Cover
Cover - USD ($) | 12 Months Ended | ||||
Sep. 30, 2023 | Jan. 05, 2024 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cover [Abstract] | |||||
Document Type | 10-K | ||||
Amendment Flag | false | ||||
Document Annual Report | true | ||||
Document Period End Date | Sep. 30, 2023 | ||||
Document Fiscal Period Focus | FY | ||||
Document Fiscal Year Focus | 2023 | ||||
Current Fiscal Year End Date | --09-30 | ||||
Entity File Number | 000-55377 | ||||
Entity Registrant Name | Exceed World, Inc. | ||||
Entity Central Index Key | 0001634293 | ||||
Entity Tax Identification Number | 47-3002566 | ||||
Entity Incorporation, State or Country Code | DE | ||||
Entity Address, Postal Zip Code | 564-0063 | ||||
Entity Well-known Seasoned Issuer | No | ||||
Entity Voluntary Filers | No | ||||
Entity Current Reporting Status | Yes | ||||
Entity Interactive Data Current | Yes | ||||
Entity Filer Category | Non-accelerated Filer | ||||
Entity Small Business | true | ||||
Entity Emerging Growth Company | false | ||||
Elected Not To Use the Extended Transition Period | false | ||||
Entity Shell Company | false | ||||
Entity Public Float | $ 1,602,300 | ||||
Common Stock, Shares, Issued | 32,700,000 | 32,700,000 | 32,700,000 | 32,700,000 | |
Auditor Firm ID | 206 | ||||
Auditor Name | MaloneBailey, LLP | ||||
Auditor Location | Houston, Texas |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Current Assets | ||
$ 18,165,169 | $ 23,822,217 | |
49,860 | 48,860 | |
587,663 | ||
112,363 | 119,999 | |
1,759,542 | 1,396,622 | |
411,343 | 1,751 | |
TOTAL CURRENT ASSETS | 21,085,940 | 25,389,449 |
Non-current Assets | ||
310,943 | 385,941 | |
189,431 | 380,046 | |
623,650 | 436,407 | |
120,852 | 127,293 | |
34,527 | 38,018 | |
675,000 | 132,853 | |
53,796 | 1,023,069 | |
189,630 | 196,152 | |
TOTAL NON-CURRENT ASSETS | 2,197,829 | 2,719,779 |
TOTAL ASSETS | 23,283,769 | 28,109,228 |
Current Liabilities | ||
642,483 | 2,910,407 | |
592,740 | 905,271 | |
406,635 | 445,846 | |
436,448 | 1,843,214 | |
1,163,548 | 866,916 | |
13,925 | 22,781 | |
299,947 | 296,359 | |
1,640,160 | 1,398,781 | |
741,248 | 741,248 | |
410,106 | 685,142 | |
TOTAL CURRENT LIABILITIES | 6,347,240 | 10,115,965 |
Non-current Liabilities | ||
82,380 | ||
27,020 | 32,945 | |
295,566 | 110,944 | |
TOTAL NON-CURRENT LIABILITIES | 322,586 | 226,269 |
TOTAL LIABILITIES | 6,669,826 | 10,342,234 |
3,270 | 3,270 | |
103,840 | 103,840 | |
22,463,148 | 23,014,895 | |
(5,956,315) | (5,355,011) | |
TOTAL SHAREHOLDERS' EQUITY | 16,613,943 | 17,766,994 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 23,283,769 | $ 28,109,228 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Sep. 30, 2023 $ / shares shares |
Statement of Financial Position [Abstract] | |
preferred par value | $ / shares | $ 0.0001 |
preferred authorized | 20,000,000 |
preferred issued | 0 |
common par value | $ / shares | $ 0.0001 |
common authorized | 500,000,000 |
common issued | 32,700,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 25,922,721 | $ 34,690,411 |
Cost of revenues | 12,986,260 | 17,306,860 |
Gross profit | 12,936,461 | 17,383,551 |
Operating expenses | ||
2,437,156 | 1,493,824 | |
10,884,757 | 9,482,020 | |
Total operating expenses | 13,321,913 | 10,975,844 |
Income (loss) from operations | (385,452) | 6,407,707 |
Other income (expenses) | ||
122,139 | 196,498 | |
60,851 | ||
(2,305) | (2,785) | |
Total other income | 119,834 | 254,564 |
Net income (loss) before tax | (265,618) | 6,662,271 |
Income tax expense | 286,129 | 2,523,924 |
Net income (loss) | (551,747) | 4,138,347 |
Comprehensive income (loss) | ||
(601,304) | (5,355,105) | |
Total comprehensive loss | $ (1,153,051) | $ (1,216,758) |
Income (loss) per common share | ||
$ (0.02) | $ 0.13 | |
$ (0.02) | $ 0.13 | |
Weighted average common shares outstanding | ||
32,700,000 | 32,700,000 | |
32,700,000 | 32,700,000 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid in Capital | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Common shares issued and outstanding | 32,700,000 | ||||
Balance - September 30, 2023 | $ 3,270 | $ 103,840 | $ 94 | $ 18,876,548 | $ 18,983,752 |
Balance - September 30, 2022 at Sep. 30, 2021 | 3,270 | 103,840 | 94 | 18,876,548 | 18,983,752 |
Net loss | 4,138,347 | 4,138,347 | |||
Foreign currency translation | (5,355,105) | $ (5,355,105) | |||
Common shares issued and outstanding | 32,700,000 | ||||
Balance - September 30, 2023 | 3,270 | 103,840 | (5,355,011) | 23,014,895 | $ 17,766,994 |
Balance - September 30, 2022 at Sep. 30, 2022 | 3,270 | 103,840 | (5,355,011) | 23,014,895 | 17,766,994 |
Net loss | (551,747) | (551,747) | |||
Foreign currency translation | (601,304) | $ (601,304) | |||
Common shares issued and outstanding | 32,700,000 | ||||
Balance - September 30, 2023 | $ 3,270 | $ 103,840 | $ (5,956,315) | $ 22,463,148 | $ 16,613,943 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
$ (551,747) | $ 4,138,347 | |
315,226 | 358,586 | |
35,411 | 6,461 | |
(60,852) | ||
(12,691) | (7,166) | |
(674,815) | 14,322 | |
351,174 | 393,583 | |
(2,829) | 3,466 | |
(633,281) | ||
3,883 | (88,593) | |
(441,130) | (804,576) | |
(441,449) | (852) | |
2,410 | 2,691 | |
(2,339,702) | 1,654,112 | |
(26,282) | (174,948) | |
(65,474) | 801,827 | |
(1,449,930) | 1,412,487 | |
350,718 | (353,836) | |
(351,174) | (393,583) | |
(228,951) | (142,027) | |
(6,160,633) | 6,759,449 | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
(91,960) | (105,620) | |
34,009 | ||
(8,560) | ||
1,029,111 | (237,683) | |
525,952 | ||
962,600 | 182,649 | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
(43,118) | (23,175) | |
50,416 | ||
(43,118) | 27,241 | |
Net effect of exchange rate changes on cash | (415,897) | (6,203,364) |
Net change in cash | ||
Cash - beginning of year | 23,822,217 | 23,056,242 |
Net increase (decrease) in cash | (5,657,048) | 765,975 |
Cash - end of year | 18,165,169 | 23,822,217 |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
31,517 | ||
568,587 | 114,185 | |
241,379 | 146,393 | |
1,000 | ||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | 2,305 | 2,785 |
Income taxes paid | $ 3,044,155 | $ 1,097,116 |
NOTE 1 ORGANIZATION, DESCRIPTIO
