WDSP Narrows Losses Amidst Revenue Dip, Cash Reserves Plummet

TL;DR

**WDSP is burning cash fast on fixed assets, but their net loss is shrinking, making it a high-risk, high-reward play.**

AI Summary

World Scan Project, Inc. (WDSP) reported a significant decline in revenues for the nine months ended July 31, 2025, dropping to $10,257,153 from $12,956,465 in the prior year, a decrease of 20.8%. Despite this, the company narrowed its net loss to $196,673 for the nine-month period, a substantial improvement from a net loss of $1,057,883 in the same period last year. Gross profit increased to $3,960,850 from $3,302,305, indicating improved cost management relative to revenue. Operating expenses decreased by 8.1% to $4,187,212. Cash and cash equivalents plummeted from $1,634,200 at October 31, 2024, to $211,684 by July 31, 2025, primarily due to $4,021,282 spent on fixed assets and $2,635,333 used in operating activities. Total assets decreased from $27,410,251 to $24,112,180, while total liabilities saw a sharp reduction from $10,826,845 to $1,958,182, largely due to a decrease in 'share application pending allotment' from $5,154,136 to $0. Strategic outlook includes continued development and manufacturing of autonomous aerial vehicles, specifically drones, through its wholly-owned subsidiary WSP Japan.

Why It Matters

For investors, WDSP's ability to significantly reduce its net loss by 81.4% year-over-year, despite a 20.8% revenue decline, suggests improved operational efficiency and cost control, which could be a positive signal for future profitability. However, the drastic 87% drop in cash and cash equivalents, coupled with substantial investment in fixed assets, raises concerns about liquidity and future capital needs, potentially impacting its ability to fund ongoing drone development and manufacturing. Competitively, a cash-strapped startup in the autonomous aerial vehicle sector faces intense pressure from better-funded rivals, making its financial health critical for market positioning and innovation. Employees and customers might view the reduced losses positively, but the cash burn could signal future instability if not addressed.

Risk Assessment

Risk Level: high — The company's cash and cash equivalents decreased by 87% from $1,634,200 to $211,684 within nine months, indicating significant cash burn. Furthermore, WDSP reported 'No' to having filed all required reports and submitted Interactive Data Files, suggesting potential regulatory compliance issues and a lack of transparency.

Analyst Insight

Investors should exercise extreme caution and conduct thorough due diligence. While the reduction in net loss is positive, the severe decline in cash and cash equivalents, coupled with non-compliance with SEC filing requirements, presents substantial risks. Consider this a highly speculative investment.

Financial Highlights

debt To Equity

0.09

revenue

$10,257,153

operating Margin

N/A

total Assets

$24,112,180

total Debt

$1,958,182

net Income

($196,673)

eps

N/A

gross Margin

38.6%

cash Position

$211,684

revenue Growth

-20.8%

Revenue Breakdown

Key Numbers

• $10.26M — Total Revenues (Decreased by 20.8% from $12.96M in the prior year for the nine months ended July 31, 2025.)
• ($196.7K) — Net Loss (Significantly narrowed from ($1.06M) in the prior year for the nine months ended July 31, 2025.)
• $211.7K — Cash and Cash Equivalents (Plummeted from $1.63M at October 31, 2024, representing an 87% decrease.)
• $4.02M — Cash Paid for Fixed Assets (Substantial investment for the nine months ended July 31, 2025, compared to $33.8K in the prior year.)
• $3.96M — Gross Profit (Increased from $3.30M in the prior year for the nine months ended July 31, 2025, despite revenue decline.)
• $4.19M — Total Operating Expenses (Decreased by 8.1% from $4.56M in the prior year for the nine months ended July 31, 2025.)
• $22.15M — Total Shareholders' Equity (Increased from $16.58M at October 31, 2024.)
• $1.96M — Total Liabilities (Decreased significantly from $10.83M at October 31, 2024.)
• 11,997,350 — Common Shares Outstanding (As of July 31, 2025, up from 11,560,350 at October 31, 2024.)
• ($2.64M) — Net Cash Used in Operating Activities (For the nine months ended July 31, 2025, an improvement from ($11.45M) in the prior year.)

