Exceed World, Inc 10-Q for FY2025 Q2
Exceed World, Inc. (EXDW)
About this 10-Q
Exceed World, Inc filed this 10-Q on May 20, 2025, covering the quarter ended March 31, 2025 (FY2025 Q2).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.32M
- down 63.6% from $6.36M a year earlier
- Net loss
- $1.63M
- compared with a net loss of $163.24K a year earlier
- Diluted EPS
- -$0.05
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
FOR
THE QUARTERLY PERIOD ENDED
OR
| [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
COMMISSION FILE NUMBER:
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | ||
|
1-23-38-8F, Esakacho, Suita-shi, Osaka Japan |
564-0063 (Zip Code) |
||
| (Address of Principal Executive Offices) |
Issuer's telephone number: +81-6-6339-4177
Fax number: +81-6-6339-4180
Email: ceo.exceed.world@gmail.com
Indicate by check mark whether the registrant
(1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. [X]
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a small reporting company. See definition of large accelerated filer, accelerated filer and small reporting company in Rule 12b-2 of the Securities Exchange Act of 1934.
| Large accelerated filer ☐ | Accelerated filer ☐ | |||
| Smaller reporting company |
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of May 20, 2025, there were approximately shares of common stock and no shares of preferred stock issued and outstanding.
-1-
INDEX
-2-
PART I - FINANCIAL INFORMATION
| ITEM 1 | FINANCIAL STATEMENTS |
|
EXCEED WORLD, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
|
| As of | As of | |||
|
March 31, 2025 |
September 30, 2024 | |||
| ASSETS | ||||
| Current Assets | ||||
| Cash | $ | $ | ||
| Restricted cash | ||||
| Accounts receivable | ||||
| Income tax recoverable | ||||
| Prepaid expenses | ||||
| Inventories | ||||
| Other current assets | ||||
| TOTAL CURRENT ASSETS | ||||
| Non-current Assets | ||||
| Property, plant and equipment, net | ||||
| Software, net | ||||
| Operating lease right-of-use assets | ||||
| Other intangible assets, net | ||||
| Long-term prepaid expenses | ||||
| Deferred tax assets | ||||
| Investments | ||||
| Insurance funds | ||||
| Security deposits | ||||
| TOTAL NON-CURRENT ASSETS | ||||
| TOTAL ASSETS | $ | $ | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current Liabilities | ||||
| Accounts payable | $ | $ | ||
| Accrued expenses and other payables | ||||
| Contingency liability | ||||
| Income tax payable | ||||
| Deferred income | ||||
| Finance lease obligations, current | ||||
| Operating lease liabilities, current | ||||
| Due to related parties | ||||
| Due to director | ||||
| Other current liabilities | ||||
| TOTAL CURRENT LIABILITIES | ||||
| Non-current Liabilities | ||||
| Finance lease obligations, non-current | ||||
| Operating lease liabilities, non-current | ||||
| TOTAL NON-CURRENT LIABILITIES | ||||
| TOTAL LIABILITIES | ||||
| Shareholders' Equity | ||||
|
Preferred stock ($ par value, shares authorized; issued and outstanding as of March 31, 2025 and September 30, 2024) |
||||
|
Common stock ($ par value, shares authorized, shares issued and outstanding as of March 31, 2025 and September 30, 2024) |
||||
| Additional paid-in capital | ||||
| Retained earnings | ||||
| Accumulated other comprehensive loss | ( |
( | ||
| TOTAL SHAREHOLDERS' EQUITY | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | $ |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-F1-
EXCEED WORLD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
| Three Months Ended | Three Months Ended |
Six Months Ended |
Six Months Ended | ||||||
| March 31, 2025 | March 31, 2024 | March 31, 2025 | March 31, 2024 | ||||||
| Revenues | $ | $ | $ | $ | |||||
| Cost of revenues | |||||||||
| Gross profit | |||||||||
| Operating expenses | |||||||||
| Selling and distribution expenses | |||||||||
| Administrative expenses | |||||||||
| Total operating expenses | |||||||||
| Income (loss) from operations | ( |
( |
( | ||||||
| Other income (expense) | |||||||||
| Other income | |||||||||
| Interest expenses | ( |
( |
( |
( | |||||
| Total other income | |||||||||
| Net income (loss) before tax | ( |
( |
|||||||
| Income tax expense | |||||||||
