PASSUR AEROSPACE, INC. | |
(Exact Name of Registrant as Specified in Its Charter) | |
New York | 11-2208938 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
One Landmark Square, Suite 1900, Stamford, Connecticut | 06901 |
(Address of Principal Executive Office) | (Zip Code) |
Registrant’s telephone number, including area code: 203-622-4086 | |
Securities registered pursuant to Section 12(b) of the Act: | |
None | |
Securities registered pursuant to Section 12(g) of the Act: | |
Common Stock, par value $0.01 per share |
Accelerated filer [ ] | |||
Non-accelerated filer [ ] | (Do not check if a smaller reporting company) | Smaller reporting company [X] | |
Emerging growth company [ ] |
Objective | Outcome | |
Airlines | Aircraft Utilization/Capacity Increase | Block optimization, fleet planning |
Improved Hub efficiency | Fly the optimal commercial schedule by ensuring throughput and connectivity | |
Improved on time performance | Passenger (booking) preference and competitive advantage (Yield) | |
Reduced cancellations | Passenger satisfaction and loyalty; higher Net Promoter Score (NPS) | |
Airports | Increased Gate Utilization and more efficient Surface Traffic Flows | Competitive hub advantage; higher throughput leading to more volume/more concessions/higher aeronautical fees revenue; improved asset utilization |
On-Time Performance/Punctuality; Irregular Operations Prediction and Recovery | Higher customer satisfaction; higher rankings in performance surveys; competitive hub advantage; attract and retain airline entrants | |
Air Navigation Service Providers (“ANSPs”) | Accurate, Early Forecast of Demand and Capacity; Early Indications of Disruptions | Right-sized Traffic Management Initiative programs/restrictions |
Reduced Holding and improved Spacing of arrivals and departures | Most appropriate arrival/departure throughput without comprising safety | |
Shorter Taxi Queues and Runway Occupancy Times; Fewer Diversions / Faster Recovery / Irregular Operations (IROPS) Resilience | Improved Service Delivery (completion, throughput, reduced holding and diversions) |
1. | Data Aggregation: We source and integrate a multitude of industry data inputs to ensure the most complete and accurate information, processed in a way that supports specific operational and business requirements. |
2. | Automation: Decision makers have too many variables to consider, on too many screens. We are consolidating information into actionable guidance that removes the need for complex, time-consuming manual calculations. |
3. | Predictive Accuracy: Our technology uses the power of vast amounts of historical data, machine learning, and a comprehensive view of the real-time environment to generate uniquely accurate, reliable, and relevant forecasting information. |
4. | Networked Collaboration and Platform: Our collaborative solutions simplify and automate the information exchange among the key stakeholders that is at the heart of aviation collaboration, enabling coordinated action to jointly solve problems that could not otherwise be addressed by any one participant on their own. |
1. | Increase |
2. | |
3. | Organize the |
4. | |
Develop strategic relationships with major companies to broaden the reach of PASSUR products in the worldwide commercial and government marketplace. | |
Further expand the reach of | |
• | Real-time surveillance from the PASSUR Network gives the necessary breadth and granularity of data to support detailed scenario building and pattern recognition. This includes “fast-time simulation” of the airport surface and terminal area operation, applying the necessary decisions and constraints that controllers will have to apply in managing the traffic, as well as addressing the highly nonlinear and non-stationary nature of the airport operating environment. |
• | Detailed, granular data acquired by the PASSUR Network, supplemented by many other data sources collected within the integrated aviation database, is stored and correlated, providing the large sample sizes required to accurately model future performance based on past performance under similar or identical conditions. |
• | PASSUR is recognized by airlines as having the best flight predicted arrival time Estimated Time of Arrival (“ETA”) in the industry. More than ten independent airline studies have demonstrated the PASSUR predicted arrival time to be more accurate than any other source, including the airlines’ own internally-generated ETAs. The Company believes that this greater accuracy translates directly into significant operational and financial benefits in areas such as completing connections (passengers and bags), reduced fuel consumption, more efficient staffing plans, and greater on-time schedule completion. |
Category | PASSUR solutions description | Key growth drivers | |||||||||
Traffic Flow Management | |||||||||||
Diversion Management | ☐ | ||||||||||
Flight Predictability (ETAs and ETDs) | ☐ ☐ | ||||||||||
Surface Management | ☐ | ||||||||||
Turn Time Management | |||||||||||
Connectivity and Collaboration | |||||||
Aviation Fees and Charges |
(1) | improving financial performance and cutting costs; |
(2) | improving operational efficiency and effectiveness; |
(3) | increasing safety and security; and |
(4) | improving the passenger experience. |
· | Increasing airline profitability, driving investment in technology. We expect airlines will take advantage of their increased profitability to invest in technology that can lower costs, increase revenue, and improve customer satisfaction. |
· | Consolidation in the airline industry creating demand for a common operating system. Airlines are consolidating into much larger networks of greater complexity. There is increasing demand for a common operating platform that can service their entire system. This demand is growing worldwide, not just in the US. |
· | Current rate of projected traffic growth outpacing aviation infrastructure capacity. There is a dynamic and fast-growing market environment where the projected increase in airline flights over the next 10 years is expected to outpace the current |
· | Increased susceptibility to systemic disruption. The NAS has become much more sensitive to disruptions, and less capable of quickly rebounding, because of tightly-packed airline schedules, growth in passenger volumes, reduction in fleet sizes, and congestion at several key airport metroplexes. The NAS is highly susceptible to disruptions at several key airport metroplexes, which have a chronic and disproportionate delay impact that ripples across the system. |
· | Growth in International Hub |
· | Emphasis on infrastructure spending. The most recent U.S. election has resulted in an administration committed to large-scale infrastructure projects, which could include technologies, like |
· | Large government contracts combining both safety and efficiency capabilities. Today, there is a demand for a combination of safety-based Air Traffic Management |
