Pharma-Bio Serv (PBSV) 10-K 11 Feb 22 2021 FY Annual report Financial data

Cover

Cover - USD ($)	12 Months Ended
	Oct. 31, 2021	Jan. 27, 2022	Apr. 30, 2021
Cover [Abstract]
Entity Registrant Name	PHARMA-BIO SERV, INC.
Entity Central Index Key	0001304161
Document Type	10-K
Amendment Flag	false
Entity Voluntary Filers	No
Current Fiscal Year End Date	--10-31
Entity Well Known Seasoned Issuer	No
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Oct. 31, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		22,969,486
Entity Public Float			$ 17,131,449
Document Annual Report	true
Document Transition Report	false
Entity File Number	000-50956
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	20-0653570
Entity Address Address Line 1	Pharma-Bio Serv Building,#6 Road 696
Entity Address City Or Town	Dorado
Entity Address Country	PR
Entity Address Postal Zip Code	00646
City Area Code	787
Local Phone Number	278-2709
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Oct. 31, 2021	Oct. 31, 2020
Current assets
Cash and cash equivalents	$ 17,468,345	$ 17,137,924
Accounts receivable	4,613,142	9,727,591
Current portion - promissory note receivable due from sale of assets from discontinued operations	0	1,250,000
Prepaids and other assets	740,869	468,703
Total current assets	22,822,356	28,584,218
Property and equipment	105,522	217,572
Operating lease right-of-use	639,969	846,714
Other assets	353,354	270,242
Total assets	23,921,201	29,918,746
Current liabilities
Loans - short term portion	0	1,287,800
Current operating lease liabilities	130,060	162,917
Accounts payable and accrued expenses	2,071,264	1,949,945
Current portion of US Tax Reform Transition Tax and income taxes payable	449,896	392,131
Total current liabilities	2,651,220	3,792,793
US Tax Reform Transition Tax payable	1,850,536	2,062,024
Loans - long term portion	0	643,900
Long term operating lease liabilities	487,364	629,979
Other liabilities	17,950	73,389
Total liabilities	5,007,070	7,202,085
Stockholders' equity
Preferred stock, $0.0001 par value; authorized 10,000,000 shares; none issued or outstanding	0	0
Common stock, $0.0001 par value; authorized 50,000,000 shares; 23,433,341 and 23,405,753 shares issued, and 23,003,615 and 23,001,627 shares outstanding at October 31, 2021 and 2020, respectively	2,343	2,341
Additional paid-in capital	1,480,193	1,423,954
Retained earnings	17,707,384	21,523,990
Accumulated other comprehensive income	144,455	160,654
Total Equity	19,334,375	23,110,939
Treasury stock, at cost; 429,726 and 404,126 common shares held at October 31, 2021 and 2020, respectively	(420,244)	(394,278)
Total stockholders' equity	18,914,131	22,716,661
Total liabilities and stockholders' equity	$ 23,921,201	$ 29,918,746

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Oct. 31, 2021	Oct. 31, 2020
Stockholders' equity
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, authorized	50,000,000	50,000,000
Common stock, issued	23,433,341	23,405,753
Common stock, outstanding	23,003,615	23,001,627
Treasury stock, shares	429,726	404,126

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Consolidated Statements of Operations
REVENUES	$ 20,115,175	$ 21,564,360
COST OF SERVICES	14,755,212	14,897,638
GROSS PROFIT	5,359,963	6,666,722
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	9,213,657	4,441,175
INCOME (LOSS) FROM OPERATIONS	(3,853,694)	2,225,547
OTHER INCOME (INCLUDING LOANS FORGIVENESS), NET	1,977,700	64,463
INCOME (LOSS) BEFORE INCOME TAX	(1,875,994)	2,290,010
INCOME TAX EXPENSE	213,246	239,088
NET INCOME (LOSS)	$ (2,089,240)	$ 2,050,922
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$ (0.091)	$ 0.089
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC	23,026,260	23,003,327
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED	23,161,727	23,040,075

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Consolidated Statements of Comprehensive Income
NET INCOME (LOSS)	$ (2,089,240)	$ 2,050,922
OTHER COMPREHENSIVE INCOME (LOSS), NET OF RECLASSIFICATION ADJUSTMENTS AND TAXES:
Foreign currency translation gain (loss), net of tax	(16,199)	17,054
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(16,199)	17,054
COMPREHENSIVE INCOME (LOSS)	$ (2,105,439)	$ 2,067,976

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Total	Common Stock	Preferred Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Accumulated other comprehensive loss	Treasury Stock
Balance, shares at Oct. 31, 2019		23,397,707
Balance, amount at Oct. 31, 2019	$ 20,607,506	$ 2,340	$ 0	$ 1,381,076	$ 19,473,069	$ 143,600	$ (392,579)
STOCK-BASED COMPENSATION	42,878	$ 0	0	42,878	0	0	0
ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS, shares		8,046
ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS, amount	0	$ 1	0	0	(1)	0	0
PURCHASE OF TREASURY STOCK(2,300 SHARES)	(1,699)	0	0	0	0	0	(1,699)
NET INCOME (LOSS)	2,050,922	0	0	0	2,050,922	0	0
OTHER COMPREHENSIVE INCOME, NET OF TAX	17,054	$ 0	0	0		17,054	0
Balance, shares at Oct. 31, 2020		23,405,753
Balance, amount at Oct. 31, 2020	22,716,661	$ 2,341	0	1,423,954	21,523,990	160,654	(394,278)
STOCK-BASED COMPENSATION	56,239	$ 0	0	56,239	0	0	0
ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS, shares		27,588
ISSUANCE OF COMMON STOCK PURSUANT TO THE CASHLESS EXERCISE OF STOCK OPTIONS, amount	0	$ 2	0	0	(2)	0	0
NET INCOME (LOSS)	(2,089,240)	0	0	0	(2,089,240)	0	0
PURCHASE OF TREASURY STOCK(25,600 SHARES)	(25,966)	0	0	0	0	0	(25,966)
OTHER COMPREHENSIVE LOSS, NET OF TAX	(16,199)	0	0	0	0	(16,199)	0
CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE)	(1,727,364)	$ 0	0	0	(1,727,364)	0	0
Balance, shares at Oct. 31, 2021		23,433,341
Balance, amount at Oct. 31, 2021	$ 18,914,131	$ 2,343	$ 0	$ 1,480,193	$ 17,707,384	$ 144,455	$ (420,244)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS)	$ (2,089,240)	$ 2,050,922
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of property and equipment	(7,404)	(13,327)
Stock-based compensation	56,239	42,878
Depreciation and amortization	72,728	86,283
Loans forgiveness	(1,956,291)	0
Customer account receivable provision	5,246,782	0
Increase in accounts receivable	(134,990)	(944,257)
Increase in other assets	(143,234)	(675,902)
Increase (decrease) in liabilities	(239,748)	967,815
NET CASH PROVIDED BY OPERATING ACTIVITIES	804,842	1,514,412
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(10,845)	(55,657)
Proceeds from disposition of property and equipment	57,571	26,700
Collection of promissory note receivable	1,250,000	0
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	1,296,726	(28,957)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from loans	0	1,931,700
Repurchase of common stock	(25,966)	(1,699)
Cash dividends paid to shareholders	(1,727,364)	(1,725,295)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(1,753,330)	204,706
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(17,817)	(42,411)
NET INCREASE IN CASH AND CASH EQUIVALENTS	330,421	1,647,750
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR	17,137,924	15,490,174
CASH AND CASH EQUIVALENTS - END OF YEAR	17,468,345	17,137,924
Cash paid during the period for:
Income taxes	574,757	212,463
Interest	1,404	3,869
SUPPLEMENTARY SCHEDULES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Disposed property and equipment with accumulated depreciation of $35,833 and $38,583 disposed during the years ended October 31, 2021 and 2020, respectively	86,000	51,956
Income tax withheld by clients to be used as a credit in the Company's income tax returns	4,046	4,769
Obligations under operating lease liabilities	0	911,922
Conversion of cashless exercise of options to shares of common stock	$ 2	$ 1