| Net loss | $ | ( |
$ | ( |
$ | ( |
$ | ( | |
| Comprehensive loss | |||||||||
| Net loss | $ | ( |
$ | ( |
$ | ( |
$ | ( | |
| Other comprehensive income (loss) | |||||||||
| Foreign currency translation adjustment | ( |
( |
( | ||||||
| Total comprehensive loss | $ | ( |
$ | ( |
$ | ( |
$ | ( | |
| Loss per common share | |||||||||
| Basic | $ | ( |
$ | ( |
$ | ( |
$ | ( | |
| Diluted | $ | ( |
$ | ( |
$ | ( |
$ | ( | |
| Weighted average common shares outstanding | |||||||||
| Basic | |||||||||
| Diluted | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-F2-
EXCEED WORLD, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
| ADDITIONAL |
ACCUMULATED OTHER |
||||||||||
| COMMON STOCK | PAID-IN | COMPREHENSIVE | RETAINED | ||||||||
| NUMBER | AMOUNT | CAPITAL | INCOME (LOSS) | EARNINGS | TOTAL | ||||||
| Balance - September 30, 2023 | $ | $ | $ | ( |
$ | $ | |||||
| Net loss | - | ( |
( | ||||||||
| Foreign currency translation | - | ||||||||||
| Balance – December 31, 2023 | $ | $ | $ | ( |
$ | $ | |||||
| Net loss | - | ( |
( | ||||||||
| Foreign currency translation | - | ( |
( | ||||||||
| Balance – March 31, 2024 | $ | $ | $ | ( |
$ | $ | |||||
| Balance – September 30, 2024 | $ | $ | $ | ( |
$ | $ | |||||
| Net loss | ( |
( | |||||||||
| Foreign currency translation | - | ( |
( | ||||||||
| Balance – December 31, 2024 | $ | $ | $ | ( |
$ | $ | |||||
| Net loss | - | ( |
( | ||||||||
| Foreign currency translation | - | ||||||||||
| Balance – March 31, 2025 | $ | $ | $ | ( |
$ | $ | |||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-F3-
EXCEED WORLD, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended | Six Months Ended | |||
| March 31, 2025 | March 31, 2024 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net loss | $ | ( |
$ | ( |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Depreciation and amortization | ||||
| Gain on disposal of property, plant and equipment | ( |
|||
| Loss on company owned life insurance policies | ||||
| Non-cash lease expense | ||||
| Deferred income taxes | ||||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | ( |
( | ||
| Income tax recoverable | ||||
| Prepaid expenses | ( | |||
| Inventories | ||||
| Other current assets | ( |
|||
| Long-term prepaid expenses | ( |
|||
| Accounts payable | ( |
|||
| Accrued expenses and other payables | ||||
| Contingency liability | ( | |||
| Income tax payable | ( |
( | ||
| Deferred income | ( |
( | ||
| Operating lease liabilities | ( |
( | ||
| Other current liabilities | ( |
|||
| Net cash provided by (used in) operating activities | ( |
|||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Purchase of property, plant and equipment | ( |
( | ||
| Payments for investments | ( |
|||
| Purchase of software | ( |
|||
| Payment towards company-owned life insurance policies | ( |
( | ||
| Net cash used in investing activities | ( |
( | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Repayment of finance lease obligations | ( |
( | ||
| Net cash used in financing activities | ( |
( | ||
| Net effect of exchange rate changes on cash and restricted cash | ( |
( | ||
| Net change in cash and restricted cash | ||||
| Cash and restricted cash- beginning of period | ||||
| Net increase (decrease) in cash and restricted cash | ( |
|||
| Cash and restricted cash - end of period | $ | $ | ||
| NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||||
| Property, plant and equipment obtained in connection with capital lease | $ | $ | ||
| Remeasurement of the lease liabilities and right-of-use assets due to lease modification | $ | $ | ||
| Reclassification from long-term lease liabilities to short-term lease liabilities | $ | $ | ||
| Operating expense paid by related parties on behalf of the Company | $ | $ | ||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||
| Interest paid | $ | $ | ||
| Income taxes paid | $ | $ |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-F4-
EXCEED WORLD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF March 31, 2025
(UNAUDITED)
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 $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 stock 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.
