Notes to Consolidated Unaudited
Financial Statements
Note 1 - Organization and Description of Business
We were originally incorporated in
the state of Nevada on August 30, 2019, under the name Business Solutions Plus, Inc.
On August 30, 2019, Paul Moody was
appointed Chief Executive Officer, Chief Financial Officer, and Director of Business Solutions Plus, Inc.
On March 3, 2021, Business
Solutions Plus, Inc. (the “Company” or “Successor”) transmuted its business plan from that of a blank check shell
company to forming a holding company that is a business combination related shell company. The reason for the change being that our former
sole director desired to complete a holding company reorganization (“Reorganization”) pursuant to NRS 92A.180, NRS A.200,
NRS 92A.230 and NRS 92A.250. The constituent corporations in the Reorganization were InterActive Leisure Systems, Inc. (“IALS”
or “Predecessor”), the Company and Business Solutions Merger Sub, Inc. (“Merger Sub”). Our former director was
the sole director/officer of each constituent corporation in the Reorganization. In preparation of the Reorganization, our former sole
and controlling shareholder, Flint Consulting Services, LLC cancelled and returned to the Company’s treasury all issued and outstanding
common shares of the Company held and owned by it. The Company issued 1,000 common shares of its common stock to Predecessor and Merger
Sub issued 1,000 shares of its common stock to the Company prior to the Reorganization. Immediately prior to the merger, the Company was
a wholly owned direct subsidiary of IALS and Merger Sub was a wholly owned and direct subsidiary of the Company.
On March 22, 2021, the
company filed articles of merger with the Nevada Secretary of State. The merger became effective on March 31, 2021 at 4:00 PM EST
(“Effective Time”). At the Effective Time, Predecessor merged with and into Merger Sub (the “Merger), and
Predecessor was the surviving corporation. Each share of Predecessor common stock issued and outstanding immediately prior to the
Effective Time was converted into one validly issued, fully paid and non-assessable share of Successor common
stock.
In addition, the new ticker symbol
“BSPI” was announced April 14, 2021 on the Financial Industry Regulatory Authority’s daily list with a market effective
date of April 15, 2021. The Company received a new CUSIP Number 12330M107.
On May 4, 2021,
the Company entered into a Share Purchase Agreement (the “Agreement”) by and among Flint Consulting Services, LLC, a Wyoming
Limited Liability Company (“FLINT”), and White Knight Co., Ltd., a Japan Company (“WKC”), pursuant to which, on
May 7, 2021, (“Closing Date”) , FLINT sold 405,516,868 shares of the Company’s Restricted Common Stock and 1,000,000
Shares of Series A Preferred Stock, representing approximately 93.70% voting control of the Company. WKC paid consideration of three hundred
twenty-five thousand dollars ($325,000) (the “Purchase Price”). The consummation of the transactions contemplated by the Agreement
resulted in a change in control of the Company, with WKC becoming the Company’s largest controlling stockholder.
The sole shareholder of White Knight
Co., Ltd., a Japanese Company, is Koichi Ishizuka.
On the Closing Date, Mr. Paul Moody
resigned as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer. In addition, Mr. Moody
resigned as Director on the Closing Date. Also on the Closing Date, Mr. Koichi Ishizuka was appointed as the Company’s Chief Executive
Officer, Chief Financial Officer, President, Secretary, Treasurer, and Director.
On June 18, 2021, our majority shareholder,
White Knight Co., Ltd., a Japan Company, and our sole Director Mr. Koichi Ishizuka, executed a resolution to ratify, affirm, and approve
a name and ticker symbol change of the Company from Business Solutions Plus, Inc., to WB Burgers Asia, Inc. A Certificate of Amendment
to change our name was filed with the Nevada Secretary of State with an effective date of July 2, 2021.
On July
1, 2021, we filed an amendment to our Articles of Incorporation with the Nevada Secretary of State, resulting in an increase to our authorized
shares of common stock from 500,000,000 to 1,500,000,000.