NOTE 1 ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Exceed World, Inc. (the “Company”), was incorporated under the laws of the State of Delaware on November 25, 2014. On September 26, 2018, e-Learning Laboratory Co., Ltd. (“e-Learning”), a direct wholly owned subsidiary of Force International Holdings Limited, which was incorporated in Hong Kong with limited liability (“Force Holdings”), entered into a share purchase agreement with Force Internationale Limited (“Force Internationale”), the holding company of Force Holdings, in which e-Learning agreed to sell and Force Internationale agreed to purchase 74.5% equity interest of the Company at a consideration of US$26,000. On September 26, 2018, the same date, Force Internationale entered into a share purchase agreement with the Company, in which Force Internationale agreed to sell and the Company agreed to purchase 100% equity interest of Force Holdings. In consideration of the agreement, the Company issued 12,700,000 common stocks at US$1 each to Force Internationale. The results of these transactions are that Force Internationale is an 84.4% owner of the Company, and the Company is a 100% owner of Force Holdings (the “Reorganization”). On December 6, 2018, the Company entered into a share contribution agreement (the “Agreement”) with Force Internationale. Under this Agreement, the Company transferred 100% of the equity interest of School TV Co., Ltd. ("School TV"), to Force Internationale without consideration. This Agreement was approved by the board of directors of the Company, Force Internationale and School TV. Upon the completion of the disposal, School TV was deconsolidated from the Company's consolidated financial statements. As of September 30, 2023, the Company operates through our wholly owned subsidiaries, which are engaged in provision of the educational services through an internet platform called “Force Club”. The Company has elected September 30th as its fiscal year end. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). When used in these notes, the terms "Company", "we", "us" or "our" mean the Company. |
NOTE 2 SIGNIFICANT ACCOUNTING P
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. Inter-company accounts and transactions have been eliminated. The results of subsidiaries disposed during the respective periods are included in the consolidated statements of operations and comprehensive loss up to the effective date of disposal. Name of Subsidiary Place of Organization Percentage of Effective Ownership Force International Holdings Limited (“Force Holdings”) Hong Kong 100% e-Learning Laboratory Co., Ltd. (“e-Learning”) Japan 100% (*1) e-Communications Co., Ltd. (“e-Communications”) Japan 100% (*2) (*1) Wholly owned subsidiary of Force Holdings (*2) Wholly owned subsidiary of e-Learning USE OF ESTIMATES The presentation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as the date of the financial statements and the reported amounts of revenue and expenses reported in those financial statements. Certain accounting policies that contain subjective management estimates and assumptions include those related to write-down in value of inventory, useful lives and impairment of long-lived assets, realization of deferred tax assets and legal contingencies. The extent to which the COVID-19 pandemic may directly or indirectly impact the business, financial condition, and results of operations is highly uncertain and subject to change. Due to the high uncertainty of the evolving situation, the Company has limited visibility on the full impact brought upon by the COVID-19 pandemic and the related financial impact cannot be estimated at this time. Operating results in the future could vary from the amounts derived from management's estimates and assumptions. RELATED PARTY TRANSACTION A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. ACCOUNTS RECEIVABLE AND ALLOWANCE Accounts receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are recorded corresponding to the allowance when identified. INVESTMENTS The Company's investments in marketable securities are accounted for pursuant to ASC 321 and reported at their readily determinable fair values as quoted by market exchanges in the consolidated balance sheets with changes in fair value recognized in earnings. The Company also has investments in corporate-owned life insurance policies to insure its CEO and key employees. These insurance policies are recorded at their cash surrender values in the consolidated balance sheets with change in the cash surrender value during the period recorded in earnings. INVENTORIES Inventories, consisting of educational products accounted for using the weighted average, are valued at the lower of cost and market value. For the year ended September 30, 2023, 96% of the inventories of educational products were purchased from supplier A. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less depreciation and impairment loss. Depreciation is calculated using the straight-line method or declining balance method at the following estimated useful life: Building 47 years on straight-line method Leasehold improvement 10 years on straight-line method Equipment 2 to 15 years on declining balance method or straight-line method Vehicle 6 years on straight-line method Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. INTANGIBLE ASSETS Intangible assets consist of internal use software, membership and land. The Company capitalizes certain costs related to obtaining or developing software for internal use. Costs incurred during the application development stage internally or externally are capitalized and amortized on a straight-line basis over the expected useful life of five years. The application development stage includes design of chosen path, software configuration and integration, coding, hardware installation and testing. Costs incurred during the preliminary project stage and post implementation-operation stage are expensed as incurred. Membership and land have indefinite useful life, and the balance was $ 120,852 127,293 IMPAIRMENT OF LONG-LIVED ASSETS The carrying value of property, plant and equipment and intangible assets subject to depreciation and amortization is evaluated whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. -F7- Table of Contents FOREIGN CURRENCY TRANSLATION The Company maintains its books and records in its local currencies, Japanese YEN (“JPY”) , Hong Kong Dollars (“HK$”) and United States Dollars (“US$” or “$”), which are the functional currencies as being the primary currencies of the economic environment in which their