On December 6, 2018, the Company entered into a share contribution 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 March 31, 2025, 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 unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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, 2024, included in our Form 10-K.
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.
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 and legal contingencies. Operating results in the future could vary from the amounts derived from management's estimates and assumptions.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially expose the Company to concentrations or credit risk consist primarily of cash. The Company places its majority of cash with financial institutions with high credit ratings and quality located in Japan. Cash balances in bank accounts in Japan are insured by the Deposit Insurance Corporation of Japan up to a limitation of JPY10 million per depositor per financial institution.
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.
FOREIGN CURRENCY TRANSLATION
The Company maintains its books and records in its local currencies, Japanese YEN (“JPY”), Hong Kong Dollars (“HK$”) and the United States Dollars (“US$”), which are the functional currencies as being the primary currencies of the economic environment in which their operations are conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive income.
The reporting currency of the Company is US$ and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, Translation of Financial Statement, assets and liabilities of the Company whose functional currency is not US$ 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. Shareholders’ equity is translated at historical exchange rate at the time of transaction. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the consolidated statements of changes in 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, 2025 | March 31, 2024 | ||
| Current JPY: US$1 exchange rate | 149.52 | 151.41 | |
| Average JPY: US$1 exchange rate | 152.59 | 148.14 | |
| Current HK$: 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
Our revenue generated from Force Club Membership arrangements accounted for substantially all of our revenues during the six months ended March 31, 2025. 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 six months ended March 31, 2025 and 2024, 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 March 31, 2025 and September 30, 2024, as substantially all sales of premium packs (including the upgrade pack) during the periods then ended have reached the end of the return periods.
Connector Plan Membership Fee
The Company launched a new Game Business (Connector Plan) website as from June 2024, earning membership fee and virtual points charge, and those virtual points can only be consumed in the Company’s online games. Therefore, the Company regards the sales of a virtual point as a service, where the related performance obligation is satisfied over time, and revenues are recognized by measuring progress toward satisfying the performance obligation in a manner that best depicts the transfer of goods or services to the customer. Accordingly, the Company recognizes revenues from the sale of virtual points over the period of time using the output method, which is generally the estimated service period.
Estimated Service Period - The Company used the estimated retention period of the players as the estimate for the service period. The Company evaluates the appropriateness of such estimates quarterly to see if they are in line with the Company’s observations in the operations. The Company believes this provides a reasonable depiction of the transfer of services to customers, as it is the best representation of the time period during which the Company’s customers play the Company’s games. Determining the estimated service period is subjective and requires management’s judgment. Future usage patterns may differ from historical ones and therefore, the estimated service period may change in the future. The estimated service periods for players of the Company’s current games are generally 1 month.
Membership fee - The Company charges a membership fee to its customers, which grants its members the rights to full access to the Company’s online games and the right to recruit prospect customers to become the Company’s members for the duration of the membership. As the Company has the obligation to provide access to its online games for the duration of the membership term, the Company recognizes membership fee on a straight-line basis over a period of time ratably over the estimated service period. For membership with refundable periods, the Company reasonably estimates the possibility of refund based on historical experience. The Company historically did not incur material refunds and did not accrue liabilities for refunds of membership fees. If actual refunds differ from the Company’s estimates, the effects could be material to the consolidated financial statements.
Contract asset and liability
Deferred income is recorded when consideration is received from a member prior to the goods were delivered or the access was granted. As of March 31, 2025 and September 30, 2024, the Company's deferred income was $16,326 and $498,975 respectively. During the six months ended March 31, 2025, the Company recognized $498,975 of deferred income in the opening balance.
