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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Jiuzi Holdings Inc | NASDAQ:JZXN | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.04 | -2.42% | 1.61 | 1.25 | 1.67 | 1.83 | 1.60 | 1.63 | 70,354 | 22:00:00 |
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of August
(Exact name of registrant as specified in its charter)
No.168 Qianjiang Nongchang Gengwen Road, 15th Floor
Economic and Technological Development Zone
Xiaoshan District, Hangzhou City
Zhejiang Province 310000
People’s
Republic of China
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Interim Financial Statements
Jiuzi Holdings Inc. (the “Company”) is furnishing this Form 6-K to provide six-month interim financial statements and incorporate such financial statements into the Company’s registration statements referenced below.
This Form 6-K is hereby incorporated by reference into the registration statements of the Company on Form S-8 (Registration No. 333-269332) and on Form F-3, as amended (Registration No. No. 333-267617), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Financial Statements and Exhibits.
Exhibits.
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Consolidated Financial Statements as of April 30, 2023 and for the Six Months Ended April 30, 2023 and 2022 | |
| 99.2 | Operating and Financial Review and Prospects in Connection with the Unaudited Interim Consolidated Financial Statements for the Six Months Ended April 30, 2023 and 2022 | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Jiuzi Holdings Inc. | ||
| Date: August 23, 2023 | By: | /s/ Tao Li |
| Tao Li | ||
| Chief Executive Officer | ||
2
Exhibit 99.1
Jiuzi Holdings, Inc.
Consolidated Balance Sheets
As of April 30, 2023 and October 31, 2022
Unaudited
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Short-term investment | ||||||||
| Accounts receivable | ||||||||
| Accounts receivable - related party | ||||||||
| Due from related parties | ||||||||
| Inventory, net | ||||||||
| Advances to suppliers | ||||||||
| Loans receivable from related parties, net - current portion | ||||||||
| Other receivables and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Other non-current assets | ||||||||
| Operating lease right of use asset | ||||||||
| Loans receivable from related parties, net | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accruals and other payables | ||||||||
| Accounts payable – related party | ||||||||
| Due to related parties | ||||||||
| Convertible debenture | ||||||||
| Taxes payable | ||||||||
| Operating lease liabilities - current | ||||||||
| Contract liability | ||||||||
| Contract liability - related party | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Operating lease liabilities - non-current | ||||||||
| Deferred income | ||||||||
| Contract liability – related party non-current | ||||||||
| Other long-term liability | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Ordinary Shares ( | ||||||||
| Additional paid in capital | ||||||||
| Statutory reserve | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total equity attributable to Jiuzi Holdings, Inc. | ||||||||
| Non-controlling interest | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
See accompanying notes to financial statements.
Jiuzi Holdings, Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the Six Months Ended April 30, 2023 and 2022
Unaudited
| Six Months Ended | Six Months Ended | |||||||
| April 30, | April 30, | |||||||
| 2023 | 2022 | |||||||
| Revenues, net | $ | $ | ||||||
| Revenues – related party, net | ||||||||
| Total Revenues | ||||||||
| Cost of revenues | ||||||||
| Cost of revenues – related party | ||||||||
| Total cost of revenues | ||||||||
| Gross profit | ( | ) | ||||||
| Selling and marketing expense | ||||||||
| General and administrative expenses | ||||||||
| Provision for credit loss on loans receivable | ||||||||
| Operating expense | ||||||||
| Loss before tax | ( | ) | ( | ) | ||||
| Non-operating income (expense) items: | ||||||||
| Other income (expense), net | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| ( | ) | |||||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Less: Loss attributable to non-controlling interest | ( | ) | ( | ) | ||||
| Net loss attributable to controlling interest | $ | ( | ) | $ | ( | ) | ||
| Earnings (Loss) per share | ||||||||
| Basic | ( | ) | ( | ) | ||||
| Diluted | ( | ) | ( | ) | ||||
| Weighted average number of ordinary shares outstanding* | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation income | ||||||||
| Total comprehensive loss | ( | ) | ( | ) | ||||
See accompanying notes to financial statements.
2
Jiuzi Holdings, Inc.
Consolidated Statements of Changes in Shareholders’ Equity
For the Six Months Ended April 30, 2023 and 2022
Unaudited
Common Stock | Additional | Accumulated other | Equity attributable | Non- | ||||||||||||||||||||||||||||||||
Number of | Paid-in | Statutory | Retained | Comprehensive | to | Controlling |
Total | |||||||||||||||||||||||||||||
Shares | Amount | Capital | Reserve | Earnings | Income | Jiuzi | interest | Equity | ||||||||||||||||||||||||||||
| Balance at October 31, 2021 | ||||||||||||||||||||||||||||||||||||
| (Distribution)/Contribution in capital | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Appropriations to statutory reserves | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at April 30, 2022 | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at October 31, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Shares issued for cash proceeds, net | ||||||||||||||||||||||||||||||||||||
| Shares issued for compensation | ||||||||||||||||||||||||||||||||||||
| Shares issued for debt conversion | ||||||||||||||||||||||||||||||||||||
| Contribution (Distribution) in capital | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Appropriations to statutory reserves | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at April 30, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
See accompanying notes to financial statements.
3
Jiuzi Holdings, Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended April 30, 2023 and 2022
Unaudited
| Six Months Ended | Six Months Ended | |||||||
| April 30, | April 30, | |||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | ( |
) | $ | ( |
) | ||
| Depreciation and amortization | ||||||||
| Provision (Recovery) for doubtful accounts | ||||||||
| Amortization of operating lease ROU assets | ||||||||
| Provision for credit losses | ||||||||
| Imputed interest expense | ||||||||
| Loss (gain) from disposal of investments | ||||||||
| Loss (gain) from disposal of assets | ||||||||
| Stock-based compensation | ||||||||
| Changes in assets and liabilities | ||||||||
| (Increase) decrease in accounts receivable | ||||||||
| (Increase) decrease in accounts receivable – related party | ( |
) | ||||||
| (Increase) decrease in inventories | ( |
) | ||||||
| (Increase) decrease in advances to suppliers | ||||||||
| (Increase) decrease in notes receivable-related party customers sales | ( |
) | ||||||
| (Increase) decrease in loans to related parties | ( |
) | ( |
) | ||||
| (Increase) decrease in due from relates parties | ||||||||
| (Increase) decrease in other assets | ( |
) | ||||||
| (Decrease) increase in accrued and other liabilities | ||||||||
| Decrease in account payable | ( |
) | ||||||
| Increase in accounts payable – related party | ( |
) | ( |
) | ||||
| Increase in taxes payable | ( |
) | ||||||
| (Decrease) increase in contract liability | ( |
) | ||||||
| (Decrease) increase in contract liability – related party | ( |
) | ||||||
| (Decrease) increase in operating lease liabilities | ( |
) | ||||||
| (Decrease) increase in other long term liabilities | - | ( |
) | |||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of fixed assets | ( |
) | ( |
) | ||||
| Acquisition of investment | ( |
) | ||||||
| Disposal of fixed assets | ||||||||
| Redemption/Disposal of investments | - | |||||||
| Net cash provided by (used in) investing activities | ( |
) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from owner’s injection of capital | ||||||||
| Proceeds from convertible debenture | ||||||||
| Repayments to convertible debenture | ( |
) | - | |||||
| Net cash provided by financing activities | ||||||||
| Net decrease of cash and cash equivalents | ( |
) | ( |
) | ||||
| Effect of foreign currency translation on cash and cash equivalents | ( |
) | ||||||
| Cash, cash equivalents, and restricted cash – beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | $ | ||||||
| Reconciliation of Cash, Cash Equivalents & Restricted Cash to Statements of Cash Flows | ||||||||
| Cash & cash equivalents | ||||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||
| Supplementary cash flow information: | ||||||||
| Interest received | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash financing and investing activities: | ||||||||
| Notes payable converted to common stock | $ | $ | ||||||
See accompanying notes to financial statements.
4
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Jiuzi Holdings, Inc. (“Company” or “Jiuzi”) was incorporated in the Cayman Islands on October 10, 2019. The Company is an investment holding company; its primary operations are conducted through subsidiaries and variable interest entities as described below.
Jiuzi (HK) Limited (“Jiuzi HK”) was incorporated in Hong Kong on October 25, 2019. It is wholly owned subsidiary of the Company.
Zhejiang Navalant New Energy Automobile Co., Ltd. (“Jiuzi WFOE”) was incorporated on June 5, 2020 as wholly foreign owned entity in the People’s Republic of China (“PRC”). Jiuzi WFOE is a wholly owned subsidiary of Jiuzi HK.
Zhejiang Jiuzi (“Zhejiang Jiuzi”) was incorporated on May 26, 2017 in the PRC. Zhejiang Jiuzi’s scope of business includes the sale of new energy vehicles (“NEVs”) and NEV components and parts, and the related development of products and services for the NEV industry. Zhejiang Jiuzi generates revenues by both selling NEVs and NEV components and parts to Jiuzi branded licensed NEV dealerships, and by rendering professional services to new Jiuzi NEV dealerships, such as initial setup, NEV product procurement services, and specialized marketing campaigns. The Zhejiang Jiuzi also provides short term financing solutions to the new Jiuzi NEV dealerships for the procurement of NEVs.
Shangli Jiuzi was incorporated on May 10, 2018
in the PRC. Its scope of business is similar to Zhejiang Jiuzi. Zhejiang Jiuzi owns
Hangzhou Zhitongche Technology Co., Ltd. (“Hangzhou Zhitongche”) was incorporated on February 2, 2018 in the PRC. The company is providing technical services, technical development, technical consulting and trading for new energy for motor vehicle and its accessories. Zhitongche is a wholly owned subsidiary of Zhejiang Jiuzi.
Zhejiang Jiuzi New Energy Network Technology Co.,
Ltd was incorporated on July 1, 2021 in PRC. Its scope of business includes software outsourcing services; industrial internet data services;
network and information security software development; artificial intelligence application software development; Internet of Things technology
research and development; internet security services; information system operation and maintenance services; artificial intelligence basic
software development; cloud computing equipment technical services; research and development of robots (except for projects subject to
approval according to law, business activities are carried out independently according to law with business licenses). Zhejiang Jiuzi
owns
Guangxi Nanning Zhitongche New Energy Technology
Co., Ltd was incorporated on December 31, 2021 in PRC. Its scope of business includes technical service, development and consultation;
sales of electrical accessories for new energy vehicles; automobiles new car sales; business agency services; motor vehicle charging sales;
sales of new energy prime movers; R&D of emerging energy technologies; car trailers, assistance, and clearance services; auto parts
wholesale; auto parts retail; sales agency; domestic trade agency; import and export agency. Hangzhou Zhitongche owns
Hangzhou Jiuyao New Energy Automobile Technology
Co. Ltd. was incorporated on January 24, 2022 in PRC. Its scope of business includes technical service, technology development, technical
consultation and promotion, as well as sales of automobiles and new energy vehicles, and sales of electrical accessories and accessories
for new energy vehicles. Hangzhou Jiuyao is
5
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
Hangzhou Jiuzi Haoche Technology Co., Ltd. was
incorporated on January 21, 2022 under the laws of the People’s Republic of China. Its registered business scope is software outsourcing
services, industrial internet data services, network and information security software development, artificial intelligence application
software development, technology development, consulting and transfer, market planning, convention planning, and cloud computing equipment
technical services. Hangzhou Jiuzi Haoche Technology Co., Ltd. is a wholly owned subsidiary of Jiuzi New Energy and has a registered capital
with the amount of RMB
On November 10, 2022, Zhejiang Jiuzi New Energy
Automobile Co., Ltd.(“Zhejiang Jiuzi”), the variable interest entity (the “VIE”) of the Company, entered into
a termination agreement (the “Termination Agreement”) with Zhejiang Navalant New Energy Automobile Co. Ltd., a wholly foreign-owned
entity of the Company (“Jiuzi WFOE”), pursuant to which the Exclusive Option Agreement, the Exclusive Business Cooperation
Agreement and the Equity Pledge Agreement (collectively, the “VIE agreements”) entered into among Zhejiang Jiuzi, Jiuzi WFOE
and certain shareholders of Zhejiang Jiuzi shall be terminated effective upon the conditions are met.
6
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
The accompanying financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 20-F for the fiscal year ended October 31, 2022, filed with the SEC on March 15, 2023. The interim financial information is not necessarily indicative of the results to be expected for the fiscal year ended or for any other interim period or for any future year.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Significant inter-company transactions have been eliminated in consolidation.
Reverse Stock Split
On July 7, 2023, our Board of Directors declared a reverse share split at a ratio of 1-for-18 for shares having a par value of $0.001 per share with effect from July 10. Following the reverse split, the shares will have a par value of $0.018 per share. There was no effect on total stockholders’ equity. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the reverse stock split.
Going Concern and Management’s Plan
The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge
of liabilities in the normal course of business for the foreseeable future. As of April 30, 2023, the Company had an accumulated deficit
of
The Company plans to establish provincial regional sales centers nationwide to geographically expand the market and adopt centralized procurement system to reduce overhead cost and obtain volume discount. The company will also cooperate with more brands of NEV, introduce more quality services and strengthen its publicity to attract more franchisees to join. Additionally, the Company will be undertaking capital raising activities to provide additional cash to meet current and future liquidity needs. Management believes that it will be able to obtain the necessary financing and fund future expansion plans; however, there is no assurance that the Company will be successful in securing sufficient funds to sustain or grow its operations.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.
7
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
Functional and presentation currency
The functional currency of the Company is the currency of the primary economic environment in which the Company operates which is Chinese Yuan (“RMB”).
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.
For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.
US$ to RMB
| Period End |
Average | |||||||
| April 30, 2023 | ||||||||
| October 31, 2022 | ||||||||
| April 30, 2022 | ||||||||
Fair Values of Financial Instruments
The Company adopted ASC 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follow:
| ● | Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value. |
As of the balance sheet date, the estimated fair values of the financial instruments approximated their fair values due to the short-term nature of these instruments. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each year.
8
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
Related parties
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Cash and Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Accounts Receivable
Accounts receivable are recorded at the net value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. When collection of the original invoice amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for doubtful accounts.
Short-term investments
Short-term investments consist primarily of investments
in fixed deposits with original maturities between three months and one year and certain investments in wealth management products and
other investments that the Company has the intention to redeem within one year. As of April 30, 2023 and October 31, 2022, the investments
in bank wealth management and security that were recorded as short-term investments amounted to $
Loans Receivable
Loans receivable are recorded at origination at the fair value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for credit losses. When collection of the original amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for credit losses.