· | Government contracts require proven commercial viability for public programs. Increasingly, government request for proposals for large-scale aviation systems and technologies require a proven track record of precursor models from the commercial sector, in order to shorten development time and ensure the broadest level of adoption by all stakeholders. Many companies regard |
· | Lower tolerance for severe disruptions. Public policy in the form of expensive fines levied on airlines reflects this change of attitude. Consumers want better information relating to aviation, and fewer delays. |
· | Limiting carbon emissions becoming a greater focus. Airlines are increasingly sensitive to the |
· | The Connected Airplane and the IoT are expected to grow in the coming years. |
· | Airlines, airports, government, and other aviation stakeholders are requesting a collaborative decision-making platform. Large airlines need collaborative decision tools including common operating platforms, enabling instant coordination between system operations departments, hubs, and regional operators, and between airlines, airports, and ANSPs to solve complex operational procedures. Common use systems will incorporate airport-centric as well as airline-centric solutions. Airports are increasingly being tasked with providing more multi-airline operational services, previously provided by each airline. When airports provide collective services, redundancy and costs can be reduced. PASSUR has been asked by airlines, airports and |
· | Shift from manual processes to automation creating large opportunities for cost savings and efficiencies. Many complex and expensive operational processes at airlines and airports are still manual, opening a large opportunity for automation enabling the realization of cost savings and efficiencies. These opportunities are especially prevalent in the areas of irregular operations, airspace and surface management, and operations where there is a heavy requirement for collaboration among airlines and airports. |
· |
· | delays and/or decreases in the signing and invoicing of new contracts; |
· | the length of time needed to initiate and complete customer contracts; |
· | the introduction and market acceptance of new and enhanced products and services; |
· | the costs associated with providing existing and new products and services; |
· | economic conditions and the impact on the aviation industry of acts of terrorism; and |
· | the potential of future terrorist acts against the aviation industry and the adverse effects of any further terrorist attacks or other international hostilities. |
Period | Prices* | Prices* | ||||||||||||||
Fiscal year ended October 31, 2018 | High | Low | ||||||||||||||
First quarter | $ | 3.00 | $ | 2.31 | ||||||||||||
Second quarter | $ | 2.50 | $ | 1.70 | ||||||||||||
Third quarter | $ | 2.20 | $ | 1.60 | ||||||||||||
Fourth quarter | $ | 1.70 | $ | 1.40 | ||||||||||||
Fiscal year ended October 31, 2017 | High | Low | ||||||||||||||
First quarter | $ | 4.00 | $ | 2.75 | $ | 4.00 | $ | 2.75 | ||||||||
Second quarter | $ | 5.50 | $ | 3.75 | $ | 5.50 | $ | 3.75 | ||||||||
Third quarter | $ | 4.41 | $ | 2.90 | $ | 4.41 | $ | 2.90 | ||||||||
Fourth quarter | $ | 3.05 | $ | 2.40 | $ | 3.05 | $ | 2.40 | ||||||||
Fiscal year ended October 31, 2016 | ||||||||||||||||
First quarter | $ | 3.45 | $ | 2.25 | ||||||||||||
Second quarter | $ | 2.95 | $ | 2.17 | ||||||||||||
Third quarter | $ | 3.92 | $ | 2.33 | ||||||||||||
Fourth quarter | $ | 4.00 | $ | 2.75 |
Plan category | Number of securities to be issued upon exercise of outstanding stock options, warrants, and rights (a) | Weighted average exercise price of outstanding stock options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 1,522,000 | $ | 3.47 | 1,478,000 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||
Total | 1,522,000 | $ | 3.47 | 1,478,000 |
Plan category | Number of securities to be issued upon exercise of outstanding stock options, warrants, and rights (a) | Weighted average exercise price of outstanding stock options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 1,594,000 | $ | 3.52 | 1,448,000 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||
Total | 1,594,000 | $ | 3.52 | 1,448,000 |
• | Airline operations performance analysis |
• | Air traffic management concepts of operation and best practices |
• | Airport collaborative decision making (A-CDM) |
• | Airport and airspace simulation and modeling |
• | Operational base-lining and outcomes measurement |
1) | Continue developing decision support solutions built on business intelligence, predictive analytics, and web-dashboard technology; |
2) | Continue integrating multiple additional industry data sets into its integrated aviation database, including data from a variety of additional aircraft, airspace, and ground surveillance technologies, in order to ensure that PASSUR is the primary choice for data integration and management for large aviation organizations; |
3) | Continue extending the reach of the PASSUR Network, which provides the proprietary backbone for many of the |
4) | Continue developing the |
PASSUR Network | 5 to 7 years |
Capitalized software development costs | 5 years |
Property and equipment | 3 to 10 years |
· | recognizing upfront fees that do not provide the customer with a material right over the contract term rather than over the estimated customer relationship of five years; and, |
· | required disclosures including disaggregation of revenues, information about the remaining transaction price and when the Company expects to recognize revenue. |
Name | Age | Director since | Director Position and Officers with the Company |
G.S. Beckwith Gilbert | 76 | 1997 | Executive Chairman of the Board, Chairman of the Executive Committee, and Director |
James T. Barry | 57 | 2000 | President, Chief Executive Officer, and Director |
John F. Thomas | 59 | 2018 | Vice Chairman of the Board and Director |
Brian G. Cook | 54 | 2018 | Director |
Kurt J. Ekert | 48 | 2009 | Chairman of the Compensation Committee and Director |
Paul L. Graziani | 61 | 1997 | Chairman of the Audit Committee and Director |
Richard L. Haver | 73 | 2010 | Director |
Ronald V. Rose | 67 | 2014 | Chairman of the Technology Committee and Director |
Michael P. Schumaecker | 74 | 2017 | Director |
Robert M. Stafford | 76 | 2013 | Director |
Name | Age | Director since | Director Position and Officers with the Company |
G.S. Beckwith Gilbert | 75 | 1997 | Executive Chairman of the Board, Chairman of the Executive Committee, and Director |
Paul L. Graziani | 60 | 1997 | Chairman of the Audit Committee and Director |
James T. Barry | 56 | 2000 | President, Chief Executive Officer, and Director |
Kurt J. Ekert | 47 | 2009 | Chairman of the Compensation Committee and Director |
Richard L. Haver | 72 | 2010 | Director |
Robert M. Stafford | 75 | 2013 | Director |
