UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT
![](https://www.sec.gov/Archives/edgar/data/1813744/000159991623000171/image_028.jpg)
World
Scan Project, Inc.
(Exact
name of registrant as specified in its charter)
Date:
August 8, 2023
Delaware |
3728 |
35-2677532 |
(State
or Other Jurisdiction
of
Incorporation) |
(Primary
Standard Classification Code) |
(IRS
Employer
Identification
No.)
|
Address:
2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo, 162-0051, Japan
Issuer’s Email Address: contact@world-scan-project.com
Issuer’s Telephone Number: +81-3-6670-1692
Approximate
date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please
check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for
the same offering. |_|
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_|
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_|
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large
accelerated filer |_| |
Accelerated
filer |_| |
Non-accelerated
filer |X| |
Smaller
reporting company |X| |
Emerging
growth company |X| |
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. |_|
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of Securities
to
be Registered |
Proposed
Maximum
Offering
Price
Per
Share (1) |
Shares
to be Offered Pursuant to Offering |
Underwriting Discounts and Commissions |
Maximum
Net
Proceeds |
Amount
of Registration Fee (2) |
|
|
|
|
|
|
Common
Stock, $0.0001 par value |
$12.00 |
1,200,000 |
none |
14,400,000 |
$1,586.88 |
(1) |
The offering price has
been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance
can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. |
|
|
(2) |
Estimated solely for purposes
of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. |
The
Registrant hereby amends this Registration Statement (the “Registration Statement”) on such date or dates as may be necessary
to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration
Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any jurisdiction where an offer or sale is not permitted. There is no minimum purchase requirement
for the offering to proceed.
PRELIMINARY
PROSPECTUS
World
Scan Project, Inc.
1,200,000
SHARES OF COMMON STOCK
$0.0001
PAR VALUE PER SHARE
The
common stock of World Scan Project, Inc. is currently quoted on the OTC Markets Group Inc.’s Pink® Open Market (the “OTC
Pink”) under the symbol WDSP. At present, there is a lack of liquidity in our common stock. Our shares are thinly traded, meaning
our shares cannot be easily purchased or sold. Any prospective investor should we aware that they may be unable to easily sell their
shares of our common stock should they decide to purchase shares pursuant to this Offering. Any attempts by investors to resell shares
purchased pursuant to this offering, may need to be completed through privately negotiated transactions.
In
this public offering we, “World Scan Project, Inc.” are offering 1,200,000 shares of our common. The shares offered by
the Company will be sold on our behalf by our Chief Executive Officer, Chief Financial Officer, and Director, Mr. Ryohei Uetaki.
There is uncertainty that we will be able to sell any of the 1,200,000 shares being offered herein by the Company. Mr. Ryohei Uetaki
will not receive any commissions or proceeds for selling the shares on our behalf. All of the shares being registered for sale by
the Company will be sold at a fixed price of $12.00 per share for the duration of the Offering. Assuming all of the 1,200,000 shares
being offered by the Company are sold, the Company will receive $14,400,000 in net proceeds. Assuming 900,000 shares (75%) being
offered by the Company are sold, the Company will receive $10,800,000 in net proceeds. Assuming 600,000 shares (50%) being offered by
the Company are sold, the Company will receive $7,200,000 in net proceeds. Assuming 300,000 shares (25%) being offered by the Company
are sold, the Company will receive $3,600,000 in net proceeds. There is no minimum amount we are required to raise from the shares
being offered by the Company and any funds received will be immediately available to us. There is no guarantee that we will sell any
of the securities being offered in this offering.
Additionally,
there is no guarantee that this Offering will successfully raise enough funds to further our Company's business plan going forward, and
additional funding avenues may be necessary.
This
primary offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration
statement or (ii) 365 days from the effective date of this Prospectus, unless extended by our Director, Mr. Ryohei Uetaki, for an additional
90 days. We may however, at any time and for any reason terminate the offering.
Currently,
we have 10,797,350 shares of common stock, $0.0001 par value, issued and outstanding.
Currently,
we also have 10,000,000 shares of series A Preferred Stock issued and outstanding. Our shares of Series A Preferred Stock have no voting
rights. Each shareholder of Series A Preferred Stock shall have conversion privileges to other class or series of the Corporation’s
stock. Shares of Series A Preferred stock may be converted on a 1:1 basis into shares of common stock.
Our Chief Executive Officer, Mr. Ryohei Uetaki,
currently owns 100% of the membership interests in SKYPR LLC., a Delaware Limited Liability Company, which beneficially owns 7,000,000
shares of our Common Stock and 10,000,000 shares of our Series A Preferred Stock. Personally, Mr. Ryohei Utaki is the beneficial owner
of 3,000,000 shares of our Common Stock. Mr. Uetaki’s combined voting control of the Company, inclusive of SKYPR LLC, is approximately
92.62% and amounts to a total of 10,000,000 shares of our Common Stock.
We operate through our wholly owned subsidiary,
World Scan Project Corporation, a Japan Corporation (“WSP Japan”). We also share the same business plan as that of our wholly
owned subsidiary. The Company, headquartered in Tokyo, Japan, is an industrial automation equipment manufacturer, designing and developing
robots, drones, Web3 infrastructure, IoT equipment and other related products.
The Company’s website is https://www.world-scan-project.com/.
All
shares being offered pursuant to this Registration Statement will be sold at a fixed price of $12.00 per share for the duration of the
offering. The Company estimates the costs of this offering at about $83,587. Expenses incurred in this offering will be paid for
by the Company.
The
proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company’s account and or
the account of its wholly owned subsidiary; any investor who purchases shares will have no assurance that any monies, beside their own,
will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable
laws.
The
Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, which became law
in April 2012 and will be subject to reduced public company reporting requirements.
THESE
SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS
OF YOUR INVESTMENT. PLEASE REFER TO ‘RISK FACTORS’ BEGINNING ON PAGE 4.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
You
should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized
any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that
is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely
on it.
The
following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to
read the entire prospectus.
TABLE
OF CONTENTS
You
should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities
and Exchange Commission. We have not authorized anyone to provide you with additional information or information different from that
contained in this prospectus filed with the Securities and Exchange Commission. We take no responsibility for, and can provide no assurance
as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our common
stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business,
financial condition, results of operations and prospects may have changed since that date.
Through
August, 2024 all dealers that effect transactions in these securities, whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
The
date of this prospectus is August 8, 2023.
Table
of Contents
PROSPECTUS
SUMMARY
In
this Prospectus, “World Scan Project,” “the Issuer,” the “Company,” “we,” “us,”
and “our,” refer to World Scan Project, Inc., unless the context otherwise requires. Unless otherwise indicated, the term
''fiscal year'' refers to our fiscal year ending October 31st. Unless otherwise indicated, the term ''Common Stock'' refers
to shares of the Company's Common Stock.
This
Prospectus, and any supplement to this Prospectus include “forward-looking statements”. To the extent that the information
presented in this Prospectus discusses financial projections, information or expectations about our business plans, results of operations,
products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements
can be identified by the use of words such as “intends”, “anticipates”, “believes”, “estimates”,
“projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe
that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks
and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others,
the cautionary statements in the “Risk Factors” section and the “Management’s Discussion and Analysis”
section in this Prospectus.
This
summary only highlights selected information contained in greater detail elsewhere in this Prospectus. This summary may not contain all
of the information that you should consider before investing in our common stock. You should carefully read the entire Prospectus, including
“Risk Factors” beginning on Page 4, and the financial statements, before making an investment decision.
The
Company
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 was appointed
as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On October 25, 2019, Ryohei Uetaki 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, each with a par value of $0.0001 per share and 10,000,000 shares of Series A Preferred stock, each with a par value of $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 issued to Mr. Uetaki, based on the par value of $.0001 per share of Common Stock and Series A Preferred
Stock, was valued at $2,000.
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. WSP Japan, headquartered in Tokyo, Japan, is an industrial automation equipment manufacturer, designing and developing
robots, drones, Web3 infrastructure, IoT equipment and other related products. We share the same business plan as that of WSP Japan.
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 to SKYPR LLC, a Delaware Limited Liability Company (referred
to herein as “SKYPR LLC”). 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.
In June, 2023, the Company entered into
subscription agreements with 9 shareholders. Pursuant to these agreements, the Company issued 150,000 shares of Common Stock in
total to these shareholders and received $1,500,000 as aggregate consideration. At the time of purchase the price paid per share by
each shareholder was the equivalent of about 10.00 USD. These shares were sold pursuant to the Company’s effective S-1
Registration Statement deemed effective on May 25, 2023 at 4pm EST. The aforementioned offering has been completed and is no
longer ongoing.
Our principal executive offices are located at 2-18-23,
Nishiwaseda, Shinjuku-Ku, Tokyo, 169-0051, Japan.
-
1 -
Table
of Contents
Our
Offering
We have authorized capital stock consisting of 200,000,000
shares of common stock, $0.0001 par value per share (“Common Stock”) and 200,000,000 shares of preferred stock, $0.0001 par
value per share (“Preferred Stock”). Of our shares of preferred stock, we have authorized 100,000,000 shares of Series A
Preferred Stock, $0.0001 par value per share (“Series A Preferred”). 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 shall have conversion privileges to other class or series of the Corporation’s stock. Shares
of Series A Preferred stock may be converted on a 1:1 basis into shares of common stock.
We have 10,797,350 shares of Common Stock and 10,000,000
shares of Series A Preferred issued and outstanding. Through this offering we will register a total of 1,200,000 shares of common stock.
These shares represent 1,200,000 new shares of common stock to be issued by us.
Currently,
we also have 10,000,000 shares of series A Preferred Stock issued and outstanding. Our shares of Series A Preferred Stock have no voting
rights. Each shareholder of Series A Preferred Stock shall have conversion privileges to other class or series of the Corporation’s
stock. Shares of Series A Preferred stock may be converted on a 1:1 basis into shares of common stock.
Our Chief Executive Officer, Mr. Ryohei Uetaki, currently
owns 100% of the membership interests in SKYPR LLC., a Delaware Limited Liability Company, which beneficially owns 7,000,000 shares of
our Common Stock and 10,000,000 shares of our Series A Preferred Stock. Personally, Mr. Ryohei Utaki is the beneficial owner of 3,000,000
shares of our Common Stock. Mr. Uetaki’s combined voting control of the Company, inclusive of SKYPR LLC, is approximately 92.62%
and amounts to a total of 10,000,000 shares of our Common Stock.
All
shares being offered pursuant to this Registration Statement will be sold at a fixed price of $12.00 per share for the duration of the
offering. The Company estimates the costs of this offering at approximately $83,587. Expenses incurred in this offering will be paid for
by the Company.
The
proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company’s account and or
the account of its wholly owned subsidiary; any investor who purchases shares will have no assurance that any monies, beside their own,
will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable
laws.
*We
will notify investors by filling a post-effective amendment to our registration statement that will be available for public viewing on
the SEC Edgar Database of any such extension of the offering.
|
|
Securities
being offered by the Company |
1,200,000
shares of common stock, at a fixed price of $12.00 offered by us in a direct public offering.
Our offering will terminate upon the earliest of (i) such time as all of the common stock
has been sold pursuant to the registration statement or (ii) 365 days from the effective
date of this prospectus unless extended by our Board of Directors for an additional 90 days.
We may however, at any time and for any reason terminate the offering.
|
|
|
Offering
price per share |
We
will sell the shares at a fixed price of $12.00 per share for the duration of this Offering. |
|
|
Number
of shares of common stock outstanding before the offering of common stock |
10,797,350
common shares are currently issued and outstanding. |
|
|
Number
of shares of common stock outstanding after the offering of common stock |
11,997,350
common shares will be issued and outstanding if we sell all of the shares we are offering. |
|
|
The
minimum number of shares to be
sold in this offering |
None. |
|
|
Market
for the common shares |
The
Common Stock of the Company is quoted on the OTC Markets Group Inc.’s Pink® Open Market (the “OTC Pink”) under
the symbol WDSP. |
|
|
|
The
offering price for the shares will remain constant for the duration of the offering and will be offered at a fixed price of $12.00
per share of common stock. |
-
2 -
Table
of Contents
Use
of Proceeds |
We
intend to use the gross proceeds from this Offering for, but not limited to, further improving upon our existing product lines,
researching and developing new products, paying for future marketing/ related expenses, recruiting and hiring additional staff,
developing sales networks in the USA, Asia, and Europe, and for general working capital. |
|
|
Termination
of the Offering |
This
offering will terminate upon the earlier to occur of (i) 365 days after this registration statement becomes effective with the Securities
and Exchange Commission, or (ii) the date on which all 1,200,000 shares registered hereunder have been sold. We may, at our discretion,
extend the offering for an additional 90 days. At any time and for any reason we may also terminate the offering. |
|
|
Terms
of the Offering |
Mr.
Ryohei Uetaki will sell the 1,200,000 shares of common stock on behalf of the company, upon effectiveness of this registration statement,
on a BEST EFFORTS basis. Mr. Uetaki is Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer
of the Company. |
|
|
Subscriptions: |
All
subscriptions once accepted by us are irrevocable.
|
Registration
Costs |
We
estimate our total offering registration costs to be approximately $83,587.
|
Risk
Factors: |
See
“Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before
deciding to invest in shares of our common stock. |
You
should rely only upon the information contained in this prospectus. We have not authorized anyone to provide you with information different
from that which is contained in this prospectus. We are offering to sell common stock and seeking offers to common stock only in jurisdictions
where offers and sales are permitted.
-
3 -
Table
of Contents
RISK
FACTORS
Please
consider the following risk factors and other information in this prospectus relating to our business before deciding to invest in our
common stock.
This
offering and any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below
and all of the information contained in this prospectus before deciding whether to purchase our common stock. If any of the following
risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock
could decline due to any of these risks, and you may lose all or part of your investment.
We
consider the following to be the material risks for an investor regarding this offering. Our company should be viewed as a high-risk
investment and speculative in nature. An investment in our common stock may result in a complete loss of the invested amount.
An
investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment
in us. You should carefully consider the following risk factors and other information in this report before deciding to become a holder
of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to
a significant extent.
Risks
Relating to Our Company and Our Industry
At
present we rely exclusively on Cellessence Corp. in regards to the sale of cryptocurrency miners/IoT terminals. Should our relationship
with Cellessence Corp., for any reason, terminate, then the results of our operations would be significantly impacted.
Currently,
we rely solely on Cellessence Corp. an unrelated third party, in regards to any and all sales of cryptocurrency miners/IoT terminals
(referred to as “Zexabox”). Although we have no indication, at present, that our relationship with Cellessence Corp. is in
jeopardy, it is conceivable that unforeseen events could lead the alteration, or ultimate cancellation, of our relationship with Cellessence
Corp. It is also possible that for reasons outside of our control, that Cellessence Corp. may cease operations for any number of reasons.
In that event, we can provide no assurances that we could identify, or forge a relationship with, a suitable third party in time to fulfill
our business obligations. In which case, we may be forced to alter, cease, or suspend our business operations entirely in regards to
our cryptocurrency minters/IoT terminals in a worst case scenario.
Our business operations may be materially and
adversely affected by the outbreak of the Coronavirus (“COVID-19”).
An outbreak of respiratory illness caused by the
novel coronavirus, commonly referred as “COVID-19” emerged in late 2019 and has spread globally. The COVID-19 is considered
to be highly contagious and poses a serious public health threat. The World Health Organization labeled the COVID-19 outbreak as a pandemic
on March 11, 2020, given its threat beyond a public health emergency of international concern the organization had declared on January
30, 2020.
The epidemic has resulted in social-distancing restrictions,
travel restrictions, and the temporary closure of stores and facilities during the past few months. The negative impacts of the COVID-19
outbreak on our business may include, but not strictly be limited to:
|
- |
Uncertain
economic conditions may cause clients to refrain from engaging our services. |
|
- |
The operations
of businesses in most industries have been, and could continue to be, negatively impacted by the epidemic, which may in turn adversely
impact their business performance. |
We are unable to accurately predict the impact that
the COVID-19 will have due to various uncertainties, including the ultimate geographic spread of the virus, the severity of the disease,
the duration of the outbreak globally, and effectiveness of the actions that may be taken by governmental authorities. Additionally,
it is possible that we may face similar difficulties from future events, such as this, should there be at any point another global pandemic.
As of the current date, we do not believe that we have been directly impacted by Covid-19. However, economies throughout the world have
been impacted significantly in a vast number of ways, and we cannot state with any level of certainty to what extent we may have been
indirectly impacted by market conditions as a result of the pandemic and/or if the pandemic has forestalled, in any capacity, our growth
to date.
Inflation could pose a risk to our business.
Inflation is an important factor that must be considered
as we move forward. A change in the rate of inflation could influence the profits that we generate from our business. When the rate of
inflation rises, the operational costs of running our company would increase, such as labor costs and inventory costs, affecting our
ability to provide our products at competitive prices. An increase in the rate of inflation would force our customers to search for other
companies offering comparable products in the technology industry, causing us to lose business and revenue. To date, the impact of inflationary
pressures on our operations has been negligible.
The
success of our business relies heavily on brand image, reputation, and product quality.
It
is important that we maintain and increase the image and reputation of our existing brands and products. Concerns about product quality,
even when unsubstantiated, could be harmful to our image and reputation of our brands and products. While we have quality control programs
in place, in the event we experienced an issue with product quality, we may experience recalls or liability in addition to business disruption
which could further negatively impact brand image and reputation and negatively affect our sales. Our brand image and reputation may
also be more difficult to protect due to less oversight and control as a result of the outsourcing of some of our operations. We also
could be exposed to lawsuits relating to product liability or marketing or sales practices. Deterioration to our brand equity may be
difficult to combat or reverse and could have a material effect on our business and financial results.
-
4 -
Table
of Contents
If we are unable to adapt to changes in market
demand, our business will be adversely affected.
We must source new products to adapt to market demand
and to maintain or increase our sales. The success of new products may depend on a number of factors including anticipating and effectively
addressing user preferences and demand, the success of our sales and marketing efforts, timely and successful product development, effective
forecasting and management of product demand. Further, as a number of our products are in the research and development stage, we cannot
forecast with certainty what the demand for these products will be when they are ready for sale, as the market may have changed significantly
by such time. The risk of not meeting our customers’ preferences and or demands may result in lower sales revenue, adversely affecting
our business
Because we operate in a highly competitive industry,
our revenues or profits could be harmed if we are unable to compete effectively.
The technology industry in which we operate is subject
to intense competition. We compete against a wide array of competitors who provide comparable products, conduct similar operations, have
an extensive operating history, have greater revenue and resources, amongst other advantages. If we cannot compete effectively, we may
not generate substantive revenue or profits which could negatively impact the value of our common stock.
The occurrence of any acts of God, war, terrorist
attacks and other emergencies which are beyond our control may have a material adverse effect on our business operations and financial
condition.
Acts of God, war, terrorist attacks and other emergencies
which are beyond our control may have a material adverse effect on the economy and infrastructure in Japan and on the livelihood of the
Japanese population. Our business operations and financial condition may be materially and adversely affected should such events occur.
We cannot give assurance that any acts of God such as floods, earthquakes, drought or any war, terrorist attack or other hostilities
in any part of Japan or even the world, potential or threatened, will not, directly or indirectly, have a material adverse effect on
our business, financial condition and operating results.
If we were to lose the services of Mr. Uetaki
or Mr. Ichikawa, we may not be able to execute our business strategy.
We currently depend on the continued services and
performance of our management team, which is comprised of Ryohei Uetaki and Yasumasa Ichikawa. Their leadership has played an integral
role in our company. The loss of either or both of the members of our management team would disrupt our operations and have an adverse
effect on our ability to grow our business. In addition, competition for senior executives and key personnel in our industry is intense,
and we may be unable to retain our officers and directors or attract and retain new senior executives and key personnel in the future,
in which case our business may be severely disrupted.
If we are unable to hire qualified personnel and
retain or motivate key personnel, we may not be able to grow effectively.
Our future success depends on our continuing ability
to identify, hire, develop, motivate and retain skilled personnel for all areas of our organization. Competition in our industry for
qualified employees is very intense. Our ability to compete effectively depends on our ability to attract new employees and to retain
and motivate our existing employees.
Our Principal executive offices are located in
Japan and our Company has non-U.S. resident Officers and Directors. As such, it may be difficult to pursue legal action against our Company
or Directors.
Due to the fact that our Company’s executive
office is located in Japan and our Company has non-U.S. resident Officers and Directors, the enforceability of civil liability provisions
of U.S. federal securities laws against the company’s Officers and Directors, and company assets located in foreign jurisdictions,
will be limited, if possible at all.
You may have difficulty
enforcing judgments against us.
We are a Delaware corporation
and most of our operations are, and will continue to be, located outside of the United States. We are a Delaware company conducting our
operations in Japan. Almost all of our operations are, and will be, conducted in Japan. In addition, our officers and directors are nationals
and residents of a country other than the United States. The majority of their assets are located outside the United States. As a result,
it may be difficult for you to effect service of process within the United States upon our officers and directors. It may also be difficult
for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and officers
and directors, since they are not a resident in the United States.
A decline in general economic conditions could
have a material adverse effect on our business, financial condition and results of operations.
Our operating and financial performance may be adversely
affected by a variety of factors that influence the general economy. It is our opinion that in the event of an economic slowdown, spending
habits of both consumers and businesses could be adversely affected and we could experience lower net sales than expected on a quarterly
or annual basis which could have a material adverse effect on our business, financial condition and results of operations.
-
5 -
Table of Contents
As a result of increasing drone regulation in
Japan, we have experienced a decrease in demand for our drone products. We cannot forecast with any level of specificity what effect,
if any, future regulatory action taken by the Japanese government in regards to drone ownership may have on our financial results.
