Japanese Apparel Firm ANAP Faces Steep Losses After Bitcoin Investment
Tokyo, Japan – Japanese apparel company ANAP, which reported a substantial paper gain of 1.22 billion yen from its Bitcoin holdings last year, has seen that figure reverse into a staggering 4.37 billion yen loss. The company has not sold its Bitcoin, and its investment remains underwater. Compounding the issue, ANAP financed its Bitcoin purchases through loans, while its core business has been mired in consecutive years of losses. The company is now resorting to debt-to-equity swaps and warrants to raise capital, resulting in a significant dilution of 274.97% and a stock price decline of approximately 96% from its peak.
Financial Reversal on Bitcoin Holdings
ANAP, a Tokyo Stock Exchange-listed apparel firm, disclosed its annual financial results on October 15th, alongside a separate announcement detailing an “evaluation loss” of 4.37 billion yen on its Bitcoin holdings. This marks a stark contrast to the previous year, when the same Bitcoin holdings generated a paper gain of 1.22 billion yen.
It is important to clarify that an “evaluation loss” does not signify a loss from selling Bitcoin. Under Japanese accounting standards, crypto assets like Bitcoin, which have active markets, are revalued at market price at the end of each quarter. Any difference is directly recorded in profit or loss, even if the asset has not been sold, and does not involve cash outflow. Therefore, ANAP, which has not yet sold its Bitcoin, still has the opportunity to recover its investment over time.
Debt-Financed Bitcoin Purchases and Core Business Struggles
The company’s financial predicament stems from its decision to finance Bitcoin purchases through loans. ANAP’s primary business involves women’s and children’s apparel, along with beauty salons. In the fiscal year ending August 2024, the company faced a deficit of 2.077 billion yen, indicating liabilities exceeding assets. It completed an out-of-court debt restructuring (ADR) in July of the same year. ANAP made its first Bitcoin purchase of 16.66 BTC on April 16, 2025, joining a trend of listed companies accumulating Bitcoin, with its subsidiary ANAP Lightning Capital holding the cryptocurrency. The cash flow statement for the fiscal year ending August 2026 shows that 6.081 billion yen was spent on acquiring Bitcoin, while operating cash flow was a negative 2.272 billion yen.
The core business has not provided any relief. For the fiscal year ending August 2026, revenue stood at 2.128 billion yen, with an operating loss of 2.155 billion yen. Including the Bitcoin evaluation loss, the recurring loss reached 6.762 billion yen, and the net loss attributable to the parent company was 7.323 billion yen, approximately 2.8 times that of the previous year. All four business segments – apparel, e-commerce, beauty salons, and investments – reported losses. Following the closure of unprofitable stores, the apparel subsidiary was left with 17 stores, and the salon division with 4.
Going Concern Warning and Stock Price Collapse
The financial report also included a “material uncertainty related to going concern” note, indicating that the company has experienced continuous losses in operating, recurring, and net profit for seven consecutive years since the fiscal year ending August 2020.
The company’s stock price has plummeted from an intraday high of 1,835 yen in July 2025 to a closing price of 81 yen on the day the financial report was released. The following day, October 16th, the stock fell another 11.11% to close at 72 yen, representing a decline of approximately 96% from its peak.
Capital Raising Through Dilution
ANAP initially attempted to raise funds by issuing shares through MS warrants, which feature a strike price that adjusts downwards with the stock price. However, as the stock price fell below the lower limit, few warrants were exercised. The 8th series of warrants expired worthless in April 2026. For the 9th series, with a lower limit price of 115 yen, only 24,799 out of 500,000 warrants were exercised, and they also expired on September 7th.
Consequently, the company shifted to a debt-to-equity swap (DES) strategy. At an extraordinary general meeting of shareholders on September 29th, approval was granted, and the transaction was completed on September 30th. A 3.6 billion yen loan was converted into 72 million common shares at 50 yen per share, approximately 31% below the closing price on October 16th. Additionally, a 4 billion yen loan was converted into 10 million shares of Class A preferred stock, which carry no voting rights. The company also issued warrants exercisable for 54.5 million shares at a fixed price of 50 yen, which could raise approximately 2.725 billion yen if fully exercised.
The newly raised funds are designated for repaying corporate debt, settling loans, and replenishing working capital for subsidiaries. The company’s Q&A materials explicitly state that the funds used to purchase Bitcoin are not part of this fundraising effort and will be supported by existing financing facilities. ANAP’s last recorded Bitcoin purchase was 9.18 BTC on April 21st, and its holdings have remained largely unchanged since then. While the company had initially aimed to be among the top 35 listed companies globally in terms of Bitcoin holdings by the end of August 2026, it has not increased its holdings since April.
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