Ronald V. Rose | 66 | 2014 | Chairman of the Technology Committee and Director |
Michael P. Schumaecker | 73 | 2017 | Director |
Name | Age | Officer since | Officer Position and Officers with the Company | Age | Officer since | Officer Position and Officers with the Company |
G.S. Beckwith Gilbert | 75 | 1997 | Executive Chairman of the Board, Chairman of the Executive Committee, and Director | 76 | 1997 | Executive Chairman of the Board, Chairman of the Executive Committee, and Director |
James T. Barry | 56 | 1998 | President, Chief Executive Officer, and Director | 57 | 1998 | President, Chief Executive Officer, and Director |
Louis J. Petrucelly | 43 | 2016 | Chief Financial Officer, Treasurer, and Secretary | 44 | 2016 | Chief Financial Officer, Treasurer, and Secretary |
Timothy P. Campbell | 55 | 2017 | Chief Operating Officer | 56 | 2017 | Chief Operating Officer |
G.S. Beckwith Gilbert | Mr. Gilbert is Executive Chairman of the Board of Directors of the Company, and has served as the Chairman of the Board since his election in 1997. Mr. Gilbert also serves as the Chairman of the Executive Committee. Mr. Gilbert was appointed Chief Executive Officer in October of 1998 and served as such until his retirement from that post on February 1, 2003. Mr. Gilbert is President and Chief Executive Officer of Field Point Capital Management Company, a merchant-banking firm, a position he has held since 1988. Mr. Gilbert is also Chairman Emeritus |
Mr. | |
Brian G. Cook | Mr. Cook has been a Director of the Company since |
Kurt J. Ekert | Mr. Ekert has been a Director of the Company since September 10, 2009, and became the President and Chief Executive Officer of Carlson Wagonlit Travel (CWT), the |
Paul L. Graziani | Mr. Graziani has been a Director of the Company since 1997 and is the Chairman of the Audit Committee. He currently serves as Chief Executive Officer of Analytical Graphics, Inc. (“AGI”), a leading producer of commercially available analysis and visualization software for the aerospace, defense, and intelligence communities, a position he has held since January 1989. Until March 2009, he also served as AGI’s President. In recent times, Mr. Graziani has been recognized as “CEO of the Year” by the Philadelphia region’s Eastern Technology Council and the Chester County Chamber of Business and Industry; “Entrepreneur of the Year” regional winner by Ernst & Young; and “Businessman of the Year” by the local Great Valley Regional Chamber of Commerce. He sits on the Boards of Directors of the United States Geospatial Intelligence Foundation and Federation of Galaxy Explorers, and is a former member of the board of governors of the Civil Air Patrol. He is an associate fellow of the American Institute of Aeronautics and Astronautics and has formerly served on the advisory board for Penn State Great Valley. After fulfilling his board tenure, he was recently elected to the honorary position of Life Director of The Space Foundation. In 2009 AGI was named a “Top Small Workplace” by the Wall Street Journal and the non-profit organization Winning Workplaces. Mr. Graziani’s knowledge of the Company through his service as a Director of the Company, as well as his experience as CEO of a software company, allow him to bring valuable insight and knowledge to the Board. |
Richard L. Haver | Mr. Haver has been a Director of the Company since October 8, 2010. Mr. Haver retired from Northrop Grumman Corporation in December 2010 following 10 years of service with Northrop and the TRW component acquired by Northrop in 2002. His position at Northrop Grumman was Vice President for Intelligence Programs. He earned a B.A. degree in History from Johns Hopkins University in 1967. He served on active duty in the U.S. Navy from 1967 to 1973. In 1973, Mr. Haver became a civilian intelligence analyst in the Anti-Submarine Warfare Systems branch at the Naval Intelligence Support Center. In 1976, he was selected as a department head at the Navy Field Operational Intelligence Office |
Ronald V. Rose | Mr. Rose has been a Director of the Company since December 17, 2014. Mr. Rose now serves as CEO of Value Creation Strategies Holdings, LLC, an investment company focused on value creation through data analytics technologies. Formerly Mr. Rose was the Vice Chairman and CEO, of Decisyon, Inc., a company which accelerates business process improvement through the combination of collaborative business intelligence technologies and IoT analytics. Prior to Decisyon, Mr. Rose served as Senior Vice President of Dell.com at Dell Inc., where he ran a multi-billion dollar B2B business unit. Prior to Dell, Mr. Rose served as Chief Information Officer of Priceline.com for eleven years during which time the company successfully made the transition from a pre-IPO startup to a multi-billion dollar global travel company. Mr. Rose began his career at Delta Air Lines focusing on transaction systems. Mr. Rose holds a Bachelor of Science degree from Tulane University and the University of Aberdeen Scotland. Mr. Rose received a |
Michael P. Schumaecker | Mr. Schumaecker was appointed to the Board of Directors in June, 2017. Mr. Schumaecker, is a retired partner of Pillsbury Winthrop Shaw Pittman LLP, an international law firm which focuses on the aviation, technology, energy and natural resources, financial services, real estate and construction, and travel and hospitality sectors. Mr. Schumaecker was a member of the law |
Robert M. Stafford | Mr. Stafford has been a Director of the Company since June 12, 2013. Mr. Stafford is currently the Chairman and CEO of Stafford Capital Management, where he has worked since 1986, and the Managing Partner of Pacific Management Ltd., where he has also worked since 1986. Mr. Stafford received a bachelor’s degree from Princeton University in 1963 and an MBA from Stanford Graduate School of Business in 1968. Mr. Stafford’s extensive financial experience allows him to bring valuable insight and knowledge to the Board. |
James T. Barry | Mr. Barry was named Chief Executive Officer of the Company in February 2003 and President in April 2003. He also serves on the Company’s Executive Committee and Technology Advisory Committee. Since Mr. Barry joined the Company in 1998, he has held the positions of Chief Operating Officer, Chief Financial Officer, Secretary, and Executive Vice President. Mr. Barry has also been a Director of the Company since 2000. |
Louis J. Petrucelly | Mr. Petrucelly joined the Company as Senior Vice President, Chief Financial Officer, Treasurer and Secretary in October 2016. Mr. Petrucelly has more than 15 years of experience in multi-dimensional corporate finance, operations, and accounting. Previously, Mr. Petrucelly spent almost 10 years at FalconStor Software, Inc., a leading software-defined storage data services company, serving most recently as Executive Vice President, Chief Financial Officer, and Treasurer since August 2012. Mr. Petrucelly joined FalconStor Software, Inc. in March 2007 and held several senior financial positions. Prior to FalconStor Software, Inc., Mr. Petrucelly spent time in senior financial positions at both Granite Broadcasting Corporation and PASSUR Aerospace, Inc. He began his career with Ernst & Young, LLP. Mr. Petrucelly received his B.S. from the C.W. Post Campus of Long Island University. |
