| Schedule of Movement in Prepaid Royalties |
Movement in prepaid royalties for the years ended July 31, 2026 and 2025 is as follows: | | | For the years ended July 31, | | | | | 2026 | | | 2025 | | | 2024 | | | Beginning balance | | $ | 3,499,962 | | | $ | 3,660,198 | | | $ | 2,976,290 | | | Reclassification from prepaid expenses | | | 449,448 | | | | — | | | | — | | | Additions | | | 1,380,447 | | | | 2,024,883 | | | | 2,105,413 | | | Minimum guarantee carried over by licensor (noncash) (1) | | | 30,522 | | | | — | | | | — | | | Amortization | | | (1,092,366 | ) | | | (1,698,654 | ) | | | (1,260,248 | ) | | Impairment | | | — | | | | (483,149 | ) | | | — | | | Foreign currency translation | | | (204,709 | ) | | | (3,316 | ) | | | (161,257 | ) | | Ending balance | | $ | 4,063,304 | | | $ | 3,499,962 | | | $ | 3,660,198 | | | (1) | In the year ended July 31, 2026, a licensor agreed to carry over to a new title a prepaid royalties that the Group had previously paid and expensed for an earlier title. The balance of the carry over is $30,522 (or JPY 4.75 million). The contractual carryover does not, by itself, provide a basis to reinstate the previously expensed amount as a prepaid royalty asset or to recognize a corresponding reduction of cost of revenue. Impairment losses are not reversed. |
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