On September
14, 2021 we entered into an “Acquisition Agreement” with White Knight Co., Ltd., a Japan Company, whereas we issued 500,000,000
shares of restricted common stock to White Knight Co., Ltd., in exchange for 100% of the equity interests of WB Burgers Japan Co., Ltd.,
a Japan Company. Pursuant to the agreement, on October 1, 2021, White Knight Co., Ltd. has agreed to, and has subsequently forgiven any
outstanding loans with WB Burgers Japan Co., Ltd. as of October 1, 2021. Following this transaction, WB Burgers Japan Co., Ltd. became
our wholly owned subsidiary which we now operate through.
In regards
to the above transaction, the Company claims an exemption from registration afforded by Section Regulation S of the Securities Act of
1933, as amended ("Regulation S") for the above sales/issuances of the stock since the sales/issuances of the stock were made
to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed
selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting
on behalf of any of the foregoing.
On September
14, 2021, we acquired 100% of the equity interest of WB Burgers Japan Co., Ltd., a Japan Company. Following the acquisition, we ceased
to be a shell company and adopted the same business plan as that of our now wholly owned subsidiary, WB Burgers Japan Co., Ltd. WB
Burgers Japan Co. (“WBBJ”), which we now operate through and share the same business plan of, holds the rights to
the “Master Franchise Agreement” with Jakes’ Franchising LLC, a Delaware Limited Liability Company, as it pertains to
the establishment and operation of Wayback Burger Restaurants within the country of Japan. The Master Franchise Agreement provides WBBJ
the right to establish and operate Wayback Burgers restaurants in the country of Japan, and also license affiliated and unaffiliated third
parties (“Franchisees”) to establish and operate Wayback Burgers restaurants in the Country of Japan. The Master Franchise
Agreement, amongst other things, also provides WBBJ the right of first refusal to enter into a subsequent Master Franchise
Agreement with Jake’s Franchising, LLC to establish and operate Wayback Burgers restaurants in the Countries of Indonesia, Malaysia
(Eastern Malaysia only, Western Malaysia if it becomes available as it is currently licensed to another party), the Philippines, Vietnam,
China, India, Korea, Thailand, Singapore, and Taiwan. At the time these shares were issued and WBBJ became the wholly owned subsidiary
of the Company, all rights and obligations previously held by WBBJ, particularly the franchise rights of approximately $2.7 million and
the associated related party loan, became those of the Company. This was a common control transaction and we have shown this consolidation
retrospectively in the restatement of the fiscal 2021 financial statements (see Notes 2 and 10).
On February 9, 2022, we incorporated Store Foods Co., Ltd.
(“Store Foods”), a Japan Company. Store Foods is now a wholly owned subsidiary of the Company and currently Koichi
Ishizuka is the sole Officer and Director. As of October 31, 2022, material operations for Store Foods had not yet commenced. As a
result, we now have two wholly owned subsidiaries, WB Burgers Japan Co., Ltd, and Store Foods Co., Ltd., both of which are Japan
Companies.
While our plans for Store Foods are not definitive
and may change, the intended business purpose of the Company is as follows:
1. Food sales;
2. Food wholesale and retail;
3. Chain organizations consisting of food retailers
as members;
4. Restaurants;
5. Manufacturing and sales of boxed lunches for catering;
6. Alcohol sales;
7. Health supplement and health drink sales;
8. Manufacturing and sales of functional foods;
9. Lease of goods related to restaurant management;
10. System development;
11. Delivery;
12. Application development and sales;
13. Advertising;
14. Management consulting;
15. All businesses incidental to any of the above.
The Company’s main office is
located at 3F K’s Minamiaoyama 6-6-20 Minamiaoyama, Minato-ku, Tokyo
107-0062, Japan.
The Company
has elected July 31st as its year end.
Note
2 - Summary of Significant Accounting Policies
Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting
policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the
preparation of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management,
all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from
those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at October 31, 2022 and July 31, 2022
were $131,016 and $126,669, respectively.
Revenue Recognition
The Company adopted ASC 606, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), in the second quarter of fiscal
year 2020, as this was the first quarter that the Company generated revenues. Under ASC 606, the Company recognizes revenue when a customer
obtains control of promised goods, in an amount that reflects the consideration that the Company expects to receive in exchange for the
goods. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1)
identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price;
(4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies
a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the
consideration it is entitled to in exchange for the goods it transfers to the customer. Under ASC 606, disaggregated revenue from contracts
with customers depicts the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors.