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Oct. 31, 2021
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Pharma-Bio Serv, Inc. (“Pharma-Bio”) is a Delaware corporation organized on January 14, 2004. Pharma-Bio is the parent company of Pharma-Bio Serv PR, Inc. (“Pharma-PR”), Pharma Serv, Inc. (“Pharma-Serv”), and Scienza Labs, Inc. (“Scienza Labs”), each a Puerto Rico corporation, Pharma-Bio Serv US, Inc. (“Pharma-US”), a Delaware corporation, Pharma-Bio Serv SL (“Pharma-Spain”), a Spanish limited liability company, and Pharma-Bio Serv Brasil Servicos de Consultoria Ltda. (“Pharma-Brazil”), a Brazilian limited liability company. Pharma-Bio, Pharma-PR, Pharma-Serv, Scienza Labs, Pharma-US, Pharma-Spain and Pharma-Brazil are collectively referred to as the “Company.” The Company operates in Puerto Rico, the United States, Europe and Brazil under the name of Pharma-Bio Serv and is engaged in providing technical compliance consulting service. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Segments The Company operates in three reportable business segments: (i) Puerto Rico technical compliance consulting, (ii) United States technical compliance consulting, and (iii) Europe technical compliance consulting. Accordingly, the accompanying consolidated financial statements are presented to show these three reportable segments. Use of Estimates The preparation of consolidated 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 and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates. Fair Value of Financial Instruments The carrying value of the Company's financial instruments, cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are considered reasonable estimates of fair value due to their liquidity or short-term nature. Revenue Recognition The Company records revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. We evaluate our revenue contracts with customers based on the five-step model under ASC 606: (i) Identify the contract with the customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to separate performance obligations; and (v) Recognize revenue when (or as) each performance obligation is satisfied. Revenue is primarily derived from: (1) time and material contracts (representing approximately 99% of total revenues), and (2) short-term fixed-fee contracts or "not to exceed" contracts (representing approximately 1% of total revenues). Time and material contracts are typically based on the number of hours worked at contractually agreed upon rates. These service contracts relate to work which have no alternative use and for which the Company has an enforceable right to payment for the work completed to date. As a result, revenue is recognized over time when or as the Company transfers control of the promised products or services (known as performance obligations) to its customers. Revenue for short term fixed fee contracts or “not to exceed” contracts is recognized similarly, except that certain milestones also have to be reached before revenue is recognized. If the Company determines that a contract will result in a loss, the Company recognizes the estimated loss in the period in which such determination is made. Cash Equivalents For purposes of the consolidated statements of cash flows, cash equivalents include investments in money market obligation’s trusts that are registered under the U.S. Investment Company Act of 1940 and liquid investments with original maturities of three months or less. Accounts Receivable Accounts receivable are recorded at their estimated realizable value. Accounts are deemed past due when payment has not been received within the stated time period. The Company's policy is to review individual past due amounts periodically and write off amounts for which all collection efforts are deemed to have been exhausted. Due to the nature of the Company’s customers, bad debts are mainly accounted for using the direct write-off method whereby an expense is recognized only when a specific balance is determined to be uncollectible in full. The effect of using this method approximates that of the allowance method. However, in the event the Company determines that the collectability of any account receivable reaches a certain uncertainty threshold, the Company will provide an allowance for doubtful account to reduce said balance. Income Taxes The Company follows an asset and liability approach method of accounting for income taxes. This method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. As of October 31, 2021 and 2020, the resulting deferred tax asset has been fully allowed. The Company follows guidance from the Financial Accounting Standards Board (“FASB”) related to Accounting for Uncertainty in Income Taxes, Leases The Company follows accounting standards issued by the FASB for the accounting and disclosure of leases. Under those standards, assets and liabilities that arise from leases are recognized on the balance sheet, and the leases are categorized at their inception as either operating or finance leases. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date, and lease liability amounts are based on the present value of lease payments made during the lease term. Property and Equipment Owned property and equipment are stated at cost. Vehicles under finance leases are stated at the lower of fair market value or net present value of the minimum lease payments at the inception of the leases. Depreciation of owned assets are provided for, when placed in service, in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using straight-line basis. Assets under finance leases are amortized over the lease term. While expenditures for repairs and maintenance are expensed when incurred. Impairment of Long-Lived Assets The Company evaluates for impairment its long-lived assets to be held and used, and long-lived assets to be disposed of, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Based on management estimates, no impairment of the long-lived assets was present as of October 31, 2021 and 2020. Stock-based Compensation Stock-based compensation expense is recognized in the consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period, and includes an estimate of awards that will be forfeited. The Company calculates the fair value of stock options using the Black-Scholes option-pricing model at grant date, while for restricted stock units the fair market value of the units is determined by Company’s share market value at grant date. Excess tax benefits related to stock-based compensation are reflected as cash flows from financing activities rather than cash flows from operating activities. However, the Company has not recognized such cash flow from financing activities since there has been no tax benefit related to the stock-based compensation. Earnings (Loss) Per Share of Common Stock Basic earnings (loss) per share of common stock is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share includes the dilution of common stock equivalents. The diluted weighted average shares of common stock outstanding were calculated using the treasury stock method for the respective periods. Foreign Operations The functional currency of the Company’s foreign subsidiaries is its local currency. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for subsidiaries using a functional currency other than the U.S. dollar is included as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income. The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income, while gains and losses resulting from the remeasurement of intercompany receivables from those international subsidiaries for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statements of operations. Subsequent Events The Company has evaluated subsequent events to the date of the issuance of the consolidated financial statements. The Company has determined that there are no events occurring in this period that required disclosure or adjustment, except as disclosed in the accompanying consolidated financial statements. Reclassifications Certain reclassifications have been made to the October 31, 2020 consolidated financial statements to conform them to the October 31, 2021 consolidated financial statements presentation. Such reclassifications do not have an effect on net income as previously reported. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses” (ASU 2016-13), which changes the impairment model for most financial assets and certain other instruments from an incurred loss model to an expected loss model. In addition, the guidance also requires incremental disclosures regarding allowances and credit quality indicators. ASU 2016-13 is required to be adopted using the modified-retrospective approach. For the Company this guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Based on the Company’s preliminary assessment, it currently does not anticipate a material impact to the Company’s Consolidated Financial Statements.