Timothy P. Campbell | Mr. Campbell was named Chief Operating Officer in October 2017. Before joining PASSUR, Mr. Campbell was most recently Senior Vice President, Air Operations for American Airlines Group. Mr. Campbell led the effort to combine |
(a) | List of Documents Filed as a Part of This Annual Report on Form 10-K: | Page |
(1) | Index to Consolidated Financial Statements Included in Part II of This Report: | |
F-1 | ||
Consolidated Balance Sheets as of October 31, | F-2 | |
Consolidated Statements of Operations for the years ended October 31, | F-3 | |
Consolidated Statements of | F-4 | |
Consolidated Statements of Cash Flows for the years ended October 31, | F-5 | |
Notes to Consolidated Financial Statements | F-6 | |
(2) | Index to Financial Statement Schedule: N/A |
3.1 | The |
The Company's Amendment | |
3.2 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
10.5 | |
10.6 | |
10.7 | |
10.8 | |
10.9 | |
10.10 | |
10.11 | |
10.12 | |
10.13 | |
10.14 |
10.15 | |
10.17 | |
10.18 | |
10.19 | |
10.20 | |
10.21 | |
10.22* | Debt Extension Agreement, dated as of January 28, 2019, by and between PASSUR Aerospace, Inc., and G.S. Beckwith Gilbert. |
Secure Promissory Note, dated as of | |
Commitment of G.S. Beckwith Gilbert, dated | |
21 | List of Subsidiaries is incorporated by reference |
23.1* | Consent of Independent Registered Public Accounting Firm. |
31.1* | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.ins** | XBRL Instance |
101.xsd** | XBRL Schema |
101.cal** | XBRL Calculation |
101.def** | XBRL Definition |
101.lab** | XBRL Label |
101.pre** | XBRL Presentation |
Dated: | By: |
James T. Barry | |
President and Chief Executive Officer and Director | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated: | |
Dated: | /s/ James T. Barry |
James T. Barry | |
President and Chief Executive Officer and Director | |
(Principal Executive Officer) | |
Dated: | /s/ Louis J. Petrucelly |
Louis J. Petrucelly | |
Chief Financial Officer, Treasurer, and Secretary | |
(Principal Financial and Accounting Officer) |
Dated: | /s/ G.S. Beckwith Gilbert |
G.S. Beckwith Gilbert | |
Executive Chairman of the Board and Director | |
Dated: | /s/ |
Vice Chairman of the Board and Director | |
Dated: | /s/ |
Director | |
Dated: | /s/ Kurt J. Ekert |
Kurt J. Ekert | |
Director | |
Dated: January 29, 2019 | /s/ Paul L. Graziani |
Paul L. Graziani | |
Director | |
Dated: January 29, 2019 | /s/ Richard L. Haver |
Richard L. Haver | |
Director | |
Dated: January 29, 2019 | /s/ Ronald V. Rose |
Ronald V. Rose | |
Director | |
Dated: | /s/ Michael P. Schumaecker |
Michael P. Schumaecker | |
Director | |
Dated: January 29, 2019 | /s/ Robert M. Stafford |
Robert M. Stafford | |
Director |
2018 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 100,856 | $ | 275,146 | ||||
Accounts receivable, net | 1,186,664 | 1,359,447 | ||||||
Prepaid expenses and other current assets | 199,173 | 251,689 | ||||||
Total current assets | 1,486,693 | 1,886,282 | ||||||
PASSUR Network, net | 4,800,750 | 6,004,367 | ||||||
Capitalized software development costs, net | 8,141,589 | 8,893,414 | ||||||
Property and equipment, net | 672,601 | 852,147 | ||||||
Other assets | 112,551 | 169,635 | ||||||
Total assets | $ | 15,214,184 | $ | 17,805,845 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 989,958 | $ | 984,369 | ||||
Accrued expenses and other current liabilities | 1,189,342 | 1,273,170 | ||||||
Deferred revenue, current portion | 2,847,323 | 2,824,885 | ||||||
Total current liabilities | 5,026,623 | 5,082,424 | ||||||
Deferred revenue, long term portion | 409,971 | 470,831 | ||||||
Note payable - related party | 6,050,000 | 3,800,000 | ||||||
Other Liabilities | 113,273 | - | ||||||
Total liabilities | 11,599,867 | 9,353,255 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred shares - authorized 5,000,000 shares, par value $0.01 per share; none issued or outstanding | - | - | ||||||
Common shares - authorized 20,000,000 shares, respectively, par value $0.01 per share; issued 8,480,526 at October 31, 2018 and 2017, respectively | 84,804 | 84,804 | ||||||
Additional paid-in capital | 17,345,450 | 16,699,337 | ||||||
Accumulated deficit | (11,882,259 | ) | (6,397,873 | ) | ||||
5,547,995 | 10,386,268 | |||||||
Treasury stock, at cost, 784,435 shares at October 31, 2018 and 2017, respectively | (1,933,678 | ) | (1,933,678 | ) | ||||
Total stockholders' equity | 3,614,317 | 8,452,590 | ||||||
Total liabilities and stockholders' equity | $ | 15,214,184 | $ | 17,805,845 |
2017 | 2016 | |||||||
(Restated) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 275,146 | $ | 1,523,655 | ||||
Accounts receivable, net | 1,308,091 | 1,073,498 | ||||||
Deferred tax assets, current | - | 418,889 | ||||||
Prepaid expenses and other current assets | 303,045 | 217,410 | ||||||
Total current assets | 1,886,282 | 3,233,452 | ||||||
PASSUR Network, net | 6,004,367 | 5,198,421 | ||||||
Capitalized software development costs, net | 8,893,414 | 7,600,038 | ||||||
Property and equipment, net | 852,147 | 1,187,158 | ||||||
Deferred tax assets, non-current | - | 1,522,967 | ||||||
Other assets | 169,635 | 208,755 | ||||||
Total assets | $ | 17,805,845 | $ | 18,950,791 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 984,369 | $ | 356,387 | ||||
Accrued expenses and other current liabilities | 1,273,170 | 936,272 | ||||||
Deferred revenue, current portion | 2,824,885 | 3,140,292 | ||||||
Total current liabilities | 5,082,424 | 4,432,951 | ||||||
Deferred revenue, long term portion | 470,831 | 423,346 | ||||||
Note payable - related party | 3,800,000 | 2,700,000 | ||||||
Total liabilities | 9,353,255 | 7,556,297 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred shares - authorized 5,000,000 shares, par value $0.01 per share; none issued or outstanding | - | - | ||||||
Common shares - authorized 20,000,000 and 10,000,000 shares, respectively, par value $0.01 per share; issued 8,480,526 and 8,465,526 at October 31, 2017 and 2016, respectively | 84,804 | 84,654 | ||||||
Additional paid-in capital | 16,699,337 | 16,082,865 | ||||||
Accumulated deficit | (6,397,873 | ) | (2,877,597 | ) | ||||
10,386,268 | 13,289,922 | |||||||
Treasury stock, at cost, 784,435 and 775,327 shares at October 31, 2017 and 2016, respectively | (1,933,678 | ) | (1,895,428 | ) | ||||
Total stockholders' equity | 8,452,590 | 11,394,494 | ||||||
Total liabilities and stockholders' equity | $ | 17,805,845 | $ | 18,950,791 |
2017 | 2016 | |||||||
(Restated) | ||||||||
Revenues | $ | 13,871,495 | $ | 14,892,495 | ||||