Revenue Recognition
In 2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has concluded that the new guidance did not require any significant change to its revenue recognition processes.
The Company’s revenues consist of sales of vehicle by the Company’s own corporate retail store to third party customers, sales of vehicle to franchisees as a supplier, fees from retail stores operated by franchisees, and sublease of vehicles to third party customers. Revenues from franchised stores include initial franchise fees and annual royalties based on a percent of net incomes.
The Company recognizes sales of vehicle revenues at the point in time when the Company has transferred physical possession of the goods to the customer and the customer has accepted the goods, therefore, indicating as control of the goods has been transferred to the customer. The transaction price is determined and allocated to the product prior to the transfer of the goods to the customer.
9
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
The initial franchise services include a series of performance obligations and an indefinite license to use the Company’s trademark. The series of performance obligations are specific services and deliverables that are set forth in the agreement and are billed and receivable as delivered and accepted by the franchisee. These services and deliverables may be customized and are not transferable to other third parties.
The royalty revenues are distinct from the initial franchise services. The Company recognizes royalty revenues only when the franchisee has generated positive annual net income, at which point the Company has the contractual right to request for payment of the royalty. The royalty is calculated as a percentage of the franchisees’ annual net income.
The Company subleases vehicles to third party and recognizes revenues over time which is ratably on a monthly basis over the lease period according to the lease agreement.
The Company estimates potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue. The Company has not experienced any sales returns.
Inventory
Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers.
Advertising
The Company expenses advertising costs as incurred
and includes it in selling expenses. The Company recorded $
Income Taxes
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the years of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.
Earnings (loss) per share
Basic income (loss) per share is computed by dividing net income (loss) attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per share is calculated by dividing net income (loss) attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.
10
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
All per share amounts for all periods presented herein have been adjusted to reflect the Share Subdivision and 2 for 1 stock dividend on post-Share Subdivision basis. See Note 17.
Property and Equipment & Depreciation
| Equipment | ||
| Furniture and fixtures | ||
| Motor vehicles |
Intangible Assets & Amortization
Intangible assets are stated at historical cost
net of accumulated amortization. Software is amortized on a straight-line basis over the estimated useful life of the software which is
Impairment of Long-lived assets
The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value.
New Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires contract assets and contract liabilities (e.g., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in purchase accounting. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The adoption is not expected to have a material impact on the Company’s consolidated financial statements.
Besides the above, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted would have a material effect on the consolidated financial statements.
11
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 3 – INVENTORY
| April 30, 2023 | October 31, 2022 | |||||||
| Finished goods | ||||||||
| Total, net | ||||||||
Inventory write-down expense was $ and $ for the six months ended April 30, 2023 and 2022, respectively.
NOTE 4 – ACCOUNTS RECEIVABLES
| April 30, 2023 | October 31, 2022 | |||||||
| Accounts receivables | ||||||||
| Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Total, net | ||||||||
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Accounts receivables-related parties | ||||||||
| Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Total, net | ||||||||
| April 30, 2023 | October 31, 2022 | |||||||
| Balance at beginning of year | ||||||||
| Provision | ||||||||
| Charge-offs | ||||||||
| Recoveries | ||||||||
| Effect of translation adjustment | ( | ) | ||||||
| Balance at end | ||||||||
Bad debt expense (recoveries) was $
12
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 5 – SHORT-TERM INVESTMENT
| As of April 30, 2023 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Bank Wealth Management | ||||||||||||||||
| Securities | ||||||||||||||||
| As of October 31, 2022 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Bank Wealth Management | ||||||||||||||||
| Securities | ||||||||||||||||
NOTE 6 – LOANS RECEIVABLES
Loans receivables include amounts due from related franchisees and are presented net of imputed interest and an allowance for estimated loan losses. The loans are provided in the form of credit line to related franchisee to support their operations. These loans are unsecured with a due date of 18 months upon initial drawing.
Management has determined that the 18-month borrowing rate most appropriately capture the financing cost for these loans. Given that the loans are in the forms of credit lines to the franchisees that may have varying balances over time, as a practical expedient, management has elected to the expense the interest as a cost of revenue at inception rather than amortize over time.
The amounts charged were $
The allowance for loan losses represents an estimated amount of net losses inherent in our portfolio of managed receivables as of the applicable reporting date and expected to become evident during the following 12 months.
13
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
Each lending request is evaluated by considering the borrower’s financial condition. The Company uses a proprietary model to assign each franchisee a risk rating. This model uses historical franchisee performance data to identify key factors about a franchisee that are considered most significant in predicting a franchisee’s ability to meet its financial obligations. The Company also considers numerous other financial and qualitative factors of the franchisee’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with the Company and other creditors.
The Company also consider recent trends in delinquencies and defaults, recovery rates, age of the loans. and the economic environment in assessing the models used in estimating the allowance for loan losses, and may adjust the allowance for loan losses to reflect factors that may not be captured in the models. In addition, the Company periodically consider whether the use of additional metrics would result in improved model performance and revise the models when appropriate. The provision for loan losses is the periodic expense of maintaining an adequate allowance.
An account is considered delinquent when the related franchisee fails to make a substantial portion of a scheduled payment 3 months after the due date. For purposes of determining impairment, loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.
As these loans are non-interest bearing, the Company
recorded a discount to the face amount using an imputed interest rate of
| April 30, 2023 | October 31, 2022 | |||||||
| Loan to related franchisees, gross | ||||||||
| Discount based on imputed interest rate of | ( | ) | ( | ) | ||||
| Loan to related franchisees, net of discount | ||||||||
| April 30, 2023 | October 31, 2022 | |||||||
| Loan to related franchisees, net of discount | ||||||||
| Provision for credit losses | ( | ) | ( | ) | ||||
| Loan to related franchisees, net of discount and allowance | ||||||||
| April 30, 2023 | October 31, 2022 | |||||||
| Balance at beginning of year | ||||||||
| Provision | ||||||||
| Charge-offs | ||||||||
| Recoveries | ||||||||
| Effect of translation adjustment | ( | ) | ||||||
| Balance at end | ||||||||
14
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
Credit loss was $
| April 30, 2023 | October 30, 2022 | |||||||
| Loan to related franchisees, net of discount and allowances, current | ||||||||
| Loan to related franchisees, net of discount and allowances, non-current | ||||||||
Credit Quality
The Company extends credit to related franchisees primarily in the form of lines of credit to purchase vehicles and support their daily operations. Each of the franchisees are assigned to one of four groups according to risk ratings with Group I demonstrating the best credit history with the Company and Group IV demonstrating the weakest.
| ● | Group I – strong to superior credit rating; | |
| ● | Group II – fair to favorable credit rating; | |
| ● | Group III – marginal to weak credit rating; and | |
| ● | Group IV – poor credit rating, including franchisees classified as uncollectible. |
Generally, the Company suspends credit lines and does not extend further funding to franchisee who are unable to repay the balance within 3 months after the 18-month deadline.
The credit quality of the loans receivables is evaluated based on the Company’s adjusted aging schedule. The Company regularly reviews the model to confirm the continued business significance and statistical predictability of the model and may make updates to improve the performance of the model.
| April 30, 2023 | October 31, 2021 | |||||||
| Franchisee Financing: | ||||||||
| Group I | ||||||||
| Group II | ||||||||
| Group III | ||||||||
| Group IV | ||||||||
| Balance at end | ||||||||
15
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 7 – OTHER RECEIVABLES AND OTHER CURRENT ASSETS
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Deposits put down on the car | ||||||||
| Excess input VAT credits | ||||||||
| Prepaid expense | ||||||||
| Cash advance to employee | ||||||||
| Total | ||||||||
NOTE 8 – PROPERTY & EQUIPMENT
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| At Cost: | ||||||||
| Equipment | ||||||||
| Motor vehicles | ||||||||
| Leasehold Improvement | ||||||||
| Furniture and fixtures | ||||||||
| Less: Accumulated depreciation | ||||||||
| Total, net | ||||||||
Depreciation expenses was $
16
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 9 – INTANGIBLE ASSETS
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| At Cost: | ||||||||
| Financial software | ||||||||
| Domain name | ||||||||
| Less: Accumulated Amortization | ||||||||
| Total, net | ||||||||
Amortization expenses was $
NOTE 10 – RELATED PARTY TRANSACTIONS
The franchisees are related parties of the Company
due to the nominal, symbolic equity interest ownership in the franchisees.
The Company did not and does not control the franchisees, exert significant influence over the franchisees, have the power to direct the use of the franchisee’s assets and the fulfillment of their obligations, appoint or dismiss directors, authorized representatives, or executive officers of the franchisees. Management has also determined that the percentage shareholding in the franchisee is not compensatory to the Company in nature, and accordingly, would not be subject to consideration as income under revenue recognition criteria. The Company did not contribute any permanent equity capital in these franchisees and if these franchisees were to incur substantial losses and accumulate significant liabilities, the Company is not obligated to absorb such losses on behalf of the franchisees. Accordingly, the management has determined that the financial positions and results of operations of these franchisees should not be included as part of the Company’s consolidated financial statements.
In addition, the Company did not and will not
receive any actual ownership interest in the franchisees, nor receive any benefits from being a
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Yichun Jiuzi New Energy Automobile Co., Ltd | ||||||||
| Wanzai Jiuzi New Energy Automobile Co., Ltd | ||||||||
| Xinyu Jiuzi New Energy Automobile Co., Ltd | ||||||||
| Quanzhou Jiuzi New Energy Automobile Co., Ltd | ||||||||
| Yulin Jiuzi New Energy Automobile Co., Ltd | ||||||||
| Total | ||||||||
Accounts receivables above derived from sales
of vehicles supplied to the Company’s franchisees without any special payment terms. Sales revenues from related parties’
franchisees were $ and $
17
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
| As of April 30, 2023 | As of October 31, 2022 | |||||||||||||||||||||||||||||||
| Gross | Discount | Allowance | Net | Gross | Discount | Allowance | Net | |||||||||||||||||||||||||
| Jiangsu Changshu | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Shandong Dongming | ||||||||||||||||||||||||||||||||
| Jiangxi Gao’an | ||||||||||||||||||||||||||||||||
| Hunan Huaihua | ||||||||||||||||||||||||||||||||
| Jiangxi Jiujiang | ||||||||||||||||||||||||||||||||
| Hunan Liuyang | ||||||||||||||||||||||||||||||||
| Hunan Loudi | ||||||||||||||||||||||||||||||||
| Hunan Pingjiang | ||||||||||||||||||||||||||||||||
| Jiangxi Pingxiang | ||||||||||||||||||||||||||||||||
| Henan Puyang | ||||||||||||||||||||||||||||||||
| Fujian Quanzhou | ||||||||||||||||||||||||||||||||
| Jiangxi Wanzai | ||||||||||||||||||||||||||||||||
| Jiangxi Xinyu | ||||||||||||||||||||||||||||||||
| Jiangxi Yichun | ||||||||||||||||||||||||||||||||
| Jiangxi Yudu | ||||||||||||||||||||||||||||||||
| Guangdong Zengcheng | ||||||||||||||||||||||||||||||||
| Jiangxi Shanggao | ||||||||||||||||||||||||||||||||
| Shandong Heze | ||||||||||||||||||||||||||||||||
| Jiangxi Ganzhou | ||||||||||||||||||||||||||||||||
| Hunan Liling | ||||||||||||||||||||||||||||||||
| Hunan Zhuzhou | ||||||||||||||||||||||||||||||||
| Hunan Changsha | ||||||||||||||||||||||||||||||||
| Guangxi Guilin | ||||||||||||||||||||||||||||||||
| Hunan Chenzhou | ||||||||||||||||||||||||||||||||
| Jiangxi Ji’an | ||||||||||||||||||||||||||||||||
| Guangxi Nanning | ||||||||||||||||||||||||||||||||
| Hunan Leiyang | ||||||||||||||||||||||||||||||||
| Guangdong Dongguan Changping | ||||||||||||||||||||||||||||||||
| Hunan Changsha County | ||||||||||||||||||||||||||||||||
| Guizhou Zunyi | ||||||||||||||||||||||||||||||||
| Jiangsu Xuzhou | ||||||||||||||||||||||||||||||||
| Hunan Yongxing | ||||||||||||||||||||||||||||||||
| Hunan Hengyang | ||||||||||||||||||||||||||||||||
| Hainan Sanya | ||||||||||||||||||||||||||||||||
| Hunan Changsha Yuhua | ||||||||||||||||||||||||||||||||
| Shandong Heze Dingtao | ||||||||||||||||||||||||||||||||
| Shandong Heze Yuncheng | - | |||||||||||||||||||||||||||||||
| Shandong Heze Gaoxin | ||||||||||||||||||||||||||||||||
| Shandong Zouping | ||||||||||||||||||||||||||||||||
| Shandong Juye | ||||||||||||||||||||||||||||||||
| Shandong Juancheng | ||||||||||||||||||||||||||||||||
| Shandong Shanxian | ||||||||||||||||||||||||||||||||
| Jiangxi Zhangshu | ||||||||||||||||||||||||||||||||
| Guangdong Foshan | ||||||||||||||||||||||||||||||||
| Jiangxi Jingdezhen | ||||||||||||||||||||||||||||||||
| Guangxi Yulin | ||||||||||||||||||||||||||||||||
| Shandong Heze Cao County | ||||||||||||||||||||||||||||||||
| Dongguan Nancheng | ||||||||||||||||||||||||||||||||
| Hubei Macheng | ||||||||||||||||||||||||||||||||
| Shandong Jining Liangshan | ||||||||||||||||||||||||||||||||
| Guangdong Zhanjiang | ||||||||||||||||||||||||||||||||
| Hunan Hengyang Shigu | ||||||||||||||||||||||||||||||||
| Jiangxi Ji’an Yongfeng | ||||||||||||||||||||||||||||||||
| Hunan Changde | ||||||||||||||||||||||||||||||||
| Hunan Shaoyang | ||||||||||||||||||||||||||||||||
| Hunan Yongzhou | ||||||||||||||||||||||||||||||||
| Hunan Ningxiang | ||||||||||||||||||||||||||||||||
| Guangxi Nanning Jiangnan | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
18
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
The advances paid above are derived from funds advanced to the Company’s franchisees as working capital to support its operations. Such advances are due within 18 months.
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Yudu Jiuzi New Energy Automobile Co., Ltd. | ||||||||
| Total | ||||||||
Accounts payable above derived from vehicles purchased by the Company from the franchisees as inventory on a needed basis without any special payment terms.