Based on the revised Civil Aeronautics Act of 2020,
registration of Unmanned Aircraft has been mandated. Based on the amendment to the Civil Aeronautics Act in 2020, unregistered Unmanned
Aircraft flights will be banned. From June 20, 2022, Unmanned Aircraft will have to be marked with a registration ID to identify them
and be fitted with a Remote ID function. The exclusion for Unmanned Aircraft was changed from “those weighing less than 200g”
to “those weighing less than 100g.” This means that all Unmanned Aircraft of 100g or more are subject to registration. Acceptance
of pre-registration began on December 20, 2021 and mandatory registration of all unmanned aircrafts began on June 20, 2022. The registration
system for Unmanned Aircraft has been established to ensure safety and security in the expanded use of Unmanned Aircraft. While this
regulation does not directly impact our ability to conduct any of our operations, it has placed the burden of registering autonomous
drones onto the consumer, which we believe has had, and will continue to have, a detrimental impact upon our sales.
At present, we are not aware of any specific upcoming
regulatory actions that could have a material effect upon our financial condition. However, as regulations are altered, updated, and
added to there is the possibility that our business results may be further effected and/or that we may have to suspend or cease some,
or all, of our activities related to drone manufacturing. While we do not anticipate that this will occur in the short term, we cannot
state with any certainty that such an event will not occur in the future. Further, if such an event were to occur we cannot state what
effect this may have upon both the demand for our drones, and out ability to manufacture drones in the future.
We expect our quarterly financial results to fluctuate.
We expect our revenue and operating results to vary
significantly from quarter to quarter due to a number of factors, including changes in:
• General economic conditions;
• Our sales numbers;
• Our ability to retain, grow our business and
attract new suppliers/clients;
• Administrative costs;
• Manufacturing costs;
• Cost of sensors provided to the manufacturer
to be included in our drones;
• Advertising and other marketing costs.
As a result of the variability of these and other
factors, our operating results in future quarters may be below the expectations of public market analysts and investors.
The recently enacted JOBS Act will allow the Company
to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount
of information provided in reports filed with the SEC.
The recently enacted JOBS Act is intended to reduce
the regulatory burden on “emerging growth companies”. The Company meets the definition of an “emerging growth company”
and so long as it qualifies as an “emerging growth company,” it will, among other things:
-be exempt from the provisions of Section 404(b)
of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness
of its internal control over financial reporting;
-be exempt from the "say on pay” provisions
(requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute”
provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection
with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank
Act”) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;
-be permitted to omit the detailed compensation discussion
and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and instead provide a reduced level of disclosure concerning executive compensation; and
-be exempt from any rules that may be adopted by
the Public Company Accounting Oversight Board (the “PCAOB”) requiring mandatory audit firm rotation or a supplement to the
auditor’s report on the financial statements.
Although the Company is still evaluating the JOBS
Act, it currently intends to take advantage of all of the reduced regulatory and reporting requirements that will be available to it
so long as it qualifies as an “emerging growth company”. The Company has elected not to opt out of the extension of time
to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this
means that the Company's independent registered public accounting firm will not be required to provide an attestation report on the effectiveness
of the Company's internal control over financial reporting so long as it qualifies as an “emerging growth company”, which
may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long
as it qualifies as an “emerging growth company”, the Company may elect not to provide certain information, including certain
financial information and certain information regarding compensation of executive officers, which would otherwise have been required
to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As
a result, investor confidence in the Company and the market price of its common stock may be adversely affected.
Notwithstanding the above, we are also currently
a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned
subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues
of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting
company”, at such time are we cease being an “emerging growth company”, the disclosure we will be required to provide
in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth
company” or a “smaller reporting company”. Specifically, similar to “emerging growth companies”, “smaller
reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions
of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report
on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC
filings, including, among other things, being required to provide only two years of audited financial statements in annual reports. Decreased
disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company”
may make it harder for investors to analyze the Company’s results of operations and financial prospects.
-
6 -
Table
of Contents
We are an “emerging growth company”
under the JOBS Act of 2012, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will
make our common stock less attractive to investors.
We are an “emerging growth company,”
as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to
other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote
on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors
will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive
as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
In addition, Section 107 of the JOBS Act also provides
that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing
to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial
statements may not be comparable to those of companies that comply with public company effective dates.
We will remain an “emerging growth company”
for up to five years, although we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in
non-convertible debt in a three year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million.
We may be susceptible to an adverse effect on
our business due to the current worldwide economic crisis.
A decline in general economic conditions could lead
to reduced consumer traffic and could negatively impact our business operations and financial condition. A decline of this nature could
have a material adverse effect on our business, financial condition and results of operations. Our operating and financial performance
may be adversely affected by a variety of factors that influence the general economy. Consumer spending habits are affected by, among
other things, prevailing economic conditions, levels of unemployment, salaries and wage rates, prevailing interest rates, income
tax rates and policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns
may be influenced by consumers’ disposable income. In the event of an economic slowdown, consumer spending habits could be adversely
affected and we could experience lower net sales than expected on a quarterly or annual basis which could have a material adverse effect
on our business, financial condition and results of operations. Our market and sales results could be greatly impacted by the current
worldwide economic crisis, making it difficult to reach sales goals and thus generate significant revenue.
We do not currently have a fully developed marketing
plan, and as such we may not generate as much revenue as we anticipate.
Presently, we do not have a definitive marketing
plan to acquire clients. It will take us time to develop a concrete marketing plan. We currently, and in the future may continue to,
rely on third parties to market various products and we rely on purchases by repeat customers.
Due to the fact that we are a publicly reporting
company we will continue to incur significant costs in staying current with reporting requirements. Our management will be required to
devote substantial time to compliance initiatives. Additionally, the lack of an internal audit group may result in material misstatements
to our financial statements and ability to provide accurate financial information to our shareholders.
Our management and other personnel will need to devote
a substantial amount of time to compliance initiatives to maintain reporting status. Moreover, these rules and regulations, which are
necessary to remain as an SEC reporting Company, will be costly because an external third party consultant(s), attorney, or firm, may
have to assist us in following the applicable rules and regulations for each filing on behalf of the company.
We currently do not have an internal audit group,
and we may eventually need to hire additional accounting and financial staff with appropriate public company experience and technical
accounting knowledge to have effective internal controls for financial reporting. Additionally, due to the fact that our officers and
director have limited experience as an officer or director of a reporting company, such lack of experience may impair our ability to
maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements
to our financial statements and an inability to provide accurate financial information to our stockholders.
Moreover, if we are not able to comply with the requirements
or regulations as an SEC reporting company, in any regard, we could be subject to sanctions or investigations by the SEC or other regulatory
authorities, which would require additional financial and management resources.
Due to the fact that a small number of existing
shareholders own a large percentage of the Company’s voting shares, future investors will have minimal influence over shareholder
decisions.
Existing management has significant share ownership
in the Company and will retain control of the Company in the future. As a result of such ownership concentration, our Chief Executive
Officer, Ryohei Uetaki will have significant influence over the management and affairs of the Company and its business. Mr. Uetaki will
also exert considerable, ongoing influence over matters subject to shareholder approval, including the election of directors and significant
corporate transactions, such as a merger, sale of assets or other business combination or sale of the Company. This concentration of
ownership may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover or
other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain
control of the Company, even if such a transaction would benefit other shareholders.
-
7 -
Table
of Contents
Risks
Relating to the Company’s Securities
We do not intend to pay dividends on our common stock.
We have no intention to declare or pay any cash dividend
on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
The costs to meet our reporting and other requirements
as a public company subject to the Exchange Act of 1934 will be substantial, which may result in us having insufficient funds to expand
our business or even to meet routine business obligations. We will also be subject to Section 15(d) of the Exchange Act which necessitates,
amongst other things, that we file quarterly and annual reports with the Securities and Exchange Commission.
As a public entity, subject to the reporting requirements
of the Exchange Act of 1934, we will continue to incur ongoing expenses associated with professional fees for accounting, legal and a
host of other expenses for annual reports and proxy statements. We estimate that these costs may reach up to approximately $80,000 per
year for the next few years and will be higher if our business volume and activity increases. As a result, we may not have sufficient
funds to grow our operations.
We will be subject to Section 15(d) of the Exchange
Act, which provides that any issuer who registers a class of securities under the Securities Act of 1933, as amended (the Securities
Act) shall become subject to periodic reporting requirements under Section 13(a) (15 USCS § 78m) of the Exchange Act, including
annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. However, Section 15(d) does not trigger
all Exchange Act obligations. For example, reports under Section 16 (15 USCS § 78p) or Section 13(d) or obligations with respect
to proxies are not triggered by the application of Section 15(d) alone. As mentioned above, we will incur costs to maintain compliance
with our reporting obligations, and if we fail to do so then we may be subject to a host of potential legal consequences, and we could
become unable to seek quotation via the OTC Marketplace.
State Securities Laws may limit secondary trading,
which may restrict the states in which and conditions under which you can sell Shares.
Secondary trading in our common stock may not be
possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation
that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail
to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the
common stock cannot be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states
refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted.
There may be future sales of our securities
or other dilution of our equity, which may adversely affect the market price of our common stock.
We are generally not restricted from issuing additional
common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common
stock. The market price of our common stock could decline as a result of sales of common stock or securities that are convertible into
or exchangeable for, or that represent the right to receive, common stock after this offering or the perception that such sales could
occur.
A large number of shares issued in this offering may be sold in the market following this offering, which may depress the market price
of our common stock.
A large number of shares issued in this offering
may be sold in the market following this offering, which may depress the market price of our common stock. Sales of a substantial number
of shares of our common stock in the public market following this offering could cause the market price of our common stock to decline.
If there are more shares of common stock offered for sale than buyers are willing to purchase, then the market price of our common stock
may decline to a market price at which buyers are willing to purchase the offered shares of common stock and sellers remain willing to
sell the shares. All of the securities issued in the offering will be freely tradable without restriction or further registration under
the Securities Act.
We may, in the future, issue additional shares of our common stock,
which may have a dilutive effect on our stockholders.
Our Certificate of Incorporation authorizes the issuance
of 200,000,000 shares of common stock, of which 10,797,350 shares are issued and outstanding as of the date of this filing. The future
issuance of our common shares may result in substantial dilution in the percentage of our common shares held by our then existing stockholders.
We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions
or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect
on any trading market for our common stock.
-
8 -
Table
of Contents
Risks
Relating to this Offering
Investors cannot withdraw funds once invested
and will not receive a refund.
Investors do not have the right to withdraw invested
funds. Subscription payments will be paid to World Scan Project, Inc. and/or World Scan Project Corporation, held in our/their corporate
bank account if the Subscription Agreements are in good order and the Company accepts the investor’s investment. Therefore, once
an investment is made, investors will not have the use or right to return of such funds.
There is the risk that investors may lose their
investment.
If a public trading market does not develop, purchasers
of the shares of common stock may have difficulty selling or be unable to sell their securities, in the worst case scenario this could
render their shares effectively worthless and result in a partial or complete loss of their investment.
If an active, liquid trading market for our common
stock does not develop, you may not be able to sell your shares quickly or at or above the initial offering price.
There has not been an active and liquid public market
for our common stock. An active and liquid trading market for our common stock may not develop or be sustained following this offering.
The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider
reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our
ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies
by using our shares as consideration. You may not be able to sell your shares quickly or at or above the initial offering price. The
offering price for our common stock pursuant to this prospectus was arbitrarily determined by management. This price may not be indicative
of the price at which our common stock will trade after this offering, and our common stock could trade below the initial public offering
price.
Our stock price may be volatile or may decline
regardless of our operating performance, and you may not be able to resell your shares at, or above, the initial public offering price
and the price of our common stock may fluctuate significantly.
After this offering, the market price for
our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, the market price of
our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:
- Changes in general economic or market conditions
or trends in our industry or the economy as a whole and, in particular, in the leisure travel environment;
- Changes in key personnel;
- Entry into new geographic markets;
- Actions and announcements by us or our competitors
or significant acquisitions, divestitures, strategic partnerships, joint ventures or capital commitments;
- Fluctuations in quarterly operating results,
as well as differences between our actual financial and operating results and those expected by investors;
- The public’s response to press releases
or other public announcements by us or third parties, including our filings with the SEC;
- Announcements relating to litigation;
- Guidance, if any, that we provide to the
public, any changes in this guidance or our failure to meet this guidance;
- Changes in financial estimates or ratings
by any securities analysts who follow our common stock, our failure to meet these estimates or failure of those analysts to initiate
or maintain coverage of our common stock;
- The development and sustainability of an
active trading market for our common stock;
- Future sales of our common stock by our officers,
directors and significant stockholders; and
- Changes in accounting principles.
The trading in our shares will be regulated by
the Securities and Exchange Commission Rule 15G-9 which established the definition of a “Penny Stock.”
The shares being offered are defined as a penny stock
under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and rules of the Commission. The Exchange
Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our
securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $4,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000 jointly with spouse), or in transactions
not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker dealer must make certain mandated disclosures
in penny stock transactions, including the actual sale or purchase price and actual bid and offer quotations, the compensation to be
received by the broker-dealer and certain associated persons, and must deliver certain disclosures required by the Commission. Consequently,
the penny stock rules may make it difficult for you to resell any shares you may purchase.
FINRA sales requirements may limit a stockholder’s
ability to buy and sell our stock.
FINRA has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.
Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts
to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for certain
customers. FINRA requirements will likely make it more difficult for broker-dealers to recommend that their customers buy our common
stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may
be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock.
-
9 -
Table
of Contents
We will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.
We will incur significant
legal, accounting and other expenses, including costs associated with public company reporting requirements. We will also incur costs
associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as new rules implemented
by the SEC and the OTC Markets. Our executive officers and other personnel will need to devote substantial time to these rules and regulations.
These rules and regulations are expected to increase our legal and financial compliance costs and to make some other activities more
time-consuming and costly. These rules and regulations may also make it difficult and expensive for us to obtain directors' and officers'
liability insurance. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of
directors or as executive officers of the Company, which may adversely affect investor confidence and could cause our business or stock
price to suffer.
Financial Industry Regulatory Authority (“FINRA”)
sales practice requirements may also limit your ability to buy and sell our common stock, which could depress the price of our shares.
FINRA rules require broker-dealers to have reasonable
grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending
speculative low-priced securities to their non-institutional members, broker-dealers must make reasonable efforts to obtain information
about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these
rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some
Members. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that their Members buy our common stock, which
may limit your ability to buy and sell our shares, have an adverse effect on the market for our shares, and thereby depress our share
price.
In the event that our shares are traded, they
may trade under $5.00 per share and thus will be a penny stock. Trading in penny stocks has many restrictions and these restrictions
could severely affect the price and liquidity of our shares.
In the event that our shares are traded below $5.00
per share, our stock would be known as a “penny stock”, which is subject to various regulations involving disclosures to
be given to you prior to the purchase of any penny stock. The U.S. Securities and Exchange Commission (the “SEC”) has adopted
regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per
share, subject to certain exceptions. Depending on market fluctuations, our common stock could be considered to be a “penny stock”.
A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons
other than established Members and accredited investors. For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he must receive the purchaser’s written consent to
the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the “penny
stock” rules may restrict the ability of broker/dealers to sell our securities, and may negatively affect the ability of holders
of shares of our common stock to resell them. These disclosures require you to acknowledge that you understand the risks associated with
buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks are low priced securities that do not have
a very high trading volume. Consequently, the price of the stock is often volatile and you may not be able to buy or sell the stock when
you want to.
Investing in our company is highly speculative
and could result in the entire loss of your investment.
Purchasing the offered shares is highly speculative
and involves significant risk. The offered shares should not be purchased by any person who cannot afford to lose their entire investment.
Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their entire
investment. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits carefully
and consult with their attorney, business and/or investment advisor.
Because we have 200,000,000 authorized shares
of common stock, management could issue additional shares, diluting the current shareholders’ equity.
We are authorized to issue an aggregate of 200,000,000
shares of common stock, par value $0.0001 per share, of which only 10,797,350 are currently issued and outstanding. Our management could,
without the consent of the existing shareholders, issue substantially more shares, causing a large dilution in the equity position of
our current shareholders. Additionally, large share issuances would generally have a negative impact on our share price. It is possible
that, due to additional share issuance, you could lose a substantial amount, or all, of your investment.
-
10 -
Table
of Contents
The
Company is electing to not opt out of JOBS Act extended accounting transition period. This may make its financial statements more difficult
to compare to other companies.
Pursuant
to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new
or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition
period, which means that when a standard is issued or revised and it has different application dates for public or private companies,
the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company’s
financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.
Emerging
Growth Company
The
recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Company meets the definition
of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:
|
|
· |
be
temporarily exempted from the internal control audit requirements Section 404(b) of the Sarbanes-Oxley Act; |
|
|
· |
be
temporarily exempted from various existing and forthcoming executive compensation-related disclosures, for example: “say-on-pay”,
“pay-for-performance”, and “CEO pay ratio”; |
|
|
· |
be
temporarily exempted from any rules that might be adopted by the Public Company Accounting Oversight Board requiring mandatory audit
firm rotation or supplemental auditor discussion and analysis reporting; |
|
|
· |
be
temporarily exempted from having to solicit advisory say-on-pay, say-on-frequency and say-on-golden-parachute shareholder votes on
executive compensation under Section 14A of the Securities Exchange Act of 1934, as amended; |
|
|
· |
be
permitted to comply with the SEC’s detailed executive compensation disclosure requirements on the same basis as a smaller reporting
company; and, |
|
|
· |
be
permitted to adopt any new or revised accounting standards using the same timeframe as private companies (if the standard applies
to private companies). |
Our
company will continue to be an emerging growth company until the earliest of:
|
|
· |
the
last day of the fiscal year during which we have annual total gross revenues of $1.07 billion or more; |
|
|
· |
the
last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered
under the Securities Act; |
|
|
· |
the
date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or |
|
|
· |
the
date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange
Act Rule 12b-2). |
-
11 -
Table
of Contents
SUMMARY
OF OUR FINANCIAL INFORMATION
The
following table sets forth selected financial information, which should be read in conjunction with the information set forth in the
“Management’s Discussion and Analysis” section and the accompanying financial statements and related notes included
elsewhere in this Prospectus.
WORLD SCAN PROJECT, INC.