operations are conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive loss. The reporting currency of the Company is US$ and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, Translation of Financial Statement Translation of amounts from the local currency of the Company September 30, 2023 September 30, 2022 Current JPY: US$1 exchange rate 149.79 144.81 Average JPY: US$1 exchange rate 139.00 124.50 Current HK$: US$1 exchange rate 7.80 7.80 Average HK$: US$1 exchange rate 7.80 7.80 REVENUE RECOGNITION The Company operates and manages multilevel marketing (“MLM”) in operating its businesses as the Force Club Membership and generates revenues primarily by providing the rights to access the Company’s educational content and to recruit new members. The Company recognizes revenue by applying the following steps in accordance with ASC 606 - Revenue from contracts with Customers. The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services. - Identification of the contract, or contracts, with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when (or as) we satisfy the performance obligation Force Club Membership fee Nature of operation The revenue generated from Force Club Membership arrangements accounted for substantially all of revenues during the year ended September 30, 2023. Generally, the Company grants Force Club members the rights to access the Company’s educational content. There are three tiers of members, namely standard members, support members and premium members. The premium members are granted full access to the Company’s educational content and the right to recruit prospect customers to become the Company’s members. Each premium member needs to purchase a premium pack, containing promotional materials aiding the recruiting process, from the Company. The standard members are granted limited access to the Company’s educational content. To further promote the Company’s business, starting fiscal year 2021, the Company also offers its customers to subscribe and become a support member. Similar to a premium member, the support members are granted full access to the Company’s educational content and the right to recruit prospect customers to become the Company’s members, but the amount of commission entitled to the support member for each recruitment is lower than that to the premium members. The customers subscribing to support membership pay a lower fee for the access to educational content and will receive promotional materials which is substantially lesser in scale as compared to that to a premium member. For the years ended September 30, 2023 and 2022, the revenue generated from support member subscription is still immaterial. The support member has the choice to become a premium member by making relevant premium member registration and purchasing the upgrade pack from the Company. The revenue from upgrade pack is accounted for in the same manner as the revenue from the premium pack as described below. Revenue from the premium pack (including the upgrade pack) is recognized net of discounts and return allowances at a point in time upon delivery. Revenue from the right to access the Company’s educational content is recognized over a period of time ratably over the effective period. For sales of premium packs and upgrade packs with return conditions, the Company reasonably estimate the possibility of return based on historical experience. There were no liabilities for return allowances nor assets from the right to recover products from the associated return allowances recorded as of September 30, 2023 and 2022, as substantially all sales of premium packs (including the upgrade pack) during the years then ended have reached the end of the return periods. The Company's chief operating decision maker reviews results analyzed by customers and the analysis is only presented at the revenue level with no allocation of direct or indirect costs. The Company determines that it has only one operating segment. Consequently, the Company does not disaggregate revenue recognized from contracts with customers. Substantially all of the Company’s revenue was generated in Japan. Contract asset and liability Deferred income is recorded when consideration is received from a member prior to the goods delivered or the access granted. As of September 30, 2023 and 2022, the Company's deferred income was $ 1,163,548 866,916 866,916 The Company does not have any contract asset. ADVERTISING Advertising costs are expensed as incurred and included in selling and distributions expenses. Advertising expenses were $ 2,437,156 1,493,824 Advertising expenses were comprised of, but not limited to, sales events hosted for sales agents, exhibitions to promote and display company product offerings, signboards, and public relations activities. RESEARCH AND DEVELOPMENT EXPENSE Research and development expenses consist primarily of expenses incurred related to the development activities for the Company’s internally-used software and are charged to operations as incurred as these costs do not qualify for capitalization. For the years ended September 30, 2023 and 2022, research and development expenses of $ 2,282,502 253,123 EARNINGS PER SHARE The Company computes basic and diluted earnings per share in accordance with ASC Topic 260, Earnings per Share The Company does not have any potentially dilutive instruments as of September 30, 2023 and 2023 and, thus, anti-dilution issues are not applicable. INCOME TAXES The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Company’s income tax provision and net income or loss in the period the determination is made. The Company recognizes the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Penalties and interest incurred related to underpayment of these uncertain tax positions are classified as income tax expense in the period incurred. No such penalties and interest incurred during the years ended September 30, 2023 and 2022. LEASES The Company accounts for leases in accordance with ASC 842 and determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and operating lease liabilities, non-current in the Company’s consolidated balance sheets, and finance leases are included in property, plant and equipment, finance lease obligations, current and finance lease obligations, non-current in the Company’s consolidated balance sheets. ROU assets and related lease liabilities