CUSTOMER ACCOUNT RECEIVABLE

CUSTOMER ACCOUNT RECEIVABLE	12 Months Ended
	Oct. 31, 2021
CUSTOMER ACCOUNT RECEIVABLE
NOTE B - CUSTOMER ACCOUNT RECEIVABLE	NOTE B - CUSTOMER ACCOUNT RECEIVABLE As of October 31, 2021, one of the Company’s customers owed the Company approximately $5.2 million ($4.6 million as of October 31, 2020). The Company has been actively monitoring this account. The Company is aware that in the ordinary course of this customer’s business a significant portion of this customer’s operations are subject to compliance and regulatory approvals. This customer has experienced significant negative changes in its financial terms and challenges in obtaining financing and is also in the process of developing a therapeutic drug for the treatment of COVID-19. At this time, the Company believes the collection of this customer’s account receivable is principally dependent on the commercial success of this therapeutic drug. As a result, the Company is unable to estimate the future cash flows this customer will generate to settle this obligation or the timing of such future cash flows, if any, and, as of October 31, 2021, the Company has fully allowed approximately $5.2 million for this customer’s account receivable. Nevertheless, the Company will continue to monitor this account and actively seek full payment from this customer.

PROMISSORY NOTE

PROMISSORY NOTE	12 Months Ended
	Oct. 31, 2021
PROMISSORY NOTE
NOTE C - PROMISSORY NOTE	NOTE C - PROMISSORY NOTE On September 17, 2018, the Company sold substantially all of its Lab business assets (the “Laboratory Assets”). Upon the completion of the Laboratory Assets sale, the Company received, as partial payment, a $3 million Promissory Note from the purchaser. The Promissory Note was composed of two tranches: (i) Tranche A for $2 million and secured with lab equipment and (ii) Tranche B for $1 million which was unsecured. The interest rate accrual was 3% for Tranche A and 5% for Tranche B. The Promissory Note’s final payment installment of $1,250,000 from Tranche A was collected in November 2020.

LOANS FORGIVENESS

LOANS FORGIVENESS	12 Months Ended
	Oct. 31, 2021
LOANS FORGIVENESS
NOTE D - LOANS FORGIVENESS	NOTE D - LOANS FORGIVENESS On April 23, 2020, Pharma-PR, Pharma-Serv, and Pharma-US (collectively, the “Borrowers”) entered into loan agreements and related promissory notes to receive U.S. Small Business Administration Loans. These loans were originated pursuant to the Paycheck Protection Program (the “PPP”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and in the aggregate amount of $1,931,700 (the “Loan Proceeds”). The Borrowers received the Loan Proceeds on April 23, 2020. These SBA Loans terms followed the CARES Act provisions and the corresponding regulations issued by the SBA. Under regulations established by the Small Business Administration and the CARES Act, in July 2021 the Company applied for and obtained the full forgiveness of the SBA Loans and the related accrued interests. The forgiveness of these loans and related interest for the aggregate amount of approximately $1,956,000 were recorded as other income on the Consolidated Statements of Operations for the year ended October 31, 2021.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	Oct. 31, 2021
PROPERTY AND EQUIPMENT
NOTE E - PROPERTY AND EQUIPMENT	NOTE E - PROPERTY AND EQUIPMENT The balance of property and equipment at October 31, 2021 and 2020 consisted of the following: Useful life October 31, (years) 2021 2020 Vehicles 5 $ 115,623 $ 201,623 Computers 3 387,014 376,160 Equipment 3-7 139,685 139,685 Furniture and fixtures 10 1,584 1,593 Total 643,906 719,061 Less: Accumulated depreciation and amortization (538,384 ) (501,489 ) Property and equipment, net $ 105,522 $ 217,572

INCOME TAXES

INCOME TAXES	12 Months Ended
	Oct. 31, 2021
INCOME TAXES
NOTE F - INCOME TAXES	NOTE F - INCOME TAXES On December 22, 2017, Public Law 115-97, commonly known as the Tax Cuts and Jobs Act of 2017 (the “Tax Reform”), was enacted. The Tax Reform imposed a mandatory one-time transition tax (the “Transition Tax”) over foreign subsidiaries undistributed earnings and profits (“E&Ps”) earned prior to a date set by the statute. Based on the Company’s E&Ps, the Transition Tax was determined to be approximately $2.7 million. The Transition Tax liability must be paid over a period of eight years which started with the Company’s second quarter of fiscal year 2019. In the past, most of these E&Ps’ were not repatriated since such E&Ps’ were considered to be reinvested indefinitely in the foreign location, therefore no US tax liability was incurred unless the E&Ps were repatriated as a dividend. After December 31, 2017, the Tax Reform has established a 100% tax exemption on the foreign-source portion of dividends received attributable to E&Ps, with certain limitations. However, foreign subsidiaries earnings are subject to U.S. tax at a reduced rate of 10.5%. In June 2011, Pharma-Bio, Pharma-PR and Pharma-Serv obtained a Grant of Industrial Tax Exemption pursuant to the terms and conditions set forth in Act No. 73 of May 28, 2008 (“the Grant”) issued by the Puerto Rico Industrial Development Company (“PRIDCO”). The Grant was effective as of November 1, 2009 and covers a fifteen-year period. The Grant provides relief on various Puerto Rico taxes, including income tax, with certain limitations, for most of the activities carried on within Puerto Rico, including those that are for services to parties located outside of Puerto Rico. Industrial Development Income (“IDI”) covered under the Grant are subject to a fixed income tax rate of 4%. In addition, IDI earnings distributions accumulated since November 1, 2009 are exempt from Puerto Rico earnings distribution tax. Puerto Rico operations not covered in the exempt activities of the Grant are subject to Puerto Rico income tax at a maximum tax rate of 37.5% as provided by the 1994 Puerto Rico Internal Revenue Code, as amended. The operations carried out in the United States by the Company’s subsidiaries, is taxed in the United States at a maximum regular federal income tax rate of 21%. The reconciliation between the United States federal statutory rate and our effective tax rate applicable to continuing operations for the years ended October 31, 2021, and 2020 is as follows: October 31, 2021 2020 United States federal statutory rate (21.0) % 21.0 % Foreign earnings (5.9) % (11.3 )% PPP loans forgiveness (21.6 )% - % Allowance of resulting deferred tax asset 58.7 % - % Other 1.2 % 0.7 % Effective tax rate 11.4 % 10.4 % The effective tax rates for the years ended October 31, 2021 and 2020 differ from the federal statutory rate mainly due to the impact of the jurisdictional mix of income and expenses. Except for the benefit derived from the PPP loans forgiveness for the year ended October 31, 2021, the benefit to our effective tax rate is mainly from foreign earnings results from the Company’s operations conducted in Puerto Rico, a territory of the United States that is treated as a foreign jurisdiction for U.S. tax purposes and is subject to tax incentive grants. As previously disclosed, these earnings are also subject to U.S. tax at a reduced rate of 10.5%. As of October 31, 2021 and 2020 income tax expense includes US federal and state taxes of approximately $150,500 and $134,000, respectively, and foreign income taxes of $62,700 and $105,000, respectively. As of October 31, 2021, Pharma-PR, Pharma-Serv and Scienza Labs have established an allowance against a customer account receivable for an aggregate expense amount of approximately $5,246,800, representing a potential deferred tax asset for those subsidiaries of approximately $209,900. However, an allowance has been provided covering the total amount of the potential deferred tax assets since it is uncertain whether they can be used in the future. Realization of future tax benefits related to a deferred tax asset is dependent on many factors. Accordingly, the income tax benefit will be recognized when realization is determined to be more probable than not. As of October 31, 2020, a deferred tax asset resulting from Pharma-Spain carryforward losses was fully allowed, however, as of October 31, 2021, remaining carryforward losses for Pharma-Spain were not significant. The Company files income tax returns in the United States (federal and various states jurisdictions), Puerto Rico, Spain and Brazil. The 2017 (2016 for Puerto Rico) through 2020 tax years are open and may be subject to potential examination in one or more jurisdictions. Currently, the Company is not subject to a federal, state, Puerto Rico or foreign income tax examination.