CONSOLIDATED BALANCE SHEETS
|
|
October
31, 2022 |
|
October
31, 2021 |
ASSETS |
|
|
|
|
Current
Assets |
|
|
|
|
Cash
and cash equivalents |
$ |
5,836,065 |
$ |
2,583,218 |
Accounts
receivable, trade |
|
1,847,068 |
|
4,724 |
Other
receivables, current |
|
489 |
|
16,775 |
Advance
payments and prepaid expenses |
|
16,389,562 |
|
3,035,135 |
Inventories |
|
403 |
|
47,994 |
TOTAL
CURRENT ASSETS |
|
24,073,587 |
|
5,687,846 |
Non-current
assets |
|
|
|
|
Furniture,
fixtures and equipment, net |
|
280,024 |
|
161,390 |
Lease
asset long term |
|
705,007 |
|
406,816 |
Long
term prepaid expenses and security deposits, net |
|
112,145 |
|
230,278 |
Deferred
tax assets |
|
307,438 |
|
- |
Other
intangible assets, non-current |
|
19,960 |
|
- |
TOTAL
NON-CURRENT ASSETS |
|
1,424,574 |
|
798,484 |
|
|
|
|
|
TOTAL
ASSETS |
$ |
25,498,161 |
$ |
6,486,330 |
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accrued
expenses and other payables |
$ |
2,453,668 |
$ |
261,809 |
Accounts
payable - related party |
|
18,517 |
|
- |
Income
taxes payable |
|
3,329,572 |
|
325,693 |
Consumption
tax payable |
|
941,483 |
|
170,294 |
Short-term
lease liability |
|
231,041 |
|
219,892 |
Deferred
revenue |
|
7,401,171 |
|
1,476,492 |
Due
to related party |
|
458 |
|
455 |
TOTAL
CURRENT LIABILITIES |
|
14,375,910 |
|
2,454,635 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
|
Lease
liability long term |
|
520,002 |
|
219,474 |
|
|
|
|
|
TOTAL
LIABILITIES |
$ |
14,895,912 |
$ |
2,674,109 |
|
|
|
|
|
Shareholders'
Equity |
|
|
|
|
Preferred
stock ($0.0001 par value, 200,000,000 shares authorized; 10,000,000 shares issued and outstanding as of
October 31, 2022 and 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
October 31, 2022 and 2021) |
|
1,065 |
|
1,065 |
Additional
paid-in capital |
|
323,990 |
|
323,990 |
Accumulated
earnings |
|
12,555,142 |
|
3,646,360 |
Accumulated
other comprehensive income |
|
(2,278,948) |
|
(160,194) |
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY |
$ |
10,602,249 |
$ |
3,812,221 |
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
25,498,161 |
$ |
6,486,330 |
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
|
|
|
Year
Ended |
|
Year
Ended |
|
|
|
October
31, 2022 |
|
October
31, 2021 |
|
|
|
|
|
|
Revenues |
|
|
|
|
Revenues |
$ |
14,515,175 |
$ |
11,813,816 |
Revenues
– related party |
|
7,879 |
|
- |
Revenues,
net |
|
14,917,287 |
|
- |
Total
Revenues |
|
29,440,341 |
|
11,813,816 |
Cost
of revenues |
|
11,319,348 |
|
5,019,811 |
Gross
profit |
|
18,120,993 |
|
6,794,005 |
|
|
|
|
|
|
OPERATING
EXPENSE |
|
|
|
|
|
General
and administrative expenses |
|
4,308,251 |
|
3,462,056 |
Total
operating Expenses |
|
4,308,251 |
|
3,462,056 |
|
|
|
|
|
|
Income
from operations |
|
13,812,742 |
|
3,331,840 |
|
|
|
|
|
|
Other
income (expense) |
|
|
|
|
|
Other
income |
|
20,918 |
|
333,843 |
|
Interest
Expense |
|
- |
|
(3) |
Total
other income (expense) |
|
21,918 |
|
333,840 |
|
|
|
|
|
|
Net
income before tax |
|
13,833,660 |
|
3,665,789 |
Income
tax expense |
|
4,924,878 |
|
1,333,338 |
NET
INCOME (LOSS) |
$ |
8,908,782 |
$ |
2,332,451 |
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
Foreign
currency translation adjustment |
$ |
(2,118,754) |
$ |
(242,488) |
|
|
|
|
|
|
TOTAL
COMPREHENSIVE INCOME (LOSS) |
$ |
6, 790,028 |
$ |
2,089,963 |
|
|
|
|
|
|
Income
per common share |
|
|
|
|
|
Basic |
$ |
0.84 |
$ |
0.22 |
|
Diluted |
$ |
0.43 |
$ |
0.11 |
|
|
|
|
|
|
Weighted
average common shares outstanding |
|
|
|
|
|
Basic |
|
10,647,350 |
|
10,647,350 |
|
Diluted |
|
20,647,350 |
|
20,647,350 |
-12-
Table of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED BALANCE SHEETS
|
|
April 30, 2023
(Unaudited) |
|
October 31, 2022 |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
$ |
2,381,921 |
$ |
5,836,065 |
Accounts receivable, trade |
|
27,585 |
|
1,847,068 |
Other receivables, current |
|
668 |
|
489 |
Advance payments and prepaid expenses |
|
31,477,156 |
|
16,389,562 |
Inventories |
|
446 |
|
403 |
TOTAL CURRENT ASSETS |
|
33,887,776 |
|
24,073,587 |
Non-current assets |
|
|
|
|
Furniture, fixtures and equipment, net |
|
312,347 |
|
280,024 |
Lease asset long term |
|
660,055 |
|
705,007 |
Long term prepaid expenses and security deposits, net |
|
96,372 |
|
112,145 |
Deferred tax assets |
|
650,604 |
|
307,438 |
Other intangible assets, non-current |
|
- |
|
19,960 |
TOTAL NON-CURRENT ASSETS |
|
1,719,378 |
|
1,424,574 |
|
|
|
|
|
TOTAL ASSETS |
$ |
35,607,154 |
$ |
25,498,161 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accrued expenses and other payables |
$ |
6,674,514 |
$ |
2,453,668 |
Accounts payable - related party |
|
20,479 |
|
18,517 |
Income taxes payable |
|
7,079,847 |
|
3,329,572 |
Consumption tax payable |
|
1,870,816 |
|
941,483 |
Short-term lease liability |
|
175,604 |
|
231,041 |
Deferred revenue |
|
333,721 |
|
7,401,171 |
Due to related party |
|
458 |
|
458 |
TOTAL CURRENT LIABILITIES |
|
16,155,439 |
|
14,375,910 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
Lease liability long term |
|
525,384 |
|
520,002 |
|
|
|
|
|
TOTAL LIABILITIES |
$ |
16,680,823 |
$ |
14,895,912 |
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
Preferred stock ($0.0001 par value, 200,000,000 shares authorized; 10,000,000 shares issued and outstanding as of April 30, 2023 and October 31, 2022) |
$ |
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, 2023 and October 31, 2022) |
|
1,065 |
|
1,065 |
Additional paid-in capital |
|
323,990 |
|
323,990 |
Accumulated earnings |
|
19,703,898 |
|
12,555,142 |
Accumulated other comprehensive income |
|
(1,103,622) |
|
(2,278,948) |
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
$ |
18,926,331 |
$ |
10,602,249 |
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
35,607,154 |
$ |
25,498,161 |
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(UNAUDITED)
|
|
For the Three Months
Ended April 30, 2023 |
|
For the Three Months
Ended April 30, 2022 |
|
For the Six Months
Ended April 30, 2023 |
|
For the Six Months
Ended April 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
734 |
$ |
8,266,406 |
$ |
5,991 |
$ |
13,196,434 |
|
Revenues, net |
|
15,517,197 |
|
- |
|
23,255,104 |
|
- |
|
Total Revenues |
|
15,517,931 |
|
8,266,406 |
|
23,261,095 |
|
13,196,434 |
|
Cost of revenues |
|
628 |
|
3,680,443 |
|
4,120 |
|
6,064,436 |
|
Gross profit |
$ |
15,517,303 |
$ |
4,585,963 |
$ |
23,256,975 |
$ |
7,131,998 |
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSE |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
8,091,044 |
|
1.161,020 |
|
12,200,702 |
|
2,116,257 |
|
Total operating expenses |
|
8,091,044 |
|
1,161,020 |
|
12,200,702 |
|
2,116,257 |
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
7,426,259 |
|
3,424,943 |
|
11,056,273 |
|
5,015,741 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
Other income |
|
10 |
|
7,727 |
|
10 |
|
27,190 |
|
Other expense |
|
(31,939) |
|
- |
|
(31,939) |
|
- |
|
Total other income (expenses) |
|
(31,929) |
|
7,727 |
|
(31,929) |
|
27,190 |
|
|
|
|
|
|
|
|
|
|
|
Net income before tax |
|
7,394,330 |
|
3,432,670 |
|
11,024,344 |
|
5,042,931 |
|
Income tax expense |
|
2,267,815 |
|
1,285,389 |
|
3,875,588 |
|
1,957,109 |
|
NET INCOME |
$ |
5,126,515 |
$ |
2,147,281 |
$ |
7,148,756 |
$ |
3,085,822 |
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
$ |
(356,592 ) |
$ |
(672,155) |
$ |
1,175,326 |
$ |
(729,598) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME (LOSS) |
$ |
4,769,923 |
$ |
1,475,126 |
$ |
8,324,082 |
$ |
2,356,224 |
|
|
|
|
|
|
|
|
|
|
|
Income per common share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
$ |
0.20 |
$ |
.67 |
$ |
.29 |
|
Diluted |
$ |
0.25 |
$ |
0.10 |
$ |
.35 |
$ |
.15 |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
-13
-
Table
of Contents
MANAGEMENT’S
DISCUSSION AND ANALYSIS
You
should read the following “Management’s Discussion and Analysis” in conjunction with the section inclusive of our financial
statements and the related notes provided elsewhere in this prospectus. This discussion contains forward-looking statements that involve
risks and uncertainties about our business and operations. Our actual results and the timing of selected events may differ materially
from those anticipated in these forward-looking statements as a result of various factors, including those we describe under “Risk
Factors”, beginning above on page 4.
We
make forward-looking statements in this Registration Statement, in other materials we file with the Securities and Exchange Commission
(the “SEC”) or otherwise release to the public. In addition, our management might make forward-looking statements orally
to analysts, investors, the media and others. Statements concerning our future operations, prospects, strategies, financial condition,
future economic performance (including growth and earnings) and demand for our products, and other statements of our plans, beliefs,
or expectations, including the statements contained in this section, regarding our future plans, strategies and expectations are forward-looking
statements. In some cases, these statements are identifiable through the use of words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “plan,” “project,” “target,”
“can,” “could,” “may,” “should,” “will,” “would” and similar
expressions. We intend such forward-looking statements to be covered by the safe harbor provisions contained in Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”) and in Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
Overview
World
Scan Project, Inc., a Delaware corporation (“the Company”) was incorporated under the laws of the State of Delaware on October
25, 2019.
We operate through our wholly owned subsidiary, World
Scan Project Corporation, a Japanese Company. The Company is an industrial automation equipment manufacturer, designing/developing robots,
drones, Web3 infrastructure, IoT equipment and other related products.
Results of Operations
Cash Balance
As of April 30, 2023, the Company recorded cash and
cash equivalents of $2,381,921, an increase of $468,434 as compared to $1,913,487 as of April 30, 2022. The Company’s increased
liquidity is derived from increased sales, particularly sales of crypto miners.
Our cash and cash equivalents were $5,836,065 as
of October 31, 2022. The decrease in our cash balance as of October 31, 2022, compared to April 30, 2023 is attributable to an increase
in operating expenses.
Currently, our cash balance is sufficient to fund
our current level of business operations without the need for additional funding, although we believe that we may need additional funding
to further our business agenda.
Assets
Our total assets, as of April 30, 2023, were $35,607,154
and our total assets, as of October 31, 2022, were $25,498,161. For both periods, our total assets were primarily comprised of both cash
and cash equivalents, and advance payments and prepaid expenses. It should be noted that we hold nominal inventory as our products are
primarily manufactured by third parties, held in their facilities, and then sold to consumers. We do not take physical possession of
the majority of our products.
Liabilities
Our total liabilities, as of April 30, 2023, were
$16,680,823 and our total liabilities, as of October 31, 2022, were $14,895,912. Our liabilities were primarily comprised of accrued
expenses and other payables, income taxes payable, and deferred revenue. As of October 31, 2022, our deferred revenue was significantly
higher than our deferred revenue as of April 30, 2023, because we had a large number of crypto miners that had been ordered, but not
yet been delivered to customers.
Revenues
We recorded total revenues of $14,917,287 for the
fiscal year ended October 31, 2022. We recorded total revenues of $0 for the fiscal year ended October 31, 2021. The cost of revenues
for the fiscal year ended October 31, 2022 was $11,319,348, whereas for the fiscal year ended October 31, 2021, our cost of revenues
was $5,019,811. Our gross profit for the year ended October 31, 2022 was $18,120,993 compared to $6,794,005 for the fiscal year ended
October 31, 2021. The increase in gross profit year over year is attributable to the fact that we began selling "crypto miners", i.e.
computer hardware used to collect digital currency.
We recorded total revenues of $15,517,931 for the
three months ended April 30, 2023. We recorded total revenues of $8,266,406 for the three months ended April 30, 2022. We recorded revenues
of $23,261,095 for the six months ended April 30, 2023. We recorded revenues of $13,196,434 for the six months ended April 30, 2022.
For the three and six months ended April 30, 2023,
revenues, comprised of the sale of crypto miners (net) were $15,517,197 and $23,255,104, respectively. For the three and six months ended
April 30, 2022 it was $0. The aforementioned variance is due to the fact that, for the three and six months ended April 30, 2022, we
did not record any revenue from crypto miners. The Company acts as an agent in facilitating the sales of crypto miners and does not hold
physical inventory. The miners are produced by a third party manufacturer. For the three and six months ended April 30, 2023, we had
product sales of only $734 and $5,991, respectively, compared to $8,266,406 and $13,196,434, respectively, for the three and six months
ended April 30, 2022. Our product sales do not include crypto miners.
This significant decrease is due to the fact that,
for the three and six months ended April 30, 2023, we had realized fewer drone sales due to changes in Japanese regulations pertinent
to drone registration as consumers now need to register drones that they purchase with the appropriate Japanese authorities, and pay
a corresponding fee in order to do so. Although these changing regulations do not have a direct impact on the products we offer, we believe
that consumer sentiment has still been effected by the increased registration requirements. The cost of revenues was also significantly
impacted due to the decrease in drone sales.
General and Administrative Expenses
Our general and administrative expenses, for the
three and six months ended April 30, 2023, were $8,091,044 and $12,200,702, respectively, and, for the three and six months ended April
30, 2022, our general and administrative expenses were $1,161,02 and $2,116,257, respectively.
Our general and administrative expenses, for the
fiscal years ended October 30, 2022 and October 30, 2021, were $4,308,251 and $3,462,056, respectively.
Net Income
Our net income, for the three and six months ended
April 30, 2023, was $5,126,515 and $7,148,756, respectively, and, for the three and six months ended April 30, 2022, our net income was
$2,147,281 and $3,085,822, respectively.
Despite the decrease in drone sales that we experienced
for the six months ended April 30, 2023, the sale of crypto miners during this period provided a significant increase to our total revenue,
which in turn resulted in a greater net income for the six months ended April 30, 2023.
Our net income for the fiscal years ended
October 30, 2022 and October 30, 2021, were $8,908,782 and $2,089,963, respectively. The increase in net income year over year is
attributable to the fact that we began selling "crypto miners", i.e. computer hardware used to collect digital currency.
Liquidity and Capital Resources
Cash Provided by Operating Activities
Net cash used in operating activities was $(4,071,264)
for the six months ended April 30, 2023, and net cash used in operating activities was $(175,100) for the six months ended April 31,
2022. The variance is primarily the result of greater advance payments and other prepaid expenses, and deferred revenue, for the six
months ended April 30, 2023.
Net cash used in operating activities was
$4,605,591 for the fiscal year ended October 30, 2022, and net cash used in operating activities was $2,032,197 for the fiscal year
ended October 30, 2021. The variance is primarily the result of greater income tax payable and accrued expenses and other payables
during the fiscal year ended October 31, 2022.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
-
14 -
Table
of Contents
INDUSTRY
OVERVIEW
This
section includes market and industry data that we have developed from publicly available information, various industry publications and
other published industry sources and our internal data and estimates. Although we believe the publications and reports are reliable,
we have not independently verified the data. Our internal data, estimates and forecasts are based upon information obtained from trade
and business organizations and other contacts in the market in which we operate and our management’s understanding of industry
conditions.
As
of the date of the preparation of this section, these and other independent government and trade publications cited herein are publicly
available on the Internet without charge. Upon request, the Company will also provide copies of such sources cited herein.
Industry Overview
World Scan Project, Inc. (herein referred
as the “Company”) is an industrial automaton equipment manufacturer, focusing on the design and development of robots, drones,
Web3 infrastructure, IoT equipment, and other related products. We consider ourselves to be operating in the technology industry, in
broad terms, but we will discuss below the specific subcategories of this industry which we believe most closely pertain to our operations
in Japan.
The industrial robot market is expected to
expand both in Japan and overseas in the future. Industrial robots are still used by many companies today, but in the future, industrial
robot technology will become more sophisticated with FA (factory automation), IoT, and AI, and it will be possible to further improve
efficiency and quality. The size of the domestic robot market in Japan was approximately 219 billion USD in 2020, and is projected to
reach approximately 404 billion USD in 2025, with additional growth anticipated in the future. (1)
The current year, 2022, has been a year of
big moves for the drone industry. In December 2022, new rules regarding drones under the Civil Aeronautics Act will come into effect,
and full-fledged flight beyond visual line of sight (level 4 flight) in manned areas (above third parties) will be implemented for various
purposes including logistics. is now possible. With the lifting of the ban on level 4 flights, it is expected that the use of drones
will advance, and at the same time, new solutions and services that utilize drones will be created. The market size of the drone business
in Japan in 2022 is estimated to be 308.6 billion yen, an increase of 77.8 billion yen from 230.8 billion yen in 2021 (up 33.7% from
the previous year). It is expected to expand to 382.8 billion yen in 2023, up 24.0% from the previous year, and reach 934.0 billion yen
in 2028. Converting this to an average annual growth rate (2022-2028), it is anticipated to increase by 20.3% annually. (2)
“Currently, the domestic metaverse market
is in its infancy, but Yano Research Institute predicts that the corporate market will take precedence, and after business-use services
become widespread, it will penetrate the consumer market.” According to a survey taken by Yano Research Institute, the size of
the domestic metaverse market in 2021 is estimated at 74.4 billion yen, and is expected to grow significantly to 182.5 billion yen in
2022, and is estimated to grow to approximately 325.5 billion yen in 2023. This is due to the rapid increase in demand for services that
can be replaced by virtual spaces, such as internal meetings, virtual exhibitions for corporations, and online seminars, due to the impact
of infectious diseases. (3)
The company believes that its diverse range
of products, encompassing various aspects of the larger technology industry, in Japan, have the ability to penetrate into this fast growing
industry and will realize increasing demand year by year, as our development of new and innovative products continues.
Sources:
(1) https://robokaru.jp/fundamental-knowledge/industrial-robot-market-size/
(2) https://research.impress.co.jp/topics/list/drone/664
(3) https://webtan.impress.co.jp/n/2022/09/30/43385
-
15 -
Table
of Contents
FORWARD
LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve risk and uncertainties. We use words such as “anticipate”, “believe”,
“plan”, “expect”, “future”, “intend”, and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of management
as of the date of this filing. Our actual results could differ materially from those anticipated in these forward-looking statements
for many reasons, including the risks faced by us as described in the “Risk Factors” section and elsewhere in this prospectus.
DESCRIPTION
OF BUSINESS
Corporate
History
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 was appointed
as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer.
On October 25, 2019, Ryohei Uetaki 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, each with a par value of $0.0001 per share and 10,000,000 shares of Series A Preferred stock, each with a par value of $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 issued to Mr. Uetaki, based on the par value of $0.0001 per share of Common Stock and Series A Preferred
Stock, was valued at $2,000.
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. WSP Japan, headquartered in Tokyo, Japan, is an industrial automation equipment manufacturer, designing and developing
robots, drones, Web3 infrastructure, IoT equipment and other related products. We share the same business plan as that of WSP Japan.
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 to SKYPR LLC, a Delaware Limited Liability Company (referred
to herein as “SKYPR LLC”). 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.
In June, 2023, the Company entered into subscription
agreements with 9 shareholders. Pursuant to these agreements, the Company issued 150,000 shares of Common Stock in total to these shareholders
and received $1,500,000 as aggregate consideration. At the time of purchase the price paid per share by each shareholder was the equivalent
of about 10.00 USD. These shares were sold pursuant to the Company’s effective S-1 Registration Statement deemed effective on May
25, 2023 at 4pm EST. The aforementioned offering has been completed and is no longer ongoing.
Our principal executive offices are located at 2-18-23,
Nishiwaseda, Shinjuku-Ku, Tokyo, 169-0051, Japan.
Business Overview
We operate through our wholly owned subsidiary, World
Scan Project Corporation, a Japanese Company. We are an industrial automation equipment manufacturer, currently focused on developing
and designing robots, drones, Web3 infrastructure, IoT equipment and other related products. We currently operate globally, although
the majority of our operations are conducted within Japan.
Our principal executive offices are located at 2-18-23,
Nishiwaseda, Shinjuku-Ku, Tokyo, 162-0051, Japan.
The Company’s website is https://www.world-scan-project.com/.
The Company has elected October 31th as its year
end.
Sales results
The Company’s sales results, for the fiscal years ended October
31, 2021 and October 31, 2022, are as follows:
Product/Service |
From
November 1, 2021 |
From
November 1, 2020 |
|
Description |
through
October 31, 2022 |
through
October 31, 2021 |
Total |
|
Number |
|
Amount |
Number |
|
Amount |
Number |
|
Amount |
SkyFight-X |
|
|
|
|
|
|
|
|
|
Small
sized drone |
230,000 |
$ |
13,816,367 |
130,000 |
$ |
10,930,726 |
360,000 |
$ |
24,747,093 |
ZEXABOX |
|
|
|
|
|
|
|
|
|
Crypto
currency miner |
27,720 |
$ |
14,917,287 |
- |
|
- |
27,720 |
$ |
14,917,287 |
SKY
SELFEE and FLYLLY |
|
|
|
|
|
|
|
|
|
Small
sized drone with HD camera |
2,664 |
$ |
78,336 |
9,800 |
$ |
561,369 |
12,464 |
$ |
639,705 |
SOLAR
SUNVA |
|
|
|
|
|
|
|
|
|
Washing
ROBOT of Photovoltaic power generation panel |
18 |
$ |
156,814 |
2 |
$ |
32,117 |
20 |
$ |
188,931 |
Other |
|
|
|
|
|
|
|
|
|
|
- |
$ |
471,537 |
- |
$ |
289,604 |
- |
$ |
761,141 |
Total |
|
|
|
|
|
|
|
|
|
|
$ |
29,440,341 |
|
$ |
11,813,816 |
|
$ |
41,254,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SkyFight-X
SkyFight-X, was originally developed and designed
by our Chief Executive Officer, specifically for the hobbyist drone race known as “SKY FIGHT”, which is organized by Drone
Net, a Japanese Company. Drone Net began operating a ‘drone school’ in 2017, and a drone race in 2019. At the time, our CEO,
Ryohei Uetaki, was in the planning stages of a new, small sized drone product, and believed that his products would have higher performance
capabilities than the drones at the time used by Drone Net, which prompted him to propose a collaboration between the Company and Drone
Net. Currently, Drone Net operates 24 racetracks in Japan, specifically designed for drone use.
Although SkyFight-X was designed for Sky Fight, the drones
can also be used outside the facilities designed exclusively for drone racing, and they can be used for recreational and miscellaneous
purposes.
The following includes details regarding the SkyFight-X
which we currently offer for sale. As mentioned later on, we have plans to expand our reach to more customers, but at this time it should
be noted our only customer is Drone Net.
Schematics
of SKYFight-X
- The weight of SKYFight-X is approximately 40 grams.
Product packaging
- One Main body of machine
- One Transmitter (2.4 GHz)
- One Battery
- Four Spare propellers
- One USB charging cable
- One user manual
Current Operations of SKYFight-X
For the year ended October 31, 2021, the Company sold 130,000 small sized
drones named “SkyFight-X” to Drone Net for total proceeds of JPY1,185,000,000 (approximately $10,930,726).
For the year ended October 31, 2022, the Company sold 230,000 small sized
drones named “SkyFight-X” to Drone Net for total proceeds of JPY1,760,000,000 (approximately $13,816,367).
Structure of Operations of SkyFight-X
![](https://www.sec.gov/Archives/edgar/data/1813744/000159991623000171/image_030.jpg)
At present, the majority of the Company’s operations pertaining
to SkyFight-X are carried out in the following manner:
(1) The Company receives an order for the Company’s products from
Drone Net.
