| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation 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 (“SEC”). Principles of consolidation The consolidated financial statements include the financial statements
of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly,
controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors,
to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee
under a statute or agreement among the shareholders or equity holders. Non-controlling interest represents the portion of the net assets of
subsidiaries attributable to interests that are not owned by the Company. The non-controlling interest is presented in the consolidated
balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest’s operating result
is presented on the face of the consolidated statements of operations and comprehensive income (loss) as an allocation of the total income
for the year between non-controlling shareholders and the shareholders of the Company. Non-controlling interests Non-controlling interest represents the portion of the net assets of
subsidiaries attributable to interests that are not owned or controlled by the Company. The non-controlling interest is presented in the
consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest’s
operating results are presented on the face of the consolidated statements of operations and comprehensive income (loss) as an allocation
of the total income for the year between non-controlling shareholders and the shareholders of the Company. As of October 31, 2022 and
2021, non-controlling interests represent non-controlling shareholders’ proportionate share of equity interests in Topsheen Samoa
and Topsheen Shipping. Foreign
currency translation The Group follows U.S. GAAP for both the translation and remeasurement
of balance sheet and income statement items into U.S. Dollars. For those business units that operate in a local currency functional environment,
all assets and liabilities are translated into U.S. Dollars using the exchange rates in effect at the end of the period; revenue and expenses
are translated using average exchange rates in effect during each period. Resulting translation adjustments are reported as a separate
component of accumulated comprehensive income (loss) in shareholders’ equity. For those business units that operate in a U.S. Dollar
functional environment, foreign currency assets and liabilities are remeasured into U.S. Dollars using the exchange rates in effect at
the end of the period except for nonmonetary assets and capital accounts, which are remeasured at historical exchange rates. Revenue and
expenses are generally translated at monthly exchange rates which approximate average exchange rates in effect during each year, except
for those expenses related to balance sheet amounts that are remeasured at historical exchange rates. For the years ended October 31,
2022 and 2021, all the Group’s functional currency are U.S. Dollars. 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 revenues and expenses during the reporting
period. These estimates are based on information as of the date of the consolidated financial statements. Significant accounting estimates
required to be made by management include, but are not limited to revenue recognition. Actual results could differ from those estimates. Cash
and cash equivalent Cash and cash equivalent comprise cash at banks and on hand, which
includes deposits with original maturities of three months or less with commercial banks. Accounts
Receivable Accounts receivable are recognized and carried at original invoiced
amount less an estimated allowance for uncollectible accounts. Most accounts receivable are collected within one month. The Group usually
determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Group
establishes a provision for doubtful receivables when there is objective evidence that the Group may not be able to collect amounts due.
The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical
trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated
statements of operations and comprehensive income (loss). Delinquent account balances are written-off against the allowance for doubtful
accounts after management has determined that the likelihood of collection is not probable. No allowance was recorded as of October 31,
2022 and 2021, respectively. Prepayments
and other assets Prepayment and other assets primarily consist of prepayment for fuel
and other costs, prepayment for keyman insurance and advances to employees, which are presented net of allowance for doubtful accounts.
