Yoshitsu Co., Ltd Reports Fiscal Year 2024 Financial Results

TOKYO, July 16, 2024 /PRNewswire/ -- Yoshitsu Co., Ltd ("Yoshitsu" or the "Company") (Nasdaq: TKLF), a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, Japan, North America, and the United Kingdom, today announced its financial results for the fiscal year 2024 ended March 31, 2024.

Mr. Mei Kanayama, Principal Executive Officer of Yoshitsu, commented, "I am thrilled to report that Yoshitsu has achieved outstanding success during fiscal year 2024. Our total revenue surged by 15.3%, and our income from operations increased by 601.3%, clear indicators of our robust growth and strategic excellence. This remarkable increase is primarily driven by the performance of our directly-operated physical stores and our expanding franchise network, alongside our dedicated wholesale customers."

"We are particularly proud of the successful introduction of luxury products, which has significantly boosted sales in our directly-operated physical stores, franchise stores, and among our wholesale customers. Our strategic expansion into North America, with new stores in the United States and Canada, has also contributed to our impressive revenue growth. Additionally, our expansion in key markets like Japan and Hong Kong has been successful. We have further strengthened our wholesale customer base and franchise store network, highlighting our ability to innovate and adapt in a dynamic market environment."

"Looking ahead, we are excited about the future. We are continuing our efforts to explore sales opportunities, for instance, we continue exploring new markets while enhancing our current presence, by analyzing customer trends in different regions, focusing on improving customer in-store experience, further expanding our distribution network, and exploring new partnership opportunities. Additionally, following the capital reduction, we expect further reductions in operating expenses. We believe the combination of increasing revenue and decreasing costs will position us for strong future growth and development."

"In addition, we continue expanding our product offerings by cooperating with beauty product and other product suppliers to develop our own private label products, and investing in IT and equipment to enhance operational efficiency and reduce costs. We believe these initiatives can help us attract new customers and encourage repeat visits, which will eventually support our revenue growth and create long-term values for our shareholders."

Mr. Youichiro Haga, Principal Accounting and Financial Officer of Yoshitsu, remarked, "I am proud to share that our financial performance for fiscal year 2024 has shown substantial improvement. Our net income reached $7.5 million, a significant turnaround from a net loss of $8.0 million in the previous year. This positive outcome is a result of our focused efforts on cost management, strategic investments, and revenue growth."

"We have successfully reduced operating expenses by 38.5%. This reduction highlights our commitment to operational efficiency and cost control, ensuring that we maximize our profitability. We also achieved a notable reduction in interest expenses by 33.5%, thanks to our strategic debt management and favorable loan conditions. Additionally, we saw a significant increase in other income, mainly from the disposal of property and equipment."

"Net cash provided by operating activities surged to $1.9 million for fiscal year 2024, a significant improvement from net cash outflow of $25.7 million for fiscal year 2023. We belive that this liquidity can support our ongoing operations and strategic initiatives."

"As we move forward, we will continue to focus on enhancing our financial performance through disciplined cost management, strategic investments, and exploring new revenue streams. We are confident that these efforts will drive long-term value for our shareholders."

Fiscal Year 2024 Financial Highlights

  • Total revenue was $195.7 million for fiscal year 2024, increased by 15.3% from $169.7 million for fiscal year 2023.
  • Income from operations was $5.8 million for fiscal year 2024, increased by 601.3% from $0.8 million for fiscal year 2023.
  • Net income increased to $7.5 million for fiscal year 2024, compared to net loss of $8.0 million for fiscal year 2023.
  • Net cash provided by operating activities increased to $1.9 million for fiscal year 2024, from net cash used in operating activities of $25.7 million for fiscal year 2023.
  • Basic and diluted earnings per share was $0.20 for fiscal year 2024, compared to loss per share of $0.22 for fiscal year 2023.

Fiscal Year 2024 Financial Results

Revenue

Revenue increased by 15.3%, to $195.7 million for fiscal year 2024, from $169.7 million for fiscal year 2023. The increase in the Company's revenue consists of increased revenue from directly-operated physical stores and franchise stores and wholesale customers, which was partially offset by the decreased revenue from online stores and services.