LEASES

LEASES	12 Months Ended
	Oct. 31, 2021
LEASES
NOTE G - LEASES	NOTE G - LEASES Operating facilities The Office Facilities lease agreement was for an initial five-year term commencing January 1, 2016, with a renewal option for five additional years which was exercised and became effective January 1, 2021. The lease agreement, as amended taking into consideration the Sublease Transfer, has monthly rental payments of $14,561 beginning as of the Sublease Transfer date through the end of the renewal option term. The lease agreement also requires the payment of utilities, property taxes, insurance and expenses incurred by the affiliate in connection with the maintenance of common areas. The Company maintains an office facility in Madrid, Spain. The facility is under a month-to-month lease with monthly payments of approximately $1,000. The Company leases certain apartments as dwellings for employees. The leases are under short-term lease agreements and usually are cancelable upon 30-day notification. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of October 31, 2021 are as follows: Twelve months ending October 31, Amount 2022 $ 174,730 2023 174,730 2024 174,730 2025 174,730 2026 29,121 Total future minimum operating lease payments 728,041 Less: Amount of imputed interest (110,617 ) Present value of future minimum operating lease payments 617,424 Current operating lease liabilities (130,060 ) Long term operating lease liabilities $ 487,364 Rent expense for the years ended October 31, 2021 and 2020 was approximately $187,000 and $190,000, respectively.

CONTINGENCIES

CONTINGENCIES	12 Months Ended
	Oct. 31, 2021
CONTINGENCIES
NOTE H - CONTINGENCIES	NOTE H - CONTINGENCIES In the ordinary course of business, the Company may be a party to legal proceedings incidental to the business. These proceedings are not expected to have a material adverse effect on the Company’s business or financial condition.

EQUITY TRANSACTIONS

EQUITY TRANSACTIONS	12 Months Ended
	Oct. 31, 2021
Stockholders' equity
NOTE I - EQUITY TRANSACTIONS	NOTE I - EQUITY TRANSACTIONS On June 13, 2014, the Board of Directors of the Company authorized the Company to repurchase up to two million shares of its outstanding common stock under the Company Stock Repurchase Program. The timing, manner, price and amount of any repurchases under the Company Stock Repurchase Program will be at the discretion of the Company, subject to the requirements of the Securities Exchange Act of 1934, as amended, and related rules. The Company Stock Repurchase Program does not oblige the Company to repurchase any shares and it may be modified, suspended or terminated at any time and for any reason. No shares will be repurchased under the Company Stock Repurchase Program directly from directors or officers of the Company. To conserve cash due to the economic uncertainty caused by the coronavirus pandemic, in April 2020 the Company suspended the purchases under the Company Stock Repurchase Program, though this have resumed in September 2021. As of October 31, 2021 and 2020, a total of 366,754 and 341,154 shares of the Company’s common stock were purchased under the Company Stock Repurchase Program for an aggregate amount of $357,272 and $331,306, respectively. On January 5, 2021 the Board of Directors of the Company declared a cash dividend of $0.075 per common share for shareholders of record as of the close of business on January 25, 2021. Accordingly, an aggregate dividend payment of $1,727,364 was paid on February 5, 2021.

EARNINGS PER SHARE

EARNINGS PER SHARE	12 Months Ended
	Oct. 31, 2021
EARNINGS PER SHARE
NOTE J - EARNINGS PER SHARE	NOTE J - EARNINGS (LOSS) PER SHARE The computation of basic earnings (loss) per share is based on the weighted-average number of our common shares outstanding. The computation of diluted earnings (loss) per share is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally shares that may be issued under: warrants, our stock option and restricted stock unit awards, determined using the treasury stock method. The following data show the amounts used in the calculations of basic and diluted earnings (loss) per share. Years ended October 31, 2021 2020 Net income (loss) available to common equity holders - used to compute basic and diluted earnings per share $ (2,089,240 ) $ 2,050,922 Weighted average number of common shares - used to compute basic earnings per share 23,026,260 23,003,327 Effect of options to purchase common stock 135,467 36,748 Weighted average number of shares - used to compute diluted earnings per share 23,161,727 23,040,075 For the years ended October 31, 2021 and 2020, options for the purchase of 80,000 and 160,000 shares of common stock, respectively, were not included in computing earnings per share because their effect was antidilutive.