Cost of expenses: | ||||||||
Cost of revenues | 6,449,931 | 6,240,949 | ||||||
Research and development expenses | 783,014 | 826,227 | ||||||
Selling, general, and administrative expenses | 8,021,182 | 6,481,260 | ||||||
15,254,127 | 13,548,436 | |||||||
(Loss)/Income from operations | $ | (1,382,632 | ) | $ | 1,344,059 | |||
Interest expense - related party | 170,917 | 183,333 | ||||||
Other (Loss)/Income | (5,221 | ) | - | |||||
(Loss)/Income before income taxes | (1,558,770 | ) | 1,160,726 | |||||
Provision for income taxes | 1,961,506 | 643,023 | ||||||
Net (loss)/income | $ | (3,520,276 | ) | $ | 517,703 | |||
Net (loss)/income per common share - basic | $ | (0.46 | ) | $ | 0.07 | |||
Net (loss)/income per common share - diluted | $ | (0.46 | ) | $ | 0.07 | |||
Weighted average number of common shares outstanding - basic | 7,693,831 | 7,679,696 | ||||||
Weighted average number of common shares outstanding - diluted | 7,693,831 | 7,730,566 |
2018 | 2017 | |||||||
Revenues | $ | 14,817,799 | $ | 13,871,495 | ||||
Cost of expenses: | ||||||||
Cost of revenues | 10,481,134 | 6,449,931 | ||||||
Research and development expenses | 593,708 | 783,014 | ||||||
Selling, general, and administrative expenses | 8,887,985 | 8,021,182 | ||||||
19,962,827 | 15,254,127 | |||||||
Loss from operations | $ | (5,145,028 | ) | $ | (1,382,632 | ) | ||
Interest expense - related party | 335,948 | 170,917 | ||||||
Other Loss | (1,224 | ) | 5,221 | |||||
Loss before income taxes | (5,479,752 | ) | (1,558,770 | ) | ||||
Provision for income taxes | 4,634 | 1,961,506 | ||||||
Net loss | $ | (5,484,386 | ) | $ | (3,520,276 | ) | ||
Net loss per common share - basic | $ | (0.71 | ) | $ | (0.46 | ) | ||
Net loss per common share - diluted | $ | (0.71 | ) | $ | (0.46 | ) | ||
Weighted average number of common shares outstanding - basic | 7,696,091 | 7,693,831 | ||||||
Weighted average number of common shares outstanding - diluted | 7,696,091 | 7,693,831 |
Additional | Total | |||||||||||||||||||||||
Common Stock | Paid-In | Accum. | Treasury | Stockholders | ||||||||||||||||||||
Shares | Amount | Capital | Deficit | Stock | Equity | |||||||||||||||||||
Balance at November 1, 2016 - Restated | 7,690,199 | $ | 84,654 | $ | 16,082,865 | $ | (2,877,597 | ) | $ | (1,895,428 | ) | $ | 11,394,494 | |||||||||||
Exercise of common stock options | 15,000 | 150 | 38,100 | 38,250 | ||||||||||||||||||||
Purchase of treasury stock | (9,108 | ) | (38,250 | ) | (38,250 | ) | ||||||||||||||||||
Stock-based compensation expense | 578,372 | 578,372 | ||||||||||||||||||||||
Net loss | (3,520,276 | ) | (3,520,276 | ) | ||||||||||||||||||||
Balance at October 31, 2017 | 7,696,091 | $ | 84,804 | $ | 16,699,337 | $ | (6,397,873 | ) | $ | (1,933,678 | ) | $ | 8,452,590 | |||||||||||
Stock-based compensation expense | 646,113 | 646,113 | ||||||||||||||||||||||
Net loss | (5,484,386 | ) | (5,484,386 | ) | ||||||||||||||||||||
Balance at October 31, 2018 | 7,696,091 | $ | 84,804 | $ | 17,345,450 | $ | (11,882,259 | ) | $ | (1,933,678 | ) | $ | 3,614,317 |
Additional | Total | |||||||||||||||||||||||
Common Stock | Paid-In | Accum. | Treasury | Stockholders | ||||||||||||||||||||
Shares | Amount | Capital | Deficit | Stock | Equity | |||||||||||||||||||
Balance at November 1, 2015 - Restated | 7,653,199 | $ | 84,284 | $ | 15,663,796 | $ | (3,395,300 | ) | $ | (1,895,428 | ) | $ | 10,457,352 | |||||||||||
Exercise of common stock options | 37,000 | 370 | 17,850 | 18,220 | ||||||||||||||||||||
Stock-based compensation expense | 401,219 | 401,219 | ||||||||||||||||||||||
Net income | 517,703 | 517,703 | ||||||||||||||||||||||
Balance at October 31, 2016 - Restated | 7,690,199 | $ | 84,654 | $ | 16,082,865 | $ | (2,877,597 | ) | $ | (1,895,428 | ) | $ | 11,394,494 | |||||||||||
Exercise of common stock options | 15,000 | 150 | 38,100 | 38,250 | ||||||||||||||||||||
Purchase of treasury stock | (9,108 | ) | (38,250 | ) | (38,250 | ) | ||||||||||||||||||
Stock-based compensation expense | 578,372 | 578,372 | ||||||||||||||||||||||
Net loss | (3,520,276 | ) | (3,520,276 | ) | ||||||||||||||||||||
Balance at October 31, 2017 | 7,696,091 | $ | 84,804 | $ | 16,699,337 | $ | (6,397,873 | ) | $ | (1,933,678 | ) | $ | 8,452,590 |
2017 | 2016 | |||||||
(Restated) | ||||||||
Cash flows from operating activities | ||||||||
Net (loss)/income | $ | (3,520,276 | ) | $ | 517,703 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 2,967,557 | 2,890,541 | ||||||
Provision for deferred taxes | 1,941,856 | 593,605 | ||||||
Provision for doubtful accounts | 179,415 | 5,982 | ||||||
Stock-based compensation | 578,372 | 401,219 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (414,008 | ) | 155,506 | |||||
Prepaid expenses and other current assets | (134,497 | ) | (120,260 | ) | ||||
Other assets | 39,120 | 31,106 | ||||||
Accounts payable | 627,982 | (524,432 | ) | |||||
336,898 | (41,628 | ) | ||||||
Deferred revenue | (267,922 | ) | 686,058 | |||||
Total adjustments | 5,854,773 | 4,077,697 | ||||||
Net cash provided by operating activities | 2,334,497 | 4,595,400 | ||||||
Cash flows from investing activities | ||||||||
PASSUR Network | (1,400,624 | ) | (622,098 | ) | ||||
Software development costs | (3,027,394 | ) | (2,263,198 | ) | ||||
Property and equipment | (254,988 | ) | (330,177 | ) | ||||
Net cash used in investing activities | (4,683,006 | ) | (3,215,473 | ) | ||||
Cash flows from financing activities | ||||||||
Purchase of treasury stock | - | - | ||||||
Payment of notes payable-related party | - | (800,000 | ) | |||||
Proceeds from notes payable - related party | 1,100,000 | - | ||||||
Proceeds from exercise of stock options | - | 18,220 | ||||||
Net cash provided by/(used in) financing activities | 1,100,000 | (781,780 | ) | |||||
(Decrease)/increase in cash | (1,248,509 | ) | 598,147 | |||||
Cash - beginning of period | 1,523,655 | 925,508 | ||||||
Cash - end of period | $ | 275,146 | $ | 1,523,655 | ||||
Supplemental cash flow information | ||||||||
Cash paid during the period for: | ||||||||
Interest - related party | $ | 171,000 | $ | 183,000 | ||||
Income taxes | $ | 89,000 | $ | 62,000 | ||||
Non-cash financing activities - purchase of treasury stock | $ | 38,250 | $ | - | ||||
Non-cash financing activities - proceeds from exercise of stock options | $ | 38,250 | $ | - |
2018 | 2017 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (5,484,386 | ) | $ | (3,520,276 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 3,561,677 | 2,967,557 | ||||||
Provision for deferred taxes | - | 1,941,856 | ||||||
Provision for doubtful accounts | 7,500 | 179,415 | ||||||
Provision for obsolete and slow moving PASSUR Network parts and supplies | 229,500 | - | ||||||
Other Liabilities | 113,273 | - | ||||||
Stock-based compensation | 646,113 | 578,372 | ||||||
Loss from impairment charges | 1,470,479 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 165,283 | (414,008 | ) | |||||
