Cover
Cover | 6 Months Ended |
Apr. 30, 2022 | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Period End Date | Apr. 30, 2022 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2022 |
Current Fiscal Year End Date | --10-31 |
Entity File Number | 000-56208 |
Entity Registrant Name | World Scan Project, Inc. |
Entity Central Index Key | 0001813744 |
Entity Tax Identification Number | 35-2677532 |
Entity Incorporation, State or Country Code | DE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 1,913,487 | $ 2,583,218 |
Accounts receivable, trade | 4,724 | |
Other receivable | 97 | 16,775 |
Advance payments and prepaid expenses | 5,970,709 | 3,055,135 |
Inventories | 181,403 | 47,994 |
Short term portion of lease deposits | 49,463 | |
TOTAL CURRENT ASSETS | 8,115,159 | 5,687,846 |
Non-current assets | ||
Furniture, fixtures and equipment, net | 364,062 | 161,390 |
Lease asset, long term | 945,579 | 406,816 |
Long term lease deposits, net | 115,898 | 230,278 |
Other intangible assets, non-current | 25,819 | |
TOTAL NON-CURRENT ASSETS | 1,451,358 | 798,484 |
TOTAL ASSETS | 9,566,517 | 6,486,330 |
Accrued expenses and other payables | ||
Tax payable | 2,145,591 | 495,987 |
Short-term lease liability | 270,518 | 219,892 |
Deferred revenue | 4,758 | 1,476,492 |
Other current liabilities | 20,752 | |
Due to related party | 458 | 455 |
TOTAL CURRENT LIABILITIES | 2,670,622 | 2,454,635 |
Non Current Liabilities | ||
Lease liability long term | 727,450 | 219,474 |
TOTAL LIABILITIES | 3,398,072 | 2,674,109 |
Preferred stock ($0.0001 par value, 200,000,000 shares authorized; 10,000,000 shares issued and outstanding as of April 30, 2022 and October 31, 2021) | 1,000 | 1,000 |
Common stock ($0.0001 par value, 200,000,000 shares authorized, 10,647,350 shares issued and outstanding as of April 30, 2022 and October 31, 2021) | 1,065 | 1,065 |
Additional paid-in capital | 323,990 | 323,990 |
Accumulated earnings | 6,732,182 | 3,646,360 |
Accumulated other comprehensive income | (889,792) | (160,194) |
TOTAL SHAREHOLDERS' EQUITY | 6,168,445 | 3,812,221 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 9,566,517 | $ 6,486,330 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Apr. 30, 2022 $ / shares shares |
Statement of Financial Position [Abstract] | |
preferred par value | $ / shares | $ 0.0001 |
preferred authorized | 200,000,000 |
preferred outstanding | 10,000,000 |
common stock par value | $ / shares | $ 0.0001 |
common authorized | 200,000,000 |
common stock outstanding | 10,647,350 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2022 | Apr. 30, 2021 | Apr. 30, 2022 | Apr. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 8,266,406 | $ 2,483,924 | $ 13,196,434 | $ 4,570,702 |
Cost of revenues | 3,680,443 | 836,959 | 6,064,436 | 1,598,866 |
Gross profit | 4,585,963 | 1,646,965 | 7,131,998 | 2,971,836 |
OPERATING EXPENSE | ||||
General and administrative expenses | 1,161,020 | 932,257 | 2,116,257 | 1,635,346 |
Total operating expenses | 1,161,020 | 932,257 | 2,116,257 | 1,635,346 |
Income from operations | 3,424,943 | 714,708 | 5,015,741 | 1,336,490 |
Other income (expense) | ||||
Other income | 7,727 | 116,429 | 27,190 | 223,715 |
Translation income (expense) | (354) | (431) | ||
Total other income (expenses) | 7,727 | 116,075 | 27,190 | 223,284 |
Net income before tax | 3,432,670 | 830,783 | 5,042,931 | 1,559,774 |
Income tax expense | 1,285,389 | 265,094 | 1,957,109 | 641,658 |
NET INCOME | 2,147,281 | 565,687 | 3,085,822 | 918,116 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation adjustment | (672,155) | (93,253) | (729,598) | (92,725) |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ 1,475,126 | $ 472,436 | $ 2,356,224 | $ 825,391 |
Income per common share | ||||
Basic | $ 0.20 | $ 0.05 | $ 0.29 | $ 0.09 |
Diluted | $ 0.10 | $ 0.03 | $ 0.15 | $ 0.04 |
Weighted average common shares outstanding | ||||
Basic | 10,647,350 | 10,647,350 | 10,647,350 | 10,647,350 |
Diluted | 20,647,350 | 20,647,350 | 20,647,350 | 20,647,350 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Comprehensive Income [Member] | Retained Earnings [Member] | Total |
Balance – April 30, 2022 | $ 1,000 | $ 1,065 | $ 323,987 | $ 82,294 | $ 1,313,909 | $ 1,722,255 |
Balance – January 31, 2022 at Oct. 31, 2020 | 1,000 | 1,065 | 323,987 | 82,294 | 1,313,909 | 1,722,255 |
Net income | 352,429 | 352,429 | ||||
Foreign currency translation | 526 | 526 | ||||