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 |
|
2021 |
|
Current JPY:US$1 exchange rate |
|
|
148.26 |
|
114.00 |
|
Average JPY:US$1 exchange rate |
|
|
141.63 |
|
108.41 |
|
|
|
|
|
|
|
|
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.
Accounts
Receivable and Allowance for Doubtful Accounts
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.
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.
ROU lease
assets and liabilities
The Company capitalizes all leased assets pursuant
to ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize right-of-use 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. The Company adopted the standard in the third
quarter of fiscal year 2022.
Franchise Rights and amortization
Franchise rights are stated at cost less amortization.
Initial cost of the asset comprises the deposit and fees paid to the franchisor. Amortization is calculated using the straight-line method
over the life of the recognized asset, which is the duration of the contract held between the Company and the franchisor.
Income Taxes
The Company accounts for income taxes
under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A
valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets
through future operations. No deferred tax assets or liabilities were recognized at October 31, 2022 and July 31, 2022 except for
accruals of $134 and $520, respectively, for Japanese income taxes payable by our wholly owned subsidiary, WB Burgers Japan Co., Ltd.
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.
The Company does not have any potentially
dilutive instruments as of October 31, 2022 and, thus, anti-dilution issues are not applicable.
F-5
Table of Contents
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 and July 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. These financial instruments include accrued expenses.
Related Parties
The Company follows ASC 850, Related
Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Share-Based Compensation
ASC 718, “Compensation –
Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee
services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments
such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee
stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized
over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period
(usually the vesting period).
The Company accounts for stock-based
compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments
to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value
of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair
value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
The Company had no
stock-based compensation plans as of October 31, 2022.
The Company’s stock-based compensation
for the periods ended October 31, 2022 and October 31, 2021 were $0 for both periods.
Recently Issued Accounting Pronouncements
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU
2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively
(collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset,
representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12
months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly
changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP)
and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially
similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended
ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows
arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02,
which includes a number of optional practical expedients that entities may elect to apply.
We
have no assets and or leases and do not believe we will be impacted in the foreseeable future by the newly adopted accounting standard(s)
mentioned above.
The Company has implemented all
new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any
other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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 adverse
conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance
of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency,
and other adverse key financial ratios.
The Company has not established
any source of revenue sufficient to cover its operating costs. Management plans to fund operating expenses with related party
contributions to capital and the sale of shares of stock. There is no assurance that management's plan will be successful. 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 -
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due
plus deferred taxes related primarily to differences between the recorded book basis and the tax basis of assets and liabilities for financial
and income tax reporting. Deferred tax assets and liabilities represent the future tax return consequences of those differences, which
will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax credits that are available to offset future federal income
taxes. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any
adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flow.
Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740.
The
Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate
taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred
tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods,
tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely
than not.
As
of October 31, 2022, the Company has incurred a net loss of approximately $2,975,974 which resulted in a net operating loss for
income tax purposes. The loss results in a deferred tax asset of approximately $624,955 at the effective statutory rate of 21%.
The deferred tax asset has been offset by an equal valuation allowance. Given our inception on August 30, 2019, and our fiscal year
end of July 31, 2022, we have completed three taxable fiscal years as of October 31, 2022.
F-6
Table of Contents
Note 5 -
Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising
from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of October 31, 2022
and July 31, 2022.
Note
6 - Fixed Assets
Fixed assets are stated at
cost and depreciated using the straight-line method over their estimated useful lives. When retired or otherwise disposed, the carrying
value and accumulated depreciation of the fixed asset is removed from its respective accounts and the net difference less any amount realized
from disposition, is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related
assets are expensed as incurred.
