Document And Entity Information
Document And Entity Information | 12 Months Ended |
Mar. 31, 2022 shares | |
Document Information Line Items | |
Entity Registrant Name | Yoshitsu Co., Ltd |
Trading Symbol | TKLF |
Document Type | 20-F |
Current Fiscal Year End Date | --03-31 |
Entity Common Stock, Shares Outstanding | 36,250,054 |
Amendment Flag | false |
Entity Central Index Key | 0001836242 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Mar. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | true |
Entity Shell Company | false |
Entity Ex Transition Period | false |
ICFR Auditor Attestation Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-41181 |
Entity Incorporation, State or Country Code | M0 |
Entity Address, Address Line One | Harumi Building |
Entity Address, Address Line Two | 2-5-9 Kotobashi |
Entity Address, City or Town | Sumida-Ku |
Entity Address, Address Line Three | Tokyo |
Entity Address, Postal Zip Code | 130-0022 |
Entity Address, Country | JP |
Title of 12(b) Security | American depositary shares, each representing one ordinary share |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Auditor Firm ID | 711 |
Auditor Name | Friedman LLP |
Auditor Location | New York |
Business Contact | |
Document Information Line Items | |
Entity Address, Address Line One | Harumi Building |
Entity Address, Address Line Two | 2-5-9 Kotobashi |
Entity Address, City or Town | Tokyo |
Entity Address, Address Line Three | Sumida-Ku |
Entity Address, Postal Zip Code | 130-0022 |
Entity Address, Country | JP |
Contact Personnel Name | Mei Kanayama |
City Area Code | +81 |
Local Phone Number | 356250668 |
Contact Personnel Email Address | ky@ystbek.co.jp |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 | |
CURRENT ASSETS: | |||
Cash | $ 17,671,370 | $ 16,380,363 | |
Accounts receivable, net | 34,831,521 | 43,683,575 | |
Accounts receivable - related parties, net | 6,305,927 | 3,499,070 | |
Merchandise inventories, net | 30,240,130 | 27,122,504 | |
Due from related parties | 692,995 | 632,380 | |
Prepaid expenses and other current assets, net | 9,905,486 | 3,926,590 | |
TOTAL CURRENT ASSETS | 99,647,429 | 95,244,482 | |
Property and equipment, net | 12,734,182 | 10,553,724 | |
Operating lease right-of-use assets | 2,909,432 | 2,898,551 | |
Long term investment | 168,509 | 333,357 | |
Long-term prepaid expenses and other non-current assets, net | 7,366,719 | 3,464,617 | |
Deferred tax assets, net | 518,909 | 447,124 | |
TOTAL ASSETS | 123,345,180 | 112,941,855 | |
CURRENT LIABILITIES: | |||
Short-term borrowings | 40,328,982 | 65,084,803 | |
Current portion of long-term borrowings | 951,045 | 645,570 | |
Accounts payable | 7,839,741 | 11,625,477 | |
Accounts payable - related parties | 132,047 | 63,011 | |
Due to related parties | 53,365 | 235,774 | |
Deferred revenue | 104,663 | 186,046 | |
Income tax payable | 723,550 | 2,180,764 | |
Operating lease liabilities, current | 1,005,460 | 811,299 | |
Finance lease liabilities, current | 320,555 | 174,904 | |
Representative’s warrants liability | 181,740 | ||
Other payables and other current liabilities | 2,808,146 | 627,179 | |
TOTAL CURRENT LIABILITIES | 54,449,294 | 81,634,827 | |
Operating lease liabilities, non-current | 1,877,324 | 1,928,682 | |
Finance lease liabilities, non-current | 673,612 | 414,428 | |
Long-term borrowings | 19,627,749 | 6,439,751 | |
Other non-current liabilities | 2,104,472 | 289,730 | |
TOTAL LIABILITIES | 78,732,451 | 90,707,418 | |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS’ EQUITY | |||
Ordinary shares, 100,000,000 shares authorized; 36,250,054 shares and 27,327,594 shares issued and outstanding as of March 31, 2022 and 2021, respectively | [1] | 14,694,327 | 2,416,635 |
Capital reserve | 10,308,404 | ||
Retained earnings | 23,493,869 | 20,221,300 | |
Accumulated other comprehensive loss | (3,883,871) | (403,498) | |
TOTAL SHAREHOLDERS’ EQUITY | 44,612,729 | 22,234,437 | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 123,345,180 | $ 112,941,855 | |
[1]Retrospectively restated for effect of a 294-for-1 forward split on August 18, 2021. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - shares | Mar. 31, 2022 | Mar. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, authorized | 100,000,000 | 100,000,000 |
Ordinary shares, issued | 36,250,054 | 27,327,594 |
Ordinary shares, outstanding | 36,250,054 | 27,327,594 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive (Loss) - USD ($) | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | ||
REVENUE | ||||
Revenue - third parties | $ 206,307,380 | $ 198,739,410 | $ 135,231,401 | |
Revenue - related parties | 22,129,316 | 22,775,332 | 4,342,557 | |
Total revenue | 228,436,696 | 221,514,742 | 139,573,958 | |
OPERATING EXPENSES | ||||
Merchandise costs | 189,382,124 | 181,559,939 | 112,088,049 | |
Selling, general and administrative expenses | 32,674,100 | 29,297,682 | 18,076,688 | |
Total operating expenses | 222,056,224 | 210,857,621 | 130,164,737 | |
INCOME FROM OPERATIONS | 6,380,472 | 10,657,121 | 9,409,221 | |
OTHER INCOME (EXPENSE) | ||||
Interest expenses, net | (2,691,481) | (1,953,490) | (1,888,018) | |
Other income, net | 735,359 | 364,656 | 292,103 | |
Gain (loss) from foreign currency exchange | 804,311 | (209,396) | (266,683) | |
Change in fair value of representative’s warrants liability | 369,404 | |||
Loss from equity method investment | (145,828) | (29,242) | ||
Total other expenses, net | (928,235) | (1,827,472) | (1,862,598) | |
INCOME BEFORE INCOME TAX PROVISION | 5,452,237 | 8,829,649 | 7,546,623 | |
PROVISION FOR INCOME TAXES | 2,179,668 | 3,307,048 | 2,655,786 | |
NET INCOME | 3,272,569 | 5,522,601 | 4,890,837 | |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation gain (loss) | (3,480,373) | (698,440) | 300,727 | |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ (207,804) | $ 4,824,161 | $ 5,191,564 | |
Earnings per ordinary share - basic and diluted (in Dollars per share) | $ 0.1 | $ 0.21 | $ 0.18 | |
Weighted average shares - basic and diluted (in Shares) | [1] | 32,678,625 | 26,887,006 | 26,727,540 |
[1] Retrospectively restated for effect of share issuances on October 22, 2020 and a 294-for-1 forward split on August 18, 2021. |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive (Loss) (Parentheticals) - $ / shares | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Earnings per ordinary share - basic and diluted (in Dollars per share) | $ 0.10 | $ 0.21 | $ 0.18 |
Weighted average shares - basic and diluted (in Shares) | 32,678,625 | 26,887,006 | 26,727,540 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) | Ordinary Shares | Capital Reserve | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |
Balance at Mar. 31, 2019 | $ 970,023 | $ 9,807,862 | $ (5,785) | $ 10,772,100 | ||
Balance (in Shares) at Mar. 31, 2019 | [1] | 26,727,540 | ||||
Net income for the year | 4,890,837 | 4,890,837 | ||||
Foreign currency translation gain (loss) | 300,727 | 300,727 | ||||
Balance at Mar. 31, 2020 | $ 970,023 | 14,698,699 | 294,942 | 15,963,664 | ||
Balance (in Shares) at Mar. 31, 2020 | [1] | 26,727,540 | ||||
Capital contribution | $ 1,446,612 | 1,446,612 | ||||
Capital contribution (in Shares) | [1] | 600,054 | ||||
Net income for the year | 5,522,601 | 5,522,601 | ||||
Foreign currency translation gain (loss) | (698,440) | (698,440) | ||||
Balance at Mar. 31, 2021 | $ 2,416,635 | 20,221,300 | (403,498) | 22,234,437 | ||
Balance (in Shares) at Mar. 31, 2021 | [1] | 27,327,594 | ||||
Capital contribution | $ 920,192 | 902,224 | 1,822,416 | |||
Capital contribution (in Shares) | [1] | 2,672,460 | ||||
Issuance of ordinary shares and additional shares under overallotment option in initial public offerings, net of issuance costs | $ 11,357,500 | 10,060,011 | 21,417,511 | |||
Issuance of ordinary shares and additional shares under overallotment option in initial public offerings, net of issuance costs (in Shares) | [1] | 6,250,000 | ||||
Issuance of representative’s warrants | (653,831) | (653,831) | ||||
Net income for the year | 3,272,569 | 3,272,569 | ||||
Foreign currency translation gain (loss) | (3,480,373) | (3,480,373) | ||||
Balance at Mar. 31, 2022 | $ 14,694,327 | $ 10,308,404 | $ 23,493,869 | $ (3,883,871) | $ 44,612,729 | |
Balance (in Shares) at Mar. 31, 2022 | [1] | 36,250,054 | ||||
[1] Retrospectively restated for effect of share issuances on October 22, 2020 and a 294-for-1 forward split on August 18, 2021. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Cash Flows [Abstract] | |||
Net Income | $ 3,272,569 | $ 5,522,601 | $ 4,890,837 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation and amortization | 1,035,569 | 441,893 | 403,159 |
Loss (gain) from disposal of property and equipment | 35,803 | (35,516) | (178,814) |
Loss (gain) from unrealized foreign currency translation | (662,345) | 127,208 | (423,680) |
Provision for (reversal of) doubtful accounts | (278,642) | 609,418 | 603,098 |
Amortization of operating lease right-of-use assets | 1,071,435 | 1,218,372 | 1,070,912 |
Deferred tax benefit | (122,276) | (234,362) | (182,140) |
Investment loss from equity method investment | 145,828 | ||
Change in fair value of representative’s warrants liability | (369,404) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 6,218,036 | (7,720,713) | (9,422,992) |
Accounts receivable - related parties | (3,393,445) | (2,567,062) | (1,060,092) |
Merchandise inventories | (6,074,870) | (5,344,367) | (1,140,268) |
Prepaid expenses and other current assets | (6,933,131) | (1,116,517) | (2,949,689) |
Long term prepaid expenses and other non-current assets | (4,578,679) | (765,668) | (264,908) |
Accounts payable | (2,954,997) | 7,818,308 | 1,068,687 |
Accounts payable - related parties | 81,177 | 26,783 | |
Deferred revenue | (69,862) | (350,790) | 362,812 |
Income tax payable | (1,365,092) | 602,387 | 303,680 |
Other payables and other current liabilities | 2,429,202 | (304,243) | 165,025 |
Operating lease liabilities | (943,998) | (1,396,307) | (1,039,231) |
Other non-current liabilities | 1,179,459 | 91,750 | 143,883 |
Net cash used in operating activities | (12,277,663) | (3,376,825) | (7,649,721) |
Cash flows from investing activities: | |||
Payment made for a long-term equity method investment | (348,118) | ||
Purchase of property and equipment | (2,815,184) | (2,939,471) | (3,414,703) |
Proceeds from disposal of property and equipment | 61,109 | 436,081 | 1,281,736 |
Collections from (advances made to) related parties | (128,535) | 857,582 | 2,500,610 |
Payment for long-term loan due from a related party | 3,773,600 | (3,680,400) | |
Net cash provided by (used in) investing activities | (2,882,610) | 1,779,674 | (3,312,757) |
Cash flows from financing activities: | |||
Capital contribution prior to IPO | 1,822,416 | 1,446,612 | |
Proceeds from initial public offerings, net of issuance costs | 22,102,984 | ||
Proceeds from short-term borrowings | 282,176,915 | 424,201,158 | 260,918,369 |
Repayments of short-term borrowings | (302,541,521) | (415,796,955) | (233,253,603) |
Proceeds from long-term borrowings | 16,568,880 | 2,802,275 | |
Repayments of long-term borrowings | (1,221,572) | (1,511,354) | (11,388,520) |
Advances received from related parties | (174,570) | 246,213 | 15,020 |
Repayment of obligations under finance leases | (408,492) | (332,643) | (140,386) |
Net cash provided by financing activities | 18,325,040 | 11,055,306 | 16,150,880 |
Effect of exchange rate fluctuation on cash | (1,873,760) | (607,011) | 85,150 |
Net increase in cash | 1,291,007 | 8,851,144 | 5,273,552 |
Cash at beginning of year | 16,380,363 | 7,529,219 | 2,255,667 |
Cash at end of year | 17,671,370 | 16,380,363 | 7,529,219 |
Cash paid for income taxes | 3,718,637 | 2,928,603 | 2,589,710 |
Cash paid for interest | 779,291 | 665,797 | 1,074,757 |
Supplemental non-cash operating activity | |||
Purchase of property and equipment financed under long-term payment | 22,719 | 143,888 | |
Purchase of property and equipment financed under finance leases | (901,561) | 527,992 | |
Right of use assets obtained in exchange for operating lease liabilities | 1,295,850 | 351,930 | 2,382,547 |
Deduction of right of use assets and operating lease liabilities in relation to lease concession | 84,368 | 232,189 | |
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 |
Organization and Business Descr
Organization and Business Description | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND BUSINESS DESCRIPTION | NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION Yoshitsu Co., Ltd (the “Company”) is a stock company incorporated in Japan pursuant to the laws of Japan on December 28, 2006. The Company owns 100% of the equity interests of Tokyo Lifestyle Co., Ltd. (“Tokyo Lifestyle”), a stock company incorporated pursuant to the laws of Japan on October 24, 2019. The Company and its subsidiary (collectively, “Yoshitsu”) are a retailer and wholesaler of Japanese beauty and health products, as well as sundry products and other products. The Company offers approximately 35,000 stock keeping units (“SKUs”) of beauty products, including cosmetics, skin care, fragrance, and body care, among others, 28,400 SKUs of health products, including over-the-counter (“OTC”) drugs, nutritional supplements, and medical supplies and devices, 34,800 SKUs of sundry products, including home goods, and 16,300 SKUs of other products, including food and alcoholic beverages. On January 13, 2022, the Company closed its IPO of 6,250,000 American Depositary Shares (“ADSs”) at a public offering price of $4.00 per ADS, which included 250,000 ADSs issued pursuant to the partial exercise of the underwriters’ over-allotment option. Each ADS represents one ordinary share of the Company. In connection with the IPO, the ADSs began trading on the Nasdaq Capital Market under the symbol “TKLF” on January 18, 2022. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of the Company and its subsidiary. All intercompany balances and transactions are eliminated upon consolidation. Uses of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, useful lives of property and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities, inputs used in the calculation of the asset retirement obligation, and implicit interest rate of operating leases and financing leases. Actual results could differ from those estimates. Cash Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains all of its bank accounts in Japan. Cash balances in bank accounts in Japan are insured by the Deposit Insurance Corporation of Japan subject to certain limitations. The Company considers all highly-liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. As of March 31, 2022 and 2021, the Company did not have any cash equivalents. Accounts receivable Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company determines the adequacy of reserves for doubtful accounts based on general and individual account analysis and historical collection trend. The Company establishes general and specific allowance when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income (loss). Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of March 31, 2022 and 2021, allowance for uncollectible balances amounted to $177,793 and $483,124, respectively. Leases In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which is effective for annual reporting periods (including interim periods) beginning after December 15, 2018, and early adoption is permitted. The Company early adopted the Topic 842 on April 1, 2018 using a modified retrospective approach reflecting the application of the standard to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. The Company leases retail store facilities and distribution centers, which are classified as operating leases and leases certain software and equipment and furniture as finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use 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. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet. At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The operating lease right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All operating lease right-of-use assets are reviewed for impairment annually. There was no impairment for operating lease right-of-use lease assets as of March 31, 2022 and 2021. The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less. In response to the large volume of anticipated lease concessions to be granted related to the effects of the COVID-19 pandemic, and the resultant expected cost and complexity of applying the lease modification requirements in Topic 842, the FASB issued Staff Q&A—Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic Based on the nature of the agreements reached with many of its landlords, the Company has accounted for rent concessions as if they were part of the enforceable rights and obligations of the existing lease contracts and did not account for the concessions as lease modifications. The Company has received a total of lease concessions amounting to $276,586, and among which, $127,303, $53,502, and $ nil Equity investment An investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest, is accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the board of directors, voting rights, and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company did not record impairment losses on its equity method investment during the years ended March 31, 2022, 2021, and 2020. Merchandise inventories, net Merchandise inventories are stated at the lower of cost or net realizable value, on a weighted average basis. Costs include mainly the cost of merchandise inventories. Any excess of the cost over the net realizable value of each item of merchandise inventories is recognized as a provision for diminution in the value of merchandise inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to sell products. The Company periodically evaluates merchandise inventories for their net realizable value adjustments, and reduces the carrying value of those merchandise inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales. For the years ended March 31, 2022, 2021, and 2020, no merchandise inventory reserve was recorded because no slow-moving, obsolete, or damaged merchandise inventory was identified. Property and equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Except for assets that are not subject to depreciation, such as land and construction in progress, Useful life Property and buildings 35-50 years Land Infinite Leasehold improvements Lesser of useful life and lease term Equipment and furniture 2-18 years Automobiles 4-6 years Software 5 years Land has infinite useful life and is not subjected to amortization. Management reviews for impairment accordance with the accounting policy stated under impairment of long-lived assets. Expenditures for maintenance and repair, which do not materially extend the useful lives of the assets, are charged to expenses as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. Asset retirement obligations The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. The Company’s asset retirement obligations are primarily related to leasehold improvement of its retail stores leases, are required to be returned to the landlords in their original condition. asset retirement obligations nil leasehold improvements and are depreciated over the shorter of the estimated useful life of the asset or the term of the lease subsequent to the initial measurement Impairment of long-lived assets Long-lived assets, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of March 31, 2022 and 2021. Deferred initial public offering (“IPO”) costs The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses of Offering.” Deferred offering costs consist of underwriting, legal, and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred offering costs was charged to shareholders’ equity upon the completion of the IPO. Revenue recognition The Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), on April 1, 2018 using the modified retrospective approach. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance (ASC Topic 605, Revenue Recognition) did not result in significant changes in the way the Company records its revenue. The Company has assessed the impact of the guidance by reviewing its existing customer contracts to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control, and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606 and therefore there was no material changes to the Company’s consolidated financial statements upon adoption of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. Control is the ability to direct the use of, and obtain substantially all of the remaining benefits from the specified goods and services. The Company currently generates its revenue through retail and wholesale of Japanese beauty and health products, as well as sundry products and other products, through a multi-channel distribution network. Currently, the Company sells its products through: (i) directly-operated physical stores, (ii) online stores, and (iii) franchise stores and wholesale customers. For Japanese domestic sales, revenue is recognized at the point of sales or delivery of the related products and control is transferred. For international sales, the Company sells goods under Cost Insurance and Freight (“CIF”) shipping point term, and revenue is recognized when product is loaded on the ships and control is deemed as transferred. The Company generally offers a seven-day product return policy, as long as the products are undamaged, in their original condition, and can be resold. Products sold in the Company’s physical stores may be returned in store with receipt subject to certain restrictions. Historically, the customer returns were immaterial. Therefore, the Company did not provide any sales return allowances as of March 31, 2022 and 2021. The Company enters into trademark license agreements with franchisees under which the franchisee is granted a revocable license and non-exclusive right to use the Company’s trademarks solely for the purposes of selling, promoting sales of, and performing post-sale and other support relating to the products the Company sells to the franchisee. In exchange, the franchisee is required to pay a monthly royalty fee of ¥60,000 (approximately $492) per franchise store and purchase at least 75% of the products sold in store (except heavy products such as purified water) from the Company. The trademark license agreements have a term of one year and automatically renew for successive one-year terms, unless either party sends a written non-renewal notice no later than two months prior to the expiration of the then current term. The Company is the principal for the majority of its transactions and recognizes revenue on a gross basis. The Company is the principal when it has control of the merchandise before it is transferred to customers, which generally is established when the Company is primarily responsible for merchandising decisions, maintains the relationship with customer, including assurance of member service and satisfaction, and has pricing discretion. In directly-operated physical stores of the Company in Japan, customers can enroll in the Company’s rewards program, which is primarily a spending-based rewards program, and get a rewards card. Members of the rewards program usually earn one membership point for each ¥100 spent in the Company’s directly-operated physical stores, and subsequently one membership point can be used as ¥1 at the Company’s directly-operated physical stores when making payments; the membership points are valid for one year starting from the last use of the rewards card. The Company initially accounts for these membership points as a reduction in sales based on the estimated monetary value of the membership points with the corresponding liability classified as deferred revenue in the consolidated balance sheets. When a customer redeems earned membership points at its stores, the Company recognizes revenue and reduce the deferred revenue. Unused membership points are recognized as breakage, which is recorded as revenue in the consolidated statement of income and comprehensive income (loss). Membership point breakage was immaterial for the years ended March 31, 2022, 2021, and 2020. Contract balances and remaining performance obligations Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. The Company did not have contract assets as of March 31, 2022 and 2021. The Company’s contract liabilities, which are reflected in its consolidated balance sheets as deferred revenue of $104,663 and $186,046 as of March 31, 2022 and 2021 respectively, consist primarily of revenue for amount received in advance from the Company’s wholesale customers and unredeemed membership points. These amounts represent the Company’s unsatisfied performance obligations as of the balance sheet dates. The amount of revenue recognized in the years ended March 31, 2022, 2021, and 2020 that was included in the opening deferred revenue was $182,871, $531,612, and $165,479, respectively. As of March 31, 2022, the amount received in advance from wholesale customers and unredeemed membership points was $104,663. The Company expects to recognize revenue when products are delivered to the wholesale customers or when customers redeem their membership points, which is expected to occur within one year. Disaggregation of revenue The Company disaggregates its revenue by geographic areas, product categories, and distribution channels, which the Company believes best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenue for the years ended March 31, 2022, 2021, and 2020 is as following: Revenue by geographic areas The summary of the Company’s total revenue by geographic areas for the years ended March 31, 2022, 2021, and 2020 was as follows: For the Years Ended March 31, 2022 2021 2020 Japan domestic market $ 21,786,380 $ 42,728,171 $ 55,590,347 China market 192,933,863 170,674,887 77,276,549 Other overseas markets 13,716,453 8,111,684 6,707,062 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 Revenue by product categories The summary of the Company’s total revenue by product categories for the years ended March 31, 2022, 2021, and 2020 was as follows: For the Years Ended March 31, 2022 2021 2020 Beauty products $ 153,428,218 $ 141,111,215 $ 113,645,885 Health products 16,565,637 39,717,066 13,813,746 Sundry products* 50,484,777 31,599,246 8,530,111 Other products 7,958,064 9,087,215 3,584,216 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 * Sundry products include primarily home goods, such as bedding and bath products, home décor, dining and tabletop items, storage containers, car supplies, cleaning agents, and laundry supplies. It also includes spa supplies, clothing, formula milk, and diapers. Revenue by distribution channels The summary of the Company’s total revenue by distribution channels for the years ended March 31, 2022, 2021, and 2020 was as follows: For the Years Ended March 31, 2022 2021 2020 Directly-operated physical stores $ 10,836,229 $ 29,502,329 $ 45,824,603 Online stores 121,164,347 111,435,341 50,464,251 Franchise stores and wholesale customers 96,436,120 80,577,072 43,285,104 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 Fair value of financial instruments Fair value is defined 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, due from related parties, prepaid expenses and other current assets, short-term borrowings, current portion of long-term borrowings, accounts payable, due to related parties, deferred revenue, taxes payable, and other payables and other current liabilities, approximate the fair value of the respective assets and liabilities as of March 31, 2022 and 2021 based upon the short-term nature of the assets and liabilities. Foreign currency translation The Company maintains its books and record in its local currency, Japanese yen (“¥”), which is a functional currency as being the primary currency of the economic environment in which its operation is 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 statements of income and comprehensive income (loss). The reporting currency of the Company is the United States Dollars (“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 are translated into US$, using the exchange rate on the balance sheet date. Revenue and expenses are translated at the average rates prevailing during the period. Shareholders’ equity is translated at the historical exchange rate at the time of transaction. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: March 31, 2022 March 31, 2021 March 31, 2020 Year-end spot rate ¥1=US$0.008208 ¥1=US$0.009034 ¥1=US$0.009250 Average rate ¥1=US$0.008908 ¥1=US$0.009434 ¥1=US$0.009201 Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expenses in the period incurred. No significant penalties or interest relating to income taxes were incurred during the years ended March 31, 2022, 2021, and 2020. The Company does not believe there was any uncertain tax provision as of March 31, 2022 and 2021. The Company’s operating subsidiary in Japan is subject to the income tax laws of Japan. As of March 31, 2022, the tax years ended March 31, 2016 through March 31, 2022 for the Company and its subsidiary remain open for statutory examination by the Japanese tax authorities. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of March 31, 2022 and 2021, there were no dilutive shares. Shipping and handling cost All shipping and handling costs are expensed as incurred and included in selling, general, and administrative expenses in the consolidated statements of income and comprehensive income (loss). Total shipping and handling expenses were $13,481,078, $10,977,722, and $3,026,823 for the years ended March 31, 2022, 2021, and 2020, respectively. Advertising expenses Advertising costs are expensed as incurred and included in selling, general, and administrative expenses in the consolidated statements of income and comprehensive income (loss). Advertising expenses amounted to $2,847,383, $2,440,443, and $527,934 for the years ended March 31, 2022, 2021, and 2020, respectively. Comprehensive income Comprehensive income consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in ¥ to US$ is reported in other comprehensive loss in the consolidated statements of income and comprehensive income (loss). Risks and uncertainties Political and economic risk The directly-operated physical stores of the Company are all located in the Japan. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Japan, as well as by the general state of Japan economy. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in Japan. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, including its organization and structure disclosed in Note 1, such experience may not be indicative of future results. Credit risk As of March 31, 2022 and 2021, $17,568,176 and $16,320,040 of the Company’s cash was on deposit at financial institutions in Japan, respectively, which were insured by the Deposit Insurance Corporation of Japan subject to certain limitations. The Company has not experienced any losses in such accounts. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risks. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. Concentrations For the years ended March 31, 2022, 2021, and 2020, all of the Company’s assets were located in Japan and all of the Company’s revenue was generated by the Company and its subsidiary, which are both located in Japan. For the year ended March 31, 2022, no single customer accounted for more than 10% of the Company’s total revenue. For the year ended March 31, 2021, two customers accounted for approximately 11.5% and 10.3% of the Company’s total revenue, respectively. For the year ended March 31, 2020, one customer accounted for approximately 12.1% of the Company’s total revenue. As of March 31, 2022, two third-party platform operators of the Company’s online stores accounted for 29.5% and 11.9% of the total accounts receivable balance, respectively. As of March 31, 2021, two customers and two third-party platform operators of the Company’s online stores accounted for 16.0%, 15.5%, 13.8%, and 10.6% of the total accounts receivable balance, respectively. For the year ended March 31, 2022, three suppliers accounted for approximately 30.1%, 19.7%, and 17.9% of the Company’s total purchases, respectively. For the year ended March 31, 2021, two suppliers accounted for approximately 34.9% and 28.2% of the Company’s total purchases, respectively. For the year ended March 31, 2020, four suppliers accounted for approximately 25.9%, 17.1%, 15.3%, and 13.4% of the Company’s total purchases, respectively. Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326),” which significantly changed the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life, instead of when incurred. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which amended Subtopic 326-20 (created by ASU No.2016-13) to explicitly state that operating lease receivables are not in the scope of Subtopic 326-20. Additionally, in April 2019, the FASB issued ASU No.2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” in May 2019, the FASB issued ASU No. 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief,” and in November 2019, the FASB issued ASU No. 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” and ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which updated the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations, and certain smaller reporting companies applying for credit losses standard and to provide further clarifications on certain aspects of ASU No. 2016-13. In February 2020, the FASB issued ASU 2020-02, “Financial Instruments – Credit Losses (Topic 326) and Leases (topic 842) Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (topic 842).” This ASU provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. The new effective date for these preparers is for annual and interim periods in fiscal years beginning after December 15, 2022, and the Company is in the process of evaluating the potential effect on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (T |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Mar. 31, 2022 | |
Credit Loss, Additional Improvements [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 3 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: March 31, March 31, Accounts receivable $ 35,009,314 $ 44,166,699 Less: allowance for doubtful accounts (177,793 ) (483,124 ) Accounts receivable, net $ 34,831,521 $ 43,683,575 The Company’s accounts receivable primarily include balance due from customers when the Company’s products have been sold and delivered to customers, which has not been collected as of the balance sheet dates. Allowance for doubtful accounts movement was as follows: March 31, March 31, Beginning balance $ 483,124 $ 392,626 Additions (reductions) (283,429 ) 104,080 Foreign currency translation adjustments (21,902 ) (13,582 ) Ending balance $ 177,793 $ 483,124 |
Merchandise Inventories, Net
Merchandise Inventories, Net | 12 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
MERCHANDISE INVENTORIES, NET | NOTE 4 – MERCHANDISE INVENTORIES, NET Merchandise inventories, net, consisted of the following: March 31, March 31, Beauty products $ 27,359,354 $ 24,687,452 Health products 1,052,880 1,419,970 Other products 1,827,896 1,015,082 Subtotal 30,240,130 27,122,504 Less: inventory allowances - - Merchandise inventories, net $ 30,240,130 $ 27,122,504 |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, Net | 12 Months Ended |
Mar. 31, 2022 | |
Prepaid Expense and Other Assets [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS, NET | NOTE 5 – PREPAID EXPENSES AND OTHER ASSETS, NET Prepaid expenses and other assets consisted of the following: March 31, March 31, Deposits (1) $ 2,988,322 $ 3,229,044 Consumption tax receivable 8,190,981 2,172,220 Other receivables (2) 1,888,234 1,526,759 Advance to suppliers (3) 479,734 445,685 Deferred initial public offering costs - 714,250 Prepaid expenses and others (4) 4,610,905 273,525 Allowance for doubtful accounts (885,971 ) (970,276 ) Subtotal 17,272,205 7,391,207 Less: prepaid expenses and other current assets, net 9,905,486 3,926,590 Long-term prepaid expenses and other non-current assets, net $ 7,366,719 $ 3,464,617 (1) Deposits primarily include security deposits paid to landlords for the Company’s retail stores and distribution centers as well as security deposits paid to the Company’s suppliers and to third-party platform operators for the operations of online stores. (2) Other receivables as of March 31, 2022 and 2021 included $881,539 and $970,252 due from a construction company, which is a refund of the design and construction service fee the Company prepaid for the construction of its new distribution center. Since the construction company failed to obtain relevant construction permits and delayed the construction, the service agreement was terminated and the Company requested the refund of prepaid contract amount. In November 2020, the Company filed a legal case against the construction company claiming the refund of the contract prepayment, and as the date of this report, the legal case is still in process. Although the Company is confident in winning the legal case based on management’s evaluation of the collectability on a combination of various factors, the Company fully accrued bad debt allowance for the receivable from this construction company as of March 31, 2022 and 2021, respectively. (3) Advance to suppliers consists of advance payments paid to suppliers for purchases of merchandise products and storage fee. (4) Prepaid expenses and others as of March 31, 2022 included a prepaid service fee amounting to $4,250,789 (approximately ¥517.9 million). The Company entered into an agreement to engage a third-party service provider for warehouse and logistics services over the period from March 1, 2022 to February 28, 2025, with monthly service fee of $118,077 (approximately ¥14.4 million). |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 6 – PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following: March 31, March 31, Property and buildings $ 4,878,918 $ 1,581,295 Leasehold improvements 4,370,186 1,053,467 Land 3,809,390 4,192,743 Equipment and furniture 985,986 1,250,548 Automobiles 264,701 288,201 Software 412,157 379,610 Construction in progress - 2,939,288 Subtotal 14,721,338 11,685,152 Less: accumulated depreciation (1,987,156 ) (1,131,428 ) Property and equipment, net $ 12,734,182 $ 10,553,724 Depreciation expense was $1,035,569, $441,893, and $403,159 for the years ended March 31, 2022, 2021, and 2020, respectively. As of March 31, 2022 and 2021, the Company pledged a piece of land of 16,165 square feet with a carrying value of ¥340.1 million (approximately $2.8 million) as collateral to safeguard the Company’s bank borrowings from MUFG Bank and Tokyo Higashi Shinkin Bank (see Note 9). |