Balance – January 31, 2022 at Oct. 31, 2020 | 1,000 | 1,065 | 323,987 | 82,294 | 1,313,909 | 1,722,255 |
Net income | 918,116 | |||||
Balance – April 30, 2022 | 1,000 | 1,065 | 323,987 | 82,820 | 1,666,338 | 2,075,210 |
Balance – January 31, 2022 at Jan. 31, 2021 | 1,000 | 1,065 | 323,987 | 82,820 | 1,666,338 | 2,075,210 |
Net income | 565,687 | |||||
Foreign currency translation | (93,251) | (93,251) | ||||
Balance – April 30, 2022 | 1,000 | 1,065 | 323,987 | (10,431) | 2,232,025 | 2,547,646 |
Balance – April 30, 2022 | 1,000 | 1,065 | 323,990 | (160,194) | 3,646,360 | 3,812,221 |
Balance – January 31, 2022 at Oct. 31, 2021 | 1,000 | 1,065 | 323,990 | (160,194) | 3,646,360 | 3,812,221 |
Net income | 938,541 | 938,541 | ||||
Foreign currency translation | (57,443) | (57,443) | ||||
Balance – January 31, 2022 at Oct. 31, 2021 | 1,000 | 1,065 | 323,990 | (160,194) | 3,646,360 | 3,812,221 |
Net income | 3,085,822 | |||||
Balance – April 30, 2022 | 1,000 | 1,065 | 323,990 | (217,637) | 4,584,901 | 4,693,319 |
Balance – January 31, 2022 at Jan. 31, 2022 | 1,000 | 1,065 | 323,990 | (217,637) | 4,584,901 | 4,693,319 |
Net income | 2,147,281 | 2,147,281 | ||||
Foreign currency translation | (672,155) | (672,155) | ||||
Balance – April 30, 2022 | $ 1,000 | $ 1,065 | $ 323,990 | $ (889,792) | $ 6,732,182 | $ 6,168,445 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Deficit) (Unaudited) Continued - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Comprehensive Income [Member] | Retained Earnings [Member] | Total |
Balance – April 30, 2021 | $ 1,000 | $ 1,065 | $ 323,987 | $ 82,294 | $ 1,313,909 | $ 1,722,255 |
Balance – January 31, 2022 at Oct. 31, 2020 | 1,000 | 1,065 | 323,987 | 82,294 | 1,313,909 | 1,722,255 |
Net income | 352,429 | 352,429 | ||||
Foreign currency translation | 526 | 526 | ||||
Balance – January 31, 2022 at Oct. 31, 2020 | 1,000 | 1,065 | 323,987 | 82,294 | 1,313,909 | 1,722,255 |
Net income | 918,116 | |||||
Balance – April 30, 2021 | 1,000 | 1,065 | 323,987 | 82,820 | 1,666,338 | 2,075,210 |
Balance – January 31, 2022 at Jan. 31, 2021 | 1,000 | 1,065 | 323,987 | 82,820 | 1,666,338 | 2,075,210 |
Net income | 565,687 | |||||
Foreign currency translation | (93,251) | (93,251) | ||||
Net income | 565,687 | 565,687 | ||||
Balance – April 30, 2021 | 1,000 | 1,065 | 323,987 | (10,431) | 2,232,025 | 2,547,646 |
Balance – April 30, 2021 | 1,000 | 1,065 | 323,990 | (160,194) | 3,646,360 | 3,812,221 |
Balance – January 31, 2022 at Oct. 31, 2021 | 1,000 | 1,065 | 323,990 | (160,194) | 3,646,360 | 3,812,221 |
Net income | 938,541 | 938,541 | ||||
Foreign currency translation | (57,443) | (57,443) | ||||
Balance – January 31, 2022 at Oct. 31, 2021 | 1,000 | 1,065 | 323,990 | (160,194) | 3,646,360 | 3,812,221 |
Net income | 3,085,822 | |||||
Balance – April 30, 2021 | 1,000 | 1,065 | 323,990 | (217,637) | 4,584,901 | 4,693,319 |
Balance – January 31, 2022 at Jan. 31, 2022 | 1,000 | 1,065 | 323,990 | (217,637) | 4,584,901 | 4,693,319 |
Net income | 2,147,281 | 2,147,281 | ||||
Foreign currency translation | (672,155) | (672,155) | ||||
Balance – April 30, 2021 | $ 1,000 | $ 1,065 | $ 323,990 | $ (889,792) | $ 6,732,182 | $ 6,168,445 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Apr. 30, 2022 | Apr. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 3,085,822 | $ 918,116 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 22,179 | |
Amortization of long term deposits | 58,377 | |
Lease expense | 165,942 | 25,037 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,598 | (253,929) |
Other receivable | 16,221 | |
Advance payments and other prepaid expense | (3,651,301) | (618,056) |
Inventories | (152,870) | (622,416) |
Other assets | (9,513) | |
Deposit | (15,148) | |
Accounts payable | 265,988 | |
Accrued expenses and other payables | 19,453 | (120,935) |
Software | (28,232) | |
Income tax payable | 1,877,878 | 544,778 |
Deferred revenues | (1,431,916) | |
ROU Asset/Liability | (146,103) | (25,037) |
Other current liabilities | (12,951) | |
Net cash provided by (used in) operating activities | (175,100) | 91,082 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for purchase of fixed assets | (243,462) | (109,426) |
Net cash used in investing activities | (243,462) | (109,426) |
Net effect of exchange rate changes on cash | (251,169) | (37,564) |
Net Change in Cash and Cash Equivalents | (669,731) | (55,908) |