In accordance with the Memorandum of Understanding, entered into on March
1, 2020, Drone Net shall not develop, manufacture, purchase or sell similar products to SkyFight-X without the Company’s consent
through February 28, 2023. Following the conclusion of the Memorandum of Understanding, we entered into a new Memorandum of Understanding
with Drone Net on March 1, 2023. This memorandum will expire on February 28, 2026. The material terms of the memorandum have remained
unchanged, except for minor alterations to the wholesale price adjustment and prepayment terms have been omitted.
(2) The Company places orders to G-Force, Inc., a Japan corporation (“G-Force”)
to manufacture the Products, in accordance with the terms outlined in the agreement entered into on March 4, 2020.
(3) G-Force purchases lap measuring sensors (the “Sensors”)
from ShenZhen RadioMaster Co., Ltd., a Chinese corporation (“RadioMaster”). The sensors are later installed in the SkyFight-X
Drones.
(4) The Sensors are installed into the drones manufactured by G-Force
on behalf of the Company.
(5) G-Force manufactures the Products and installs the Sensors. G-Force
is a non-exclusive OEM supplier of the Company. After completion of the production process, the Company conducts a final product inspection
of the goods produced. During the inspection, on average, the Company physically inspects between five to ten percent of the products
for quality control.
(6) Following inspection and acceptance of the products, the Company directs
G-Force to deliver the products to a location designated by Drone Net; currently the warehouse of Drone Net is in Toyko, Japan, and G-Force
delivers the products there directly.
(7)
The Company relies on the marketing and sales of Drone Net, in part for its own success. If Drone Net realizes increased demand for the
products, then in turn our own operations will increase and benefit from more sales. It should be noted that, at present, Drone Net is
our primary customer.
-
16 -
Table
of Contents
Flylly:
Small sized drone with 4K camera
The
Flylly is an extra small sized drone weighing only 38 grams, and it is not subject to the revised Aviation Act. A 4K camera is installed
on the drone for taking photographs, and angles can be adjusted manually by tilting the camera. Automatic flights are also programmable
for simple flight plans.
Flylly
and a smartphone is all a user needs for operation: download the dedicated app, SKY Drone Go, to the smartphone to connect and control
Flylly via Wi-Fi.
Schematics of Flylly
- The weight of Flylly is approximately 38 grams.
![](https://www.sec.gov/Archives/edgar/data/1813744/000159991623000171/image_037.jpg)
Product packaging
Specifications: Total length:82 mm, Width: 89 mm Height: 33 mm Weight:
39.5g
A set of Flylly contains the blow:
- Main body of drone, 1 unit
- LiPo battery, 1 unit
- Upper shell, 3 units (in orange, yellow and white)
- Spare propellers, 4 pieces (2 in black and 2 in blue)
- USB battery charger, 1 unit
- Screwdriver, 1
- Demounting tool for propellers, 1
- User manual (in Japanese), 1
Current Operations of Flylly
For the year ended October 31, 2022, the Company
sold 1,164 units of small sized drones with 4K cameras named “Flylly” for total proceeds of JPY2,568,182 (approximately $20,160).
SUNVA: Solar panel cleaning robot
The Company developed a solar panel cleaning robot named “SUNVA”
and commenced marketing and sales efforts in 2021. The aggregate development cost was JPY45,646,500 (approximately $358,355).
![](https://www.sec.gov/Archives/edgar/data/1813744/000159991623000171/image_038.jpg)
Outside dimensions
- 6m type: width 760 mm, length 6,495 mm and height 356 mm (without washing
machine).
- 4m type: width 760 mm, length 4,460 mm and height 356 mm (without washing
machine).
- Standard machine: width 972 mm, length 1,140 mm and height 400 mm.
Weight
- 6 m type: 44.04 kg(excluding washing machine, 4 batteries) 67.98 kg
(including washing machine, 4 batteries).
- 4 m type: 34.60 kg(excluding washing machine, 4 batteries) 60.34 kg
(including washing machine, 4 batteries).
- Standard machine: 21.03 kg (excluding batteries) 60.34 kg (including
2 batteries).
Wireless communication
Wireless standard: Conformable to Specification ARIB STD-T108 for specific
small power wireless communication in 92 MHz band.
Frequency: Sub-Giga, 920 MHz band (920.6 - 923.4 MHz, 15 channels).
Water sprinkling
7ℓ per minute: Depends on water head condition of pump/waterworks.
Batteries
Rechargeable lithium battery (1 or 2 units of BL1850B, made by Makita
Corporation).
Battery Life
Approximately 500 cycles of charge and discharge.
Rated voltage
DC18V.
Continuous availability time
6m standard type: Approximately 180 minutes (use BL1850B(18V/5Ah) batteries
at the same time at air temperature of 25 degree Celsius/77 degree Fahrenheit).
4m standard type: Approximately 200 minutes (use BL1850B(18V/5Ah) batteries
at the same time at air temperature of 25 degree Celsius/77 degree Fahrenheit).
Current Operations of SUNVA
For the year ended October 31, 2022, the Company
sold 18 solar panel cleaning robots “SOLAR SUNVA” for total proceeds of JPY 19,975,815 (approximately
$156,814).
META
DIVER
META DIVER is an application for smartphones that provides user experience(s)
with full-scale VR images. The purpose of the application is to provide 3D data such as historical heritage sites as VR video content.
The main function of the application is image reproductions of VR images
and 360 degree images, with VR images of World Heritages, historical heritages, and natural heritage both in Japan and overseas as its
contents. Currently, all content in the application is free of charge, although this does not preclude us from monetizing META DIVER
in the future.
Pine Hill Productions, Inc., a New York corporation, (“Pine
Hill”) is currently supervising the development of META DIVER.
ZEXABOX
ZEXABOX is made pursuant to, what we believe to be, strict
Japanese guidelines for quality. The device is a GPU Mining Rig, comprised of computer components, used to “mine” digital
currency. In layman’s terms, “mine” is defined as the process of solving complex math problems that verifying transaction(s)
in the digital currency or blockchain, which, generally speaking, results in a predetermined amount of digital currency to be gained.
As of the date of this Registration Statement, the company
offers for sale the following types of Zexabox machines: PRO, MINI, ULTIMA, DIV, ULTIMA EX, and PRO TYPE-C.
![](https://www.sec.gov/Archives/edgar/data/1813744/000159991623000171/image_031.jpg)
Current Operations Relating to Zexabox
For the year ended October 31, 2022, the Company sold 897 units of “ZEXABOX
PRO”, 620 units of “ZEXABOX MINI”, 13 units of “ZEXABOX ULTIMA” and 26,190 units of “ZEXABOX DIV”,
for a total amount of JPY1,900,241,017 (approximately $14,917,287). Sales activities pursuant to ZEXABOX are outsourced to Cellessence
Corp., an unrelated third party. The company does not carry inventory related to the ZEXABOX. All marketing and sales efforts are conducted
by Cellessence Corp.
Marketing
Our marketing plan, at present, is not yet complete and is still being
researched and developed. SkyFight-X is being marketed solely by our customer, Drone Net. We believe that Drone Net’s sales of
our products will result in increased demand from Drone Net for future products, but this is not directly related to any marketing activities
conducted by the Company itself. Additionally, sales and marketing activities pursuant to ZEXABOX are outsourced to Cellessence Corp.,
an unrelated third party. At present, company’s marketing activities are constrained to our company website located at: https://www.world-scan-project.com/, through
which recent news and updates are released, and general advertising to direct potential customers to our website. Additionally, from
time to time the company attends industry specific exhibitions and trade shows.
Future
plans
World Scan Project,
Inc., as an industrial automation equipment manufacturer, plans to further develop and apply our technologies in designing/developing
Web3 infrastructure, IoT equipment (Zexabox) and other related products, in addition to the robots and drones we have been offering
to the market globally.
(1) To begin direct sales to consumers in Japan
The Company has tentative plans to evaluate the
possibility of directly selling its products via web-based direct sales in Japan. It is possible that we may evaluate, and even begin
to do so in 2023, but we do not currently have any definitive plans to do so at this point in time.
(2) To expand the sales volume for our digital
currency mining rigs
The Company is planning to gain sales agents
and agencies to expand the sales of its new product named XEXABOX series.
(3) To start selling products overseas, mainly
in the USA
The Company has intentions to begin developing
its own sales agencies, and at such time to begin to sell products through such agencies, overseas beginning, potentially, in 2023. These
plans remain speculative in nature, however, in order to begin to progress these efforts, the Company entered into a consulting agreement
with Pine Hill Productions, Inc., a New York corporation (Pine Hill”) on March 3, 2020. Pine Hill shall support the Company to
expand its business operations into the USA. The consulting fee due to Pine Hill is $3,000 per month. As of October 31, 2022, there has
been no material progress to disclose as pertains to this agreement.
(4) To develop new products
The Company intends to develop core products other than drones and digital
currency mining rigs.
(5) The Company also has tentative plans, to evaluate the possibility
of working on developing an underwater drone and a hover bike (flying bike). At this time, we are developing a scanner device that can
be attached to an underwater drone and used to scan the sea floor, and the hover bike has been successfully tested in flight. The underwater
3D robot is called MURAKUMO, and the Hovercraft bike is called FREAP. At present neither of these potential products are available for
sale as testing remains ongoing. However. we are still exploring the feasibility of these endeavors, and there is no guarantee that such
plans will come to fruition.
Government Regulations in Japan
Given that the entirety of our operations are conducted within Japan,
and our customers reside in Japan, only the rules and regulations pertaining to Japan are presently applicable to the Company’s
operations relating to drones.
The Aviation Act prohibits flying drones over residential areas or areas
surrounding an airport without permission from the Minister of Land, Infrastructure and Transportation. Flying drones during night time
and during an event is also prohibited. In addition, drones no lighter than 200 grams in unrestricted areas across the country are required
to stay below 150 meters (492 feet), and also be kept at least 30 meters (98 feet) from people, buildings, and vehicles.
Given that SkyFight-X is lighter than 200 grams, flying SkyFight-X’s
for the purposes of drone racing or participating in drone flying schools is not prohibited by any pertinent regulations in Japan. We
are not subject to specific regulations pertaining to the manufacturing and design of the SkyFight-X at this time.
Based on the revised Civil Aeronautics Act of 2020, registration of Unmanned
Aircraft has been mandated. Based on the amendment to the Civil Aeronautics Act in 2020, unregistered Unmanned Aircraft flights will
be banned. From June 20, 2022, Unmanned Aircraft will have to be marked with a registration ID to identify them and be fitted with a
Remote ID function. The exclusion for Unmanned Aircraft was changed from “those weighing less than 200g” to “those
weighing less than 100g.” This means that all Unmanned Aircraft of 100g or more are subject to registration. Acceptance of pre-registration
began on December 20, 2021 and mandatory registration of all unmanned aircrafts began on June 20, 2022. The registration system for Unmanned
Aircraft has been established to ensure safety and security in the expanded use of Unmanned Aircraft. While this regulation does not
directly impact our ability to conduct any of our operations, it has placed the burden of registering autonomous drones onto the consumer,
which we believe has had, and will continue to have, a detrimental impact upon our sales.
Employees
As of the date of this Registration Statement, the
Company, and its subsidiary, collectively have a total of 12 full-time employees. We do not presently have pension, health, annuity,
insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no
personal benefits available to our officers/or directors and or employees.
-
17 -
Table
of Contents
USE
OF PROCEEDS
Our
offering is being made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed.
The offering price per share of common stock is $12.00. Shares will be sold at a fixed price for the duration of the offering. The
following table sets forth the uses of proceeds assuming the sale of 100%, 75%, 50% and 25% of the securities offered for sale by
the Company at a price of $12.00 per share. There is no assurance that we will raise the full $14,400,000 as anticipated. The below
table(s) are in relation specifically to uses of proceeds from this specific offering.
If 1,200,000 shares (100%) are sold: |
|
Next 12 months |
|
|
|
Planned Action: |
Estimated Cost to Complete |
Improvement of existing products |
$1,000,000 |
Research and Development for new products |
$6,000,000 |
Marketing Expenses |
$2,500,000 |
Developing sales structure and network in the USA |
$500,000 |
Developing sales structure and network in Asia and Europe |
$200,000 |
Recruiting personnel and hiring staff |
$200,000 |
Working capital |
$4,000,000 |
Total |
$14,400,000 |
|
|
If 900,000 shares (75%) are sold: |
|
Next 12 months |
|
Planned Action: |
Estimated Cost to Complete |
Improvement of existing products |
$750,000 |
Research and Development for new products |
$4,500,000 |
Marketing Expenses |
$1,875,000 |
Developing sales structure and network in the USA |
$375,000 |
Developing sales structure and network in Asia and Europe |
$150,000 |
Recruiting personnel and hiring staff |
$150,000 |
Working capital |
$3,000,000 |
Total |
$10,800,000 |
|
|
If 600,000 shares (50%) are sold: |
|
Next 12 months |
|
Planned Action: |
Estimated Cost to Complete |
Improvement of existing products |
$500,000 |
Research and Development for new products |
$4,500,000 |
Marketing Expenses |
$1,000,000 |
Developing sales structure and network in the USA |
$50,000 |
Developing sales structure and network in Asia and Europe |
$50,000 |
Recruiting personnel and hiring staff |
$100,000 |
Working capital |
$1,000,000 |
Total |
$7,200,000 |
|
|
If 300,000 shares (25%) are sold: |
|
Next 12 months |
|
Planned Action: |
Estimated Cost to Complete |
Improvement of existing products |
$200,000 |
Research and Development for new products |
$3,000,000 |
Marketing Expenses |
$200,000 |
Working capital |
$200,000 |
Total |
$3,600,000 |
The above figures represent only estimated uses of
proceeds from this offering for the next 12 months. Funds may be allocated in differing quantities should the Company decide at
a later date it would be in the Company’s best interests.
The Company estimates the costs of this offering at
about $83,587. Expenses incurred in this offering will be paid for by the Company.
Mr. Ryohei Uetaki and SKYPR LLC will not be repaid
any loans with funds raised from this offering.
DETERMINATION
OF OFFERING PRICE
The
offering price per share of common stock pursuant to this offering, which is at a fixed price of $12.00, was arbitrarily determined.
The offering price was determined by us and is based on our own assessment of our financial condition and prospects, limited operating
history, and the general condition of the securities market. It does not necessarily bear any relationship to our book value, assets,
past operating results, financial condition or any other established criteria of value.
We
are quoted on the OTC Markets Group Inc.’s Pink® Open Market (the “OTC Pink”) under the symbol WDSP.
There
is no assurance that our common stock being offered pursuant to this prospectus will trade in excess of the current market price of our
common stock as may be quoted by the OTC Markets Group’s OTC Pink tier.
The
current and future market price of our common stock may be influenced by many factors, including the depth and liquidity of the market
for the common stock, investor perception of us and general economic and market conditions.
-
18 -
Table
of Contents
DILUTION
The
price of the offering is to be fixed at $12.00 per share of common stock for the duration of the offering. The information below is based
upon financial information for the quarterly period ended April 30, 2023.
Dilution
represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering.
Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution
arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of
the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. The following tables
compare the differences of your investment in our shares with the investment of our existing stockholders.
The
following table illustrates the dilution to the purchasers of the common stock in this offering.
As
of April 30, 2023, the net tangible book value per share of our common stock was approximately $1.80.
|
|
|
(25%
of the shares are sold in the offering) |
|
|
(50%
of the shares are sold in the offering |
|
|
(75%
of the shares are sold in the offering |
|
|
(100%
of shares are sold in the offering) |
Offering
Price Per Share |
|
$ |
12.00 |
|
|
12.00 |
|
|
12.00 |
|
|
12.00 |
Net
Tangible Book Value Per Share Before the Offering (Approximate) |
|
$ |
1.80 |
|
|
1.80 |
|
|
1.80 |
|
|
1.80 |
Net
Tangible Book Value Per Share After the Offering (Approximate) |
|
$ |
2.08 |
|
|
2.34 |
|
|
2.59 |
|
|
2.82 |
Increase
in Investment to Existing Shareholder (Based on Book Value Before the Offering) |
|
$ |
0.28 |
|
|
0.54 |
|
|
0.79 |
|
|
1.02 |
Decrease
in Investment to New Shareholder |
|
$ |
9.92 |
|
|
9.66 |
|
|
9.41 |
|
|
9.18 |
Dilution
to New Shareholders (Approximate %) |
|
|
82.67% |
|
|
80.50% |
|
|
78.42% |
|
|
76.50%
|
Net
Value Calculation
If
100% of the shares in the offering are sold
Numerator: |
|
|
|
|
Net
tangible book value before the offering |
|
$ |
19,451,715 |
|
Net
proceeds from this offering |
|
|
14,400,000 |
|
|
|
$ |
33,851,715 |
|
Denominator: |
|
|
|
|
Shares
of common stock outstanding prior to this offering |
|
|
10,797,350 |
|
Shares
of common stock to be sold in this offering (100%) |
|
|
1,200,000 |
|
|
|
|
11,997,350 |
|
Net
Value Calculation
If
75% of the shares in the offering are sold
Numerator: |
|
|
|
|
Net
tangible book value before the offering |
|
$ |
19,451,715 |
|
Net
proceeds from this offering |
|
|
10,800,000 |
|
|
|
$ |
30,251,715 |
|
Denominator: |
|
|
|
|
Shares
of common stock outstanding prior to this offering |
|
|
10,797,350 |
|
Shares
of common stock to be sold in this offering (75%) |
|
|
900,000 |
|
|
|
|
11,697,350 |
|
Net
Value Calculation
If
50% of the shares in the offering are sold
Numerator: |
|
|
|
|
Net
tangible book value before the offering |
|
$ |
19,451,715 |
|
Net
proceeds from this offering |
|
|
7,200,000 |
|
|
|
$ |
26,651,715 |
|
Denominator: |
|
|
|
|
Shares
of common stock outstanding prior to this offering |
|
|
10,797,350 |
|
Shares
of common stock to be sold in this offering (50%) |
|
|
600,000 |
|
|
|
|
11,397,350 |
|
Net
Value Calculation
If
25% of the shares in the offering are sold
Numerator: |
|
|
|
|
Net
tangible book value before the offering |
|
$ |
19,451,715 |
|
Net
proceeds from this offering |
|
|
3,600,000 |
|
|
|
$ |
23,051,715 |
|
Denominator: |
|
|
|
|
Shares
of common stock outstanding prior to this offering |
|
|
10,797,350 |
|
Shares
of common stock to be sold in this offering (25%) |
|
|
300,000 |
|
|
|
|
11,097,350 |
|
-
19 -
Table
of Contents
PLAN
OF DISTRIBUTION
The Company has 10,797,350 shares of common stock
issued and outstanding as of the date of this prospectus. The Company is registering an additional 1,200,000 shares of its common stock
for sale at the fixed price of $12.00 per share for the duration of the offering.
There is no arrangement to address the possible effect
of the offering on the price of the stock.
In connection with the Company’s selling efforts
in the offering, our Chief Executive Officer and Director, Mr. Ryohei Uetaki will not register as a broker-dealer pursuant to Section
15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
Generally speaking, Rule 3a4-1 provides an exemption
from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering
of the issuer’s securities. Ryohei Uetaki is not subject to any statutory disqualification, as that term is defined in Section
3(a)(39) of the Exchange Act. Ryohei Uetaki will not be compensated in connection with her participation in the offering by the payment
of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Uetaki is not, nor has
he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person
of a broker or dealer. At the end of the offering, Mr. Uetaki will continue to primarily perform substantial duties for the Company or
on its behalf otherwise than in connection with transactions in securities. Ryohei Uetaki will not participate in selling an offering
of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
The Company will receive all proceeds from the sale
of the 1,200,000 shares being offered on behalf of the company itself. The price per share is fixed at $12.00 for the duration of this
offering.
We
are quoted on the OTC Markets Group Inc.’s Pink® Open Market (the “OTC Pink”) under the symbol WDSP. There is no
assurance that our common stock being offered pursuant to this prospectus will trade in excess of the current market price of our common
stock as may be quoted by the OTC Pink. The OTC Pink does not have the liquidity or corporate standards of the NYSE or NASDAQ and as
such, the price per share of our common stock as quoted on the OTC Pink may not reflect our value. There can be no assurance that there
will be an active market for our shares of common stock in the future. As a result, investors may not be able to liquidate their investment
or liquidate their investment at a price point that reflects the value of our business.
In order to comply with the applicable securities
laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale;
an exemption from such registration or if qualification requirement is available and with which the Company has complied.
In addition and without limiting the foregoing, the
Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during
the period of time when this Registration Statement is effective.
The Company will pay all expenses incidental to the
registration of the shares (including registration pursuant to the securities laws of certain states), which we expect to be no more
than, approximately, $55,165. At this time, the Company only has plans to sell to non U.S. citizens outside of the United States. This
does not forbid the Company however, from deciding at a later date to pursue sales within the United States.
Procedures for Subscribing (Shares offered by
us, “The Company”)
If you decide to subscribe for any shares in this
offering that are offered by us, “The Company”, you must
- Execute and deliver a subscription agreement;
and
- Deliver a check or certified funds to
us for acceptance or rejection.
All checks for subscriptions must be either made
payable to (i) “World Scan Project, Inc.”, (ii) the subsidiary of the Company, “World Scan Project Corporation.”,
or (iii) an escrow agent as agreed upon by the Company. Wire transfer and telegraphic transfer are also accepted. The Company will deliver
stock certificates attributable to shares of common stock purchased directly to the purchasers within ninety (90) days of the close of
the offering.
Right to Reject Subscriptions (Shares offered
by us, “The Company”)
We have the right to accept or reject subscriptions
in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the
subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected with letter by mail within 48 hours
after we receive them.
