Judging Management’s Character、alt 260A JP

On April 25, Alt (260A) disclosed the possibility of overstating

revenue for its primary meeting transcription service. The issue came

to light during an investigation by the Securities and Exchange

Surveillance Commission, which began in early April. Alt also

announced the creation of an independent third-party committee to

conduct a thorough investigation and postponed the release of its

consolidated financial results for Q1 FY12/2025, originally scheduled

for May 14. Alt went public in October 2024.

The investigation centers on potentially inflated revenue from paid

accounts that reportedly showed no actual usage of the transcription

service “AI GIJIROKU.” Additionally, certain projects obtained through

sales agents are suspected to have contributed to overstated revenue

figures.

The third-party committee, comprising independent lawyers and

certified public accountants, will examine the details and assess the

financial impact from December 2020 through January–March 2025. The

revised date for the financial results announcement remains undecided.

Following the announcement, Alt’s stock dropped 19% (limit down) on April 28.

I met Alt’s CFO twice, most recently on April 7. He presented himself

as an aggressive and outspoken professional who strongly backs the

CEO—a hands-on engineer focused on product development. Reflecting on

our meeting, the CFO appeared more subdued than before, possibly

preoccupied with the ongoing investigation. I even joked with him,

asking, “Are you feeling OK?” He attributed his demeanor to a severe

hay fever allergy. Just to be sure, he might not have been aware of

this possible overstatement.

I generally admire young, ambitious management teams eager to share

their long-term growth visions with investors. However, my judgment

may have been clouded by the CFO’s enthusiasm. This experience has

taught me valuable lessons about evaluating management’s character

with greater discernment over the longer term.

I would love to hear your take on how to judge management characters.

Regards,

Yuka

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