The Company does not have any contract asset.
Disaggregation of revenue
For the six months ended March 31, 2025 and 2024, substantially all of the Company’s revenue was generated in Japan and contributed by the Company’s subsidiaries. The Company disaggregates revenue into two revenue streams, consisting of Force Club Membership Fee and Connector Plan Membership Fee, as follows：
|
Six Months Ended March 31, 2025 |
Six Months Ended March 31, 2024 | |||
| Force Club Membership Fee | 3,614,326 | 11,122,274 | ||
| Connector Plan Membership Fee | 1,660,976 | - | ||
| Others | 45,641 | 64,395 | ||
| Total | 5,320,943 | 11,186,669 |
OPERATING LEASES
The Company recognizes its leases in accordance with ASC 842 - Leases. Under ASC 842, lessees are required to recognize all qualified operating leases at the commencement date including a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use (ROU) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The initial lease liability is equal to the future fixed minimum lease payments discounted using the Company’s incremental borrowing rate, on a secured basis. The lease term includes option renewal periods and early termination payments when it is reasonably certain that the Company will exercise those rights. The initial measurement of the ROU asset is equal to the initial lease liability plus any initial direct costs and prepayments, less any lease incentives.
The Company elected the practical expedient not to separate lease and non-lease components for certain classes of underlying assets and the short-term lease exemption for contracts with lease terms of 12 months or less. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. In addition, the Company elected the land easement transition practical expedient and did not reassess whether an existing or expired land easement is a lease or contains a lease if it has not historically been accounted for as a lease.
-F5-
NOTE 3 - FAIR VALUE MEASUREMENT
FASB ASC 820, Fair Value Measurements and Disclosures, ("ASC 820") defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into three levels:
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, inventories, 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 March 31, 2025 and September 30, 2024 owing to their short-term or present value nature or present value of the assets and liabilities.
NOTE 4 - LONG-TERM INVESTMENT
The Company’s long-term investment consist of equity investments without readily determinable fair value. For those investments over which the Company does not have significant influence and without readily determinable fair value, the Company records them at cost, less impairment, and plus or minus subsequent adjustments for observable price changes, in accordance with ASC 321, “Investments Equity Securities”. Under this measurement alternative, changes in the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. During November 2024, the Company purchased 1,250 shares of Mint Productions Inc in the amount of JPY50,000,000, approximately $ as of March 31, 2025. During six months ended March 31, 2025, no impairment loss was recognized for this investment.
NOTE 5 - INCOME TAXES
For the six months ended March 31, 2025 and
2024, the Company had income tax expense of $
The provisions for income taxes for the six months ended March 31, 2025 and 2024 are summarized as follows:
| For the six months ended March 31, | |||
| 2025 | 2024 | ||
| Current income tax expense | $ | - | 351,462 |
| Deferred income tax expense | 70,051 | 120,669 | |
| Total | $ | 70,051 | 472,131 |
Japan
The Company conducts its major businesses in Japan and e-Learning and e-Communications Co., Ltd. (collectively, “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, which, in aggregate, represent a statutory tax rate approximately as follows:
| Company’s assessable profit | ||||||
| For the period ended March 31, | Up to JPY 4 million | Up to JPY 8 million | Over JPY 8 million | |||
| 2024 | 21.87% | 23.74% | 34.34% | |||
| 2025 | 21.87% | 23.74% | 34.34% | |||
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 has not generated any estimated assessable profits in Hong Kong from its inception.
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 six months ended March 31, 2025 and 2024, 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.
NOTE 6 - RELATED-PARTY TRANSACTIONS
As of March 31, 2025, and September 30, 2024, the Company’s due to related parties and director are as follows:
| March 31, 2025 | September 30, 2024 | |||
| 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 | 2,059,970 | 1,943,725 | ||
| Total due to related parties | $ | 2,107,605 | $ | 1,991,360 |
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 six months ended March 31, 2025
and 2024, Force Internationale paid expenses on behalf of the Company in the amount of $
Tomoo Yoshida provided guarantee for the Company’s office leases during the six months ended March 31, 2025 and 2024.