As of October
31, 2022 and July 31, 2022 fixed assets were made up of the following:
|
|
Estimated |
|
|
|
|
|
|
|
|
|
Useful |
|
|
|
|
|
|
|
|
|
Life |
|
|
October 31, |
|
|
July 31, |
|
|
|
(approx.. years) |
|
|
2022 |
|
|
2022 |
|
Furniture fixtures and equipment |
|
|
5 |
|
|
$ |
43,951 |
|
|
$ |
48,408 |
|
Furniture fixtures and equipment |
|
|
6 |
|
|
|
14,689 |
|
|
|
16,178 |
|
Furniture fixtures and equipment |
|
|
8 |
|
|
|
162,345 |
|
|
|
178,807 |
|
Leasehold improvement |
|
|
Remaining Lease Term |
|
|
|
577,588 |
|
|
|
636,158 |
|
|
|
|
|
|
|
|
798,573 |
|
|
|
879,551 |
|
Accumulated depreciation |
|
|
|
|
|
|
(86,853 |
) |
|
|
(73,669) |
|
Net book value |
|
|
|
|
|
$ |
711,720 |
|
|
$ |
805,882 |
|
Total depreciation expense
for the periods ended October 31, 2022 and 2021, was $46,810 and $0, respectively, all of which was recorded in our general and administrative
expenses on our statement of operations.
Note 7 - Right of Use Asset
The Company capitalizes all leased assets pursuant
to ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize right-of-use 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. The Company adopted the standard in the third
quarter of fiscal year 2022.
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 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.
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. The initial recognition of the ROU operating lease was $653,704 for both the
ROU asset and ROU liability. As of October 31, 2022, the ROU lease liability was $442,025.
|
Balance Sheet Classification |
October 31, 2022 |
July 31, 2022 |
|
|
|
|
|
|
Right-of-use assets |
Lease asset long |
$ |
333,520 |
$ |
442,025 |
Current lease liabilities |
Short-term lease liability |
|
286,384 |
|
330,066 |
Non-current lease liabilities |
Lease liability long term |
|
74,612 |
|
148,822 |
|
|
|
|
|
|
Maturities of lease liabilities as of October 31, 2022 are as follows: |
|
2022 |
49,612 |
|
|
|
|
2023 |
304,705 |
|
|
|
|
2024 and beyond |
6,679 |
|
|
|
|
Total |
360,996 |
|
|
|
|
Add(Less): Imputed interest |
- |
|
|
|
|
Present value of lease liabilities |
360,996 |
|
|
|
|
Note 8 -
Deposits
During the period
ended July 31, 2022, the Company paid two security deposits for the leased office and restaurant space totaling approximately $240,704 at the October 31, 2022 exchange rate.
Note
9 - Franchise Rights
On
June 9, 2021, our wholly owned subsidiary, WB Burgers Japan Co., Ltd (WBBJ), entered into a Master Franchise Agreement with Wayback Burgers.
Compensation of approximately $2,275,204
was paid by WBBJ to Jake Franchise for these franchise rights.
These funds were borrowed from related party White Knight. In addition, White Knight paid approximately $395,673 directly to Jake Franchise
which was also considered a loan to the company. These payments were originally combined as a loan to the Company and $2,317,272 of this
loan has since been forgiven and is posted as additional paid-in capital. The Franchise rights are being amortized over a 20 year period.
The amortization expense was approximately $25,908 and $0 for the periods ended October 31, 2022 and 2021, respectively.
Note
10 - Accrued Expenses and Other Payables
Accrued
expenses and other payables totaled $2,135
and $5,040 at
October 31, 2022 and July 31, 2022, respectively, and consisted primarily of professional fees.
Note
11 - Shareholder Equity
Preferred Stock
The authorized preferred stock
of the Company consists of 200,000,000 shares with a par value of $0.0001. There were 1,000,000 Series A preferred shares issued and
outstanding as of October 31, 2022 and July 31, 2022. Our Certificate of Incorporation authorizes the issuance of up to
200,000,000 shares of Preferred Stock with 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
additional shares of our authorized Preferred Stock, there can be no assurance that we will not do so in the future.