Cash and cash equivalents - beginning of period | 2,583,218 | 974,606 |
Cash and cash equivalents - end of period | 1,913,487 | 918,698 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Interest paid | ||
Income taxes paid | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
ROU Asset/Liability | $ 1,269,132 | $ 110,119 |
NOTE 1 - ORGANIZATION AND DESCR
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Apr. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS World Scan Project, Inc., a Delaware corporation (“the Company”) was incorporated under the laws of the State of Delaware on October 25, 2019. On October 25, 2019, Ryohei Uetaki, our officer and director, paid for expenses involved with the incorporation of the Company with personal funds on behalf of the Company, in exchange for 10,000,000 shares of Common Stock, par value $0.0001 per share and 10,000,000 shares of Series A Preferred stock, par value $0.0001 per share, which issuance was exempt from the registration provisions of Section 5 of the Securities Act under Section 4(2) of such same said act. The value of the stock provided to Mr. Uetaki, based on the par value of $.0001 per share of common stock and Series A Preferred Stock, is valued at $2,000. On October 25, 2019, Ryohei Uetaki was appointed as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer. On November 18, 2019, Yasumasa Ichikawa was appointed as Chief Technology Officer. On January 25, 2020, the Company entered into and consummated a Share Contribution Agreement with Ryohei Uetaki. Pursuant to this agreement Mr. Uetaki gifted to the Company, at no cost, 300 shares of common stock of World Scan Project Corporation, a Japan corporation (“WSP Japan”), which represented all of its issued and outstanding shares. The Company has since gained a 100% interest in the issued and outstanding shares of WSP Japan’s common stock and WSP Japan is now a wholly owned subsidiary of the Company. The Company and WSP Japan were under common control at the time of the acquisition. WSP Japan was incorporated under the laws of Japan on January 22, 2020. Currently, WSP Japan is headquartered in Tokyo, Japan. The Company’s primary business is focused on developing and manufacturing of autonomous aerial vehicles including drones. On February 19, 2020, Ryohei Uetaki gifted 7,000,000 shares of our Common Stock and 10,000,000 shares of our Series A Preferred Stock, which represented all of our issued and outstanding shares of Preferred Stock at the time, to SKYPR LLC, a Delaware Limited Liability Company (referred to herein as “SKYPR LLC”). Our CEO Ryohei Uetaki owns and controls 100% of the membership interests in SKYPR LLC. In September, 2020, the Company entered into subscription agreements with 41 shareholders. Pursuant to these agreements, the Company issued 647,350 shares of common stock in total to these shareholders and received $323,675 as aggregate consideration. At the time of purchase the price paid per share by each shareholder was the equivalent of about 0.50 USD. These shares were sold pursuant to the Company’s effective S-1 Registration Statement deemed effective on August 28, 2020 at 4pm EST. We operate through our wholly owned subsidiary, World Scan Project Corporation, a Japanese Company. We are a start-up stage company currently focused on developing, designing and selling small sized drones which may be used for a variety of purposes. During the period ended April 30, 2022, we ordered cryptocurrency miners with expected delivery in the next fiscal quarter. The Company intends to capitalize on the growing popularity of cryptocurrency by expanding its operations to include the sale of cryptocurrency miners. Currently our sales team is reaching out to potential customers and our goal is to sell 50 units each month. We hope to revise our sales plan in the future, as we grow our customer base, so that the cryptocurrency miners will be a mainstay commercial product of the Company. Our principal executive offices are located at 2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo, 169-0051, Japan. The Company has elected October 31 st |
NOTE 2 - SUMMARY OF SIGNIFICANT
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Apr. 30, 2022 | |