Key Players & Entities

• World Scan Project, Inc. (company) — registrant
• Ryohei Uetaki (person) — CEO, CFO, President, Director, Secretary, Treasurer, and owner of SKYPR LLC
• Yasumasa Ichikawa (person) — Chief Technology Officer
• World Scan Project Corporation (company) — wholly owned subsidiary (WSP Japan)
• SKYPR LLC (company) — Delaware Limited Liability Company, 100% owned by Ryohei Uetaki
• SEC (regulator) — Securities and Exchange Commission
• $10,257,153 (dollar_amount) — Total Revenues for the nine months ended July 31, 2025
• $196,673 (dollar_amount) — Net Loss for the nine months ended July 31, 2025
• $211,684 (dollar_amount) — Cash and cash equivalents as of July 31, 2025
• $4,021,282 (dollar_amount) — Cash paid for purchase of fixed assets for the nine months ended July 31, 2025

FAQ

Risk Factors

• Dependence on Subsidiary for Drone Development [medium — operational]: The company's strategic outlook relies heavily on the continued development and manufacturing of autonomous aerial vehicles (drones) through its wholly-owned subsidiary, WSP Japan. Any operational, financial, or strategic challenges faced by WSP Japan could directly impact the company's ability to execute its core business strategy.
• Deteriorating Cash Position [high — financial]: Cash and cash equivalents have plummeted from $1,634,200 at October 31, 2024, to $211,684 by July 31, 2025. This 87% decrease, driven by substantial fixed asset investments ($4,021,282) and operating cash burn ($2,635,333), raises concerns about short-term liquidity and future funding needs.
• Revenue Decline [medium — financial]: Total revenues decreased by 20.8% to $10,257,153 for the nine months ended July 31, 2025, from $12,956,465 in the prior year. This significant drop indicates potential market challenges or execution issues that need to be addressed.
• Significant Fixed Asset Investment [medium — financial]: The company invested $4,021,282 in fixed assets during the nine months ended July 31, 2025, a substantial increase from $33,823 in the prior year. While this may support future growth, it has significantly depleted cash reserves and requires careful management to ensure it aligns with revenue generation.
• Unregistered Sales of Equity Securities [low — regulatory]: The filing mentions 'Unregistered Sales of Equity Securities and Use of Proceeds' as a section in Item 2. This suggests potential past or ongoing activities related to equity issuance that may not have been registered with the SEC, carrying inherent regulatory and compliance risks.

Industry Context

World Scan Project, Inc. operates in the autonomous aerial vehicle (drone) sector, a rapidly evolving and competitive market. Key trends include increasing demand for drone technology in logistics, surveillance, and data collection, alongside advancements in AI and sensor capabilities. The company's focus on development and manufacturing through its subsidiary WSP Japan positions it to capitalize on these trends, but it faces competition from established players and emerging startups.

Regulatory Implications

The company's operations, particularly in drone technology, are subject to evolving aviation regulations and data privacy laws. The mention of 'Unregistered Sales of Equity Securities' in the filing also points to potential past or ongoing compliance risks with securities regulations. Investors should monitor any disclosures related to regulatory compliance and potential enforcement actions.

What Investors Should Do

1. Monitor cash burn and liquidity
2. Analyze the sustainability of gross margin improvements
3. Evaluate the strategic rationale for fixed asset investment
4. Assess the performance and outlook of WSP Japan

Key Dates

• 2025-07-31: End of Nine-Month Period — Reporting period for the current financial results, showing revenue decline but improved net loss and gross profit.
• 2024-10-31: End of Prior Fiscal Year — Benchmark for comparison of assets, liabilities, and cash position.
• 2019-10-25: Company Incorporation — Marks the beginning of the company's operational history.

Glossary

Share application pending allotment

Represents funds received from investors for shares that have not yet been formally issued or allotted by the company. (A significant reduction from $5,154,136 to $0 in this line item contributed to a substantial decrease in total liabilities.)

Accumulated earnings

The total net income or loss of a company since its inception, less any dividends paid out. (Shows a decrease from $8,370,124 to $8,173,451, reflecting the net loss incurred during the period.)

Accumulated other comprehensive income (loss)

Includes unrealized gains and losses that are not reported in the income statement, such as foreign currency translation adjustments. (The company has a net accumulated other comprehensive loss, which decreased from ($2,418,721) to ($1,895,456).)

ROU asset/liability

Right-of-Use asset and liability, recognized under lease accounting standards for the right to use an asset for a specified period. (Appears in the cash flow statement related to lease expenses and changes in operating activities.)

