ITEM 2
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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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 subsidiary School TV Co., Ltd.
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 (the “Agreement”)
with e-Learning Laboratory Co., Ltd. (“e-Learning”), with an address at 1-23-38-6F, Esakacho, Suita-shi, Osaka 564-0063
Japan. Pursuant to the Agreement, Mr. DeNunzio transferred to e-Learning Laboratory Co., Ltd., 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. The resignation was not the result
of any disagreement with us on any matter relating to our operations, policies or practices.
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 Laboratory Co., Ltd. entered
into stock purchase agreements with 7 Japanese shareholders. Pursuant to these agreements, e-Learning Laboratory Co., Ltd. sold
140,000 shares of common stock in total to these individuals and received $270 as aggregate consideration. Each shareholder paid
.215 Japanese Yen per share. At the time of purchase the price paid per share by each shareholder was the equivalent of about .002
USD.
The aforementioned 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 Laboratory Co., Ltd. entered
into stock purchase agreements with 33 Japanese shareholders. Pursuant to these agreements, e-Learning Laboratory Co., Ltd. sold
3,300 shares of common stock in total to these individuals and received $330 as aggregate consideration. Each shareholder paid
10 Japanese Yen per share. At the time of purchase the price paid per share by each shareholder was the equivalent of about 0.1
USD.
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, Exceed World, Inc., a Delaware corporation,
(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 Laboratory Co, Ltd. e-Learning Laboratory Co, Ltd. has
provided consent for 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.
Shareholder’s name: e-Learning
Laboratory Co., Ltd.
Total amount of shares cancelled
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19,000,000
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shares
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Restricted shares
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16,500,000
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shares
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Free trading shares
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2,500,000
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shares
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On October 28, 2016, every one (1) share
of Common Stock, par value $.0001 per share, of the Corporation issued and outstanding was automatically reclassified and changed
into twenty (20) shares fully paid and non-assessable shares of Common Stock of the Corporation, 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.
On October 28, 2016, we filed a Certificate
of Amendment with the Delaware Secretary of State. The effective date of the 20-for-1 Forward Stock Split was upon the acceptance
of the Certificate of Amendment with the Secretary of State of the State of Delaware. The Certificate of Amendment can be found
as Exhibit 3.1 to Form 8-K filed November 1, 2016.
Business Information
The Company is a start-up stage company operates through
our wholly owned subsidiary, School TV Co., Ltd. (“School TV”), which is engaged in various business activities and
industries including:
- The sale and distribution of health related products;
- The promotion of third party consumer goods and services;
- RE/MAX business in Kanagawa, Okinawa and Tokyo.
Our principal executive offices are located at 1-2-38-8F,
Esaka-cho, Suita-shi, Osaka 564-0063, Japan. Our phone number is +81-6-6339-4117.
Liquidity and Capital Resources
Our cash balance is $71,412 as of March 31, 2018. Our cash
balance is not sufficient to fund our limited levels of operations for any period of time. We have been utilizing and may utilize
funds from Tomoo Yoshida, our sole Officer and Director who has informally agreed to advance funds to allow us to pay for filing
fees and professional fees. Tomoo Yoshida, however, has no formal commitment, arrangement or legal obligation to advance or loan
funds to the company. In order to implement our plan of operations for the next twelve-month period, we require further funding.
Being a start-up stage company, we have very limited operating history. After a twelve-month period we may need additional financing
but currently do not have any arrangements for such financing.
As of March 31, 2018, the company has a due to the related
party of Mr. Tommo Yoshida, our sole Officer and Director, in the amount of $168,549.
As of March 31, 2018, the Company had $94,109 owed to e-Communications
Co., Ltd. Tomoo Yoshida, our CEO, is also the CEO of e-Communications Co., Ltd.
As of March 31, 2018, the Company had $235,272 owed to e-Learning
Laboratory Co., Ltd., the beneficial owner of the Company.
As of March 31, 2018, the Company had $517,598 owed to Mr.
Toshihiro Hirai.
If we need additional cash and cannot raise it, we will either
have to suspend operations until we do raise the cash we need, or cease operations entirely.
Inventory
As of March 31, 2018, we have $82,306 in inventory which
primarily consists of a health beauty equipment. Any goods that are purchased from our supply of physical inventory are sent out
to the purchaser. We are responsible for any shipping and or related costs.
Net Loss
For the three months ended March 31, 2018 and 2017, we have
recorded a net loss of $76,223 and $17,774, respectively. For the six months ended March 31, 2018 and 2017, we have recorded a
net loss of $118,320 and $29,475, respectively. The larger net loss we experienced for the three months and six months ended March
31, 2018 is attributed to the fact that we have increased our level of our operations and thus experienced increased expenses to
operate our business.
Going Concern
The accompanying consolidated financial statements are prepared
on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction
of liabilities in the normal course of business. For the six months ended March 31, 2018, the Company had generated net loss of
$118,320 and negative cash flows from operations of $68,870. As of March 31, 2018, the Company had working deficit of $135,523. These
factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not
include any adjustments that might be necessary if the Company is unable to continue as a going concern.
As a first priority, we plan to increase sufficient revenues
for necessary working capital from our business. If we cannot generate sufficient revenues, we plan to borrow working capital
from the director or parent company.