-
20 -
Table
of Contents
DESCRIPTION
OF SECURITIES
We have authorized capital stock consisting of 200,000,000
shares of common stock, $0.0001 par value per share (“Common Stock”) and 200,000,000 shares of preferred stock, $0.0001 par
value per share (“Preferred Stock”). Of the 200,000,000 shares of authorized Preferred Stock we have authorized 100,000,000
shares to be deemed as Series A Preferred Stock, $0.0001 par value per share (“Series A Preferred”). As of the date of this
filing we have 10,797,350 shares of Common Stock and 10,000,000 shares of Series A Preferred issued and outstanding.
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 right;
(b) Each shareholder
of Series A Preferred Stock shall have conversion privilege to other class or series of the Corporation’s stock. Shares of Series
A Preferred stock may be converted on a 1:1 basis into shares of common stock.
Common Stock
All outstanding shares of Common Stock are of the
same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted
to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from
time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Common Stock are entitled
to share ratably in all assets remaining after payment of all liabilities. Stockholders do not have cumulative or preemptive rights.
Preferred Stock
Our Certificate of Incorporation authorizes the issuance
of up to 200,000,000 shares of Preferred Stock of which 100,000,000 shares of Series A Preferred Stock are authorized.
Our Preferred stock shall have designations, rights
and preferences to be determined from time to time by our Board of Directors. Accordingly, our Board of Directors is empowered, without
stockholder approval, to issue Preferred Stock with dividend, liquidation, conversion, voting, or other rights which could adversely
affect the voting power or other rights of the holders of the Common Stock. In the event of issuance, the Preferred Stock could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have
no present intention to issue any shares of our authorized Preferred Stock, there can be no assurance that we will not do so in the future.
-
21 -
Table
of Contents
Options
and Warrants
None.
Convertible
Notes
None.
Dividend
Policy
We
have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the discretion of our board of directors
and depends upon our earnings, if any, our capital requirements and financial position, general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings,
if any, in our business operations.
Transfer
Agent
Our
transfer agent is Olde Monmouth Stock Transfer Co., Inc. Their mailing address is 200 Memorial Parkway Atlantic Highlands, NJ 07716.
Market
Information
We
are quoted on the OTC Markets Group Inc.’s Pink® Open Market (the “OTC Pink”) under the symbol WDSP.
Holders
As
of the date of this registration statement, we have 51 shareholders of record holding shares of our common
stock.
Penny
Stock Regulation
The
SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined)
of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional
sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior
to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose
the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over
the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely
be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares
in the secondary market.
-
22 -
Table
of Contents
INTERESTS
OF NAMED EXPERTS AND COUNSEL
The
validity of the shares of common stock offered hereby will be passed upon for us by Carl Ranno, with an office address at 2733 East Vista
Drive, Phoenix, Arizona 85032.
The financial statements included in this prospectus
and the registration statement have been audited by M&K CPAS, PLLC, to the extent and for the periods set forth in their report appearing
elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm
as experts in auditing and accounting.
REPORTS
TO SECURITIES HOLDERS
We will and will continue to make our financial information
equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-K for a smaller
reporting company under the Securities Exchange Act. In addition, we will file Form 8-K and other proxy and information statements from
time to time as required. The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at
100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.
The Company’s mailing address is 2-18-23,
Nishiwaseda, Shinjuku-Ku, Tokyo, 162-0051, Japan. If a shareholder wishes to contact the Company in writing please utilize the
aforementioned mailing address and address mail to our Director, Ryohei Uetaki.
DESCRIPTION
OF FACILITIES
Our principal executive offices are located at 120 Wall
Street, floor 25, New York, NY 10005 and 2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo, 162-0051, Japan.
The
following table details the terms of the lease agreements for the various properties leased by the Company.
Work
Space |
Address |
Lessee |
Lessor |
Monthly
Rent |
Date
of Agreement |
Term
(Expiration of Lease) |
Tokyo
Office |
2-18-23-2F,
Nishiwaseda, Shinjuku-ku, Tokyo, Japan |
World
Scan Project Corporation |
Make
V Holdings Co., Ltd, |
JPY
200,000 $1,569 |
December
1, 2020 |
December
31, 2023 |
Kojimachi
Office |
3-5-2-201,
Kojimachi,
Chiyuda-ku, Tokyo, Japan |
World
Scan Project Corporation |
Kenedix
Property Design Co., Ltd, |
JPY
601,920
$4,725 |
July
27,
2021 |
October
19, 2023 |
Kojimachi
Office |
3-5-2-1112,
Kojimachi,
Chiyuda-ku, Tokyo, Japan |
World
Scan Project Corporation |
Kenedix
Property Design Co., Ltd, |
JPY
581,058
$4,561 |
July
1,
2021 |
September
30, 2023 |
Kojimachi
Office |
3-5-2-601,
Kojimachi,
Chiyuda-ku, Tokyo, Japan |
World
Scan Project Corporation |
Kenedix
Property Design Co., Ltd, |
JPY627,575
$4,926 |
September
3, 2021 |
December
2, 2023 |
Kojimachi
Office |
3-5-2-1102,
Kojimachi,
Chiyuda-ku, Tokyo, Japan |
World
Scan Project Corporation |
Kenedix
Property Design Co., Ltd, |
JPY
270,400
$2,122 |
October
20, 2021 |
January
19, 2024 |
Kojimachi
Office |
3-5-2-201,
Kojimachi,
Chiyuda-ku,
Tokyo, Japan |
World
Scan Project Corporation |
Kenedix
Property Design Co., Ltd, |
JPY
325,325
$2,553 |
February
1, 2022 |
April
1, 2024 |
Tenshodo |
4-3-9
12fl.
Ginza, Chuo-ku, Tokyo, Japan |
World
Scan Project Corporation |
Tenshodo
Co. |
JPY
1,050,000
$8,242 |
November
19, 2021 |
November
18, 2031 |
-
23 -
Table
of Contents
LEGAL
PROCEEDINGS
From
time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our
business. At this time, we, and our officers and directors, are not currently involved in any legal proceedings of any kind.
PATENTS
AND TRADEMARKS
The following table includes our pending trademark and
patent applications.
Patent
or Trademark |
Application
Number |
Name |
Applicant |
Application
date |
Country/
Jurisdiction |
Record
date |
Trademark |
2020-027977 |
SKY
PLATINUM |
World
Scan Project Corporation |
March
13, 2020 |
Japan |
March
5, 2021 |
T-5259 |
World
Scan Project, Inc. |
April
23, 2020 |
WIPO |
Trademark |
2020-026589 |
DRONE
FITNESS |
World
Scan Project Corporation |
March
11, 2020 |
Japan |
September
24, 2020 |
Trademark |
2020-026590 |
DRONE
RACE CAFÉ |
World
Scan Project Corporation |
March
11, 2020 |
Japan |
September
24, 2020 |
Trademark |
2020-007786 |
SOLAR
SUNVA |
World
Scan Project Corporation |
January
23, 2020 |
Japan |
July
9, 2021 |
Trademark |
2020-045941 |
SMART
CITY SPRAY |
World
Scan Project Corporation |
April
24, 2020 |
Japan |
April
7, 2021 |
Trademark |
2020-045942 |
SMART
CITY MASK |
World
Scan Project Corporation |
April
24, 2020 |
Japan |
April
7, 2021 |
Trademark |
2020-061544 |
SMART
CITY FROZEN |
World
Scan Project Corporation |
April
24, 2020 |
Japan |
July
9, 2021 |
Trademark |
2020-061552 |
TIME
WARP DELI |
World
Scan Project Corporation |
April
24, 2020 |
Japan |
May
29, 2021 |
Trademark |
2020-064420 |
DRONESOLOGY |
World
Scan Project Corporation |
April
24, 2020 |
Japan |
December
4, 2020 |
Trademark |
2020-069802 |
DOKODEMO
DOUJOKIN |
World
Scan Project Corporation |
June
5, 2020 |
Japan |
March
5, 2021 |
Trademark |
2020-099990 |
SDGs
DRONR |
World
Scan Project Corporation |
August
12, 2020 |
Japan |
|
Trademark |
2020-122283 |
Droneglish |
World
Scan Project Corporation |
October
2, 2020 |
Japan |
August
6, 2021 |
Trademark |
2020-131464 |
Dorograming |
World
Scan Project Corporation |
October
23, 2020 |
Japan |
November
5, 2021 |
Trademark |
2020-132407 |
SKESELFEE |
World
Scan Project Corporation |
October
26, 2020 |
Japan |
October
15, 2021 |
Trademark |
2020-134225 |
LSEEON
CLOUD |
World
Scan Project Corporation |
October
29, 2020 |
Japan |
|
Trademark |
2020-140874 |
MURAKUMO |
World
Scan Project Corporation |
November
13, 2020 |
Japan |
October
8, 2021 |
Trademark |
2020-145756 |
3D
DIVER |
World
Scan Project Corporation |
November
26, 2020 |
Japan |
September
29, 2021 |
Trademark |
2020-149888 |
WSP
/ WORLD SCAN PROJECT |
World
Scan Project Corporation |
December
4, 2020 |
Japan |
November
18, 2021 |
Trademark |
2020-154653 |
CARE
CLOUD |
World
Scan Project Corporation |
December
15, 2020 |
Japan |
|
Trademark |
2021-033240 |
FREAP |
World
Scan Project Corporation |
March
19, 2021 |
Japan |
February
17,
2022 |
Trademark |
2021-034167 |
SKY
DREAMER |
World
Scan Project Corporation |
March
22, 2021 |
Japan |
October
29, 2021 |
Trademark |
2021-053953 |
FrozenMoment |
World
Scan Project Corporation |
April
30, 2021 |
Japan |
January
31,
2022 |
Trademark |
2021-054960 |
SeaStreet |
World
Scan Project Corporation |
May
6, 2021 |
Japan |
January
21,
2022 |
Trademark |
2021-058360 |
Intelligent
village |
World
Scan Project Corporation |
May
13, 2021 |
Japan |
February
17,
2022 |
Trademark |
2021-072523 |
Virtual
Travel Exhibition |
World
Scan Project Corporation |
June
11, 2021 |
Japan |
January
7,
2022 |
Trademark |
2021-078943 |
VIRTUAL
STUDY TRAVEL |
World
Scan Project Corporation |
June
24, 2021 |
Japan |
January
7,
2022 |
Trademark |
2021-078965 |
DIGITAL
YOUHAI |
World
Scan Project Corporation |
June
24, 2021 |
Japan |
January
7,
2022 |
Trademark |
2021-079992 |
DIGITAL
CHIREKI |
World
Scan Project Corporation |
June
28, 2021 |
Japan |
|
Trademark |
2021-080084 |
VR
YOUHAI |
World
Scan Project Corporation |
June
28, 2021 |
Japan |
January
21,
2022 |
Trademark |
2021-087436 |
Drone
Adventure |
World
Scan Project Corporation |
July
13, 2021 |
Japan |
March
18,
2022 |
Trademark |
2021-087437 |
DEEPSEACASK |
World
Scan Project Corporation |
July
13, 2021 |
Japan |
March
8, 2022 |
Trademark |
2021-111126 |
Flylly |
World
Scan Project Corporation |
September
7, 2021 |
Japan |
February
17,
2022 |
Trademark |
2021-133847 |
Mature
20,000 Mile |
World
Scan Project Corporation |
October
27, 2021 |
Japan |
June
1, 2022 |
Trademark |
2021-136408 |
Metatours |
World
Scan Project Corporation |
November
2, 2021 |
Japan |
June
16, 2022 |
Trademark |
2021-148950 |
THE
CASK |
World
Scan Project Corporation |
November
30, 2021 |
Japan |
June
17, 2022 |
Patent |
2021-501939 |
Unmanned
flight equipment,
management equipment,
operating equipment,
and flight management methods |
World
Scan Project Corporation |
February
14, 2020 |
Japan |
July
22, 2022 |
Trademark |
2022-002586 |
DIVERLAND |
World
Scan Project Corporation |
January
12, 2022 |
Japan |
July
11, 2022 |
Trademark |
2022-007645 |
DIVERSMARKET |
World
Scan Project Corporation |
January
15, 2022 |
Japan |
July
11, 2022 |
Trademark |
2022-003119 |
METAWHISKEY |
World
Scan Project Corporation |
January
13, 2022 |
Japan |
July
8, 2022 |
Trademark |
2022-004574 |
METAPLAYER |
World
Scan Project Corporation |
January
18, 2022 |
Japan |
July
8, 2022 |
Trademark |
2022-004575 |
METAPET |
World
Scan Project Corporation |
January
18, 2022 |
Japan |
July
8, 2022 |
Trademark |
2022-011861 |
ZettaVerse |
World
Scan Project Corporation |
February
3, 2022 |
Japan |
|
Trademark |
2022-011865 |
ZettaWorld |
World
Scan Project Corporation |
February
3, 2022 |
Japan |
|
Trademark |
2022-011870 |
NFT
NO MADOGUCHI |
World
Scan Project Corporation |
February
3, 2022 |
Japan |
July
20, 2022 |
Trademark |
2022-020572 |
ZETTAGATE |
World
Scan Project Corporation |
February
24, 2022 |
Japan |
|
Trademark |
2022-062963 |
SMART
RC-X |
World
Scan Project Corporation |
June
2, 2022 |
Japan |
|
Trademark |
2022-125054 |
ZEXA
BOX |
World
Scan Project Corporation |
November
1, 2022 |
Japan |
|
Trademark |
2022-128727 |
DIVERMIST |
World
Scan Project Corporation |
November
10, 2022 |
Japan |
|
DIRECTORS
AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Biographical
information regarding the officers and director of the Company, who will continue to serve such positions, are provided below:
World Scan Project, Inc.
NAME |
AGE |
POSITION |
Ryohei Uetaki |
48 |
Chief Executive Officer, Chief
Financial Officer, President, Secretary, Treasurer and Director |
Yasumasa
Ichikawa |
29 |
Chief
Technology Officer |
World Scan Project Corporation (our wholly owned
subsidiary)
NAME |
AGE |
POSITION |
Ryohei Uetaki |
48 |
Chief Executive Officer, Chief
Financial Officer, President, Secretary, Treasurer and Director |
Yasumasa
Ichikawa |
29 |
Chief
Technology Officer |
Ryohei Uetaki
Mr. Ryohei Uetaki graduated from the Osaka Gakuin University
Faculty of Commerce in 1997. In 2000, he incorporated Zero Step Ltd and assumed the position of president. In 2006, Zero Step Ltd ceased
all operations. In 2006, Mr. Uetaki joined EAZ Holdings Ltd as a director in charge of the company’s marketing efforts. Mr. Uetaki
remained as director of EAZ until 2007. From 2007 to 2019, he was engaged as an independent business consultant. From 2017 to 2018, he
served as an associated professor of Keio University Graduate School. On October 25, 2019, he was appointed as the president, CEO and
director of World Scan Project, Inc. On January 10, 2020, he was appointed as the CEO and member of SKYPR LLC. Inc. On January 22, 2020,
he was appointed as the president, CEO and director of World Scan Project Corporation. October 19, 2020, he was appointed as the president,
CEO and director of Kids Cell Technologies, Inc.. On November 18, 2020, he was appointed as the president, CEO and director of Kids Cell
Technologies Corporation. Currently, he serves as the officer and director of World Scan Project, Inc., World Scan project Corporation,
SKYPR LLC, Kids Cell Technologies, Inc. and Kids Cell Technologies Corporation.
Due to Mr. Uetaki’s diverse business experience,
the Board has determined it is in the best interest of the company to appoint him as the company’s Chief Executive Officer, Chief
Financial Officer, President, Treasurer and Director.
Yasumasa Ichikawa
Mr. Yasumasa Ichikawa graduated from Kyoto Saga University
of Arts in 2015. After graduation, he was engaged as an independent computer graphic designer. On November 18, 2019, he was appointed
as Chief Technology Officer (“CTO”) of World Scan Project, Inc. On January 22, 2020, he was appointed as the CTO of World
Scan Project Corporation and World Scan Project Corporation. Currently, he serves as the CTO of World Scan Project, Inc. and World Scan
project Corporation.
Due to Mr. Ichikawa’s technological experience,
the Board has determined it is in the best interest of the company to appoint him as the company’s Chief Technology Officer.
Corporate
Governance
The
Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable
disclosure in reports and documents that the Company files with the SEC and in other public communications made by the Company; and strives
to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business
conduct and ethics that governs the Company’s employees, officers and Director as the Company is not required to do so.
In
lieu of an Audit Committee, the Company’s Director, Mr. Ryohei Uetaki, is responsible for reviewing and making recommendations
concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial
statements and other services provided by the Company’s independent public accountants. The Board of Directors, the Chief Executive
Officer and the Chief Financial Officer of the Company, all of which are Mr. Uetaki, review the Company's internal accounting controls,
practices and policies.
-
24 -
Table
of Contents
Committees
of the Board
Our
Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our
Company have a written nominating, compensation or audit committee charter. Our Director, Mr. Uetaki, believes that it is not necessary
to have such committees at this time because the Director can adequately perform the functions of such committees.
Audit
Committee Financial Expert
Our
Board of Directors, comprised solely of Mr. Ryohei Uetaki, has determined that we do not have a board member that qualifies as an “audit
committee financial expert” as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as “independent”
as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(14) of the FINRA Rules.
We
believe that our Director is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures
for financial reporting. Our sole Director does not believe that it is necessary to have an audit committee because management believes
that the Board can adequately perform the functions of an audit committee. In addition, we believe that retaining an independent Director
who would qualify as an "audit committee financial expert" would be overly costly and burdensome.
Involvement
in Certain Legal Proceedings
Our officers and sole director have not been involved
in or a party in any of the following events or actions during the past ten years:
1. |
Bankruptcy
petition filed by or against any business of which such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; |
2. |
Any
conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor
offenses); |
3. |
Being
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities
or banking activities; or |
4. |
Being
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. |
5. |
Such
person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended,
or vacated; |
6. |
Such
person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated; |
7. |
Such
person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged violation of:(i) Any Federal or State securities or commodities
law or regulation; or(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited
to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist
order, or removal or prohibition order; or (iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with
any business entity; or |
8. |
Such
person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that
has disciplinary authority over its members or persons associated with a member. |
Independence
of Directors
We
are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such
time as we are required to do so.
Code
of Ethics
We
have not adopted a formal Code of Ethics. The Board of Directors, comprised solely of Mr. Ryohei Uetaki, has evaluated the business of
the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules
of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event
our operations, employees and/or Director expand in the future, we may take actions to adopt a formal Code of Ethics.
Shareholder
Proposals
Our
Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Director.
Our sole director believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance
until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria
for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees.
The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election
or appointment.
A shareholder who wishes to communicate with our
Board of Director(s) may do so by directing a written request addressed to our sole Director Ryohei Uetaki, at the address appearing
on the first page of this Information Statement.
EXECUTIVE
COMPENSATION
The table below summarizes all compensation awarded
to, earned by, or paid to our named executive officers and director for the year ended October 31, 2022 and for the year ended October
31, 2021. The below table is inclusive of the Company’s wholly owned subsidiary, World Scan Project Corporation.
Name and
principal position |
Year |
Salary
($) |
Bonus
($) |
Stock
Awards
($) |
Option
Awards
($) |
Non-Equity
Incentive Plan
Compensation
($) |
Nonqualified
Deferred
Compensation
Earnings ($) |
All Other
Compensation
($) |
Total
($) |
Ryohei
Uetaki
CEO,
CFO, and Sole Director (1) |
2022 |
188,405 |
|
0 |
0 |
0 |
0 |
0 |
188,405 |
Yasumasa
Ichikawa,
Chief
Technology Officer (2) |
2022 |
121,678 |
|
0 |
0 |
0 |
0 |
0 |
121,678 |
Ryohei
Uetaki
Chief
Executive Officer and Sole Director (1) |
2021 |
221,922 |
|
0 |
0 |
0 |
0 |
0 |
221,922 |
Yasumasa
Ichikawa,
Chief
Technology Officer (2) |
2021 |
110,961 |
|
0 |
0 |
0 |
0 |
0 |
110,961 |
(1)
On October 25, 2019, Ryohei Uetaki was appointed as Chief Executive Officer, Chief Financial Officer, President, Director, Secretary,
and Treasurer.
(2)
On November 18, 2019, Yasumasa Ichikawa was appointed as Chief Technology Officer.
-
25 -
Table
of Contents
Summary
of Compensation
Stock
Option Grants
We
have not granted any stock options to our executive officers since our incorporation.
Employment
Agreements
We
do not have an employment or consulting agreement with our sole director, Mr. Ryohei Uetaki. However, we do have an employment agreement
with our Chief Technology Officer, Mr. Yasumasa Ichikawa. Pursuant to Mr. Ichikawa’s contract, he is to receive a monthly salary
of JPY 14,400,000 (approximately USD $11,500) indefinitely.
Director
Compensation
At
this time, we have only one director, Mr. Ryohei Uetaki. Our Board of Directors does not currently receive any consideration for their
services as members of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board
of Directors cash or stock based consideration for their services to the Company, which awards, if granted shall be in the sole determination
of the Board of Directors.
Executive
Compensation Philosophy
Our
Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves
the right to pay our executive or any future executives a salary, and/or issue them shares of common stock issued in consideration for
services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s
performance. This package may also include long-term stock based compensation to certain executives, which is intended to align the performance
of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance
base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination
believes such grants would be in the best interests of the Company.
Incentive
Bonus
The
Board of Directors may grant incentive bonuses to our executive officers and/or future executive officers in its sole discretion, if
the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives
and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and
ability of such executives.
Long-term,
Stock Based Compensation
In
order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award
our executive and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of
Directors, which we do not currently have any immediate plans to award.
-
26 -
Table
of Contents
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As
of the date of this registration statement, the Company has 10,797,350 shares of common stock and 10,000,000 shares of Series A preferred
stock issued and outstanding.