Prepaid expenses and other current assets | 10,467 | (134,497 | ) | |||||
Other assets | 57,084 | 39,120 | ||||||
Accounts payable | 5,589 | 627,982 | ||||||
(83,828 | ) | 336,898 | ||||||
Deferred revenue | (38,422 | ) | (267,922 | ) | ||||
Total adjustments | 6,144,715 | 5,854,773 | ||||||
Net cash provided by operating activities | 660,329 | 2,334,497 | ||||||
Cash flows used in investing activities | ||||||||
PASSUR Network | (321,703 | ) | (1,400,624 | ) | ||||
Software development costs | (2,503,045 | ) | (3,027,394 | ) | ||||
Property and equipment | (259,871 | ) | (254,988 | ) | ||||
Net cash used in investing activities | (3,084,619 | ) | (4,683,006 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from notes payable - related party | 2,250,000 | 1,100,000 | ||||||
Net cash provided by financing activities | 2,250,000 | 1,100,000 | ||||||
Decrease in cash | (174,290 | ) | (1,248,509 | ) | ||||
Cash - beginning of period | 275,146 | 1,523,655 | ||||||
Cash - end of period | $ | 100,856 | $ | 275,146 | ||||
Supplemental cash flow information | ||||||||
Cash paid during the period for: | ||||||||
Interest - related party | $ | 336,000 | $ | 171,000 | ||||
Income taxes | $ | (40,579 | ) | $ | 89,000 | |||
Non-cash financing activities - purchase of treasury stock | $ | - | $ | 38,250 | ||||
Non-cash financing activities - proceeds from exercise of stock options | $ | - | $ | 38,250 |
2017 | 2016 | 2018 | 2017 | |||||||||||||
Basic Weighted average shares outstanding | 7,693,831 | 7,679,696 | 7,696,091 | 7,693,831 | ||||||||||||
Effect of dilutive stock options | - | 50,870 | - | - | ||||||||||||
Diluted weighted average shares outstanding | 7,693,831 | 7,730,566 | ||||||||||||||
Diluted weighted average shares outstanding | 7,696,091 | 7,693,831 | ||||||||||||||
Weighted average shares which are not included in the calculation of diluted net income per share because their impact is anti-dilutive. These shares consist of stock options. | 1,594,000 | 1,182,000 | ||||||||||||||
Weighted average shares which are not included in the calculation of diluted net loss per share because their impact is anti-dilutive. These shares consist of stock options. | 1,522,000 | 1,594,000 |
· |
· | required disclosures including disaggregation of revenues, information about the |
October 31, 2015 | ||||||||||||||||
Select Balance Sheet Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
PASSUR Network, net | $ | 5,902,751 | $ | (554,088 | ) | $ | 5,348,663 | 2 | ||||||||
Capitalized software development costs, net | $ | 7,684,603 | $ | (786,894 | ) | $ | 6,897,709 | 1 | ||||||||
Deferred tax asset, non-current | $ | 1,658,557 | $ | 325,234 | $ | 1,983,791 | 1-3 | |||||||||
Total stockholders' equity | $ | 11,473,100 | $ | (1,015,748 | ) | $ | 10,457,352 | 1-3 |
October 31, 2016 | ||||||||||||||||||||
Select Balance Sheet Accounts | As Reported | Period Adjustments | Prior Period Adjustments | As Restated | Reference | |||||||||||||||
PASSUR Network, net | $ | 5,739,753 | $ | 12,756 | $ | (554,088 | ) | $ | 5,198,421 | 2 | ||||||||||
Capitalized software development costs, net | $ | 8,263,533 | $ | 123,399 | $ | (786,894 | ) | $ | 7,600,038 | 1 | ||||||||||
Deferred tax asset, non-current | $ | 1,250,833 | $ | (53,100 | ) | $ | 325,234 | $ | 1,522,967 | 1-2 | ||||||||||
Total stockholders' equity | $ | 12,327,187 | $ | 83,055 | $ | (1,015,748 | ) | $ | 11,394,494 | 1-2 |
October 31, 2016 | ||||||||||||||||
Select Statement of Operations Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Cost of revenues | $ | 6,377,104 | $ | (136,155 | ) | $ | 6,240,949 | 1-2 | ||||||||
Income from operations | $ | 1,207,904 | $ | 136,155 | $ | 1,344,059 | 1-2 | |||||||||
Income tax expense | $ | 589,923 | $ | 53,100 | $ | 643,023 | 1-2 | |||||||||
Net income | $ | 434,648 | $ | 83,055 | $ | 517,703 | 1-2 | |||||||||
Net income per common share - basic | $ | 0.06 | $ | 0.01 | $ | 0.07 | ||||||||||
Net income per common share - diluted | $ | 0.06 | $ | 0.01 | $ | 0.07 | ||||||||||
October 31, 2016 | ||||||||||||||||
Select Statement of Cash Flows Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Net income | $ | 434,648 | $ | 83,055 | $ | 517,703 | 1-2 | |||||||||
Depreciation and amortization | $ | 3,341,349 | $ | (450,808 | ) | $ | 2,890,541 | 1-2 | ||||||||
Provision for deferred taxes | $ | 540,505 | $ | 53,100 | $ | 593,605 | ||||||||||
Net cash provided by operating activities | $ | 4,910,053 | $ | (314,653 | ) | $ | 4,595,400 | 1-2 | ||||||||
PASSUR Network | $ | (776,138 | ) | $ | 154,040 | $ | (622,098 | ) | 2 | |||||||
Capitalized software development | $ | (2,423,811 | ) | $ | 160,613 | $ | (2,263,198 | ) | 1 | |||||||
Net cash used in investing activities | $ | (3,530,126 | ) | $ | 314,653 | $ | (3,215,473 | ) | 1-2 |
Three months ended January 31, 2017 | ||||||||||||||||||||
Select Balance Sheet Accounts | As Reported | Period Adjustments | Prior Period Adjustments | As Restated | Reference | |||||||||||||||
PASSUR Network, net | $ | 5,686,154 | $ | (18,833 | ) | $ | (541,332 | ) | $ | 5,125,989 | 2 | |||||||||
Capitalized software development costs, net | $ | 8,419,097 | $ | 27,068 | $ | (663,495 | ) | $ | 7,782,670 | 1 | ||||||||||
Deferred tax asset, non-current | $ | 1,165,039 | $ | - | $ | 272,134 | $ | 1,437,173 | ||||||||||||
Total stockholders' equity | $ | 12,212,596 | $ | 8,235 | $ | (932,693 | ) | $ | 11,288,138 | 1-2 | ||||||||||
Six months ended April 30, 2017 | ||||||||||||||||||||
Select Balance Sheet Accounts | As Reported | Period Adjustments | Prior Period Adjustments | As Restated | Reference | |||||||||||||||
PASSUR Network, net | $ | 5,918,106 | $ | (55,970 | ) | $ | (560,165 | ) | $ | 5,301,971 | 2 | |||||||||
Capitalized software development costs, net | $ | 8,616,778 | $ | 22,783 | $ | (636,427 | ) | $ | 8,003,134 | 1 | ||||||||||
Deferred tax asset, non-current | $ | 1,358,400 | $ | - | $ | 272,134 | $ | 1,630,534 | ||||||||||||
Total stockholders' equity | $ | 12,287,185 | $ | (33,187 | ) | $ | (924,458 | ) | $ | 11,329,540 | 1-2 | |||||||||
Nine months ended July 31, 2017 | ||||||||||||||||||||
Select Balance Sheet Accounts | As Reported | Period Adjustments | Prior Period Adjustments | As Restated | Reference | |||||||||||||||
PASSUR Network, net | $ | 6,169,478 | $ | (35,256 | ) | $ | (616,135 | ) | $ | 5,518,087 | 2 | |||||||||
Capitalized software development costs, net | $ | 8,957,601 | $ | 16,449 | $ | (613,644 | ) | $ | 8,360,406 | 1 | ||||||||||
Deferred tax asset, non-current | $ | 1,271,900 | $ | - | $ | 272,134 | $ | 1,544,034 | ||||||||||||
Total stockholders' equity | $ | 11,861,213 | $ | (18,807 | ) | $ | (957,645 | ) | $ | 10,884,761 | 1-2 |
Three months ended January 31, 2017 | ||||||||||||||||
Select Statement of Operations Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Cost of revenues | $ | 1,690,009 | $ | (8,235 | ) | $ | 1,681,774 | 1-2 | ||||||||
(Loss)/Income from operations | $ | (120,467 | ) | $ | 8,235 | $ | (112,232 | ) | 1-2 | |||||||