STOCK OPTIONS AND STOCK BASED C

STOCK OPTIONS AND STOCK BASED COMPENSATION	12 Months Ended
	Oct. 31, 2021
STOCK OPTIONS AND STOCK BASED COMPENSATION
NOTE K - STOCK OPTIONS AND STOCK BASED COMPENSATION	NOTE K - STOCK OPTIONS AND STOCK BASED COMPENSATION The Company has an incentive plan that covers 2,300,000 shares of the Company’s common stock, that provide for the grant of incentive and non-qualified options, stock grants, stock appreciation rights and other equity-based incentives to employees, including officers, consultants and directors for a period of ten years (the “2014 Long-Term Incentive Plan” also known as the “2014 Plan”). The 2014 Plan is to be administered by a committee of independent directors. In the absence of a committee, the plan is administered by the board of directors. Options intended to be incentive stock options must be granted at an exercise price per share which is not less than the fair market value of the common stock on the date of grant and may have a term which is not longer than ten years. If the option holder holds at least 10% of the Company’s common stock, the exercise price must be at least 110% of the fair market value on the date of grant and the term of the option cannot exceed five years. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period, and includes an estimate of awards that will be forfeited. The fair value of stock-based awards to employees is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of the option has been estimated using the “simplified” method as provided in the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107, for plans with insufficient exercise experience. Under this method, the expected term equals the arithmetic average of the vesting term and the contractual term of the option. The risk-free rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, which would affect fair values of stock options granted in such future periods, and could cause volatility in the total amount of the stock-based compensation expense reported in future periods. The 2014 Plan stock options activity and status for the years ended October 31, 2021 and 2020 was as follows: Year ended October 31, 2021 2020 Weighted- Weighted- Number of Average Option Number of Average Option Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 470,000 $ 0.8587 410,000 $ 0.8615 Granted 80,000 $ 1.4000 80,000 $ 0.7600 Exercised (80,000 ) $ 0.9500 (20,000 ) $ 0.5200 Expired and/or forfeited - $ - - $ - Total outstanding at end of year 470,000 $ 0.9353 470,000 $ 0.8587 Outstanding exercisable stock options at end of year 396,700 $ 0.8931 363,300 $ 0.8657 October 31, 2021 October 31, 2020 Weighted average remaining years in contractual life for: Total outstanding options 2.3 years 2.6 years Outstanding exercisable options 2.1 years 2.1 years Shares of common stock available for issuance pursuant to future stock option grants 1,420,000 1,500,000 The following weighted average assumptions were used to estimate the fair value of stock options granted under the 2014 Plan for the years ended October 31, 2021 and 2020: Year ended October 31, 2021 2020 Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 87.6 % 82.0 % Risk free interest rate 0.2 % 1.6 % Expected life of options 3.2 years 3.2 years Weighted average fair value of options granted $ 0.7928 $ 0.4152 As of October 31, 2021, estimated stock based compensation expense to be recognized in future periods for granted nonvested stock options is attributable to stock options granted under the 2014 Plan. The nonvested stock options compensation expense in the amount of $40,440 will be recognized in a weighted average period of approximately 0.8 years. As of October 31, 2021 and 2020, the aggregate intrinsic value of options outstanding under the 2014 Plan were approximately $74,100 and $202,700, respectively. The aggregate intrinsic value represents the difference between the Company’s stock price at year end and the exercise price, multiplied by the number of in-the money options had all option holders exercised their options. This amount changes based on the fair market value of the Company’s stock. The following table presents the total stock-based compensation included in the Company’s consolidated statement of income and the effect in earnings per share: Year ended October 31, 2021 2020 Stock-based compensation expense: Cost of services $ - $ - Selling, general and administrative 56,239 42,878 Stock-based compensation before tax 56,239 42,878 Income tax benefit - - Net stock-based compensation expense $ 56,239 $ 42,878 Effect on earnings per share: Basic earnings per share $ (0.002 ) $ (0.002 ) Diluted earnings per share $ (0.002 ) $ (0.002 )

SEGMENT DISCLOSURES

SEGMENT DISCLOSURES	12 Months Ended
	Oct. 31, 2021
SEGMENT DISCLOSURES
NOTE L - SEGMENT DISCLOSURES	NOTE L - SEGMENT DISCLOSURES The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision maker to determine resource allocation and assess performance. Each reportable segment is managed by its own management team and reports to executive management. The Company has three reportable segments: (i) Puerto Rico consulting, (ii) United States consulting, and (iii) Europe consulting. These reportable segments provide services primarily to the pharmaceutical, chemical, medical device and biotechnology industries in their respective markets. The following table presents information about the reported revenue from services and earnings from operations of the Company for the years ended in October 31, 2021 and 2020. There is no intersegment revenue for the mentioned periods. Corporate expenses that support the operating units have been allocated to the segments. Asset information by reportable segment is not presented, since the Company does not produce such information internally, nor does it use such data to manage its business. Year ended October 31, 2021 2020 REVENUES: Puerto Rico consulting $ 14,680,665 $ 18,214,656 United States consulting 2,720,662 2,283,370 Europe consulting 2,329,359 829,170 Other 384,489 237,164 Total consolidated revenues $ 20,115,175 $ 21,564,360 INCOME (LOSS) BEFORE TAXES: Puerto Rico consulting, including loans and related interest forgiveness of approximately $1,861,000 for the year ended October 31, 2021 $ (2,887,749 ) $ 2,332,052 United States consulting, including loan and related interest forgiveness of approximately $95,000 for the year ended October 31, 2021 204,110 (80,635 ) Europe consulting 720,427 (9,661 ) Other 87,218 48,254 Total consolidated income (loss) before taxes $ (1,875,994 ) $ 2,290,010 Long lived assets (property and equipment) and related depreciation and amortization expense for the years ended October 31, 2021 and 2020, were concentrated in the corporate headquarters in Puerto Rico. Accordingly, depreciation expense and acquisition of property and equipment, as presented in the statements of cash flows are mainly related to the corporate headquarters.

CONCENTRATIONS OF RISKS

CONCENTRATIONS OF RISKS	12 Months Ended
	Oct. 31, 2021
CONCENTRATIONS OF RISKS
NOTE M - CONCENTRATIONS OF RISKS	NOTE M - CONCENTRATION OF RISKS Cash and cash equivalents The Company domestic cash and cash equivalents consist of cash deposits in FDIC insured banks (substantially covered by FDIC insurance by the spread of deposits in multiple FDIC insured banks), a money market obligations trust registered under the US Investment Company Act of 1940, as amended, and U.S. Treasury securities with maturities of three months or less. In the foreign markets we serve, we also maintain cash deposits in foreign banks, which tend to be not significant and have no specific insurance. No losses have been experienced or are expected on these accounts. Accounts receivable and revenues Except as set forth in Note B-Customer Account Receivable, management deems all its accounts receivable to be fully collectible, and, as such, does not maintain any allowances for uncollectible receivables. The Company's revenues, and the related receivables, are concentrated in the pharmaceutical industry in Puerto Rico, the United States of America and Europe. Although a few customers represent a significant source of revenue, the Company’s functions are not a continuous process, accordingly, the client base for which the services are typically rendered, on a project-by-project basis, changes regularly. The Company provided a substantial portion of its services to four customers, who accounted for 10% or more of its revenues in either of the years ended October 31, 2021 or 2020. During the year ended October 31, 2021, revenues from these customers were 20.1%, 12.3%, 8.8% and 0.0%, or a total of 41.2%, as compared to the same period last year for 14.2%, 10.5%, 11.6% and 16.2%, or a total of 52.5%, respectively. At October 31, 2021 and 2020, amounts due from these customers represented 9.2% and 27.9% of total accounts receivable balance, respectively. The major customer information in the above paragraph is based on revenues earned from said customers at the segment level because in management’s opinion contracts by segments are totally independent of each other, and therefore such information is more meaningful to the reader. However, at the global level four groups of affiliated companies accounted for 10% or more of our revenues in either October 31, 2021 or 2020. During the year ended October 31, 2021, aggregate revenues from these global groups of affiliated companies were 20.1%, 12.3%, 11.1% and 0.0%, or a total of 43.5%, as compared to the same period last year for 14.2%, 10.5%, 13.8% and 16.2%, or a total of 54.7%, respectively. At October 31, 2021 and 2020, amounts due from these global groups of affiliated companies represented 10.6% and 28.8% of total accounts receivable balance, respectively.