Year-Over-Year Comparison

World Scan Project, Inc. has experienced a significant 20.8% decrease in total revenues for the nine months ended July 31, 2025, falling to $10.26M from $12.96M in the prior year. However, the company has demonstrated improved cost management, leading to a higher gross profit ($3.96M vs $3.30M) and a narrowed net loss of $196.7K compared to $1.06M. Operating expenses also decreased by 8.1%. A major concern is the dramatic 87% drop in cash and cash equivalents, largely due to substantial capital expenditures. Total liabilities have significantly decreased, primarily due to the elimination of 'share application pending allotment'.

Key Financial Figures

• $0.0001 — 0,000 shares of Common Stock, par value $0.0001 per share and 10,000,000 shares of Seri
• $2,000 — Series A Preferred Stock, is valued at $2,000. On October 25, 2019, Ryohei Uetaki w
• $323,675 — otal to these shareholders and received $323,675 as aggregate consideration. At the time
• $1,740,000 — otal to these shareholders and received $1,740,000 as aggregate consideration. At the time
• $ — rrency is not US$ are translated into US$, using the exchange rate on the balance
• $1,027,979 — of July 31, 2025, advances received of $1,027,979 are related to product sales. Revenue
• $404,819 — mpany recognized deferred tax assets of $404,819 and $436,572 as of July 31, 2025 and Oc
• $436,572 — zed deferred tax assets of $404,819 and $436,572 as of July 31, 2025 and October 31, 202

Filing Documents

• worldscan_q325o.htm (10-Q) — 594KB
• ex31_325.htm (EX-31) — 11KB
• ex32_325.htm (EX-32) — 7KB
• 0001813744-25-000013.txt ( ) — 2735KB
• wdsp-20250731.xsd (EX-101.SCH) — 29KB
• wdsp-20250731_cal.xml (EX-101.CAL) — 15KB
• wdsp-20250731_def.xml (EX-101.DEF) — 28KB
• wdsp-20250731_lab.xml (EX-101.LAB) — 162KB
• wdsp-20250731_pre.xml (EX-101.PRE) — 132KB
• worldscan_q325o_htm.xml (XML) — 380KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1

FINANCIAL STATEMENTS - UNAUDITED

FINANCIAL STATEMENTS - UNAUDITED F1 Consolidated Balance Sheets - UNAUDITED F1 CONSOLIDATED Statements of Operations AND COMPREHENSIVE INCOME- UNAUDITED F2 cONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)- UNAUDITED F3 cONSOLIDATED Statement of Cash Flows - unaudited F4 Notes to CONSOLIDATED Financial Statements - unaudited F5 ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 3 ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 3 ITEM 4

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 4

- OTHER INFORMATION

PART II - OTHER INFORMATION ITEM 1

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 5 ITEM 1A

RISK FACTORS

RISK FACTORS ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 5 ITEM 3 DEFAULTS UPON SENIOR SECURITIES 5 ITEM 4 MINE SAFETY DISCLOSURES 5 ITEM 5 OTHER INFORMATION 5 ITEM 6 EXHIBITS 5

SIGNATURES

SIGNATURES 6 -2- Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION WORLD SCAN PROJECT, INC. CONSOLIDATED BALANCE SHEETS July 31, 2025 (Unaudited) October 31, 2024 ASSETS Current Assets Cash and cash equivalents $ 211,684 $ 1,634,200 Accounts receivable, trade 309 902 Other receivables, current 1,823,797 1,070,404 Advance payments and prepaid expenses 396,213 4,636,258 Inventories 14,866,256 17,045,647 TOTAL CURRENT ASSETS 17,298,259 24,387,411 Non-current assets Furniture, fixtures and equipment, net 4,132,955 212,200 Lease asset long term 520,347 677,022 Investment securities 1,606,533 1,562,093 Long term prepaid expenses and security deposits, net 64,429 49,071 Deferred tax assets 404,819 436,572 Other intangible assets, non-current 84,838 85,882 TOTAL NON-CURRENT ASSETS 6,813,921 3,022,840 TOTAL ASSETS $ 24,112,180 $ 27,410,251 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accrued expenses and other payables $ 300,772 $ 1,186,679 Accounts payable - related party 48,335 45,532 Income taxes payable - 334,413 Consumption tax payable - 13,882 Short-term lease liability 134,369 233,160 Advance received 1,027,979 3,391,942 Due to related party 458 458 Share application pending allotment - 5,154,136 TOTAL CURRENT LIABILITIES 1,511,913 10,360,202 Non-Current Liabilities Lease liability long term 406,897 466,643 Deferred revenue long term 39,372 - TOTAL NON-CURRENT LIABILITIES 446,269 466,643 TOTAL LIABILITIES $ 1,958,182 $ 10,826,845 Shareholders' Equity Preferred stock ($ 0.0001 par value, 200,000,000 shares authorized; 10,000,000 shares issued and outstanding as of July 31, 2025 and October 31, 2024) $ 1,000 $ 1,000 Common stock ($ 0.0001 par value, 200,000,000 shares authorized, 11,997,350 and 11,560,350 shares issued and outstanding as of July 31, 2025 and October 31, 2024, respectively) 1,200 1,156