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
| March 31, 2025 | September 30, 2024 | |||
| Building | $ | 275,563 | $ | 235,425 |
| Leasehold improvement | 206,649 | 193,757 | ||
| Equipment | 693,752 | 658,913 | ||
| Vehicles | 204,582 | 248,427 | ||
| Land | 166,943 | 174,885 | ||
| Construction in process | 26,685 | 15,974 | ||
| 1,574,174 | 1,527,381 | |||
| Accumulated depreciation | (756,927) | (750,641) | ||
| Total net book value | $ | 817,247 | $ | 776,740 |
The aggregate depreciation
expense of property, plant and equipment was $
NOTE 8 - SOFTWARE
The Company capitalized 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 chose 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. During
six months March 31, 2025 and 2024, $
The book value of the Company’s software as of March 31, 2025 and September 30, 2024 was as follows:
| March 31, 2025 | September 30, 2024 | |||
| Software | $ | 4,775,339 | $ | 2,335,929 |
| Accumulated amortization | (1,006,874) | (796,141) | ||
| Software in process | 278,461 | 1,440,222 | ||
| Total net book value | $ | 4,046,926 | $ | 2,980,010 |
The aggregate amortization expense related to the
software was $
NOTE 9 - COMMITMENTS
As of March 31, 2025, the Company had four finance
leases of equipment with a gross value of approximately $
The components of lease expense were as follows:
| For the six months ended March 31, | |||
| 2025 | 2024 | ||
| Operating lease cost | $ | 165,721 | 170,699 |
| Short term lease cost | 9,240 | 8,073 | |
| Finance lease cost: | |||
| Amortization of right-of-use asset | 10,130 | 10,316 | |
| Interest on lease liability | 1,245 | 1,182 | |
| Total finance lease cost | 11,375 | 11,498 | |
| Total lease cost | $ | 186,336 | 190,270 |
The following table presents the Company’s supplemental information related to operating and finance leases:
| For the six months ended March 31, | |||
| 2025 | 2024 | ||
| Cash paid for amounts included in the measurement of lease liabilities | |||
| Operating cash flows from finance leases | $ | 1,245 | 1,182 |
| Operating cash flows from operating leases | $ | 169,123 | 170,699 |
| Financing cash flows from finance leases | $ | 8,183 | 4,236 |
| Weighted Average Remaining Lease Term | |||
| Operating leases | 1.55 years | 2.07 years | |
| Finance leases | 4.21 years | 3.44 years | |
| Weighted Average Discount Rate | |||
| Operating leases | 1.84% | 1.84% | |
| Finance leases | 1.91% | 6.93% | |
The future maturity of lease liabilities as of March 31, 2025 are as follows:
| Year ending September 30 | Finance lease | Operating lease | ||
| 2025 (remaining) | $ | 8,852 | $ | 169,123 |
| 2026 | 17,263 | 284,208 | ||
| 2027 | 17,263 | 31,002 | ||
| 2028 | 17,263 | - | ||
| 2029 | 11,388 | - | ||
| Thereafter | 1,025 | - | ||
| Total | $ | 73,054 | $ | 484,333 |
| Less imputed interest | (2,912) | (6,951) | ||
| Total lease liabilities | 70,142 | 477,382 | ||
| Less current portion | (16,290) | (332,261) | ||
| Long-term lease liabilities | $ | 53,852 | $ | 145,121 |
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 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 our 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 our management as to how we intend to respond to the complaints.
During the six months ended March 31, 2025, the Company
has settled one legal case in the amount of approximately JPY3.4 million, (approximately $
NOTE 11 - SUBSEQUENT EVENTS
The Company evaluated all subsequent events that may have a material impact on the Company’s consolidated financial statements as of May 20, 2025, and concluded that no such events have occurred.
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| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Any references to “the Company” refer to Exceed World, Inc., which operates through its wholly owned subsidiaries.