from operating leases and finance leases are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s lease do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. For leases with a term of 12 months or less, the Company makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. Modification to existing lease agreements, including changes to the lease term or payment amounts, are reviewed to determine whether they result in a sperate contract. For modifications that do not result in a separate contract, management reviews the lease classification and re-measures the related ROU assets and lease liabilities at the effective date of the modification. RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, (collectively with amendments issued subsequently thereto, “ASC 326”). ASC 326 eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. ASU 2016-13 will be effective for the Company beginning on October 1, 2023. The Company does not expect the adoption to have a material impact to its consolidated financial statements. -F8- Table of Contents |
NOTE 3 FAIR VALUE MEASUREMENT
NOTE 3 FAIR VALUE MEASUREMENT | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 3 FAIR VALUE MEASUREMENT | NOTE 3 FAIR VALUE MEASUREMENT FASB ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Significant other inputs that are directly or indirectly observable in the marketplace. Level 3: Significant unobservable inputs which are supported by little or no market activity. The Company considers the carrying amount of its financial assets and liabilities, which consist primarily of cash, accounts receivable, income tax recoverable, other current assets, accounts payable, income tax payable, contingency liabilities, deferred income, accrued expenses and other payables, other current liabilities and current portion of operating and finance lease obligations approximate the fair value of the respective assets and liabilities as of September 30, 2023 and 2022 owing to their short-term or present value nature or present value of the assets and liabilities. |
NOTE 4 INCOME TAXES
NOTE 4 INCOME TAXES | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
NOTE 4 INCOME TAXES | NOTE 4 INCOME TAXES For the years ended September 30, 2023 and 2022, the provision of income tax expense was $ 286,129 2,523,924 960,944 2,509,602 (674,815) 14,322 Japan The Company conducts its major businesses in Japan and e-Learning and e-Communications (“Japanese Subsidiaries”) are subject to tax in this jurisdiction. As a result of its business activities, Japanese Subsidiaries file tax returns that are subject to examination by the local tax authority. Japanese Subsidiaries are subject to a number of income taxes Company’s assessable profit For the years ended September 30, Up to JPY 4 million Up to JPY 8 million Over JPY 8 million 2023 21.87% 23.74% 34.34% 2022 21.87% 23.74% 34.34% Open tax years in Japan are five years. As of September 30, 2023, the Company’s earliest open tax year for Japanese income tax purposes is its fiscal year ended September 30, 2018. The Company's tax attributes from prior periods remain subject to adjustment. The reconciliations of the Japanese statutory income tax rate and the Company’s effective income tax rate Year Ended September 30, 2023 Year Ended September 30, 2022 Japanese statutory tax rate 33.80% 33.80% Income tax difference under different tax jurisdictions (36.38%) 0.94% Effect of valuation allowance on deferred income tax assets (142.41%) - Non-deductible expenses (9.54%) - Deductible tax payments 81.30% - Other adjustments (34.53%) 3.14% Total (107.76%) 37.88% Hong Kong Force Holdings, a direct wholly owned subsidiary of the Company in Hong Kong, is engaged in investment holding. Hong Kong profits tax has been provided at the rate of 16.5% on the estimated assessable profit arising in Hong Kong. No provision for the Hong Kong profits tax has been made as Force Holdings did not generate any estimated assessable profits in Hong Kong during the years ended September 30, 2023 and 2022. Open tax year in Hong Kong is six years after the relevant year of assessment. This may be extended to ten years in the case of fraud of willful evasion of taxes. There are no provisions that govern the time limit for tax collection. United States 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 years ended September 30, 2023 and 2022, 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. 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. 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 the Global Intangible Low-taxed Income (“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 elected to account for GILTI tax in the period the tax is incurred, and no provision is made during the year ended September 30, 2023 and 2022. 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 operations and comprehensive loss and estimated tax payments will be made when required by U.S. law. As of September 30, 2023, the Company’s earliest open tax year for U.S. federal income tax purposes is its fiscal year ended September 30, 2021. The Company's tax attributes from prior periods remain subject to adjustment. Open tax years in state and foreign jurisdictions generally range from three to six years. Accounting for Uncertainty in Income Taxes The tax authority within the jurisdiction of each of the Company’s subsidiaries conducts periodic and ad hoc tax filing reviews on business enterprises operating within that jurisdiction after those enterprises complete their relevant tax filings. Therefore, the Company’s subsidiaries’ tax filings results are subject to change. It is therefore uncertain as to whether the tax authorities may take different views about the Company’s subsidiaries’ tax filings, which may lead to additional tax liabilities. ASC 740 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and concluded that no provision for uncertainty in income taxes was necessary as of September 30, 2023 and 2022. |
NOTE 5 DEFERRED TAX ASSETS AND
NOTE 5 DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