Leases
Leases | 12 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 7 – LEASES The Company leases retail store facilities and distribution centers under non-cancellable operating leases, with terms ranging from one to 15 years, as well as finance leases for software, equipment, and furniture with a term of five years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right-of-use assets and lease liabilities. Operating lease expenses for lease payment are recognized on a straight-line basis over the lease term. Finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the leased assets, and interest expenses, which are recognized following an effective interest rate method. Leases with initial term of 12 months or less are not recorded on the balance sheet. Operating Leases The table below presents the operating lease related assets and liabilities recorded on the balance sheets. March 31, March 31, Operating lease right-of-use lease assets $ 2,909,432 $ 2,898,551 Operating lease liabilities – current $ 1,005,460 $ 811,299 Operating lease liabilities – non-current 1,877,324 1,928,682 Total operating lease liabilities $ 2,882,784 $ 2,739,981 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of March 31, 2022 and 2021: March 31, March 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 5.92 7.19 Weighted average discount rate 6.69 % 6.69 % During the years ended March 31, 2022, 2021, and 2020, the Company incurred total operating lease expenses of $1,436,003, $1,301,136, and $1,263,423, respectively. Finance Leases The components of finance lease expenses were as follows: For the Years Ended March 31, 2022 2021 2020 Finance leases cost: Amortization of right-of-use assets $ 199,796 $ 187,556 $ 145,056 Interest on lease liabilities 204,774 102,252 45,971 Total finance leases cost $ 404,570 $ 289,808 $ 191,027 Supplemental cash flow information related to finance leases was as follows: For the Years Ended March 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 204,774 102,252 45,971 Supplemental balance sheet information related to leases was as follows: March 31, March 31, Finance leases cost: Software $ 344,902 $ 379,610 Equipment and furniture 851,915 518,409 Subtotal 1,196,817 898,019 Less: accumulated depreciation (519,869 ) (305,927 ) Property and equipment, net $ 676,948 $ 592,092 The weighted average remaining lease terms and discount rates for all of finance leases as of March 31, 2022 and 2021 were as follows: March 31, March 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 3.42 3.15 Weighted average discount rate 8.07 % 8.07 % The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2022: Operating Leases Finance Leases 2023 $ 1,192,469 $386,593 2024 789,724 356,016 2025 269,381 178,725 2026 161,412 141,049 2027 134,477 62,814 Thereafter 963,748 11,215 Total lease payments 3,511,211 1,136,412 Less: imputed interest (628,427 ) (142,245) Present value of lease liabilities $ 2,882,784 $994,167 |
Investments
Investments | 12 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | NOTE 8 – INVESTMENTS On December 25, 2020, the Company and an individual investor established Palpito Co., Ltd. (“Palpito”), a stock company incorporated in Japan pursuant to the laws of Japan with a registered capital of ¥61.0 million ($577,792). The Company owns 40% of Palpito and the registered capital was fully injected on December 31, 2020. Palpito is a retailer of art toys and focuses on selling artworks made by Japanese artists to both Japan and overseas markets. The investment is accounted for using the equity method because the Company has significant influence, but no control of Palpito. The Company recorded a loss of $145,828, $29,242, and $ nil The Company’s investment in unconsolidated entity consists of the following: March 31, March 31, Palpito $ 168,509 $ 333,357 Total investment $ 168,509 $ 333,357 Summarized financial information of unconsolidated entity is as follows: March 31, March 31, Current assets $ 659,862 $ 1,150,220 Noncurrent assets 540,393 366,435 Current liabilities 75,957 300,574 Noncurrent liabilities 703,025 382,688 For the Years Ended March 31, 2022 2021 2020 Net sales $ 2,404,172 $ 148,252 $ - Gross profit 328,249 7,315 - Loss from operations (355,711 ) (72,682 ) - Net loss (364,569 ) (73,106 ) - |
Borrowings
Borrowings | 12 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE 9 – BORROWINGS Short-term borrowings consisted of the following: Maturity Interest Rate March 31, March 31, Syndicated Loans Tranche A (1) September 2021* TIBOR^+0.70% $ - $ 58,886,548 Syndicated Loans Tranche B (2) September 2022 TIBOR+0.70% 40,328,982 - Tokyo Higashi Shinkin Bank (3) June 2021 – August 2021* 1.2% - 5,746,916 Japan Finance Corporation (4) June 2021* 1.10% - 26,741 MUFG Bank May 2021* 0.35% - 424,598 Total short-term borrowings $ 40,328,982 $ 65,084,803 The terms of the various loan agreements related to short-term borrowings contain certain restrictive covenants which, among other things, require the Company to maintain current organization structure, specified ratios of debt to tangible net assets and debt service coverage, and positive net income, etc. The terms also prohibit the Company from transferring part or all of its assets to third-party companies or receiving part of all of the assets from other third-party companies. As of March 31, 2022 and 2021, the Company was in compliance with such covenants. * The loans were fully repaid upon maturity. ^ TIBOR is an acronym for the Tokyo Interbank Offered Rate, which is the daily reference rate derived from the interest rate that banks charge to lend funds to other banks in the Japanese interbank market. (1) On September 25, 2020, the Company entered into a one-year syndicated loan agreement, which was effective from September 30, 2020, with a consortium of banks, with an aggregate credit line of ¥7.0 billion (approximately $63.2 million). As of March 31, 2021, the Company borrowed an aggregated of ¥6.6 billion (approximately $59.6 million) under the agreement, and the net outstanding balance of this loan was approximately ¥6.5 billion (approximately $58.9 million), net off the unamortized loan service cost of ¥81.7 million (approximately $0.7 million). The syndicated loan is guaranteed by Mr. Kanayama. (2) On September 27, 2021, the Company entered into another one-year syndicated loan agreement, which was effective from September 30, 2021, with a consortium of banks, with an aggregate credit line of ¥7.5 billion (approximately $61.6 million). As of March 31, 2022, the Company borrowed an aggregated of ¥5.0 billion (approximately $41.0 million) under the agreement, and the net outstanding balance of this loan was approximately ¥4.9 billion (approximately $40.3 million), net off the unamortized loan service cost of ¥86.6 million ($711,018). The syndicated loan is guaranteed by Mr. Kanayama. (3) In connection with the Company’s bank borrowings from Tokyo Higashi Shinkin Bank, the Company pledged a piece of land of 16,165 square feet with a carrying value of ¥340.1 million (approximately $2.8 million) as of March 31, 2021 as collateral to safeguard the loan. On December 21, 2020, the Company entered into a construction contract with a construction company for the construction of its new distribution center in Koshigaya. The total cost of the contract was approximately ¥511.9 million (approximately $4.2 million) was fully paid in six installments by August 31, 2021. On the same day, the Company entered into a loan agreement with Tokyo Higashi Shinkin Bank to borrow ¥25.6 million (approximately $0.2 million) for eight months with a maturity date of August 31, 2021. On January 29, 2021, the Company entered into a second loan agreement with Tokyo Higashi Shinkin Bank to borrow approximately ¥128.0 million (approximately $1.1 million) for seven months with a maturity date of August 31, 2021. On March 22, 2021, the Company entered into a third loan with Tokyo Higashi Shinkin Bank to borrow approximately ¥153.6 million (approximately $1.3 million) for five months with a maturity date of August 31, 2021. On July 21, 2021, the Company entered into a fourth loan with Tokyo Higashi Shinkin Bank to borrow approximately ¥13.9 million (approximately $0.1 million) for one month with a maturity date of August 31, 2021. All loans are the capital for the construction of this distribution center and bear a fixed interest rate of 1.20%. (4) Guaranteed by Mr. Kanayama. Long-term borrowings consisted of the following: Maturity Interest Rate March 31, March 31, Toei Shinkin Bank (1) December 2053 1.10% $ 2,233,520 $ 2,535,799 Japan Finance Corporation (2) May 2022 – April 2025 0.71% - 4.25% 1,975,830 2,742,722 BOT Lease Co., Ltd. (3) March 2028 TIBOR (3M) + 6.0% 1,641,600 1,806,800 MUFG Bank (4) March 2028 TIBOR (3M) + 0.8% 6,377,616 - Messanine Solution No.4 Investment Limited Liability Union (5) October 2026 9.0% - 10.5% 8,208,000 - Tokyo Higashi Shinkin Bank July 2026 2.0% 142,228 - Total long-term borrowings $ 20,578,794 $ 7,085,321 Current portion of long-term borrowings $ 951,045 $ 645,570 Non-current portion of long-term borrowings $ 19,627,749 $ 6,439,751 (1) Guaranteed by Mr. Kanayama. (2) One of the loans was fully repaid upon during the year ended March 31, 2022. (3) The loan bears an interest rate of TIBOR (3M)+6.0% (in the case EBITDA exceeds ¥0) or TIBOR (3M)+0.7% (in the case EBITDA is ¥0 or less). (4) In connection with the Company’s bank borrowings from MUFG Bank, the Company pledged a piece of land of 16,165 square feet with a carrying value of ¥340.1 million (approximately $2.8 million) as of March 31, 2022 as collateral to safeguard the loan. (5) The loan bears an interest rate of 9.0% from October 13, 2021 to March 31, 2024, and 10.5% from April 1, 2024 to October 30, 2026. The future maturities of long-term borrowings as of March 31, 2022 were as follows: 12 months ending March 31, 2023 $ 951,045 2024 2,517,131 2025 875,531 2026 803,301 2027 11,908,790 Thereafter 3,522,996 Total long-term borrowings $ 20,578,794 For the above mentioned short-term and long-term loans, the Company recorded interest expenses of $2,857,599, $2,046,933, and $1,888,018 for the years ended March 31, 2022, 2021, and 2020, respectively. The annual weighted average interest rates were 1.51%, 0.97%, and 1.46% for the years ended March 31, 2022, 2021, and 2020, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS The Company’s relationships with related parties who had transactions with the Company are summarized as follows: Name of Related Party Relationship to the Company Mr. Mei Kanayama Representative director, director, and controlling shareholder Tokyo Lifestyle Limited An entity controlled by Mr. Kanayama Seihinkokusai Co., Ltd. (“Seihinkokusai”) An entity of which Mr. Kanayama’s wife is a corporate auditor Takuetsu Kokusai Co., Ltd. The entity’s representative director is Mr. Kanayama’s wife YST (HK) Limited An entity controlled by Mr. Kanayama, which was subsequently dissolved on January 14, 2022 Shintai Co., Ltd. The entity’s representative director is Mr. Kanayama’s wife Shenzhen Qingzhiliangpin Network Technology Co., Ltd. (“Qingzhiliangpin”) A subsidiary of YST (HK) Limited before October 2021, which became a subsidiary of Tokyo Lifestyle Limited in October 2021 Palpito An equity investment entity of the Company a. Accounts receivable, net - related parties Accounts receivable, net - related parties consisted of the following: March 31, March 31, Name Tokyo Lifestyle Limited $ 6,305,332 $ 3,496,659 Seihinkokusai 345 2,411 Shintai Co., Ltd. 250 - Subtotal 6,305,927 3,499,070 Less: allowance for doubtful accounts - - Total accounts receivable, net - related parties $ 6,305,927 $ 3,499,070 b. Due from related parties Due from related parties consisted of the following: March 31, March 31, Name Palpito $ 1,717 $ - Seihinkokusai (1) 691,278 632,380 Total due from related parties $ 692,995 $ 632,380 (1) The Company rents a storefront from Seihinkokusai. Pursuant to the rent agreement, the Company paid ¥50 million ($410,400) as a rental security deposit to this related party. The Company also rents an office space from Seihinkokusai. Pursuant to the rent agreement, the Company paid ¥14 million ($114,912) as a rental security deposit to this related party. In addition, the Company obtained the operating rights of Seihinkokusai’s online stores on domestic e-commerce marketplaces and use them as the Company’s own online stores to sell its products. Pursuant to an EC Site Operation Business Assignment Agreement dated January 31, 2020, the Company paid ¥20 million ($164,160) as an operating security deposit to Seihinkokusai; the Company also needs to pay transaction commission of 1% based on its sales amount and the transaction commission was immaterial during the years ended March 31, 2022 and 2021. The agreement is valid for one year, and is automatically renewed yearly unless the parties indicate otherwise in writing. The amount due from Seihinkokusai will be collected back when the agreement expires or is terminated. The Company recorded these amounts as due from related parties in the consolidated financial statements. c. Accounts payable - related parties Related parties consisted of the following: March 31, March 31, Name Seihinkokusai $ 34,043 $ 46,750 Palpito 98,004 8,504 Qingzhiliangpin - 7,757 Total accounts payable - related parties $ 132,047 $ 63,011 d. Due to related parties Due to related parties consisted of the following: March 31, March 31, Name Mr. Mei Kanayama $ 29,921 $ 13,924 YST (HK) Limited - 69,159 Qingzhiliangpin - 152,691 Seihinkokusai 23,444 - Total due to related parties $ 53,365 $ 235,774 e. Sales to related parties For the Years Ended March 31, 2022 2021 2020 Tokyo Lifestyle Limited $ 22,047,156 $ 22,766,429 $ 4,263,196 Seihinkokusai 22,092 8,246 19,554 Shintai Co., Ltd. 1,347 657 59,807 Palpito 52,214 - - Takuetsu Kokusai Co., Ltd. 6,507 - - Total revenue from related parties $ 22,129,316 $ 22,775,332 $ 4,342,557 f. Purchase from related parties For the Years Ended March 31, 2022 2021 2020 Seihinkokusai $ 401,341 $ 667,156 $ 492,202 Palpito 122,520 37,677 - Qingzhiliangpin 79,653 8,100 - Tokyo Lifestyle Limited 879 26,491 - YST (HK) Limited 13,885 - - Total purchase from related parties $ 618,278 $ 739,424 $ 492,202 g. Other related party transaction Mr. Kanayama provided guarantees in connection with certain loans the Company borrowed (see Note 9). |
Taxes
Taxes | 12 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
TAXES | NOTE 11 – TAXES (a) Corporate Income Taxes The Company and its subsidiary in Japan are mainly subject to Japanese national and local income taxes, inhabitant tax, and enterprise tax, for the years ended March 31, 2022 and 2021. The components of the income tax provision were as follows: For the Years Ended March 31, 2022 2021 2020 Current tax provision Japan $ 2,301,944 $ 3,541,410 $ 2,837,926 2,301,944 3,541,410 2,837,926 Deferred tax benefit Japan (122,276 ) (234,362 ) (182,140 ) (122,276 ) (234,362 ) (182,140 ) Income tax provision $ 2,179,668 $ 3,307,048 $ 2,655,786 The Company’s deferred tax assets comprised of the following: March 31, March 31, Deferred tax assets: Allowance for doubtful accounts $ 301,229 $ 329,893 Accrued member rewards 32,693 62,761 Accrued employee bonus 74,219 54,470 Accrued asset retirement obligation 113,033 - Accrued employee retirement pension 59,127 - Investment loss from equity method investment 54,336 - Net operating loss carry-forwards 25,903 - Total deferred tax assets 660,540 447,124 Valuation allowance (25,903 ) - Total deferred tax assets 634,637 447,124 Deferred tax liability: Change in fair value of purchase option (115,728 ) - Total deferred tax liability (115,728 ) - Deferred tax assets, net $ 518,909 $ 447,124 The following table reconciles the Japan statutory rate to the Company’s effective tax rates for the years ended March 31, 2022 and 2021 For the Years Ended March 31, 2022 2021 2020 Japanese statutory income tax rate 34.0 % 34.0 % 34.0 % Non-deductible expenses 2.0 % 0.6 % 1.3 % Non-taxable income (2.5 )% (3.9 )% (3.3 )% Valuation allowance 0.5 % - - Others 2.2 % 1.0 % 3.2 % Subtotal 36.2 % 31.7 % 35.2 % Undistributed retained earnings tax (1) 3.8 % 5.8 % - Effective tax rate 40.0 % 37.5 % 35.2 % (1) The Company is a Specified Family Company, as one shareholder and its related persons hold more than 50% of its total outstanding shares. Hence, i n addition to the normal corporate income taxes, the Company is also subjected to a special tax on its undistributed retained earnings (“URE”) for each fiscal year, tax is imposed which URE URE (b) Consumption tax Consumption tax collected and remitted to tax authorities is excluded from revenue, cost of sales, and expenses in the consolidated statements of income and comprehensive income (loss). Before October 1, 2019, the applicable consumption tax rate was 8%, and since October 1, 2019, the Company has been subject to the applicable consumption tax rate of 10%, with an 8% rate applicable to a limited number of exceptions based on the new Japanese tax law. For overseas sales, the Company is exempted from paying consumption tax. The Company can deduct all its qualified input consumption tax paid when purchasing from suppliers, against the output consumption tax derived from domestic sales. The Company is eligible for consumption tax refund from the tax authorities for excess input consumption tax, which is recorded as consumption tax receivable in the prepaid expenses and other current assets on the balance sheets (See Note 5). |
Representative's Warrants Liabi
Representative's Warrants Liability | 12 Months Ended |
Mar. 31, 2022 | |
Representatives Warrants Liability [Abstract] | |