Accounting Policies [Abstract] | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidations The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, World Scan Project Corporation, whose registered address is 2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo, 162-0051, Japan. All significant intercompany accounts and transactions have been eliminated. Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make 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 revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. Related party transaction A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents. Accounts Receivable and Credit Policies Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. If there is a claim for a defect of product within four days after arrival of goods, the Company shall accept a goods return. Advance payments and prepaid expenses Advance payments and prepaid expenses are cash paid amounts that represent costs incurred from which a service or benefit is expected to be derived in the future. Inventory Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out ("FIFO") method, and are valued at the lower of cost or market value. This valuation requires the Company to make judgments, based on currently-available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. Fixed assets and depreciation Property, plant and equipment are stated at cost less depreciation and impairment loss. The initial cost of the assets comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the respective assets as follows: computer software developed or acquired for internal use, 2 to 5 years; computer equipment, 2 to 5 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years. F-5 Table of Contents Foreign currency translation The Company maintains its books and records in its local currency, Japanese YEN (“JPY”), 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 operations. The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity. Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: April 30, 2022 Current JPY: US$1 exchange rate 128.86 Average JPY: US$1 exchange rate 117.12 Comprehensive income or loss ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. Revenue recognition The Company adopted ASC 606 – Revenue from contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations: Period Ended April 30, 2022 2021 Revenues Product sales $ 13,140,491 $ 4,570,702 Drone imaging and video production 20,958 - Program for educational institution 34,985 - Total Revenue Under ASC 606 13,196,434 4,570,702 Total Revenue Under ASC 606 $ 13,196,434 $ 4,570,702 Revenue from product sales Revenue for products is recognized when the products are delivered to the customer and the customer completes the product inspection. Cash receipts for undelivered products are recorded as deferred revenues. As of April 30, 2022, the Company had deferred revenues of $4,758. Revenue from drone imaging and video production Revenue for drone imaging and video production is recognized when the products and/or services are delivered or provided to the customer and the customer completes the product inspection. Cash receipts for undelivered products or services are recorded as deferred revenues. As of April 30, 2022, the Company had no deferred revenues related to drone imaging and video production . Revenue from educational institution program Revenue for educational institution fees is recognized when the services are provided to the customer. Cash receipts for undelivered products are recorded as deferred revenues. As of April 30, 2022, the Company had no deferred revenues related to the educational institution program. Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at April 30, 2022. Basic Earnings (Loss) Per Share The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. Each shareholder of Series A Preferred Stock may convert their shares at the option of the holder thereof into an equal amount of shares of any other class or series of the Company’s stock on a one to one basis, therefore the Company computes diluted earnings (loss) per shares by dividing net income (loss) by the sum of the total of weighted average number of common shares and total preferred shares outstanding. Fair Value of Financial Instruments The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820, Fair Value Measurements and Disclosures - Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. - Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. - Level 3 – Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of April 30, 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. As of April 30, 2022 and October 31, 2021, the Company had no off-balance-sheet financial instruments. Recently Issued Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. F-6 Table of Contents |