NOTE 5 DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES | NOTE 5 DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES The Components of deferred tax assets and liabilities as of September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Deferred tax assets Inventories 17,324 19,208 Software 538,134 48,663 Expense 137,768 151,053 Net operating loss carryforward 350,985 - 1,044,211 218,924 Less: valuation allowance (350,985) - Total deferred tax asset $ 693,226 $ 218,924 September 30, 2023 September 30, 2022 Deferred tax liabilities Insurance funds $ (18,226) $ (168,451) Deferred tax liabilities, non-current $ (18,226) $ (168,451) For the purpose of presentation in the consolidated balance sheets, certain deferred income tax assets and liabilities have been offset. The following is the analysis of the deferred income tax balances for financial reporting purpose: September 30, 2023 September 30, 2022 Deferred tax assets $ 675,000 $ 132,853 Deferred tax liabilities $ - $ 82,380 |
NOTE 6 RELATED-PARTY TRANSACTIO
NOTE 6 RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
NOTE 6 RELATED-PARTY TRANSACTIONS | NOTE 6 RELATED-PARTY TRANSACTIONS Due to related parties and directors As of September 30, 2023 and 2022, the Company’s due to related parties and directors September 30, 2023 September 30, 2022 Due to director Tomoo Yoshida, CEO, CFO, sole director and a shareholder of the Company $ 741,248 $ 741,248 Total due to director $ 741,248 $ 741,248 Due to related parties Keiichi Koga, a shareholder of the Company and a director of certain subsidiaries of the Company $ 47,635 $ 47,635 Force Internationale, the Company’s majority shareholder. Tomoo Yoshida is a director of Force Internationale 1,592,525 1,351,146 Total due to related parties $ 1,640,160 $ 1,398,781 The payable balances are unsecured, due on demand, and bear no interest. From time to time, these related parties have advanced to the Company or paid expenses on behalf of the Company, and the Company has also made repayments. During the years ended September 30, 2023 and 2022, Force Internationale paid expense on behalf of the Company in the amount of $ 241,379 146,393 Tomoo Yoshida provided guarantee for the Company’s office leases during the years ended September 30, 2023 and 2022. -F9- Table of Contents |
NOTE 7 PROPERTY, PLANT AND EQUI
NOTE 7 PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
NOTE 7 PROPERTY, PLANT AND EQUIPMENT | NOTE 7 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment September 30, 2023 September 30, 2022 Building $ 183,045 $ 181,992 Leasehold improvement 41,284 42,704 Equipment 706,774 827,886 Vehicles 32,504 36,600 963,607 1,089,182 Accumulated depreciation (652,664) (703,241) Total net book value $ 310,943 $ 385,941 The aggregate depreciation expense of property, plant and equipment was $ 121,050 91,969 |
NOTE 8 SOFTWARE
NOTE 8 SOFTWARE | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 8 SOFTWARE | NOTE 8 SOFTWARE The book value of the Company’s software as of September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Software $ 1,098,725 $ 1,136,510 Accumulated amortization (909,294) (756,464) Total net book value 189,431 380,046 The aggregate amortization expense related to the software was $ 191,796 261,198 The estimated future amortization expense of software as of September 30, 2023 is as follows: Year ending September 30 Amount 2024 $ 127,728 2025 61,703 2026 - 2027 - 2028 - Thereafter - Total $ 189,431 |
NOTE 9 COMMITMENTS
NOTE 9 COMMITMENTS | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 9 COMMITMENTS | NOTE 9 COMMITMENTS As of September 30, 2023, the Company had four finance leases comprised of equipment and vehicle leases with a gross value of $ 74,878 The components of lease expense For the year ended September 30, 2023 Operating lease cost $ 363,847 Short term lease cost 17,280 Finance lease cost: Amortization of right-of-use assets 22,734 Interest on lease obligations 2,330 Total finance lease cost 25,064 Total lease cost $ 406,191 The following table presents the Company’s supplemental information related to operating and finance leases For the year ended September 30, 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 2,330 Operating cash flows from operating leases $ 363,847 Financing cash flows from finance leases $ 43,118 Weighted Average Remaining Lease Term Operating leases 2.38 years Finance leases 3.44 years Weighted Average Discount Rate Operating leases 1.84% Finance leases 6.00% The future maturity of lease liabilities Year ending September 30 Finance lease Operating lease 2024 $ 17,597 308,196 2025 8,153 177,945 2026 6,457 122,500 2027 6,457 - 2028 13,804 - Thereafter - - Total 52,468 608,64 Less imputed interest (11,523) (13,128) Total lease liabilities 40,945 595,513 Less current portion (13,925) (299,947) Long-term lease liabilities $ 27,020 $ 295,566 |
NOTE 10 CONTINGENCIES
NOTE 10 CONTINGENCIES | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 10 CONTINGENCIES | NOTE 10 CONTINGENCIES The Company is subject to various claims and legal proceedings in the course of conducting the business related to Force Club Membership and, from time to time, the Company may become involved in additional claims and lawsuits incidental to the businesses. The Company’s legal counsel and the management routinely assess the likelihood of adverse judgments and outcomes to these matters, as well as ranges of probable losses; to the extent losses are reasonably estimable. Accruals are recorded for these matters to the extent that management concludes a loss is probable and the financial impact, should an adverse outcome occur, is reasonable estimable. In the opinion of management, appropriate and adequate accruals for legal matters have been made, and management believes that the probability of a material loss beyond the amounts accrued is remote. Nevertheless, the Company cannot predict the impact of future developments affecting the Company’s pending or future claims and lawsuits. The Company expenses legal costs as incurred, and all recorded legal liabilities are adjusted as required as better information becomes available to the Company. The factors the Company considers when recording an accrual for contingencies include, among others: (i) the opinions and views of the Company’s legal counsel; (ii) the Company’s previous experience; and (iii) the decision of management as to how the Company intend to respond to the complaints. For the year ended September 30, 2023, the Company has settled four legal cases in total amount of approximately JPY10.3 million (approximately $ 74,000 From October 1, 2023 to the filing date, the Company has settled three cases under the same nature with an aggregate amount of approximately JPY22.8 million (approximately $ 164,000 419,000 |