For the Fiscal Years Ended March 31,



2024


2023

($ millions)


Revenue


Cost of
Revenue


Gross
Margin


Revenue


Cost of
Revenue


Gross
Margin

Directly-operated physical stores


15.0


11.9


20.3 %


11.6


8.9


23.5 %

Online stores and services


10.7


7.9


26.0 %


20.7


16.2


21.6 %

Franchise stores and wholesale
customers


170.0


152.5


10.3 %


137.4


115.2


16.2 %

Total


195.7


172.3


11.9 %


169.7


140.3


17.3 %

Revenue from directly-operated physical stores increased by 28.8%, to $15.0 million for fiscal year 2024, from $11.6 million for fiscal year 2023. The increase was mainly because during fiscal year 2024, the Company started to offer luxury products, which contributed a significant portion of increased directly-operated physical store sales in fiscal year 2024. The increase in directly-operated physical stores sales was also due to revenue contributed from the Company's newly-opened physical stores in the United States and Canada, which was partially offset by the decreased revenue as a result of the transformation of the Company's physical stores in Japan during fiscal year 2024. The transformation of the physical stores in Japan was because these stores had been underperformed and the Company transformed these stores into franchise stores to improve the Company's cash flow and working capital. After the change, these physical stores purchased products from the Company like other franchise stores, and hence this portion of revenue was recorded under franchise stores and wholesale customers.

Revenue from franchise stores and wholesale customers increased by 23.7%, to $170.0 million for fiscal year 2024, from $137.4 million for fiscal year 2023. The increase was mainly due to   expansion of products offering as the Company started to offer luxury products and electronic products that have higher unit selling prices. Meanwhile, the increase was also due to increased revenue generated from franchise stores which previously was recognized under physical stores as mentioned above, as well as increased revenue from some new wholesale customers whom the Company entered into business relationships with during fiscal year 2024. The increase was partially offset by the decreased sales of beauty products to wholesale customers as the demand for Japanese beauty products declined in China market.

Cost of Revenue

Total cost of revenue increased by 22.8%, to $172.3 million for fiscal year 2024, from $140.3 million for fiscal year 2023.

Gross Profit and Gross Margin

Gross profit decreased by 20.6%, to $23.4 million for fiscal year 2024, from $29.4 million for fiscal year 2023.

Gross margin decreased by 5.4 percentage points, to 11.9% for fiscal year 2024, from 17.3% for fiscal year 2023.

Operating Expenses

Operating expenses consist of selling and marketing expenses and general and administrative expenses, which primarily include payroll, employee benefit expenses and bonus expenses, shipping expenses, promotion and advertising expenses, and other facility-related costs, such as store rent, utilities, and depreciation.

Operating expenses decreased by 38.5%, to $17.6 million for fiscal year 2024, from $28.6 million for fiscal year 2023. The decrease in operating expenses was primarily attributable to a decrease in allowance for credit loss, shipping expenses, promotion and advertising expenses, payroll, employee benefit expenses and bonus expenses,and transaction commission, which was partially offset by an increase in professional service fees.

Interest Expenses, net

Interest expenses, net included interest expenses calculated at interest rate per loan agreements and loan service costs, which were directly incremental to the loan agreements and amortized over the loan periods. Due to our strategic debt management and favorable loan conditions, interest expenses, net decreased by 33.5%, to $1.6 million for fiscal year 2024, from $2.4 million for fiscal year 2023. The decrease mainly consisted of a decrease in amortized loan service costs in relation to the Company's syndicated loans by $454,980, as well as a decrease in interest expenses at interest rate by $355,542, which was mainly due to the decreased weighted average loan balances and interest rate for fiscal year 2024 as compared to fiscal year 2023.

Other Income, net

Other income, net primarily includes tax refund, disposal gain or loss from property and equipment, government subsidy, and other immaterial income and expense items. Other income, net increased by 5,685.0%, to $760,435 for fiscal year 2024, from $13,145 for fiscal year 2023. The increase was mainly due to the increased gain from disposal of property and equipment, which was partially offset by decreased government subsidy received during fiscal year 2024 as compared to fiscal year 2023.

Gain from Foreign Currency Exchange

Gain from foreign currency exchange was $3.1 million for fiscal year 2024, as compared to a gain from foreign currency exchange of $0.7 million for fiscal year 2023. The gain from foreign currency exchange was mainly due to the significant fluctuations of foreign exchange rates on the Company's accounts receivable that denominated in foreign currencies such as U.S. dollar and Chinese Yuan during fiscal year 2024. The increase was also due to the increased gain from foreign currency exchange by the Company's Hong Kong subsidiaries, which was mainly due to the significant fluctuations of foreign exchange rate on its payables that were denominated in Japanese Yen during fiscal year 2024.

