Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Mar. 31, 2018 | May 15, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Exceed World, Inc. | |
Entity Central Index Key | 1,634,293 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Well Known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 253,660 | |
Entity Common Stock Shares Outstanding | 20,000,000 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 71,412 | $ 46,295 |
Accounts receivable | 143 | 1,011 |
Inventories, net | 82,306 | 78,268 |
Prepaid expenses | 4,475 | 9,652 |
Total Current Assets | 158,336 | 135,226 |
Intangible assets, net | 671,668 | 656,828 |
Total assets | 830,004 | 792,054 |
Current Liabilities | ||
Accounts payable | 5,697 | 5,382 |
Due to related parties | 262,658 | 159,243 |
Accrued expenses | 25,504 | 4,512 |
Total Current Liabilities | 293,859 | 169,137 |
Long-term notes payables | 517,598 | 489,019 |
Long-term notes payables – related party | 235,272 | 222,281 |
Total Liabilities | 1,046,729 | 880,437 |
Stockholders' Deficit | ||
Preferred stock ($.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of March 31, 2018 and September 30, 2017) | ||
Common stock ($.0001 par value, 500,000,000 shares authorized, 20,000,000 shares issued and outstanding as of March 31, 2018 and September 30, 2017) | 2,000 | 2,000 |
Additional Paid In Capital | 10,517 | 10,517 |
Accumulated Deficit | (220,863) | (102,543) |
Accumulated other comprehensive income (loss) | (8,379) | 1,643 |
Total Stockholders' Deficit | (216,725) | (88,383) |
Total Liabilities & Stockholders' Deficit | $ 830,004 | $ 792,054 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Sep. 30, 2017 |
StockholdersEquity | ||
Preferred Stock Par Or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock Shares Issued | 0 | 0 |
Preferred Stock Shares Outstanding | 0 | 0 |
Common Stock Par Or Stated Value Per Share | $ 0.0001 | $ .0001 |
Common Stock Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock Shares Issued | 20,000,000 | 20,000,000 |
Common Stock Shares Outstanding | 20,000,000 | 20,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,171 | $ 5,363 | $ 11,158 | $ 13,849 |
Cost of revenues | 30,509 | 3,285 | 59,031 | 8,943 |
Gross profit (loss) | (29,338) | 2,078 | (47,873) | 4,906 |
Selling, general and administrative expenses | 44,464 | 19,796 | 65,701 | 33,915 |
Total operating expenses | 44,464 | 19,796 | 65,701 | 33,915 |
Loss from operations | (73,802) | (17,718) | (113,574) | (29,009) |
Interest expense | 2,421 | 4,746 | ||
Total other expense | 2,421 | 4,746 | ||
Loss before tax | (76,223) | (17,718) | (118,320) | (29,009) |
Income tax expense | 56 | 466 | ||
Net loss | (76,223) | (17,774) | (118,320) | (29,475) |
Net loss | (76,223) | (17,774) | (118,320) | (29,475) |
Other comprehensive income | ||||
Foreign Currency Translation Adjustment | (10,098) | (2,100) | (10,022) | 2,681 |
Total comprehensive loss | $ (86,321) | $ (19,874) | $ (128,342) | $ (26,794) |
Basic and diluted net loss per common share | $ 0 | $ 0 | $ (0.01) | $ 0 |
Weighted Average Number of Common Shares Outstanding-Basic and Diluted | 20,000,000 | 20,000,000 | 20,000,000 | 70,386,740 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (118,320) | $ (29,475) |
Amortization of intangible assets | 22,618 | |
Write-down of inventory value | 174 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 890 | (349) |
Inventories | 342 | 8,943 |
Prepaid expenses | 5,515 | 420 |
Accrued expenses | 19,911 | (229) |
Income tax payables | (294) | |
Net cash used in operating activities | (68,870) | (20,984) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advance from related party | 90,547 | |
Net cash provided by financing activities | 90,547 | |
Effect of exchange rate changes on cash and cash equivalents | 3,440 | (3,520) |
Net Change in Cash and Cash Equivalents | 25,117 | (24,504) |
Cash and cash equivalents - beginning of period | 46,295 | 38,410 |
Cash and cash equivalents - end of period | 71,412 | 13,906 |
Stock cancellation | 38,000 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | ||
Income taxes paid | $ 823 |
NOTE 1 - ORGANIZATION, DESCRIPT
NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS, AND BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 - ORGANIZATION, DESCRIPTION OF BUSINESS, AND BASIS OF PRESENTATION Exceed World, Inc., formerly known as Brilliant Acquisition, Inc. (the “Company”), was incorporated under the laws of the State of Delaware on November 25, 2014. As of March 31, 2018, we operate through our wholly owned subsidiary, School TV Co., Ltd. (“School TV”), which is engaged in various business activities and industries including: - The sale and distribution of health related products; - The promotion of third party consumer goods and services; - RE/MAX business in Kanagawa, Okinawa and Tokyo. The accompanying unaudited consolidated financial statements of Exceed World, Inc. have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the six months ended March 31, 2018, have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we”, “us” or “our” mean the Company. Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our consolidated financial statements for the year ended September 30, 2017, included in our Form 10-K. |
NOTE 2 - SIGNIFICANT ACCOUNTING