Company Overview
Corporate History
The Company was originally incorporated with the name Brilliant Acquisition, Inc., under the laws of the State of Delaware on November 25, 2014, with an objective to acquire, or merge with, an operating business. On January 12, 2016, Thomas DeNunzio of 780 Reservoir Avenue, #123, Cranston, RI 02910, the sole shareholder of the Company, entered into a Share Purchase Agreement with e-Learning Laboratory Co., Ltd., a Japan corporation (“e-Learning”). Pursuant to the Agreement, Mr. DeNunzio transferred to e-Learning, 20,000,000 shares of our common stock which represents all of our issued and outstanding shares. Following the closing of the share purchase transaction, e-Learning gained a 100% interest in the issued and outstanding shares of our common stock and became the controlling shareholder of the Company.
On January 12, 2016, the Company changed its name to Exceed World, Inc. and filed with the Delaware Secretary of State, a Certificate of Amendment. On January 12, 2016, Mr. Thomas DeNunzio resigned as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer. Also, on January 12, 2016, Mr. Tomoo Yoshida was appointed as our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On February 29, 2016, the Company entered into a Stock Purchase Agreement with Tomoo Yoshida, our Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer. Pursuant to this Agreement, Tomoo Yoshida transferred to Exceed World, Inc., 10 shares of the common stock of E&F Co., Ltd., a Japan corporation (“E&F”), which represents all of its issued and outstanding shares in consideration of $4,835 (JPY 500,000). Following the effective date of the share purchase transaction on February 29, 2016, Exceed World, Inc. gained a 100% interest in the issued and outstanding shares of E&F’s common stock and E&F became a wholly owned subsidiary of Exceed World. On August 4, 2016, the E&F changed its name to School TV Co., Ltd (“School TV”) and filed with the Legal Affairs Bureau in Osaka, Japan.
On April 1, 2016, e-Learning entered into stock purchase agreements with 7 Japanese individuals. Pursuant to these agreements, e-Learning sold 140,000 shares of common stock in total to these individuals and received $270 as aggregate consideration. Each paid JPY0.215 per share. At the time of purchase the price paid per share by each was the equivalent of about $0.002. This sale of shares was exempt from registration in accordance with Regulation S of the Securities Act of 1933, as amended ("Regulation S") because the above sales of the stock were made to non-U.S. persons as defined under Rule 902 section (k)(2)(i) of Regulation S, pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.
On August 1, 2016, the Company changed its fiscal year end from November 30 to September 30.
On August 9, 2016, e-Learning entered into stock purchase agreements with 33 Japanese individuals. Pursuant to these agreements, e-Learning sold 3,300 shares of common stock in total to these individuals and received $330 as aggregate consideration. Each paid JPY10 per share. At the time of purchase the price paid per share by each shareholder was the equivalent to about $0.1. These shares were sold pursuant to the Company’s effective S-1 Registration Statement deemed effective on July 20, 2016 at 4pm EST.
On October 28, 2016, the Company, with the approval of its board of directors and its majority shareholders by written consent in lieu of a meeting, authorized the cancellation of shares owned by e-Learning. e-Learning consented to the cancellation of shares. The total number of shares cancelled was 19,000,000 shares which was comprised of 16,500,000 restricted common shares and 2,500,000 free trading shares.
On October 28, 2016, every one (1) share of common stock, par value $.0001 per share, of the Company issued and outstanding was automatically reclassified and changed into twenty (20) shares fully paid and non-assessable shares of common stock of the Company, par value $.0001 per share. (“20-for-1 Forward Stock Split”) No fractional shares were issued. The authorized number of shares, and par value per share, of common stock are not affected by the 20-for-1 Forward Stock Split.
During July 2017 and August 2017, e-Learning entered into stock purchase agreements with 24 Japanese individuals. Pursuant to these agreements, e-Learning sold 2,240,000 shares of its common stock in total to these individuals and received $38,263 as aggregate consideration.