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Current Portion | ||||||||
| Customer deposit | ||||||||
| Non-current Portion | ||||||||
| Unearned franchise fee | ||||||||
| Total, net | ||||||||
19
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Unearned franchise fee - current | ||||||||
| Jinan Chuangtu New Energy Co., Ltd. | - | |||||||
| Hunan Changsha | - | |||||||
| Hunan Yueyang | - | |||||||
| Zhejiang Hangzhou Xiaoshan | - | |||||||
| Hunan Yueyang Xiangyin | - | |||||||
| Guangdong Zhongshan | - | |||||||
| Hunan Hengyang | ||||||||
| Henan Luohe Yancheng Agent | - | |||||||
| Guangdong Foshan Shunde Agent | - | |||||||
| Chongqing Banan Agent | - | |||||||
| Zhejiang Hangzhou Gongshu Agent | - | |||||||
| Jiangsu Jingjiang Agent | - | |||||||
| Shanghai Fengxian Agent | - | |||||||
| Chengdu municipal level Agent | - | |||||||
| Zhejiang Jiaxing Nanhu Agent | - | |||||||
| Hunan Yueyang Miluo Agent | ||||||||
| Zhejing JiaXing | ||||||||
| Henan Jiuzi New Energy Vehicle Sales and Service Co. LTD | - | |||||||
| Zhejiang Huasu Automobile Service Co., LTD | - | |||||||
| Huzhou Fengtao New Energy Automobile Sales Co., LTD | - | |||||||
| Shandong Shenglong Automobile Sales Co. LTD | - | |||||||
| Nantong Meixinyao Vehicle Sales Service Co., LTD | - | |||||||
| Anhui Auto e-Link Auto Sales Co., LTD | - | |||||||
| Fengshang Network Technology (Shaoxing) Co., LTD | - | |||||||
| Anhui LiuAn | ||||||||
| Guangxi Qinzhou | ||||||||
| Guangxi Qinzhou Lingshan | ||||||||
| Zhejiang Shaoxing Shengzhou | ||||||||
| Xinjiang Urumqi | ||||||||
| Hunan Changzhutan | - | |||||||
| Hunan Shaoyang | ||||||||
| Guangxi Liuzhou (Guangxi Shuangru Trading Co., Ltd.) | ||||||||
| Guangxi Nanning | ||||||||
| Guangxi Yulin | ||||||||
| Guangxi Nanning (Guangxi Zhanyuan Automobile) | ||||||||
| Guangxi Yulin (Yulin Qihui Automobile) | ||||||||
| Zhejiang Huzhou | ||||||||
| Sanmen Xian Wuji Automobile Sales | ||||||||
| Shandong Yuncheng (Yuncheng Zhanteng New Energy Automobile Co., Ltd.) | ||||||||
| Zhejiang Shaoxing Niuniu Automobile Sales Service Co., Ltd. | ||||||||
| Yongkang Yijie Automobile Trading Co., LTD | - | |||||||
| Ningbo Jinhui Internet Technology Service Co., LTD | - | |||||||
| Xingtai Wanhua Botian Automobile Trading Co., LTD | - | |||||||
| Zhejiang Hangzhou Xiaoshan Agent | - | |||||||
| Hunan Changsha Yuelu Agent | - | |||||||
| Hunan Yueyang Xiangyin Agent | - | |||||||
| Hunan Yueyang Yueyang Lou Agent | - | |||||||
| Guangdong Zhongshan City Agent | - | |||||||
| Guangxi Yulin (Yulin Haorui Automobile Sales Co., Ltd.) | - | |||||||
| Zhejiang Hangzhou Gongshu Agent | - | |||||||
| Zhejiang Jiaxing Nanhu Agent | - | |||||||
| Unearned franchise fee – non-current | ||||||||
| Guizhou 320 Automobile Service Co., LTD | - | |||||||
| Yongkang Yijie Automobile Trading Co., LTD | - | |||||||
| Ningbo Jinhui Internet Technology Service Co., LTD | - | |||||||
| Xingtai Wanhua Botian Automobile Trading Co., LTD | - | |||||||
| Zhejiang Hangzhou Xiaoshan Agent | - | |||||||
| Hunan Changsha Yuelu Agent | - | |||||||
| Hunan Yueyang Xiangyin Agent | - | |||||||
| Hunan Yueyang Yueyang Lou Agent | - | |||||||
| Guangdong Zhongshan City Agent | - | |||||||
| Hunan Yueyang Miluo Agent | - | |||||||
| Henan Luohe Yancheng Agent | - | |||||||
| Guangdong Foshan Shunde Agent | - | |||||||
| Chongqing Banan Agent | - | |||||||
| Zhejiang Hangzhou Gongshu Agent | - | |||||||
| Jiangsu Jingjiang Agent | - | |||||||
| Shanghai Fengxian Agent | - | |||||||
| Chengdu municipal level Agent | - | |||||||
| Zhejiang Jiaxing Nanhu Agent | - | |||||||
| Hunan Hengyang Agent | - | |||||||
| - | ||||||||
| Total | ||||||||
20
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
The deferred revenues above derived from initial franchise fees payments received in advance for services which have not yet been performed. The initial franchise fees include a series of performance obligations and an indefinite license to use the Company’s trademark. Amounts are recognized as advances when received, and are recognized as deferred revenues when the minimum amount required under the franchise or license agreement is attained. The payments are received in advance progressively and are not refundable once the required amount is attained. Such amounts are recognized as revenues when the Company performed the initial services required under the franchise or license agreement, which is generally when a specific performance obligation is completed or when and if the franchise or license agreement is terminated.
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Mr. Shuibo Zhang | ||||||||
| Mr. Qi Zhang | ||||||||
| Mr. Dewen Chen | ||||||||
| Mr. Ruchun Huang | ||||||||
| Total | ||||||||
As of April 30, 2023 and October 31, 2022, the
Company has an outstanding receivable of $
As of April 30, 2023 and October 31, 2022, the
Company has an outstanding receivable of $
As of April 30, 2023 and October 31, 2022, the
Company has an outstanding receivable of $
As of April 30, 2023 and October 31, 2022, the
Company has an outstanding receivable of $
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Mr. Ligui Xu | ||||||||
| Total | ||||||||
As of April 30, 2023 and October 31, 2022, the
Company has an outstanding payable of $
21
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 11 – DEFERRED INCOME AND OTHERS LONG TERM LIABILITIES
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Subsidy for the maintenance and repair of the office | ||||||||
| Total | ||||||||
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Guangxi Rongxian Junsheng Automobile Trading Co., Ltd. | ||||||||
| Chongqing Suiqian Trading Co., Ltd. | ||||||||
| Guangxi Yulin Shangfeng Automobile Sales Co., Ltd. | ||||||||
| Jiangxi Haomen Automobile Sales Co., Ltd. | ||||||||
| Guangxi Zhanyuan Automobile Sales Co., Ltd. | ||||||||
| Total | ||||||||
NOTE 12 – LEASES
The Company has
Operating lease right-of-use assets and liabilities
are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate
present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing
rate for each lease based primarily on its lease term in PRC which is approximately
Operating lease expenses of office and retail
store were $
The Company has three operating leases for multiple
vehicles. The leases have different leasing periods which are from June 1, 2022 to June 30, 2025. The discount rate used to calculate
present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing
rate for each lease based primarily on its lease term in PRC which is approximately
Operating lease cost for the subleases of vehicles
were $
| Six Months Ended | ||||
| April 30, 2023 | ||||
| Lease Cost | ||||
| Operating lease cost (included in general and administrative expenses and cost in the Company’s statement of operations) | $ | |||
| Other Information | ||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | |||
| Weighted average remaining lease term – operating leases (in years) | ||||
| Average discount rate – operating lease | % | |||
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Operating leases | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Operating lease liabilities | $ | $ | ||||||
22
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
| For the fiscal years ended October 31, | Amounts | |||
| 2023 (six months from May 1, 2023 to October 31, 2023) | ||||
| 2024 | ||||
| 2025 | ||||
| Total | ||||
NOTE 13 – CONVERTIBLE DEBENTURES
On December 2, 2021 and on December 6, 2021, the
Company issued convertible debenture of $
On December 30, 2022 (the “Maturity Date”),
the outstanding balance of the convertible debenture dated December 2, 2021 in the amount of $
The outstanding convertible debenture were $
Interest expenses were $
NOTE 14 – TAXES PAYABLE
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Value-added tax, net | ||||||||
| Company Income tax | ||||||||
| Other taxes | ||||||||
| Total | ||||||||
NOTE 15 – CONTRACT LIABILITY
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Customer deposit for car purchase | ||||||||
| Total, net | ||||||||
Contract liability – related party See Note 10 for details.
23
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 16 – SHAREHOLDERS’ EQUITY
As of April 30, 2023 and October 31, 2022, the
Company had
On October 31, 2020, pursuant to a special resolution
adopted by its shareholders to amend and restate the memorandum and articles of associations, the Company conducted a subdivision of its
par value with each share of a par value of $
Subsequent to the Share Subdivision, the Company
increased its authorized share capital from
On May 20, 2021, we issued
On October 28, 2022, the Company issued
For the year ended October 31, 2022, the Company
also issued
For the six months ended April 30, 2023, the Company
issued
Reverse Stock Split
24
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 17 – SEGMENTS AND GEOGRAPHIC INFORMATION
The Company believes that it operates in
Sales of goods revenues comprised of sales of vehicles to third party customers and to the franchisees. Franchise services revenues comprised of initial fees and ongoing royalties from the franchisees. Under the franchise arrangement, franchisees are granted the right to operate retail store using the Company’s Jiuzi brand and system. Other service revenues comprised of sublease of vehicles to third party customers with a mark-up to the rental price.
| Six Months Ended | ||||||||||||||||
| April 30, 2023 | April 30, 2022 | |||||||||||||||
| NEVs sales | % | % | ||||||||||||||
| Franchisees service revenues | % | % | ||||||||||||||
| Other service revenues | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
| Six Months Ended | ||||||||||||||||
| April 30, 2023 | April 30, 2022 | |||||||||||||||
| NEVs sales | % | % | ||||||||||||||
| Franchisees service revenues | % | % | ||||||||||||||
| Other service revenues | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
25
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
| Six Months Ended | ||||||||||||||||
| April 30, 2023 | April 30, 2022 | |||||||||||||||
| NEVs sales | ( | )% | % | |||||||||||||
| Franchisees service revenues | ( | ) | % | % | ||||||||||||
| Other service revenues | ( | )% | % | |||||||||||||
| Total | ( | ) | % | % | ||||||||||||
NOTE 18 – INCOME TAX
The Company is subject to profits tax rate at
| Six Months Ended | ||||||||
| April 30, 2023 | April 30, 2022 | |||||||
| Income (loss) attributed to China | ( | ) | ( | ) | ||||
| PRC statutory tax rate | % | % | ||||||
| Income tax expense at statutory rate | ||||||||
| Reconciliation | ||||||||
| Income tax expense/ (benefit) | ||||||||
NOTE 19 – COMMITMENTS AND CONTINGENCIES
The
Company has filed civil claim suits against certain vendors for failing to deliver the purchased vehicles according to the terms of
the agreements. The Company demands the vendors to refund the advance paid and to compensate the Company for liquidated damages.
| Suppliers (Defendant) | Status of the case | Amount involved (USD equivalent) | ||||
| Shengzhou Baiyuan New Energy Vehicle Technology Co. | ||||||
| Jiangsu Yakai Auto Sales & Service Co. | ||||||
| Hangzhou Shicheng Auto Trading Co. | ||||||
| Nanning Huangyang Auto Sales Co. | ||||||
| Anhui Junmao Automobile Sales and Service Co., Ltd | ||||||
| Shanghai Aichi Yiwei Automobile Sales Co., Ltd | ||||||
| Guangxi Runyin Automobile Sales Co., Ltd | ||||||
| Other suppliers | ||||||
| Total | ||||||
26
Jiuzi Holdings, Inc.
Notes to the Financial Statements
(Unaudited)
NOTE 20 – CONCENTRATIONS, RISKS AND UNCERTAINTIES
Credit risk
Cash deposits with banks are held in financial institutions in China, which deposits are not federally insured. Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.
Concentration
The Company has a concentration risk related to suppliers and customers. Failure to maintain existing relationships with the suppliers or customers to establish new relationships in the future could negatively affect the Company’s ability to obtain goods sold to customers in a price advantage and timely manner. If the Company is unable to obtain ample supply of goods from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which could materially and adversely affect revenues.
| Six Months Ended | ||||||||||||||||
| April 30, 2023 | April 30, 2022 | |||||||||||||||
| Third party sales revenues | % | % | ||||||||||||||
| Related party sales revenues | % | % | ||||||||||||||
| Third party franchise revenues | % | % | ||||||||||||||
| Related party franchise revenues | % | % | ||||||||||||||
| Third party other revenues | % | % | ||||||||||||||
| Related party other revenues | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
| Six Months Ended | ||||||||||||||||
| April 30, 2023 | April 30, 2022 | |||||||||||||||
| Customer A | % | % | ||||||||||||||
| Customer B | % | % | ||||||||||||||
| Customer C | % | % | ||||||||||||||
| Customer D | % | % | ||||||||||||||
| Customer E | % | % | ||||||||||||||
| Customer F | % | % | ||||||||||||||
| Customer G | % | % | ||||||||||||||
| Customer H | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
NOTE 21 – SUBSEQUENT EVENTS
The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. Subsequent to the date the financial statements were available to be issued. There was no subsequent event that would require disclosure to or adjustment to the financial statements.
On July 17, 2023 the Company sold an aggregate of
27
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the following description of our results of operations and financial condition in conjunction with the consolidated unaudited financial statements for the six months ended April 30, 2023 and 2022.