REPRESENTATIVE'S WARRANTS LIABILITY | NOTE 12 – REPRESENTATIVE’S WARRANTS LIABILITY In connection with the Company’s IPO, the Company agreed to issue warrants to a representative of several underwriters, for a nominal consideration of $0.01 to purchase 300,000 of the Company (equal to 5% of the total number of sold in the IPO, but not including any over-allotment sold in the over-allotment option) (the “Representative’s Warrants”). Company’s IPO offering price of $4.00 per ADS) The will be Company’s IPO Company’s IPO Because the strike price of the Representative’s Warrants is denominated in U.S. dollars, a currency other than the Company’s functional currency, ¥, the Representative’s Warrants were not considered indexed to the Company’s own stock. As such, the Representative’s Warrants were classified as a derivative liability under ASC 815-10, and recorded initially and subsequently at fair value with As of March 31, 2022, these Representative’s Warrants were issued and outstanding but none of the warrants had been exercised. For the year ended March 31, 2022, these Representative Warrants were antidilutive and accordingly were not included in the diluted EPS calculation based on treasury stock method. On January 13, 2022, the Company recorded a fair value of $522,116 for the Representative’s Warrants liability at issuance resulting in a decrease in additional paid-in capital of $522,116, as the Company determined these warrants issued to the representative of underwriters were part of its incremental cost directly attributable to the Company’s IPO. The Company recognized a gain of $369,404 from the change in fair value of the Representative’s Warrants liability subsequently for year ended March 31, 2022. These warrants do not trade in an active securities market, and as such, the Company estimates its fair value using the Black-Scholes Option Pricing Model (the “Black-Scholes Model”) on the date that these warrants were originally issued and as of March 31, 2022 using the following assumptions: January 13, 2022 March 31, Representative’s Warrants liability Stock price $ 4.00 $ 2.12 Exercise price $ 4.80 $ 4.80 Expected term (years) 5.00 4.79 Risk-free interest rate 1.47 % 2.42 % Expected volatility 55.39 % 56.86 % |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 13 – SHAREHOLDERS’ EQUITY Ordinary shares The Company is a stock company incorporated in Japan pursuant to the laws of Japan on December 28, 2006. At the incorporation, the number of authorized ordinary shares was 1,000 and 1,000 ordinary shares were issued to the original shareholder of the Company for cash of ¥10,000,000 ($85,060). The issued ordinary shares were subsequently transferred to Mr. Mei Kanayama, the controlling shareholder of the Company. On April 25, 2011, the number of authorized ordinary shares was increased to 10,000. 2,000 new ordinary shares were issued to Mr. Mei Kanayama for cash of ¥20,000,000 ($248,640), the controlling shareholder of the Company. On October 15, 2014, 500 shares were transferred from Mr. Mei Kanayama to Mr. Yingjia Yang, the minority shareholder of the Company. On July 30, 2016, 2,000 new ordinary shares were issued to Mr. Mei Kanayama for cash of ¥20,000,000 ($195,960). On March 30, 2017, 4,410 new ordinary shares were issued to Mr. Mei Kanayama for cash of ¥44,100,000 ($396,327), and 490 new ordinary shares were issued to Mr. Yingjia Yang for cash of ¥4,900,000 ($44,036). On October 22, 2020, the Company’s shareholders approved an increase in the number of the Company’s authorized ordinary shares from 10,000 to 300,000, and 72,909 new ordinary shares were issued to Mr. Mei Kanayama and 8,101 new ordinary shares were issued to Mr. Yingjia Yang, which share issuances were equivalent to a forward split of the Company’s outstanding ordinary shares at an approximate or rounded ratio of 9.1828-for-1 share. The Company has retroactively restated the shares and per share data for all the periods presented. As a result, the Company had 300,000 authorized ordinary shares and 90,910 ordinary shares were issued and outstanding as of March 31, 2020. On November 10, 2020, 9,090 ordinary shares were issued to Grand Elec-Tech Limited, which the Company subsequently repurchased and cancelled on January 20, 2021. On December 25, 2020, 2,041 new ordinary shares were issued to SHUR Co., Ltd. for cash of ¥150,001,254 ($1,446,012). On February 5 and 12, 2021, an issuance of 9,090 ordinary shares to Grand Elec-Tech Limited was authorized by the Company’s board of directors and a general meeting of shareholders, respectively. Grand Elec-Tech Limited was obliged to contribute the price of such issuance amounting to ¥200,007,270 (approximately $1.9 million) by August 12, 2021. Grand Elec-Tech Limited started to make payments in April 2021 and contributed the fully amount by June 22, 2021. On June 22, 2021, the Company’s shareholders and board of directors passed a resolution to amend the original date of payment from August 12, 2021 to June 22, 2021, and on the same day, the Company issued the 9,090 shares to Grand Elec-Tech Limited. On August 18, 2021, shareholders of the Company approved an increase in the number of the Company’s authorized Ordinary Shares from 300,000 to 100,000,000 and the Company’s board of directors approved a forward split of the Company’s outstanding Ordinary Shares at a ratio of 294-for-1 share, which became effective on the same day. Initial public offering On January 13, 2022, the Company closed its IPO of 6,250,000 ADSs at a public offering price of $4.00 per ADS, which included 250,000 ADSs issued pursuant to the partial exercise of the underwriters’ over-allotment option. Each ADS represents one ordinary share of the Company. The closing for the sale of the over-allotment shares took place on February 21, 2022. Gross proceeds of the Company’s IPO, including the proceeds from the sale of the over-allotment shares, totaled $25.0 million, before deducting underwriting discounts and other related expenses. Net proceeds of the Company’s IPO, including over-allotment shares, was approximately $21.4 million. In connection with the IPO, the Company’s ordinary shares began trading on the Nasdaq Capital Market under the symbol “TKLF” on January 18, 2022. Restricted net assets The Company is restricted in its ability to transfer a portion of its net assets, equivalent to its share capital to its shareholders in the form of loans, advances, or cash dividends. The payment of dividends by the Company organized in Japan is subject to limitations, procedures, and formalities. Regulations in Japan currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in Japan. As of March 31, 2022 and 2021, the total restricted net assets of the Company amounted to $25,002,731 and $2,416,635, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. As of March 31, 2022 and 2021, there were no legal claims and litigation against the Company. |
Segment reporting
Segment reporting | 12 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 15 – SEGMENT REPORTING In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the CODM, reviews operation results by the revenue of different distribution channels. Based on management’s assessment, the Company has determined that it has three operating segments. The following table presents the segment information for the years ended March 31, 2022, 2021, and 2020, respectively: For the Year Ended March 31, 2022 Directly- Online Stores Franchise Total Revenue $ 10,836,229 $ 121,164,347 $ 96,436,120 $ 228,436,696 Merchandise costs $ 9,596,336 $ 98,328,079 $ 81,457,709 $ 189,382,124 Interest expenses, net $ (127,675 ) $ (1,427,579 ) $ (1,136,227 ) $ (2,691,481 ) Provision for income tax $ 103,396 $ 1,156,110 $ 920,162 $ 2,179,668 Net income $ 155,240 $ 1,735,792 $ 1,381,537 $ 3,272,569 Depreciation and amortization $ 49,123 $ 549,273 $ 437,173 $ 1,035,569 Capital expenditures $ 705,690 $ 1,174,609 $ 934,885 $ 2,815,184 Total assets $ 6,219,359 $ 67,291,828 $ 49,833,993 $ 123,345,180 Total liabilities $ 4,588,581 $ 42,053,619 $ 32,090,251 $ 78,732,451 For the Year Ended March 31, 2021 Directly- Online Stores Franchise Total Revenue $ 29,502,329 $ 111,435,341 $ 80,577,072 $ 221,514,742 Merchandise costs $ 24,608,915 $ 88,899,645 $ 68,051,379 $ 181,559,939 Interest expenses, net $ (260,174 ) $ (982,724 ) $ (710,592 ) $ (1,953,490 ) Provision for income tax $ 440,447 $ 1,663,646 $ 1,202,955 $ 3,307,048 Net income $ 735,525 $ 2,778,203 $ 2,008,873 $ 5,522,601 Depreciation and amortization $ 58,853 $ 222,299 $ 160,741 $ 441,893 Capital expenditures $ 781,023 $ 1,252,666 $ 905,782 $ 2,939,471 Total assets $ 10,593,798 $ 55,595,433 $ 46,752,624 $ 112,941,855 Total liabilities $ 12,189,004 $ 45,654,076 $ 32,864,338 $ 90,707,418 For the Year Ended March 31, 2020 Directly- Online Stores Franchise Total Revenue $ 45,824,603 $ 50,464,251 $ 43,285,104 $ 139,573,958 Merchandise costs $ 36,860,755 $ 38,336,001 $ 36,891,293 $ 112,088,049 Interest expenses, net $ (619,870 ) $ (682,630 ) $ (585,518 ) $ (1,888,018 ) Provision for income tax $ 871,941 $ 960,224 $ 823,621 $ 2,655,786 Net income $ 1,605,749 $ 1,768,327 $ 1,516,761 $ 4,890,837 Depreciation and amortization $ 132,364 $ 145,766 $ 125,029 $ 403,159 Capital expenditures $ 1,633,006 $ 959,068 $ 822,629 $ 3,414,703 Total assets $ 14,531,739 $ 42,528,146 $ 35,892,174 $ 92,952,059 Total liabilities $ 25,368,417 $ 27,425,786 $ 24,194,192 $ 76,988,395 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS On July 20, 2022, the Company entered into a definitive agreement (the “Agreement”) with All Seas Global Limited to acquire 100% equity interests in Tokyo Lifestyle Limited, a company principally engaged in the import and retail of Japanese beauty and cosmetic products in Hong Kong and engaged in the live e-commerce business through its wholly-owned subsidiary, Qingzhiliangpin. This acquisition is a critical initiative of the Company’s business strategy to boost the Company’s business expansion in the Southeast Asia market and advance the digital transformation of live streaming e-commerce in its retail business. Pursuant to the Agreement, the Company agreed to acquire 100% of the equity interests in Tokyo Lifestyle Limited in consideration of the sum of ¥392,000,000 in cash (approximately US$2,805,192), subject to certain terms. The transaction contemplated by the Agreement was approved by the Company’s board of directors at a meeting on June 27, 2022, and closed on July 27, 2022. These consolidated financial statements were approved by management and available for issuance on August 15, 2022, and the Company has evaluated subsequent events through this date. The Company did not identify any subsequent events except disclosed above that would have required adjustment or disclosure in the financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of the Company and its subsidiary. All intercompany balances and transactions are eliminated upon consolidation. |
Uses of estimates | Uses of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, useful lives of property and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities, inputs used in the calculation of the asset retirement obligation, and implicit interest rate of operating leases and financing leases. Actual results could differ from those estimates. |
Cash | Cash Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains all of its bank accounts in Japan. Cash balances in bank accounts in Japan are insured by the Deposit Insurance Corporation of Japan subject to certain limitations. The Company considers all highly-liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. As of March 31, 2022 and 2021, the Company did not have any cash equivalents. |
Accounts receivable | Accounts receivable Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company determines the adequacy of reserves for doubtful accounts based on general and individual account analysis and historical collection trend. The Company establishes general and specific allowance when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income (loss). Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of March 31, 2022 and 2021, allowance for uncollectible balances amounted to $177,793 and $483,124, respectively. |
Leases | Leases In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which is effective for annual reporting periods (including interim periods) beginning after December 15, 2018, and early adoption is permitted. The Company early adopted the Topic 842 on April 1, 2018 using a modified retrospective approach reflecting the application of the standard to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. The Company leases retail store facilities and distribution centers, which are classified as operating leases and leases certain software and equipment and furniture as finance lease in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use 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. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current, and operating lease liabilities, non-current, and finance leases are included in property and equipment, finance lease liabilities, current, and finance lease liabilities, non-current in the consolidated balance sheet. At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The operating lease right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All operating lease right-of-use assets are reviewed for impairment annually. There was no impairment for operating lease right-of-use lease assets as of March 31, 2022 and 2021. The Company has elected the short-term lease exception, and therefore operating lease right-of-use assets and liabilities do not include leases with a lease term of twelve months or less. In response to the large volume of anticipated lease concessions to be granted related to the effects of the COVID-19 pandemic, and the resultant expected cost and complexity of applying the lease modification requirements in Topic 842, the FASB issued Staff Q&A—Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic Based on the nature of the agreements reached with many of its landlords, the Company has accounted for rent concessions as if they were part of the enforceable rights and obligations of the existing lease contracts and did not account for the concessions as lease modifications. The Company has received a total of lease concessions amounting to $276,586, and among which, $127,303, $53,502, and $ nil |
Equity investment | Equity investment An investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest, is accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the board of directors, voting rights, and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Company did not record impairment losses on its equity method investment during the years ended March 31, 2022, 2021, and 2020. |
Merchandise inventories, net | Merchandise inventories, net Merchandise inventories are stated at the lower of cost or net realizable value, on a weighted average basis. Costs include mainly the cost of merchandise inventories. Any excess of the cost over the net realizable value of each item of merchandise inventories is recognized as a provision for diminution in the value of merchandise inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to sell products. The Company periodically evaluates merchandise inventories for their net realizable value adjustments, and reduces the carrying value of those merchandise inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales. For the years ended March 31, 2022, 2021, and 2020, no merchandise inventory reserve was recorded because no slow-moving, obsolete, or damaged merchandise inventory was identified. |
Property and equipment | Property and equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Except for assets that are not subject to depreciation, such as land and construction in progress, Useful life Property and buildings 35-50 years Land Infinite Leasehold improvements Lesser of useful life and lease term Equipment and furniture 2-18 years Automobiles 4-6 years Software 5 years Land has infinite useful life and is not subjected to amortization. Management reviews for impairment accordance with the accounting policy stated under impairment of long-lived assets. Expenditures for maintenance and repair, which do not materially extend the useful lives of the assets, are charged to expenses as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. |
Asset retirement obligations | Asset retirement obligations The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. The Company’s asset retirement obligations are primarily related to leasehold improvement of its retail stores leases, are required to be returned to the landlords in their original condition. asset retirement obligations nil leasehold improvements and are depreciated over the shorter of the estimated useful life of the asset or the term of the lease subsequent to the initial measurement |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of March 31, 2022 and 2021. |
Deferred initial public offering (“IPO”) costs | Deferred initial public offering (“IPO”) costs The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses of Offering.” Deferred offering costs consist of underwriting, legal, and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred offering costs was charged to shareholders’ equity upon the completion of the IPO. |