Provision for Income Taxes

Provision for income taxes decreased by 36.1% to $0.5 million for fiscal year 2024 from $0.7 million for fiscal year 2023. The decrease in provision for income taxes was mainly due to the decreased deferred income tax expenses, which was partially offset by the increased current income tax expenses resulted from the increased taxable income for fiscal year 2024.

Net Income (Loss)

Net income increased to $7.5 million for fiscal year 2024, compared to net loss of $8.0 million for fiscal year 2023.

Basic and Diluted Earnings per Share

Basic and diluted earnings per share was $0.20 for fiscal year 2024, compared to loss per share of $0.22 for fiscal year 2023.

Financial Condition

As of March 31, 2024, the Company had $2.5 million in cash as compared to $1.8 million as of March 31, 2023. As of March 31, 2024, the Company also had approximately $105.4 million of accounts receivable balance due from third parties. Approximately 35.4% of the March 31, 2024 balance has subsequently been collected, and the majority of the remaining balance is expected to be collected by December 31, 2024. The collection of such receivables made cash available for use in the Company's operations as working capital, if necessary.

Net cash provided by operating activities was $1.9 million for fiscal year 2024, mainly derived from a net income of $7.5 million for the year, and net changes in the Company's operating assets and liabilities, which mainly included a decrease in compensation receivable for consumption tax of $11.3 million as the Company has received payments from the debtors according to the collection plan, and an increase in accounts payable of $13.8 million as the Company negotiated longer payment terms with the Company's suppliers. The Company's merchandise inventories decreased by $2.4 million due to the Company's strengthening inventory management to minimize inventory backlog and improve inventory turnover rate. Meanwhile, accounts receivable due from third parties increased by $24.7 million as a result of the Company's increased sales, and taxes payable decreased by $7.0 million as the Company has made payments to tax authority for the additional consumption tax as a result of the consumption tax examination as mentioned above during fiscal year 2024.

Net cash provided by investing activities amounted to $2.7 million for fiscal year 2024, mainly due to proceeds from disposal of property and equipment of $3.1 million and proceeds from disposal of equity method investment of $0.3 million, partially offset by purchases of property and equipment in the aggregate amount of $0.9 million and disposal of a subsidiary of $0.2 million.

Net cash used in financing activities was $1.8 million for fiscal year 2024, which primarily consisted of repayments of long-term borrowings of $4.2 million and repayments of short-term borrowings of $2.1 million, partially offset by proceeds from issuance of ordinary shares, net of issuance costs of $3.7 million and proceeds from short-term borrowings of $1.4 million.

Conference Call Information

The Company will host an earnings conference call at 8:30 am U.S. Eastern Time (9:30 pm Japan Standard Time) on July 16, 2024. Dial-in details for the conference call are as follows:

Dial-in details for the conference call are as follows:

Date:

July 16, 2024

Time:

8:30 am U.S. Eastern Time

International:

1-412-902-4272

United States Toll Free:

1-888-346-8982

Japan Toll Free:

0066-33-812830

Conference ID

Yoshitsu Co., Ltd

Please dial in at least 15 minutes before the commencement of the call to ensure timely participation.

For those unable to participate, an audio replay of the conference call will be available from approximately one hour after the end of the live call until July 23, 2024. The dial-in for the replay is 1-877-344-7529 within the United States or 1-412-317-0088 internationally. The replay access code is 8200869.

A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://www.ystbek.co.jp/irlibrary/.