Results of Operations
For the six months ended April 30, 2023 and 2022
The following table sets forth a summary of the Company’s consolidated results of operations for the six months ended April 30, 2023 and 2022. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.
| For six months ended | ||||||||||||||||
| April 30, | Changes | |||||||||||||||
| 2023 | 2022 | Amount | % | |||||||||||||
| Net revenue | $ | 925,759 | $ | 4,109,736 | $ | (3,183,977 | ) | -77.47 | % | |||||||
| Cost of revenue | 936,314 | 3,641,309 | (2,704,995 | ) | -74.28 | % | ||||||||||
| Gross profit | (10,555 | ) | 468,427 | (478,982 | ) | -102.25 | % | |||||||||
| Selling, general and administrative expenses | 6,333,820 | 6,528,418 | (194,598 | ) | -2.98 | % | ||||||||||
| Loss from operations | (6,344,375 | ) | (6,059,991 | ) | (284,384 | ) | 4.69 | % | ||||||||
| Interest income (expense), net | (235,702 | ) | (454,152 | ) | 485,619 | 106.92 | % | |||||||||
| Other income (expense), net | 31,467 | 1,391,065 | (1,626,767 | ) | -117 | % | ||||||||||
| Loss before income tax provision | (6,548,610 | ) | (5,123,078 | ) | (1,425,532 | ) | 28 | % | ||||||||
| Provision for income taxes | 20 | 127,661 | (127,641 | ) | -99.98 | % | ||||||||||
| Net loss | (6,548,630 | ) | (5,250,739 | ) | (1,297,891 | ) | 258 | % | ||||||||
Net Revenue
The following table lists the calculation methods of gross profit and gross profit margin of each type of revenue:
| For the six months ended April 30, | Changes | |||||||||||||||
| 2023 | 2022 | Amount | % | |||||||||||||
| New energy vehicle sales | ||||||||||||||||
| Net revenue | $ | 884,083 | 3,208,591 | (2,324,508 | ) | (72 | )% | |||||||||
| Cost of revenue | 882,160 | 3,186,391 | (2,304,231 | ) | (72 | )% | ||||||||||
| Gross profit | $ | 1,923 | 22,200 | (20,277 | ) | (91 | )% | |||||||||
| Gross profit margin | 0.22 | % | 0.69 | % | % | |||||||||||
| Franchise initial fees | ||||||||||||||||
| Net revenue | $ | 13,527 | 901,145 | (887,618 | ) | (98.49 | )% | |||||||||
| Cost of revenue | 28,275 | 454,918 | (426,643 | ) | (93.78 | )% | ||||||||||
| Gross profit | $ | (14,748 | ) | 446,227 | (460,975 | ) | (103.30 | )% | ||||||||
| Gross profit margin | (109.02 | )% | 49.52 | % | % | |||||||||||
| Other service revenues | ||||||||||||||||
| Net revenue | $ | 28,149 | - | - | - | |||||||||||
| Cost of revenue | 25,879 | - | - | - | ||||||||||||
| Gross profit | $ | 2,270 | - | - | - | |||||||||||
| Gross profit margin | 8.06 | % | ||||||||||||||
| Total | ||||||||||||||||
| Net revenue | $ | 925,759 | 4,109,736 | (3,183,977 | ) | (77.47 | )% | |||||||||
| Cost of revenue | 936,314 | 3,641,309 | (2,704,995 | ) | (74.28 | )% | ||||||||||
| Gross profit | $ | (10,555 | ) | 468,427 | (478,982 | ) | 102.25 | % | ||||||||
| Gross profit margin | (1.14 | )% | 11.4 | % | % | |||||||||||
Our net revenues were $925,759 for the six months ended April 30, 2023 as compared to $4,109,736 in 2022, an decrease of $3,183,977 or 77.47%. The decrease is mainly due to the re-outbreak of the pandemic in China and the increase in the procurement cost of new energy vehicles.
New Energy Vehicle (NEV) sales
Our NEVs sales include the sales of NEVs in our Shangli store and sales of NEVs to our franchisees. For the six months ended April 30, 2023, our NEVs sales decreased by $2,324,508 or 72.14%, from $3,208,591 for the six months ended April 30, 2022 to $884,083 for the six months ended April 30, 2023.
Cost of revenue was $882,160 for the six months ended April 30, 2023, an decrease of $2,304,231 or 72.00%, from $3,186,391 for the six months ended April 30, 2022 which resulted from the decrease in sales for the period.
Gross profit and gross profit margin were $1,923 and 0.22% for the six months ended April 30, 2023 as compared to $22,200 and 0.69% for the same period in 2022, respectively. Due to the increase of procurement cost, the gross profit rate decreased.
2
Franchisees initial fees
The initial franchise fee revenue decreased by $887,618 or 98.49%, from $901,145 for the six months ended April 30, 2022 to $13,527 for the six months ended April 30, 2023.
Cost of revenue was $28,275 for the six months ended April 30, 2023, an decrease of $426,643 or 93.78%, from $454,918 for the six months ended April 30, 2022.
Gross profit and gross profit margin were $(14,748) and (109)% for the six months ended April 30, 2023 as compared to $446,227 and 49.52% for the same period in 2022, respectively. The decrease was mainly due to an decrease in revenue and fixed cost per franchisee.
Selling, General and Administrative Expenses
We incurred selling, general and administrative expenses of $6,333,820 for the six months ended April 30, 2023, as compared to $6,528,418 for the six months ended April 30, 2022, an decrease of $194,598.00, or 2.98%. This decrease is due to Other General & Administrative Expenses.
Interest Expenses
Interest expense decreased to $239,325 for the six months ended April 30, 2023, from $455,809 for the six months ended April 30, 2022, mainly due to the decrease in the balance of convertible debenture.
Provision for Income Taxes
Provision for income tax was $20 during the six months ended April 30, 2023, an decrease of $127641 or 99.98%, as compared to $127661 for the six months ended April 30, 2022.
Net Loss
Our net Loss increased by $1,297,891.00 or 25%, to $6,548,630 for the six months ended April 30, 2023, from $5,250,739 for the six months ended April 30, 2022. Such change was the result of the combination of the changes as discussed above.
Liquidity and Capital Resources
For the six months ended April 30, 2023 and 2022
As of April 30, 2023, we had $827,308 in cash and equivalent. The Company’s working capital and other capital needs mainly come from shareholders’ equity contribution and operating cash flow. Cash is needed to pay for inventory, wages, sales expenses, rent, income taxes, other operating expenses, and purchases to service debts.
Although the Company’s management believes that cash generated from operations will be sufficient to meet the Company’s normal working capital requirements, its ability to service its current debt will depend on its future realization of its current assets for at least the next 12 months. Management took into account historical experience, the economy, trends in the automotive industry, the collectability of accounts receivable as of April 30, 2023, and the realization of inventory. Based on these considerations, the Company’s management believes that the Company has sufficient funds to meet its working capital requirements and debt obligations, as they will be due at least 12 months from the date of financial reporting. However, there is no guarantee that management’s plan will succeed. There are a number of factors that can arise and cause the company’s plans to fall short, such as demand for NEVs, economic conditions, competitive pricing in the industry, and the continued support of banks and suppliers. If future cash flow from operations and other capital resources are insufficient to meet its liquidity needs, the Company may be forced to reduce or delay its anticipated expanding plans, sell assets, acquire additional debt or equity capital, or refinance all or part of its debt.
3
The following table summarizes the company’s cash flow for the six months ended April 30, 2023 and 2022:
For the six months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| Net cash (used in) operating activities | $ | (2,677,367 | ) | $ | (4,295,043 | ) | ||
| Net cash provided by (used in) investing activities | 828,248 | (946,930 | ) | |||||
| Net cash provided by financing activities | 326,114 | 4,224,203 | ||||||
| Effect of exchange rate on cash | 23,084 | (404,753 | ) | |||||
| Net decrease in cash and cash equivalents | $ | (1,499,921 | ) | $ | (1,422,523 | ) | ||
Operating Activities
Net cash used in operating activities consists primarily of net income adjusted for non-cash items, including depreciation and amortization, accounts receivables and contractual liabilities, and is adjusted for the impact of changes in working capital. Net cash used in operations for the six months ended April 30, 2023 was $2,677,367, representing an decrease of $1,617,675.98, compared to net cash used in operating activities of $4,295,043 for the six months ended April 30, 2022.
Investing Activities
Net cash gained in investing activities was approximately $828,248 for the six months ended April 30, 2023, an increase of $1,775,178.32, as compared to $946,930 net cash used in investing activities for the six months ended April 30, 2022. The increase was mainly due to disposal of short-term investment.
Financing Activities
Net cash provided by financing activities was approximately $326,114 for the six months ended April 30, 2023, an decrease of $3,898,088.83, as compared to net cash provided by $4,224,203 for the six months ended April 30, 2022. The decrease in cash provided by financing activities was due to proceeds from private equity.
Contractual Obligations
For the six months ended April 30, 2023 and 2022
The Company has one operating leases for its corporate office and retail store. The current lease agreement was signed to cover the lease for the period from August 1, 2021 to July 31, 2026. The Company does not expect to receive the subsidy from PRC government as the Company may not meets the requirement of paying RMB 20 million in income taxes to the government, therefore the specific deferred government subsidy was not recognized
Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in PRC which is approximately 4.75%.
Operating lease expenses of office and retail store were $83,306 and $97,191 for the six months ended April 30, 2023 and 2022, respectively.
The Company has three operating leases for multiple vehicles. The leases have different leasing periods which are from June 1, 2022 to June 30, 2025. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in PRC which is approximately 4.45%. The Company subleases vehicles to third party and recognizes revenues over time which is ratably on a monthly basis over the lease period according to the lease agreement.
Operating lease cost for the subleases of vehicles were $22,996 and $nil for the six months ended April 30, 2023 and 2022, respectively.
4
The components of lease expense and supplemental cash flow information related to leases for the period are as follows:
| Six Months Ended | ||||
| April 30, 2023 | ||||
| Lease Cost | ||||
| Operating lease cost (included in general and administrative expenses and cost in the Company’s statement of operations) | $ | 106,302 | ||
| Other Information | ||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | 25,985 | ||
| Weighted average remaining lease term – operating leases (in years) | 3.12 | |||
| Average discount rate – operating lease | 4.75 | % | ||
The supplemental balance sheet information related to leases is as follows:
| April 30, | October 31, | |||||||
| 2023 | 2022 | |||||||
| Operating leases | ||||||||
| Right-of-use assets | $ | 649,773 | $ | 725,903 | ||||
| Operating lease liabilities | $ | 783,003 | $ | 768,185 | ||||
Off-Balance Sheet Arrangements
Other than as disclosed elsewhere in this prospectus, we have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.
CONVERTIBLE DEBENTURES
On December 2, 2021 and on December 6, 2021, the Company issued convertible debenture of $6,000,000 with annual interest rate of 5%, which is valid for 12 months from the date of funds receipt. The debentures are carried out in three stages. In the first stage, the company would issue a convertible debenture of $2,500,000 on December 3, 2021, which is the date of signing this Agreement. Second stage, convertible debenture of $2,500,000 was issued by the company on January 4, 2022, which is the date of filing Registration Statement with SEC. In the third stage, convertible debenture of $1,000,000 will be issued on or about the date the Registration Statement has first been declared effective by the SEC.
On December 30, 2022 (the “Maturity Date”), the outstanding balance of the convertible debenture dated December 2, 2021 in the amount of $1,300,000 (principal, plus accrued and unpaid interest thereon) were due for payment. The Company and the Debenture Holder agreed to an extension (the “Extension”) that extends the Maturity Date to June 30, 2023, pursuant to which the Company shall repay the outstanding balance in cash through monthly payments beginning on January 6, 2023 and continue on the same day of each successive month, with each monthly payment equals to the sum of $216,667 of principal, the redemption premium and the accrued and unpaid interest on the Convertible Debentures as of each payment date. In addition, if the Company completes any financing transaction with gross proceeds of in excess of $250,000, the Company shall pay to the Debenture Holder as an optional redemption but no more than 50% of the total proceeds, an amount up to the total amount outstanding under the Convertible Debentures.
The outstanding convertible debenture were $433,332 and $2,835,400 as of April 30, 2023 and October 31, 2022. Interest expenses were $239,325 and $nil for the six months ended April 30, 2023 and 2022, respectively.
5
Document And Entity Information |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Document Information Line Items | |
| Entity Registrant Name | JIUZI HOLDINGS INC. |
| Document Type | 6-K |
| Current Fiscal Year End Date | --10-31 |
| Amendment Flag | false |
| Entity Central Index Key | 0001816172 |
| Document Period End Date | Apr. 30, 2023 |
| Document Fiscal Year Focus | 2023 |
| Document Fiscal Period Focus | Q2 |
| Entity File Number | 000-00000 |
Consolidated Balance Sheets Unaudited (Parentheticals) - $ / shares |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Ordinary shares par value (in Dollars per share) | $ 0.018 | $ 0.018 |
| Ordinary shares authorized | 8,333,333 | 8,333,333 |
| Ordinary shares issued | 2,584,804 | 1,363,630 |
| Ordinary shares outstanding | 2,584,804 | 1,363,630 |
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) |
Common Stock |
Additional Paid-in Capital |
Statutory Reserve |
Retained Earnings |
Accumulated other Comprehensive Income |
Equity attributable to Jiuzi |
Non- Controlling interest |
Total |
|---|---|---|---|---|---|---|---|---|
| Balance at Oct. 31, 2021 | $ 21,427 | $ 13,150,667 | $ 891,439 | $ 7,459,539 | $ 541,615 | $ 22,064,687 | $ 264,685 | $ 22,329,372 |
| Balance (in Shares) at Oct. 31, 2021 | 1,190,380 | |||||||
| Contribution (Distribution) in capital | (95,990) | (95,990) | ||||||
| Net Income (Loss) | (5,243,232) | (5,243,232) | (7,507) | (5,250,739) | ||||
| Appropriations to statutory reserves | ||||||||
| Foreign currency translation adjustment | (754,885) | (754,885) | 2,157 | (752,728) | ||||
| Balance at Apr. 30, 2022 | $ 21,427 | 13,150,667 | 891,439 | 2,216,307 | (213,270) | 16,066,570 | 163,345 | 16,229,915 |
| Balance (in Shares) at Apr. 30, 2022 | 1,190,380 | |||||||
| Balance at Oct. 31, 2022 | $ 24,545 | 15,444,233 | 891,439 | (9,342,111) | (1,074,299) | 5,943,807 | 137,413 | 6,081,220 |
| Balance (in Shares) at Oct. 31, 2022 | 1,363,630 | |||||||
| Shares issued for cash proceeds, net | $ 8,000 | 1,192,000 | 1,200,000 | 1,200,000 | ||||
| Shares issued for cash proceeds, net (in Shares) | 444,444 | |||||||
| Shares issued for compensation | $ 3,200 | 536,800 | 540,000 | 540,000 | ||||
| Shares issued for compensation (in Shares) | 177,778 | |||||||
| Shares issued for debt conversion | $ 10,781 | 1,662,319 | 1,673,100 | 1,673,100 | ||||
| Shares issued for debt conversion (in Shares) | 598,952 | |||||||
| Contribution (Distribution) in capital | (7,218) | (7,218) | ||||||
| Net Income (Loss) | (6,537,968) | (6,537,968) | (10,662) | (6,548,630) | ||||
| Appropriations to statutory reserves | ||||||||
| Foreign currency translation adjustment | 687,899 | 687,899 | (16,404) | 671,495 | ||||
| Balance at Apr. 30, 2023 | $ 46,526 | $ 18,835,352 | $ 891,439 | $ (15,880,079) | $ (386,400) | $ 3,506,838 | $ 103,129 | $ 3,609,967 |
| Balance (in Shares) at Apr. 30, 2023 | 2,584,804 |
Organization and Basis of Presentation |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Organization and Basis of Presentation [Abstract] | |
| ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Jiuzi Holdings, Inc. (“Company” or “Jiuzi”) was incorporated in the Cayman Islands on October 10, 2019. The Company is an investment holding company; its primary operations are conducted through subsidiaries and variable interest entities as described below.