Revenue recognition | Revenue recognition The Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), on April 1, 2018 using the modified retrospective approach. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance (ASC Topic 605, Revenue Recognition) did not result in significant changes in the way the Company records its revenue. The Company has assessed the impact of the guidance by reviewing its existing customer contracts to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control, and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606 and therefore there was no material changes to the Company’s consolidated financial statements upon adoption of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. Control is the ability to direct the use of, and obtain substantially all of the remaining benefits from the specified goods and services. The Company currently generates its revenue through retail and wholesale of Japanese beauty and health products, as well as sundry products and other products, through a multi-channel distribution network. Currently, the Company sells its products through: (i) directly-operated physical stores, (ii) online stores, and (iii) franchise stores and wholesale customers. For Japanese domestic sales, revenue is recognized at the point of sales or delivery of the related products and control is transferred. For international sales, the Company sells goods under Cost Insurance and Freight (“CIF”) shipping point term, and revenue is recognized when product is loaded on the ships and control is deemed as transferred. The Company generally offers a seven-day product return policy, as long as the products are undamaged, in their original condition, and can be resold. Products sold in the Company’s physical stores may be returned in store with receipt subject to certain restrictions. Historically, the customer returns were immaterial. Therefore, the Company did not provide any sales return allowances as of March 31, 2022 and 2021. The Company enters into trademark license agreements with franchisees under which the franchisee is granted a revocable license and non-exclusive right to use the Company’s trademarks solely for the purposes of selling, promoting sales of, and performing post-sale and other support relating to the products the Company sells to the franchisee. In exchange, the franchisee is required to pay a monthly royalty fee of ¥60,000 (approximately $492) per franchise store and purchase at least 75% of the products sold in store (except heavy products such as purified water) from the Company. The trademark license agreements have a term of one year and automatically renew for successive one-year terms, unless either party sends a written non-renewal notice no later than two months prior to the expiration of the then current term. The Company is the principal for the majority of its transactions and recognizes revenue on a gross basis. The Company is the principal when it has control of the merchandise before it is transferred to customers, which generally is established when the Company is primarily responsible for merchandising decisions, maintains the relationship with customer, including assurance of member service and satisfaction, and has pricing discretion. In directly-operated physical stores of the Company in Japan, customers can enroll in the Company’s rewards program, which is primarily a spending-based rewards program, and get a rewards card. Members of the rewards program usually earn one membership point for each ¥100 spent in the Company’s directly-operated physical stores, and subsequently one membership point can be used as ¥1 at the Company’s directly-operated physical stores when making payments; the membership points are valid for one year starting from the last use of the rewards card. The Company initially accounts for these membership points as a reduction in sales based on the estimated monetary value of the membership points with the corresponding liability classified as deferred revenue in the consolidated balance sheets. When a customer redeems earned membership points at its stores, the Company recognizes revenue and reduce the deferred revenue. Unused membership points are recognized as breakage, which is recorded as revenue in the consolidated statement of income and comprehensive income (loss). Membership point breakage was immaterial for the years ended March 31, 2022, 2021, and 2020. Contract balances and remaining performance obligations Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. The Company did not have contract assets as of March 31, 2022 and 2021. The Company’s contract liabilities, which are reflected in its consolidated balance sheets as deferred revenue of $104,663 and $186,046 as of March 31, 2022 and 2021 respectively, consist primarily of revenue for amount received in advance from the Company’s wholesale customers and unredeemed membership points. These amounts represent the Company’s unsatisfied performance obligations as of the balance sheet dates. The amount of revenue recognized in the years ended March 31, 2022, 2021, and 2020 that was included in the opening deferred revenue was $182,871, $531,612, and $165,479, respectively. As of March 31, 2022, the amount received in advance from wholesale customers and unredeemed membership points was $104,663. The Company expects to recognize revenue when products are delivered to the wholesale customers or when customers redeem their membership points, which is expected to occur within one year. Disaggregation of revenue The Company disaggregates its revenue by geographic areas, product categories, and distribution channels, which the Company believes best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenue for the years ended March 31, 2022, 2021, and 2020 is as following: Revenue by geographic areas The summary of the Company’s total revenue by geographic areas for the years ended March 31, 2022, 2021, and 2020 was as follows: For the Years Ended March 31, 2022 2021 2020 Japan domestic market $ 21,786,380 $ 42,728,171 $ 55,590,347 China market 192,933,863 170,674,887 77,276,549 Other overseas markets 13,716,453 8,111,684 6,707,062 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 Revenue by product categories The summary of the Company’s total revenue by product categories for the years ended March 31, 2022, 2021, and 2020 was as follows: For the Years Ended March 31, 2022 2021 2020 Beauty products $ 153,428,218 $ 141,111,215 $ 113,645,885 Health products 16,565,637 39,717,066 13,813,746 Sundry products* 50,484,777 31,599,246 8,530,111 Other products 7,958,064 9,087,215 3,584,216 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 * Sundry products include primarily home goods, such as bedding and bath products, home décor, dining and tabletop items, storage containers, car supplies, cleaning agents, and laundry supplies. It also includes spa supplies, clothing, formula milk, and diapers. Revenue by distribution channels The summary of the Company’s total revenue by distribution channels for the years ended March 31, 2022, 2021, and 2020 was as follows: |
Fair value of financial instruments | Fair value of financial instruments Fair value is defined 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, due from related parties, prepaid expenses and other current assets, short-term borrowings, current portion of long-term borrowings, accounts payable, due to related parties, deferred revenue, taxes payable, and other payables and other current liabilities, approximate the fair value of the respective assets and liabilities as of March 31, 2022 and 2021 based upon the short-term nature of the assets and liabilities. |
Foreign currency translation | Foreign currency translation The Company maintains its books and record in its local currency, Japanese yen (“¥”), which is a functional currency as being the primary currency of the economic environment in which its operation is 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 statements of income and comprehensive income (loss). The reporting currency of the Company is the United States Dollars (“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 are translated into US$, using the exchange rate on the balance sheet date. Revenue and expenses are translated at the average rates prevailing during the period. Shareholders’ equity is translated at the historical exchange rate at the time of transaction. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: March 31, 2022 March 31, 2021 March 31, 2020 Year-end spot rate ¥1=US$0.008208 ¥1=US$0.009034 ¥1=US$0.009250 Average rate ¥1=US$0.008908 ¥1=US$0.009434 ¥1=US$0.009201 |
Income taxes | Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expenses in the period incurred. No significant penalties or interest relating to income taxes were incurred during the years ended March 31, 2022, 2021, and 2020. The Company does not believe there was any uncertain tax provision as of March 31, 2022 and 2021. The Company’s operating subsidiary in Japan is subject to the income tax laws of Japan. As of March 31, 2022, the tax years ended March 31, 2016 through March 31, 2022 for the Company and its subsidiary remain open for statutory examination by the Japanese tax authorities. |
Earnings per share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of March 31, 2022 and 2021, there were no dilutive shares. |
Shipping and handling cost | Shipping and handling cost All shipping and handling costs are expensed as incurred and included in selling, general, and administrative expenses in the consolidated statements of income and comprehensive income (loss). Total shipping and handling expenses were $13,481,078, $10,977,722, and $3,026,823 for the years ended March 31, 2022, 2021, and 2020, respectively. |
Advertising expenses | Advertising expenses Advertising costs are expensed as incurred and included in selling, general, and administrative expenses in the consolidated statements of income and comprehensive income (loss). Advertising expenses amounted to $2,847,383, $2,440,443, and $527,934 for the years ended March 31, 2022, 2021, and 2020, respectively. |
Comprehensive income | Comprehensive income Comprehensive income consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in ¥ to US$ is reported in other comprehensive loss in the consolidated statements of income and comprehensive income (loss). |
Risks and uncertainties | Risks and uncertainties Political and economic risk The directly-operated physical stores of the Company are all located in the Japan. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Japan, as well as by the general state of Japan economy. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in Japan. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, including its organization and structure disclosed in Note 1, such experience may not be indicative of future results. Credit risk As of March 31, 2022 and 2021, $17,568,176 and $16,320,040 of the Company’s cash was on deposit at financial institutions in Japan, respectively, which were insured by the Deposit Insurance Corporation of Japan subject to certain limitations. The Company has not experienced any losses in such accounts. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risks. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. Concentrations For the years ended March 31, 2022, 2021, and 2020, all of the Company’s assets were located in Japan and all of the Company’s revenue was generated by the Company and its subsidiary, which are both located in Japan. For the year ended March 31, 2022, no single customer accounted for more than 10% of the Company’s total revenue. For the year ended March 31, 2021, two customers accounted for approximately 11.5% and 10.3% of the Company’s total revenue, respectively. For the year ended March 31, 2020, one customer accounted for approximately 12.1% of the Company’s total revenue. As of March 31, 2022, two third-party platform operators of the Company’s online stores accounted for 29.5% and 11.9% of the total accounts receivable balance, respectively. As of March 31, 2021, two customers and two third-party platform operators of the Company’s online stores accounted for 16.0%, 15.5%, 13.8%, and 10.6% of the total accounts receivable balance, respectively. For the year ended March 31, 2022, three suppliers accounted for approximately 30.1%, 19.7%, and 17.9% of the Company’s total purchases, respectively. For the year ended March 31, 2021, two suppliers accounted for approximately 34.9% and 28.2% of the Company’s total purchases, respectively. For the year ended March 31, 2020, four suppliers accounted for approximately 25.9%, 17.1%, 15.3%, and 13.4% of the Company’s total purchases, respectively. |
Recent accounting pronouncements | Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments (Topic 326),” which significantly changed the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life, instead of when incurred. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which amended Subtopic 326-20 (created by ASU No.2016-13) to explicitly state that operating lease receivables are not in the scope of Subtopic 326-20. Additionally, in April 2019, the FASB issued ASU No.2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,” in May 2019, the FASB issued ASU No. 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief,” and in November 2019, the FASB issued ASU No. 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates,” and ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which updated the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations, and certain smaller reporting companies applying for credit losses standard and to provide further clarifications on certain aspects of ASU No. 2016-13. In February 2020, the FASB issued ASU 2020-02, “Financial Instruments – Credit Losses (Topic 326) and Leases (topic 842) Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (topic 842).” This ASU provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. The new effective date for these preparers is for annual and interim periods in fiscal years beginning after December 15, 2022, and the Company is in the process of evaluating the potential effect on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards (the “Simplification Initiative”). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this ASU were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this ASU are effective for years, and interim periods within those years, beginning after December 15, 2020. The Company adopted this ASU on April 1, 2021 and the adoption of this ASU did not have a material impact on its consolidated financial statements. Except for the above-mentioned pronouncement, there are no new recently issued accounting standards that will have material impact on the Company’s consolidated financial position, statements of operations, and cash flows. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of expected economic useful lives | Useful life Property and buildings 35-50 years Land Infinite Leasehold improvements Lesser of useful life and lease term Equipment and furniture 2-18 years Automobiles 4-6 years Software 5 years |
Schedule of total revenue by geographic areas | For the Years Ended March 31, 2022 2021 2020 Japan domestic market $ 21,786,380 $ 42,728,171 $ 55,590,347 China market 192,933,863 170,674,887 77,276,549 Other overseas markets 13,716,453 8,111,684 6,707,062 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 |
Schedule of total revenue by product categories | For the Years Ended March 31, 2022 2021 2020 Beauty products $ 153,428,218 $ 141,111,215 $ 113,645,885 Health products 16,565,637 39,717,066 13,813,746 Sundry products* 50,484,777 31,599,246 8,530,111 Other products 7,958,064 9,087,215 3,584,216 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 |
Schedule of total revenue by distribution channels | For the Years Ended March 31, 2022 2021 2020 Directly-operated physical stores $ 10,836,229 $ 29,502,329 $ 45,824,603 Online stores 121,164,347 111,435,341 50,464,251 Franchise stores and wholesale customers 96,436,120 80,577,072 43,285,104 Total revenue $ 228,436,696 $ 221,514,742 $ 139,573,958 |
Schedule of consolidated financial statements | March 31, 2022 March 31, 2021 March 31, 2020 Year-end spot rate ¥1=US$0.008208 ¥1=US$0.009034 ¥1=US$0.009250 Average rate ¥1=US$0.008908 ¥1=US$0.009434 ¥1=US$0.009201 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Credit Loss, Additional Improvements [Abstract] | |
Schedule of accounts receivable | March 31, March 31, Accounts receivable $ 35,009,314 $ 44,166,699 Less: allowance for doubtful accounts (177,793 ) (483,124 ) Accounts receivable, net $ 34,831,521 $ 43,683,575 |
Schedule of allowance for doubtful accounts | March 31, March 31, Beginning balance $ 483,124 $ 392,626 Additions (reductions) (283,429 ) 104,080 Foreign currency translation adjustments (21,902 ) (13,582 ) Ending balance $ 177,793 $ 483,124 |
Merchandise Inventories, Net (T
Merchandise Inventories, Net (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of merchandise inventories | March 31, March 31, Beauty products $ 27,359,354 $ 24,687,452 Health products 1,052,880 1,419,970 Other products 1,827,896 1,015,082 Subtotal 30,240,130 27,122,504 Less: inventory allowances - - Merchandise inventories, net $ 30,240,130 $ 27,122,504 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, Net (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of prepaid expenses and other assets, net | March 31, March 31, Deposits (1) $ 2,988,322 $ 3,229,044 Consumption tax receivable 8,190,981 2,172,220 Other receivables (2) 1,888,234 1,526,759 Advance to suppliers (3) 479,734 445,685 Deferred initial public offering costs - 714,250 Prepaid expenses and others (4) 4,610,905 273,525 Allowance for doubtful accounts (885,971 ) (970,276 ) Subtotal 17,272,205 7,391,207 Less: prepaid expenses and other current assets, net 9,905,486 3,926,590 Long-term prepaid expenses and other non-current assets, net $ 7,366,719 $ 3,464,617 (1) Deposits primarily include security deposits paid to landlords for the Company’s retail stores and distribution centers as well as security deposits paid to the Company’s suppliers and to third-party platform operators for the operations of online stores. (2) Other receivables as of March 31, 2022 and 2021 included $881,539 and $970,252 due from a construction company, which is a refund of the design and construction service fee the Company prepaid for the construction of its new distribution center. Since the construction company failed to obtain relevant construction permits and delayed the construction, the service agreement was terminated and the Company requested the refund of prepaid contract amount. In November 2020, the Company filed a legal case against the construction company claiming the refund of the contract prepayment, and as the date of this report, the legal case is still in process. Although the Company is confident in winning the legal case based on management’s evaluation of the collectability on a combination of various factors, the Company fully accrued bad debt allowance for the receivable from this construction company as of March 31, 2022 and 2021, respectively. (3) Advance to suppliers consists of advance payments paid to suppliers for purchases of merchandise products and storage fee. (4) Prepaid expenses and others as of March 31, 2022 included a prepaid service fee amounting to $4,250,789 (approximately ¥517.9 million). The Company entered into an agreement to engage a third-party service provider for warehouse and logistics services over the period from March 1, 2022 to February 28, 2025, with monthly service fee of $118,077 (approximately ¥14.4 million). |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | March 31, March 31, Property and buildings $ 4,878,918 $ 1,581,295 Leasehold improvements 4,370,186 1,053,467 Land 3,809,390 4,192,743 Equipment and furniture 985,986 1,250,548 Automobiles 264,701 288,201 Software 412,157 379,610 Construction in progress - 2,939,288 Subtotal 14,721,338 11,685,152 Less: accumulated depreciation (1,987,156 ) (1,131,428 ) Property and equipment, net $ 12,734,182 $ 10,553,724 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of operating lease related assets and liabilities | March 31, March 31, Operating lease right-of-use lease assets $ 2,909,432 $ 2,898,551 Operating lease liabilities – current $ 1,005,460 $ 811,299 Operating lease liabilities – non-current 1,877,324 1,928,682 Total operating lease liabilities $ 2,882,784 $ 2,739,981 For the Years Ended March 31, 2022 2021 2020 Finance leases cost: Amortization of right-of-use assets $ 199,796 $ 187,556 $ 145,056 Interest on lease liabilities 204,774 102,252 45,971 Total finance leases cost $ 404,570 $ 289,808 $ 191,027 |
Schedule of lease terms and discount rates for all of operating leases | March 31, March 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 5.92 7.19 Weighted average discount rate 6.69 % 6.69 % March 31, March 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 3.42 3.15 Weighted average discount rate 8.07 % 8.07 % |
Schedule of cash flow information related to finance leases | For the Years Ended March 31, 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 204,774 102,252 45,971 |
Schedule of supplemental balance sheet information related to leases | March 31, March 31, Finance leases cost: Software $ 344,902 $ 379,610 Equipment and furniture 851,915 518,409 Subtotal 1,196,817 898,019 Less: accumulated depreciation (519,869 ) (305,927 ) Property and equipment, net $ 676,948 $ 592,092 |
Schedule of maturities of lease liabilities | Operating Leases Finance Leases 2023 $ 1,192,469 $386,593 2024 789,724 356,016 2025 269,381 178,725 2026 161,412 141,049 2027 134,477 62,814 Thereafter 963,748 11,215 Total lease payments 3,511,211 1,136,412 Less: imputed interest (628,427 ) (142,245) Present value of lease liabilities $ 2,882,784 $994,167 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of company’s investment in unconsolidated entity | March 31, March 31, Palpito $ 168,509 $ 333,357 Total investment $ 168,509 $ 333,357 |
