NOTE 9 - COMMITMENTS

As of March 31, 2025, the Company had four finance leases of equipment with a gross value of approximately $95,032, included in property, plant and equipment. The Company also leases its offices under operating lease and short-term lease. The estimated effect of lease renewal and termination options, as applicable, was included in the consolidated financial statements in current period.

The components of lease expense were as follows:

The following table presents the Company’s supplemental information related to operating and finance leases:

The future maturity of lease liabilities as of March 31, 2025 are as follows:

NOTE 10 - CONTINGENCIES

The Company is subject to various claims and legal proceedings in the course of conducting the business related to Force Club Membership and, from time to time, the Company may become involved in additional claims and lawsuits incidental to the businesses. The Company’s legal counsel and management routinely assess the likelihood of adverse judgments and outcomes to these matters, as well as ranges of probable losses; to the extent losses are reasonably estimable. Accruals are recorded for these matters to the extent that management concludes a loss is probable and the financial impact, should an adverse outcome occur, is reasonable estimable.

In the opinion of management, appropriate and adequate accruals for legal matters have been made, and management believes that the probability of a material loss beyond the amounts accrued is remote. Nevertheless, the Company cannot predict the impact of future developments affecting our pending or future claims and lawsuits. The Company expenses legal costs as incurred, and all recorded legal liabilities are adjusted as required as better information becomes available to the Company. The factors the Company considers when recording an accrual for contingencies include, among others: (i) the opinions and views of the Company’s legal counsel; (ii) the Company’s previous experience; and (iii) the decision of our management as to how we intend to respond to the complaints. 

During the six months ended March 31, 2025, the Company has settled one legal case in the amount of approximately JPY3.4 million, (approximately $22,500) related to the cancellation of contract of Force Club membership sales. As of filing date, the Company had five pending legal cases, claiming a damage of approximately JPY19.4 million (approximately $129,300) related to the same nature. The Company’s legal counsel estimated a probable settlement for these cases with total settlement amount of approximately JPY8.0 million (approximately $53,400). The Company accrued a total liability of JPY8.0 million (approximately $53,400) as of March 31, 2025.