Jiuzi (HK) Limited (“Jiuzi HK”) was incorporated in Hong Kong on October 25, 2019. It is wholly owned subsidiary of the Company.
Zhejiang Navalant New Energy Automobile Co., Ltd. (“Jiuzi WFOE”) was incorporated on June 5, 2020 as wholly foreign owned entity in the People’s Republic of China (“PRC”). Jiuzi WFOE is a wholly owned subsidiary of Jiuzi HK.
Zhejiang Jiuzi (“Zhejiang Jiuzi”) was incorporated on May 26, 2017 in the PRC. Zhejiang Jiuzi’s scope of business includes the sale of new energy vehicles (“NEVs”) and NEV components and parts, and the related development of products and services for the NEV industry. Zhejiang Jiuzi generates revenues by both selling NEVs and NEV components and parts to Jiuzi branded licensed NEV dealerships, and by rendering professional services to new Jiuzi NEV dealerships, such as initial setup, NEV product procurement services, and specialized marketing campaigns. The Zhejiang Jiuzi also provides short term financing solutions to the new Jiuzi NEV dealerships for the procurement of NEVs.
Shangli Jiuzi was incorporated on May 10, 2018 in the PRC. Its scope of business is similar to Zhejiang Jiuzi. Zhejiang Jiuzi owns 59.0% equity interest in Shangli Jiuzi, and the remaining 41% equity interest is owned by unrelated third-party investors; as such Shangli Jiuzi is accounted as a subsidiary of Zhejiang Jiuzi.
Hangzhou Zhitongche Technology Co., Ltd. (“Hangzhou Zhitongche”) was incorporated on February 2, 2018 in the PRC. The company is providing technical services, technical development, technical consulting and trading for new energy for motor vehicle and its accessories. Zhitongche is a wholly owned subsidiary of Zhejiang Jiuzi.
Zhejiang Jiuzi New Energy Network Technology Co., Ltd was incorporated on July 1, 2021 in PRC. Its scope of business includes software outsourcing services; industrial internet data services; network and information security software development; artificial intelligence application software development; Internet of Things technology research and development; internet security services; information system operation and maintenance services; artificial intelligence basic software development; cloud computing equipment technical services; research and development of robots (except for projects subject to approval according to law, business activities are carried out independently according to law with business licenses). Zhejiang Jiuzi owns 100% equity interest in Zhejiang Jiuzi Xinneng Network Technology Co., Ltd.
Guangxi Nanning Zhitongche New Energy Technology Co., Ltd was incorporated on December 31, 2021 in PRC. Its scope of business includes technical service, development and consultation; sales of electrical accessories for new energy vehicles; automobiles new car sales; business agency services; motor vehicle charging sales; sales of new energy prime movers; R&D of emerging energy technologies; car trailers, assistance, and clearance services; auto parts wholesale; auto parts retail; sales agency; domestic trade agency; import and export agency. Hangzhou Zhitongche owns 90% equity interest in Guangxi Nanning Zhitongche New Energy Technology Co., Ltd, and the remaining 10% equity interest is owned by unrelated third-party investor; as such Guangxi Nanning Zhitongche New Energy Technology Co., Ltd is accounted as a subsidiary of Zhejiang Jiuzi.
Hangzhou Jiuyao New Energy Automobile Technology Co. Ltd. was incorporated on January 24, 2022 in PRC. Its scope of business includes technical service, technology development, technical consultation and promotion, as well as sales of automobiles and new energy vehicles, and sales of electrical accessories and accessories for new energy vehicles. Hangzhou Jiuyao is 51% owned by Hangzhou Zhitongche, as such Hangzhou Jiuyao is accounted as a subsidiary of Zhejiang Jiuzi.; the remaining 49% equity interest is owned by unrelated third-party investors.
Hangzhou Jiuzi Haoche Technology Co., Ltd. was incorporated on January 21, 2022 under the laws of the People’s Republic of China. Its registered business scope is software outsourcing services, industrial internet data services, network and information security software development, artificial intelligence application software development, technology development, consulting and transfer, market planning, convention planning, and cloud computing equipment technical services. Hangzhou Jiuzi Haoche Technology Co., Ltd. is a wholly owned subsidiary of Jiuzi New Energy and has a registered capital with the amount of RMB5,000,000.
On November 10, 2022, Zhejiang Jiuzi New Energy Automobile Co., Ltd.(“Zhejiang Jiuzi”), the variable interest entity (the “VIE”) of the Company, entered into a termination agreement (the “Termination Agreement”) with Zhejiang Navalant New Energy Automobile Co. Ltd., a wholly foreign-owned entity of the Company (“Jiuzi WFOE”), pursuant to which the Exclusive Option Agreement, the Exclusive Business Cooperation Agreement and the Equity Pledge Agreement (collectively, the “VIE agreements”) entered into among Zhejiang Jiuzi, Jiuzi WFOE and certain shareholders of Zhejiang Jiuzi shall be terminated effective upon the conditions are met. On November 10, 2022, with approval of Jiuzi WFOE and approval of the board of directors of Zhejiang Jiuzi, Zhejiang Jiuzi issued 0.1% equity interest in Zhejiang Jiuzi to a third-party investor. The issuance was completed on November 27, 2022. On January 20, 2023, Jiuzi WFOE exercised its call option under the Exclusive Option Agreements dated June 15, 2020 with certain shareholder of Zhejiang Jiuzi and entered into equity transfer agreements with all the shareholders of Zhejiang Jiuzi to purchase all the equity interest in Zhejiang Jiuzi. The transaction underlying the equity transfer agreement was completed and the VIE Agreements were terminated pursuant to the Termination Agreement on January 20, 2023. As a result, the VIE structure is dissolved and Zhejiang Jiuzi became a wholly owned subsidiary of Jiuzi WFOE. |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
The accompanying financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 20-F for the fiscal year ended October 31, 2022, filed with the SEC on March 15, 2023. The interim financial information is not necessarily indicative of the results to be expected for the fiscal year ended or for any other interim period or for any future year.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Significant inter-company transactions have been eliminated in consolidation.
Reverse Stock Split
On July 7, 2023, our Board of Directors declared a reverse share split at a ratio of 1-for-18 for shares having a par value of $0.001 per share with effect from July 10. Following the reverse split, the shares will have a par value of $0.018 per share. There was no effect on total stockholders’ equity. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the reverse stock split.
Going Concern and Management’s Plan
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As of April 30, 2023, the Company had an accumulated deficit of $15,880,079.
The Company plans to establish provincial regional sales centers nationwide to geographically expand the market and adopt centralized procurement system to reduce overhead cost and obtain volume discount. The company will also cooperate with more brands of NEV, introduce more quality services and strengthen its publicity to attract more franchisees to join. Additionally, the Company will be undertaking capital raising activities to provide additional cash to meet current and future liquidity needs. Management believes that it will be able to obtain the necessary financing and fund future expansion plans; however, there is no assurance that the Company will be successful in securing sufficient funds to sustain or grow its operations.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.
Functional and presentation currency
The functional currency of the Company is the currency of the primary economic environment in which the Company operates which is Chinese Yuan (“RMB”).
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.
For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.
Exchange rate used for the translation as follows:
US$ to RMB
Fair Values of Financial Instruments
The Company adopted ASC 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follow:
As of the balance sheet date, the estimated fair values of the financial instruments approximated their fair values due to the short-term nature of these instruments. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each year.
Related parties
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Cash and Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Accounts Receivable
Accounts receivable are recorded at the net value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. When collection of the original invoice amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for doubtful accounts.
Short-term investments
Short-term investments consist primarily of investments in fixed deposits with original maturities between three months and one year and certain investments in wealth management products and other investments that the Company has the intention to redeem within one year. As of April 30, 2023 and October 31, 2022, the investments in bank wealth management and security that were recorded as short-term investments amounted to $46,926 and $834,303, respectively.
Loans Receivable
Loans receivable are recorded at origination at the fair value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for credit losses. When collection of the original amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for credit losses.
Revenue Recognition
In 2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has concluded that the new guidance did not require any significant change to its revenue recognition processes.
The Company’s revenues consist of sales of vehicle by the Company’s own corporate retail store to third party customers, sales of vehicle to franchisees as a supplier, fees from retail stores operated by franchisees, and sublease of vehicles to third party customers. Revenues from franchised stores include initial franchise fees and annual royalties based on a percent of net incomes.
The Company recognizes sales of vehicle revenues at the point in time when the Company has transferred physical possession of the goods to the customer and the customer has accepted the goods, therefore, indicating as control of the goods has been transferred to the customer. The transaction price is determined and allocated to the product prior to the transfer of the goods to the customer.
The initial franchise services include a series of performance obligations and an indefinite license to use the Company’s trademark. The series of performance obligations are specific services and deliverables that are set forth in the agreement and are billed and receivable as delivered and accepted by the franchisee. These services and deliverables may be customized and are not transferable to other third parties.
The royalty revenues are distinct from the initial franchise services. The Company recognizes royalty revenues only when the franchisee has generated positive annual net income, at which point the Company has the contractual right to request for payment of the royalty. The royalty is calculated as a percentage of the franchisees’ annual net income.
The Company subleases vehicles to third party and recognizes revenues over time which is ratably on a monthly basis over the lease period according to the lease agreement.
The Company estimates potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue. The Company has not experienced any sales returns.
Inventory
Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers.
Advertising
The Company expenses advertising costs as incurred and includes it in selling expenses. The Company recorded $79,400 and $220,850 of advertising and promotional expenses for the six months ended April 30. 2023 and 2022, respectively.
Income Taxes
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the years of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.
Earnings (loss) per share
Basic income (loss) per share is computed by dividing net income (loss) attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per share is calculated by dividing net income (loss) attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.
All per share amounts for all periods presented herein have been adjusted to reflect the Share Subdivision and 2 for 1 stock dividend on post-Share Subdivision basis. See Note 17.
Property and Equipment & Depreciation
Property and equipment are stated at historical cost net of accumulated depreciation. Repairs and maintenance are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the following periods:
Intangible Assets & Amortization
Intangible assets are stated at historical cost net of accumulated amortization. Software is amortized on a straight-line basis over the estimated useful life of the software which is 3 years.
Impairment of Long-lived assets
The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value.
New Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires contract assets and contract liabilities (e.g., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in purchase accounting. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The adoption is not expected to have a material impact on the Company’s consolidated financial statements.
Besides the above, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted would have a material effect on the consolidated financial statements. |
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Inventory |
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||
| INVENTORY | NOTE 3 – INVENTORY
Inventory, net comprised of the following:
Inventory write-down expense was $ and $ for the six months ended April 30, 2023 and 2022, respectively. |
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Accounts Receivables |
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| Accounts Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTS RECEIVABLES | NOTE 4 – ACCOUNTS RECEIVABLES
Accounts receivables, net is comprised of the following:
The following is a summary of the activity in the allowance for doubtful accounts:
Bad debt expense (recoveries) was $25,528 and $(764) for the six months ended April 30, 2023 and 2022, respectively. |
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Short-Term Investment |
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| Short-Term Investment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHORT-TERM INVESTMENT | NOTE 5 – SHORT-TERM INVESTMENT
Short-term investment comprised of the following:
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Loans Receivables |
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| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LOANS RECEIVABLES | NOTE 6 – LOANS RECEIVABLES
Loans receivables include amounts due from related franchisees and are presented net of imputed interest and an allowance for estimated loan losses. The loans are provided in the form of credit line to related franchisee to support their operations. These loans are unsecured with a due date of 18 months upon initial drawing.
Management has determined that the 18-month borrowing rate most appropriately capture the financing cost for these loans. Given that the loans are in the forms of credit lines to the franchisees that may have varying balances over time, as a practical expedient, management has elected to the expense the interest as a cost of revenue at inception rather than amortize over time.
The amounts charged were $28,281, and $183,557 for the six months ended April 30, 2023 and 2022, respectively.
The allowance for loan losses represents an estimated amount of net losses inherent in our portfolio of managed receivables as of the applicable reporting date and expected to become evident during the following 12 months.
Each lending request is evaluated by considering the borrower’s financial condition. The Company uses a proprietary model to assign each franchisee a risk rating. This model uses historical franchisee performance data to identify key factors about a franchisee that are considered most significant in predicting a franchisee’s ability to meet its financial obligations. The Company also considers numerous other financial and qualitative factors of the franchisee’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with the Company and other creditors.
The Company also consider recent trends in delinquencies and defaults, recovery rates, age of the loans. and the economic environment in assessing the models used in estimating the allowance for loan losses, and may adjust the allowance for loan losses to reflect factors that may not be captured in the models. In addition, the Company periodically consider whether the use of additional metrics would result in improved model performance and revise the models when appropriate. The provision for loan losses is the periodic expense of maintaining an adequate allowance.
An account is considered delinquent when the related franchisee fails to make a substantial portion of a scheduled payment 3 months after the due date. For purposes of determining impairment, loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.
As these loans are non-interest bearing, the Company recorded a discount to the face amount using an imputed interest rate of 11.75% for the six months ended April 30, 2023 and 2022 to reflect the fair value of the loan at origination. The imputed interest rate reflects the borrowing rate in the market under similar terms and duration. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.
The following is a summary of the activity in the allowance for credit loss:
Credit loss was $3,440,368 and $3,846,416 for the six months ended April 30, 2023 and 2022, respectively. The Company has made additional allowance for credit losses for the six months ended April 30, 2023 due to the aging of the balances and the current market and economic condition.
The following is a summary of current and non-current loan receivables, net of allowance for credit losses:
Credit Quality
The Company extends credit to related franchisees primarily in the form of lines of credit to purchase vehicles and support their daily operations. Each of the franchisees are assigned to one of four groups according to risk ratings with Group I demonstrating the best credit history with the Company and Group IV demonstrating the weakest.
