| NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
3 - 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. Reclassification Certain amounts
in the prior period have been reclassified to conform to the current period presentation. 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. Advertising and Promotion All advertising, promotion and marketing expenses, including commissions,
are expensed when incurred. Leases The Company capitalizes all leased assets pursuant to ASU 2016-02, Leases (Topic 842) (“Topic 842”), which requires lessees
to recognize right-of-use (“ROU”) assets and lease liability, initially measured at present value of the lease payments, on
its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. The Company excludes
short-term leases having initial terms of 12 months or less from Topic 842 as an accounting policy election and recognizes rent expense
on a straight-line basis over the lease term. 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 six 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
July 31, 2023
Current JPY: US$1 exchange rate 140.97
Average JPY: US$1 exchange rate 136.51 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. Revenue amount
represents the invoiced value, net of a value-added tax (“Consumption Tax”) and applicable local government levies. The Consumption
Tax on sales is calculated at 10% of gross sales. The Company is subject to consumption taxes in Japan for the years ended October 31,
2022 and 2023. The
following table summarizes our revenue recognized under ASC 606 in our consolidated statements of operations
Nine Months Ended
July 31,
2023 2022
Revenues
Product sales $ 6,925 $ 12,905,805
Crypto miners sales, net 28,222,609 -
Drone
imaging and video production 82,567 20,031
Program for educational institution - 34,869
Other 3,223 196,350
Total Revenue Under ASC 606 $ 28,315,324 $ 13,157,055 Revenue
from product sal es 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
advance received. As of July 31, 2023, no advance received related to product sales. Revenue
from crypto miners sales, net During the period ended July
31, 2023, the Company acted as an agent in facilitating the sales of crypto miners, produced by a third-party manufacturer, to customers
of the Company. Revenue for the sale of crypto miners was recognized when the miners were delivered to the customers and the customers
completed the inspection of the miners. Management assessed the Company’s contracts with the third-party manufacturer and customers
in consideration of ASC 606, “Revenue from Contracts with Customers”, and determined the Company as the agent in said transactions.
As such, the company recognized crypto miner sales net of costs. For the period ended July 31, 2023, cost of goods sold for miner purchases,
netted by the gross sales was $103,483,250. As of July 31, 2023, $124,343 of advance
received are related to deposits for crypto miners. 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 July 31, 2023, the Company had no advance received 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. The Company recognized deferred tax assets of $374,094 and $307,438 as of July 31, 2023 and October
31, 2022, respectively. 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 and diluted earnings per share
or the three and nine months ended July 31 st
Three Months Ended July 31, 2023
Three Months Ended July 31, 2022
Nine Months Ended July 31, 2023
Nine Months Ended July 31, 2022
Basic earnings per share
$
(1.02)
$ (.09) $ (.35) $ .14
Diluted earnings per share
$ (1.02)
$ (.09)
$ (.35) $ .15 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 July 31, 2023. 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 July 31, 2023 and October 31, 2022, the Company had no 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. Concentration
of Purchases Net purchase
from suppliers accounting for 10% or more of total purchases are as follows: For the period
ended July 31, 2023, “For the period ended July 31, 2023, 100% of the inventories were purchased from G-Force for $9,772.”. For the period
ended July 31, 2022, 85.64% of the inventories were purchased from G-Force in the amount of $5,306,411. Concentration
of Revenues Gross revenues
from customers accounting for 10% or more of total revenues are as follows: For the period
ended July 31, 2023, 21% of total revenue was generated from Kinoshita Group in the amount of $ 6,610,618 For the period
ended July 31, 2022, 95.72% of total revenue was generated from Done Net in the amount of $ 12,593,394 F-6 Table of
Contents |