(Benefit) provision for income taxes | $ | 94,684 | $ | (197,749 | ) | $ | (103,065 | ) | 3 | |||||||
Net (loss)/income | $ | (256,551 | ) | $ | 205,984 | $ | (50,567 | ) | ||||||||
Net (loss)/income per common share - basic | $ | (0.03 | ) | $ | 0.02 | $ | (0.01 | ) | ||||||||
Net (loss)/income per common share - diluted | $ | (0.03 | ) | $ | 0.02 | $ | (0.01 | ) | ||||||||
Three months ended April 30, 2017 | ||||||||||||||||
Select Statement of Operations Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Cost of revenues | $ | 1,534,126 | $ | 33,187 | $ | 1,567,313 | 1-2 | |||||||||
(Loss)/Income from operations | $ | (185,166 | ) | $ | (33,187 | ) | $ | (218,353 | ) | 1-2 | ||||||
(Benefit) provision for income taxes | $ | (192,325 | ) | $ | - | $ | (192,325 | ) | ||||||||
Net (loss)/income | $ | (38,112 | ) | $ | (33,187 | ) | $ | (71,299 | ) | |||||||
Net (loss)/income per common share - basic | $ | 0.00 | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Net (loss)/income per common share - diluted | $ | 0.00 | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Three months ended July 31, 2017 | ||||||||||||||||
Select Statement of Operations Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Cost of revenues | $ | 1,489,703 | $ | 18,807 | $ | 1,508,510 | 1-2 | |||||||||
(Loss)/Income from operations | $ | (451,460 | ) | $ | (18,807 | ) | $ | (470,267 | ) | 1-2 | ||||||
(Benefit) provision for income taxes | $ | 86,500 | $ | - | $ | 86,500 | ||||||||||
Net (loss)/income | $ | (579,360 | ) | $ | (18,807 | ) | $ | (598,167 | ) | |||||||
Net (loss)/income per common share - basic | $ | (0.08 | ) | $ | - | $ | (0.08 | ) | ||||||||
Net (loss)/income per common share - diluted | $ | (0.08 | ) | $ | - | $ | (0.08 | ) |
Three months ended January 31, 2017 | ||||||||||||||||
Select Statement of Cash Flows Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Net (loss)/income | $ | (256,551 | ) | $ | 205,984 | $ | (50,567 | ) | 1-3 | |||||||
Depreciation and amortization | $ | 857,174 | $ | (111,256 | ) | $ | 745,918 | 1-2 | ||||||||
Provision for deferred taxes | $ | 85,794 | $ | (197,749 | ) | $ | (111,955 | ) | 3 | |||||||
Net cash (used in)/ provided by operating activities | $ | (124,381 | ) | $ | (103,021 | ) | $ | (227,402 | ) | 1-3 | ||||||
PASSUR Network | $ | (162,795 | ) | $ | 62,658 | $ | (100,137 | ) | 2 | |||||||
Capitalized software development | $ | (647,432 | ) | $ | 40,362 | $ | (607,070 | ) | 1 | |||||||
Net cash used in investing activities | $ | (896,046 | ) | $ | 103,021 | $ | (793,025 | ) | 1-2 | |||||||
Six months ended April 30, 2017 | ||||||||||||||||
Select Statement of Cash Flows Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Net (loss)/income | $ | (294,663 | ) | $ | 172,797 | $ | (121,866 | ) | 1-3 | |||||||
Depreciation and amortization | $ | 1,702,760 | $ | (222,512 | ) | $ | 1,480,248 | 1-2 | ||||||||
Provision for deferred taxes | $ | (107,567 | ) | $ | (197,749 | ) | $ | (305,316 | ) | 3 | ||||||
Net cash (used in)/ provided by operating activities | $ | 2,339,774 | $ | (247,464 | ) | $ | 2,092,310 | 1-3 | ||||||||
PASSUR Network | $ | (596,533 | ) | $ | 162,453 | $ | (434,080 | ) | 2 | |||||||
Capitalized software development | $ | (1,327,848 | ) | $ | 85,009 | $ | (1,242,839 | ) | 1 | |||||||
Net cash used in investing activities | $ | (2,021,324 | ) | $ | 247,464 | $ | (1,773,860 | ) | 1-2 | |||||||
Nine months ended July 31, 2017 | ||||||||||||||||
Select Statement of Cash Flows Accounts | As Reported | Adjustments | As Restated | Reference | ||||||||||||
Net (loss)/income | $ | (874,024 | ) | $ | 153,990 | $ | (720,034 | ) | 1-3 | |||||||
Depreciation and amortization | $ | 2,519,500 | $ | (349,331 | ) | $ | 2,170,169 | 1-2 | ||||||||
Provision for deferred taxes | $ | (21,067 | ) | $ | (197,749 | ) | $ | (218,816 | ) | 3 | ||||||
Net cash (used in)/ provided by operating activities | $ | 2,711,495 | $ | (393,090 | ) | $ | 2,318,405 | 1-3 | ||||||||
PASSUR Network | $ | (1,023,608 | ) | $ | 261,238 | $ | (762,370 | ) | 2 | |||||||
Capitalized software development | $ | (2,144,555 | ) | $ | 131,850 | $ | (2,012,705 | ) | 1 | |||||||
Net cash used in investing activities | $ | (3,421,958 | ) | $ | 393,090 | $ | (3,028,868 | ) | 1-2 |
Estimated useful lives | 2018 | 2017 | |||||||
Leasehold improvements | 3-5 years | $ | 216,000 | $ | 216,000 | ||||
Equipment | 5-10 years | 6,212,000 | 5,960,000 | ||||||
Furniture and fixtures | 5-10 years | 593,000 | 585,000 | ||||||
7,021,000 | 6,761,000 | ||||||||
Less accumulated depreciation | 6,348,000 | 5,909,000 | |||||||
Total | $ | 673,000 | $ | 852,000 |
Estimated useful lives | 2017 | 2016 | |||||||
Leasehold improvements | 3-5 years | $ | 216,000 | $ | 216,000 | ||||
Equipment | 5-10 years | 5,960,000 | 5,727,000 | ||||||
Furniture and fixtures | 5-10 years | 585,000 | 563,000 | ||||||
6,761,000 | 6,506,000 | ||||||||
Less accumulated depreciation | 5,909,000 | 5,319,000 | |||||||
Total | $ | 852,000 | $ | 1,187,000 |
2017 | 2016 | 2018 | 2017 | |||||||||||||
(As Restated) | ||||||||||||||||
PASSUR Network, beginning balance | $ | 18,387,000 | $ | 17,765,000 | $ | 19,788,000 | $ | 18,387,000 | ||||||||
Additions | 1,401,000 | 622,000 | 322,000 | 1,401,000 | ||||||||||||
Write-off | (510,000 | ) | - | |||||||||||||
Inventory reserve | (230,000 | ) | ||||||||||||||
Total capitalized PASSUR Network costs | 19,788,000 | 18,387,000 | 19,370,000 | 19,788,000 | ||||||||||||
Less accumulated depreciation | 13,784,000 | 13,189,000 | 14,569,000 | 13,784,000 | ||||||||||||
PASSUR Network, ending balance, net | $ | 6,004,000 | $ | 5,198,000 | $ | 4,801,000 | $ | 6,004,000 |
2017 | 2016 | 2018 | 2017 | |||||||||||||
(As Restated) | ||||||||||||||||
Software development costs, beginning balance | $ | 16,890,000 | $ | 14,627,000 | $ | 19,917,000 | $ | 16,890,000 | ||||||||
Additions | 3,027,000 | 2,263,000 | 2,503,000 | 3,027,000 | ||||||||||||
Impairment charge | (1,262,000 | ) | - | |||||||||||||
Total capitalized software development costs | 19,917,000 | 16,890,000 | 21,158,000 | 19,917,000 | ||||||||||||
Less accumulated amortization | 11,024,000 | 9,290,000 | 13,017,000 | 11,024,000 | ||||||||||||
Software development costs, ending balance, net | $ | 8,893,000 | $ | 7,600,000 | $ | 8,141,000 | $ | 8,893,000 |
2018 | 2017 | |||||||
Payroll, payroll taxes, and benefits | $ | 304,000 | $ | 565,000 | ||||
Professional fees | 272,000 | 156,000 | ||||||
Travel expenses | 142,000 | 98,000 | ||||||
Accrued rent | 151,000 | 41,000 | ||||||
Contractor fees | - | 172,000 | ||||||
Other liabilities | 320,000 | 241,000 | ||||||
Total | $ | 1,189,000 | $ | 1,273,000 |
2017 | 2016 | |||||||
Payroll, payroll taxes, and benefits | $ | 565,000 | $ | 513,000 | ||||
Professional fees | 156,000 | 148,000 | ||||||
Travel expenses | 171,000 | 142,000 | ||||||
Contractor fees | 172,000 | - | ||||||
Other liabilities | 209,000 | 133,000 | ||||||
Total | $ | 1,273,000 | $ | 936,000 |