Schedule of summarized financial information of unconsolidated entity | March 31, March 31, Current assets $ 659,862 $ 1,150,220 Noncurrent assets 540,393 366,435 Current liabilities 75,957 300,574 Noncurrent liabilities 703,025 382,688 For the Years Ended March 31, 2022 2021 2020 Net sales $ 2,404,172 $ 148,252 $ - Gross profit 328,249 7,315 - Loss from operations (355,711 ) (72,682 ) - Net loss (364,569 ) (73,106 ) - |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of short-term borrowings | Maturity Interest Rate March 31, March 31, Syndicated Loans Tranche A (1) September 2021* TIBOR^+0.70% $ - $ 58,886,548 Syndicated Loans Tranche B (2) September 2022 TIBOR+0.70% 40,328,982 - Tokyo Higashi Shinkin Bank (3) June 2021 – August 2021* 1.2% - 5,746,916 Japan Finance Corporation (4) June 2021* 1.10% - 26,741 MUFG Bank May 2021* 0.35% - 424,598 Total short-term borrowings $ 40,328,982 $ 65,084,803 * The loans were fully repaid upon maturity. ^ TIBOR is an acronym for the Tokyo Interbank Offered Rate, which is the daily reference rate derived from the interest rate that banks charge to lend funds to other banks in the Japanese interbank market. (1) On September 25, 2020, the Company entered into a one-year syndicated loan agreement, which was effective from September 30, 2020, with a consortium of banks, with an aggregate credit line of ¥7.0 billion (approximately $63.2 million). As of March 31, 2021, the Company borrowed an aggregated of ¥6.6 billion (approximately $59.6 million) under the agreement, and the net outstanding balance of this loan was approximately ¥6.5 billion (approximately $58.9 million), net off the unamortized loan service cost of ¥81.7 million (approximately $0.7 million). The syndicated loan is guaranteed by Mr. Kanayama. (2) On September 27, 2021, the Company entered into another one-year syndicated loan agreement, which was effective from September 30, 2021, with a consortium of banks, with an aggregate credit line of ¥7.5 billion (approximately $61.6 million). As of March 31, 2022, the Company borrowed an aggregated of ¥5.0 billion (approximately $41.0 million) under the agreement, and the net outstanding balance of this loan was approximately ¥4.9 billion (approximately $40.3 million), net off the unamortized loan service cost of ¥86.6 million ($711,018). The syndicated loan is guaranteed by Mr. Kanayama. (3) In connection with the Company’s bank borrowings from Tokyo Higashi Shinkin Bank, the Company pledged a piece of land of 16,165 square feet with a carrying value of ¥340.1 million (approximately $2.8 million) as of March 31, 2021 as collateral to safeguard the loan. On December 21, 2020, the Company entered into a construction contract with a construction company for the construction of its new distribution center in Koshigaya. The total cost of the contract was approximately ¥511.9 million (approximately $4.2 million) was fully paid in six installments by August 31, 2021. On the same day, the Company entered into a loan agreement with Tokyo Higashi Shinkin Bank to borrow ¥25.6 million (approximately $0.2 million) for eight months with a maturity date of August 31, 2021. On January 29, 2021, the Company entered into a second loan agreement with Tokyo Higashi Shinkin Bank to borrow approximately ¥128.0 million (approximately $1.1 million) for seven months with a maturity date of August 31, 2021. On March 22, 2021, the Company entered into a third loan with Tokyo Higashi Shinkin Bank to borrow approximately ¥153.6 million (approximately $1.3 million) for five months with a maturity date of August 31, 2021. On July 21, 2021, the Company entered into a fourth loan with Tokyo Higashi Shinkin Bank to borrow approximately ¥13.9 million (approximately $0.1 million) for one month with a maturity date of August 31, 2021. All loans are the capital for the construction of this distribution center and bear a fixed interest rate of 1.20%. (4) Guaranteed by Mr. Kanayama. |
Schedule of long-term borrowings | Maturity Interest Rate March 31, March 31, Toei Shinkin Bank (1) December 2053 1.10% $ 2,233,520 $ 2,535,799 Japan Finance Corporation (2) May 2022 – April 2025 0.71% - 4.25% 1,975,830 2,742,722 BOT Lease Co., Ltd. (3) March 2028 TIBOR (3M) + 6.0% 1,641,600 1,806,800 MUFG Bank (4) March 2028 TIBOR (3M) + 0.8% 6,377,616 - Messanine Solution No.4 Investment Limited Liability Union (5) October 2026 9.0% - 10.5% 8,208,000 - Tokyo Higashi Shinkin Bank July 2026 2.0% 142,228 - Total long-term borrowings $ 20,578,794 $ 7,085,321 Current portion of long-term borrowings $ 951,045 $ 645,570 Non-current portion of long-term borrowings $ 19,627,749 $ 6,439,751 (1) Guaranteed by Mr. Kanayama. (2) One of the loans was fully repaid upon during the year ended March 31, 2022. (3) The loan bears an interest rate of TIBOR (3M)+6.0% (in the case EBITDA exceeds ¥0) or TIBOR (3M)+0.7% (in the case EBITDA is ¥0 or less). (4) In connection with the Company’s bank borrowings from MUFG Bank, the Company pledged a piece of land of 16,165 square feet with a carrying value of ¥340.1 million (approximately $2.8 million) as of March 31, 2022 as collateral to safeguard the loan. (5) The loan bears an interest rate of 9.0% from October 13, 2021 to March 31, 2024, and 10.5% from April 1, 2024 to October 30, 2026. |
Schedule of future maturities of long-term borrowings | 12 months ending March 31, 2023 $ 951,045 2024 2,517,131 2025 875,531 2026 803,301 2027 11,908,790 Thereafter 3,522,996 Total long-term borrowings $ 20,578,794 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of relationships with related parties who had transactions | Name of Related Party Relationship to the Company Mr. Mei Kanayama Representative director, director, and controlling shareholder Tokyo Lifestyle Limited An entity controlled by Mr. Kanayama Seihinkokusai Co., Ltd. (“Seihinkokusai”) An entity of which Mr. Kanayama’s wife is a corporate auditor Takuetsu Kokusai Co., Ltd. The entity’s representative director is Mr. Kanayama’s wife YST (HK) Limited An entity controlled by Mr. Kanayama, which was subsequently dissolved on January 14, 2022 Shintai Co., Ltd. The entity’s representative director is Mr. Kanayama’s wife Shenzhen Qingzhiliangpin Network Technology Co., Ltd. (“Qingzhiliangpin”) A subsidiary of YST (HK) Limited before October 2021, which became a subsidiary of Tokyo Lifestyle Limited in October 2021 Palpito An equity investment entity of the Company |
Schedule of accounts receivable, net - related parties | March 31, March 31, Name Tokyo Lifestyle Limited $ 6,305,332 $ 3,496,659 Seihinkokusai 345 2,411 Shintai Co., Ltd. 250 - Subtotal 6,305,927 3,499,070 Less: allowance for doubtful accounts - - Total accounts receivable, net - related parties $ 6,305,927 $ 3,499,070 |
Schedule of due to related parties | March 31, March 31, Name Palpito $ 1,717 $ - Seihinkokusai (1) 691,278 632,380 Total due from related parties $ 692,995 $ 632,380 |
Schedule of accounts payable - related parties | March 31, March 31, Name Seihinkokusai $ 34,043 $ 46,750 Palpito 98,004 8,504 Qingzhiliangpin - 7,757 Total accounts payable - related parties $ 132,047 $ 63,011 |
Schedule of due to related parties | March 31, March 31, Name Mr. Mei Kanayama $ 29,921 $ 13,924 YST (HK) Limited - 69,159 Qingzhiliangpin - 152,691 Seihinkokusai 23,444 - Total due to related parties $ 53,365 $ 235,774 |
Schedule of due to related parties | For the Years Ended March 31, 2022 2021 2020 Tokyo Lifestyle Limited $ 22,047,156 $ 22,766,429 $ 4,263,196 Seihinkokusai 22,092 8,246 19,554 Shintai Co., Ltd. 1,347 657 59,807 Palpito 52,214 - - Takuetsu Kokusai Co., Ltd. 6,507 - - Total revenue from related parties $ 22,129,316 $ 22,775,332 $ 4,342,557 |
Schedule of purchase from related parties | For the Years Ended March 31, 2022 2021 2020 Seihinkokusai $ 401,341 $ 667,156 $ 492,202 Palpito 122,520 37,677 - Qingzhiliangpin 79,653 8,100 - Tokyo Lifestyle Limited 879 26,491 - YST (HK) Limited 13,885 - - Total purchase from related parties $ 618,278 $ 739,424 $ 492,202 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | For the Years Ended March 31, 2022 2021 2020 Current tax provision Japan $ 2,301,944 $ 3,541,410 $ 2,837,926 2,301,944 3,541,410 2,837,926 Deferred tax benefit Japan (122,276 ) (234,362 ) (182,140 ) (122,276 ) (234,362 ) (182,140 ) Income tax provision $ 2,179,668 $ 3,307,048 $ 2,655,786 |
Schedule of deferred tax assets comprised | March 31, March 31, Deferred tax assets: Allowance for doubtful accounts $ 301,229 $ 329,893 Accrued member rewards 32,693 62,761 Accrued employee bonus 74,219 54,470 Accrued asset retirement obligation 113,033 - Accrued employee retirement pension 59,127 - Investment loss from equity method investment 54,336 - Net operating loss carry-forwards 25,903 - Total deferred tax assets 660,540 447,124 Valuation allowance (25,903 ) - Total deferred tax assets 634,637 447,124 Deferred tax liability: Change in fair value of purchase option (115,728 ) - Total deferred tax liability (115,728 ) - Deferred tax assets, net $ 518,909 $ 447,124 |
Schedule of reconciles the Japan statutory rate to the company’s effective tax rates | For the Years Ended March 31, 2022 2021 2020 Japanese statutory income tax rate 34.0 % 34.0 % 34.0 % Non-deductible expenses 2.0 % 0.6 % 1.3 % Non-taxable income (2.5 )% (3.9 )% (3.3 )% Valuation allowance 0.5 % - - Others 2.2 % 1.0 % 3.2 % Subtotal 36.2 % 31.7 % 35.2 % Undistributed retained earnings tax (1) 3.8 % 5.8 % - Effective tax rate 40.0 % 37.5 % 35.2 % |
Representative's Warrants Lia_2
Representative's Warrants Liability (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Representatives Warrants Liability [Abstract] | |
Schedule of fair value using the black-scholes option pricing model | January 13, 2022 March 31, Representative’s Warrants liability Stock price $ 4.00 $ 2.12 Exercise price $ 4.80 $ 4.80 Expected term (years) 5.00 4.79 Risk-free interest rate 1.47 % 2.42 % Expected volatility 55.39 % 56.86 % |
Segment reporting (Tables)
Segment reporting (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of presents the segment information | For the Year Ended March 31, 2022 Directly- Online Stores Franchise Total Revenue $ 10,836,229 $ 121,164,347 $ 96,436,120 $ 228,436,696 Merchandise costs $ 9,596,336 $ 98,328,079 $ 81,457,709 $ 189,382,124 Interest expenses, net $ (127,675 ) $ (1,427,579 ) $ (1,136,227 ) $ (2,691,481 ) Provision for income tax $ 103,396 $ 1,156,110 $ 920,162 $ 2,179,668 Net income $ 155,240 $ 1,735,792 $ 1,381,537 $ 3,272,569 Depreciation and amortization $ 49,123 $ 549,273 $ 437,173 $ 1,035,569 Capital expenditures $ 705,690 $ 1,174,609 $ 934,885 $ 2,815,184 Total assets $ 6,219,359 $ 67,291,828 $ 49,833,993 $ 123,345,180 Total liabilities $ 4,588,581 $ 42,053,619 $ 32,090,251 $ 78,732,451 For the Year Ended March 31, 2021 Directly- Online Stores Franchise Total Revenue $ 29,502,329 $ 111,435,341 $ 80,577,072 $ 221,514,742 Merchandise costs $ 24,608,915 $ 88,899,645 $ 68,051,379 $ 181,559,939 Interest expenses, net $ (260,174 ) $ (982,724 ) $ (710,592 ) $ (1,953,490 ) Provision for income tax $ 440,447 $ 1,663,646 $ 1,202,955 $ 3,307,048 Net income $ 735,525 $ 2,778,203 $ 2,008,873 $ 5,522,601 Depreciation and amortization $ 58,853 $ 222,299 $ 160,741 $ 441,893 Capital expenditures $ 781,023 $ 1,252,666 $ 905,782 $ 2,939,471 Total assets $ 10,593,798 $ 55,595,433 $ 46,752,624 $ 112,941,855 Total liabilities $ 12,189,004 $ 45,654,076 $ 32,864,338 $ 90,707,418 For the Year Ended March 31, 2020 Directly- Online Stores Franchise Total Revenue $ 45,824,603 $ 50,464,251 $ 43,285,104 $ 139,573,958 Merchandise costs $ 36,860,755 $ 38,336,001 $ 36,891,293 $ 112,088,049 Interest expenses, net $ (619,870 ) $ (682,630 ) $ (585,518 ) $ (1,888,018 ) Provision for income tax $ 871,941 $ 960,224 $ 823,621 $ 2,655,786 Net income $ 1,605,749 $ 1,768,327 $ 1,516,761 $ 4,890,837 Depreciation and amortization $ 132,364 $ 145,766 $ 125,029 $ 403,159 Capital expenditures $ 1,633,006 $ 959,068 $ 822,629 $ 3,414,703 Total assets $ 14,531,739 $ 42,528,146 $ 35,892,174 $ 92,952,059 Total liabilities $ 25,368,417 $ 27,425,786 $ 24,194,192 $ 76,988,395 |
Organization and Business Des_2
Organization and Business Description (Details) - $ / shares | 12 Months Ended | ||
Jan. 13, 2022 | Mar. 31, 2021 | Oct. 24, 2019 | |
Accounting Policies [Abstract] | |||
Percentage of equity interest | 100% | ||
Stock keeping units, description | The Company offers approximately 35,000 stock keeping units (“SKUs”) of beauty products, including cosmetics, skin care, fragrance, and body care, among others, 28,400 SKUs of health products, including over-the-counter (“OTC”) drugs, nutritional supplements, and medical supplies and devices, 34,800 SKUs of sundry products, including home goods, and 16,300 SKUs of other products, including food and alcoholic beverages. | ||
IPO of american depositary shares | 6,250,000 | ||
Public offering price per ADS (in Dollars per share) | $ 4 | ||
ADS issued shares | 250,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Mar. 31, 2022 USD ($) | Mar. 31, 2022 JPY (¥) | Mar. 31, 2021 USD ($) | Mar. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Uncollectible allowance | $ 177,793 | $ 483,124 | ||
Lease term | 12 months | |||
Lease concessions | $ 276,586 | |||
Lease concessions received | 127,303 | 53,502 | ||
Operating lease liabilities | 84,368 | 232,189 | ||
ROU assets | 84,368 | 232,189 | ||
Other non-current liabilities | 889,147 | |||
Royalty fee | $ 492 | ¥ 60,000 | ||
Products sold in percentage | 75% | 75% | ||
Deferred revenue | $ 104,663 | 186,046 | ||
Deferred revenue recognized | 182,871 | 531,612 | 165,479 | |
Unredeemed membership points | $ 104,663 | |||
Tax benefit percentage | 50% | 50% | ||
Shipping and handling expenses | $ 13,481,078 | 10,977,722 | 3,026,823 | |
Advertising expenses | 2,847,383 | 2,440,443 | $ 527,934 | |
Cash deposit | $ 17,568,176 | $ 16,320,040 | ||
Total revenue percentage | 10% | |||
Customer One [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Total revenue percentage | 11.50% | 12.10% | ||
Accounts receivable percentage | 16% | |||
Customer Two [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Total revenue percentage | 10.30% | |||
Accounts receivable percentage | 15.50% | |||
Third-Party Platform Operators [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Accounts receivable percentage | 29.50% | 29.50% | 13.80% | |
Third-Party Platform Operators One [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Accounts receivable percentage | 11.90% | 11.90% | 10.60% | |
Suppliers One [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Total purchases in percentage | 30.10% | 30.10% | 34.90% | 25.90% |
Suppliers Two [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Total purchases in percentage | 19.70% | 19.70% | 28.20% | 17.10% |
Suppliers Three [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Total purchases in percentage | 17.90% | 17.90% | 15.30% | |
Suppliers Four [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Total purchases in percentage | 13.40% | |||
Equity Investment [Member] | Minimum [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Ownership interest voting percentage | 20% | |||
Equity Investment [Member] | Maximum [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Ownership interest voting percentage | 50% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of expected economic useful lives | 12 Months Ended |
Mar. 31, 2022 | |
Property and buildings [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 35 years |
Property and buildings [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 50 years |
Land [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life description | Infinite |
Leasehold improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life description | Lesser of useful life and lease term |
Equipment and furniture [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Equipment and furniture [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 18 years |
Automobiles [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 4 years |
Automobiles [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 6 years |
Software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by geographic areas - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by geographic areas [Line Items] | |||
Total revenue | $ 228,436,696 | $ 221,514,742 | $ 139,573,958 |
Japan domestic market [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by geographic areas [Line Items] | |||
Total revenue | 21,786,380 | 42,728,171 | 55,590,347 |
China market [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by geographic areas [Line Items] | |||
Total revenue | 192,933,863 | 170,674,887 | 77,276,549 |
Other overseas markets [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by geographic areas [Line Items] | |||
Total revenue | $ 13,716,453 | $ 8,111,684 | $ 6,707,062 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by product categories - USD ($) | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | ||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by product categories [Line Items] | ||||
Total revenue | $ 228,436,696 | $ 221,514,742 | $ 139,573,958 | |
Beauty products [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by product categories [Line Items] | ||||
Total revenue | 153,428,218 | 141,111,215 | 113,645,885 | |
Health products [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by product categories [Line Items] | ||||
Total revenue | 16,565,637 | 39,717,066 | 13,813,746 | |
Sundry products [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by product categories [Line Items] | ||||
Total revenue | [1] | 50,484,777 | 31,599,246 | 8,530,111 |
Other products [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by product categories [Line Items] | ||||
Total revenue | $ 7,958,064 | $ 9,087,215 | $ 3,584,216 | |
[1]Sundry products include primarily home goods, such as bedding and bath products, home décor, dining and tabletop items, storage containers, car supplies, cleaning agents, and laundry supplies. It also includes spa supplies, clothing, formula milk, and diapers. |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by distribution channels - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by distribution channels [Line Items] | |||
Total revenue | $ 228,436,696 | $ 221,514,742 | $ 139,573,958 |
Directly-operated physical stores [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by distribution channels [Line Items] | |||
Total revenue | 10,836,229 | 29,502,329 | 45,824,603 |
Online stores [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by distribution channels [Line Items] | |||
Total revenue | 121,164,347 | 111,435,341 | 50,464,251 |
Franchise stores and wholesale customers [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of total revenue by distribution channels [Line Items] | |||
Total revenue | $ 96,436,120 | $ 80,577,072 | $ 43,285,104 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of consolidated financial statements | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Year-end spot rate [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Currency exchange rates | ¥1=US$0.008208 | ¥1=US$0.009034 | ¥1=US$0.009250 |