NOTE 3 - GOING CONCERN
NOTE 3 - GOING CONCERN | 6 Months Ended |
Apr. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 3 - GOING CONCERN | NOTE 3 - GOING CONCERN The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company demonstrates some positive trends, compared with the previous fiscal years, in our financial statements as in below: As of April 30, 2022, the Company recorded net income of $3,085,822, an increase of $2,167,706 compared to the same period in the prior fiscal year ended October 31, 2021, and the Company’s major source of liquidity derived from the sales of drones. As stated in the fiscal 2021 year-end consolidated financial statements, the Company, for the year ended October 31, 2021, recorded a net income of $2,332,451 (+177% y-o-y) and earned $2,032,197 (+357% y-o-y) in cash flows from operating activities. Having reviewed the above, the Company realizes that our concerns, whether we shall be able to continue demonstrating those positive trends for the following years from the issuance of the financial statements, lies in our ability to generate revenue. Principally, the Company’s consolidated financial statements are based on going concern assumptions, which assume the realization of assets and offset of liabilities in the normal course of business. Based on this, the Company also recognizes that it is critical for us to continue to operate and/or perform our obligation in the future as well and to procure any required funds to meet the redemption of its debt during the normal business operation. The management also evaluated the estimated impact of COVID-19, which has become a significant factor for social and economic activities, since the previous fiscal year, on the Company’s operation and business results for the years following the filing of the financial statements. The Company assessed that, although it depends on future developments relating to COVID-19, the impact on drone sales, which is a major source of our liquidity, shall be immaterial and the Company believes that it will not affect our assumptions as a going concern. Based on its evaluation, with positive financial trends afore-mentioned, e.g. increase in net income and increase in net cash provided by operating activities, management believes that it has completely mitigated the circumstance that led to a doubt with respect to the Company’s ability to continue as a going concern, i.e. dependency on a single major customer, which existed at the time of the filing of the Company’s fiscal 2020 year-end report. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. |
NOTE 4 - ADVANCE PAYMENTS AND P
NOTE 4 - ADVANCE PAYMENTS AND PREPAID EXPENSES | 6 Months Ended |
Apr. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
NOTE 4 - ADVANCE PAYMENTS AND PREPAID EXPENSES | NOTE 4 - ADVANCE PAYMENTS AND PREPAID EXPENSES Advance payments are comprised of the payments for undelivered products and other prepaid services. As of April 30, 2022 and October 31, 2021, the Company had advance payments of $5,970,709 and $3,035,135, respectively. Details of the advance payments as of April 30, 2022 and October 31, 2021 are as follows: April 30, 2022 October 31, 2021 Purchase of products from G-Force Inc. $ 948,449 $ 2,343,700 Purchase of products from Radio Master 115,784 325,441 Purchase of parts from Sankyu Co./Solar Samba 95,322 119,395 Purchase of services from Kenedix Property Design, Inc. 21,287 - Purchase of services from Japan Renewable Energy Business 23,071 - Purchase of parts from Bluish Co., Ltd - 21,360 Purchase of parts from Team M 42,682 48,246 Purchase of cryptocurrency miners from Cellessence Corp. 4,334,937 - Other 389,177 193,993 Totals $ 5,970,709 $ 3,035,135 |
NOTE 5 - FIXED ASSETS
NOTE 5 - FIXED ASSETS | 6 Months Ended |
Apr. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