On September 26, 2018, Force Internationale Limited, a Cayman Island limited company (“Force Internationale”) entered into a Share Purchase Agreement with its wholly-owned subsidiary, e-Learning and 74.5% owner of the Company. Under this Share Purchase Agreement, e-Learning transferred its 74.5% interest in the Company to Force Internationale. As consideration for this transfer, Force Internationale paid $26,000.00 to e-Learning. Immediately subsequent, the Company entered into a Share Purchase Agreement with Force Internationale, to acquire 100% of Force Holdings and 100% direct owner of e-Learning. In consideration of this agreement, the Company issued 12,700,000 common shares to Force Internationale. The result of these transaction is that Force Internationale is a 84.4% owner of the Company, the Company is a 100% owner of Force Holdings, and Force Holdings is a 100% owner of e-Learning. Prior to the Share Purchase Agreements, Force Internationale was an indirect owner of 74.5% of the Company and subsequent to the Share Purchase Agreements, Force Internationale is a direct owner of 84.4% of the Company. The Share Purchase Agreements were approved by the boards of directors of each of the Company, Force Internationale, Force Holdings, and e-Learning.
On December 6, 2018, the Company entered into a share contribution agreement (the “Contribution 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 Contribution 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.
Business Information
As of March 31, 2025, we operate through our wholly-owned subsidiaries, which are engaged in the provision of the educational services through an internet platform called “Force Club”.
Our principal executive offices are located at 1-1-36, 1-23-38-6F, Esakacho, Suita-shi, Osaka 564-0063, Japan. Our phone number is +81-6-6339-4177.
Liquidity and Capital Resources
As of March 31, 2025 and September 30, 2024, we had cash in the amount of $11,587,260 and $17,573,926, respectively. Currently, our cash balance is sufficient to fund our operations without the need for additional funding.
Revenues
We recorded revenue of $2,315,935 for the three months ended March 31, 2025 as opposed to $6,359,520 for the three months ended March 31, 2024. We recorded revenue of $5,320,943 for the six months ended March 31, 2025 as opposed to $11,186,669 for the six months ended March 31, 2024. The decrease in revenue, in our opinion, is primarily attributed to a decrease in recruitment activities of premium Force Club members.
Net Loss
We recorded net loss of $1,631,923 for the three months ended March 31, 2025 as opposed to net loss of $163,242 for the three months ended March 31, 2024. We recorded net loss of $2,608,963 for the six months ended March 31, 2025 as opposed to net loss of $441,188 for the six months ended March 31, 2024. The increase in net loss is attributed to a decrease in revenue.
Cash flow
For the six months ended March 31, 2025, we had negative cash outflows from operations in the amount of $3,709,737 as opposed to cash inflows of $1,283,161 for the six months ended March 31, 2024. The increase in operating cash outflow, in our opinion, is mainly attributed to an increase in settlement of account payable, deferred income and other current liabilities, and decrease in receipts of accounts receivable.
Working capital
As of March 31, 2025 and September 30, 2024, we had working capital of $8,742,154 and $13,800,283, respectively.
Advertising
Advertising costs are expensed as incurred and included in selling and distributions expenses. Advertising expenses were $463,562 and $123,372 for the three months ended March 31, 2025 and 2024, respectively. Advertising expenses were $562,723 and $224,428 for the six months ended March 31, 2025 and 2024, respectively.
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. The increase in advertising expenses is mainly because the Company held more promotional activities in current periods to attract customers.
Research and development
Research and development expenses incurred during the preliminary project stage and post implementation-operation stage are expensed as incurred and included in administrative expenses. Research and development expenses were $469,772 and $1,249,043 for the three months ended March 31, 2025 and 2024, respectively. Research and development expenses were $1,342,691 and $2,225,838 for the six months ended March 31, 2025 and 2024, respectively.
Research and development expenses comprised of, but not limited to outsourcing fees for development of internal used software related to connector plan. The decrease in research and development expenses is mainly due to the decrease of activities incurred during the preliminary project stage related to the connector plan. The development of connector plan is progressing into the application development stage.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements as of March 31, 2025.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited consolidated financial statements. The preparation of our financial statements in conformity with accounting principles generally accepted in the United States, or GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results may differ under different estimates and assumptions. We believe there are no critical accounting policies and estimates for the six months ended March 31, 2025.