NOTE 11 SUBSEQUENT EVENTS
NOTE 11 SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
NOTE 11 SUBSEQUENT EVENTS | NOTE 11 SUBSEQUENT EVENTS The Company evaluated subsequent events through January 5, 2024, the date the financial statements were available to issue, and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements. |
NOTE 2 SIGNIFICANT ACCOUNTING_2
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. Inter-company accounts and transactions have been eliminated. The results of subsidiaries disposed during the respective periods are included in the consolidated statements of operations and comprehensive loss up to the effective date of disposal. Name of Subsidiary Place of Organization Percentage of Effective Ownership Force International Holdings Limited (“Force Holdings”) Hong Kong 100% e-Learning Laboratory Co., Ltd. (“e-Learning”) Japan 100% (*1) e-Communications Co., Ltd. (“e-Communications”) Japan 100% (*2) (*1) Wholly owned subsidiary of Force Holdings (*2) Wholly owned subsidiary of e-Learning |
USE OF ESTIMATES | USE OF ESTIMATES The presentation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as the date of the financial statements and the reported amounts of revenue and expenses reported in those financial statements. Certain accounting policies that contain subjective management estimates and assumptions include those related to write-down in value of inventory, useful lives and impairment of long-lived assets, realization of deferred tax assets and legal contingencies. The extent to which the COVID-19 pandemic may directly or indirectly impact the business, financial condition, and results of operations is highly uncertain and subject to change. Due to the high uncertainty of the evolving situation, the Company has limited visibility on the full impact brought upon by the COVID-19 pandemic and the related financial impact cannot be estimated at this time. Operating results in the future could vary from the amounts derived from management's estimates and assumptions. |
RELATED PARTY TRANSACTION | RELATED PARTY TRANSACTION A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. |
ACCOUNTS RECEIVABLE AND ALLOWANCE | ACCOUNTS RECEIVABLE AND ALLOWANCE Accounts receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are recorded corresponding to the allowance when identified. |
INVESTMENTS | INVESTMENTS The Company's investments in marketable securities are accounted for pursuant to ASC 321 and reported at their readily determinable fair values as quoted by market exchanges in the consolidated balance sheets with changes in fair value recognized in earnings. The Company also has investments in corporate-owned life insurance policies to insure its CEO and key employees. These insurance policies are recorded at their cash surrender values in the consolidated balance sheets with change in the cash surrender value during the period recorded in earnings. |
INVENTORIES | INVENTORIES Inventories, consisting of educational products accounted for using the weighted average, are valued at the lower of cost and market value. For the year ended September 30, 2023, 96% of the inventories of educational products were purchased from supplier A. |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less depreciation and impairment loss. Depreciation is calculated using the straight-line method or declining balance method at the following estimated useful life: Building 47 years on straight-line method Leasehold improvement 10 years on straight-line method Equipment 2 to 15 years on declining balance method or straight-line method Vehicle 6 years on straight-line method Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consist of internal use software, membership and land. The Company capitalizes certain costs related to obtaining or developing software for internal use. Costs incurred during the application development stage internally or externally are capitalized and amortized on a straight-line basis over the expected useful life of five years. The application development stage includes design of chosen path, software configuration and integration, coding, hardware installation and testing. Costs incurred during the preliminary project stage and post implementation-operation stage are expensed as incurred. Membership and land have indefinite useful life, and the balance was $ 120,852 127,293 |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS The carrying value of property, plant and equipment and intangible assets subject to depreciation and amortization is evaluated whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. -F7- Table of Contents |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION The Company maintains its books and records in its local currencies, Japanese YEN (“JPY”) , Hong Kong Dollars (“HK$”) and United States Dollars (“US$” or “$”), which are the functional currencies as being the primary currencies of the economic environment in which their operations are conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive loss. The reporting currency of the Company is US$ and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, Translation of Financial Statement Translation of amounts from the local currency of the Company September 30, 2023 September 30, 2022 Current JPY: US$1 exchange rate 149.79 144.81 Average JPY: US$1 exchange rate 139.00 124.50 Current HK$: US$1 exchange rate 7.80 7.80 Average HK$: US$1 exchange rate 7.80 7.80 |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company operates and manages multilevel marketing (“MLM”) in operating its businesses as the Force Club Membership and generates revenues primarily by providing the rights to access the Company’s educational content and to recruit new members. The Company recognizes revenue by applying the following steps in accordance with ASC 606 - Revenue from contracts with Customers. The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services. - Identification of the contract, or contracts, with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when (or as) we satisfy the performance obligation Force Club Membership fee Nature of operation The revenue generated from Force Club Membership arrangements accounted for substantially all of revenues during the year ended September 30, 2023. Generally, the