About Yoshitsu Co., Ltd

Headquartered in Tokyo, Japan, Yoshitsu Co., Ltd is a retailer and wholesaler of Japanese beauty and health products, sundry products, and other products in Hong Kong, Japan, North America, and the United Kingdom. The Company offers various beauty products (including cosmetics, skincare, fragrance, and body care products), health products (including over-the-counter drugs, nutritional supplements, and medical supplies and devices), sundry products (including home goods), and other products (including food and alcoholic beverages). The Company currently sells its products through directly-operated physical stores, through online stores, and to franchise stores and wholesale customers. For more information, please visit the Company's website at https://www.ystbek.co.jp/irlibrary/.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains, and economic activity in general. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

Yoshitsu Co., Ltd
Investor Relations Department
Email: ir@ystbek.co.jp

Ascent Investor Relations LLC
Tina Xiao
President
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

 

 

YOSHITSU CO., LTD

CONSOLIDATED BALANCE SHEETS





March 31,



March 31,




2024



2023


ASSETS







CURRENT ASSETS:







Cash


$

2,475,538



$

1,766,441


Accounts receivable, net



105,359,841




89,447,155


Accounts receivable - related parties, net



25,704




327,807


Merchandise inventories, net



4,413,880




7,187,800


Due from related parties



9,762




444,567


Compensation receivable for consumption tax, current



7,133,470




3,912,719


Prepaid expenses and other current assets, net



2,748,682




3,542,864


TOTAL CURRENT ASSETS



122,166,877




106,629,353











Property and equipment, net



9,013,827




12,938,598


Operating lease right-of-use assets



3,979,727




2,709,954


Long term investment



-




169,148


Compensation receivable for consumption tax, non-current, net



2,721,034




19,230,370


Long-term prepaid expenses and other non-current assets, net



4,115,694




4,997,857


TOTAL ASSETS


$

141,997,159



$

146,675,280











CURRENT LIABILITIES:









Short-term borrowings


$

53,234,650



$

60,636,412


Current portion of long-term borrowings



1,730,796




2,783,445


Accounts payable



24,392,029




12,719,160


Accounts payable - a related party



299,541




-


Due to related parties



42,943




297,559


Deferred revenue



55,093




146,024


Taxes payable



9,357,482




18,219,803


Operating lease liabilities, current



1,523,222




1,323,900


Finance lease liabilities, current



170,553




369,786


Warrants liabilities



441,104




24,663


Other payables and other current liabilities



2,167,320




1,520,756


TOTAL CURRENT LIABILITIES



93,414,733




98,041,508











Operating lease liabilities, non-current



2,488,823




1,416,508


Finance lease liabilities, non-current



263,571




622,922


Long-term borrowings



5,636,960




10,326,399


Other non-current liabilities



1,934,927




2,535,123


Deferred tax liabilities, net



2,215,361




4,451,077


TOTAL LIABILITIES


$

105,954,375



$

117,393,537











COMMITMENTS AND CONTINGENCIES


















SHAREHOLDERS' EQUITY









Ordinary shares, no par value,100,000,000 shares authorized; 42,220,206 shares and
   36,250,054 shares issued and outstanding as of March 31, 2024 and 2023,
   respectively



16,716,839




14,694,327


Capital reserve



10,262,191




9,078,915


Retained earnings



21,056,780




13,577,844


Accumulated other comprehensive loss



(11,993,026)




(8,069,343)


TOTAL SHAREHOLDERS' EQUITY



36,042,784




29,281,743


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

141,997,159



$

146,675,280


 

 

 

YOSHITSU CO., LTD

 CONSOLIDATED STATEMENTS OF OPERTAIONS AND COMPREHENSIVE INCOME
(LOSS)
 




For the Years Ended March 31




2024



2023



2022 (1)


REVENUE










Revenue - third parties


$

189,674,322



$

168,876,360



$

234,508,821


Revenue - related parties



6,006,993




847,986




243,759


   Total revenue



195,681,315




169,724,346




234,752,580















COSTS AND OPERATING EXPENSES













Merchandise costs



172,306,308




140,293,419




191,040,547


Selling, general and administrative expenses



17,597,125




28,607,088




36,422,772


   Total operating expenses



189,903,433




168,900,507




227,463,319















INCOME FROM OPERATIONS



5,777,882




823,839




7,289,261















OTHER INCOME (EXPENSE)













Interest expense, net



(1,611,141)




(2,422,079)




(2,785,766)


Additional and delinquent tax due to consumption tax correction



(628,876)




(6,622,486)




-


Gain from disposal of equity method investment



190,571




-




-


Gain from disposal of a subsidiary



341,139




-




-


Other income, net



760,435




13,145




598,206


Gain from foreign currency exchange



3,065,971




718,990




833,547


Change in fair value of warrants liabilities



109,173




139,615




369,404


Income (loss) from equity method investment



(69,444)




14,554




(145,828)