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the financial statements of its wholly-owned subsidiary, School TV. Intercompany transactions are eliminated. USE OF ESTIMATES The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates and assumptions made by management include going concern, allowance for doubtful accounts, valuation allowance on deferred income tax, write-down in value of inventory and sales allowance. Operating results in the future could vary from the amounts derived from management's estimates and assumptions. FOREIGN CURRENCY TRANSLATION The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity. Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: March 31, 2018 Current JPY: US$1 exchange rate 106.26 Average JPY: US$1 exchange rate 110.62 RECENT ACCOUNTING PRONOUNCEMENTS In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. This ASU adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. The amendments are effective upon addition to the FASB Accounting Standards Codification. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements. |
NOTE 3 - INCOME TAXES
NOTE 3 - INCOME TAXES | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Income taxes | nOTE 3 - INCOME TAXES The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority. National income tax in Japan is charged at 15% of a company’s assessable profit. The Company’s subsidiary, School TV, was incorporated in Japan and is subject to Japanese national income tax and city income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance with the relevant enterprises income tax laws applicable to foreign enterprises. School TV’s operation during the six months ended March 31, 2018 has resulted a net taxable loss, as such School TV was not subject to income tax for the six months ended March 31, 2018. The effective income tax rate of School TV is 0%. Deferred tax assets arise from net operating loss carried forward of $104,766 is fully allowed as the Company is not able to estimate future operating results due to limited operating history. The net operating loss carry forward will start to expire in the year 2026. For the six months ended March 31, 2017, income tax for School TV is $466. The effective tax rate of School TV is 15%. Exceed World, Inc., which acts as a holding company on a non-consolidated basis, does not plan to engage any business activities and current or future loss will be fully allowed. For the six months ended March 31, 2018 and 2017, respectively, Exceed World, Inc., as a holding company registered in the state of Delaware, has incurred net loss and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry forward has been fully reserved. United States The Company is a Delaware corporation that is subject to U.S. corporate income tax on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “2017 Act”), was signed into law on December 22, 2017. The 2017 Act significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years or in a single lump sum. The 2017 Act also includes provisions for a new tax on GILTI effective for tax years of foreign corporations beginning after December 31, 2017. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of controlled foreign corporations (“CFCs”), subject to the possible use of foreign tax credits and a deduction equal to 50 percent to offset the income tax liability, subject to some limitations. The Company’s management is still evaluating the effect of the 2017 Act on the Company. Management may update its judgment of that effect based on its continuing evaluation and on future regulations or guidance issued by the U.S. Department of the Treasury, and specific actions the Company may take in the future. To the extent that portions of the Company’s U.S. taxable income, such as Subpart F income or GILTI, are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. If dividends that the Company receives from its subsidiaries are determined to be from sources outside of the U.S., subject to certain limitations, the Company will generally not be required to pay U.S. corporate income tax on those dividends. Any liabilities for U.S. corporate income tax will be accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments will be made when required by U.S. law. One-Time Transition Tax Related to the 2017 Act The Company estimated the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the 2017 Act. The Company retained an accumulated deficit as of December 31, 2017 and therefore did not recognize any one-time transition tax. The actual impact of the 2017 Act on the Company may differ from management’s estimates, and management may update its judgments based on future regulations or guidance issued by the U.S. Department of the Treasury, and specific actions the Company may take in the future. |
NOTE 4 - GOING CONCERN
NOTE 4 - GOING CONCERN | 6 Months Ended |
Mar. 31, 2018 | |
Going Concern | |
Going Concern | NOTE 4 - GOING CONCERN The accompanying consolidated financial statements are prepared on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction of liabilities in the normal course of business. For the six months ended March 31, 2018, the Company had generated net loss of $118,320 and negative cash flows from operations of $68,870. As of March 31, 2018, the Company had working deficit of $135,523. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As a first priority, we plan to increase sufficient revenues for necessary working capital from our business. If we cannot generate sufficient revenues, we plan to borrow working capital from the director or parent company. |