Company grants Force Club members the rights to access the Company’s educational content. There are three tiers of members, namely standard members, support members and premium members. The premium members are granted full access to the Company’s educational content and the right to recruit prospect customers to become the Company’s members. Each premium member needs to purchase a premium pack, containing promotional materials aiding the recruiting process, from the Company. The standard members are granted limited access to the Company’s educational content. To further promote the Company’s business, starting fiscal year 2021, the Company also offers its customers to subscribe and become a support member. Similar to a premium member, the support members are granted full access to the Company’s educational content and the right to recruit prospect customers to become the Company’s members, but the amount of commission entitled to the support member for each recruitment is lower than that to the premium members. The customers subscribing to support membership pay a lower fee for the access to educational content and will receive promotional materials which is substantially lesser in scale as compared to that to a premium member. For the years ended September 30, 2023 and 2022, the revenue generated from support member subscription is still immaterial. The support member has the choice to become a premium member by making relevant premium member registration and purchasing the upgrade pack from the Company. The revenue from upgrade pack is accounted for in the same manner as the revenue from the premium pack as described below. Revenue from the premium pack (including the upgrade pack) is recognized net of discounts and return allowances at a point in time upon delivery. Revenue from the right to access the Company’s educational content is recognized over a period of time ratably over the effective period. For sales of premium packs and upgrade packs with return conditions, the Company reasonably estimate the possibility of return based on historical experience. There were no liabilities for return allowances nor assets from the right to recover products from the associated return allowances recorded as of September 30, 2023 and 2022, as substantially all sales of premium packs (including the upgrade pack) during the years then ended have reached the end of the return periods. The Company's chief operating decision maker reviews results analyzed by customers and the analysis is only presented at the revenue level with no allocation of direct or indirect costs. The Company determines that it has only one operating segment. Consequently, the Company does not disaggregate revenue recognized from contracts with customers. Substantially all of the Company’s revenue was generated in Japan. Contract asset and liability Deferred income is recorded when consideration is received from a member prior to the goods delivered or the access granted. As of September 30, 2023 and 2022, the Company's deferred income was $ 1,163,548 866,916 866,916 The Company does not have any contract asset. |
ADVERTISING | ADVERTISING Advertising costs are expensed as incurred and included in selling and distributions expenses. Advertising expenses were $ 2,437,156 1,493,824 Advertising expenses were comprised of, but not limited to, sales events hosted for sales agents, exhibitions to promote and display company product offerings, signboards, and public relations activities. |
RESEARCH AND DEVELOPMENT EXPENSE | RESEARCH AND DEVELOPMENT EXPENSE Research and development expenses consist primarily of expenses incurred related to the development activities for the Company’s internally-used software and are charged to operations as incurred as these costs do not qualify for capitalization. For the years ended September 30, 2023 and 2022, research and development expenses of $ 2,282,502 253,123 |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company computes basic and diluted earnings per share in accordance with ASC Topic 260, Earnings per Share The Company does not have any potentially dilutive instruments as of September 30, 2023 and 2023 and, thus, anti-dilution issues are not applicable. |
INCOME TAXES | INCOME TAXES The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Company’s income tax provision and net income or loss in the period the determination is made. The Company recognizes the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Penalties and interest incurred related to underpayment of these uncertain tax positions are classified as income tax expense in the period incurred. No such penalties and interest incurred during the years ended September 30, 2023 and 2022. |
LEASES | LEASES The Company accounts for leases in accordance with ASC 842 and determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and operating lease liabilities, non-current in the Company’s consolidated balance sheets, and finance leases are included in property, plant and equipment, finance lease obligations, current and finance lease obligations, non-current in the Company’s consolidated balance sheets. ROU assets and related lease liabilities from operating leases and finance leases are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s lease do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. For leases with a term of 12 months or less, the Company makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. Modification to existing lease agreements, including changes to the lease term or payment amounts, are reviewed to determine whether they result in a sperate contract. For modifications that do not result in a separate contract, management reviews the lease classification and re-measures the related ROU assets and lease liabilities at the effective date of the modification. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, (collectively with amendments issued subsequently thereto, “ASC 326”). ASC 326 eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. ASU 2016-13 will be effective for the Company beginning on October 1, 2023. The Company does not expect the adoption to have a material impact to its consolidated financial statements. |
NOTE 2 SIGNIFICANT ACCOUNTING_3