Name
and Address of Beneficial Owner |
Shares
of Common Stock Beneficially Owned |
Common
Stock Voting Percentage Beneficially Owned |
Preferred
Stock Beneficially Owned |
Shares
of Preferred Stock Voting Percentage Beneficially Owned |
Total
Approximate Voting Percentage Beneficially Owned (1) |
Executive Officers and
Directors |
|
|
|
|
|
Ryohei Uetaki (1)
Address: 2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo,
162-0051, Japan |
10,000,000 |
93.9% |
10,000,000 |
* |
92.62% |
5% or greater shareholders |
|
|
|
|
|
None |
- |
- |
- |
- |
- |
* Our Series A Preferred Stock currently has no voting
rights. Currently we have 10,000,000 shares of Series A Preferred Stock issued and outstanding of which Ryohei Uetaki owns and controls
through his exclusive membership interest in SKYPR LLC.
(1) Ryohei Uetaki currently serves as our Chief Executive
Officer, Chief Financial Officer, President, Director, Secretary, and Treasurer. Ryohei Uetaki owns 100% of the membership interests
in SKYPR LLC., a Delaware Limited Liability Company, which owns 7,000,000 shares of our common stock and 10,000,000 shares of our Series
A Preferred Stock. The table above includes the share ownership of SKYPR LLC with Ryohei Uetaki collectively, in the row for Mr. Uetaki.
Beneficial ownership has been determined in accordance
with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person
(if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially
owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of
the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed
to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of
outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power
at any particular date.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On October 25, 2019 the Company issued 10,000,000
shares of restricted Common Stock to Ryohei Uetaki for services rendered to the Company. Additionally, on the same day, it issued 10,000,000
shares of its restricted Series A Preferred Stock to Ryohei Uetaki, also for services rendered. The aforementioned shares of common and
preferred stock were all issued at par value, $0.0001, having a total value of $2,000. No monies were exchanged per the issuances and
the shares were all exempt from the registration provisions of Section 5 of the Securities Act under Section 4(2) of such same said act.
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 is an industrial automation equipment manufacturer currently focused on developing and designing robots,
drones, Web3 infrastructure, IoT equipment and other related products.
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 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.
For the year ended October 31, 2022, the Company
borrowed $0 from Ryohei Uetaki, our CEO. The total due was $18,517 for salary and $458 for expenses as of October 31, 2022, and $455
for expenses as of October 31, 2021, and were unsecured, due on demand and non-interest bearing.
As of April 30, 2023, our CEO and Director, to Ryohei
Uetaki, has advanced the Company $14,911 for salary, $5,568 for health insurance and $458 for expenses. This advance is considered as
a loan to the Company which is unsecured, noninterest-bearing and payable on demand.
Aiming to establish a new revenue source, the Company
planned to enter a new business, create avatars which offer exploring opportunities in metaverse. Found less feasible to realize reasonable
revenue, the Company gave up the idea and related assets were transferred to ZEXAVERSE before the Company put those in service.
For the said transaction, the Company and ZEXAVERSE
entered into a memorandum on July 1, 2022 and assets were all transferred to ZEXAVERSE on July 15, 2022. However, the Company was the
contracting party with the vendors in sourcing assets for the new business, the Company invoiced the sum of contract value with vendors
to ZEXAVERSE upon the said transfer in the amount of $727,911. The amount we disbursed to the vendors and the amount the company invoiced
to ZEXAVERSE was paid on October 31, 2022. There is no revenue/loss, inventory, cost of goods sold occurred to the Company in relation
to this transaction.
For the year ended October 31, 2022, revenue totaling
$7,879 was recognized from sales to related party ZEXAVERSE Corporation (hereinafter referred to as “ZEXAVERSE”). ZEXAVERSE
is considered as a related party due to the fact that Ryohei Uetaki, our CEO, controls this entity. For the year ended October 31, 2021,
there were no related party sales.
The terms and conditions applied to the above transactions
were the same as those applied to sales to customers not related to the Company.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
Below is the aggregate amount of fees billed for
professional services rendered by our principal accountants with respect to our last two fiscal years.
|
|
|
2022 |
2021 |
|
Audit
fees |
M&K
CPAS, PLLC |
$57,677 |
$31,000 |
|
Audit
related fees |
|
|
|
|
Tax
fees |
|
|
$3,854 |
|
All
other fees |
|
|
|
|
|
|
|
|
|
Total |
|
$57,677 |
$34,854 |
Board of Directors Pre-Approval Process, Policies
and Procedures
Our principal auditors have informed our sole director
of the scope and nature of each service provided. With respect to the provisions of services other than audit, review, or attest services,
our principal accountants brought such services to the attention of our sole director prior to commencing such services.
MATERIAL
CHANGES
None.
-
27 -
Table
of Contents
FINANCIAL
STATEMENTS AND EXHIBITS
INDEX
TO FINANCIAL STATEMENTS
|
|
Pages |
|
|
|
Report
of Independent Registered Public Accounting Firm (PCAOB FIRM ID - 2738) |
|
F2 |
|
|
|
Consolidated
Balance Sheets |
|
F3 |
|
|
|
Consolidated
Statements of Operations and Comprehensive Income |
|
F4 |
|
|
|
Consolidated
Statements of Changes in Shareholders’ Equity |
|
F5 |
|
|
|
Consolidated
Statements of Cash Flows |
|
F6 |
|
|
|
Notes
to the Audited Consolidated Financial Statements |
|
F7-F10 |
-
F1 -
Table
of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Shareholders of World Scan Project,
Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of World Scan Project, Inc. (the Company) as of October 31, 2022 and 2021, and the related consolidated statements of
operations and comprehensive income, changes in shareholders’ equity, and cash flows for each of the years then ended and the related
notes to the consolidated financial statements. In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company as of October 31, 2022 and 2021, and the results of its operations and its cash flows
for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below
is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to
the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions
on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition
As discussed in Note 2 to the financial statements, when another party
is involved in providing goods or services to the Company’s clients, a determination is made as to who is acting in the capacity
as the principal in the sales transaction.
Auditing management’s evaluation of agreements with customers involves
significant judgment, given the fact that some agreements require management’s evaluation of principal versus agent.
To evaluate the appropriateness and accuracy of the assessment by management,
we evaluated management’s assessment in relationship to the relevant agreements.
/s/ M&K CPAS, PLLC
We have served as the Company’s auditor since 2020.
Houston, TX
February 10, 2023
-
F2 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED BALANCE SHEETS
|
|
October
31, 2022 |
|
October
31, 2021 |
ASSETS |
|
|
|
|
Current
Assets |
|
|
|
|
Cash
and cash equivalents |
$ |
5,836,065 |
$ |
2,583,218 |
Accounts
receivable, trade |
|
1,847,068 |
|
4,724 |
Other
receivables, current |
|
489 |
|
16,775 |
Advance
payments and prepaid expenses |
|
16,389,562 |
|
3,035,135 |
Inventories |
|
403 |
|
47,994 |
TOTAL
CURRENT ASSETS |
|
24,073,587 |
|
5,687,846 |
Non-current
assets |
|
|
|
|
Furniture,
fixtures and equipment, net |
|
280,024 |
|
161,390 |
Lease
asset long term |
|
705,007 |
|
406,816 |
Long
term prepaid expenses and security deposits, net |
|
112,145 |
|
230,278 |
Deferred
tax assets |
|
307,438 |
|
- |
Other
intangible assets, non-current |
|
19,960 |
|
- |
TOTAL
NON-CURRENT ASSETS |
|
1,424,574 |
|
798,484 |
|
|
|
|
|
TOTAL
ASSETS |
$ |
25,498,161 |
$ |
6,486,330 |
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accrued
expenses and other payables |
$ |
2,453,668 |
$ |
261,809 |
Accounts
payable - related party |
|
18,517 |
|
- |
Income
taxes payable |
|
3,329,572 |
|
325,693 |
Consumption
tax payable |
|
941,483 |
|
170,294 |
Short-term
lease liability |
|
231,041 |
|
219,892 |
Deferred
revenue |
|
7,401,171 |
|
1,476,492 |
Due
to related party |
|
458 |
|
455 |
TOTAL
CURRENT LIABILITIES |
|
14,375,910 |
|
2,454,635 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
|
Lease
liability long term |
|
520,002 |
|
219,474 |
|
|
|
|
|
TOTAL
LIABILITIES |
$ |
14,895,912 |
$ |
2,674,109 |
|
|
|
|
|
Shareholders'
Equity |
|
|
|
|
Preferred
stock ($0.0001 par value, 200,000,000 shares authorized; 10,000,000 shares issued and outstanding as of October 31, 2022 and 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 October 31, 2022 and 2021) |
|
1,065 |
|
1,065 |
Additional
paid-in capital |
|
323,990 |
|
323,990 |
Accumulated
earnings |
|
12,555,142 |
|
3,646,360 |
Accumulated
other comprehensive income |
|
(2,278,948) |
|
(160,194) |
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY |
$ |
10,602,249 |
$ |
3,812,221 |
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
25,498,161 |
$ |
6,486,330 |
|
|
|
|
|
The
accompanying notes are an integral part of these audited financial statements. |
-
F3 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
|
|
|
Year
Ended |
|
Year
Ended |
|
|
|
October
31, 2022 |
|
October
31, 2021 |
|
|
|
|
|
|
Revenues |
|
|
|
|
Revenues |
$ |
14,515,175 |
$ |
11,813,816 |
Revenues
– related party |
|
7,879 |
|
- |
Revenues,
net |
|
14,917,287 |
|
- |
Total
Revenues |
|
29,440,341 |
|
11,813,816 |
Cost
of revenues |
|
11,319,348 |
|
5,019,811 |
Gross
profit |
|
18,120,993 |
|
6,794,005 |
|
|
|
|
|
|
OPERATING
EXPENSE |
|
|
|
|
|
General
and administrative expenses |
|
4,308,251 |
|
3,462,056 |
Total
operating Expenses |
|
4,308,251 |
|
3,462,056 |
|
|
|
|
|
|
Income
from operations |
|
13,812,742 |
|
3,331,840 |
|
|
|
|
|
|
Other
income (expense) |
|
|
|
|
|
Other
income |
|
20,918 |
|
333,843 |
|
Interest
Expense |
|
- |
|
(3) |
Total
other income (expense) |
|
21,918 |
|
333,840 |
|
|
|
|
|
|
Net
income before tax |
|
13,833,660 |
|
3,665,789 |
Income
tax expense |
|
4,924,878 |
|
1,333,338 |
NET
INCOME (LOSS) |
$ |
8,908,782 |
$ |
2,332,451 |
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
Foreign
currency translation adjustment |
$ |
(2,118,754) |
$ |
(242,488) |
|
|
|
|
|
|
TOTAL
COMPREHENSIVE INCOME (LOSS) |
$ |
6, 790,028 |
$ |
2,089,963 |
|
|
|
|
|
|
Income
per common share |
|
|
|
|
|
Basic |
$ |
0.84 |
$ |
0.22 |
|
Diluted |
$ |
0.43 |
$ |
0.11 |
|
|
|
|
|
|
Weighted
average common shares outstanding |
|
|
|
|
|
Basic |
|
10,647,350 |
|
10,647,350 |
|
Diluted |
|
20,647,350 |
|
20,647,350 |
|
|
|
|
|
|
The
accompanying notes are an integral part of these audited financial statements. |
-
F4 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED |
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL |
|
OTHER |
|
ACCUMULATED |
|
TOTAL |
|
PREFERRED
STOCK |
|
COMMON
STOCK |
|
PAID
IN |
|
COMPREHENSIVE |
|
EARNINGS |
|
EQUITY |
|
NUMBER |
|
AMOUNT |
|
NUMBER |
|
AMOUNT |
|
CAPITAL |
|
INCOME
(LOSS) |
|
(DEFICIT) |
|
(DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
- October 31, 2020 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,987 |
$ |
82,294 |
$ |
1,313,909 |
$ |
1,722,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
2,332,451 |
|
2,332,451 |
Imputed
interest |
- |
|
- |
|
- |
|
- |
|
3 |
|
- |
|
- |
|
3 |
Foreign
currency translation |
- |
|
- |
|
- |
|
- |
|
- |
|
(242,488) |
|
- |
|
(242,488) |
Balance
- October 31, 2021 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,990 |
$ |
(160,194) |
$ |
3,646,360 |
$ |
3,812,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
8,908,782 |
|
8,908,782 |
Foreign
currency translation |
- |
|
- |
|
- |
|
- |
|
- |
|
(2,118,754) |
|
- |
|
(2,118,754) |
Balance
- October 31, 2022 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,990 |
$ |
(2,278,948) |
$ |
12,555,142 |
$ |
10,602,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these audited financial statements. |
-
F5 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
Year
Ended |
|
Year
Ended |
|
|
|
October
31, 2022 |
|
October
31, 2021 |
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
Net
income |
$ |
8,908,782 |
$ |
2,332,451 |
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
Depreciation
and amortization |
|
146,437 |
|
16,136 |
|
Imputed
interest |
|
- |
|
3 |
|
Lease
expense |
|
311,951 |
|
99,850 |
Changes
in operating assets and liabilities: |
|
|
|
|
|
Accounts
receivable |
|
(2,145,524) |
|
845,298 |
|
Advance
payments and other prepaid expense |
|
(16,413,398) |
|
(2,626,641) |
|
Inventories |
|
42,482 |
|
(42,282) |
|
Other
receivables |
|
14,443 |
|
(17,772) |
|
Other
current assets |
|
(41,345) |
|
(211,855) |
|
Deferred
tax assets |
|
(357,819) |
|
- |
|
Accrued
expenses and other payables |
|
2,642,891 |
|
140,056 |
|
Software |
|
(24,602) |
|
- |
|
Other
current liabilities |
|
- |
|
(12,751) |
|
Income
tax payable |
|
3,583,726 |
|
(149,234) |
|
Consumption
tax payable |
|
943,365 |
|
161,944 |
|
Deferred
revenue |
|
7,292,667 |
|
1,564,294 |
|
ROU
asset/liability |
|
(298,465) |
|
(67,300) |
|
Net
cash provided by operating activities |
|
4,605,591 |
|
2,032,197 |
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
Cash
paid for purchase of fixed assets |
|
(227,180) |
|
(187,123) |
|
Net
cash used in investing activities |
|
(227,180) |
|
(187,123) |
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
Proceeds
from due to related party |
|
- |
|
455 |
|
Net
cash provided by (used in) financing activities |
|
- |
|
455 |
|
|
|
|
|
|
Net
effect of exchange rate changes on cash |
$ |
(1,125,564) |
$ |
(236,917) |
|
|
|
|
|
|
Net
Change in Cash and Cash Equivalents |
|
3,252,847 |
|
1,608,612 |
Cash
and cash equivalents - beginning of period |
|
2,583,218 |
|
974,606 |
Cash
and cash equivalents - end of period |
$ |
5,836,065 |
$ |
2,583,218 |
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION |
|
|
Interest
paid |
$ |
- |
$ |
- |
Income
taxes paid |
$ |
1,695,213 |
$ |
1,333,338 |
|
NON-CASH
INVESTING AND FINANCING TRANSACTIONS |
ROU
Asset/Liability |
$ |
1,269,132 |
$ |
555,942 |
|
|
|
|
|
|
The
accompanying notes are an integral part of these audited financial statements. |
-
F6 -
Table
of Contents
NOTES TO THE AUDITED CONSOLIDATED
FINANCIAL STATEMENTS
OCTOBER 31, 2022
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.
Our principal executive offices are located at 2-18-23,
Nishiwaseda, Shinjuku-Ku, Tokyo, 169-0051, Japan.
The Company has elected October 31st as
its year end.
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.
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.
-
F7 -
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:
|
October
31, 2022 |
Current JPY: US$1 exchange
rate |
148.26 |
Average JPY: US$1 exchange
rate |
127.39 |
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 year ended October 31, 2022. For the year ended October
31, 2021, a consumption tax refund of $330,694 was recorded in Other income due to a tax exemption.
The following table summarizes
our revenue recognized under ASC 606 in our consolidated statements of operations:
|
|
Year
Ended |
|
|
October
31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
Revenues |
|
|
|
|
|
|
Product
sales |
|
$ |
14,043,637 |
|
$ |
11,637,104 |
Product
sales – related party |
|
|
7,879 |
|
|
- |
Crypto
miners sales, net |
|
|
14,917,287 |
|
|
- |
Program
for educational institution |
|
|
33,541 |
|
|
38,606 |
Other |
|
|
437,997 |
|
|
138,106 |
Total
Revenue Under ASC 606 |
|
|
29,440,341 |
|
|
11,813,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue Under ASC 606 |
|
$ |
29,440,341 |
|
$ |
11,813,816 |
|
|
|
|
|
|
|
|
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 October 31, 2022, the Company no deferred revenues related to product sales.
Revenue – related party
During the year ended October 31, 2022, revenue totaling
approximately $7,879 was recognized from sales to related party ZEXAVERSE Corporation (hereinafter referred to as “ZEXAVERSE”).
ZEXAVERSE is considered as a related party due to the fact that Ryohei Uetaki, CEO of the Company, controls the said company. The terms
and conditions applied to the above transactions were the same as those applied to sales to customers not related to the Company.
Revenue from crypto miners sales
During the year ended October 31, 2022, 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 year ended October 31, 2022, Cost of goods sold for minor purchases,
netted by the gross sales was $35,580,995. $7,401,171 of deferred revenues 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 October
31, 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.
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.
Basic and diluted earnings per share are as follows:
|
|
October
31, |
|
|
|
|
|
|
|
2022 |
|
2021 |
|
Basic
earnings per share |
|
$ |
.84 |
|
$ |
.22 |
|
Diluted
earnings per share |
|
$ |
.43 |
|
$ |
.11 |
|
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,
defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant
assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists
of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
- 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 October 31, 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
October 31, 2022 and October 31, 2021, 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 year ended October 31, 2022, 51.81% of the
inventories were purchased from G-Force in the amount of $5,864,586 and 24.95% of the inventories were purchased from DN Branch in the
amount of $2,823,899.
For the year ended October 31, 2021, 90.6% of the
inventories were purchased from G-Force in the amount of $4,545,382.
Concentration of Revenues
Gross revenues from customers accounting for 10%
or more of total revenues are as follows:
For the year ended October 31, 2022, 48.31% of total
revenue was generated from Drone Net in the amount of $14,221,414.
For the year ended October 31, 2021, 98.95% of total
revenue was generated from Drone Net in the amount of $11,690,057.
-
F8 -
Table
of Contents
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 October 31, 2022, the Company recorded cash
and cash equivalents of $5,836,065, an increase of $3,252,847 compared to $2,583,218 in the prior year ended October 31, 2021, and the
Company’s major sources of liquidity derived from the sales of drones and crypto miners. As stated in the consolidated financial
statements, the Company, for the year ended on October 31, 2022, recorded a net income of $8,908,782 (+282% y-o-y) and earned $4,605,591
(+127% y-o-y) in cash flows from operating activities.
Having reviewed the above, the Company realizes that whether we shall
be able to continue demonstrating the positive trends demonstrated in our financial statements, lies in our ability to continue to generate
revenue and increase revenue going forward. 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(s) in the future and procure any required funds needed
to meet the redemption of its debt during normal business operations.
Management has evaluated the estimated impact of COVID-19, which has become
a significant factor impacting operations of businesses globally, one of which we believe we will need to continue to monitor as to the
potential effects it may have on our own business.
The Company assessed the impact of COVID-19 and believes there to be minimal
impact of COVID-19 on the Company’s drone sales, which is currently the Company’s primary source of revenue. The Company
will need to continue to monitor COVID-19 and the effects it may have, socially and economically, as it is possible that such developments
may in fact impact our operations going forward or more specifically, our sales results. At this time, the Company believes that it will
not affect our assumptions as a going concern.
Based
on the Company’s evaluation, based on the positive financial trends it has experienced year over year e.g. increase in net income
and increase in net cash provided by operating activities, management believes that it has completely mitigated the circumstances 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 prior year 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 - ACCOUNTS RECEIVABLE
Accounts receivable from customers totaled $1,847,068
as of October 31, 2022 and $4,724 as of October 31, 2021. No bad debt allowance was provided as of October 31, 2022 and 2021 respectively.
Concentration of Accounts Receivable
Accounts receivable from customers accounting for
10% or more of total accounts receivable are as follows:
For the year ended October 31, 2022, 77.36% of total
accounts receivable was owed to the Company by Drone Net in the amount of $1,428,976 and 15.36% of total accounts receivable was owed
to the Company by Chabi land in the amount of $283,792.
NOTE 5 - ADVANCE PAYMENTS AND PREPAID EXPENSES
Advance payments are comprised of the payments
for the undelivered products and other deliverables. As of October 31, 2022 and October 31, 2021, the Company had advance payments and
other prepaid expenses of $16,389,562 and $3,035,135, respectively. Details of the advance payments as of October 31, 2022 and October
31, 2021 are as follows:
|
|
October
31, 2022 |
|
October
31, 2021 |
Purchase
of products from G-Force Inc. |
$ |
101,158 |
$ |
2,343,700 |
Purchase
of products from Radio Maker |
|
- |
|
325,441 |
Purchase
of products from Solar Samba |
|
- |
|
119,395 |
Purchase
of parts from Bluish Co., Ltd |
|
- |
|
21,360 |
Purchase
of parts from Team M |
|
37,097 |
|
48,246 |
Purchase
of parts from Wise Partners Co., Ltd |
|
228,785 |
|
- |
Purchase
of parts from Rogyx Co., Ltd |
|
31,161 |
|
- |
Purchase
of cryptocurrency miners from Cellessence Corp. |
|
15,915,311 |
|
- |
Other
advances and prepaid expenses |
|
76,050 |
|
176,993 |
Totals |
$ |
16,389,562 |
$ |
3,035,135 |
NOTE 6 - 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 year ended October 31, 2022, the Company
purchased long-term assets, including building renovations, totaling approximately $227,180. The Company is depreciating these assets
over a 5-10 year period once they were put into use. Depreciation expense for the year ended October 31, 2022 was approximately
$50,535.