Future Plans
Over the course of the next twelve months, the Company will continue to focus on expanding its sales network in order to strengthen its business activities as well as to provide benefits and incentives to premium members as value-added services, in addition to the standard compensation package.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
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| ITEM 4 | CONTROLS AND PROCEDURES |
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of March 31, 2025, the end of the fiscal period covered by this report, we carried out an evaluation, under the supervision of our chief executive officer, with the participation of our chief financial officer, of the effectiveness of the design and the operation of our disclosure controls and procedures. The officers concluded that the disclosure controls and procedures were not effective as of the end of the period covered by this report due to material weaknesses identified below.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: domination of management by a single individual without adequate compensating controls, lack of a majority of outside directors on board of directors, inadequate segregation of duties consistent with control objectives, lack of well-established procedures to identify, approve and report related party transactions and lack of an audit committee. These material weaknesses were identified by our Chief Executive Officer who also serves as our Chief Financial Officer in connection with the above annual evaluation.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that have occurred for the six months ended March 31, 2025, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II-OTHER INFORMATION
| ITEM 1 | LEGAL PROCEEDINGS |
During the six months ended March 31, 2025, the Company has settled one legal case in the amount of approximately JPY3.4 million (approximately $22,500) related to the cancellation of contract. As of filing date, the Company had five pending legal cases, claiming a damage of approximately JPY19.4 million (approximately $129,300) related to the cancellation of contracts. The Company’s legal counsel estimated a probable settlement for these cases with total settlement amount of approximately JPY8.0 million (approximately $53,400). The Company accrued a total liability of JPY8.0 million (approximately $53,400) as of March 31, 2025.
During the past ten (10) years, none of our directors, persons nominated to become directors, executive officers, promoters or control persons was involved in any of the legal proceedings listen in Item 401 (f) of Regulation S-K.
| ITEM 1A | RISK FACTORS |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
None.
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES |
None
| ITEM 4 | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5 | OTHER INFORMATION |
None
| ITEM 6 | EXHIBITS |
| (1) | Filed as an exhibit to the Company's Registration Statement on Form 10, as filed with the SEC on February 19, 2015, and incorporated herein by this reference. |
| (2) | Filed as an exhibit to the Company's Current Report on Form 8-K as filed with the SEC on January 12, 2016, and incorporated herein by this reference. |
| (3) | Filed as an exhibit to the Company's Current Report on Form 8-K as filed with the SEC on November 1, 2016, and incorporated herein by this reference. |
| (4) | Filed herewith. |
-5-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Exceed World, Inc.
(Registrant)
By: /s/ Tomoo Yoshida
Tomoo Yoshida, Chief Executive Officer, Chief Financial Officer, Director
Dated: May 20, 2025
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Tomoo Yoshida
Tomoo Yoshida, Chief Executive Officer, Chief Financial Officer, Director
Dated: May 20, 2025
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EXHIBIT 31.1
Exceed World, INC.
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Tomoo Yoshida, certify that:
1. I have reviewed this report on Form 10-Q of Exceed World, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The small business owner’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Dated: May 20, 2025
By: /s/ Tomoo Yoshida
Tomoo Yoshida,
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
Exceed World, INC.
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Tomoo Yoshida, certify that:
1. I have reviewed this report on Form 10-Q of Exceed World, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The small business owner’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Dated: May 20, 2025
By: /s/ Tomoo Yoshida
Tomoo Yoshida,
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
Exceed World, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Exceed World, Inc. (the Company) on Form 10-Q for the quarter ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Tomoo Yoshida, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Tomoo Yoshida and will be retained by Exceed World, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: May 20, 2025
By: /s/ Tomoo Yoshida
Tomoo Yoshida,
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 32.2
Exceed World, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Exceed World, Inc. (the Company) on Form 10-Q for the quarter ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Tomoo Yoshida, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Tomoo Yoshida and will be retained by Exceed World, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: May 20, 2025
By: /s/ Tomoo Yoshida
Tomoo Yoshida,
Chief Financial Officer
(Principal Financial Officer)