   Total other income (expenses), net



2,157,828




(8,158,261)




(1,130,437)















INCOME (LOSS) BEFORE INCOME TAX PROVISION



7,935,710




(7,334,422)




6,158,824















PROVISION FOR INCOME TAXES



456,774




714,400




2,234,676















NET INCOME (LOSS)



7,478,936




(8,048,822)




3,924,148















OTHER COMPREHENSIVE LOSS













Foreign currency translation loss



(3,923,683)




(4,279,325)




(3,466,261)















TOTAL COMPREHENSIVE INCOME (LOSS)


$

3,555,253



$

(12,328,147)



$

457,887















Earnings (loss) per ordinary share - basic and diluted


$

0.2



$

(0.22)



$

0.12


Weighted average shares - basic and diluted*



37,264,162




36,250,054




32,678,625


 


*

Retrospectively restated for effect of a 294-for-1 forward split on August 18, 2021.


(1)

The financial information presented in this report has been retrospectively adjusted for the acquisition of Tokyo Lifestyle Limited.

 

 

YOSHITSU CO., LTD

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

















Ordinary Shares



Capital



Retained



Accumulated
Other
Comprehensive



Total
Shareholders'




Shares*



Amount



Reserve



Earnings



Income (Loss)



Equity (1)





















Balance, March 31, 2021



27,327,594



$

2,416,635



$

501,053



$

17,702,518



$

(323,757)



$

20,296,449





















-






Capital contribution from Grand Elec-Tech Limited



2,672,460




920,192




902,224




-




-




1,822,416


Issuance of ordinary shares and additional shares under overallotment
option in initial public offerings, net of issuance costs



6,250,000




11,357,500




10,060,011




-




-




21,417,511


Capital contribution in the form of debt exemption



-




-




1,111,608




-




-




1,111,608


Issuance of representative's warrants



-




-




(653,831)




-




-




(653,831)


Net income for the year



-




-




-




3,924,148




-




3,924,148


Foreign currency translation loss



-




-




-




-




(3,466,261)




(3,466,261)



























Balance, March 31, 2022



36,250,054



$

14,694,327



$

11,921,065



$

21,626,666



$

(3,790,018)



$

44,452,040



























Business combinations under common control



-




-




(2,842,173)




-




-




(2,842,173)


Capital contribution received by Malaysia subsidiary



-




-




23




-




-




23


Capital contribution in the form of debt exemption



-




-




-




-




-




-


Issuance of representative's warrants



-




-




-




-




-




-


Net loss for the year



-




-




-




(8,048,822)




-




(8,048,822)


Foreign currency translation loss



-




-




-




-




(4,279,325)




(4,279,325)



























Balance, March 31, 2023



36,250,054



$

14,694,327



$

9,078,915



$

13,577,844



$

(8,069,343)



$

29,281,743



























Issuance of ordinary shares



5,970,152




2,022,512




1,724,770




-




-




3,747,282


Issuance of investors' warrants



-




-




(541,494)




-




-




(541,494)


Net income for the year



-




-




-




7,478,936




-




7,478,936


Foreign currency translation loss



-




-




-




-




(3,923,683)




(3,923,683)



























Balance, March 31, 2024



42,220,206



$

16,716,839



$

10,262,191



$

21,056,780



$

(11,993,026)



$

36,042,784


 


*

Retrospectively restated for effect of share issuances on October 22, 2020 and a 294-for-1 forward split on August 18, 2021.


(1)

The financial information presented in this report has been retrospectively adjusted for the acquisition of Tokyo Lifestyle Limited.

 

 

YOSHITSU CO., LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS





For the Years Ended March 31




2024



2023



2022 (1)


Cash flows from operating activities:










Net Income (loss)


$

7,478,936



$

(8,048,822)



$

3,924,148


Adjustments to reconcile net income (loss) to net cash
   provided by (used in) operating activities:













Depreciation and amortization



1,232,611




1,226,496




1,217,455


Loss (gain) from disposal of property and equipment



(712,685)




329,580




35,803


Loss (gain) from unrealized foreign currency translation



(412,728)




282,131




(662,345)


Provision for (reversal of) credit losses



(2,043,939)




3,471,953




(278,642)


Addition (reversal) of merchandise inventories written
  down



(68,361)