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.
The Company is depreciating these assets over a five year period once they have been put into use. Depreciation expense for the year
ended October 31, 2021 was approximately $16,136.
NOTE 7 - DEFERRED REVENUE
Deferred revenue is the amount the Company received
in advance from the customer for their orders placed with us. As of October 31, 2022 deferred revenue in the amount of $7,401,171 was
related to our sales of cryptocurrency miners which represents a large amount in both number of transactions and values. As of October
31, 2021, deferred revenue in the amount of $1,476,492 was related to our sales of drones.
NOTE 8 - INCOME TAXES
For the years ended October 31, 2022 and 2021, the
Company had income tax expense in the amount of $4,924,878 and $1,333,338, respectively.
United States
The Company was incorporated under the laws of the
State of Delaware on October 25, 2019. The U.S. federal income tax rate is 21%.
Japan
The Company conducts its major businesses in Japan
through WSP 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 4 million |
|
Up
to JPY 8 million |
|
Over
JPY 8 million |
2022 |
22.9% |
|
25.37% |
|
37.59% |
|
|
|
|
|
|
|
As of October 31, 2022 and October 31, 2021, the
Company had income tax payable of $3,329,572 and $325,693, respectively.
For the years ended December 31, 2022 and 2021, the
Company’s income tax expenses are as follows:
|
|
For the Years
Ended |
|
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
Current |
|
$ |
5,282,697 |
|
|
$ |
1,333,338 |
|
Deferred |
|
|
(357,819) |
|
|
|
- |
|
Total |
|
$ |
4,924,878 |
|
|
$ |
1,333,338 |
|
A reconciliation of the effective income tax rates
reflected in the accompanying consolidated statements of operations to the Japanese statutory tax rate for the years ended December 31,
2022 and 2021 is as follows:
|
|
For the Years
Ended |
|
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
Japanese statutory tax rate |
|
|
34.59 |
% |
|
|
34.59 |
% |
Change in valuation allowance |
|
|
1.01 |
% |
|
|
1.78 |
% |
Effective tax rate |
|
|
35.60 |
% |
|
|
36.37 |
% |
The tax effects of temporary differences that give
rise to the deferred tax assets at December 31, 2022 and 2021 are presented below:
|
|
December
31, |
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
Deferred tax assets |
|
|
|
|
|
|
|
|
Business tax payable |
|
$ |
307,438 |
|
|
$ |
34,744 |
|
Other |
|
|
82,991 |
|
|
|
9,016 |
|
Subtotal |
|
|
390,429 |
|
|
|
43,760 |
|
Less valuation allowance |
|
|
(82,991 |
) |
|
|
(43,760 |
) |
Total deferred tax assets |
|
$ |
307,438 |
|
|
$ |
- |
|
The realization of deferred tax assets is dependent
upon the generation of sufficient taxable income of the appropriate character in future periods. The Company regularly assesses the ability
to realize its deferred tax assets and establish a valuation allowance if it is more-likely-than-not that some portion of the deferred
tax assets will not be realized. The Company weighs all available positive and negative evidence, including its earnings history and
results of recent operations, projected future taxable income, and tax planning strategies.
The amount of the deferred tax asset considered realizable,
however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective
negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such
as the Company’s projections for growth. The adjustments of a valuation allowance against deferred tax assets may cause greater
volatility in the effective tax rate in the periods in which the valuation allowance is adjusted. For the year ended October 31, 2021,
a full valuation allowance was provided. For the year ended October 31, 2022, certain valuation allowance was released for WSP Japan
considering the collectability of deferred tax assets.
-
F9 -
Table
of Contents
NOTE 9 - 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 October 31, 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 October
31, 2022 and October 31, 2021.
NOTE 10 - RELATED-PARTY TRANSACTIONS
Revenue
During the year ended October 31, 2022, revenue totaling
$7,879 was recognized from sales to related party ZEXAVERSE. The said company is considered as a related party due to the fact that Ryohei
Uetaki, CEO of the Company, controls the said company.
The terms and conditions applied to the above transactions
were the same as those applied to sales to customers not related to the Company.
Loan to the Company
As of October 31, 2022, our CEO and Director, Ryohei
Uetaki, has advanced to the Company $18,517 for salary and $458 for expenses. This advance is considered as a loan to the Company
which is unsecured, noninterest-bearing and payable on demand.
Transfer of assets to ZEXAVERSE
Aiming to establish a new revenue source, the Company
planned to enter a new business, create avatars which offer exploring opportunities in metaverse. Found less feasible to realize reasonable
revenue, the Company gave up the idea and related assets were transferred to ZEXAVERSE before the Company put those in service.
For the said transaction, the Company and ZEXAVERSE
entered into a memorandum on July 1, 2022 and assets were all transferred to ZEXAVERSE on July 15, 2022. However, the Company was the
contracting party with the vendors in sourcing assets for the new business, the Company invoiced the sum of contract value with vendors
to ZEXAVERSE upon the said transfer and booked the said amount as other receivables – related party, a total of $727,911. The amount
we disbursed to the vendors and the amount the company invoiced to ZEXAVERSE, which was paid by October 31, 2022, are the same amount.
There is no revenue/loss, inventory, cost of goods sold occurred or recorded as an asset to the Company in relation to this transaction.
Sales activities with ZEXAVERSE
During the year ended October 31, 2022, the Company sold goggles ($7,879
in total) to ZEXAVERSE. The terms of conditions applied to the said transactions were the same conditions the Company applies to the
non-Related Party clients, and the Company did not give any advantages to ZEXAVERSE.
Account receivables and sales relevant to the said transactions are presented
in the Consolidated Balance Sheets and Consolidated Statements of Operations and Comprehensive Income hereinabove.
NOTE 11 - 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 $311,951 and $99,850 in operating lease costs for the years
ended October 31, 2022 and October 31, 2021, respectively.
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. 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, 2022 |
October
31, 2021 |
|
|
|
|
|
|
Right-of-use
assets |
Lease
asset long |
$ |
705,007 |
$ |
406,816 |
Current
lease liabilities |
Short-term
lease liability |
|
231,041 |
|
219,892 |
Non-current
lease liabilities |
Lease
liability long term |
|
520,002 |
|
219,474 |
|
|
|
|
|
|
Maturities
of lease liabilities as of October 31, 2022 are as follows: |
|
|
|
|
|
|
|
2023 |
231,041 |
|
|
|
|
2024 |
69,464 |
|
|
|
|
2025 |
52,120 |
|
|
|
|
2026
and beyond |
398,418 |
|
|
|
|
Total |
751,043 |
|
|
|
|
Add(Less):
Imputed interest |
(232,304) |
|
|
|
|
Present
value of lease liabilities |
518,739 |
|
|
|
|
NOTE 12 - ACCRUED EXPENSES AND OTHER PAYABLES
Accrued expenses and other payables are comprised
of trade accounts payable, accrued payroll tax liabilities and accrued expenses As of October 31, 2022 and October 31, 2021, the Company
had accrued expenses and other payables of $2,453,668 and $261,809, respectively. Details of the accrued expenses and other payables
as of October 31, 2022 and October 31, 2021 are as follows:
|
|
October
31, 2022 |
|
|
October
31, 2021 |
Accounts
payable, trade |
$ |
2,383,161 |
|
$ |
130,393 |
Accounts
payable for employees |
|
54,879 |
|
|
90,922 |
Accrued
payroll liabilities |
|
15,628 |
|
|
40,494 |
Totals |
$ |
2,453,668 |
|
$ |
261,809 |
NOTE 13 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events through February
10, 2023, the date on which the consolidated financial statements were available to be issued and has found no material transactions
to report.
-
F10 -
Table
of Contents
INDEX TO THE UNAUDITED
FINANCIAL STATEMENTS
|
|
Pages |
|
|
|
Consolidated
Balance Sheets - Unaudited |
|
F12 |
|
|
|
Consolidated
Statements of Operations and Comprehensive Income - Unaudited |
|
F13 |
|
|
|
Consolidated
Statements of Changes in Shareholders’ Equity - Unaudited |
|
F14 |
|
|
|
Consolidated
Statements of Cash Flows - Unaudited |
|
F15 |
|
|
|
Notes
to the Audited Consolidated Financial Statements - Unaudited |
|
F16-F18 |
-F11-
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED BALANCE SHEETS
|
|
April 30, 2023
(Unaudited) |
|
October 31, 2022 |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
$ |
2,381,921 |
$ |
5,836,065 |
Accounts receivable, trade |
|
27,585 |
|
1,847,068 |
Other receivables, current |
|
668 |
|
489 |
Advance payments and prepaid expenses |
|
31,477,156 |
|
16,389,562 |
Inventories |
|
446 |
|
403 |
TOTAL CURRENT ASSETS |
|
33,887,776 |
|
24,073,587 |
Non-current assets |
|
|
|
|
Furniture, fixtures and equipment, net |
|
312,347 |
|
280,024 |
Lease asset long term |
|
660,055 |
|
705,007 |
Long term prepaid expenses and security deposits, net |
|
96,372 |
|
112,145 |
Deferred tax assets |
|
650,604 |
|
307,438 |
Other intangible assets, non-current |
|
- |
|
19,960 |
TOTAL NON-CURRENT ASSETS |
|
1,719,378 |
|
1,424,574 |
|
|
|
|
|
TOTAL ASSETS |
$ |
35,607,154 |
$ |
25,498,161 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accrued expenses and other payables |
$ |
6,674,514 |
$ |
2,453,668 |
Accounts payable - related party |
|
20,479 |
|
18,517 |
Income taxes payable |
|
7,079,847 |
|
3,329,572 |
Consumption tax payable |
|
1,870,816 |
|
941,483 |
Short-term lease liability |
|
175,604 |
|
231,041 |
Deferred revenue |
|
333,721 |
|
7,401,171 |
Due to related party |
|
458 |
|
458 |
TOTAL CURRENT LIABILITIES |
|
16,155,439 |
|
14,375,910 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
Lease liability long term |
|
525,384 |
|
520,002 |
|
|
|
|
|
TOTAL LIABILITIES |
$ |
16,680,823 |
$ |
14,895,912 |
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
Preferred stock ($0.0001 par value, 200,000,000 shares authorized; 10,000,000 shares issued and outstanding as of April 30, 2023 and October 31, 2022) |
$ |
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, 2023 and October 31, 2022) |
|
1,065 |
|
1,065 |
Additional paid-in capital |
|
323,990 |
|
323,990 |
Accumulated earnings |
|
19,703,898 |
|
12,555,142 |
Accumulated other comprehensive income |
|
(1,103,622) |
|
(2,278,948) |
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
$ |
18,926,331 |
$ |
10,602,249 |
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
35,607,154 |
$ |
25,498,161 |
The accompanying notes are an integral part of these
unaudited financial statements.
- F12 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(UNAUDITED)
|
|
For the Three Months
Ended April 30, 2023 |
|
For the Three Months
Ended April 30, 2022 |
|
For the Six Months
Ended April 30, 2023 |
|
For the Six Months
Ended April 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
734 |
$ |
8,266,406 |
$ |
5,991 |
$ |
13,196,434 |
|
Revenues, net |
|
15,517,197 |
|
- |
|
23,255,104 |
|
- |
|
Total Revenues |
|
15,517,931 |
|
8,266,406 |
|
23,261,095 |
|
13,196,434 |
|
Cost of revenues |
|
628 |
|
3,680,443 |
|
4,120 |
|
6,064,436 |
|
Gross profit |
$ |
15,517,303 |
$ |
4,585,963 |
$ |
23,256,975 |
$ |
7,131,998 |
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSE |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
8,091,044 |
|
1.161,020 |
|
12,200,702 |
|
2,116,257 |
|
Total operating expenses |
|
8,091,044 |
|
1,161,020 |
|
12,200,702 |
|
2,116,257 |
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
7,426,259 |
|
3,424,943 |
|
11,056,273 |
|
5,015,741 |
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
Other income |
|
10 |
|
7,727 |
|
10 |
|
27,190 |
|
Other expense |
|
(31,939) |
|
- |
|
(31,939) |
|
- |
|
Total other income (expenses) |
|
(31,929) |
|
7,727 |
|
(31,929) |
|
27,190 |
|
|
|
|
|
|
|
|
|
|
|
Net income before tax |
|
7,394,330 |
|
3,432,670 |
|
11,024,344 |
|
5,042,931 |
|
Income tax expense |
|
2,267,815 |
|
1,285,389 |
|
3,875,588 |
|
1,957,109 |
|
NET INCOME |
$ |
5,126,515 |
$ |
2,147,281 |
$ |
7,148,756 |
$ |
3,085,822 |
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
$ |
(356,592 ) |
$ |
(672,155) |
$ |
1,175,326 |
$ |
(729,598) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME (LOSS) |
$ |
4,769,923 |
$ |
1,475,126 |
$ |
8,324,082 |
$ |
2,356,224 |
|
|
|
|
|
|
|
|
|
|
|
Income per common share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
$ |
0.20 |
$ |
.67 |
$ |
.29 |
|
Diluted |
$ |
0.25 |
$ |
0.10 |
$ |
.35 |
$ |
.15 |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
The accompanying notes are an integral part of these
unaudited financial statements.
- F13 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY (DEFICIT)
FOR THE PERIOD ENDING APRIL 30,
2023
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED |
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL |
|
OTHER |
|
ACCUMULATED |
|
TOTAL |
|
PREFERRED STOCK |
|
COMMON STOCK |
|
PAID IN |
|
COMPREHENSIVE |
|
EARNINGS |
|
EQUITY |
|
NUMBER |
|
AMOUNT |
|
NUMBER |
|
AMOUNT |
|
CAPITAL |
|
INCOME (LOSS) |
|
(DEFICIT) |
|
(DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - October 31, 2022 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,990 |
$ |
(2,278,948) |
$ |
12,555,142 |
$ |
10,602,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
2,022,241 |
|
2,022,241 |
Foreign currency translation |
- |
|
- |
|
- |
|
- |
|
- |
|
1,531,918 |
|
- |
|
1,531,198 |
Balance
– January 31, 2023 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,990 |
$ |
(747,030) |
$ |
14,577,383 |
$ |
14,156,408 |
Net
income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
5,126,515 |
|
5,126,515 |
Foreign
currency translation |
- |
|
- |
|
- |
|
- |
|
- |
|
(356,592 ) |
|
- |
|
(356,952) |
Balance
- April 30, 2023 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,990 |
$ |
(1,103,622) |
$ |
19,703,898 |
$ |
18,926,331 |
The accompanying notes
are an integral part of these unaudited financial statements.
WORLD SCAN PROJECT,
INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’
EQUITY (DEFICIT)
FOR THE PERIOD ENDING APRIL 30,
2022
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED |
|
|
|
|
|
|
|
|
|
|
|
|
|
ADDITIONAL |
|
OTHER |
|
ACCUMULATED |
|
TOTAL |
|
PREFERRED STOCK |
|
COMMON STOCK |
|
PAID IN |
|
COMPREHENSIVE |
|
EARNINGS |
|
EQUITY |
|
NUMBER |
|
AMOUNT |
|
NUMBER |
|
AMOUNT |
|
CAPITAL |
|
INCOME (LOSS) |
|
(DEFICIT) |
|
(DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - October 31, 2021 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
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 |
10,000,000 |
$ |
1,000 |
|
10,647,.350 |
$ |
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 |
10,000,000 |
$ |
1,000 |
|
10,647,350 |
$ |
1,065 |
$ |
323,990 |
$ |
(889,792) |
$ |
6,732,182 |
$ |
6,168,445 |
The accompanying notes
are an integral part of these unaudited financial statements.
- F14 -
Table
of Contents
WORLD SCAN PROJECT, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
|
|
|
Six Months |
|
Six Months |
|
|
|
April 30, 2023 |
|
April 30, 2022 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
Net income |
$ |
7,148,756 |
$ |
3,085,822 |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
26,019 |
|
22,179 |
|
Amortization of long-term deposits |
|
27,467 |
|
58,377 |
|
Lease expense |
|
144,775 |
|
165,942 |
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
2,005,392 |
|
4,598 |
|
Advance payments and other prepaid expense |
|
(13,302,962) |
|
(3,651,301) |
|
Inventories |
|
- |
|
(152,870) |
|
Other receivables |
|
(127) |
|
16,221 |
|
Deposits |
|
- |
|
(15,148) |
|
Other intangible assets |
|
- |
|
(28,232) |
|
Deferred tax assets |
|
(309,441) |
|
- |
|
Accrued expenses and other payables |
|
3,945,425 |
|
19,453 |
|
Taxes payable |
|
4,211,460 |
|
1,877,878 |
|
Deferred revenue |
|
(7,813,344) |
|
(1,431,916) |
|
ROU asset/liability |
|
(154,684) |
|
(146,103) |
|
Net cash used in operating activities |
|
(4,071,264) |
|
(175,100) |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
Cash paid for purchase of fixed assets |
|
- |
|
(243,462) |
|
Net cash used in investing activities |
|
- |
|
(243,462) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
Proceeds from due to related party |
|
- |
|
- |
|
Net cash provided by (used in) financing activities |
|
- |
|
- |
|
|
|
|
|
|
Net effect of exchange rate changes on cash |
$ |
617,120 |
$ |
(251,169) |
|
|
|
|
|
|
Net Change in Cash and Cash Equivalents |
|
(3,454,144) |
|
(669,731) |
Cash and cash equivalents - beginning of period |
|
5,836,065 |
|
2,583,218 |
Cash and cash equivalents - end of period |
$ |
2,381,921 |
$ |
1,913,487 |
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
Interest paid |
$ |
- |
$ |
- |
Income taxes paid |
$ |
- |
$ |
- |
|
NON-CASH INVESTING AND FINANCING TRANSACTIONS |
ROU Asset/Liability |
$ |
- |
$ |
1,269,132 |
The accompanying notes are an integral part of these
unaudited financial statements.
- F15 -
Table
of Contents
WORLD SCAN
PROJECT, INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2023
(UNAUDITED)
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.
Our principal
executive offices are located at 2-18-23, Nishiwaseda, Shinjuku-Ku, Tokyo, 169-0051, Japan.
The Company
has elected October 31st as its year end.
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.
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 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.
-
F16 -
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, 2023 |
Current JPY: US$1 exchange rate |
134.13 |
Average JPY: US$1 exchange rate |
134.71 |
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:
|
|
Six Months Ended |
|
|
April 30, |
|
|
2023 |
|
2022 |
|
|
|
|
|
Revenues |
|
|
|
|
|
|
Product sales |
|
$ |
5,991 |
|
$ |
13,140,491 |
Crypto miners sales, net |
|
|
23,255,104 |
|
|
- |
Program for educational institution |
|
|
- |
|
|
34,985 |
Other |
|
|
- |
|
|
20,958 |
Total Revenue Under ASC 606 |
|
$ |
23,261,095 |
|
$ |
13,196,434 |
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, 2023, $1,233 of
deferred revenues are related to product sales.
Revenue
from crypto miners sales
During
the period ended April 30, 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 April 30, 2023, cost of goods
sold for miner purchases, netted by the gross sales was $83,700,987. As of April 30, 2023, $330,232
of deferred revenues 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 April 30, 2023, 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. The Company recognized deferred tax assets of $650,604 and $307,438 as of April 30, 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 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.
Basic and diluted earnings per share
or the three and six months ended April 30th are as follows:
|
|
|
Three months ended
April 30, 2023 |
|
|
Three months ended
April 30,
2022 |
|
Six months ended
April 30, 2023 |
|
Six months ended
April 30, 2022 |
Basic earnings per share |
|
$ |
.48 |
|
$ |
.20 |
|
$ |
.67 |
|
$ |
.29 |
Diluted earnings per share |
|
$ |
.25 |
|
$ |
.10 |
|
$ |
.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, defines fair value as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market
participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s
own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable
inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the
fair value hierarchy are described below:
- 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, 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 April 30, 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 April 30, 2023, 100% of the inventories were purchased from G-Force in the amount of $4,120.
For the period
ended April 30, 2022, 91.7% of the inventories were purchased from G-Force in the amount of $5,546,529.
Concentration
of Revenues
Gross revenues
from customers accounting for 10% or more of total revenues are as follows:
For the period
ended April 30, 2023, 28.14% of total revenue was generated from Kinoshita Group.
For the period
ended April 30, 2022, 99.0% of total revenue was generated from Done Net in the amount of $13,061,272.
-
F17 -
Table
of Contents
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, 2023, the Company recorded cash and cash equivalents of $2,381,921, an increase of $468,434 as compared to $1,913,487 in
the prior year period ended April 30, 2022, The Company’s increased liquidity is derived from increased sales, particularly sales
of crypto miners. As
stated in the consolidated financial statements, the Company, for the period ended April 30, 2023, recorded a net income of $7,148,756
(+132% y-o-y) and used $4,071,264 (2,225% y-o-y) in cash flows from operating activities.
Additionally, during the six months
ended April 30, 2023, the Company increased working capital by $8,034,660 (83%) as compared to working capital at October 31, 2022.
Having reviewed the above, the Company
realizes that whether we shall be able to continue demonstrating the positive trends demonstrated in our financial statements, lies in
our ability to continue to generate revenue and increase revenue going forward. 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(s) in the future
and procure any required funds needed to meet the redemption of its debt during normal business operations.
Management has evaluated the estimated
impact of COVID-19, which has become a significant factor impacting operations of businesses globally, one of which we believe we will
need to continue to monitor as to the potential effects it may have on our own business.