NOTE 5 - FIXED ASSETS | NOTE 5 - FIXED ASSETS The company recognizes purchased assets with a useful life longer than one year as fixed or non-current assets. These assets are depreciated using the straight-line method of depreciation over the estimated useful life of the assets. During the period ended April 30, 2022, the Company purchased long-term assets totaling approximately $243,462, of which approximately $171,310 of Leasehold improvements were added, related to our lease at Tenshodo Bldg. 12F, 4-3-9 Ginza, Chuo-ku, Tokyo During the year ended October 31, 2021, the Company purchased long-term assets, including a 360 laser scanner, and various tools, furniture and fixtures, totaling approximately $ 177,526 16,136 April 30, 2022 October 31, 2021 Furniture, fixtures & equipment, other 226,111 177,526 Leasehold improvements 171,310 - Accumulated depreciation (33,359) (16,136) Total Furniture fixtures and equipment $ 364,062 $ 161,390 |
NOTE 6 - INCOME TAXES
NOTE 6 - INCOME TAXES | 6 Months Ended |
Apr. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
NOTE 6 - INCOME TAXES | NOTE 6 - INCOME TAXES For the period ended April 30, 2022, the Company had income tax expense in the amount of $1,957,109. Japan The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority. The Company is subject to a number of income taxes, which, in aggregate, represent a statutory tax rate approximately as follows: Company’s assessable profit For the year ended October 31, Up to JPY 8 million Over JPY 8 million 2022 15.0% 23.2% As of April 30, 2022 and October 31, 2021, the Company had income tax payable totaling $1,436,056 and $325,692, respectively. tax payable amount includes consumption tax payable totaling $709,535 as of April 30, 2022 and $170,219 as of October 31, 2021, which does not affect to income tax expense account. |
NOTE 7 - SHAREHOLDERS EQUITY
NOTE 7 - SHAREHOLDERS EQUITY | 6 Months Ended |
Apr. 30, 2022 | |
Equity [Abstract] | |
NOTE 7 - SHAREHOLDERS EQUITY | NOTE 7 - SHAREHOLDERS EQUITY Preferred Stock The authorized preferred stock of the Company consists of 200,000,000 shares with a par value of $0.0001. The authorized Series A Preferred Stock of the Company consists of 100,000,000. There were 10,000,000 shares of Series A Preferred Stock issued and outstanding as of April 30, 2022 and October 31, 2021. The rights, preferences, privileges, restrictions and other matters relating to the Series A Preferred Stock are as follows: (a) Each share of Series A Preferred Stock shall have no voting rights; (b) Each shareholder of Series A Preferred Stock may convert their shares at the option of the holder thereof into an equal amount of shares of any other class or series of the Company’s stock on a one to one basis. Common Stock The authorized common stock of the Company consists of 200,000,000 shares with a par value of $0.0001. There were 10,647,350 shares of common stock issued and outstanding as of April 30, 2022 and October 31, 2021. |
NOTE 8 - RELATED-PARTY TRANSACT
NOTE 8 - RELATED-PARTY TRANSACTIONS | 6 Months Ended |
Apr. 30, 2022 | |
Note 8 - Related-party Transactions | |
NOTE 8 - RELATED-PARTY TRANSACTIONS | NOTE 8 - RELATED-PARTY TRANSACTIONS Loan to the Company As of April 30, 2022, our CEO and Director, Ryohei Uetaki, has advanced to the Company approximately $458 for expenses. This advance is considered as a loan to the company which is unsecured, noninterest-bearing and payable on demand. |
NOTE 9 - LEASE ASSETS AND LIABI
NOTE 9 - LEASE ASSETS AND LIABILITIES | 6 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
NOTE 9 - LEASE ASSETS AND LIABILITIES | NOTE 9 - LEASE ASSETS AND LIABILITIES Our adoption of ASU 2016-02, Leases (Topic 842), and subsequent ASUs related to Topic 842, requires us to recognize substantially all leases on the balance sheet as an ROU asset and a corresponding lease liability. The new guidance also requires additional disclosures as detailed below. We adopted this standard on the effective date of November 1, 2020 and used this effective date as the date of initial application. Under this application method, we were not required to restate prior period financial information or provide Topic 842 disclosures for prior periods. We elected the ‘package of practical expedients,’ which permitted us to not reassess our prior conclusions related to lease identification, lease classification, and initial direct costs, and we did not elect the use of hindsight. We determine if a contract is a lease at the inception of the arrangement. We review all options to extend, terminate, or purchase the ROU assets, and when reasonably certain to exercise, we include the option in the determination of the lease term and lease liability. We