These balances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Group considers
the balances to be impaired if the collectability of the balances becomes doubtful. The Group uses the aging method to estimate
the allowance for uncollectible balances. The allowance is also based on management’s best estimate of specific losses on individual
exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ
from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written off against
allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. No allowance was recorded
as of October 31, 2022 and 2021, respectively. Property
and equipment Property and equipment are recorded at cost less
accumulated depreciation. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful
lives using the straight-line method, as follows:
Useful life
Machinery equipment 10 years
Transportation equipment 5 years
Office and electronic equipment 3-5 years
Leasehold improvement Over the shorter of the lease term or estimated useful lives Expenditures for maintenance and repairs, which do not materially extend
the useful lives of the assets, are charged to expense 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 operations and other comprehensive
income (loss) in other income (expenses), net. Impairment
of Long-lived Assets The Group reviews long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated undiscounted 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 October 31, 2022 and 2021, respectively. Fair
value of financial instruments ASC 825-10 requires certain disclosures regarding the 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. The carrying amounts of financial assets and liabilities, such as cash
and cash equivalents, prepayments and other current assets, accounts payables, balances with related parties, and other current liabilities,
approximate their fair values because of the short-term maturity of these instruments. Revenue
recognition The Group is an international operator of comprehensive ocean
transportation service. On November 1, 2019, the Group has adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and
all subsequent ASUs that modified ASC 606 using the modified retrospective approach Step 1: Identify the contract(s) with a customer Step
2: Identify the performance obligations in the contract Step
3: Determine the transaction price Step
4: Allocate the transaction price to the performance obligations in the contract Step
5: Recognize revenue when (or as) the entity satisfies a performance obligation The Group primarily derives its
freight revenue from voyage contracts and provides vessel service. In
accordance with ASC 606, the Group evaluates whether our businesses themselves promise to transfer services to the customer (as the principal)
or to arrange for services to be provided by another party (as the agent) using a control model. Based on the evaluation of the control
model, the Group determined that the Group is the principal to the transaction for voyage contracts and
the related revenue from voyage contracts is recognized on a gross basis based on the transfer of control to the customer. The
Group’s vessel service contracts engage in certain transactions wherein the Group act as an agent of ship owners. Revenue
from these transactions is recorded on a net basis. Net revenue includes billings to customers less third-party charges, including
transportation or handling costs, fees, commissions and taxes and duties. Revenue
from voyage contracts Under a voyage contract, the Group is engaged to provide the transportation
of cargo between specific ports in return for ocean freight payment of an agreed upon freight per ton of cargo. The Group’s voyage
contracts generally do not contain cancelable provisions. A voyage was deemed to commence when a vessel was available for loading and
was deemed to end upon the completion of the discharge of the current cargo. For the voyage contracts, the customer simultaneously receives
and consumes the benefits provided by the Group performance over the voyage period because of the continuous service to the customer.
Customers receive the benefit of our services as the goods are transported from one location to another. If the Group was unable to complete
delivery to the final location, another entity would not need to reperform the transportation service already performed. As control transfers
over time, the Group recognizes revenue ratably from port of loading to when the charterer’s cargo is discharged based
on the relative transit time completed in each reporting period expense and other ocean transportation operating costs are charged
to operating costs as incurred. Revenue
from vessel services The Group contracts with various customers to carry out vessel services
for vessels as agents for and on behalf of ship owners. These services include lease of vessels on behalf of the ship owners and commercial
management. As the operator of the vessels, the Group undertakes to use its best endeavors to provide the agreed vessel services as agents
for and on behalf of the ship owners and to protect and promote the interest of the ship owners in all matters relating to the provision
of services. Most of the vessel service agreements span within one year and are typically billed on a monthly basis. The Vessel service
revenue is recorded on a net basis. Net revenue includes billings to customers, net of voyage operating expenses incurred. The Group transfers
control of the service to the customer and satisfies its performance obligation over the term of the contract, and therefore recognized
revenue over the term of the contract. Contract
balances Timing of revenue recognition may differ
from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing
when the Group has satisfied the Group’s performance obligation and has the unconditional rights to payment. The balances of
accounts receivable were $3,955,311 and $7,826,711 as of October 31, 2022 and 2021, respectively. Contract liabilities are reflected
as advance from customers on the consolidated balance sheet. Contract liabilities relate to payments received in advance of
completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of
performance obligations. As of October 31, 2022 and 2021, the advances from customer amounted to $10,067,278 and $6,182,479,