The Company assessed the impact of
COVID-19 and believes there to be minimal impact of COVID-19 on the Company’s crypto miner sales, which is currently the Company’s
primary source of revenue. The Company will need to continue to monitor COVID-19 and the effects it may have, socially and economically,
as it is possible that such developments may in fact impact our operations going forward or more specifically, our sales results. At this
time, the Company believes that it will not affect our assumptions as a going concern.
Based
on the Company’s evaluation and considering the positive financial trends the Company has experienced year over year, e.g. the increase
in net income and increased working capital, management
believes that it has completely mitigated the circumstances that led to a doubt with respect to the Company’s ability to continue
as a going concern, which existed at the time of the filing of the Company’s prior year 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 - ACCOUNTS RECEIVABLE
Accounts receivable
from customers totaled $27,585 as of April 30, 2023 and $1,847,068 as of October 31, 2022. No bad debt allowance was provided
as of April 30, 2023 and October 31, 2022.
Concentration
of Accounts Receivable
Accounts receivable
from customers accounting for 10% or more of total accounts receivable are as follows:
As
of April 30, 2023, 100% of total accounts receivable was owed to the Company by Reshare in the amount of $27,585.
For the year
ended October 31, 2022, 77.36% of total accounts receivable was owed to the Company by Drone Net in the amount of $1,428,976 and 15.36%
of total accounts receivable was owed to the Company by Chabi in the amount of $283,792.
NOTE 5 - ADVANCE PAYMENTS AND PREPAID EXPENSES
Advance payments are comprised of the payments for
the undelivered products and other deliverables. As of April 30, 2023 and October 31, 2022, the Company had advance payments and other
prepaid expenses of $31,477,156 and $16,389,562,
respectively. Details of the advance payments as of April 30, 2023 and October 31, 2022 are as follows:
|
|
April 30, 2023 |
|
October 31, 2022 |
Purchase of products from G-Force Inc. |
$ |
107,209 |
$ |
101,158 |
Purchase of products from Royal Sensing |
|
45,105 |
|
- |
Purchase of advertising from Kumamoto Communications |
|
239,196 |
|
- |
Purchase of parts from Team M |
|
41,005 |
|
37,097 |
Purchase of parts from Wise Partners Co., Ltd |
|
- |
|
228,785 |
Purchase of parts from Rogyx Co., Ltd |
|
48,984 |
|
31,161 |
Purchase of cryptocurrency miners from CU Holdings |
|
3,317,677 |
|
- |
Purchase of cryptocurrency miners from Cellessence Corp. |
|
27,595,050 |
|
15,915,311 |
Other advances and prepaid expenses |
|
82,930 |
|
76,050 |
Totals |
$ |
31,477,156 |
$ |
16,389,562 |
NOTE 6 - 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, 2023, the Company
purchased no additional long-term assets. The Company is depreciating previously purchased assets over a 5-10 year period once they
were put into use. Depreciation expense for the periods ended April 30, 2023 and April 30, 2022
were $26,019 and $22,179, respectively.
During
the year ended October 31, 2022, the Company purchased long-term assets, including building renovations, totaling approximately $227,180.
The Company is depreciating these assets over a 5-10 year period once they were put into use.
NOTE 7 - DEFERRED REVENUE
Deferred revenue is the amount the Company received in advance from the customer for their orders placed with us. As of April 30, 2023
deferred revenue in the amount of $333,721 was mainly related to our sales of cryptocurrency miners which represents a large amount
in both number of transactions and values. As of October 31, 2022, deferred revenue in the amount of $7,401,171 was related to our
sales of cryptocurrency miners which represents a large amount in both number of transactions and values.
NOTE 8 - INCOME TAXES
For the periods ended April 30, 2023
and 2022, the Company had income tax expense in the amount of $3,875,588 and $1,957,109, respectively.
United States
The Company was incorporated under the laws of the
State of Delaware on October 25, 2019. The U.S. federal income tax rate is 21%.
Japan
The Company conducts its major businesses
in Japan through WSP 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 4 million |
|
Up to JPY 8 million |
|
Over JPY 8 million |
2022 |
22.9% |
|
25.37% |
|
37.59% |
|
|
|
|
|
|
|
As of April 30, 2023 and October 31, 2022, the Company
had income tax payable of $7,079,847 and $3,329,572, respectively.
NOTE 9 - 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, 2023
and October 31, 2022.
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, 2023 and October 31, 2022.
NOTE 10 - RELATED-PARTY TRANSACTIONS
Loan to the Company
As of April 30, 2023, our CEO and Director, to Ryohei Uetaki, has advanced the Company $14,911 for salary, $5,568 for health
insurance and $458 for expenses. This advance is considered as a loan to the Company which is unsecured, noninterest-bearing and
payable on demand.
NOTE 11 - 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 $144, and $165,942 in operating
lease costs for the six months ended April 30, 2023 and April 30, 2022, respectively.
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. As noted above, we adopted Topic 842 using a transition method that does
not require application to periods prior to adoption.
|
Balance Sheet Classification |
April 30, 2023 |
October 31, 2022 |
|
|
|
|
|
|
Right-of-use assets |
Lease asset long |
$ |
660,055 |
$ |
705,007 |
Current lease liabilities |
Short-term lease liability |
|
175,604 |
|
231,041 |
Non-current lease liabilities |
Lease liability long term |
|
525,384 |
|
520,002 |
|
|
|
|
|
|
Maturities of lease liabilities as of April 30, 2023 are as follows: |
|
|
|
|
|
|
|
2023 |
148,040 |
|
|
|
|
2024 |
112,729 |
|
|
|
|
2025 |
89,465 |
|
|
|
|
2026 |
89,465 |
|
|
|
|
2027
and beyond |
447,327 |
|
|
|
|
Total |
887,026 |
|
|
|
|
Add(Less):
Imputed interest |
(106,038) |
|
|
|
|
Present
value of lease liabilities |
700,988 |
|
|
|
|
NOTE 12 - ACCRUED EXPENSES AND OTHER PAYABLES
Accrued expenses and other payables are comprised
of trade accounts payable, accrued payroll tax liabilities and accrued expenses. As of April 30, 2023 and October 31, 2022, the Company
had accrued expenses and other payables of $6,674,514 and $2,453,668, respectively.
Details of the accrued expenses and other payables as of April 30, 2023 and October 31, 2022 are as follows:
|
|
April 30, 2023 |
|
|
October 31, 2022 |
Accounts payable, trade |
$ |
2,408,852 |
|
$ |
2,383,161 |
Accounts payable for employees |
|
47,099 |
|
|
54,879 |
Accrued payroll liabilities |
|
19,532 |
|
|
15,628 |
Totals |
$ |
2,475,483 |
|
$ |
2,453,668 |
NOTE 13 - SUBSEQUENT EVENTS
The Company
has evaluated subsequent events through June 8, 2023 , the date on which the consolidated financial statements were available
to be issued and has found no material transactions to report except for the following:
On
or about May 15, 2023, the Company announced a direct public offering to sell up to 1,200,000
shares of common stock, at a fixed price of $12.00 per share. This offering became
effective May 25, 2023. Our offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant
to the registration statement or (ii) 365 days from the effective date of this prospectus unless extended by our Board of Directors for
an additional 90 days. We may however, at any time and for any reason terminate the offering.
-
F18 -
Table
of Contents
PART
II. INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
estimated costs (assuming all shares are sold) of this offering are as follows:
SEC Registration Fee |
$ |
1,586.88 |
Auditor Fees and Expenses |
$ |
10,000.00 |
Legal Fees |
$ |
2,000.00 |
Consulting Fees |
$ |
50,000.00 |
Other expenses of issuance and distribution |
$ |
10,000.00 |
Transfer Agent Fees |
$ |
10,000.00 |
TOTAL |
$ |
83,586.88 |
(1) All amounts are estimates, other than the SEC’s
registration fee. The above expenses are to be paid by the Company. The Company does not anticipate using proceeds from this offering
to cover any of the aforementioned expenses.
INDEMNIFICATION
OF DIRECTOR AND OFFICERS
Section 145 of the Delaware General Corporation Law
(the “Delaware Law”) authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, (including reimbursement
for expenses incurred) arising under the Securities Act of 1933. Article VII of the Certificate of Incorporation of World Scan Project,
Inc. (“we”, “us” or “our company”) provides for indemnification of officers, directors and other
employees of World Scan Project, Inc. to the fullest extent permitted by Delaware Law. Article VII of the Certificate of Incorporation
provides that directors shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except (i) for any breach of a director’s duty of loyalty to our company or our stockholders, (ii) acts and
omissions that are not in good faith or that involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the
Delaware Law, or (iv) for any transaction from which the director derived any improper benefit.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
Delaware Corporation Law and our Certificate of Incorporation,
allow us to indemnify our officers and Directors from certain liabilities and our Bylaws, as amended (“Bylaws”), state that
we shall indemnify every (i) present or former Director, advisory Director or officer of us and (ii) any person who while serving in
any of the capacities referred to in clause (i) served at our request as a Director, officer, employee or agent of another corporation,
partnership, joint venture, trust, association or other enterprise. (each an “Indemnitee”).
Our Bylaws provide that the Corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving
at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust,
association or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with which action, suit or proceeding, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with
respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful.
Except as provided above, our Certificate of Incorporation
provides that a Director shall be liable to the extent provided by applicable law, (i) for breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the DELAWARE CORPORATION LAW or (iv) for any transaction from which the director derived
an improper personal benefit. If the DELAWARE CORPORATION LAW hereafter is amended to authorize the further elimination or limitation
of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by the amended DELAWARE CORPORATION LAW. Neither any amendment to or
repeal of this Article 7, nor the adoption of any provision hereof inconsistent with this Article 7, shall adversely affect any right
or protection of any director of the Corporation existing at the time of, or increase the liability or alleged liability of any director
of the Corporation for or with respect to any acts or omissions of such director occurring prior to or at the time of such amendment.
Neither our Bylaws, nor our Certificate of Incorporation
include any specific indemnification provisions for our officer or Directors against liability under the Securities Act of 1933, as amended.
Additionally, insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Act") may
be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
-
28 -
Table
of Contents
RECENT
SALES OF UNREGISTERED SECURITIES
On
October 25, 2019 the Company issued 10,000,000 shares of restricted Common Stock to Ryohei Uetaki for services rendered to the Company.
Additionally, on the same day, it issued 10,000,000 shares of its restricted Series A Preferred Stock to Ryohei Uetaki, also for services
rendered. The aforementioned shares of common and preferred stock were all issued at par value, $0.0001, for a total combined value of
$2,000. No monies were exchanged per the issuances and the shares were all exempt from the registration provisions of Section 5 of the
Securities Act under Section 4(2) of such same said act.
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.
EXHIBITS
TO REGISTRATION STATEMENT |
Exhibit
No. |
|
Description |
3.1 |
|
Certificate
of Incorporation (1) |
3.2 |
|
By-laws
(1) |
5.1 |
|
Legal
Opinion Letter (2) |
23.1 |
|
Consent
of Independent Accounting Firm (2) |
99.1 |
|
Sample
Subscription Agreement (2) |
107 |
|
Filing
Fee Table (2) |
(1) |
Filed as
an exhibit to the Company's Registration Statement on Form S-1, as filed with the SEC on August 26, 2020, and incorporated herein
by this reference. |
(2) |
Filed herewith. |
-
29 -
Table
of Contents
UNDERTAKINGS
The
undersigned Registrant hereby undertakes:
(a)(1)
To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement
to:
(i)
Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in
the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in
the “Calculation of Registration Fee” table in the effective registration statement.
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall
be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however,
that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first
use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or our securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our directors,
officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In
the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one
of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of
our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of
our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of
such issue.
-
30 -
Table
of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized
in the City of Tokyo, Japan on August 8, 2023.
|
World
Scan Project, Inc. |
|
|
|
By:
/s/ Ryohei Uetaki |
|
Name:
Ryohei Uetaki |
|
Title:
Chief Executive Officer, Chief Financial Officer, Director
Date:
August 8, 2023 |
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities
and on the dates indicated.
Name:
Ryohei Uetaki Signature: /s/ Ryohei Uetaki Title: Chief Executive Officer, (Principal
Executive Officer)
Date:
August 8, 2023
Name:
Ryohei Uetaki Signature: /s/ Ryohei Uetaki Title: Chief Financial Officer (Principal Financial
Officer)
Date:
August 8, 2023
-
31 -
Exhibit 5.1
LAW OFFICE OF CARL P. RANNO
Attorney and Counselor at Law
|
2733 EAST VISTA DRIVE
PHOENIX, ARIZONA 85032
|
Telephone: 602-493-0369
Email: carlranno@cox.net
|
August 8, 2023
WORLD scan project, inc.
2-18-23, Nishiwaseda, Shinjuku-Ku
Tokyo, 162-0051, Japan
ATTN: Atsushi Shigeyoshi
Email: shigeyoshi@capital-consulting.info
RE: Opinion to be filed with an S-1 Registration statement to
be filed by World Scan Project, Inc. a Delaware Corporation
Dear Sir,
This Opinion is in connection with a registration statement to be filed
by World Scan Project, Inc. a Delaware Corporation on Form S-1 (the “Registration Statement”) with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), in
connection with the registration of 1,200,000 shares, $0.0001 par value, of the Company's newly issued common stock for public sale by
the issuer on a best efforts basis.
The common stock of World Scan Project, Inc. is currently quoted on the
OTC Markets Group Inc.’s Pink® Open Market under the symbol WDSP.
You have requested my opinion as to the matters set forth below in connection
with the Registration Statement. For purposes of this opinion, I have examined the Registration Statement, the Company’s Articles
of Incorporation filed October 25, 2019, the Company’s Bylaws, the Exhibits attached to the Registration Statement, including a
form of the Subscription Agreement, and such other documents and matters of law as I have deemed necessary for the expression of the opinion
herein contained.
In all such examinations, I have assumed the genuineness of all signatures
on original documents, and the conformity to the originals of all copies submitted to me by the parties herein. In passing upon certain
corporate records and documents of the Company, I have necessarily assumed the correctness and completeness of the statements made or
included therein by the Company, and I express no opinion thereon. As to the various questions of fact material to this opinion, I have
relied, to the extent I deemed reasonably appropriate, upon representations of officers or directors of the Company and upon documents,
records and instruments furnished to me by the Company, without verification except where such verification was readily ascertainable.
Based upon and subject to the foregoing, it is my opinion with respect
to the registration of 1,200,000 newly issued shares of the Company's common stock, $0.0001 par value (the “Shares”), for
public sale by the issuer’ that the Shares have been duly authorized and subject to the Registration Statement becoming effective,
the Shares, when issued and paid for as described in the Registration Statement and Prospectus, will be, validly issued, fully paid and
non-assessable.
This opinion is limited to the Federal laws of the United States, and the
applicable sections of Delaware General Corporation Law. We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference made to this firm in the Registration Statement under the heading “Legal
Matters.”
I hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the use of my name under the caption "Interests of Named Experts and Counsel"
in the prospectus comprising part of the Registration Statement.
This opinion is rendered pursuant to Item 601(b)(5)(i) of Regulation S-K
under the Act and may not be used or relied upon for any other purpose. This opinion is given as of the effective date of the Registration
Statement, and I assume no obligation to update or supplement the opinions contained herein to reflect any facts or circumstances which
may hereafter come to our attention or any changes in laws which may hereafter occur.
Sincerely,
By/s/ Carl P. Ranno
Carl P. Ranno
![http:||www.sec.gov|Archives|edgar|data|1535635|000107997311000947|mandk.jpg](https://www.sec.gov/Archives/edgar/data/1813744/000159991623000171/image_029.jpg)
CONSENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the inclusion in this Registration
Statement on Form S-1 of our report dated February 10, 2023, of WORLD SCAN PROJECT, INC. relating to the audits of the consolidated financial
statements for the periods ended October 31, 2022 and 2021 and the reference to our firm under the caption “Experts” in the
Registration Statement.
/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
August 8, 2023
SUBSCRIPTION AGREEMENT
The undersigned (the “Subscriber”), desires to become
a holder of common shares (the “Shares”) of World Scan Project, Inc., a corporation organized under the laws
of the state of Delaware (the “Company”); one share of Common Stock has a par value $0.0001 per share. Accordingly, the
Subscriber hereby agrees as follows:
1. Subscription.
|
1.1 |
The
Subscriber hereby subscribes for and agrees to accept from the Company that number of Shares set forth on the Signature Page
attached to this Subscription Agreement (the “Agreement”), in consideration of $12.00 per share. This offer
to purchase is submitted in accordance with and subject to the terms and conditions described in this Subscription Agreement (the
"Agreement"). The Subscriber acknowledges that the Company reserves the right, in its sole and absolute discretion, to
accept or reject this subscription and the subscription will not be binding until accepted by the Company in writing. |
|
1.2 |
The closing of the Subscription of Shares hereunder (the “Closing”) shall occur immediately upon: (i) receipt and acceptance by the Company of a properly executed Signature Page to this Agreement; and (ii) receipt of all funds for the subscription of shares hereunder. |
2. Purchase
Procedure. The Subscriber acknowledges that, in order to subscribe for Shares, he or she must, and he or she does
hereby, deliver to the Company:
|
2.1 |
One (1) executed counterpart of the Signature Page attached to this Agreement together with the passport copy or government ID copy; and |
|
2.2 |
A check, trade draft or media due bill in the amount set forth on the Signature Page attached to this Agreement, representing payment in full for the Shares desired to be purchased hereunder, either made payable to the order of (i) World Scan Project, Inc., (ii) a subsidiary of the Company, or (iii) escrow agent as agreed by the Company. Wire transfer and telegraphic transfer are also accepted. |
3. Representations
of Subscriber. By executing this Agreement, the Subscriber makes the following representations, declarations and
warranties to the Company, with the intent and understanding that the Company will rely thereon:
|
3.1 |
Such Subscriber acknowledges the public availability of the Company’s current prospectus which can be viewed on the SEC Edgar Database, under the CIK number 0001813744. This prospectus is made available in the Company’s most recent S-1 Registration Statement deemed effective on _______, 2023. In this prospectus it makes clear the terms and conditions of the offering of Common Stock and the risks associated therewith are described. |
|
3.2 |
All information herein concerning the Subscriber is correct and complete as of the date hereof and as of the date of Closing. |
|
3.3 |
If the Subscriber is purchasing the Shares in a fiduciary capacity for another person or entity, including without limitation a corporation, partnership, trust or any other entity, the Subscriber has been duly authorized and empowered to execute this Subscription Agreement and all other subscription documents. Upon request of the Company, the Subscriber will provide true, complete and current copies of all relevant documents creating the Subscriber, authorizing its investment in the Company and/or evidencing the satisfaction of the foregoing. |
- 1 -
4. Applicable
Law. This Agreement shall be construed in accordance with and governed by the laws applicable to contracts made
and wholly performed in the State of Delaware.
5. Execution
in Counterparts. This Subscription Agreement may be executed in one or more counterparts.
6. Persons
Bound. This Subscription Agreement shall, except as otherwise provided herein, inure to the benefit of and be binding
on the Company and its successors and assigns and on each Subscriber and his respective heirs, executors, administrators, successors
and assigns.
7. Notices. Any
notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid, to the address of each
party set forth herein. Any such notice shall be deemed given when delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, three days after the date of deposit in the United States mails.
8. CERTIFICATION. THE
SUBSCRIBER CERTIFIES THAT HE HAS READ THIS ENTIRE SUBSCRIPTION AGREEMENT AND THAT EVERY STATEMENT MADE BY THE SUBSCRIBER HEREIN
IS TRUE AND COMPLETE.
[SIGNATURE PAGE FOLLOWS]
- 2 -
SUBSCRIBER SIGNATURE
The undersigned, desiring to subscribe for
the number of Shares of World Scan Project, Inc., (the “Company”) as is set forth below, acknowledges that he/she has received
and understands the terms and conditions of the Subscription Agreement attached hereto and that he/she does hereby agree to all
the terms and conditions contained therein.
IN WITNESS WHEREOF,
the undersigned has hereby executed this Subscription Agreement as of the date set forth below.
(PLEASE PRINT OR TYPE)
Number of Shares |
|
|
|
|
|
|
|
x $12.00 Per Share |
|
|
|
Total Amount of Subscription: |
|
|
|
|
|
|
|
Exact name(s) of Subscriber(s): |
|
|
|
|
|
|
|
Signature of Subscriber(s): |
|
|
|
|
|
(Signature) |
|
|
|
|
|
|
|
|
|
Date: |
|
|
|
|
|
|
|
Residence or Physical Mailing Address (cannot be a
P.O. Box):
__________________________________
__________________________________
__________________________________
Telephone Numbers (include Area Code):
Business: (___)_____________ Home:
(___)________________
Social Security, Taxpayer, or other type
Identification Number(s): _______________
- 3 -
Calculation
of Filing Fee Tables
Form
S-1
(Form
Type)
World
Scan Project, Inc.
(Exact
Name of Registrant as Specified in its Charter)
Title
of Each Class of Securities
to
be Registered |
Amount
to be
Registered |
Proposed
Maximum
Offering
Price
Per
Share(1) |
Proposed
Maximum
Aggregate
Offering Price |
Amount
of
Registration
Fee
(2) |
|
|
|
|
|
Common
Stock, $0.0001 par value |
1,200,000 |
$12.00 |
14,400,000 |
$1,586.88 |
(1) |
The offering price has
been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance
can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price. |
|
|
(2) |
Estimated solely for purposes
of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. |
World Scan Project (CE) (USOTC:WDSP)
Historical Stock Chart
From May 2024 to Jun 2024
World Scan Project (CE) (USOTC:WDSP)
Historical Stock Chart
From Jun 2023 to Jun 2024