Average rate [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Currency exchange rates | ¥1=US$0.008908 | ¥1=US$0.009434 | ¥1=US$0.009201 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Schedule of accounts receivable [Abstract] | ||
Accounts receivable | $ 35,009,314 | $ 44,166,699 |
Less: allowance for doubtful accounts | (177,793) | (483,124) |
Accounts receivable, net | $ 34,831,521 | $ 43,683,575 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of allowance for doubtful accounts - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 483,124 | $ 392,626 |
Additions (reductions) | (283,429) | 104,080 |
Foreign currency translation adjustments | (21,902) | (13,582) |
Ending balance | $ 177,793 | $ 483,124 |
Merchandise Inventories, Net (D
Merchandise Inventories, Net (Details) - Schedule of merchandise inventories - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Merchandise Inventories, Net (Details) - Schedule of merchandise inventories [Line Items] | ||
Subtotal | $ 30,240,130 | $ 27,122,504 |
Less: inventory allowances | ||
Merchandise inventories, net | 30,240,130 | 27,122,504 |
Beauty Products [Member] | ||
Merchandise Inventories, Net (Details) - Schedule of merchandise inventories [Line Items] | ||
Subtotal | 27,359,354 | 24,687,452 |
Health Products [Member] | ||
Merchandise Inventories, Net (Details) - Schedule of merchandise inventories [Line Items] | ||
Subtotal | 1,052,880 | 1,419,970 |
Other Products [Member] | ||
Merchandise Inventories, Net (Details) - Schedule of merchandise inventories [Line Items] | ||
Subtotal | $ 1,827,896 | $ 1,015,082 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets, Net (Details) ¥ in Millions | 12 Months Ended | 36 Months Ended | |||
Mar. 31, 2022 USD ($) | Mar. 31, 2022 JPY (¥) | Feb. 28, 2025 USD ($) | Feb. 28, 2025 JPY (¥) | Mar. 31, 2021 USD ($) | |
Prepaid Expense and Other Assets [Abstract] | |||||
Other receivables | $ 881,539 | $ 970,252 | |||
Prepaid expenses and others | $ 4,250,789 | ¥ 517.9 | |||
Monthly service fee | $ 118,077 | ¥ 14.4 |
Prepaid Expenses and Other As_4
Prepaid Expenses and Other Assets, Net (Details) - Schedule of prepaid expenses and other assets, net - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Schedule of prepaid expenses and other assets, net [Abstract] | |||
Deposits | [1] | $ 2,988,322 | $ 3,229,044 |
Consumption tax receivable | 8,190,981 | 2,172,220 | |
Other receivables | [2] | 1,888,234 | 1,526,759 |
Advance to suppliers | [3] | 479,734 | 445,685 |
Deferred initial public offering costs | 714,250 | ||
Prepaid expenses and others | [4] | 4,610,905 | 273,525 |
Allowance for doubtful accounts | (885,971) | (970,276) | |
Subtotal | 17,272,205 | 7,391,207 | |
Less: prepaid expenses and other current assets, net | 9,905,486 | 3,926,590 | |
Long-term prepaid expenses and other non-current assets, net | $ 7,366,719 | $ 3,464,617 | |
[1] Deposits primarily include security deposits paid to landlords for the Company’s retail stores and distribution centers as well as security deposits paid to the Company’s suppliers and to third-party platform operators for the operations of online stores. Advance to suppliers consists of advance payments paid to suppliers for purchases of merchandise products and storage fee. Prepaid expenses and others as of March 31, 2022 included a prepaid service fee amounting to $4,250,789 (approximately ¥517.9 million). The Company entered into an agreement to engage a third-party service provider for warehouse and logistics services over the period from March 1, 2022 to February 28, 2025, with monthly service fee of $118,077 (approximately ¥14.4 million). |
Property and Equipment, Net (De
Property and Equipment, Net (Details) ¥ in Millions | 12 Months Ended | ||||
Mar. 31, 2022 USD ($) m² | Mar. 31, 2021 USD ($) m² | Mar. 31, 2020 USD ($) | Mar. 31, 2022 JPY (¥) m² | Mar. 31, 2021 JPY (¥) m² | |
Property, Plant and Equipment [Abstract] | |||||
Depreciation expense | $ | $ 1,035,569 | $ 441,893 | $ 403,159 | ||
Piece of land, square feet (in Square Meters) | m² | 16,165 | 16,165 | 16,165 | 16,165 | |
Carrying value | $ 2,800,000 | $ 2,800,000 | ¥ 340.1 | ¥ 340.1 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment, net - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 14,721,338 | $ 11,685,152 |
Less: accumulated depreciation | (1,987,156) | (1,131,428) |
Property and equipment, net | 12,734,182 | 10,553,724 |
Property and Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 4,878,918 | 1,581,295 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 4,370,186 | 1,053,467 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 3,809,390 | 4,192,743 |
Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 985,986 | 1,250,548 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 264,701 | 288,201 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 412,157 | 379,610 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 2,939,288 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Leases (Details) [Line Items] | |||
Finance leases term | 5 years | ||
Initial term | 12 months | ||
Operating lease expenses | $ 1,436,003 | $ 1,301,136 | $ 1,263,423 |
Minimum [Member] | |||
Leases (Details) [Line Items] | |||
operating leases terms | 1 year | ||
Maximum [Member] | |||
Leases (Details) [Line Items] | |||
operating leases terms | 15 years |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating lease related assets and liabilities - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of operating lease related assets and liabilities [Abstract] | |||
Operating lease right-of-use lease assets | $ 2,909,432 | $ 2,898,551 | |
Operating lease liabilities – current | 1,005,460 | 811,299 | |
Operating lease liabilities – non-current | 1,877,324 | 1,928,682 | |
Total operating lease liabilities | 2,882,784 | 2,739,981 | |
Amortization of right-of-use assets | 199,796 | 187,556 | $ 145,056 |
Interest on lease liabilities | 204,774 | 102,252 | 45,971 |
Total finance leases cost | $ 404,570 | $ 289,808 | $ 191,027 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of lease terms and discount rates for all of operating leases | Mar. 31, 2022 | Mar. 31, 2021 |
Minimum [Member] | ||
Leases (Details) - Schedule of lease terms and discount rates for all of operating leases [Line Items] | ||
Weighted average remaining lease term (years) | 5 years 11 months 1 day | 7 years 2 months 8 days |
Weighted average discount rate | 6.69% | 6.69% |
Maximum [Member] | ||
Leases (Details) - Schedule of lease terms and discount rates for all of operating leases [Line Items] | ||
Weighted average remaining lease term (years) | 3 years 5 months 1 day | 3 years 1 month 24 days |
Weighted average discount rate | 8.07% | 8.07% |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of cash flow information related to finance leases - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of cash flow information related to finance leases [Abstract] | |||
Operating cash flows from finance leases | $ 204,774 | $ 102,252 | $ 45,971 |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Less: accumulated depreciation | $ (519,869) | $ (305,927) |
Property and equipment, net | 676,948 | 592,092 |
Software [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Property and equipment, gross | 344,902 | 379,610 |
Equipment and furniture [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Property and equipment, gross | 851,915 | 518,409 |
Subtotal [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Property and equipment, gross | $ 1,196,817 | $ 898,019 |
Leases (Details) - Schedule o_5
Leases (Details) - Schedule of maturities of lease liabilities | 12 Months Ended |
Mar. 31, 2022 USD ($) | |
Operating Leases [Member] | |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
2023 | $ 1,192,469 |
2024 | 789,724 |
2025 | 269,381 |
2026 | 161,412 |
2027 | 134,477 |
Thereafter | 963,748 |
Total lease payments | 3,511,211 |
Less: imputed interest | (628,427) |
Present value of lease liabilities | 2,882,784 |
Finance Leases [Member] | |
Leases (Details) - Schedule of maturities of lease liabilities [Line Items] | |
2023 | 386,593 |
2024 | 356,016 |
2025 | 178,725 |
2026 | 141,049 |
2027 | 62,814 |
Thereafter | 11,215 |
Total lease payments | 1,136,412 |
Less: imputed interest | (142,245) |
Present value of lease liabilities | $ 994,167 |
Investments (Details)
Investments (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | Mar. 31, 2020 USD ($) | Dec. 25, 2020 USD ($) | Dec. 25, 2020 JPY (¥) | |
Equity Method Investments and Joint Ventures [Abstract] | ||||||
Registered capital | $ 577,792 | ¥ 61 | ||||
Registered capital percentage | 40% | |||||
Loss on investment | $ 145,828 | $ 29,242 |
Investments (Details) - Schedul
Investments (Details) - Schedule of company’s investment in unconsolidated entity - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Investments (Details) - Schedule of company’s investment in unconsolidated entity [Line Items] | ||
Total investment | $ 168,509 | $ 333,357 |
Palpito Co., Ltd. [Member] | ||
Investments (Details) - Schedule of company’s investment in unconsolidated entity [Line Items] | ||
Total investment | $ 168,509 | $ 333,357 |
Investments (Details) - Sched_2
Investments (Details) - Schedule of summarized financial information of unconsolidated entity - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of summarized financial information of unconsolidated entity [Abstract] | |||
Current assets | $ 659,862 | $ 1,150,220 | |
Noncurrent assets | 540,393 | 366,435 | |
Current liabilities | 75,957 | 300,574 | |
Noncurrent liabilities | 703,025 | 382,688 | |
Net sales | 2,404,172 | 148,252 | |
Gross profit | 328,249 | 7,315 | |
Loss from operations | (355,711) | (72,682) | |
Net loss | $ (364,569) | $ (73,106) |
Borrowings (Details)
Borrowings (Details) ¥ in Millions | 12 Months Ended | ||||||||||||
Mar. 31, 2022 USD ($) ft² | Sep. 27, 2021 USD ($) | Sep. 27, 2021 JPY (¥) | Dec. 21, 2020 | Sep. 25, 2020 USD ($) | Sep. 25, 2020 JPY (¥) | Mar. 31, 2022 USD ($) ft² | Mar. 31, 2021 USD ($) ft² | Mar. 31, 2020 USD ($) | Oct. 30, 2026 | Mar. 31, 2024 | Mar. 31, 2022 JPY (¥) ft² | Mar. 31, 2021 JPY (¥) ft² | |
Borrowings (Details) [Line Items] | |||||||||||||
Aggregate credit line | $ 61,600,000 | ¥ 7,500 | $ 63,200,000 | ¥ 7,000 | |||||||||
Borrowed amount | $ 41,000,000 | $ 41,000,000 | $ 59,600,000 | ¥ 5,000 | ¥ 6,600 | ||||||||
Net outstanding balance | 40,300,000 | 40,300,000 | 58,900,000 | 4,900 | 6,500 | ||||||||
Unamortized loan service | $ (711,018) | $ (711,018) | $ 700,000 | ¥ 86.6 | ¥ 81.7 | ||||||||
Piece of land (in Square Feet) | ft² | 16,165 | 16,165 | 16,165 | 16,165 | 16,165 | ||||||||
Land carrying value | $ 2,800,000 | $ 2,800,000 | $ 2,800,000 | ¥ 340.1 | ¥ 340.1 | ||||||||
Credit line description | the Company entered into a construction contract with a construction company for the construction of its new distribution center in Koshigaya. The total cost of the contract was approximately ¥511.9 million (approximately $4.2 million) was fully paid in six installments by August 31, 2021. On the same day, the Company entered into a loan agreement with Tokyo Higashi Shinkin Bank to borrow ¥25.6 million (approximately $0.2 million) for eight months with a maturity date of August 31, 2021. On January 29, 2021, the Company entered into a second loan agreement with Tokyo Higashi Shinkin Bank to borrow approximately ¥128.0 million (approximately $1.1 million) for seven months with a maturity date of August 31, 2021. On March 22, 2021, the Company entered into a third loan with Tokyo Higashi Shinkin Bank to borrow approximately ¥153.6 million (approximately $1.3 million) for five months with a maturity date of August 31, 2021. On July 21, 2021, the Company entered into a fourth loan with Tokyo Higashi Shinkin Bank to borrow approximately ¥13.9 million (approximately $0.1 million) for one month with a maturity date of August 31, 2021. All loans are the capital for the construction of this distribution center and bear a fixed interest rate of 1.20%. | ||||||||||||
Interest rate description | (3)The loan bears an interest rate of TIBOR (3M)+6.0% (in the case EBITDA exceeds ¥0) or TIBOR (3M)+0.7% (in the case EBITDA is ¥0 or less). | ||||||||||||
Interest expenses | $ | $ 2,857,599 | $ 2,046,933 | $ 1,888,018 | ||||||||||
Weighted average interest rates | 1.51% | 1.51% | 0.97% | 1.46% | 1.51% | 0.97% | |||||||
Forecast [Member] | |||||||||||||
Borrowings (Details) [Line Items] | |||||||||||||
Bears interest rate, percentage | 10.50% | 9% |
Borrowings (Details) - Schedule
Borrowings (Details) - Schedule of short-term borrowings - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Short-Term Debt [Line Items] | |||
Total short-term borrowings | $ 40,328,982 | $ 65,084,803 | |
Syndicated Loans Tranche A [Member] | |||
Short-Term Debt [Line Items] | |||
Maturity | [1],[2] | September 2021* | |
Interest Rate | [1],[3] | TIBOR^+0.70% | |
Total short-term borrowings | [1] | 58,886,548 | |
Syndicated Loans Tranche B [Member] | |||
Short-Term Debt [Line Items] | |||
Maturity | [4] | September 2022 | |
Interest Rate | [4] | TIBOR+0.70% | |
Total short-term borrowings | [4] | $ 40,328,982 | |
Tokyo Higashi Shinkin Bank [Member] | |||
Short-Term Debt [Line Items] | |||
Maturity | [2],[5] | June 2021 – August 2021* | |
Interest Rate | [5] | 1.2% | |
Total short-term borrowings | [5] | 5,746,916 | |
Japan Finance Corporation [Member] | |||
Short-Term Debt [Line Items] | |||
Maturity | [2],[6] | June 2021* | |
Interest Rate | [6] | 1.10% | |
Total short-term borrowings | [6] | 26,741 | |
MUFG Bank [Member] | |||
Short-Term Debt [Line Items] | |||
Maturity | [2] | May 2021* | |
Interest Rate | 0.35% | ||
Total short-term borrowings | $ 424,598 | ||
[1] On September 25, 2020, the Company entered into a one-year syndicated loan agreement, which was effective from September 30, 2020, with a consortium of banks, with an aggregate credit line of ¥7.0 billion (approximately $63.2 million). As of March 31, 2021, the Company borrowed an aggregated of ¥6.6 billion (approximately $59.6 million) under the agreement, and the net outstanding balance of this loan was approximately ¥6.5 billion (approximately $58.9 million), net off the unamortized loan service cost of ¥81.7 million (approximately $0.7 million). The syndicated loan is guaranteed by Mr. Kanayama. The loans were fully repaid upon maturity. TIBOR is an acronym for the Tokyo Interbank Offered Rate, which is the daily reference rate derived from the interest rate that banks charge to lend funds to other banks in the Japanese interbank market. On September 27, 2021, the Company entered into another one-year syndicated loan agreement, which was effective from September 30, 2021, with a consortium of banks, with an aggregate credit line of ¥7.5 billion (approximately $61.6 million). As of March 31, 2022, the Company borrowed an aggregated of ¥5.0 billion (approximately $41.0 million) under the agreement, and the net outstanding balance of this loan was approximately ¥4.9 billion (approximately $40.3 million), net off the unamortized loan service cost of ¥86.6 million ($711,018). The syndicated loan is guaranteed by Mr. Kanayama. Guaranteed by Mr. Kanayama. |
Borrowings (Details) - Schedu_2
Borrowings (Details) - Schedule of long-term borrowings - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Debt Instrument [Line Items] | |||
Total long-term borrowings | $ 20,578,794 | $ 7,085,321 | |
Current portion of long-term borrowings | 951,045 | 645,570 | |
Non-current portion of long-term borrowings | $ 19,627,749 | 6,439,751 | |
Toei Shinkin Bank [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [1] | December 2053 | |
Interest Rate | [1] | 1.10% | |
Total long-term borrowings | [1] | $ 2,233,520 | 2,535,799 |
Japan Finance Corporation [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [2] | May 2022 – April 2025 | |
Interest Rate | [2] | 0.71% - 4.25% | |
Total long-term borrowings | [2] | $ 1,975,830 | 2,742,722 |
BOT Lease Co., Ltd. [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [3] | March 2028 | |
Interest Rate | [3] | TIBOR (3M) + 6.0% | |
Total long-term borrowings | [3] | $ 1,641,600 | 1,806,800 |
MUFG Bank [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [4] | March 2028 | |
Interest Rate | [4] | TIBOR (3M) + 0.8% | |
Total long-term borrowings | [4] | $ 6,377,616 | |
Messanine Solution No.4 Investment Limited Liability Union [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | [5] | October 2026 | |
Interest Rate | [5] | 9.0% - 10.5% | |
Total long-term borrowings | [5] | $ 8,208,000 | |
Tokyo Higashi Shinkin Bank [Member] | |||
Debt Instrument [Line Items] | |||
Maturity | July 2026 | ||
Interest Rate | 2.0% | ||
Total long-term borrowings | $ 142,228 | ||
[1] Guaranteed by Mr. Kanayama. One of the loans was fully repaid upon during the year ended March 31, 2022. The loan bears an interest rate of TIBOR (3M)+6.0% (in the case EBITDA exceeds ¥0) or TIBOR (3M)+0.7% (in the case EBITDA is ¥0 or less). In connection with the Company’s bank borrowings from MUFG Bank, the Company pledged a piece of land of 16,165 square feet with a carrying value of ¥340.1 million (approximately $2.8 million) as of March 31, 2022 as collateral to safeguard the loan. The loan bears an interest rate of 9.0% from October 13, 2021 to March 31, 2024, and 10.5% from April 1, 2024 to October 30, 2026. |
Borrowings (Details) - Schedu_3
Borrowings (Details) - Schedule of future maturities of long-term borrowings - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Schedule of future maturities of long-term borrowings [Abstract] | ||
2023 | $ 951,045 | |
2024 | 2,517,131 | |
2025 | 875,531 | |
2026 | 803,301 | |
2027 | 11,908,790 | |
Thereafter | 3,522,996 | |
Total long-term borrowings | $ 20,578,794 | $ 7,085,321 |
Related Party Transactions (Det
Related Party Transactions (Details) ¥ in Millions | 12 Months Ended | |||
Mar. 31, 2022 USD ($) | Mar. 31, 2022 JPY (¥) | Jan. 31, 2020 USD ($) | Jan. 31, 2020 JPY (¥) | |
Related Party Transactions (Details) [Line Items] | ||||
Security deposit | $ 410,400 | ¥ 50 | ||
Transaction commission percentage | 1% | |||
Seihinkokusai Co., Ltd. [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Security deposit | $ 114,912 | ¥ 14 | ||
Operating security deposit to Seihinkokusai [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Security deposit | $ 164,160 | ¥ 20 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions | 12 Months Ended |
Mar. 31, 2022 | |
Mr. Mei Kanayama [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | Representative director, director, and controlling shareholder |
Tokyo Lifestyle Limited [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | An entity controlled by Mr. Kanayama |
Seihinkokusai Co., Ltd. [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | An entity of which Mr. Kanayama’s wife is a corporate auditor |
Takuetsu Kokusai Co., Ltd [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | The entity’s representative director is Mr. Kanayama’s wife |
YST (HK) Limited [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | An entity controlled by Mr. Kanayama, which was subsequently dissolved on January 14, 2022 |