Generally, the Company suspends credit lines and does not extend further funding to franchisee who are unable to repay the balance within 3 months after the 18-month deadline.
The credit quality of the loans receivables is evaluated based on the Company’s adjusted aging schedule. The Company regularly reviews the model to confirm the continued business significance and statistical predictability of the model and may make updates to improve the performance of the model.
The credit quality analysis of franchisee loan receivables as follows:
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Other Receivables and Other Current Assets |
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| Other Receivables and Other Current Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER RECEIVABLES AND OTHER CURRENT ASSETS | NOTE 7 – OTHER RECEIVABLES AND OTHER CURRENT ASSETS
Other receivables and other current assets comprised of the following:
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Property & Equipment |
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| PROPERTY & EQUIPMENT | NOTE 8 – PROPERTY & EQUIPMENT
Property and equipment, net comprised of the following:
Depreciation expenses was $105,392 and $42,471 for the six months ended April 30, 2023 and 2022, respectively. |
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Intangible Assets |
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| Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTANGIBLE ASSETS | NOTE 9 – INTANGIBLE ASSETS
Intangible assets, net comprised of the following:
Amortization expenses was $1,077 and $1,708 for the six months ended April 30 2023 and 2022, respectively. |
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Related Party Transactions |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTY TRANSACTIONS | NOTE 10 – RELATED PARTY TRANSACTIONS
The franchisees are related parties of the Company due to the nominal, symbolic equity interest ownership in the franchisees. The franchisees were originally incorporated with the Company shown as a 51.0% owner and subsequently as a 1.25% owner. The intent of having such ownership percentage in the franchisees was to enable the franchisees to register their respective individual business name to include the words “Jiuzi” as required by the local business bureau. Subsequent to the successful registration by the franchisees and completion of the Company’s obligations under the franchise and license agreement, the Company will decrease its ownership interest in these franchisees to 0%. The Company’s percentage of shareholding is nominal, inconsequential, and symbolic. The Company’s equity interest of 51.0% and 1.25% in the franchisees were symbolic in nature.
The Company did not and does not control the franchisees, exert significant influence over the franchisees, have the power to direct the use of the franchisee’s assets and the fulfillment of their obligations, appoint or dismiss directors, authorized representatives, or executive officers of the franchisees. Management has also determined that the percentage shareholding in the franchisee is not compensatory to the Company in nature, and accordingly, would not be subject to consideration as income under revenue recognition criteria. The Company did not contribute any permanent equity capital in these franchisees and if these franchisees were to incur substantial losses and accumulate significant liabilities, the Company is not obligated to absorb such losses on behalf of the franchisees. Accordingly, the management has determined that the financial positions and results of operations of these franchisees should not be included as part of the Company’s consolidated financial statements.
In addition, the Company did not and will not receive any actual ownership interest in the franchisees, nor receive any benefits from being a 51% or 1.25% owner in the franchisees. Any after tax profits generated by the franchisees that are potentially distributable to the Company are governed by the royalty agreements between the Company and the franchisee not the shareholding percentage. Accordingly, the management has determined that the ownership interest is not part of the initial franchise fee.
Accounts receivable from related franchisees comprised of the following:
Accounts receivables above derived from sales of vehicles supplied to the Company’s franchisees without any special payment terms. Sales revenues from related parties’ franchisees were $ and $484,543 for the six months ended April 30, 2023 and 2022, respectively
Loan to related franchisees is comprised of the following (See Note 6 for details):
The advances paid above are derived from funds advanced to the Company’s franchisees as working capital to support its operations. Such advances are due within 18 months.
Accounts payable to related parties’ franchisees comprised of the following:
Accounts payable above derived from vehicles purchased by the Company from the franchisees as inventory on a needed basis without any special payment terms.
Contract liability – related party comprised of the following:
Unearned franchise fee comprised of the following:
The deferred revenues above derived from initial franchise fees payments received in advance for services which have not yet been performed. The initial franchise fees include a series of performance obligations and an indefinite license to use the Company’s trademark. Amounts are recognized as advances when received, and are recognized as deferred revenues when the minimum amount required under the franchise or license agreement is attained. The payments are received in advance progressively and are not refundable once the required amount is attained. Such amounts are recognized as revenues when the Company performed the initial services required under the franchise or license agreement, which is generally when a specific performance obligation is completed or when and if the franchise or license agreement is terminated.
Related parties receivables comprised of the following:
As of April 30, 2023 and October 31, 2022, the Company has an outstanding receivable of $14,611 and $13,556, respectively, from Mr. Shuibo Zhang, the Company’s shareholder, director, and officer. The amount was advanced to Mr. Zhang for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing.
As of April 30, 2023 and October 31, 2022, the Company has an outstanding receivable of $4,207 and $22,922, respectively, from Mr. Qi Zhang, the vice president of marketing department. The amount was advanced to Mr. Zhang for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing and due on demand without a specified maturity date.
As of April 30, 2023 and October 31, 2022, the Company has an outstanding receivable of $32,215 and $30,675, respectively, from Mr. Ruchun Huang, the Shangli Jiuzi New Energy Vehicle Co., Ltd.’s legal representative. The amount was advanced to Mr. Huang for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing.
As of April 30, 2023 and October 31, 2022, the Company has an outstanding receivable of $14,468 and $, respectively, from Mr. Dewen Chen, shareholder of the Company. The amount was advanced to Mr. Chen for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing.
Related parties payables comprised of the following:
As of April 30, 2023 and October 31, 2022, the Company has an outstanding payable of $7,234 and $6,849, respectively, to Mr. Ligui Xu, the Company’s subsidiary legal representative officer. The amount was advanced by Mr. Xu for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing. |
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Deferred Income and Others Long Term Liabilities |
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Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Income and Others Long Term Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEFERRED INCOME AND OTHERS LONG TERM LIABILITIES | NOTE 11 – DEFERRED INCOME AND OTHERS LONG TERM LIABILITIES
Deferred income comprised of the following government grants which have not yet been earned:
Franchise security deposits comprised of the following:
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Leases |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES | NOTE 12 – LEASES
The Company has one operating leases for its corporate office and retail store. The current lease agreement was signed to cover the lease for the period from August 1, 2021 to July 31, 2026. The Company does not expect to receive the subsidy from PRC government as the Company may not meets the requirement of paying RMB 20 million in income taxes to the government, therefore the specific deferred government subsidy was not recognized.
Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in PRC which is approximately 4.75%.
Operating lease expenses of office and retail store were $83,306 and $97,191 for the six months ended April 30, 2023 and 2022, respectively.
The Company has three operating leases for multiple vehicles. The leases have different leasing periods which are from June 1, 2022 to June 30, 2025. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in PRC which is approximately 4.45%. The Company subleases vehicles to third party and recognizes revenues over time which is ratably on a monthly basis over the lease period according to the lease agreement.
Operating lease cost for the subleases of vehicles were $22,996 and $ for the six months ended April 30, 2023 and 2022, respectively.
The components of lease expense and supplemental cash flow information related to leases for the period are as follows:
The supplemental balance sheet information related to leases is as follows:
The undiscounted future minimum lease payment schedule as follows:
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Convertible Debentures |
6 Months Ended |
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Apr. 30, 2023 | |
| Convertible Debentures [Abstract] | |
| CONVERTIBLE DEBENTURES | NOTE 13 – CONVERTIBLE DEBENTURES
On December 2, 2021 and on December 6, 2021, the Company issued convertible debenture of $6,000,000 with annual interest rate of 5%, which is valid for 12 months from the date of funds receipt. The debentures are carried out in three stages. In the first stage, the company would issue a convertible debenture of $2,500,000 on December 3, 2021, which is the date of signing this Agreement. Second stage, convertible debenture of $2,500,000 was issued by the company on January 4, 2022, which is the date of filing Registration Statement with SEC. In the third stage, convertible debenture of $1,000,000 will be issued on or about the date the Registration Statement has first been declared effective by the SEC.
On December 30, 2022 (the “Maturity Date”), the outstanding balance of the convertible debenture dated December 2, 2021 in the amount of $1,300,000 (principal, plus accrued and unpaid interest thereon) were due for payment. The Company and the Debenture Holder agreed to an extension (the “Extension”) that extends the Maturity Date to June 30, 2023, pursuant to which the Company shall repay the outstanding balance in cash through monthly payments beginning on January 6, 2023 and continue on the same day of each successive month, with each monthly payment equals to the sum of $216,667 of principal, the redemption premium and the accrued and unpaid interest on the Convertible Debentures as of each payment date. In addition, if the Company completes any financing transaction with gross proceeds of in excess of $250,000, the Company shall pay to the Debenture Holder as an optional redemption but no more than 50% of the total proceeds, an amount up to the total amount outstanding under the Convertible Debentures.
The outstanding convertible debenture were $433,332 and $2,835,400 as of April 30, 2023 and October 31, 2022.
Interest expenses were $239,325 and $ for the six months ended April 30, 2023 and 2022, respectively. |
Taxes Payable |
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| TAXES PAYABLE | NOTE 14 – TAXES PAYABLE
Taxes payable comprised of the following:
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Contract Liability |
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| Contract Liability [Abstract] | |||||||||||||||||||||||||||||||||||||
| CONTRACT LIABILITY | NOTE 15 – CONTRACT LIABILITY
Contract liability comprised of the following:
Contract liability – related party See Note 10 for details. |
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Shareholders' Equity |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Stockholders' Equity Note [Abstract] | |
| SHAREHOLDERS’ EQUITY | NOTE 16 – SHAREHOLDERS’ EQUITY
As of April 30, 2023 and October 31, 2022, the Company had 2,584,804 and 1,363,630 shares issued and outstanding.
On October 31, 2020, pursuant to a special resolution adopted by its shareholders to amend and restate the memorandum and articles of associations, the Company conducted a subdivision of its par value with each share of a par value of $0.09 of the authorized share capital of the Company (including issued and unissued share capital) be subdivided into 5 shares of a par value of $0.018 each (the “Share Subdivision”). Immediately following the Share Subdivision, the authorized share capital of the Company was $27,778 divided into 2,777,778 shares of a par value of $0.018 each, and the total issued and outstanding shares were 277,778.
Subsequent to the Share Subdivision, the Company increased its authorized share capital from 2,777,778 shares to 8,333,333 shares with a par value of $0.018 per share, and issued a stock dividend on 2 for 1 on post-Share Subdivision basis, whereby each shareholder holding 1 share of the 277,778 shares outstanding immediately preceding this stock dividend was issued an additional 2 shares; therefore, a total of 555,556 shares were issued; immediately following this transaction, there were a total of 833,333 shares issued and outstanding. All shares and per share amounts for all periods presented herein have been adjusted to reflect the Share Subdivision and stock dividend as if it had occurred at the beginning of the first period presented.
On May 20, 2021, we issued 288,889 ordinary shares to the investors in connection with the closing of the initial public offering at the offering price of $90.00 per share.
On October 28, 2022, the Company issued 11,111 ordinary shares to a non-related party as service compensation for $60,000
For the year ended October 31, 2022, the Company also issued 162,139 ordinary shares for conversion of note payable in the amount of $2,236,684.
For the six months ended April 30, 2023, the Company issued 598,952 ordinary shares for conversion of note payable in the amount of $1,673,099, issued 444,444 ordinary shares for net cash proceeds in the amount of $1,200,000, and issued 177,778 ordinary shares for compensation in the amount of $540,000.
Reverse Stock Split
On July 7, 2023, our Board of Directors declared a reverse share split at a ratio of 1-for-18 for shares having a par value of $0.001 per share with effect from July 10. Following the reverse split, the shares will have a par value of $0.018 per share. There was no effect on total stockholders’ equity. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the reverse stock split. |
Segments and Geographic Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENTS AND GEOGRAPHIC INFORMATION | NOTE 17 – SEGMENTS AND GEOGRAPHIC INFORMATION
The Company believes that it operates in two business segments which comprised of sales of NEVs and franchise services; and it operates in one geographical location China. The Company disaggregates its revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Sales of goods revenues comprised of sales of vehicles to third party customers and to the franchisees. Franchise services revenues comprised of initial fees and ongoing royalties from the franchisees. Under the franchise arrangement, franchisees are granted the right to operate retail store using the Company’s Jiuzi brand and system. Other service revenues comprised of sublease of vehicles to third party customers with a mark-up to the rental price.
Sales revenues comprised of the following:
Direct costs comprised of the following:
Gross profit (loss) comprised of the following:
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Income Tax |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAX | NOTE 18 – INCOME TAX
The Company is subject to profits tax rate at 25% for income generated for its operation in China and net operating losses can be carried forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred.
The net taxable income (losses) before income taxes and its provision for income taxes comprised of the following:
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Commitments and Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | NOTE 19 – COMMITMENTS AND CONTINGENCIES
The Company has filed civil claim suits against certain vendors for failing to deliver the purchased vehicles according to the terms of the agreements. The Company demands the vendors to refund the advance paid and to compensate the Company for liquidated damages. Given the uncertainty of collectability, the Company has fully written off the advance paid to the suppliers of $3,313,395 as of April 30. 2023, despite the fact that the Company has won the some of the cases. The details are shown as follows.
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Concentrations, Risks and Uncertainties |
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| Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONCENTRATIONS, RISKS AND UNCERTAINTIES | NOTE 20 – CONCENTRATIONS, RISKS AND UNCERTAINTIES
Credit risk
Cash deposits with banks are held in financial institutions in China, which deposits are not federally insured. Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.
Concentration
The Company has a concentration risk related to suppliers and customers. Failure to maintain existing relationships with the suppliers or customers to establish new relationships in the future could negatively affect the Company’s ability to obtain goods sold to customers in a price advantage and timely manner. If the Company is unable to obtain ample supply of goods from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which could materially and adversely affect revenues.
The concentration on sales revenues generated by customers type comprised of the following:
The concentration of sales revenues generated by third-party customers comprised of the following:
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Subsequent Events |
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Apr. 30, 2023 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS
The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. Subsequent to the date the financial statements were available to be issued. There was no subsequent event that would require disclosure to or adjustment to the financial statements.