Of the 200,000,000 shares of preferred stock, 1,000,000 shares are designated
as Series A Preferred Stock, $0.0001 par value each. Series A Preferred stock pay no dividends, have no right to convert into common stock
or any other class of securities of the Corporation, and each share of Series A Preferred Stock shall have voting rights equal to one
thousand (1,000) votes of Common Stock. With respect to all matters upon which stockholders are entitled to vote or to which stockholders
are entitled to give consent, the holders of the outstanding shares of Series A Preferred Stock shall vote together with the holders of
Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Corporation's
Certificate of Incorporation or by-laws.
Common
Stock
The authorized common stock of the
Company consists of 1,500,000,000 shares with a par value of $0.0001. There were 1,057,340,752 and 1,014,022,586 shares of common stock
issued and outstanding as of October 31, 2022 and July 31, 2022, respectively.
On August 8, 2022, we sold 1,586,538 shares of restricted Common Stock
to Takahiro Fujiwara, a Japanese Citizen, at a price of $0.032 per share of Common Stock. The total subscription amount paid by Takahiro
Fujiwara was approximately $50,769. Takahiro Fujiwara is not a related party to the Company.
On August 8, 2022, we sold 2,403,846 shares of restricted Common Stock
to Shokafulin LLP, a Japanese Company, at a price of $0.032 per share of Common Stock. The total subscription amount paid by Shokafulin
LLP was approximately $79,623. Shokafulin LLP is not a related party to the Company.
On August 12, 2022, we sold 32,065,458 shares of restricted Common Stock
to Asset Acceleration Axis, LLC, a Japanese Company, at a price of $0.032 per share of Common Stock. The total subscription amount paid
by Asset Acceleration Axis, LLC was approximately $1,026,094. Asset Acceleration Axis, LLC is not a related party to the Company.
On September 13, 2022, we sold 7,262,324 shares of restricted Common Stock
to Asset Acceleration Axis, LLC, a Japanese Company, at a price of $0.032 per share of Common Stock. The total subscription amount paid
by Asset Acceleration Axis, LLC was approximately $232,395. Asset Acceleration Axis, LLC is not a related party to the Company.
Additional Paid-In Capital
During the period ended July 31,
2022, White Knight forgave a loan to the Company of approximately $2,317,272, which is recorded as additional paid-in capital.
The Company’s sole officer
and director, Koichi Ishizuka, paid expenses on behalf of the Company totaling $55,030 during the period ended July 31, 2022. These payments
are considered contributions to the company with no expectation of repayment and are posted as additional paid-in capital.
During
the year ended July 31, 2022, the Company recognized donated capital from its wholly owned subsidiary, Store Foods, as additional paid-in
capital in the amount of $8,673.
Shares payable
On or about July 29, 2022, the Company
received funds totaling approximately $130,392 from two perspective shareholders to be used to finalize the sale of common shares, which
took place August 8, 2022. No shares were issued until August 8, 2022. The $130,392 was reclassed as cash received by subsidiary
for the sale of common shares during period ended October 31, 2022.
Note 12 - Related-Party Transactions
Loan receivable
During the period ended October 31,
2022, a loan of approximately $917,895 from WBBJ to related party White Knight was forgiven and fully expensed as a general and administrative
expense.
Additional Paid-In Capital
During the period ended July 31,
2022, White Knight forgave a loan to the Company of approximately $2,317,272, which is recorded as additional paid-in capital.
The Company’s sole officer
and director, Koichi Ishizuka, paid expenses on behalf of the Company totaling $55,030 during the period ended July 31, 2022. These payments
are considered contributions to the company with no expectation of repayment and are posted as additional paid-in capital.
Note 13 - Subsequent Events
On February 6, 2023, we sold 10,033,445 shares of restricted Common Stock
to Kazuya Iwasaki, a Japanese Citizen, at a price of $0.023 per share of Common Stock. The total subscription amount paid by Kazuya Iwasaki
was approximately $230,769. Kazuya Iwasaki is not a related party to the Company.
On February 6, 2023, we sold 3,344,482 shares of restricted Common Stock
to Shokafulin LLP, a Japanese Company, at a price of $0.023 per share of Common Stock. The total subscription amount paid by Shokafulin
LLP was approximately $76,923. Shokafulin LLP is not a related party to the Company.
The Company intends to use the proceeds from the aforementioned sales of
shares for working capital.
F-7
Table of Contents