RETIREMENT PLAN

RETIREMENT PLAN	12 Months Ended
	Oct. 31, 2021
RETIREMENT PLAN
NOTE N - RETIREMENT PLAN	NOTE N - RETIREMENT PLAN Pharma-PR and Pharma-US each have a separate qualified retirement plan in accordance with the applicable laws of the Commonwealth of Puerto Rico and the United States of America, for employees who meet certain age and service period requirements. The Company makes contributions to these plans as required by the provisions of the plan document. During the years ended October 31, 2021 and 2020 the Company contributed to these plans $131,700 and $153,200, respectively.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Oct. 31, 2021
RELATED PARTY TRANSACTIONS
NOTE O - RELATED PARTY TRANSACTIONS	NOTE O - RELATED PARTY TRANSACTIONS On December 31, 2013, the Company entered into a Consulting Agreement with a company (the “Consultant”) affiliated with our former Chairman and our former Chairman, effective as of January 1, 2014. Pursuant to the Consulting Agreement as amended, the Consultant consulted with the Board regarding the Company’s strategic initiatives, company services, management, operations and other matters as requested from time to time by the Board. The compensation paid under this agreement was $67,400 and $524,400, for the years ended October 31, 2021 and 2020, respectively. The Consulting Agreement ended pursuant to its terms on December 31, 2020. As more fully disclosed in Note G to the consolidated financial statements, the Company leases its headquarters facilities in Dorado, Puerto Rico, from an affiliate of our past Chairman of the Board.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Oct. 31, 2021
SUBSEQUENT EVENTS
NOTE P - SUBSEQUENT EVENTS	NOTE P - SUBSEQUENT EVENTS On November 15, 2021, the Board of Directors of the Company declared a cash dividend of $0.075 per common share. The dividend was paid on or about January 3, 2022 to shareholders of record as of the close of business on December 15, 2021.

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Oct. 31, 2021
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Consolidation	The accompanying consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Segments	The Company operates in three reportable business segments: (i) Puerto Rico technical compliance consulting, (ii) United States technical compliance consulting, and (iii) Europe technical compliance consulting. Accordingly, the accompanying consolidated financial statements are presented to show these three reportable segments.
Use of Estimates	The preparation of consolidated 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 and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates.
Fair Value of Financial Instruments	The carrying value of the Company's financial instruments, cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are considered reasonable estimates of fair value due to their liquidity or short-term nature.
Revenue Recognition	The Company records revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. We evaluate our revenue contracts with customers based on the five-step model under ASC 606: (i) Identify the contract with the customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to separate performance obligations; and (v) Recognize revenue when (or as) each performance obligation is satisfied. Revenue is primarily derived from: (1) time and material contracts (representing approximately 99% of total revenues), and (2) short-term fixed-fee contracts or "not to exceed" contracts (representing approximately 1% of total revenues). Time and material contracts are typically based on the number of hours worked at contractually agreed upon rates. These service contracts relate to work which have no alternative use and for which the Company has an enforceable right to payment for the work completed to date. As a result, revenue is recognized over time when or as the Company transfers control of the promised products or services (known as performance obligations) to its customers. Revenue for short term fixed fee contracts or “not to exceed” contracts is recognized similarly, except that certain milestones also have to be reached before revenue is recognized. If the Company determines that a contract will result in a loss, the Company recognizes the estimated loss in the period in which such determination is made.
Cash Equivalents	For purposes of the consolidated statements of cash flows, cash equivalents include investments in money market obligation’s trusts that are registered under the U.S. Investment Company Act of 1940 and liquid investments with original maturities of three months or less.
Accounts Receivable	Accounts receivable are recorded at their estimated realizable value. Accounts are deemed past due when payment has not been received within the stated time period. The Company's policy is to review individual past due amounts periodically and write off amounts for which all collection efforts are deemed to have been exhausted. Due to the nature of the Company’s customers, bad debts are mainly accounted for using the direct write-off method whereby an expense is recognized only when a specific balance is determined to be uncollectible in full. The effect of using this method approximates that of the allowance method. However, in the event the Company determines that the collectability of any account receivable reaches a certain uncertainty threshold, the Company will provide an allowance for doubtful account to reduce said balance.
Income Taxes	The Company follows an asset and liability approach method of accounting for income taxes. This method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. As of October 31, 2021 and 2020, the resulting deferred tax asset has been fully allowed. The Company follows guidance from the Financial Accounting Standards Board (“FASB”) related to Accounting for Uncertainty in Income Taxes,
Leases	The Company follows accounting standards issued by the FASB for the accounting and disclosure of leases. Under those standards, assets and liabilities that arise from leases are recognized on the balance sheet, and the leases are categorized at their inception as either operating or finance leases. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date, and lease liability amounts are based on the present value of lease payments made during the lease term.
Property and Equipment	Owned property and equipment are stated at cost. Vehicles under finance leases are stated at the lower of fair market value or net present value of the minimum lease payments at the inception of the leases. Depreciation of owned assets are provided for, when placed in service, in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using straight-line basis. Assets under finance leases are amortized over the lease term. While expenditures for repairs and maintenance are expensed when incurred.
Impairment of Long-Lived Assets	The Company evaluates for impairment its long-lived assets to be held and used, and long-lived assets to be disposed of, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Based on management estimates, no impairment of the long-lived assets was present as of October 31, 2021 and 2020.
Stock-based Compensation	Stock-based compensation expense is recognized in the consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period, and includes an estimate of awards that will be forfeited. The Company calculates the fair value of stock options using the Black-Scholes option-pricing model at grant date, while for restricted stock units the fair market value of the units is determined by Company’s share market value at grant date. Excess tax benefits related to stock-based compensation are reflected as cash flows from financing activities rather than cash flows from operating activities. However, the Company has not recognized such cash flow from financing activities since there has been no tax benefit related to the stock-based compensation.
Earnings Per Share of Common Stock	Basic earnings (loss) per share of common stock is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per share includes the dilution of common stock equivalents. The diluted weighted average shares of common stock outstanding were calculated using the treasury stock method for the respective periods.
Foreign Operations	The functional currency of the Company’s foreign subsidiaries is its local currency. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for subsidiaries using a functional currency other than the U.S. dollar is included as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income. The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income, while gains and losses resulting from the remeasurement of intercompany receivables from those international subsidiaries for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statements of operations.
Subsequent Events	The Company has evaluated subsequent events to the date of the issuance of the consolidated financial statements. The Company has determined that there are no events occurring in this period that required disclosure or adjustment, except as disclosed in the accompanying consolidated financial statements.
Reclassifications	Certain reclassifications have been made to the October 31, 2020 consolidated financial statements to conform them to the October 31, 2021 consolidated financial statements presentation. Such reclassifications do not have an effect on net income as previously reported.
Recent Accounting Pronouncements	In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses” (ASU 2016-13), which changes the impairment model for most financial assets and certain other instruments from an incurred loss model to an expected loss model. In addition, the guidance also requires incremental disclosures regarding allowances and credit quality indicators. ASU 2016-13 is required to be adopted using the modified-retrospective approach. For the Company this guidance will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Based on the Company’s preliminary assessment, it currently does not anticipate a material impact to the Company’s Consolidated Financial Statements.