Shintai Co., Ltd. [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | The entity’s representative director is Mr. Kanayama’s wife |
Shenzhen Qingzhiliangpin Network Technology Co., Ltd. [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | A subsidiary of YST (HK) Limited before October 2021, which became a subsidiary of Tokyo Lifestyle Limited in October 2021 |
Palpito [Member] | |
Related Party Transactions (Details) - Schedule of relationships with related parties who had transactions [Line Items] | |
Relationship to the Company | An equity investment entity of the Company |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of accounts receivable, net - related parties - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Name | ||
Subtotal | $ 6,305,927 | $ 3,499,070 |
Total accounts receivable, net - related parties | 6,305,927 | 3,499,070 |
Tokyo Lifestyle Limited [Member] | ||
Name | ||
Subtotal | 6,305,332 | 3,496,659 |
Seihinkokusai [Member] | ||
Name | ||
Subtotal | 345 | $ 2,411 |
Shintai Co., Ltd [Member] | ||
Name | ||
Subtotal | $ 250 |
Related Party Transactions (D_4
Related Party Transactions (Details) - Schedule of due from related parties - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Total due from related parties | $ 692,995 | $ 632,380 | |
Palpito [Member] | |||
Related Party Transaction [Line Items] | |||
Total due from related parties | 1,717 | ||
Seihinkokusai [Member] | |||
Related Party Transaction [Line Items] | |||
Total due from related parties | [1] | $ 691,278 | $ 632,380 |
[1]The Company rents a storefront from Seihinkokusai. Pursuant to the rent agreement, the Company paid ¥50 million ($410,400) as a rental security deposit to this related party. The Company also rents an office space from Seihinkokusai. Pursuant to the rent agreement, the Company paid ¥14 million ($114,912) as a rental security deposit to this related party. In addition, the Company obtained the operating rights of Seihinkokusai’s online stores on domestic e-commerce marketplaces and use them as the Company’s own online stores to sell its products. Pursuant to an EC Site Operation Business Assignment Agreement dated January 31, 2020, the Company paid ¥20 million ($164,160) as an operating security deposit to Seihinkokusai; the Company also needs to pay transaction commission of 1% based on its sales amount and the transaction commission was immaterial during the years ended March 31, 2022 and 2021. The agreement is valid for one year, and is automatically renewed yearly unless the parties indicate otherwise in writing. The amount due from Seihinkokusai will be collected back when the agreement expires or is terminated. |
Related Party Transactions (D_5
Related Party Transactions (Details) - Schedule of accounts payable - related parties - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Related Party Transactions (Details) - Schedule of accounts payable - related parties [Line Items] | ||
Total accounts payable - related parties | $ 132,047 | $ 63,011 |
Seihinkokusai [Member] | ||
Related Party Transactions (Details) - Schedule of accounts payable - related parties [Line Items] | ||
Total accounts payable - related parties | 34,043 | 46,750 |
Palpito [Member] | ||
Related Party Transactions (Details) - Schedule of accounts payable - related parties [Line Items] | ||
Total accounts payable - related parties | 98,004 | 8,504 |
Qingzhiliangpin [Member] | ||
Related Party Transactions (Details) - Schedule of accounts payable - related parties [Line Items] | ||
Total accounts payable - related parties | $ 7,757 |
Related Party Transactions (D_6
Related Party Transactions (Details) - Schedule of due to related parties - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Restructuring Cost and Reserve [Line Items] | ||
Total due to related parties | $ 53,365 | $ 235,774 |
Mr. Mei Kanayama [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total due to related parties | 29,921 | 13,924 |
YST (HK) Limited [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total due to related parties | 69,159 | |
Qingzhiliangpin [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total due to related parties | 152,691 | |
Seihinkokusai [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total due to related parties | $ 23,444 |
Related Party Transactions (D_7
Related Party Transactions (Details) - Schedule of sales to related parties - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transactions (Details) - Schedule of sales to related parties [Line Items] | |||
Total revenue from related parties | $ 22,129,316 | $ 22,775,332 | $ 4,342,557 |
Tokyo Lifestyle Limited [Member] | |||
Related Party Transactions (Details) - Schedule of sales to related parties [Line Items] | |||
Total revenue from related parties | 22,047,156 | 22,766,429 | 4,263,196 |
Seihinkokusai [Member] | |||
Related Party Transactions (Details) - Schedule of sales to related parties [Line Items] | |||
Total revenue from related parties | 22,092 | 8,246 | 19,554 |
Shintai Co., Ltd. [Member] | |||
Related Party Transactions (Details) - Schedule of sales to related parties [Line Items] | |||
Total revenue from related parties | 1,347 | 657 | 59,807 |
Palpito [Member] | |||
Related Party Transactions (Details) - Schedule of sales to related parties [Line Items] | |||
Total revenue from related parties | 52,214 | ||
Takuetsu Kokusai Co., Ltd.[Member] | |||
Related Party Transactions (Details) - Schedule of sales to related parties [Line Items] | |||
Total revenue from related parties | $ 6,507 |
Related Party Transactions (D_8
Related Party Transactions (Details) - Schedule of purchase from related parties - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transactions (Details) - Schedule of purchase from related parties [Line Items] | |||
Total purchase from related parties | $ 618,278 | $ 739,424 | $ 492,202 |
Seihinkokusai [Member] | |||
Related Party Transactions (Details) - Schedule of purchase from related parties [Line Items] | |||
Total purchase from related parties | 401,341 | 667,156 | 492,202 |
Palpito [Member] | |||
Related Party Transactions (Details) - Schedule of purchase from related parties [Line Items] | |||
Total purchase from related parties | 122,520 | 37,677 | |
Qingzhiliangpin [Member] | |||
Related Party Transactions (Details) - Schedule of purchase from related parties [Line Items] | |||
Total purchase from related parties | 79,653 | 8,100 | |
Tokyo Lifestyle Limited [Member] | |||
Related Party Transactions (Details) - Schedule of purchase from related parties [Line Items] | |||
Total purchase from related parties | 879 | 26,491 | |
YST (HK) Limited [Member] | |||
Related Party Transactions (Details) - Schedule of purchase from related parties [Line Items] | |||
Total purchase from related parties | $ 13,885 |
Taxes (Details)
Taxes (Details) - JPY (¥) ¥ in Millions | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | Oct. 01, 2019 | |
Taxes (Details) [Line Items] | ||||
Statutory income tax rate | 34% | 34% | 34% | |
Outstanding shares percentage | 50% | |||
Share capital exceeds (in Yen) | ¥ 100 | |||
Taxable income percentage | 40% | |||
Subject to rate description | The portion of its URE not more than ¥30 million is subject to a rate of 10%, the portion between ¥30 million and ¥100 million is subject to a rate of 15%, and the portion over ¥100 million is subject to a rate of 20%. | |||
Applicable consumption tax rate | 8% | |||
Maximum [Member] | ||||
Taxes (Details) [Line Items] | ||||
Applicable consumption tax rate | 10% | |||
Minimum [Member] | ||||
Taxes (Details) [Line Items] | ||||
Applicable consumption tax rate | 8% |
Taxes (Details) - Schedule of i
Taxes (Details) - Schedule of income tax provision - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Taxes (Details) - Schedule of income tax provision [Line Items] | |||
Total current tax provision | $ 2,301,944 | $ 3,541,410 | $ 2,837,926 |
Total deferred tax benefit | (122,276) | (234,362) | (182,140) |
Income tax provision | 2,179,668 | 3,307,048 | 2,655,786 |
Japan [Member] | |||
Taxes (Details) - Schedule of income tax provision [Line Items] | |||
Total current tax provision | 2,301,944 | 3,541,410 | 2,837,926 |
Total deferred tax benefit | $ (122,276) | $ (234,362) | $ (182,140) |
Taxes (Details) - Schedule of d
Taxes (Details) - Schedule of deferred tax assets comprised - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 301,229 | $ 329,893 |
Accrued member rewards | 32,693 | 62,761 |
Accrued employee bonus | 74,219 | 54,470 |
Accrued asset retirement obligation | 113,033 | |
Accrued employee retirement pension | 59,127 | |
Investment loss from equity method investment | 54,336 | |
Net operating loss carry-forwards | 25,903 | |
Total deferred tax assets | 660,540 | 447,124 |
Valuation allowance | (25,903) | |
Total deferred tax assets, net | 634,637 | 447,124 |
Deferred tax liability: | ||
Change in fair value of purchase option | (115,728) | |
Total deferred tax liability | (115,728) | |
Deferred tax assets, net | $ 518,909 | $ 447,124 |
Taxes (Details) - Schedule of r
Taxes (Details) - Schedule of reconciles the Japan statutory rate to the company’s effective tax rates | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | ||
Schedule of reconciles the Japan statutory rate to the company’s effective tax rates [Abstract] | ||||
Japanese statutory income tax rate | 34% | 34% | 34% | |
Non-deductible expenses | 2% | 0.60% | 1.30% | |
Non-taxable income | (2.50%) | (3.90%) | (3.30%) | |
Valuation allowance | 0.50% | |||
Others | 2.20% | 1% | 3.20% | |
Subtotal | 36.20% | 31.70% | 35.20% | |
Undistributed retained earnings tax | [1] | 3.80% | 5.80% | |
Effective tax rate | 40% | 37.50% | 35.20% | |
[1]The Company is a Specified Family Company, as one shareholder and its related persons hold more than 50% of its total outstanding shares. Hence, in addition to the normal corporate income taxes, the Company is also subjected to a special tax on its undistributed retained earnings (“URE”) for each fiscal year, after the Company’s share capital exceeds ¥100 million. URE tax is imposed on the Company’s URE, which is defined as the Company’s taxable income for the year minus the sum of the dividends paid, the adjusted corporate income tax, and the URE credit (which usually is 40% of the taxable income). The portion of its URE not more than ¥30 million is subject to a rate of 10%, the portion between ¥30 million and ¥100 million is subject to a rate of 15%, and the portion over ¥100 million is subject to a rate of 20%. |
Representative's Warrants Lia_3
Representative's Warrants Liability (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Jan. 13, 2022 | |
Representatives Warrants Liability [Abstract] | ||
Warrant liability description | In connection with the Company’s IPO, the Company agreed to issue warrants to a representative of several underwriters, for a nominal consideration of $0.01 to purchase 300,000 ADSs of the Company (equal to 5% of the total number of ADSs sold in the IPO, but not including any over-allotment ADSs sold in the over-allotment option) (the “Representative’s Warrants”). The Representative’s Warrants have an exercise price of $4.8 per ADS (equal to 120% of the Company’s IPO offering price of $4.00 per ADS). The Representative’s Warrants will be exercisable beginning from six months after the date of commencement of sales in the Company’s IPO and for a period of five years after the date of commencement of sales in the Company’s IPO. | |
Additional paid-in capital | $ 522,116 | |
Liability to recognize the warrants’ fair value | $ 522,116 | |
Change in fair value of the representative’s warrants liability | $ 369,404 |
Representative's Warrants Lia_4
Representative's Warrants Liability (Details) - Schedule of fair value using the black-scholes option pricing model - $ / shares | 12 Months Ended | |
Jan. 13, 2022 | Mar. 31, 2022 | |
Schedule of fair value using the black-scholes option pricing model [Abstract] | ||
Stock price | $ 4 | $ 2.12 |
Exercise price | $ 4.8 | $ 4.8 |
Expected term (years) | 5 years | 4 years 9 months 14 days |
Risk-free interest rate | 1.47% | 2.42% |
Expected volatility | 55.39% | 56.86% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | 1 Months Ended | |||||||||||||||||||||
Jan. 13, 2022 USD ($) $ / shares shares | Aug. 12, 2021 USD ($) | Aug. 12, 2021 JPY (¥) | Feb. 12, 2021 shares | Feb. 05, 2021 shares | Oct. 22, 2020 | Oct. 15, 2014 shares | Jun. 22, 2021 shares | Mar. 31, 2022 USD ($) shares | Mar. 31, 2022 JPY (¥) shares | Aug. 18, 2021 shares | Mar. 31, 2021 USD ($) shares | Dec. 25, 2020 USD ($) shares | Dec. 25, 2020 JPY (¥) shares | Nov. 10, 2020 shares | Mar. 31, 2020 shares | Mar. 30, 2017 USD ($) shares | Mar. 30, 2017 JPY (¥) shares | Jul. 30, 2016 USD ($) shares | Jul. 30, 2016 JPY (¥) shares | Apr. 25, 2011 USD ($) shares | Apr. 25, 2011 JPY (¥) shares | |
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||||||||||||||||
Ordinary shares issued | 36,250,054 | 36,250,054 | 27,327,594 | |||||||||||||||||||
Cash | $ 85,060 | ¥ 10,000,000 | ||||||||||||||||||||
Shareholders description | the Company’s shareholders approved an increase in the number of the Company’s authorized ordinary shares from 10,000 to 300,000, and 72,909 new ordinary shares were issued to Mr. Mei Kanayama and 8,101 new ordinary shares were issued to Mr. Yingjia Yang, which share issuances were equivalent to a forward split of the Company’s outstanding ordinary shares at an approximate or rounded ratio of 9.1828-for-1 share. | |||||||||||||||||||||
Ordinary shares, Description | Ordinary Shares at a ratio of 294-for-1 share, which became effective on the same day. | |||||||||||||||||||||
IPO of american depositary shares | 6,250,000 | |||||||||||||||||||||
Public offering price per ADS (in Dollars per share) | $ / shares | $ 4 | |||||||||||||||||||||
ADS issued shares | 250,000 | |||||||||||||||||||||
Over-allotment shares (in Dollars) | $ | $ 25,000,000 | |||||||||||||||||||||
Total restricted net assets (in Dollars) | $ | $ 25,002,731 | $ 2,416,635 | ||||||||||||||||||||
Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares authorized | 1,000 | 1,000 | 300,000 | |||||||||||||||||||
Ordinary shares issued | 1,000 | 1,000 | ||||||||||||||||||||
Ordinary shares were issued and outstanding | 90,910 | |||||||||||||||||||||
Minimum [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares authorized | 300,000 | |||||||||||||||||||||
Maximum [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares authorized | 100,000,000 | |||||||||||||||||||||
IPO [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Over-allotment shares (in Dollars) | $ | $ 21,400,000 | |||||||||||||||||||||
Mr. Yingjia Yang [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | 490 | 490 | ||||||||||||||||||||
Grand Elec-Tech Limited [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Issuance ordinary shares | 9,090 | 9,090 | ||||||||||||||||||||
Shares issued | 9,090 | |||||||||||||||||||||
Grand Elec-Tech Limited [Member] | Series of Individually Immaterial Asset Acquisitions [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Contribute price | $ 1,900,000 | ¥ 200,007,270 | ||||||||||||||||||||
Mr. Mei Kanayama [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Cash | $ 396,327 | ¥ 44,100,000 | $ 195,960 | ¥ 20,000,000 | $ 248,640 | ¥ 20,000,000 | ||||||||||||||||
Mr. Mei Kanayama [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares authorized | 10,000 | 10,000 | ||||||||||||||||||||
Ordinary shares issued | 4,410 | 4,410 | 2,000 | 2,000 | 2,000 | 2,000 | ||||||||||||||||
Mr. Mei Kanayama [Member] | Mr. Yingjia Yang [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Shares transferred | 500 | |||||||||||||||||||||
Mr. Yingjia Yang [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Cash | $ 44,036 | ¥ 4,900,000 | ||||||||||||||||||||
Grand Elec-Tech Limited [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | 9,090 | |||||||||||||||||||||
SHUR Co., Ltd [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Cash | $ 1,446,012 | ¥ 150,001,254 | ||||||||||||||||||||
SHUR Co., Ltd [Member] | Ordinary Shares [Member] | ||||||||||||||||||||||
Shareholders' Equity (Details) [Line Items] | ||||||||||||||||||||||
Ordinary shares issued | 2,041 | 2,041 |
Segment reporting (Details)
Segment reporting (Details) | 12 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Operating segments | 3 |
Segment reporting (Details) - S
Segment reporting (Details) - Schedule of presents the segment information - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 228,436,696 | $ 221,514,742 | $ 139,573,958 |
Merchandise costs | 189,382,124 | 181,559,939 | 112,088,049 |
Interest expenses, net | (2,691,481) | (1,953,490) | (1,888,018) |
Provision for income tax | 2,179,668 | 3,307,048 | 2,655,786 |
Net income | 3,272,569 | 5,522,601 | 4,890,837 |
Depreciation and amortization | 1,035,569 | 441,893 | 403,159 |
Capital expenditures | 2,815,184 | 2,939,471 | 3,414,703 |
Total assets | 123,345,180 | 112,941,855 | 92,952,059 |
Total liabilities | 78,732,451 | 90,707,418 | 76,988,395 |
Directly- Operated Physical Stores[Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 10,836,229 | 29,502,329 | 45,824,603 |
Merchandise costs | 9,596,336 | 24,608,915 | 36,860,755 |
Interest expenses, net | (127,675) | (260,174) | (619,870) |
Provision for income tax | 103,396 | 440,447 | 871,941 |
Net income | 155,240 | 735,525 | 1,605,749 |
Depreciation and amortization | 49,123 | 58,853 | 132,364 |
Capital expenditures | 705,690 | 781,023 | 1,633,006 |
Total assets | 6,219,359 | 10,593,798 | 14,531,739 |
Total liabilities | 4,588,581 | 12,189,004 | 25,368,417 |
Online stores [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 121,164,347 | 111,435,341 | 50,464,251 |
Merchandise costs | 98,328,079 | 88,899,645 | 38,336,001 |
Interest expenses, net | (1,427,579) | (982,724) | (682,630) |
Provision for income tax | 1,156,110 | 1,663,646 | 960,224 |
Net income | 1,735,792 | 2,778,203 | 1,768,327 |
Depreciation and amortization | 549,273 | 222,299 | 145,766 |
Capital expenditures | 1,174,609 | 1,252,666 | 959,068 |
Total assets | 67,291,828 | 55,595,433 | 42,528,146 |
Total liabilities | 42,053,619 | 45,654,076 | 27,425,786 |
Franchise stores and wholesale customers [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 96,436,120 | 80,577,072 | 43,285,104 |
Merchandise costs | 81,457,709 | 68,051,379 | 36,891,293 |
Interest expenses, net | (1,136,227) | (710,592) | (585,518) |
Provision for income tax | 920,162 | 1,202,955 | 823,621 |
Net income | 1,381,537 | 2,008,873 | 1,516,761 |
Depreciation and amortization | 437,173 | 160,741 | 125,029 |
Capital expenditures | 934,885 | 905,782 | 822,629 |
Total assets | 49,833,993 | 46,752,624 | 35,892,174 |
Total liabilities | $ 32,090,251 | $ 32,864,338 | $ 24,194,192 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Jul. 20, 2022 USD ($) | Jul. 20, 2022 JPY (¥) |
Subsequent Events (Details) [Line Items] | ||
Cash | $ 2,805,192 | ¥ 392,000,000 |
All Seas Global Limited [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Equity interest percentage | 100% | 100% |
Tokyo Lifestyle Limited [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Equity interest percentage | 100% | 100% |