have six operating leases related to our office space in Tokyo with remaining lease terms of 1 to 3 years. We recognized $165,942 in operating lease costs for the period ended April 30, 2022. Lease ROU assets and liabilities are recognized at commencement date of the lease, based on the present value of lease payments over the lease term. The lease ROU asset also includes any lease payments made and excludes any lease incentives. When readily determinable, we use the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The tables below present financial information associated with our leases. This information is only presented as of, and for the year ended, October 31, 2021. As noted above, we adopted Topic 842 using a transition method that does not require application to periods prior to adoption. Balance Sheet Classification October 31, 2021 October 31, 2020 Right-of-use assets Lease asset long $ 945,579 $ 406,816 Current lease liabilities Short-term lease liability 270,518 219,892 Non-current lease liabilities Lease liability long term 727,450 219,474 Maturities of lease liabilities as of April 30, 2022 are as follows: 2022 138,832 2023 262,166 2024 79,746 2025 59,835 2026 and beyond 457,389 Total 997,968 Add(Less): Imputed interest (278,087) Present value of lease liabilities 719,881 |
NOTE 10 - SUBSEQUENT EVENTS
NOTE 10 - SUBSEQUENT EVENTS | 6 Months Ended |
Apr. 30, 2022 | |
Subsequent Events [Abstract] | |
NOTE 10 - SUBSEQUENT EVENTS | NOTE 10 - SUBSEQUENT EVENTS The Company has evaluated subsequent events through July 29, 2022, the date on which the consolidated financial statements were available to be issued and has found no significant events to report. |
NOTE 2 - SUMMARY OF SIGNIFICA_2
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Apr. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidations | Principles of Consolidations The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, World Scan Project Corporation, whose registered address is 2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo, 162-0051, Japan. All significant intercompany accounts and transactions have been eliminated. |
Basis of Presentation | Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make 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 revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. |
Related party transaction | Related party transaction A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents. |
Accounts Receivable and Credit Policies | Accounts Receivable and Credit Policies Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. If there is a claim for a defect of product within four days after arrival of goods, the Company shall accept a goods return. |
Advance payments and prepaid expenses | Advance payments and prepaid expenses Advance payments and prepaid expenses are cash paid amounts that represent costs incurred from which a service or benefit is expected to be derived in the future. |
Inventory | Inventory Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out ("FIFO") method, and are valued at the lower of cost or market value. This valuation requires the Company to make judgments, based on currently-available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. |
Fixed assets and depreciation | Fixed assets and depreciation Property, plant and equipment are stated at cost less depreciation and impairment loss. The initial cost of the assets comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the respective assets as follows: computer software developed or acquired for internal use, 2 to 5 years; computer equipment, 2 to 5 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years. F-5 Table of Contents |
Foreign currency translation | Foreign currency translation The Company maintains its books and records in its local currency, Japanese YEN (“JPY”), 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 operations. 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 whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity. Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates: April 30, 2022 Current JPY: US$1 exchange rate 128.86 Average JPY: US$1 exchange rate 117.12 |
Comprehensive income or loss | Comprehensive income or loss ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. |