On July 17, 2023 the Company sold an aggregate of 1,395,151 ordinary shares and/or pre-funded warrants in a registered direct offering for aggregate gross proceeds of $2.3 million. |
Accounting Policies, by Policy (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of Presentation The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The accompanying financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 20-F for the fiscal year ended October 31, 2022, filed with the SEC on March 15, 2023. The interim financial information is not necessarily indicative of the results to be expected for the fiscal year ended or for any other interim period or for any future year. |
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| Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Significant inter-company transactions have been eliminated in consolidation. |
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| Reverse Stock Split | Reverse Stock Split On July 7, 2023, our Board of Directors declared a reverse share split at a ratio of 1-for-18 for shares having a par value of $0.001 per share with effect from July 10. Following the reverse split, the shares will have a par value of $0.018 per share. There was no effect on total stockholders’ equity. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the reverse stock split. |
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| Going Concern and management’s plan | Going Concern and Management’s PlanThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As of April 30, 2023, the Company had an accumulated deficit of $15,880,079.The Company plans to establish provincial regional sales centers nationwide to geographically expand the market and adopt centralized procurement system to reduce overhead cost and obtain volume discount. The company will also cooperate with more brands of NEV, introduce more quality services and strengthen its publicity to attract more franchisees to join. Additionally, the Company will be undertaking capital raising activities to provide additional cash to meet current and future liquidity needs. Management believes that it will be able to obtain the necessary financing and fund future expansion plans; however, there is no assurance that the Company will be successful in securing sufficient funds to sustain or grow its operations.These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern. | ||||||||||||||||||||||||||||||||||||
| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.
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| Functional and presentation currency | Functional and presentation currency The functional currency of the Company is the currency of the primary economic environment in which the Company operates which is Chinese Yuan (“RMB”). Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period. For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets. Exchange rate used for the translation as follows: US$ to RMB
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| Fair Values of Financial Instruments | Fair Values of Financial Instruments The Company adopted ASC 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follow:
As of the balance sheet date, the estimated fair values of the financial instruments approximated their fair values due to the short-term nature of these instruments. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each year.
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| Related parties | Related parties The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. |
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| Cash and Equivalents | Cash and Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
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| Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the net value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. When collection of the original invoice amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for doubtful accounts. |
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| Short-term investments | Short-term investments Short-term investments consist primarily of investments in fixed deposits with original maturities between three months and one year and certain investments in wealth management products and other investments that the Company has the intention to redeem within one year. As of April 30, 2023 and October 31, 2022, the investments in bank wealth management and security that were recorded as short-term investments amounted to $46,926 and $834,303, respectively. |
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| Loans Receivable | Loans Receivable Loans receivable are recorded at origination at the fair value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for credit losses. When collection of the original amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for credit losses. |
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| Revenue Recognition | Revenue Recognition In 2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has concluded that the new guidance did not require any significant change to its revenue recognition processes. The Company’s revenues consist of sales of vehicle by the Company’s own corporate retail store to third party customers, sales of vehicle to franchisees as a supplier, fees from retail stores operated by franchisees, and sublease of vehicles to third party customers. Revenues from franchised stores include initial franchise fees and annual royalties based on a percent of net incomes. The Company recognizes sales of vehicle revenues at the point in time when the Company has transferred physical possession of the goods to the customer and the customer has accepted the goods, therefore, indicating as control of the goods has been transferred to the customer. The transaction price is determined and allocated to the product prior to the transfer of the goods to the customer.
The initial franchise services include a series of performance obligations and an indefinite license to use the Company’s trademark. The series of performance obligations are specific services and deliverables that are set forth in the agreement and are billed and receivable as delivered and accepted by the franchisee. These services and deliverables may be customized and are not transferable to other third parties. The royalty revenues are distinct from the initial franchise services. The Company recognizes royalty revenues only when the franchisee has generated positive annual net income, at which point the Company has the contractual right to request for payment of the royalty. The royalty is calculated as a percentage of the franchisees’ annual net income. The Company subleases vehicles to third party and recognizes revenues over time which is ratably on a monthly basis over the lease period according to the lease agreement. The Company estimates potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue. The Company has not experienced any sales returns. |
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| Inventory | Inventory Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers. |
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| Advertising | Advertising The Company expenses advertising costs as incurred and includes it in selling expenses. The Company recorded $79,400 and $220,850 of advertising and promotional expenses for the six months ended April 30. 2023 and 2022, respectively. |
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| Income Taxes | Income Taxes Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the years of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. |
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| Earnings (loss) per share | Earnings (loss) per share Basic income (loss) per share is computed by dividing net income (loss) attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per share is calculated by dividing net income (loss) attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.
All per share amounts for all periods presented herein have been adjusted to reflect the Share Subdivision and 2 for 1 stock dividend on post-Share Subdivision basis. See Note 17. |
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| Property and Equipment & Depreciation | Property and Equipment & Depreciation Property and equipment are stated at historical cost net of accumulated depreciation. Repairs and maintenance are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the following periods:
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| Intangible Assets & Amortization | Intangible Assets & Amortization Intangible assets are stated at historical cost net of accumulated amortization. Software is amortized on a straight-line basis over the estimated useful life of the software which is 3 years. |
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| Impairment of Long-lived assets | Impairment of Long-lived assets The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. |
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| New Accounting Pronouncements | New Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires contract assets and contract liabilities (e.g., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in purchase accounting. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The adoption is not expected to have a material impact on the Company’s consolidated financial statements. Besides the above, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted would have a material effect on the consolidated financial statements. |
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Summary of Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of Exchange Rate | Exchange rate used for the translation as follows:
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| Schedule of Property and Equipment | Property and equipment are stated at historical
cost net of accumulated depreciation. Repairs and maintenance are expensed as incurred. Property and equipment are depreciated on a straight-line
basis over the following periods:
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Inventory (Tables) |
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||
| Schedule of Inventory Net Comprised | Inventory, net comprised of the following:
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Accounts Receivables (Tables) |
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| Accounts Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accounts Receivables, Net | Accounts receivables, net is comprised of the
following:
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| Schedule of Allowance for Doubtful Accounts | The following is a summary of the activity in
the allowance for doubtful accounts:
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Short-Term Investment (Tables) |
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| Short-Term Investment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Short-Term Investment | Short-term investment comprised of the following:
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Loans Receivables (Tables) |
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| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Loans are Non-interest Bearing | Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.
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| Schedule of the Activity in the Allowance for Credit Loss | The following is a summary of the activity in
the allowance for credit loss:
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| Schedule of Current and Non-current Loan Receivables, Net of Allowance for Credit Losses | The following is a summary of current and non-current
loan receivables, net of allowance for credit losses:
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| Schedule of Credit Quality Analysis of Franchisee Loan Receivables | The credit quality analysis of franchisee loan
receivables as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Receivables and Other Current Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Receivables and Other Current Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Receivables and Other Current Assets | Other receivables and other current assets comprised
of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property & Equipment (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment, Net | Property and equipment, net comprised of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Intangible Assets, Net | Intangible assets, net comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accounts Receivable from Related Franchisees | Accounts receivable from related franchisees comprised
of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Loan to Related Franchisees | Loan
to related franchisees is comprised of the following (See Note 6 for details):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accounts Payable to Related Parties’ Franchisees | Accounts payable to related parties’ franchisees
comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Contract Liability – Related Party | Contract liability – related party comprised
of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Unearned Franchise Fee Comprised | Unearned franchise fee comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Related Parties Receivables | Related parties receivables comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Related Parties Payables | Related parties payables comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Income and Others Long Term Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Income and Others Long Term Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Deferred Income | Deferred income comprised of the following government
grants which have not yet been earned:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Franchise Security Deposits | Franchise security deposits comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Supplemental Cash Flow Information Related to Leases | The components of lease expense and supplemental
cash flow information related to leases for the period are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Supplemental Balance Sheet Information Related to Leases | The supplemental balance sheet information related
to leases is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Undiscounted Future Minimum Lease Payment Schedule | The undiscounted future minimum lease payment
schedule as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Payable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Taxes Payable | Taxes payable comprised of the following:
|
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Contract Liability (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||
| Contract Liability [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of Contract Liability | Contract liability comprised of the following:
|
||||||||||||||||||||||||||||||||||||
Segments and Geographic Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Sales Revenues | Sales revenues comprised of the following:
Gross profit (loss) comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Net Taxable Income (Losses) Before Income Taxes and its Provision for Income Taxes | The net taxable income (losses) before income
taxes and its provision for income taxes comprised of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fully Written Off the Advance Paid to the Suppliers | Given the uncertainty of collectability, the Company has fully written off the advance paid to the suppliers of $3,313,395 as of
April 30. 2023, despite the fact that the Company has won the some of the cases. The details are shown as follows.
|
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Concentrations, Risks and Uncertainties (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Concentration on Sales Revenues Generated by Customers Type Comprised | The concentration on sales revenues generated by customers type comprised
of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Concentration of Sales Revenues Generated by Third-Party Customers Comprised | The concentration of sales revenues generated by third-party customers
comprised of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies (Details) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Oct. 31, 2022 |
|
| Accounting Policies [Abstract] | |||
| Reverse stock split, description | On July 7, 2023, our Board of Directors declared a reverse share split at a ratio of 1-for-18 for shares having a par value of $0.001 per share with effect from July 10. Following the reverse split, the shares will have a par value of $0.018 per share. There was no effect on total stockholders’ equity. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the reverse stock split. | ||
| Accumulated deficit | $15,880,079 | ||
| Short term investments | $ 46,926 | $ 834,303 | |
| Advertising expense | $ 79,400 | $ 220,850 | |
| Estimated useful life | 3 years | ||
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rate |
6 Months Ended |
|---|---|
|
Apr. 30, 2023
$ / shares
| |
| April 30, 2023 [Member] | |
| Intercompany Foreign Currency Balance [Line Items] | |
| Period End | 6.912 |
| Average | $ 6.927 |
| October 31, 2022 [Member] | |
| Intercompany Foreign Currency Balance [Line Items] | |
| Period End | 7.3003 |
| Average | $ 6.6105 |
| April 30, 2022 [Member] | |
| Intercompany Foreign Currency Balance [Line Items] | |
| Period End | 6.6085 |
| Average | $ 6.3894 |
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Schedule of Property and Equipment [Abstract] | |
| Equipment | 5 years |
| Furniture and fixtures | 5 years |
| Motor vehicles | 10 years |
Inventory (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Inventory Disclosure [Abstract] | ||
| Inventory write-down expense | ||
Inventory (Details) - Schedule of Inventory Net Comprised - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Schedule of Inventory Net Comprised [Abstract] | ||
| Finished goods | $ 490,994 | $ 628,187 |