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Translation of amounts from the local currency of the Company | Translation of amounts from the local currency of the Company September 30, 2023 September 30, 2022 Current JPY: US$1 exchange rate 149.79 144.81 Average JPY: US$1 exchange rate 139.00 124.50 Current HK$: US$1 exchange rate 7.80 7.80 Average HK$: US$1 exchange rate 7.80 7.80 |
NOTE 4 INCOME TAXES (Tables)
NOTE 4 INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Japanese Subsidiaries are subject to a number of income taxes | Japanese Subsidiaries are subject to a number of income taxes Company’s assessable profit For the years ended September 30, Up to JPY 4 million Up to JPY 8 million Over JPY 8 million 2023 21.87% 23.74% 34.34% 2022 21.87% 23.74% 34.34% |
The reconciliations of the Japanese statutory income tax rate and the Company’s effective income tax rate | The reconciliations of the Japanese statutory income tax rate and the Company’s effective income tax rate Year Ended September 30, 2023 Year Ended September 30, 2022 Japanese statutory tax rate 33.80% 33.80% Income tax difference under different tax jurisdictions (36.38%) 0.94% Effect of valuation allowance on deferred income tax assets (142.41%) - Non-deductible expenses (9.54%) - Deductible tax payments 81.30% - Other adjustments (34.53%) 3.14% Total (107.76%) 37.88% |
NOTE 5 DEFERRED TAX ASSETS AN_2
NOTE 5 DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
The Components of deferred tax assets and liabilities as of September 30, 2023 and 2022 | The Components of deferred tax assets and liabilities as of September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Deferred tax assets Inventories 17,324 19,208 Software 538,134 48,663 Expense 137,768 151,053 Net operating loss carryforward 350,985 - 1,044,211 218,924 Less: valuation allowance (350,985) - Total deferred tax asset $ 693,226 $ 218,924 September 30, 2023 September 30, 2022 Deferred tax liabilities Insurance funds $ (18,226) $ (168,451) Deferred tax liabilities, non-current $ (18,226) $ (168,451) |
NOTE 6 RELATED-PARTY TRANSACT_2
NOTE 6 RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
As of September 30, 2023 and 2022, the Company’s due to related parties and directors | As of September 30, 2023 and 2022, the Company’s due to related parties and directors September 30, 2023 September 30, 2022 Due to director Tomoo Yoshida, CEO, CFO, sole director and a shareholder of the Company $ 741,248 $ 741,248 Total due to director $ 741,248 $ 741,248 Due to related parties Keiichi Koga, a shareholder of the Company and a director of certain subsidiaries of the Company $ 47,635 $ 47,635 Force Internationale, the Company’s majority shareholder. Tomoo Yoshida is a director of Force Internationale 1,592,525 1,351,146 Total due to related parties $ 1,640,160 $ 1,398,781 |
NOTE 7 PROPERTY, PLANT AND EQ_2
NOTE 7 PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment September 30, 2023 September 30, 2022 Building $ 183,045 $ 181,992 Leasehold improvement 41,284 42,704 Equipment 706,774 827,886 Vehicles 32,504 36,600 963,607 1,089,182 Accumulated depreciation (652,664) (703,241) Total net book value $ 310,943 $ 385,941 |
NOTE 8 SOFTWARE (Tables)
NOTE 8 SOFTWARE (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
The book value of the Company’s software as of September 30, 2023 and 2022 | The book value of the Company’s software as of September 30, 2023 and 2022 September 30, 2023 September 30, 2022 Software $ 1,098,725 $ 1,136,510 Accumulated amortization (909,294) (756,464) Total net book value 189,431 380,046 |
NOTE 9 COMMITMENTS (Tables)
NOTE 9 COMMITMENTS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
The components of lease expense | The components of lease expense For the year ended September 30, 2023 Operating lease cost $ 363,847 Short term lease cost 17,280 Finance lease cost: Amortization of right-of-use assets 22,734 Interest on lease obligations 2,330 Total finance lease cost 25,064 Total lease cost $ 406,191 |
supplemental information related to operating and finance leases | The following table presents the Company’s supplemental information related to operating and finance leases For the year ended September 30, 2023 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 2,330 Operating cash flows from operating leases $ 363,847 Financing cash flows from finance leases $ 43,118 Weighted Average Remaining Lease Term Operating leases 2.38 years Finance leases 3.44 years Weighted Average Discount Rate Operating leases 1.84% Finance leases 6.00% |
The future maturity of lease liabilities | The future maturity of lease liabilities Year ending September 30 Finance lease Operating lease 2024 $ 17,597 308,196 2025 8,153 177,945 2026 6,457 122,500 2027 6,457 - 2028 13,804 - Thereafter - - Total 52,468 608,64 Less imputed interest (11,523) (13,128) Total lease liabilities 40,945 595,513 Less current portion (13,925) (299,947) Long-term lease liabilities $ 27,020 $ 295,566 |
NOTE 2 SIGNIFICANT ACCOUNTING_4
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||
membership and land | $ 120,852 | $ 127,293 |
deferred income | 1,163,548 | 866,916 |
deferred income in opening balance | 866,916 | |
advertising expenses | 2,437,156 | 1,493,824 |
research and development expenses | $ 2,282,502 | $ 253,123 |
NOTE 4 INCOME TAXES (Details Na
NOTE 4 INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
provsion income tax expense | $ 286,129 | $ 2,523,924 |
current portion of income tax expenses | 960,944 | 2,509,602 |
Deferred portion income tax expense | $ (674,815) | $ 14,322 |
NOTE 6 RELATED-PARTY TRANSACT_3
NOTE 6 RELATED-PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transactions [Abstract] | ||
expenses paid by force internationale | $ 241,379 | $ 146,393 |
NOTE 7 PROPERTY, PLANT AND EQ_3
NOTE 7 PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 121,050 | $ 91,969 |
NOTE 8 SOFTWARE (Details Narrat
NOTE 8 SOFTWARE (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||
aggregate amortization expense | $ 191,796 | $ 261,198 |
NOTE 9 COMMITMENTS (Details Nar
NOTE 9 COMMITMENTS (Details Narrative) | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
vehicle leases and equipment | $ 74,878 |
NOTE 10 CONTINGENCIES (Details
NOTE 10 CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Jan. 05, 2024 | Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Legal cases settled | $ 164,000 | $ 74,000 |
Probable settlement amount of pending legal claims against company | $ 419,000 |