respectively. The entire contract liabilities of $6,182,479 as of October 31, 2021 has been recognized as revenue for the year ended
October 31, 2022. The Company expected to recognize the entire contract liabilities as of October 31, 2022 as revenue in the next 12
months. For
the years ended October 31, 2022, 2021 and 2020, the disaggregation of revenue is as follows:
For the years ended October 31,
2022 2021 2020
Ocean freight revenue $ 178,126,765 $ 110,113,752 $ 77,301,897
Vessel service revenue 7,222,865 11,847,305 1,049,551
Total $ 185,349,630 $ 121,961,057 $ 78,351,448 Voyage Expenses Voyage expenses include port and canal charges,
bunker (fuel) expenses, charter cost and others costs directly associated with voyages. These amounts
are recognized as cost of revenues over the voyage period. Operating leases A lease for which substantially all the benefits
and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the group are
currently classified as operating leases. Government Subsidies The Group received government subsidies according
to related policy from local government. The Group receives government subsidies that the Singaporean government has not specified its
purpose for and are not tied to future trends or performance of the Group. Receipt of such subsidy income is not contingent upon any further
actions or performance of the Group and the amounts do not have to be refunded under any circumstances. The unspecific purpose subsidies
are recognized as other income (expenses), net upon receipt as further performance by the Group is not required. For the years ended October
31, 2022, 2021 and 2020, the government subsidies amounted to $ nil Employee benefits The full-time employees of the Company’s
subsidiary are entitled to staff welfare benefits including medical care, unemployment insurance and pension benefits, which are government
mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’
respective salaries, subject to certain ceilings, in accordance with the relevant regulations, and make cash contributions to the state-sponsored
plans out of the amounts accrued. The total amounts for such employee benefits were $56,802, $133,173 and $77,398 for the years ended
October 31, 2022, 2021 and 2020, respectively. Income taxes The Group 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 expense in the period incurred. No significant penalties or interest relating to income taxes have been
incurred for the years ended October 31, 2022, 2021 and 2020. All of the tax returns of the Company’s subsidiaries in Singapore
remain subject to examination by the tax authorities for four years from the date of filing. Earnings per Share The Group 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 common shares outstanding
for the period. Diluted presents the dilutive effect on a per share basis of potential common 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 common 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. For the years ended October 31, 2022, 2021 and 2020, there were no dilutive shares. Risks and Uncertainties In December 2019, a novel strain of coronavirus
(COVID-19) surfaced. As a result of the pandemic of COVID-19 in Asia countries, the United States and the world, the Group's operations
have been, and may continue to be, adversely impacted by disruptions in business activities, commercial transactions and general uncertainties
surrounding the duration of the outbreaks and the various governments' business, travel and other restrictions. The COVID-19 virus has
led many ports and organizations to take measures against its spread, such as quarantines and restrictions on travel. These measures have
and will likely continue to cause severe trade disruptions due to, among other things, the unavailability of personnel, supply chain disruption,
interruptions of production and closure of businesses and facilities and reduced consumer demand. The duration and severity of this global
health emergency and related disruptions remains uncertain. Moreover, because the Group’s vessels travel to ports in countries in
which cases of COVID-19 have been reported, the Group face risks to personnel and operations. Such risks include delays in the loading
and discharging of cargo on or from the Group’s vessels, difficulties in carrying out crew changes, off time due to quarantine regulations,
delays and expenses in finding substitute crew members if any of the Group’s vessels’ crew members become infected, delays
in drydocking if insufficient shipyard personnel are working due to quarantines or travel restrictions. In fiscal year 2020, the COVID-19
pandemic had a material net impact on the Group’s financial positions and operating results. the Group incurred a gross loss in
fiscal year 2020 due to low ocean freight price and shorter voyage days under the impact of COVID-19. The quarantines and travel restriction
also caused congestions in ports, which caused higher port fees and longer idle time. The COVID-19 pandemic did not have a material net
impact on the Group’s financial positions and operating results for the years ended October 31, 2022 and 2021. Related parties Related parties, which can be a corporation or
individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if
they are subject to common control or common significant influence, such as a family member or relative, shareholder, or a related corporation. 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 (“CODM”), or decision-making group, in deciding how to allocate resources
and in assessing performance. The Group has two operating segments: (i) ocean transportation; (ii) heating business. The Group’s
CODM, who has been identified as the Chief Executive Officer (“CEO”), evaluates performance based on the operating segment’s
revenue and their operating results. As the Group’s long-lived assets are all located in Singapore and substantially all of the
Group’s revenues are derived from Singapore. Therefore, no geographical segments are presented. Concentrations of risks
a. Significant customers For the years ended October 31, 2022, 2021 and
2020, no customer accounted for more than 10% of the Group’s total revenues. As of October 31, 2022, two customers accounted for
approximately 30% and 25% of the Group’s accounts receivable, respectively. As of October 31, 2021, two customers accounted for
approximately 16% and 12% of the Group’s accounts receivable, respectively.