NOTE 5 - RELATED PARTY TRANSACT
NOTE 5 - RELATED PARTY TRANSACTIONS DISCLOSURE | 6 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 - RELATED-PARTY TRANSACTIONS As of March 31, 2018 and September 30, 2017, the Company had $168,549 and $159,243, respectively, owed to Tomoo Yoshida, Chief Executive Officer and Chief Financial Officer of the Company, respectively. The advance is due on demand and bears no interest. As of March 31, 2018 and September 30, 2017, the Company had $94,109 and $0, respectively, owed to e-Communications Co., Ltd. Tomoo Yoshida, our CEO, is also the CEO of e-Communications Co., Ltd. The advance is due on demand and bears no interest. On May 24, 2017, the Company borrowed JPY 25,000,000, or $223,534 from e-Learning Laboratory Co., Ltd., the beneficial owner of the Company, primarily for the payment to lease the regional franchise rights of the RE/MAX System. The loan matures on May 24, 2023 with an interest rate of 2% per annum. For the six months ended March 31, 2018, the interest expense related to this note payable was $2,260. For the six months ended March 31, 2018, e-Learning Laboratory Co. Ltd. provided 10 square meters of office space and 2 square meters of storage space to the Company free of charge. |
NOTE 6 - LONG-TERM NOTES PAYABL
NOTE 6 - LONG-TERM NOTES PAYABLE | 6 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long Term Notes Payable | NOTE 6 - LONG-TERM NOTE PAYABLE On May 22, 2017, the Company entered into a loan agreement to borrow JPY 55,000,000, or $492,436 from Mr. Toshihiro Hirai, the CEO of Actcall Inc., the 100% owner of Kidding Co., for the initial payment required upon the execution of the RE/MAX Regional Franchise Agreement entered on July 7, 2017. The loan matures on May 31, 2022 with an interest rate of 1% per annum. For the six months ended March 31, 2018, the interest expense related to this note payable was $2,486. |
NOTE 7 - INTANGIBLE ASSETS, NET
NOTE 7 - INTANGIBLE ASSETS, NET | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | NOTE 7 - INTANGIBLE ASSETS, NET The following table presents the detail of intangible assets: 3/31/2018 9/30/2017 Franchise rights Gross carrying value $ 706,381 $ 667,378 Less: accumulated amortization total 34,713 10,550 Franchise rights, net $ 671,668 $ 656,828 |
NOTE 8 - COMMITMENTS
NOTE 8 - COMMITMENTS | 6 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 8 – COMMITMENTS Under the lease of franchise rights, the Company is subjected to the following potential payment commitments: (1) membership fee in the amount of JPY42,000 (approximately $400) per year per sales associate operating under the RE/MAX brokerage office franchised from the Company (“RE/MAX Office”); (2) monthly ongoing fees comprised of monthly fixed fees, in the amount of JPY60,000 (approximately $500) per RE/MAX Office, and monthly percentage fees, in the amount of 3% of the commission the Company charges from the RE/MAX Office; (3) monthly advertising fee of JPY10,000 (approximately $100) per RE/MAX Office; and (4) unconditional monthly fixed technology fee of JPY10,000 (approximately $100) per leased franchise right. The membership fee and monthly fixed fee are subjected to increase in every two years, and the monthly advertising fee is subjected to increase upon request and negotiation. As of March 31, 2018, the Company has not had any RE/MAX Office or sales associate, and was not subject to any non-cancellable payments. |
NOTE 9 - CONCENTRATIONS
NOTE 9 - CONCENTRATIONS | 6 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 9 – CONCENTRATIONS Concentration of revenues For the six months ended March 31, 2018, the Company generated revenues of $11,158, of which 90% was generated in the first three months. The revenues generated from two customers in relation to its RE/MAX business were $2,930 and $6,975, accounting for 26% and 63% of the total revenues, respectively. For the six months ended March 31, 2017, the Company generated revenues of $13,849. $13,173 was generated by selling health products to a major customer which accounts for 95% of the total revenues. |
NOTE 2. SUMMARY OF SIGNIFICANT
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the financial statements of its wholly-owned subsidiary, School TV. Intercompany transactions are eliminated. |
Use of Estimates | USE OF ESTIMATES The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates and assumptions made by management include going concern, allowance for doubtful accounts, valuation allowance on deferred income tax, write-down in value of inventory and sales allowance. Operating results in the future could vary from the amounts derived from management's estimates and assumptions. |
Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity. Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: March 31, 2018 Current JPY: US$1 exchange rate 106.26 Average JPY: US$1 exchange rate 110.62 |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118”. This ASU adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. The amendments are effective upon addition to the FASB Accounting Standards Codification. The Company is currently evaluating the impact of the adoption of this guidance on the Consolidated Financial Statements. |