Liquidity and Capital Resources

As of September 30, 2021 and September 30, 2020, we had cash in the amount of $23,056,242 and $19,370,086, respectively. The increase in cash is mainly attributed to increase in net income from operation and accounts payable. The accounts payable were mainly unpaid commissions to the 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 $28,433,822 for the year ended September 30, 2021 as opposed to $21,019,454 for the year ended September 30, 2020. The increase in revenue, in our opinion, is attributed to an increase in membership fee income from the Force Club premium members.





Net income

We recorded net income of $3,074,544 for the year ended September 30, 2021 as opposed to net loss of $962,278 for the year ended September 30, 2020. The increase in net income is attributed to an increase in revenue and decrease in operating expenses.





Cash flow

For the year ended September 30, 2021, we had cash flows from operations in the amount of $5,257,817. For the year ended September 30, 2020, we had negative cash flows from operations in the amount of $621,048. The increase in operating cash flow, in our opinion, is attributed to an increase in net income, adjusted by the change in fair value of marketable securities, depreciation and amortization expenses and noncash lease expense, and changes in income tax payable, accrued expenses and other payables, other current liabilities and accounts payable, offset by the cash outflow resulting from changes in in deferred income and operating lease liabilities.





Working capital

As of September 30, 2021 and 2020, we had working capital of $15,695,158 and $14,083,699, respectively.





Advertising

Advertising costs are expensed as incurred and included in selling and distributions expenses. Advertising expenses were $736,195 and $1,009,721 for the years ended September 30, 2021 and 2020, 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

During the year under the review, in Japan where the Company mainly operates its business, State of Emergency were issued several times due to the intermittent outbreak of the coronavirus disease 2019 ("Covid-19") and the Company's activities had been significantly restricted. Nevertheless, the Company made efforts to give some incentives to the Force Club members, which resulted in an increase in the number of the members. Accordingly, the membership fee income for the year significantly increased.

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, based on such an increase in number of the members and cost-effective management, which was gained during the outbreak of Covid-19. We plan to provide some benefits and incentives to the Premium Members as value-added services, in addition to the normal compensation package.





Impact of COVID-19

In Japan, State of Emergency was lifted on September 30, 2021 and vaccination rate is increasing. As the restrictions on activities have been eased, the economy is expected to be recovered during the Company's financial year ending 2022. However, 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.

© Edgar Online, source Glimpses