| Total, net | $ 490,994 | $ 628,187 |
Accounts Receivables (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Accounts Receivables [Abstract] | ||
| Bad debt expense | $ 25,528 | $ 764 |
Accounts Receivables (Details) - Schedule of Accounts Receivables, Net - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Allowance for doubtful accounts | $ (173,356) | $ (139,911) |
| Total, net | 201,440 | 214,946 |
| Accounts receivables-related parties | 374,796 | 354,857 |
| Accounts Receivable [Member] | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Accounts receivables | 47,490 | 45,100 |
| Allowance for doubtful accounts | (6,076) | (5,753) |
| Total, net | $ 41,414 | $ 39,347 |
Accounts Receivables (Details) - Schedule of Allowance for Doubtful Accounts - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Schedule of the Activity in the Allowance for Doubtful Accounts [Abstract] | ||
| Balance at beginning of year | $ 145,664 | $ 18,458 |
| Provision | 25,528 | 143,003 |
| Charge-offs | ||
| Recoveries | ||
| Effect of translation adjustment | 8,240 | (15,797) |
| Balance at end | $ 179,432 | $ 145,664 |
Short-Term Investment (Details) - Schedule of Short-Term Investment - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Short-Term Debt [Line Items] | ||
| Bank Wealth Management | $ 265,836 | |
| Securities | 568,467 | |
| Total short-term investment | $ 46,296 | 834,303 |
| Fair Value, Inputs, Level 1 [Member] | ||
| Short-Term Debt [Line Items] | ||
| Bank Wealth Management | ||
| Securities | ||
| Total short-term investment | ||
| Fair Value, Inputs, Level 2 [Member] | ||
| Short-Term Debt [Line Items] | ||
| Bank Wealth Management | 46,296 | 265,836 |
| Securities | 568,467 | |
| Total short-term investment | 46,296 | 834,303 |
| Fair Value, Inputs, Level 3 [Member] | ||
| Short-Term Debt [Line Items] | ||
| Bank Wealth Management | ||
| Securities | ||
| Total short-term investment |
Loans Receivables (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Receivables [Abstract] | ||
| Loan receivables charges | $ 28,281 | $ 183,557 |
| Face amount using an imputed interest rate | 11.75% | 11.75% |
| Credit loss | $ 3,440,368 | $ 3,846,416 |
Loans Receivables (Details) - Schedule of Loans are Non-interest Bearing - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Schedule of Loans Are Non-Interest Bearing [Abstract] | ||
| Loan to related franchisees, gross | $ 18,913,509 | $ 17,678,913 |
| Discount based on imputed interest rate of 11.75% | (2,221,797) | (2,076,767) |
| Loan to related franchisees, net of discount | 16,691,712 | 15,602,146 |
| Provision for credit losses | (11,168,049) | (7,309,516) |
| Loan to related franchisees, net of discount and allowance | $ 5,523,663 | $ 8,292,630 |
Loans Receivables (Details) - Schedule of Loans are Non-interest Bearing (Parentheticals) |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Schedule of Loans Are Non-Interest Bearing [Abstract] | |
| Discount based on imputed interest rate | 11.75% |
Loans Receivables (Details) - Schedule of the Activity in the Allowance for Credit Loss - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Schedule of the Activity in the Allowance for Credit Loss [Abstract] | ||
| Balance at beginning of year | $ 7,309,516 | $ 832,170 |
| Provision | 3,440,368 | 7,267,026 |
| Charge-offs | ||
| Recoveries | ||
| Effect of translation adjustment | 418,165 | (789,680) |
| Balance at end | $ 11,168,049 | $ 7,309,516 |
Loans Receivables (Details) - Schedule of Current and Non-current Loan Receivables, Net of Allowance for Credit Losses - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Schedule of Current and Non Current Loan Receivables Net of Allowance for Credit Losses [Abstract] | ||
| Loan to related franchisees, net of discount and allowances, current | $ 5,101,224 | $ 6,661,290 |
| Loan to related franchisees, net of discount and allowances, non-current | 422,439 | 1,631,340 |
| Loan to related franchisees, net of discount and allowances, total | $ 5,523,663 | $ 8,292,630 |
Other Receivables and Other Current Assets (Details) - Schedule of Other Receivables and Other Current Assets - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Schedule of Other Receivables and Other Current Assets [Abstract] | ||
| Deposits put down on the car | $ 876,231 | $ 935,573 |
| Excess input VAT credits | 39,702 | 48,589 |
| Prepaid expense | 601,960 | |
| Cash advance to employee | 82,838 | 55,600 |
| Total | $ 1,600,731 | $ 1,039,762 |
Property & Equipment (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expenses | $ 105,392 | $ 42,471 |
Property & Equipment (Details) - Schedule of Property and Equipment, Net - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Schedule of Property and Equipment Net [Abstract] | ||
| Equipment | $ 61,886 | $ 73,415 |
| Motor vehicles | 350,650 | 340,462 |
| Leasehold Improvement | 557,711 | 502,969 |
| Furniture and fixtures | 6,248 | 9,054 |
| Total cost | 976,495 | 925,900 |
| Less: Accumulated depreciation | 401,772 | 284,542 |
| Total, net | $ 574,723 | $ 641,358 |
Intangible Assets (Details) - USD ($) |
Apr. 30, 2023 |
Apr. 30, 2022 |
|---|---|---|
| Intangible Assets [Abstract] | ||
| Amortization expenses | $ 1,077 | $ 1,708 |
Intangible Assets (Details) - Schedule of Intangible Assets, Net - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| At Cost: | ||
| Financial software | $ 15,914 | $ 17,710 |
| Domain name | 2,792 | 2,643 |
| Total cost, net | 18,706 | 17,711 |
| Less: Accumulated Amortization | 6,696 | 5,318 |
| Total, net | $ 12,010 | $ 12,393 |
Related Party Transactions (Details) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
Oct. 31, 2022 |
|
| Related Party Transactions (Details) [Line Items] | |||
| Equity interest ownership | The franchisees were originally incorporated with the Company shown as a 51.0% owner and subsequently as a 1.25% owner. The intent of having such ownership percentage in the franchisees was to enable the franchisees to register their respective individual business name to include the words “Jiuzi” as required by the local business bureau. Subsequent to the successful registration by the franchisees and completion of the Company’s obligations under the franchise and license agreement, the Company will decrease its ownership interest in these franchisees to 0%. The Company’s percentage of shareholding is nominal, inconsequential, and symbolic. The Company’s equity interest of 51.0% and 1.25% in the franchisees were symbolic in nature. | ||
| Revenues from related party | $ 484,543 | ||
| Maximum [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Ownership interest percentage | 51.00% | ||
| Minimum [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Ownership interest percentage | 1.25% | ||
| Shuibo Zhang [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Outstanding receivable | $ 14,611 | $ 13,556 | |
| Qi Zhang [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Outstanding receivable | 4,207 | 22,922 | |
| Mr. Ruchun Huang [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Outstanding receivable | 32,215 | 30,675 | |
| Mr. Dewen Chen [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Outstanding receivable | 14,468 | ||
| Mr. Ligui Xu [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Outstanding payable | $ 7,234 | $ 6,849 | |
Related Party Transactions (Details) - Schedule of Accounts Payable to Related Parties’ Franchisees - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Related Party Transactions (Details) - Schedule of Accounts Payable to Related Parties’ Franchisees [Line Items] | ||
| Total | $ 7,379 | $ 6,986 |
| Yudu Jiuzi New Energy Automobile Co., Ltd [Member] | ||
| Related Party Transactions (Details) - Schedule of Accounts Payable to Related Parties’ Franchisees [Line Items] | ||
| Total | $ 7,379 | $ 6,986 |
Related Party Transactions (Details) - Schedule of Contract Liability – Related Party - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Current Portion | ||
| Customer deposit | $ 782,482 | $ 825,990 |
| Total, net | 782,482 | 825,990 |
| Non-current Portion | ||
| Unearned franchise fee | 150,494 | |
| Total, net | $ 782,482 | $ 976,484 |
Related Party Transactions (Details) - Schedule of Related Parties Receivables - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Related Party Transactions (Details) - Schedule of Related Parties Receivables [Line Items] | ||
| Total | $ 65,501 | $ 67,153 |
| Mr. Shuibo Zhang [Member] | ||
| Related Party Transactions (Details) - Schedule of Related Parties Receivables [Line Items] | ||
| Total | 14,611 | 13,556 |
| Mr. Qi Zhang [Member] | ||
| Related Party Transactions (Details) - Schedule of Related Parties Receivables [Line Items] | ||
| Total | 4,207 | 22,922 |
| Mr. Dewen Chen [Member] | ||
| Related Party Transactions (Details) - Schedule of Related Parties Receivables [Line Items] | ||
| Total | 14,468 | |
| Mr. Ruchun Huang [Member] | ||
| Related Party Transactions (Details) - Schedule of Related Parties Receivables [Line Items] | ||
| Total | $ 32,215 | $ 30,675 |
Related Party Transactions (Details) - Schedule of Related Parties Payables - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Related Party Transactions (Details) - Schedule of Related Parties Payables [Line Items] | ||
| Total | $ 7,234 | $ 6,849 |
| Mr. Ligui Xu [Member] | ||
| Related Party Transactions (Details) - Schedule of Related Parties Payables [Line Items] | ||
| Total | $ 7,234 | $ 6,849 |
Deferred Income and Others Long Term Liabilities (Details) - Schedule of Deferred Income - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Schedule of Deferred Income [Abstract] | ||
| Subsidy for the maintenance and repair of the office | $ 216,291 | $ 236,290 |
| Total | $ 216,291 | $ 236,290 |
Leases (Details) ¥ in Millions |
6 Months Ended | ||
|---|---|---|---|
|
Apr. 30, 2023
USD ($)
|
Apr. 30, 2023
CNY (¥)
|
Apr. 30, 2022
USD ($)
|
|
| Leases (Details) [Line Items] | |||
| Number of operating leases | 1 | 1 | |
| Requirement amount (in Yuan Renminbi) | ¥ | ¥ 20 | ||
| Incremental borrowing rate | 4.75% | 4.75% | |
| Operating lease expense | $ 83,306 | $ 97,191 | |
| Subleases of Vehicles [Member] | |||
| Leases (Details) [Line Items] | |||
| Operating lease expense | $ 22,996 | ||
| PRC [Member] | |||
| Leases (Details) [Line Items] | |||
| Incremental borrowing rate | 4.45% | 4.45% | |
Leases (Details) - Schedule of Supplemental Cash Flow Information Related to Leases |
6 Months Ended |
|---|---|
|
Apr. 30, 2023
USD ($)
| |
| Lease Cost | |
| Operating lease cost (included in general and administrative expenses and cost in the Company’s statement of operations) | $ 106,302 |
| Other Information | |
| Cash paid for amounts included in the measurement of lease liabilities | $ 25,985 |
| Weighted average remaining lease term – operating leases (in years) | 3 years 1 month 13 days |
| Average discount rate – operating lease | 4.75% |
Leases (Details) - Schedule of Supplemental Balance Sheet Information Related to Leases - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Operating leases | ||
| Right-of-use assets | $ 649,773 | $ 725,903 |
| Operating lease liabilities | $ 783,003 | $ 768,185 |
Leases (Details) - Schedule of Undiscounted Future Minimum Lease Payment Schedule |
Oct. 31, 2022
USD ($)
|
|---|---|
| Schedule of Undiscounted Future Minimum Lease Payment Schedule [Abstract] | |
| 2023 (six months from May 1, 2023 to October 31, 2023) | $ 388,496 |
| 2024 | 225,779 |
| 2025 | 202,733 |
| Total | $ 817,008 |
Convertible Debentures (Details) - USD ($) |
6 Months Ended | 12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Jan. 06, 2023 |
Jan. 04, 2022 |
Dec. 06, 2021 |
Dec. 03, 2021 |
Dec. 02, 2021 |
Apr. 30, 2023 |
Apr. 30, 2022 |
Oct. 31, 2022 |
|
| Debt Disclosure [Abstract] | ||||||||
| Convertible debenture issued | $ 2,500,000 | $ 6,000,000 | $ 2,500,000 | $ 6,000,000 | $ 1,673,100 | |||
| Annual interest rate | 5.00% | 5.00% | ||||||
| Convertible debenture | $ 1,000,000 | |||||||
| Outstanding balance of convertible debenture | $ 1,300,000 | |||||||
| Maturity date | Jun. 30, 2023 | |||||||
| Principal amount | $ 216,667 | |||||||
| Financing transaction with gross proceeds | $ 250,000 | |||||||
| Total proceeds percentage | 50.00% | |||||||
| Convertible debenture outstanding | $ 433,332 | $ 2,835,400 | ||||||
| Interest expenses | $ 239,325 | |||||||
Taxes Payable (Details) - Schedule of Taxes Payable - USD ($) |
Apr. 30, 2023 |
Oct. 31, 2022 |
|---|---|---|
| Schedule Of Taxes Payable Abstract | ||
| Value-added tax, net | $ 912,637 | $ 890,620 |
| Company Income tax | 1,733,416 | 1,645,556 |
| Other taxes | 126,265 | 116,678 |
| Total | $ 2,772,318 | $ 2,652,854 |
Contract Liability (Details) - Schedule of Contract Liability - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Apr. 30, 2023 |
Oct. 31, 2022 |
|
| Schedule of Contract Liability [Abstract] | ||
| Customer deposit for car purchase | $ 1,475,213 | $ 1,343,442 |
| Total, net | $ 1,475,213 | $ 1,343,442 |
Shareholders' Equity (Details) - USD ($) |
1 Months Ended | 6 Months Ended | 8 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|---|
Oct. 31, 2020 |
Oct. 28, 2022 |
Apr. 30, 2023 |
Jul. 07, 2023 |
Oct. 31, 2022 |
Oct. 31, 2021 |
May 20, 2021 |
|
| Shareholders' Equity (Details) [Line Items] | |||||||
| Shares issued | 2,584,804 | 1,363,630 | |||||
| Shares outstanding | 2,584,804 | 1,363,630 | |||||
| Subdivided shares | 5 | ||||||
| Shares, par value (in Dollars per share) | $ 0.018 | ||||||
| Total shares issued | 177,778 | ||||||
| Stock dividend description | stock dividend on 2 for 1 on post-Share Subdivision basis, whereby each shareholder holding 1 share of the 277,778 shares outstanding immediately preceding this stock dividend was issued an additional 2 shares | ||||||
| Ordinary shares issued | 11,111 | 598,952 | 162,139 | 288,889 | |||
| Offering price per share (in Dollars per share) | $ 90 | ||||||
| Service compensation (in Dollars) | $ 60,000 | ||||||
| Conversion of note payable (in Dollars) | $ 1,673,099 | $ 2,236,684 | |||||
| Net cash proceeds (in Dollars) | 1,200,000 | ||||||
| Compensation amount (in Dollars) | $ 540,000 | ||||||
| Share Subdivision [Member] | |||||||
| Shareholders' Equity (Details) [Line Items] | |||||||
| Shares issued | 555,556 | ||||||
| Authorized share capital par value (in Dollars per share) | $ 0.09 | ||||||
| Common stock, par value (in Dollars per share) | $ 0.018 | ||||||
| Authorized share capital (in Dollars) | $ 27,778 | ||||||
| Shares, authorized | 2,777,778 | ||||||
| Shares, par value (in Dollars per share) | $ 0.018 | ||||||
| Total shares issued | 277,778 | 833,333 | |||||
| Ordinary Shares [Member] | |||||||
| Shareholders' Equity (Details) [Line Items] | |||||||
| Total shares issued | 444,444 | ||||||
| Minimum [Member] | |||||||
| Shareholders' Equity (Details) [Line Items] | |||||||
| Shares, authorized | 2,777,778 | ||||||
| Maximum [Member] | |||||||
| Shareholders' Equity (Details) [Line Items] | |||||||
| Shares, authorized | 8,333,333 | ||||||
| Forecast [Member] | |||||||
| Shareholders' Equity (Details) [Line Items] | |||||||
| Description of reverse stock split | On July 7, 2023, our Board of Directors declared a reverse share split at a ratio of 1-for-18 for shares having a par value of $0.001 per share with effect from July 10. Following the reverse split, the shares will have a par value of $0.018 per share. There was no effect on total stockholders’ equity. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the reverse stock split. | ||||||
Segments and Geographic Information (Details) |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Segment Reporting [Abstract] | |
| Number of business segments | 2 |
Income Tax (Details) |
6 Months Ended |
|---|---|
Apr. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Profit tax rate | 25.00% |
Income Tax (Details) - Schedule of Net Taxable Income (Losses) Before Income Taxes and its Provision for Income Taxes - USD ($) |
6 Months Ended | |
|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Schedule of Net Taxable Income Losses Before Income Taxes and its Provision for Income Taxes [Abstract] | ||
| Income (loss) attributed to China | $ (4,927,475) | $ (5,123,078) |
| PRC statutory tax rate | 25.00% | 25.00% |
| Income tax expense at statutory rate | ||
| Reconciliation | 20 | 127,661 |
| Income tax expense/ (benefit) | $ 20 | $ 127,661 |
Commitments and Contingencies (Details) |
6 Months Ended |
|---|---|
|
Apr. 30, 2023
USD ($)
| |
| Commitments and Contingencies Disclosure [Abstract] | |
| Paid to the suppliers | $ 3,313,395 |
Concentrations, Risks and Uncertainties (Details) - Schedule of Concentration on Sales Revenues Generated by Customers Type Comprised - USD ($) |
6 Months Ended | |
|---|---|---|
Apr. 30, 2023 |
Apr. 30, 2022 |
|
| Schedule of Concentration on Sales Revenues Generated by Customers Type Comprised [Abstract] | ||
| Third party sales revenues | $ 884,083 | $ 2,724,048 |
| Third party sales revenues, percentage | 93.00% | 66.00% |
| Related party sales revenues | $ 484,543 | |
| Related party sales revenues, percentage | 12.00% | |
| Third party franchise revenues | $ 850,649 | |
| Third party franchise revenues, percentage | 21.00% | |
| Related party franchise revenues | $ 41,802 | $ 50,496 |
| Related party franchise revenues, percentage | 4.00% | 1.00% |
| Third party other revenues | $ 28,149 | |
| Third party other revenues, percentage | 3.00% | |
| Related party other revenues | ||
| Related party other revenues, percentage | ||
| Total | $ 954,034 | $ 4,109,736 |
| Total percentage | 100.00% | 100.00% |
Subsequent Events (Details) - Forecast [Member] $ in Millions |
1 Months Ended |
|---|---|
|
Jul. 17, 2023
USD ($)
shares
| |
| Subsequent Events (Details) [Line Items] | |
| Aggregate of ordinary shares | shares | 1,395,151 |
| Gross proceeds | $ | $ 2.3 |
1 Year Jiuzi Chart |
1 Month Jiuzi Chart |
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