150,382




-


Amortization of operating lease right-of-use assets



1,711,978




1,784,754




2,385,992


Deferred tax provision (benefit)



(1,778,277)




4,849,771




(67,268)


Change in fair value of warrants liabilities



(109,173)




(139,615)




(369,404)


Investment loss (income) from equity method investment



69,444




(14,554)




145,828


Gain from disposal of equity method investment



(190,571)




-




-


Accrued interest expense



-




-




38,666


Changes in operating assets and liabilities:













Accounts receivable



(24,747,655)




(53,824,026)




7,841,569


Accounts receivable - related parties



277,005




(323,212)




-


Merchandise inventories



2,355,034




21,285,866




(6,054,509)


Compensation receivable for consumption tax



11,284,665




(23,212,327)




-


Prepaid expenses and other current assets



949,043




5,597,781




(7,028,529)


Long term prepaid expenses and other non-current assets



315,809




2,183,108




(4,762,929)


Accounts payable



13,816,414




5,280,797




(2,803,950)


Accounts payable - related parties



299,591




(119,081)




25,813


Deferred revenue



35,027




49,715




(69,862)


Taxes payable



(6,977,961)




17,268,372




(1,365,092)


Other payables and other current liabilities



1,078,396




(1,590,907)




1,932,901


Operating lease liabilities



(1,711,398)




(1,807,376)




(2,270,868)


Other non-current liabilities



(239,250)




(419,200)




1,179,459


Net cash provided by (used in) operating activities



1,911,955




(25,738,414)




(7,005,764)















Cash flows from investing activities:













Purchase of property and equipment



(929,308)




(934,960)




(3,037,813)


Proceeds from disposal of property and equipment



3,104,387




2,961




61,109


Proceeds from disposal of equity method investment



276,800




-




-


Proceeds from disposal of a subsidiary



34,600




-




-


Disposal of a subsidiary, net of cash



(171,788)




-




-


Collection of amount due from (advances made to) related
parties



399,223




188,728




(128,535)


Net cash provided by (used in) investing activities



2,713,914




(743,271)




(3,105,239)















Cash flows from financing activities:













Capital contribution



-




23




1,822,416


Proceeds from initial public offerings, net of issuance costs



-




-




22,102,984


Proceeds from issuance of ordinary shares, net of issuance
costs



3,747,282




-




-


Cash consideration paid for business combination under

common control



-




(2,842,173)




-


Proceeds from short-term borrowings



1,384,000




78,831,300




282,176,915


Repayments of short-term borrowings



(2,076,000)




(55,515,000)




(303,096,477)


Proceeds from long-term borrowings



-




2,160,161




17,057,036


Repayments of long-term borrowings



(4,186,712)




(9,798,554)




(1,608,276)


Advances received from (payments made to) related
   parties



(228,966)




104,482




(4,282,303)


Repayment of obligations under finance leases



(420,910)




(194,421)




(408,492)


Net cash provided by (used in) financing activities



(1,781,306)




12,745,818




13,763,803















Effect of exchange rate fluctuation on cash



(2,135,466)




(2,763,692)




(2,230,388)















Net increase (decrease) in cash



709,097




(16,499,559)




1,422,412


Cash at beginning of year



1,766,441




18,266,000




16,843,588


Cash at end of year


$

2,475,538



$

1,766,441



$

18,266,000















Supplemental cash flow information













Cash paid for income taxes


$

880,308



$

433,899



$

3,718,637


Cash paid for interest


$

798,353



$

1,108,863



$

873,147















Supplemental non-cash operating activities













Purchase of property and financed under long-term
   payment


$

-



$

831,746



$

22,719


Purchase of property and equipment financed under
   finance leases


$

-



$

210,666



$

901,561


Right of use assets obtained in exchange for operating
   lease liabilities


$

3,118,676



$

542,231



$

2,856,470


Capital contribution in the form of debt exemption


$

-



$

-



$

1,111,608


Deduction of right of use assets and operating lease
   liabilities in relation to lease concession


$

-



$

-



$

84,368


Reduction of right-of-use assets and operating lease
   obligations due to early termination of lease agreement


$

-



$

-



$

27,262


Deferred IPO cost offset with capital reserve


$

-



$

-



$

685,473


 


(1)

The financial information presented in this report has been retrospectively adjusted for the acquisition of Tokyo Lifestyle Limited.