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Oct. 31, 2021
PROPERTY AND EQUIPMENT
Summary of property and equipment	Useful life October 31, (years) 2021 2020 Vehicles 5 $ 115,623 $ 201,623 Computers 3 387,014 376,160 Equipment 3-7 139,685 139,685 Furniture and fixtures 10 1,584 1,593 Total 643,906 719,061 Less: Accumulated depreciation and amortization (538,384 ) (501,489 ) Property and equipment, net $ 105,522 $ 217,572

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Oct. 31, 2021
INCOME TAXES
Schedule of reconciliation between federal statutory rate and effective tax rate	October 31, 2021 2020 United States federal statutory rate (21.0) % 21.0 % Foreign earnings (5.9) % (11.3 )% PPP loans forgiveness (21.6 )% - % Allowance of resulting deferred tax asset 58.7 % - % Other 1.2 % 0.7 % Effective tax rate 11.4 % 10.4 %

LEASES (Tables)

LEASES (Tables)	12 Months Ended
	Oct. 31, 2021
LEASES
Minimum future rental payments under non-cancelable operating leases	Twelve months ending October 31, Amount 2022 $ 174,730 2023 174,730 2024 174,730 2025 174,730 2026 29,121 Total future minimum operating lease payments 728,041 Less: Amount of imputed interest (110,617 ) Present value of future minimum operating lease payments 617,424 Current operating lease liabilities (130,060 ) Long term operating lease liabilities $ 487,364

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	12 Months Ended
	Oct. 31, 2021
EARNINGS PER SHARE
Schedule of calculations of basic and diluted earnings per share	Years ended October 31, 2021 2020 Net income (loss) available to common equity holders - used to compute basic and diluted earnings per share $ (2,089,240 ) $ 2,050,922 Weighted average number of common shares - used to compute basic earnings per share 23,026,260 23,003,327 Effect of options to purchase common stock 135,467 36,748 Weighted average number of shares - used to compute diluted earnings per share 23,161,727 23,040,075

STOCK OPTIONS AND STOCK BASED_2

STOCK OPTIONS AND STOCK BASED COMPENSATION (Tables)	12 Months Ended
	Oct. 31, 2021
STOCK OPTIONS AND STOCK BASED COMPENSATION
Stock options activity	Year ended October 31, 2021 2020 Weighted- Weighted- Number of Average Option Number of Average Option Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 470,000 $ 0.8587 410,000 $ 0.8615 Granted 80,000 $ 1.4000 80,000 $ 0.7600 Exercised (80,000 ) $ 0.9500 (20,000 ) $ 0.5200 Expired and/or forfeited - $ - - $ - Total outstanding at end of year 470,000 $ 0.9353 470,000 $ 0.8587 Outstanding exercisable stock options at end of year 396,700 $ 0.8931 363,300 $ 0.8657 October 31, 2021 October 31, 2020 Weighted average remaining years in contractual life for: Total outstanding options 2.3 years 2.6 years Outstanding exercisable options 2.1 years 2.1 years Shares of common stock available for issuance pursuant to future stock option grants 1,420,000 1,500,000
Assumptions used to estimate the fair value of stock options	Year ended October 31, 2021 2020 Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 87.6 % 82.0 % Risk free interest rate 0.2 % 1.6 % Expected life of options 3.2 years 3.2 years Weighted average fair value of options granted $ 0.7928 $ 0.4152
Stock-based compensation	Year ended October 31, 2021 2020 Stock-based compensation expense: Cost of services $ - $ - Selling, general and administrative 56,239 42,878 Stock-based compensation before tax 56,239 42,878 Income tax benefit - - Net stock-based compensation expense $ 56,239 $ 42,878 Effect on earnings per share: Basic earnings per share $ (0.002 ) $ (0.002 ) Diluted earnings per share $ (0.002 ) $ (0.002 )

SEGMENT DISCLOSURES (Tables)

SEGMENT DISCLOSURES (Tables)	12 Months Ended
	Oct. 31, 2021
SEGMENT DISCLOSURES
Schedule of segment reporting information	Year ended October 31, 2021 2020 REVENUES: Puerto Rico consulting $ 14,680,665 $ 18,214,656 United States consulting 2,720,662 2,283,370 Europe consulting 2,329,359 829,170 Other 384,489 237,164 Total consolidated revenues $ 20,115,175 $ 21,564,360 INCOME (LOSS) BEFORE TAXES: Puerto Rico consulting, including loans and related interest forgiveness of approximately $1,861,000 for the year ended October 31, 2021 $ (2,887,749 ) $ 2,332,052 United States consulting, including loan and related interest forgiveness of approximately $95,000 for the year ended October 31, 2021 204,110 (80,635 ) Europe consulting 720,427 (9,661 ) Other 87,218 48,254 Total consolidated income (loss) before taxes $ (1,875,994 ) $ 2,290,010

CUSTOMER ACCOUNT RECEIVABLE (De

CUSTOMER ACCOUNT RECEIVABLE (Details Narrative) - USD ($) $ in Millions	Oct. 31, 2021	Oct. 31, 2020
CUSTOMER ACCOUNT RECEIVABLE
Customer owes	$ 5.2	$ 4.6
Account receivable	$ 5.2

PROMISSORY NOTE (Details Narrat

PROMISSORY NOTE (Details Narrative) - USD ($) $ in Millions	1 Months Ended
	Sep. 17, 2018	Nov. 30, 2020
Promissory note	$ 3
Tranche A [Member]
Promissory note	$ 2	$ 1,250,000
Interest rate	3.00%
Tranche B [Member]
Promissory note	$ 1
Interest rate	5.00%

LOANS FORGIVENESS (Details Narr

LOANS FORGIVENESS (Details Narrative)	12 Months Ended
	Oct. 31, 2021USD ($)
Loans forgiveness	$ 1,956,000
Small Business Administration Loans [Member] | April 23, 2020 [Member]
Proceeds from loans	$ 1,931,700

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Property and equipment, gross	$ 643,906	$ 719,061
Less: accumulated depreciation and amortization	(538,384)	(501,489)
Property and equipment, net	105,522	217,572
Equipment [Member]
Property and equipment, gross	$ 139,685	139,685
Useful life (years)	3-7
Vehicles
Property and equipment, gross	$ 115,623	201,623
Useful life (years)	5
Computers
Property and equipment, gross	$ 387,014	376,160
Useful life (years)	3
Furniture and Fixtures
Property and equipment, gross	$ 1,584	$ 1,593
Useful life (years)	10

INCOME TAXES (Details)

INCOME TAXES (Details)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
INCOME TAXES
United States federal statutory rate	21.00%	21.00%
Foreign earnings	(5.90%)	11.30%
PPP loans forgiveness	(21.60%)	(0.00%)
Allowance of resulting deferred tax asset	58.70%	(0.00%)
Other	1.20%	0.70%
Effective tax rate	11.40%	10.40%

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020	Dec. 22, 2017
U.S. tax reduced rate	10.5
Foreign oncome tax	$ 62,700	$ 105,000
Income tax expenses	$ 213,246	$ 239,088
United States federal income tax rate	21.00%	21.00%
Fixed income tax rate	11.40%	10.40%
Pharma-Spain
Unused operating losses	$ 909,700
Potential deferred tax asset which has been allowed	181,900
2031	180,000
2034	524,600
Aggregate expense against customer account receivable	5,246,800
Deferred tax	209,900
2035	$ 205,100
PRIDCO [Member]
Puerto Rico tax holiday derived from PRIDCO Grant tax rate	37.50%
Income tax expenses	$ 150,500	$ 134,000
United States federal income tax rate	21.00%
Fixed income tax rate	4.00%
Tax Reform [Member]
U.S. tax reduced rate	10.5
Transition Tax			$ 270,000

