Liquidity and Capital Resources

As of September 30, 2020 and September 30, 2019, we had cash and cash equivalents in the amount of $19,370,086 and $20,198,362, respectively. The decrease in cash is attributed to decrease of accounts payable and increase of inventories. These accounts payable were mainly unpaid commissions to Force Club premium members and these payments were completed as of the date of this report. Currently, our cash balance is sufficient to fund our operations without the need for additional funding.





Revenues

We recorded revenue of $21,019,454 for the year ended September 30, 2020 as opposed to $28,393,548 for the year ended September 30, 2019. The decrease in revenue, in our opinion, is attributed to a decrease in recruitment activities of premium force club members.





Net loss

We recorded net loss of $962,278 for the year ended September 30, 2020 and net loss of $132,017 for the year ended September 30, 2019. The increase in net loss is attributed to a decrease in revenue from 2019 to 2020.





Cash flow

For the year ended September 30, 2020, we had negative cash flows from operations in the amount of $621,048. For the year ended September 30, 2019, we had negative cash flows from operations in the amount of $4,365,066. The decrease in negative operating cash flow, in our opinion, is attributed to less payments made to settle outstanding accounts payable and collection of revenue proceeds in advance included in deferred income.





Working capital

As of September 30, 2020 and 2019, we had working capital of $14,083,699 and $15,318,405, respectively.





Advertising

Advertising costs are expensed as incurred and included in selling and distributions expenses. Advertising expenses were $1,009,721 and $1,908,950 for the years ended September 30, 2020 and 2019, 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.





Future Plans

Over the course of the next twelve months, the Company intends to focus on expanding its sales network in order to strengthen its business activities. Currently, revenue is derived primarily from sales of the premium package. While it is the intention of the Company to maintain this revenue stream, and to further increase the number of premium members of the Force Club, the Company also intends to diversify its operations and develop additional business activities.

In order to do so, the Company intends to focus on development of an online educational platform on which additional advertising income can be generated. At present, there are no definitive plans that have been made regarding the implementation or direction of this future online educational platform. However, we intend to begin efforts to hire additional personnel with extensive experience in web marketing in order to assist in the development of our future platform.

In addition to e-learning business, the Company has also been engaged in physical school business. Currently, we open "ixi Robot School" which provides robot programming training to children and "Kodomo Mirai Career" Which children can learn the social structure.





Impact of COVID-19

In the Company's financial year of 2020, the global outbreak of the coronavirus disease 2019 ("COVID-19") has significantly affected economy in Japan, where the Company mainly operates its business. Especially since February 2020, the economy has rapidly declined due to limited economic activity caused by COVID-19. The Company implemented some measures to prevent infection including shortening business hours and restricting movements of employees. Our Force Club Members' activities, which is our main sales resources, have also been limited due to travel restrictions and social distance rules implemented nationwide and globally. Consequently, the COVID-19 pandemic has adversely affected the Company's business operations, financial condition and operating results for 2020, including but not limited to material negative impact to the Company's total revenues, and these effects may continue in 2021. 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 to future periods cannot be estimated at this time.

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