b. Significant suppliers For the year ended October 31, 2022, one related party supplier accounted
for approximately 42.5% of the Group’s total purchases. For the year ended October 31, 2021, one related party supplier accounted
for approximately 44% of the Group’s total purchases. For the year ended October 31, 2020, one related party supplier accounted
for approximately 36% of the Group’s total purchases. As of October 31, 2022, one supplier accounted for approximately 92% of the
Group’s total accounts payable. As of October 31, 2021, one supplier accounted for approximately 98% of the Group’s total
accounts payable.
c. Cash and cash equivalents The Group maintains cash and cash equivalents
with various financial institutions in Singapore and management believes these financial institutions are high credit quality. As of October 31,
2022 and 2021, the aggregate amount of cash and cash equivalent of $21,572,030 and $10,354,320, respectively, was held at major financial
institutions in Singapore, where there is a Singapore Dollar 50,000 (or $35,333) deposit insurance limit for a legal entity’s aggregated
balance at each bank. Recent Accounting Pronouncements The Group considers the applicability and impact
of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases,
including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure
requirements. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The update provides
an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented
in the Group’s financial statements. The new guidance requires the lessee to record operating leases on the balance sheet with a
right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 “Target Improvement”
and ASU 2018-20 “Narrow-scope Improvements for Lessors.” In June 2020, the FASB issued ASU No. 2020-05, “Revenue from
Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities” (“ASU 2020-05”) in
response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides a limited deferral
of the effective dates for implementing previously issued ASU 842 to give some relief to businesses and the difficulties they are facing
during the pandemic. ASU 2020-05 affects entities in the “all other” category and public Not-For-Profit entities that have
not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the “all other” category may defer to fiscal
years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As an emerging growth
company, the Group will adopt this guidance effective November 1, 2022. The Group is evaluating the impact on its consolidated financial
statements. In June 2016, the FASB issued ASU No. 2016-13,
Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how
entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s
“incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based
on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained
earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim
and annual reporting periods beginning November 1, 2023. The adoption of ASU 2016-13 is not expected to have a material impact on the
Group’s financial position, results of operations, and cash flows. In October 2021, the FASB issued ASU No. 2021-08,
“Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”
(“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities
in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and
measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not
acquired in a business combination. The amendments are effective for the Group beginning November 1, 2024, and are applied prospectively
to business combinations that occur after the effective date. The Group does not expect the adoption of ASU 2021-04 will have a material
effect on the consolidated financial statements. In November 2021, the FASB issued Accounting
Standards Update No 2021-10, Government Assistance (Topic 832) — Disclosures by Business Entities about Government Assistance
(“ASU 2021-10”). ASU 2021-10 requires additional disclosures regarding the nature of government assistance, the
related accounting policy used to account for assistance, the affected line items and applicable amounts within the consolidated financial
position and results of operations, and significant terms and conditions related to the assistance. Government assistance within the scope
of ASC 832 includes assistance that is administered by domestic, foreign, local, state, national governments, as well as departments,
independent agencies and intergovernmental organizations. The updated guidance increases transparency of government assistance including,
1) the type of assistance, 2) the entity’s accounting for assistance, and 3) the effect of assistance on the entity’s financial
statements. The new standard is effective for fiscal years beginning after December 15, 2021. As an emerging growth company,
the Group will adopt this guidance effective November 1, 2022. The Group is evaluating the impact on its consolidated financial statements. The Group does not believe other recently issued
but not yet effective accounting standards, if currently adopted, would have a material effect on the Group’s consolidated balance
sheets, statements of operations and comprehensive income (loss) and statements of cash flows. |