financial statements

financial statements. WORLD SCAN PROJECT, INC. CONSOLIDATED FOR THE PERIOD ENDING JULY 30, 2024 (UNAUDITED) ADDITIONAL ACCUMULATED OTHER ACCUMULATED TOTAL PREFERRED STOCK COMMON STOCK PAID IN COMPREHENSIVE EARNINGS EQUITY NUMBER AMOUNT NUMBER AMOUNT CAPITAL INCOME (LOSS) (DEFICIT) (DEFICIT) Balance - October 31, 2023 10,000,000 $ 1,000 10,817,350 $ 1,082 $ 2,063,973 $ ( 2,488,923 ) $ 9,138,555 $ 8,715,687 Net loss - - - - - - ( 308,261 ) ( 308,261 ) Foreign currency translation - - - - - 213,187 - 213,187 Balance - January 31, 2024 10,000,000 $ 1,000 10,817,350 $ 1,082 $ 2,063,973 $ ( 2,275,736 ) $ 8,830,294 $ 8,620,613 Common shares sold - - 486,000 49 5,831,951 - - 5,832,000 Net income - - - - - - 110,275 110,275 Foreign currency translation - - - - - ( 1,020,259 ) - ( 1,020,259 ) Balance - April 30, 2024 10,000,000 $ 1,000 11,303,350 $ 1,131 $ 7,895,924 $ ( 3,295,995 ) $ 8,940,569 $ 13,542,629 Common shares sold - - 257,000 26 2,733,922 - - 2,733,948 Net loss - - - - - - ( 859,897 ) ( 859,897 ) Foreign currency translation - - - - - 984,085 - 984,085 Balance - July 31, 2024 10,000,000 $ 1,000 11,560,350 $ 1,157 $ 10,629,846 $ ( 2,311,910 ) $ 8,080,672 $ 16,400,765 The accompanying notes are an integral part of these unaudited

financial statements

financial statements. F-3 Table of Contents WORLD SCAN PROJECT, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Nine Months Ended Nine Months Ended July 31, 2025 July 31, 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ ( 196,673 ) $ ( 1,057,883 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 111,752 41,114 Amortization of long-term deposits 5,198 9,129 Lease expense 198,418 111,289 Changes in operating assets and liabilities: Accounts receivable 618 103,669 Advance payments and other prepaid expense 4,347,106 ( 785,178 ) Inventories 2,663,757 ( 14,323,563 ) Other receivables ( 612,439 ) ( 6,256 ) Other current assets - - Deferred tax assets 44,164 ( 362,453 ) Accrued expenses and other payables ( 6,217,605 ) 1,855,287 Taxes payable ( 358,128 ) ( 27,343 ) Advance received ( 2,420,574 ) 3,200,898 ROU asset/liability ( 200,927 ) ( 207,261 ) Net cash used in operating activities ( 2,635,333 ) ( 11,448,551 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchase of fixed assets ( 4,021,282 ) ( 33,823 ) Cash paid for intangible assets - ( 571,646 ) Net cash used in investing activities ( 4,021,282 ) ( 605,469 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the sale of shares 5,244,000 8,565,948 Net cash provided by (used in) financing activities 5,244,000 8,565,948 Net effect of exchange rate changes on cash $ ( 9,901 ) $ ( 1,088,917 ) Net Change in Cash and Cash Equivalents ( 1,422,516 ) ( 4,576,989 ) Cash and cash equivalents - beginning of period 1,634,200 5,698,883 Cash and cash equivalents - end of period $ 211,684 $ 1,121,894 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Interest paid $ - $ - Income taxes paid $ 334,413 $ - NON-CASH INVESTING AND FINANCING TRANSACTIONS ROU Asset/L

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