LEASES (Details)

LEASES (Details) - USD ($)	Oct. 31, 2021	Oct. 31, 2020
LEASES
2022	$ 174,730
2023	174,730
2024	174,730
2025	174,730
2026	29,121
Total future minimum operating lease payments	728,041
Less: amount of imputed interest	(110,617)
Present value of future minimum operating lease payments	617,424
Current operating lease liabilities	(130,060)	$ (162,917)
Long term operating lease liabilities	$ 487,364	$ 629,979

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Lease agreement description	The Office Facilities lease agreement was for an initial five-year term commencing January 1, 2016, with a renewal option for five additional years which was exercised and became effective January 1, 2021.
Rent expense	$ 187,000	$ 190,000
Lease Agreements
Payments for rent	14,561
Office Facility
Payments for rent	$ 1,000

EQUITY TRANSACTIONS (Details Na

EQUITY TRANSACTIONS (Details Narrative) - USD ($)	Feb. 05, 2021	Jan. 05, 2021	Oct. 31, 2021	Oct. 31, 2020
Stockholders Equity Abstract
Shares purchased under Repurchase Program			366,754	341,154
Shares purchased under Repurchase Program, amount			$ 357,272	$ 331,306
Cash dividend, per share		$ 0.075
Dividend paid	$ 1,727,364		$ 1,727,364	$ 1,725,295

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
EARNINGS PER SHARE
Net income available to common equity holders - used to compute basic and diluted earnings per share	$ (2,089,240)	$ 2,050,922
Weighted average number of common shares - used to compute basic earnings per share	23,026,260	23,003,327
Effect of options to purchase common stock	135,467	36,748
Weighted average number of shares - used to compute diluted earnings per share	23,161,727	23,040,075

EARNINGS PER SHARE (Details Nar

EARNINGS PER SHARE (Details Narrative) - shares	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Employee Stock Option [Member]
Antidilutive securities excluded from computation of earnings per share	80,000	160,000

STOCK OPTIONS AND STOCK BASED_3

STOCK OPTIONS AND STOCK BASED COMPENSATION (Details) - 2014 Plan - $ / shares	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Stock Option Activity
Options outstanding, beginning	470,000	410,000
Options granted	80,000	80,000
Options exercised	(80,000)	(20,000)
Options expired and/or forfeited	0	0
Options outstanding, ending	470,000	470,000
Options exercisable, ending	396,700	363,300
Weighted Average Option Exercise Price
Weighted Average Option Exercise Price Options outstanding, beginning	$ 0.8587	$ 0.8615
Weighted Average Option Exercise Price Options granted	1.4000	0.7600
Weighted Average Option Exercise Price Options exercised	0.9500	0.5200
Weighted Average Option Exercise Price Options expired and or forfeited	0	0
Weighted Average Option Exercise Price Options outstanding, ending	0.9353	0.8587
Weighted Average Option Exercise Price Outstanding exercisable stock options at end of year	$ 0.8931	$ 0.8657
Weighted average remaining years in contractual life for: total outstanding options	2 years 3 months 18 days	2 years 7 months 6 days
Weighted average remaining years in contractual life for: outstanding exercisable options	2 years 1 month 6 days	2 years 1 month 6 days
Shares of common stock available for issuance pursuant to future stock option grants	1,420,000	1,500,000

STOCK OPTIONS AND STOCK BASED_4

STOCK OPTIONS AND STOCK BASED COMPENSATION (Details 1) - 2014 Plan - $ / shares	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Expected dividend yield	0.00%	0.00%
Expected stock price volatility	87.60%	82.00%
Risk free interest rate	0.20%	1.60%
Expected life of options	3 years 2 months 12 days	3 years 2 months 12 days
Weighted average fair value of options granted	$ 0.7928	$ 0.4152

STOCK OPTIONS AND STOCK BASED_5

STOCK OPTIONS AND STOCK BASED COMPENSATION (Details 2) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Stock-based compensation before tax	$ 56,239	$ 42,878
Income tax benefit	0	0
Net stock-based compensation expense	$ 56,239	$ 42,878
Effect on earnings per share: basic earnings per share	$ (0.002)	$ (0.002)
Effect on earnings per share: diluted earnings per share	$ (0.002)	$ (0.002)
Cost of Services
Stock-based compensation before tax	$ 0	$ 0
Selling, General and Administrative
Stock-based compensation before tax	$ 56,239	$ 42,878

STOCK OPTIONS AND STOCK BASED_6

STOCK OPTIONS AND STOCK BASED COMPENSATION (Details Narrative) - 2014 Plan - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Estimated stock based compensation expense to be recognized in future periods	$ 40,440
Period of recognition	9 months 18 days
Aggregate intrinsic value of options outstanding	$ 74,100	$ 202,700

SEGMENT DISCLOSURES (Details)

SEGMENT DISCLOSURES (Details) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Total consolidated revenues	$ 20,115,175	$ 21,564,360
Total consolidated income before taxes	(1,875,994)	2,290,010
Puerto Rico Consulting [Member]
Total consolidated revenues	14,680,665	18,214,656
Total consolidated income before taxes	(2,887,749)	2,332,052
United States Consulting [Member]
Total consolidated revenues	2,720,662	2,283,370
Total consolidated income before taxes	204,110	(80,635)
Europe Consulting [Member]
Total consolidated revenues	2,329,359	829,170
Total consolidated income before taxes	720,427	(9,661)
Other Segment [Member]
Total consolidated revenues	384,489	237,164
Total consolidated income before taxes	$ 87,218	$ 48,254

CONCENTRATION OF RISKS (Details

CONCENTRATION OF RISKS (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Customer owes	$ 5,200,000	$ 4,600,000
Major Customer A
Revenue from major customers	20.10%	14.20%
Major Customer B
Revenue from major customers	12.30%	10.50%
Major Customer C
Revenue from major customers	8.80%	11.60%
Major Customer Total
Revenue from major customers	41.20%	52.50%
Amount due from major customers as percentage of accounts receivable	9.20%	27.90%
Global Customer A
Revenue from major customers	20.10%	14.20%
Global Customer B
Revenue from major customers	12.30%	10.50%
Global Customer Total
Revenue from major customers	43.50%	54.70%
Amount due from major customers as percentage of accounts receivable	10.60%	28.80%
Major Customer D
Revenue from major customers	0.00%	16.20%
Global Customer C
Revenue from major customers	11.10%	13.80%
Global Customer D
Revenue from major customers	0.00%	16.20%
Major Customer E
Revenue from major customers	3.20%
Owe amount	$ 5,200,000
Working capital percentage	20.60%

RETIREMENT PLAN (Details Narrat

RETIREMENT PLAN (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
RETIREMENT PLAN
Contributions made to retirement plan	$ 131,700	$ 153,200

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2021	Oct. 31, 2020
Consulting Agreement
Compensation paid	$ 67,400	$ 524,400

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative)	Nov. 15, 2021$ / shares
Subsequent Event
Declared cash dividend per share	$ 0.075