Contractual obligations | ||||||||
Fiscal Year Ended October 31: | under operating leases | Contractual obligations under operating leases | ||||||
2018 | $ | 287,133 | ||||||
2019 | 64,002 | $ | 617,863 | |||||
2020 | 71,882 | 606,908 | ||||||
2021 | 61,392 | 437,746 | ||||||
2022 | 308,520 | |||||||
Thereafter | - | 195,183 | ||||||
Total minimum contractual obligations | $ | 484,409 | $ | 2,166,220 |
2018 | 2017 | |||||||
Current: | ||||||||
Federal | $ | - | $ | - | ||||
State | $ | 5,000 | $ | 20,000 | ||||
Income tax provision-current | $ | 5,000 | $ | 20,000 | ||||
Deferred: | ||||||||
Federal | $ | - | $ | 1,826,000 | ||||
State | $ | - | $ | 11 6,000 | ||||
Total income tax expense, net | $ | 5,000 | $ | 1,962,000 |
2017 | 2016 | |||||||
(As Restated) | ||||||||
Current: | ||||||||
Federal | $ | - | $ | - | ||||
State | $ | 20,000 | $ | 50,000 | ||||
Income tax provision-current | $ | 20,000 | $ | 50,000 | ||||
Deferred: | ||||||||
Federal | $ | 1,826,000 | $ | 514,000 | ||||
State | $ | 116,000 | $ | 79,000 | ||||
Total income tax expense, net | $ | 1,962,000 | $ | 643,000 |
2018 | 2017 | |||||||||||||||
Amount | Percent | Amount | Percent | |||||||||||||
U.S. statutory tax | $ | (1,273,000 | ) | 23.2 | % | $ | (530,000 | ) | 34.0 | % | ||||||
Stock compensation | 128,000 | -2.3 | % | 174,000 | -11.2 | % | ||||||||||
Meals and entertainment | 9,000 | -0.2 | % | 14,000 | -0.9 | % | ||||||||||
State tax, net of federal benefit | (209,000 | ) | 3.8 | % | (37,000 | ) | 2.4 | % | ||||||||
Tax law changes (U.S. Tax Reform) | 1,127,000 | -20.5 | % | - | 0.0 | % | ||||||||||
Other | (44,000 | ) | 0.8 | % | 63,000 | -4.0 | % | |||||||||
Change in Valuation Allowance | 267,000 | -4.9 | % | 2,278,000 | -146.1 | % | ||||||||||
Income tax expense, net | $ | 5,000 | -0.1 | % | $ | 1,962,000 | -125.8 | % |
2017 | 2016 | |||||||||||||||
Amount | Percent | Amount | Percent | |||||||||||||
(As Restated) | ||||||||||||||||
U.S. statutory tax | $ | (530,000 | ) | 34.0 | % | $ | 395,000 | 34.0 | % | |||||||
Stock compensation | 174,000 | -11.2 | % | 125,000 | 10.8 | % | ||||||||||
Meals and entertainment | 14,000 | -0.9 | % | 14,000 | 1.2 | % | ||||||||||
State tax, net of federal benefit | (37,000 | ) | 2.4 | % | 109,000 | 9.4 | % | |||||||||
Other | 63,000 | -4.0 | % | - | 0.0 | % | ||||||||||
Change in Valuation Allowance | 2,278,000 | -146.1 | % | - | 0.0 | % | ||||||||||
Income tax expense, net | $ | 1,962,000 | -125.8 | % | $ | 643,000 | 55.4 | % |
2017 | 2016 | |||||||
(As Restated) | ||||||||
Deferred tax assets and liabilities: | ||||||||
Net operating loss carry-forward | $ | 2,157,000 | $ | 1,696,000 | ||||
Deferred Revenue | 178,000 | - | ||||||
Allowance for doubtful accounts receivable | 70,000 | 19,000 | ||||||
Stock compensation-nonqualified | 217,000 | 198,000 | ||||||
Accruals | 58,000 | - | ||||||
Depreciation | (402,000 | ) | 29,000 | |||||
Sub-total | $ | 2,278,000 | $ | 1,942,000 | ||||
Valuation allowance | (2,278,000 | ) | - | |||||
Deferred tax assets and liabilities | $ | - | $ | 1,942,000 |
2018 | 2017 | |||||||
Deferred tax assets and liabilities: | ||||||||
Net operating loss carry-forward | $ | 3,037,000 | $ | 2,157,000 | ||||
Deferred Revenue | 84,000 | 178,000 | ||||||
Allowance for doubtful accounts receivable | 41,000 | 70,000 | ||||||
Stock compensation-nonqualified | 171,000 | 217,000 | ||||||
Accruals | 104,000 | 58,000 | ||||||
Deferred rent | 37,000 | - | ||||||
Depreciation | (402,000 | ) | (402,000 | ) | ||||
Sub-total | $ | 3,072,000 | $ | 2,278,000 | ||||
Valuation allowance | (3,072,000 | ) | (2,278,000 | ) | ||||
Deferred tax assets and liabilities | $ | - | $ | - |
Number of stock options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value | |||||||||||||
Stock options outstanding at November 1, 2015 | 1,186,000 | $ | 3.27 | 7.1 | $ | 293,000 | ||||||||||
Stock options granted | 240,000 | $ | 3.41 | |||||||||||||
Stock options exercised | (37,000 | ) | $ | 0.49 | ||||||||||||
Stock options forfeited | (60,000 | ) | $ | 2.49 | ||||||||||||
Stock options outstanding at October 31, 2016 | 1,329,000 | $ | 3.42 | 7.1 | $ | 130,000 | ||||||||||
Stock options granted | 380,000 | $ | 3.78 | |||||||||||||
Stock options exercised | (15,000 | ) | $ | 2.55 | ||||||||||||
Stock options forfeited | (100,000 | ) | $ | 3.28 | ||||||||||||
Stock options outstanding at October 31, 2017 | 1,594,000 | $ | 3.52 | 6.9 | $ | 84,000 | ||||||||||
Stock options exercisable at October 31, 2017 | 779,500 | $ | 3.51 | 5.0 | $ | 84,000 |
Number of stock options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value | |||||||||||||
Stock options outstanding at November 1, 2016 | 1,329,000 | $ | 3.42 | 7.1 | $ | 130,000 | ||||||||||
Stock options granted | 380,000 | $ | 3.78 | |||||||||||||
Stock options exercised | (15,000 | ) | $ | 2.55 | ||||||||||||
Stock options forfeited | (100,000 | ) | $ | 3.28 | ||||||||||||
Stock options outstanding at October 31, 2017 | 1,594,000 | $ | 3.52 | 6.9 | $ | 84,000 | ||||||||||
Stock options granted | 82,500 | $ | 2.38 | |||||||||||||
Stock options exercised | - | $ | 0.00 | |||||||||||||
Stock options forfeited | (154,500 | ) | $ | 3.43 | ||||||||||||
Stock options outstanding at October 31, 2018 | 1,522,000 | $ | 3.47 | 6.2 | $ | 1,800 | ||||||||||
Stock options exercisable at October 31, 2018 | 897,000 | $ | 3.49 | 4.9 | $ | 1,800 |
Years ended October 31, | ||||||||
2017 | 2016 | |||||||
Expected dividend yield | 0 | % | 0 | % | ||||
Expected volatility | 117 | % | 117 | % | ||||
Risk-free interest rate | 1.84-2.26 | % | 1.41 - 1.85 | % | ||||
Expected term (years) | 4.9 - 6.5 | 4.9 - 6.5 | ||||||
Discount for post-vesting restrictions | N/A | N/A |
Years ended October 31, | ||||||||
2018 | 2017 | |||||||
Expected dividend yield | 0 | % | 0 | % | ||||
Expected volatility | 93-117 | % | 117 | % | ||||
Risk-free interest rate | 2.24-2.91 | % | 1.84 - 2.26 | % | ||||
Expected term (years) | 6.5 | 4.9 - 6.5 | ||||||
Discount for post-vesting restrictions | N/A | N/A |
2017 | 2016 | |||||||
Cost of revenues | $ | 27,000 | $ | 25,000 | ||||
Research and development | $ | 113,000 | 122,000 | |||||
Selling, general and administrative | $ | 438,000 | 254,000 | |||||
$ | 578,000 | $ | 401,000 |
2018 | 2017 | |||||||
Cost of revenues | $ | 25,000 | $ | 27,000 | ||||
Research and development | $ | 110,000 | $ | 113,000 | ||||
Selling, general and administrative | $ | 511,000 | $ | 438,000 | ||||
$ | 646,000 | $ | 578,000 |
Name of Plan | Shares Authorized | Shares Available for Grant | Shares Outstanding | Last Date for Grant of Shares | |||||||||
PASSUR Aerospace, Inc., 2009 Stock Incentive Plan | 3,000,000 | 1,448,000 | 1,552,000 | February 24, 2019 |
Name of Plan | Shares Authorized | Shares Available for Grant | Shares Outstanding | Last Date for Grant of Shares | |||||||||
PASSUR Aerospace, Inc., 2009 Stock Incentive Plan | 3,000,000 | 1,478,000 | 1,522,000 | February 24, 2019 |