Revenue recognition | Revenue recognition The Company adopted ASC 606 – Revenue from contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The following table summarizes our revenue recognized under ASC 606 in our condensed consolidated statements of operations: Period Ended April 30, 2022 2021 Revenues Product sales $ 13,140,491 $ 4,570,702 Drone imaging and video production 20,958 - Program for educational institution 34,985 - Total Revenue Under ASC 606 13,196,434 4,570,702 Total Revenue Under ASC 606 $ 13,196,434 $ 4,570,702 Revenue from product sales Revenue for products is recognized when the products are delivered to the customer and the customer completes the product inspection. Cash receipts for undelivered products are recorded as deferred revenues. As of April 30, 2022, the Company had deferred revenues of $4,758. Revenue from drone imaging and video production Revenue for drone imaging and video production is recognized when the products and/or services are delivered or provided to the customer and the customer completes the product inspection. Cash receipts for undelivered products or services are recorded as deferred revenues. As of April 30, 2022, the Company had no deferred revenues related to drone imaging and video production . Revenue from educational institution program Revenue for educational institution fees is recognized when the services are provided to the customer. Cash receipts for undelivered products are recorded as deferred revenues. As of April 30, 2022, the Company had no deferred revenues related to the educational institution program. |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at April 30, 2022. |
Basic Earnings (Loss) Per Share | Basic Earnings (Loss) Per Share The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. Each shareholder of Series A Preferred Stock may convert their shares at the option of the holder thereof into an equal amount of shares of any other class or series of the Company’s stock on a one to one basis, therefore the Company computes diluted earnings (loss) per shares by dividing net income (loss) by the sum of the total of weighted average number of common shares and total preferred shares outstanding. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820, Fair Value Measurements and Disclosures - Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. - Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. - Level 3 – Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of April 30, 2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. As of April 30, 2022 and October 31, 2021, the Company had no off-balance-sheet financial instruments. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. |
NOTE 9 - LEASE ASSETS AND LIA_2
NOTE 9 - LEASE ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
financial information associated with our leases. | The tables below present financial information associated with our leases. This information is only presented as of, and for the year ended, October 31, 2021. As noted above, we adopted Topic 842 using a transition method that does not require application to periods prior to adoption. Balance Sheet Classification October 31, 2021 October 31, 2020 Right-of-use assets Lease asset long $ 945,579 $ 406,816 Current lease liabilities Short-term lease liability 270,518 219,892 Non-current lease liabilities Lease liability long term 727,450 219,474 Maturities of lease liabilities as of April 30, 2022 are as follows: 2022 138,832 2023 262,166 2024 79,746 2025 59,835 2026 and beyond 457,389 Total 997,968 Add(Less): Imputed interest (278,087) Present value of lease liabilities 719,881 |
NOTE 4 - ADVANCE PAYMENTS AND_2
NOTE 4 - ADVANCE PAYMENTS AND PREPAID EXPENSES (Details Narrative) - USD ($) | Apr. 30, 2022 | Oct. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
[custom:Advancepayments-0] | $ 5,970,709 | $ 3,035,135 |
NOTE 5 - FIXED ASSETS (Details
NOTE 5 - FIXED ASSETS (Details Narrative) | Oct. 31, 2021 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
[custom:Longtermasset-0] | $ 177,526 |
[custom:Depreciationexpense-0] | $ 16,136 |
NOTE 6 - INCOME TAXES (Details
NOTE 6 - INCOME TAXES (Details Narrative) | 6 Months Ended |
Apr. 30, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
[custom:Incometaxexpense] | $ 1,957,109 |
NOTE 9 - LEASE ASSETS AND LIA_3
NOTE 9 - LEASE ASSETS AND LIABILITIES (Details Narrative) | 6 Months Ended |
Apr. 30, 2022 USD ($) | |
Leases [Abstract] | |
[custom:Operatingleasecosts] | $ 165,942 |