D priorities
• Key catalysts will be clinical/regulatory milestones and potential partnerships

Metrics to Watch:

• Quarterly R&D and SG&A expenses (operating loss trajectory)
• Cash and cash equivalents balance and detailed cash flow disclosure
• Partnerships, upfront/milestone income, and grants
• Clinical trial timelines and data readouts
• Equity financing activity and share count changes
• Working capital and current ratio trend

Relative Positioning: Within the Japanese pre-revenue biotech peer group on the TSE, Canvas exhibits stronger-than-average liquidity and very low leverage, with loss levels that are moderate for a clinical-stage profile; near-term performance remains milestone- rather than revenue-driven.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis