Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2018 | Feb. 01, 2019 | Apr. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Coda Octopus Group, Inc. | ||
Entity Central Index Key | 1,334,325 | ||
Document Type | 10-K/A | ||
Document Period End Date | Oct. 31, 2018 | ||
Amendment Flag | true | ||
Amendment Description | This Amendment No. 1 to the Annual Report on Form 10-K for the year ended October 31, 2018 (the "Form 10-K"), is filed for the sole purpose of correcting a number of typographical errors, as follows: Item 7. Management's Discussion and Analysis of Financial Condition and Results Operations included in the Form 10-K. Specifically, the subsection entitled "Operating Activities" under "Liquidity and Financial Resources," showed three errors in the figures representing net cash generated from operating activities, and net income. Item 8. Financial Statements and Supplementary Data. The Consolidated Statements of Cash Flows for the Years Ended October 31, 2018 and 2017, under the line item "unbilled receivables" should have shown a negative figure of (289,944).Except as specifically amended herewith, the Form 10-K remains unchanged. | ||
Current Fiscal Year End Date | --10-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12,973,000 | ||
Entity Common Stock, Shares Outstanding | 10,664,381 | ||
Trading Symbol | CODA | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 7,512,422 | $ 6,851,539 |
Accounts Receivable, Net | 3,326,623 | 1,418,114 |
Inventory | 3,823,243 | 3,652,249 |
Unbilled Receivables | 3,013,116 | 2,723,172 |
Other Current Assets | 219,424 | 320,814 |
Prepaid Expenses | 227,479 | 291,623 |
Total Current Assets | 18,122,307 | 15,257,511 |
FIXED ASSETS | ||
Property and Equipment, net | 5,246,183 | 5,213,281 |
OTHER ASSETS | ||
Goodwill and Other Intangibles, net | 3,613,952 | 3,589,281 |
Deferred Tax Asset | 1,754,169 | |
Total other assets | 5,368,121 | 3,589,281 |
Total Assets | 28,736,611 | 24,060,073 |
CURRENT LIABILITIES | ||
Accounts Payable | 988,148 | 981,994 |
Accrued Expenses and Other Current Liabilities | 685,454 | 519,208 |
Loans and Note Payable, current | 964,695 | 2,212,951 |
Deferred Revenue, Current | 602,914 | 402,955 |
Total Current Liabilities | 3,241,211 | 4,117,108 |
LONG TERM LIABILITIES | ||
Deferred Revenue, long term | 48,906 | 49,143 |
Loans and Note Payable, long term | 1,059,544 | 6,066,402 |
Total Long Term Liabilities | 1,108,450 | 6,115,545 |
Total Liabilities | 4,349,661 | 10,232,653 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, Series C, $.001 par value; 5,000,000 shares authorized 0 and 1,000 shares issued and outstanding as of October 31, 2018 and 2017, respectively | 1 | |
Common stock, $.001 par value; 150,000,000 shares authorized, 10,640,416 and 9,136,121 shares issued and outstanding as of October 31, 2018 and 2017, respectively | 10,641 | 9,136 |
Additional paid-in capital | 58,599,378 | 52,839,651 |
Accumulated other comprehensive loss | (2,228,663) | (2,038,431) |
Accumulated deficit | (31,994,406) | (36,982,937) |
Total Stockholders' Equity | 24,386,950 | 13,827,420 |
Total Liabilities and Stockholders' Equity | $ 28,736,611 | $ 24,060,073 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Series C Preferred stock, par value | $ 0.001 | $ 0.001 |
Series C Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Series C Preferred stock, shares issued | 0 | 1,000 |
Series C Preferred stock, shares outstanding | 0 | 1,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 10,640,416 | 9,136,121 |
Common stock, shares outstanding | 10,640,416 | 9,136,121 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Income Statement [Abstract] | ||
Net Revenues | $ 18,019,429 | $ 18,025,173 |
Cost of Revenues | 5,357,067 | 6,057,448 |
Gross Profit | 12,662,362 | 11,967,725 |
OPERATING EXPENSES | ||
Research & Development | 2,571,714 | 1,380,381 |
Selling, General & Administrative | 6,779,881 | 6,769,327 |
Total Operating Expenses | 9,351,595 | 8,149,708 |
INCOME FROM OPERATIONS | 3,310,767 | 3,818,017 |
OTHER INCOME (EXPENSE) | ||
Other Income | 41,222 | 121,278 |
Interest Expense | (249,090) | (597,011) |
Total Other Income (Expense) | (207,868) | (475,733) |
NET INCOME BEFORE INCOME TAXES | 3,102,899 | 3,342,284 |
INCOME TAX BENEFIT (EXPENSE) | ||
Current tax benefit (expense) | 131,463 | (2,621) |
Deferred tax benefit | 1,754,169 | |
Total Income Tax Benefit (Expense) | 1,885,632 | (2,621) |
NET INCOME | $ 4,988,531 | $ 3,339,663 |
NET INCOME PER SHARE: | ||
Basic | $ 0.49 | $ 0.37 |
Diluted | $ 0.49 | $ 0.36 |
WEIGHTED AVERAGE SHARES: | ||
Basic | 10,093,538 | 9,111,356 |
Diluted | 10,093,538 | 9,311,356 |
NET INCOME | $ 4,988,531 | $ 3,339,663 |
Other Comprehensive Income | ||
Foreign currency translation adjustment | (190,232) | 299,006 |
Total Other Comprehensive (Loss) Income | (190,232) | 299,006 |
COMPREHENSIVE INCOME | $ 4,798,299 | $ 3,638,669 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
Balance at Oct. 31, 2016 | $ 1 | $ 9,094 | $ 52,805,455 | $ (2,337,437) | $ (40,322,600) | $ 10,154,513 |
Balance, shares at Oct. 31, 2016 | 1,100 | 9,094,156 | ||||
Stock Issued to Board of Directors | $ 21 | 93,717 | 93,738 | |||
Stock Issued to Board of Directors, shares | 21,429 | |||||
Stock Issued to Consultants | $ 21 | 40,479 | 40,500 | |||
Stock Issued to Consultants, shares | 20,536 | |||||
Redemption of the Series C Preferred Stock | $ (1) | (1,099,999) | (1,100,000) | |||
Redemption of the Series C Preferred Stock, shares | (1,100) | |||||
Issuance of Series C Preferred Stock in lieu of interest obligations | $ 1 | 999,999 | 1,000,000 | |||
Issuance of Series C Preferred Stock in lieu of interest obligations, shares | 1,000 | |||||
Foreign currency translation adjustment | 299,006 | 299,006 | ||||
Net income | 3,339,663 | 3,339,663 | ||||
Balance at Oct. 31, 2017 | $ 1 | $ 9,136 | 52,839,651 | (2,038,431) | (36,982,937) | 13,827,420 |
Balance, shares at Oct. 31, 2017 | 1,000 | 9,136,121 | ||||
Stock Issued to Consultants | $ 38 | 170,962 | 171,000 | |||
Stock Issued to Consultants, shares | 37,500 | |||||
Redemption of the Series C Preferred Stock | $ (1) | (999,999) | (1,000,000) | |||
Redemption of the Series C Preferred Stock, shares | (1,000) | |||||
Foreign currency translation adjustment | (190,232) | (190,232) | ||||
Stock Issued to Investors | $ 1,204 | 5,311,528 | 5,312,732 | |||
Stock Issued to Investors, shares | 1,203,727 | |||||
Stock Issued to Former Officer | $ 63 | 277,436 | 277,499 | |||
Stock Issued to Former Officer, shares | 63,068 | |||||
Issuance of Stock to Redeem Series C Preferred Stock | $ 200 | 999,800 | 1,000,000 | |||
Issuance of Stock to Redeem Series C Preferred Stock, shares | 200,000 | |||||
Net income | 4,988,531 | 4,988,531 | ||||
Balance at Oct. 31, 2018 | $ 10,641 | $ 58,599,378 | $ (2,228,663) | $ (31,994,406) | $ 24,386,950 | |
Balance, shares at Oct. 31, 2018 | 10,640,416 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 4,988,531 | $ 3,339,663 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 758,408 | 953,626 |
Stock compensation | 448,499 | 134,238 |
Realized gain on the sale of fixed assets | (109,413) | |
Increase (decrease) in operating liabilities: | ||
Accounts receivable | (1,908,509) | 1,856,090 |
Inventory | (349,823) | (1,053,324) |
Unbilled receivables | (289,944) | 683,521 |
Other current assets | 101,390 | (179,860) |
Prepaid expenses | 64,144 | (178,739) |
Deferred tax assets | (1,754,169) | 96,374 |
(Increase) decrease in operating liabilities: | ||
Accounts payable and other current liabilities | 172,400 | (689,341) |
Deferred revenues | 199,722 | (12,443) |
Net Cash provided by Operating Activities | 2,430,649 | 4,840,392 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (637,152) | (2,561,551) |
Proceeds from the sale of fixed assets | 504,802 | |
Restricted cash | 13,694 | |
Net Cash used in Investing Activities | (637,152) | (2,043,055) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments - loans and notes payable | (6,255,114) | (746,571) |
Issuance of stock for cash | 5,312,732 | |
Redemption of Series C preferred stock | (1,100,000) | |
Net Cash used in Financing Activities | (942,382) | (1,846,571) |
EFFECT OF CURRENCY EXCHANGE RATE ON CHANGES IN CASH | (190,232) | 299,006 |
NET INCREASE IN CASH | 660,883 | 1,249,772 |
CASH AT THE BEGINNING OF THE PERIOD | 6,851,539 | 5,601,767 |
CASH AT THE END OF THE PERIOD | 7,512,422 | 6,851,539 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 291,802 | 697,877 |
Cash paid for taxes | 27,192 | 64,993 |
Non-cash transactions | ||
Preferred stock issued for accrued interest | 1,000,000 | |
Transfer of Demo assets from inventory to property and equipment | 178,829 | |
Common stock issued for Series C preferred stock | 1,000,000 | 0 |
Payment of secured debt directly with proceeds of note payable | $ 8,000,000 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Coda Octopus Group, Inc. (“Coda,” “the Company,” or “we”) operates two distinct business segments: Products Segment and Services Segment. The Product Segment develops, manufactures and distributes subsea products including its flagship patented real time 3D sonar technology (referred to as “Product Segment”) which it supplies to companies operating in the subsea/marine sector. The Services segment supplies proprietary engineering parts to defense and subsea companies. The consolidated financial statements include the accounts of Coda Octopus Group, Inc. and our domestic and foreign subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidated financial statements. |
Summary of Accounting Policies
Summary of Accounting Policies | 12 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Accounting Policies | NOTE 2 - SUMMARY OF ACCOUNTING POLICIES a. Basis of Presentation The Company has adopted the Financial Accounting Standards Board (FASB) Codification (Codification). The Codification is the single official source of authoritative accounting principles generally accepted in the United States of America (U.S. GAAP) recognized by the FASB to be applied by nongovernmental entities, and all of the Codification’s content carries the same level of authority. b. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. At times such investments may be in excess of federal deposit insurance limits. c. Trade Accounts Receivable Trade accounts receivable are recorded net of the allowance for doubtful accounts. The Company provides for an allowance for doubtful collections that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Balances still outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. The allowance for doubtful accounts was $47,807 and $36,553 as of October 31, 2018 and 2017 respectively. d. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for minor replacements, maintenance and repairs which do not increase the useful lives of the property and equipment are charged to operations as incurred. Major additions and improvements are capitalized. Depreciation and amortization are computed using the straight-line method over their estimated useful lives which is typically three to five years for equipment and 30 years for buildings. e. Advertising Coda follows the policy of charging the costs of advertising to expense as incurred, which aggregated $0 for the years ended October, 31 2018 and 2017. f. Inventory Inventory is stated at the lower of cost (weighted average method) or net realizable value. Inventory consisted of the following components: October 31, 2018 October 31, 2017 Raw materials and parts $ 2,887,505 $ 2,651,511 Work in progress 472,204 501,692 Demo goods - 349,480 Finished goods 463,534 149,566 Total Inventory $ 3,823,243 $ 3,652,249 g. Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues including unbilled and deferred revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates related to the percentage of completion method used to account for contracts including costs and earnings in excess of billings, billings in excess of costs and estimated earnings and the valuation of goodwill. h. Revenue Recognition Our revenue is derived from sales of underwater technologies and equipment for imaging, mapping, defense and survey applications and from the engineering services which we provide. Revenue is recognized when evidence of a contractual arrangement exists, delivery has occurred or services have been rendered, the contract price is fixed or determinable, and collectability is reasonably assured. No rights of return privileges are granted to customers after delivery. For arrangements with multiple deliverables, we recognize product revenue by allocating the revenue to each deliverable based on the relative fair value of each deliverable, and recognize revenue when equipment is delivered, and for installation and other services as they are performed. Our contracts sometimes require customer payments in advance of revenue recognition. These amounts are reflected as liabilities and recognized as revenue when the Company has fulfilled its obligations under the respective contracts. For software license sales for which any services rendered are not considered essential to the functionality of the software, we recognize revenue upon delivery of the software, provided (1) there is evidence of a contractual arrangement for this, (2) collection of our fee is considered probable and (3) the fee is fixed and determinable. For arrangements that are generated from time and material contracts where there is a signed agreement and approved purchase order in place that specifies the fixed hourly rate and other reimbursable costs to be billed based on material and direct labor hours incurred, revenue is recognized based on material and direct labor hours incurred. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred (materials and direct labor hours) to date to estimated total services (materials and direct labor hours) for each contract. This method is used as expenditures for direct materials and labor hours are considered to be the best available measure of progress on these contracts. Losses on fixed-price contracts are recognized during the period in which the loss first becomes apparent based upon costs incurred to date and the estimated costs to complete as determined by experience from similar contracts. Variations from estimated contract performance could result in adjustments to operating results. Rental revenue is recognized monthly over the term of the rental period. On November 1, 2018 the Company adopted Accounting Standards Codification ASC 606, entitled Revenue From Contracts with Customers. While terminology and requirements change in ASC 606, we believe that our existing revenue accounting is compliant with ASC 606 and that our accounting for revenue will not change. Accordingly, our disclosures about our revenue in accordance with ASC 606 will expand to comply with the new requirements, including expansion of quarterly revenue reporting requirements. i. Concentrations of Risk Credit losses, if any, have been provided for in the consolidated financial statements and are based on management’s expectations. The Company’s accounts receivable are subject to potential concentrations of credit risk, since a significant part of the Company’s sales are to a small number of companies and, even though these are generally established businesses, market fluctuations such as the price of oil may affect our customers’ ability to meet their obligations to us. The Company’s bank deposits are held with financial institutions both in and out of the USA. At times, such amounts may be in excess of applicable government mandated insurance limits. The Company has not experienced any losses in such accounts or lack of access to its cash, and believes it is not exposed to significant risk of loss with respect to cash. j. Contracts in Progress (Unbilled Receivables and Deferred Revenue) Costs and estimated earnings in excess of billings on uncompleted contracts represent accumulated project expenses and fees which have not been invoiced to customers as of the date of the balance sheet. These amounts are stated on the consolidated balance sheets as Unbilled Receivables of $3,013,116 and $2,723,172 as of October 31, 2018 and 2017, respectively. Our Deferred Revenue of $602,914 and $402,955 as of October 31, 2018 and 2017, respectively, consists of billings in excess of costs and revenues received as part of our warranty obligations upon completing a sale – elaborated further in the last paragraph of this note. Revenue received as part of sales of equipment includes a provision for warranty and is treated as deferred revenue, along with extended warranty sales, with these amounts amortized over 12 months, our stated warranty period, from the date of sale. These amounts are stated on the balance sheets as a component of Deferred Revenue of $335,646 and $452,098 as of October 31, 2018 and 2017, respectively. k. Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification 740, Income Taxes Deferred tax assets and liabilities are the amounts by which the Company’s future income taxes are expected to be impacted by these differences as they reverse. Deferred tax assets are based on differences that are expected to decrease future income taxes as they reverse. Correspondingly, deferred tax liabilities are based on differences that are expected to increase future income taxes as they reverse. Note 7 below discusses the amounts of deferred tax assets and liabilities, and also presents the impact of significant differences between financial reporting income and taxable income. For income tax purposes, the Company uses the percentage of completion method of recognizing revenues on long-term contracts which is consistent with the Company’s financial reporting under U.S. generally accepted accounting principles. l. Intangible Assets Intangible assets consist principally of the excess of cost over the fair value of net assets acquired (or goodwill), customer relationships, non-compete agreements and licenses. Goodwill was allocated to our reporting units based on the original purchase price allocation. Goodwill is not amortized and is evaluated for impairment annually or more often if circumstances indicate impairment may exist. Customer relationships, non-compete agreements, patents and licenses are being amortized on a straight-line basis over periods of 2 to 15 years. The Company amortizes its limited lived intangible assets using the straight-line method over their estimated period of benefit. We periodically evaluate the recoverability of intangible assets and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. The first step of the goodwill impairment test used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. The Company will early adopt Accounting Standards Codification 2017 – 04, Simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amount in excess of the fair value of the reporting unit as the reduction in goodwill. ASC 2017-04 eliminates the requirement in previous US GAAP to perform Step 2 of the goodwill impairment test. At the end of each year, we evaluate goodwill on a separate reporting unit basis to assess recoverability, and impairments, if any, are recognized in earnings. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the goodwill over the fair value of the reporting unit. There were no impairment charges recognized during the years ended October 31, 2018 and 2017. m. Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair values because of the short-term nature of these instruments. The aggregate carrying amount of the notes payable approximates fair value as they bear interest at a market interest rate based on their term and maturity. The fair value of the Company’s long-term debt approximates its carrying amount based on the fact that the Company believes it could obtain similar terms and conditions for similar debt. n. Foreign Currency Translation Assets and liabilities are translated at the prevailing exchange rates at the balance sheet dates, related revenue and expenses are translated at weighted average exchange rates in effect during the period and stockholders’ equity, fixed assets and long-term investments are recorded at historical exchange rates. Resulting translation adjustments are recorded as a separate component in stockholders’ equity as part of accumulated other comprehensive income or (loss) as may be appropriate. Foreign currency transaction gains and losses are included in the consolidated statements of income and comprehensive income. o. Long-Lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. No impairment loss was recognized during the years ended October 31, 2018 and 2017, respectively. p. Research and Development Research and development costs consist of expenditures for the development of present and future patents and technology, which are not capitalizable. Under current legislation, we are eligible for UK tax credits related to our qualified research and development expenditures. Tax credits are classified as a reduction of research and development expense. During the years ended October 31, 2018 and 2017, we had $140,015 and $416,624 respectively. q. Stock Based Compensation We recognize the expense related to the fair value of stock based compensation awards within the consolidated statements of income and comprehensive income. We use the fair value method for equity instruments granted to non-employees and use the Black Scholes model for measuring the fair value. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the periods in which the related services are rendered. r. Comprehensive Income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Comprehensive income includes gains and losses on foreign currency translation adjustments and is included as a component of stockholders’ equity. s. Earnings per Share We compute basic earnings per share by dividing the income attributable to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share include the dilutive effect, if any, from the potential exercise of stock options and warrants. Following is a reconciliation of earnings from continuing operations and weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share: Year Ended Year Ended Fiscal Period October 31, 2018 October 31, 2017 Numerator: Net Income $ 4,988,531 $ 3,339,663 Denominator: Basic weighted average common shares outstanding 10,093,538 9,111,356 Conversion of Series C Preferred Stock - 200,000 Diluted outstanding shares 10,093,538 9,311,356 Earnings from continuing operations Basic $ 0.49 $ 0.37 Diluted $ 0.49 $ 0.36 t. Recent Accounting Pronouncements There have been no new accounting pronouncements made effective during fiscal 2018 that have significance, or potential significance, to our Consolidated Financial Statements. Recent Accounting Pronouncements Not Yet Effective On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. We have evaluated the effects of this updated standard and determined that it will not have a significant impact on our consolidated financial statements but will expand the related disclosures, particularly for quarterly reporting purposes. On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the balance sheet. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We own substantially all of our facilities and rental asset and the effect of adopting this standard was immaterial. On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We have evaluated this standard and determined that it did not have a significant impact on our consolidated financial statements and related disclosures. With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements. u. Liquidity At October 31, 2018, we had cash on hand of approximately $7.5 million and both billed and unbilled receivables of approximately $6.3 million. Our current cash balance represents approximately one-year of Selling, General and Administrative Expenses. The Company continues to critically evaluate the level of expenses that we incur and reduce those expenses as appropriate. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 3 - INTANGIBLE ASSETS AND GOODWILL Goodwill and Other Intangible Assets are evaluated on an annual basis. If there is reason to believe that their values have been diminished or impaired, write-downs will be included in results from operations. The identifiable intangible assets acquired and their carrying value as of October 31, 2018 and 2017, are as follows: Amortization of patents, customer relationships, non-compete agreements and licenses included as a charge to income amounted to $47,190 and $163,519 for the years ended October 31, 2018 and 2017, respectively. Goodwill is not being amortized. October 31, 2018 October 31, 2017 Customer relationships (weighted average life of 10 years) $ 896,624 $ 896,624 Non-compete agreements (weighted average life of 3 years) 198,911 198,911 Patents and other (weighted average life of 10 years) 366,036 294,175 Total identifiable intangible assets - gross carrying value 1,461,571 1,389,710 Less: accumulated amortization (1,229,727 ) (1,182,537 ) Total intangible assets, net $ 231,844 $ 207,173 Future estimated annual amortization expenses as of October 31, 2018 as follows: Years Ending October 31, Amount 2019 46,318 2020 39,121 2021 34,620 2022 34,297 2023 30,831 Thereafter 46,657 Totals $ 231,844 As a result of the acquisitions of Coda Octopus Martech, Ltd., Coda Octopus Colmek, Inc. and Coda Octopus Products, Ltd. the Company has goodwill in the amount of $3,382,108 as of October 31, 2018 and 2017, respectively. The carrying amount of goodwill as of October 31, 2018 and 2017, respectively, are recorded below: October 31, 2018 October 31, 2017 Breakout of Goodwill: Coda Octopus Colmek, Inc. $ 2,038,669 $ 2,038,669 Coda Octopus Products, Ltd 62,315 62,315 Coda Octopus Martech, Ltd 1,281,124 1,281,124 Total Goodwill $ 3,382,108 $ 3,382,108 Considerable management judgment is necessary to estimate fair value of goodwill. We enlisted the assistance of an independent valuation consultant to determine the values of our intangible assets and goodwill at the dates of acquisition and by management for the dates thereafter. Based on various market factors and projections used by management, actual results could vary significantly from management’s estimates. The Company’s policy is to test its goodwill balances for impairment on an annual basis, in the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill assets of the Company arise chiefly from the acquisition of two wholly owned subsidiaries that comprise the Company’s Services Segment – Coda Octopus Colmek and Coda Octopus Martech. The goodwill impairment evaluation was conducted at the end of the financial year 2018 and management’s opinion is that the carrying values are reasonable. Based on these evaluations, the fair value of goodwill exceeds its carrying value. As such no impairment was recorded by management. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of: October 31, 2018 October 31, 2017 Buildings $ 3,996,860 $ 4,082,346 Land 200,000 200,000 Office machinery and equipment 2,875,443 2,064,449 Furniture, fixtures and improvements 1,109,225 1,165,897 Totals 8,181,528 7,512,692 Less: accumulated depreciation (2,935,345 ) (2,299,411 ) Property and Equipment – Net $ 5,246,183 $ 5,213,281 Depreciation expense for the years ended October 31, 2018 and 2017 was $711,218 and $790,107, respectively. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Oct. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | NOTE 5 - OTHER CURRENT ASSETS Other current assets consisted of the following at: October 31, 2018 October 31, 2017 Deposits $ 21,007 $ 11,255 Other receivables 141,294 73,600 Prepaid Tax 57,123 235,959 Total Other Current Assets $ 219,424 $ 320,814 |
Capital Stock
Capital Stock | 12 Months Ended |
Oct. 31, 2018 | |
Equity [Abstract] | |
Capital Stock | NOTE 6 – CAPITAL STOCK Common Stock On or around January 11, 2017, the Company effected a one for fourteen (1 for 14) reverse stock split of our issued and outstanding common stock. All historical share numbers in this document have been adjusted retroactively to account for the reverse stock split. Effecting the reverse stock split reduced the number of issued and outstanding shares of common stock as of January 11, 2017 to 9,102,192. The Company is authorized to issue 150,000,000 shares of common stock with a par value of $0.001 per share. On November 8, 2016, the Company issued 8,036 shares to two individuals for services rendered. These were valued at $10,500 which was charged to operations. On June 23, 2017, the Company issued 6,250 shares to two individuals for services rendered. These were valued at $15,000 which was charged to operations. In June and August 2017, the Company issued 21,429 shares to three of our newly appointed directors for services rendered at a value of $93,738 which was charged to operations. On October 13, 2017, the Company issued 6,250 shares to two individuals for services rendered. These were valued at $15,000 which was charged to operations. On January 29, 2018, the Company issued 1,125,950 shares to two investors pursuant to the terms of a private placement for a total purchase price of $4,954,180. On February 5, 2018, the Company issued to one of its directors pursuant to the terms of the private placement 75,000 shares for a purchase price of $345,750. On February 12, 2018, the Company issued 2,777 shares to one investor pursuant to their pre-emption rights under the terms of the private placement effected on or around January 29, 2018 for a purchase price of $12,802. On February 22, 2018 and March 6, 2018, the Company issued a total of 12,500 shares to two individuals for services rendered. These were valued at $57,250, which was charged to operations. On April 19, 2018 the Company issued 63,068 shares of common stock to a former officer pursuant to the terms of a settlement entered into on or around January 14, 2011. These were valued at $277,499, which was charged to operations. On August 12, 2018, the Company issued 25,000 shares of common stock to consultants for services rendered. These were valued $113,750, which was charged to operations. On October 31, 2018, the Company issued 200,000 shares of common stock to the holders of the Series C Preferred Stock for a value of $1,000,000 pursuant to the terms of Certificate of Designation for the Series C Preferred Stock issued and outstanding which provided for a conversion price of $5.00 per share. As of October 31, 2018, the Company had 10,640,416 shares of common stock issued and outstanding. Preferred Stock Series A and Series C Preferred Stock The Company is also authorized to issue 5,000,000 shares of preferred stock with a par value of $0.001 per share. We have designated 50,000 preferred shares as Series A preferred stock and 50,000 preferred shares as Series C preferred stock. The remaining 4,900,000 shares of preferred stock are not designated. On or around April 28, 2017, pursuant to the terms of an Exchange Agreement between the Company and the Holder, the Company issued 1,000 units of Series C Preferred Stock, each unit having a stated value equal to $1,000. Series C Preferred Stock is convertible by the Holder or the Company subject to the Conversion Conditions being met at a Conversion Price of $5.00 per share and, if not converted, are redeemable at a fixed price of $1,000,000. The Holder is entitled to receive value prior to holders of common stock in case of liquidating the Company. There are no Series C Preferred currently outstanding. On or around October 31, 2018 the holders of the Series C Preferred Stock referred to in the preceding paragraph, elected to convert all 1,000 units of Series C Preferred Stock into the Company’s Common Stock. As of October 31, 2018, there are no Series A or Series C Preferred Stock issued or outstanding. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7 - INCOME TAXES The Company files federal income tax returns in the U.S. and state income tax returns in the applicable states on a consolidated basis. The Company’s subsidiaries also file in the appropriate foreign jurisdictions as applicable, most notably the United Kingdom. The Company is required to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The Company has no significant unrecognized tax benefit during the year ended October 31, 2018. There are no material tax positions included in the accompanying consolidated financial statements at October 31, 2018 and 2017 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The Company uses an asset and liability approach to financial accounting and reporting for income taxes. The difference between the financial statement and tax bases of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce the deferred tax asset to the amount that will more likely than not be realized. Income tax expense is the current income tax payable or refundable for the period plus or minus the net change in the deferred tax assets and liabilities. For income tax reporting purposes, the Company’s aggregate U.S. unused net operating losses approximate $8,353,000 and $10,698,000 as of October 31, 2018 and 2017 respectively, which expire beginning in 2028 through 2029, subject to limitations of Section 382 of the Internal Revenue Code, as amended. The Company has had sustained taxable income in recent years supporting the Company’s judgement that the benefit of the U.S. Net operating loss carry forwards is more likely than not to be realizable in the future periods. As a result the Company has recorded the full deferred tax asset in fiscal year 2018. The deferred tax asset related to the U.S. tax carry-forward is $1,754,169 and $4,172,200 as October 31, 2018 and 2017 respectively. The Company has recognized a deferred tax asset and deferred tax benefit of $1,754,169 for the year ended October 31, 2018 and provided a valuation reserve against the full amount of the net operating loss benefit of $4,172,200 for the year ended October 31, 2017. For the years ended October 31, 2018 and 2017, the Company had an Alternative Minimum Tax of $7,840 and $27,192 due. For income tax reporting purposes, the Company’s UK unused net operating losses approximate $525,308 with no expiration. The deferred tax asset related to the UK and Norway tax carry-forwards is approximately $110,314. The Company has provided a valuation reserve against a portion of the net operating loss benefit, because in the opinion of management which is based upon the earning history of the Company, it is more likely than not that the benefits allowed will not be fully realized. Those remaining and not allowed are recorded by the Company and are expected to be used in the near future. Components of deferred tax assets as of October 31, 2018 and 2017 are as follows: October 31, 2018 October 31, 2017 Net operating loss carry-forward benefit $ 1,754,169 $ 4,172,200 Valuation allowance (4,172,200 ) Net deferred tax (liability) asset $ 1,754,169 $ - The Company did not incur any regular income tax but did incur an Alternative Minimum Tax expense in the US. For financial purposes in its U.S. entities and other foreign entities not included above, as we have been able to use net operating loss carry-forwards and other timing differences during the current and prior year to offset any tax liabilities in the various tax jurisdictions. The use of these income tax benefits in the current and prior year have been adjusted for and offset by a valuation allowance as noted above. The Company believes the future use and benefit of these tax assets is still uncertain and may not be realized. The Company’s income tax returns are subject to audit by taxing authorities for the years beginning November 1, 2015. On December 22, 2017, the US Congress passed the Tax Cuts and Jobs Act, which reduced the corporate tax rate from 35% to 21%. This change would reduce the deferred tax asset described in Note 7, from $4,172,200 to $2,246,718. The Company had provided full valuation allowance against the deferred tax asset for the year ended October 31, 2017. There was not an impact on the October 31, 2017 consolidated financial statements because of this tax law change. A reconciliation between the amounts of income tax benefit determined by applying applicable U.S. statutory tax rate to pre-tax income is as follows: October 31, 2018 October 31, 2017 Federal statutory rate of 21% as of October 31, 2018 and 35% as of October 31, 2017 $ 651,609 $ 1,169,799 Alternative Minimum Tax 7,840 27,192 Foreign tax expense (benefit) (139,303 ) (24,571 ) Recognition of deferred tax benefit (1,754,169 ) - Use of NOL losses on consolidated tax returns (651,609 ) (1,169,799 ) Total income tax expense (benefit) $ (1,885,632 ) $ 2,621 |
Loans and Notes Payable
Loans and Notes Payable | 12 Months Ended |
Oct. 31, 2018 | |
Debt Disclosure [Abstract] | |
Loans and Notes Payable | NOTE 8 - LOANS AND NOTES PAYABLE Loans and notes payable consisted of the following at: October 31, 2018 October 31, 2017 Secured note payable to HSBC NA with interest payable on the 28th day of each month at 4.56% per annum. On March 28, 2018 the Company prepaid a portion of the principal and thereby reducing the principal outstanding under this loan to $1,917,602 resulting in the repayment obligations (principal and interest payments) being reduced to $43,777 per month. There was no prepayment penalty associated with the reduction of the principal. It is now expected that the Loan will be repaid within 41 months. $ 1,524,239 $ 7,279,353 One of the subsidiaries has an unsecured working capital loan from the CEO of the Company. The note is due on November 30, 2018 and carries an interest rate of 4.5%. The loan was paid in full on December 24, 2018 and all obligations under this agreement have now been extinguished. 500,000 1,000,000 Total 2,024,239 8,279,353 Less: current portion (964,695 ) (2,212,951 ) Total Long-Term Loans and Notes Payable $ 1,059,544 $ 6,066,402 The HSBC loan is secured by a blanket lien on all of the Company’s US subsidiaries. The foreign subsidiaries are guarantor of the obligations undertaken in the loan agreement. We have an unused line of credit for up to $455,000 with HSBC UK to use specifically for performance bonds and bank guarantees. As of October 31, 2018, the balance is $0. This table shows the principal maturities on the HSBC NA Senior Note as of October 31, 2018: Years Ending October 31, Amount 2019 $ 464,695 2020 486,624 2021 509,588 2022 63,332 Totals $ 1,524,239 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Oct. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | NOTE 9 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss) consists of foreign currency translation adjustments. Total other comprehensive (loss) income was $(190,232) and $299,006 for the years ended October 31, 2018 and 2017, respectively. A reconciliation of the other comprehensive income (loss) in the stockholders’ equity section of the consolidated balance sheets is as follows: October 31, 2018 October 31, 2017 Balance, beginning of year $ (2,038,431 ) $ (2,337,437 ) Total other comprehensive income for the year - foreign currency translation adjustment (190,232 ) 299,006 Balance, end of period $ (2,228,663 ) $ (2,038,431 ) |
Concentrations
Concentrations | 12 Months Ended |
Oct. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 10 - CONCENTRATIONS Significant Customers During the year ended October 31, 2018, the Company had one customer from whom it generated sales greater than 10% of net revenues. Revenue from this customer was $2,882,761, or 16% of net revenues during the period. Total accounts receivable from this customer at October 31, 2018 was $24,993 or 1% of accounts receivable. During the year ended October 31, 2017, the Company had one customer from whom it generated sales greater than 10% of net revenues. Revenues from this customer was $4,036,591, or 22% of net revenues during the year. Total accounts receivable from this customer at October 31, 2017 was $289,571 or 21% of accounts receivable. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Oct. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | NOTE 11 - EMPLOYEE BENEFIT PLANS The Company’s U.S. subsidiaries maintain a matching 401(k) retirement plan. The plan allows the Company to make matching contributions of 10 cents per dollar of employee contributions, up to a maximum of $1,850. U.S. employees who have at least nine months of service with the Company are eligible. In addition, the Company’s UK subsidiaries operate pension schemes which provide for the payment of the full contribution by the Company. These schemes in the UK operate on a defined contribution money purchase basis and the contributions are charged to operations as they arise. Finally, the Company is obligated to provide pension funding according to Norwegian legislation for its subsidiary located in Norway. The Company has an arrangement that fulfills this requirement. Employee benefit costs for the above-noted plans for the years ended October 31, 2018 and 2017 were $51,693 and $53,498, respectively. |
Operating Leases
Operating Leases | 12 Months Ended |
Oct. 31, 2018 | |
Leases [Abstract] | |
Operating Leases | NOTE 12 - OPERATING LEASES The Company occupies various office and warehouse facilities pursuant to both term and month-to-month leases. The leases expire at various times through February 28, 2019. The following schedule summarized the future minimum lease payments on the term operating leases: Years Ending October 31, Amount 2019 $ 35,373 Totals $ 35,373 Rent expense for the years ended October 31, 2018 and 2017, was $93,773 and $93,797, respectively. |
Segment Analysis
Segment Analysis | 12 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Analysis | NOTE 13 -SEGMENT ANALYSIS We are operating in two reportable segments, which are managed separately based upon fundamental differences in their operations. Coda Octopus Martech and Coda Octopus Colmek operate as contractors (“Services Segment), and the balance of our operations are comprised of product sales (“Products Segment”). Segment operating income is total segment revenue reduced by operating expenses identifiable with the business segment. Corporate includes general corporate administrative costs. The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies. There are inter-segment sales which have been eliminated in our financial statements but are disclosed in the tables below for information purposes. The following table summarizes segment asset and operating balances by reportable segment for the years ended October 31, 2018 and 2017 respectively. The Company’s reportable business segments operate in three geographic locations. Those geographic locations are: * United States * Europe * Australia The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies. There are inter-segment sales which have been removed upon consolidation and for the purposes of the information shown below. Information concerning principal geographic areas is presented below according to the area where the activity has taken place for the years ended October 31, 2018 and 2017 respectively: Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2018 Revenues from External Customers $ 11,449,416 $ 6,570,013 $ - $ 18,019,429 Cost of Revenues 1,894,808 3,462,259 - 5,357,067 Gross Profit 9,554,608 3,107,754 - 12,662,362 Research & Development 2,048,285 523,429 - 2,571,714 Selling, General & Administrative 2,882,049 2,366,226 1,531,606 6,779,881 Total Operating Expenses 4,930,334 2,889,655 1,531,606 9,351,595 Income (Loss) from Operations 4,624,274 218,099 (1,531,606 ) 3,310,767 Other Income (Expense) Other Income 39,122 2,100 - 41,222 Interest (Expense) Income (12,154 ) (59,599 ) (177,337 ) (249,090 ) Total Other Income (Expense) 26,968 (57,499 ) (177,337 ) (207,868 ) Net Income (Loss) before income taxes 4,651,242 160,600 (1,708,943 ) 3,102,899 Current income benefit (expense) 133,419 - (1,956 ) (131,463 ) Deferred tax benefit - - 1,754,169 1,754,169 Income benefit (expense) 133,419 - 1,752,213 1,885,632 Net Income (Loss) $ 4,784,661 $ 160,600 $ 43,270 $ 4,988,531 Supplemental Disclosures Total Assets $ 15,061,693 $ 11,674,640 $ 2,000,278 $ 28,736,611 Total Liabilities $ 1,142,661 $ 1,498,828 $ 1,708,172 $ 4,349,661 Revenues from Intercompany Sales - eliminated from sales above $ 1,176,438 $ 437,387 $ 3,100,000 $ 4,713,825 Depreciation and Amortization $ 461,429 $ 282,836 $ 14,143 $ 758,408 Purchases of Long-lived Assets $ 499,262 $ 61,329 $ 76,561 $ 637,152 Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2017 Revenues from External Customers $ 10,986,268 $ 7,038,905 $ - $ 18,025,173 Cost of Revenues 2,246,881 3,810,567 - 6,057,448 Gross Profit 8,739,387 3,228,338 - 11,967,725 Research & Development 919,863 460,518 - 1,380,381 Selling, General & Administrative 3,220,635 2,714,054 834,638 6,769,327 Total Operating Expenses 4,140,498 3,174,572 834,638 8,149,708 Income (Loss) from Operations 4,598,889 53,766 (834,638 ) 3,818,017 Other Income (Expense) Other Income 117,106 4,172 - 121,278 Interest Expense (709,763 ) (56,697 ) 169,449 (597,011 ) Total Other Income (Expense) (592,657 ) (52,525 ) 169,449 (475,733 ) Net Income (Loss) before income taxes 4,006,233 1,241 (665,189 ) 3,342,284 Income refund (expense) 22,578 - (25,199 ) (2,621 ) Net Income $ 4,028,810 $ 1,241 $ (690,388 ) $ 3,339,663 Supplemental Disclosures Total Assets $ 12,374,214 $ 11,479,953 $ 205,906 $ 24,060,073 Total Liabilities $ 1,109,003 $ 1,475,442 $ 7,648,208 $ 10,232,653 Revenues from Intercompany Sales - eliminated from sales above $ 1,895,015 $ 387,142 $ 1,797,775 $ 4,079,932 Depreciation and Amortization $ 528,667 $ 412,220 $ 12,739 $ 953,626 Purchases of Long-lived Assets $ 2,419,092 $ 129,989 $ 12,470 $ 2,561,551 USA Europe Australia Total External Revenues by Geographic Locations Year Ended October 31, 2018 $ 7,617,891 $ 10,029,806 $ 371,732 $ 18,019,429 Year Ended October 31, 2017 $ 7,499,900 $ 9,056,589 $ 1,468,684 $ 18,025,173 |
Commitments
Commitments | 12 Months Ended |
Oct. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 14 – COMMITMENTS Leases Orlando, Florida Our corporate offices are co-located with our subsidiary Coda Octopus Products, Inc. in Orlando where we lease premises on a month to month basis at $5,176 per month. Edinburgh, Scotland (Lease will come to an end on February 28, 2019) Our wholly owned United Kingdom subsidiary, Coda Octopus Products Ltd, leases office space comprising 4,099 square feet in Edinburgh, United Kingdom. The annual rent is fixed for the duration of the lease at the British Pounds equivalent of $54,130 (the rent is stated in British Pounds and is therefore subject to exchange rate fluctuations). We have now agreed the schedule of works to reinstate the premises to is original conditions (ordinary wear and tear excluded) with the landlord and these premises will be surrendered on February 28, 2019. Following surrender the Company will have no further obligations (either for rent or rates) for these premises. Employment Agreements Annmarie Gayle Pursuant to the terms of an employment agreement dated March 16, 2017, the Company employs Ms. Gayle as its Chief Executive Officer on a full-time basis and a member of its Board of Directors. The annual salary is $230,000 payable on a monthly basis. Ms. Gayle is also entitled to an annual performance bonus of up to $100,000, upon achieving certain targets that are to be defined on an annual basis. The agreement provides for 30 days of paid holidays in addition to public holidays observed in Scotland. The agreement has no definitive term and may be terminated only upon twelve months’ prior written notice by Ms. Gayle. In the event that the Company terminates her at any time without cause, she is entitled to a payment equal to her annual salary as well as a separation bonus of $150,000. The Company may terminate the agreement for cause, immediately and without notice. Among others, “for cause” includes gross misconduct, a serious or repeated breach of the agreement and negligence and incompetence as reasonably determined by the Company’s Board. The agreement includes a 12-month non-compete and non-solicitation provision. Blair Cunningham Under the terms of an employment contract dated January 1, 2013, our wholly owned subsidiary Coda Octopus Products, Inc. employs Blair Cunningham as its Chief Executive Officer and President of Technology. He is being paid an annual base salary of $175,000 with effect from January 1, 2018, subject to review by the Company’s Chief Executive Officer. Mr. Cunningham is entitled to 25 vacation days in addition to any public holiday. The agreement may be terminated only upon twelve-month prior written notice without cause. The Company may terminate the agreement for cause, immediately and without notice. Among others, “for cause” includes gross misconduct, a serious or repeated breach of the agreement and negligence and incompetence as reasonably determined by the Company’s Board. The agreement includes a 18-month non-compete and non-solicitation provision. Michael Midgley Pursuant to the terms of an employment agreement dated June 1, 2011, Mike Midgley was appointed the Chief Executive Officer of our wholly owned subsidiary Coda Octopus Colmek, Inc. and our Chief Financial Officer. He is being paid an annual salary of $200,000 subject to an annual review by Colmek’s Board of Directors and the Company’s Chief Executive Officer. Mr. Midgley is entitled to 20 vacation days in addition to any public holiday. The agreement may be terminated at any time upon 4-month prior written notice. The Company may terminate the agreement for cause, immediately and without notice. Among others, “for cause” includes gross misconduct, a serious or repeated breach of the agreement and negligence and incompetence as reasonably determined by the Company’s Board. The agreement includes a 12-month non-compete and non-solicitation provision. On December 6, 2017, the board of directors of the Company appointed Mr. Midgley to be the Company’s Chief Financial Officer. In connection with this appointment, all rights and obligations under Mr. Midgley’s employment agreement with Colmek were transferred to and have been assumed by the Company. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Oct. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15 -SUBSEQUENT EVENTS On or around November 16, 2018, Coda Octopus Products Limited (UK) purchased property for its business requirements for a purchase price of £521,400 (an equivalent of $669,350 at the exchange rate of $1.2837). On or around November 16, 2018, the Company issued 23,965 shares of common stock for a purchase price of $105,446 to one investor pursuant to the terms of a private placement which was effected January 31 2018, under which certain pro-rata rights were triggered upon the conversion of the Series C Preferred Stock by the holders, on or around October 31, 2018. On December 24, 2018, the Company repaid $500,000 plus interest to our CEO representing loan outstanding (for full details see Note 8 of our Consolidated Financial Statements for year ended October 31, 2018 and 2017). The loan was paid in full and no further amounts are payable to our CEO for this loan. All obligations under this loan agreement are now extinguished. |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | a. Basis of Presentation The Company has adopted the Financial Accounting Standards Board (FASB) Codification (Codification). The Codification is the single official source of authoritative accounting principles generally accepted in the United States of America (U.S. GAAP) recognized by the FASB to be applied by nongovernmental entities, and all of the Codification’s content carries the same level of authority. |
Cash and Cash Equivalents | b. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. At times such investments may be in excess of federal deposit insurance limits. |
Trade Accounts Receivable | c. Trade Accounts Receivable Trade accounts receivable are recorded net of the allowance for doubtful accounts. The Company provides for an allowance for doubtful collections that is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Balances still outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. The allowance for doubtful accounts was $47,807 and $36,553 as of October 31, 2018 and 2017 respectively. |
Property and Equipment | d. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for minor replacements, maintenance and repairs which do not increase the useful lives of the property and equipment are charged to operations as incurred. Major additions and improvements are capitalized. Depreciation and amortization are computed using the straight-line method over their estimated useful lives which is typically three to five years for equipment and 30 years for buildings. |
Advertising | e. Advertising Coda follows the policy of charging the costs of advertising to expense as incurred, which aggregated $0 for the years ended October, 31 2018 and 2017. |
Inventory | f. Inventory Inventory is stated at the lower of cost (weighted average method) or net realizable value. Inventory consisted of the following components: October 31, 2018 October 31, 2017 Raw materials and parts $ 2,887,505 $ 2,651,511 Work in progress 472,204 501,692 Demo goods - 349,480 Finished goods 463,534 149,566 Total Inventory $ 3,823,243 $ 3,652,249 |
Estimates | g. Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues including unbilled and deferred revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates related to the percentage of completion method used to account for contracts including costs and earnings in excess of billings, billings in excess of costs and estimated earnings and the valuation of goodwill. |
Revenue Recognition | h. Revenue Recognition Our revenue is derived from sales of underwater technologies and equipment for imaging, mapping, defense and survey applications and from the engineering services which we provide. Revenue is recognized when evidence of a contractual arrangement exists, delivery has occurred or services have been rendered, the contract price is fixed or determinable, and collectability is reasonably assured. No rights of return privileges are granted to customers after delivery. For arrangements with multiple deliverables, we recognize product revenue by allocating the revenue to each deliverable based on the relative fair value of each deliverable, and recognize revenue when equipment is delivered, and for installation and other services as they are performed. Our contracts sometimes require customer payments in advance of revenue recognition. These amounts are reflected as liabilities and recognized as revenue when the Company has fulfilled its obligations under the respective contracts. For software license sales for which any services rendered are not considered essential to the functionality of the software, we recognize revenue upon delivery of the software, provided (1) there is evidence of a contractual arrangement for this, (2) collection of our fee is considered probable and (3) the fee is fixed and determinable. For arrangements that are generated from time and material contracts where there is a signed agreement and approved purchase order in place that specifies the fixed hourly rate and other reimbursable costs to be billed based on material and direct labor hours incurred, revenue is recognized based on material and direct labor hours incurred. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred (materials and direct labor hours) to date to estimated total services (materials and direct labor hours) for each contract. This method is used as expenditures for direct materials and labor hours are considered to be the best available measure of progress on these contracts. Losses on fixed-price contracts are recognized during the period in which the loss first becomes apparent based upon costs incurred to date and the estimated costs to complete as determined by experience from similar contracts. Variations from estimated contract performance could result in adjustments to operating results. Rental revenue is recognized monthly over the term of the rental period. On November 1, 2018 the Company adopted Accounting Standards Codification ASC 606, entitled Revenue From Contracts with Customers. While terminology and requirements change in ASC 606, we believe that our existing revenue accounting is compliant with ASC 606 and that our accounting for revenue will not change. Accordingly, our disclosures about our revenue in accordance with ASC 606 will expand to comply with the new requirements, including expansion of quarterly revenue reporting requirements. |
Concentrations of Risk | i. Concentrations of Risk Credit losses, if any, have been provided for in the consolidated financial statements and are based on management’s expectations. The Company’s accounts receivable are subject to potential concentrations of credit risk, since a significant part of the Company’s sales are to a small number of companies and, even though these are generally established businesses, market fluctuations such as the price of oil may affect our customers’ ability to meet their obligations to us. The Company’s bank deposits are held with financial institutions both in and out of the USA. At times, such amounts may be in excess of applicable government mandated insurance limits. The Company has not experienced any losses in such accounts or lack of access to its cash, and believes it is not exposed to significant risk of loss with respect to cash. |
Contracts in Progress (Unbilled Receivables and Deferred Revenue) | j. Contracts in Progress (Unbilled Receivables and Deferred Revenue) Costs and estimated earnings in excess of billings on uncompleted contracts represent accumulated project expenses and fees which have not been invoiced to customers as of the date of the balance sheet. These amounts are stated on the consolidated balance sheets as Unbilled Receivables of $3,013,116 and $2,723,172 as of October 31, 2018 and 2017, respectively. Our Deferred Revenue of $602,914 and $402,955 as of October 31, 2018 and 2017, respectively, consists of billings in excess of costs and revenues received as part of our warranty obligations upon completing a sale – elaborated further in the last paragraph of this note. Revenue received as part of sales of equipment includes a provision for warranty and is treated as deferred revenue, along with extended warranty sales, with these amounts amortized over 12 months, our stated warranty period, from the date of sale. These amounts are stated on the balance sheets as a component of Deferred Revenue of $335,646 and $452,098 as of October 31, 2018 and 2017, respectively. |
Income Taxes | k. Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification 740, Income Taxes Deferred tax assets and liabilities are the amounts by which the Company’s future income taxes are expected to be impacted by these differences as they reverse. Deferred tax assets are based on differences that are expected to decrease future income taxes as they reverse. Correspondingly, deferred tax liabilities are based on differences that are expected to increase future income taxes as they reverse. Note 7 below discusses the amounts of deferred tax assets and liabilities, and also presents the impact of significant differences between financial reporting income and taxable income. For income tax purposes, the Company uses the percentage of completion method of recognizing revenues on long-term contracts which is consistent with the Company’s financial reporting under U.S. generally accepted accounting principles. |
Intangible Assets | l. Intangible Assets Intangible assets consist principally of the excess of cost over the fair value of net assets acquired (or goodwill), customer relationships, non-compete agreements and licenses. Goodwill was allocated to our reporting units based on the original purchase price allocation. Goodwill is not amortized and is evaluated for impairment annually or more often if circumstances indicate impairment may exist. Customer relationships, non-compete agreements, patents and licenses are being amortized on a straight-line basis over periods of 2 to 15 years. The Company amortizes its limited lived intangible assets using the straight-line method over their estimated period of benefit. We periodically evaluate the recoverability of intangible assets and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. The first step of the goodwill impairment test used to identify potential impairment, compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value, which is based on future cash flows, exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step must be performed to measure the amount of the impairment loss, if any. The Company will early adopt Accounting Standards Codification 2017 – 04, Simplifying the Test for Goodwill Impairment, which permits the Company to impair the difference between carrying amount in excess of the fair value of the reporting unit as the reduction in goodwill. ASC 2017-04 eliminates the requirement in previous US GAAP to perform Step 2 of the goodwill impairment test. At the end of each year, we evaluate goodwill on a separate reporting unit basis to assess recoverability, and impairments, if any, are recognized in earnings. An impairment loss would be recognized in an amount equal to the excess of the carrying amount of the goodwill over the fair value of the reporting unit. There were no impairment charges recognized during the years ended October 31, 2018 and 2017. |
Fair Value of Financial Instruments | m. Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair values because of the short-term nature of these instruments. The aggregate carrying amount of the notes payable approximates fair value as they bear interest at a market interest rate based on their term and maturity. The fair value of the Company’s long-term debt approximates its carrying amount based on the fact that the Company believes it could obtain similar terms and conditions for similar debt. |
Foreign Currency Translation | n. Foreign Currency Translation Assets and liabilities are translated at the prevailing exchange rates at the balance sheet dates, related revenue and expenses are translated at weighted average exchange rates in effect during the period and stockholders’ equity, fixed assets and long-term investments are recorded at historical exchange rates. Resulting translation adjustments are recorded as a separate component in stockholders’ equity as part of accumulated other comprehensive income or (loss) as may be appropriate. Foreign currency transaction gains and losses are included in the consolidated statements of income and comprehensive income. |
Long-Lived Assets | o. Long-Lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. No impairment loss was recognized during the years ended October 31, 2018 and 2017, respectively. |
Research and Development | p. Research and Development Research and development costs consist of expenditures for the development of present and future patents and technology, which are not capitalizable. Under current legislation, we are eligible for UK tax credits related to our qualified research and development expenditures. Tax credits are classified as a reduction of research and development expense. During the years ended October 31, 2018 and 2017, we had $140,015 and $416,624 respectively. |
Stock Based Compensation | q. Stock Based Compensation We recognize the expense related to the fair value of stock based compensation awards within the consolidated statements of income and comprehensive income. We use the fair value method for equity instruments granted to non-employees and use the Black Scholes model for measuring the fair value. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the periods in which the related services are rendered. |
Comprehensive Income | r. Comprehensive Income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Comprehensive income includes gains and losses on foreign currency translation adjustments and is included as a component of stockholders’ equity. |
Earnings Per Share | s. Earnings per Share We compute basic earnings per share by dividing the income attributable to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per share include the dilutive effect, if any, from the potential exercise of stock options and warrants. Following is a reconciliation of earnings from continuing operations and weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share: Year Ended Year Ended Fiscal Period October 31, 2018 October 31, 2017 Numerator: Net Income $ 4,988,531 $ 3,339,663 Denominator: Basic weighted average common shares outstanding 10,093,538 9,111,356 Conversion of Series C Preferred Stock - 200,000 Diluted outstanding shares 10,093,538 9,311,356 Earnings from continuing operations Basic $ 0.49 $ 0.37 Diluted $ 0.49 $ 0.36 |
Recent Accounting Pronouncements | t. Recent Accounting Pronouncements There have been no new accounting pronouncements made effective during fiscal 2018 that have significance, or potential significance, to our Consolidated Financial Statements. Recent Accounting Pronouncements Not Yet Effective On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of the new revenue standard for periods beginning after December 15, 2016 to December 15, 2017, with early adoption permitted but not earlier than the original effective date. We have evaluated the effects of this updated standard and determined that it will not have a significant impact on our consolidated financial statements but will expand the related disclosures, particularly for quarterly reporting purposes. On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the balance sheet. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We own substantially all of our facilities and rental asset and the effect of adopting this standard was immaterial. On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation must be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We have evaluated this standard and determined that it did not have a significant impact on our consolidated financial statements and related disclosures. With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements. |
Liquidity | u. Liquidity At October 31, 2018, we had cash on hand of approximately $7.5 million and both billed and unbilled receivables of approximately $6.3 million. Our current cash balance represents approximately one-year of Selling, General and Administrative Expenses. The Company continues to critically evaluate the level of expenses that we incur and reduce those expenses as appropriate. |
Summary of Accounting Policie_2
Summary of Accounting Policies (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Components of Inventory | Inventory is stated at the lower of cost (weighted average method) or net realizable value. Inventory consisted of the following components: October 31, 2018 October 31, 2017 Raw materials and parts $ 2,887,505 $ 2,651,511 Work in progress 472,204 501,692 Demo goods - 349,480 Finished goods 463,534 149,566 Total Inventory $ 3,823,243 $ 3,652,249 |
Schedule of Earnings Per Share Basic and Diluted | Following is a reconciliation of earnings from continuing operations and weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share: Year Ended Year Ended Fiscal Period October 31, 2018 October 31, 2017 Numerator: Net Income $ 4,988,531 $ 3,339,663 Denominator: Basic weighted average common shares outstanding 10,093,538 9,111,356 Conversion of Series C Preferred Stock - 200,000 Diluted outstanding shares 10,093,538 9,311,356 Earnings from continuing operations Basic $ 0.49 $ 0.37 Diluted $ 0.49 $ 0.36 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Value of Identifiable Intangible Assets | The identifiable intangible assets acquired and their carrying value as of October 31, 2018 and 2017, are as follows: October 31, 2018 October 31, 2017 Customer relationships (weighted average life of 10 years) $ 896,624 $ 896,624 Non-compete agreements (weighted average life of 3 years) 198,911 198,911 Patents and other (weighted average life of 10 years) 366,036 294,175 Total identifiable intangible assets - gross carrying value 1,461,571 1,389,710 Less: accumulated amortization (1,229,727 ) (1,182,537 ) Total intangible assets, net $ 231,844 $ 207,173 |
Schedule of Estimated Future Amortization Expenses | Future estimated annual amortization expenses as of October 31, 2018 as follows: Years Ending October 31, Amount 2019 46,318 2020 39,121 2021 34,620 2022 34,297 2023 30,831 Thereafter 46,657 Totals $ 231,844 |
Schedule of Goodwill | The carrying amount of goodwill as of October 31, 2018 and 2017, respectively, are recorded below: October 31, 2018 October 31, 2017 Breakout of Goodwill: Coda Octopus Colmek, Inc. $ 2,038,669 $ 2,038,669 Coda Octopus Products, Ltd 62,315 62,315 Coda Octopus Martech, Ltd 1,281,124 1,281,124 Total Goodwill $ 3,382,108 $ 3,382,108 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of: October 31, 2018 October 31, 2017 Buildings $ 3,996,860 $ 4,082,346 Land 200,000 200,000 Office machinery and equipment 2,875,443 2,064,449 Furniture, fixtures and improvements 1,109,225 1,165,897 Totals 8,181,528 7,512,692 Less: accumulated depreciation (2,935,345 ) (2,299,411 ) Property and Equipment – Net $ 5,246,183 $ 5,213,281 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Other Current Assets | Other current assets consisted of the following at: October 31, 2018 October 31, 2017 Deposits $ 21,007 $ 11,255 Other receivables 141,294 73,600 Prepaid Tax 57,123 235,959 Total Other Current Assets $ 219,424 $ 320,814 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets | Components of deferred tax assets as of October 31, 2018 and 2017 are as follows: October 31, 2018 October 31, 2017 Net operating loss carry-forward benefit $ 1,754,169 $ 4,172,200 Valuation allowance (4,172,200 ) Net deferred tax (liability) asset $ 1,754,169 $ - |
Schedule of Reconciliation of Income Tax Expense Benefit | A reconciliation between the amounts of income tax benefit determined by applying applicable U.S. statutory tax rate to pre-tax income is as follows: October 31, 2018 October 31, 2017 Federal statutory rate of 21% as of October 31, 2018 and 35% as of October 31, 2017 $ 651,609 $ 1,169,799 Alternative Minimum Tax 7,840 27,192 Foreign tax expense (benefit) (139,303 ) (24,571 ) Recognition of deferred tax benefit (1,754,169 ) - Use of NOL losses on consolidated tax returns (651,609 ) (1,169,799 ) Total income tax expense (benefit) $ (1,885,632 ) $ 2,621 |
Loans and Notes Payable (Tables
Loans and Notes Payable (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Loans and Notes Payable | Loans and notes payable consisted of the following at: October 31, 2018 October 31, 2017 Secured note payable to HSBC NA with interest payable on the 28th day of each month at 4.56% per annum. On March 28, 2018 the Company prepaid a portion of the principal and thereby reducing the principal outstanding under this loan to $1,917,602 resulting in the repayment obligations (principal and interest payments) being reduced to $43,777 per month. There was no prepayment penalty associated with the reduction of the principal. It is now expected that the Loan will be repaid within 41 months. $ 1,524,239 $ 7,279,353 One of the subsidiaries has an unsecured working capital loan from the CEO of the Company. The note is due on November 30, 2018 and carries an interest rate of 4.5%. The loan was paid in full on December 24, 2018 and all obligations under this agreement have now been extinguished. 500,000 1,000,000 Total 2,024,239 8,279,353 Less: current portion (964,695 ) (2,212,951 ) Total Long-Term Loans and Notes Payable $ 1,059,544 $ 6,066,402 |
Schedule of Principal Maturities of Notes and Loans Payable | This table shows the principal maturities on the HSBC NA Senior Note as of October 31, 2018: Years Ending October 31, Amount 2019 $ 464,695 2020 486,624 2021 509,588 2022 63,332 Totals $ 1,524,239 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | A reconciliation of the other comprehensive income (loss) in the stockholders’ equity section of the consolidated balance sheets is as follows: October 31, 2018 October 31, 2017 Balance, beginning of year $ (2,038,431 ) $ (2,337,437 ) Total other comprehensive income for the year - foreign currency translation adjustment (190,232 ) 299,006 Balance, end of period $ (2,228,663 ) $ (2,038,431 ) |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments | The following schedule summarized the future minimum lease payments on the term operating leases: Years Ending October 31, Amount 2019 $ 35,373 Totals $ 35,373 |
Segment Analysis (Tables)
Segment Analysis (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Information concerning principal geographic areas is presented below according to the area where the activity has taken place for the years ended October 31, 2018 and 2017 respectively: Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2018 Revenues from External Customers $ 11,449,416 $ 6,570,013 $ - $ 18,019,429 Cost of Revenues 1,894,808 3,462,259 - 5,357,067 Gross Profit 9,554,608 3,107,754 - 12,662,362 Research & Development 2,048,285 523,429 - 2,571,714 Selling, General & Administrative 2,882,049 2,366,226 1,531,606 6,779,881 Total Operating Expenses 4,930,334 2,889,655 1,531,606 9,351,595 Income (Loss) from Operations 4,624,274 218,099 (1,531,606 ) 3,310,767 Other Income (Expense) Other Income 39,122 2,100 - 41,222 Interest (Expense) Income (12,154 ) (59,599 ) (177,337 ) (249,090 ) Total Other Income (Expense) 26,968 (57,499 ) (177,337 ) (207,868 ) Net Income (Loss) before income taxes 4,651,242 160,600 (1,708,943 ) 3,102,899 Current income benefit (expense) 133,419 - (1,956 ) (131,463 ) Deferred tax benefit - - 1,754,169 1,754,169 Income benefit (expense) 133,419 - 1,752,213 1,885,632 Net Income (Loss) $ 4,784,661 $ 160,600 $ 43,270 $ 4,988,531 Supplemental Disclosures Total Assets $ 15,061,693 $ 11,674,640 $ 2,000,278 $ 28,736,611 Total Liabilities $ 1,142,661 $ 1,498,828 $ 1,708,172 $ 4,349,661 Revenues from Intercompany Sales - eliminated from sales above $ 1,176,438 $ 437,387 $ 3,100,000 $ 4,713,825 Depreciation and Amortization $ 461,429 $ 282,836 $ 14,143 $ 758,408 Purchases of Long-lived Assets $ 499,262 $ 61,329 $ 76,561 $ 637,152 Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2017 Revenues from External Customers $ 10,986,268 $ 7,038,905 $ - $ 18,025,173 Cost of Revenues 2,246,881 3,810,567 - 6,057,448 Gross Profit 8,739,387 3,228,338 - 11,967,725 Research & Development 919,863 460,518 - 1,380,381 Selling, General & Administrative 3,220,635 2,714,054 834,638 6,769,327 Total Operating Expenses 4,140,498 3,174,572 834,638 8,149,708 Income (Loss) from Operations 4,598,889 53,766 (834,638 ) 3,818,017 Other Income (Expense) Other Income 117,106 4,172 - 121,278 Interest Expense (709,763 ) (56,697 ) 169,449 (597,011 ) Total Other Income (Expense) (592,657 ) (52,525 ) 169,449 (475,733 ) Net Income (Loss) before income taxes 4,006,233 1,241 (665,189 ) 3,342,284 Income refund (expense) 22,578 - (25,199 ) (2,621 ) Net Income $ 4,028,810 $ 1,241 $ (690,388 ) $ 3,339,663 Supplemental Disclosures Total Assets $ 12,374,214 $ 11,479,953 $ 205,906 $ 24,060,073 Total Liabilities $ 1,109,003 $ 1,475,442 $ 7,648,208 $ 10,232,653 Revenues from Intercompany Sales - eliminated from sales above $ 1,895,015 $ 387,142 $ 1,797,775 $ 4,079,932 Depreciation and Amortization $ 528,667 $ 412,220 $ 12,739 $ 953,626 Purchases of Long-lived Assets $ 2,419,092 $ 129,989 $ 12,470 $ 2,561,551 USA Europe Australia Total External Revenues by Geographic Locations Year Ended October 31, 2018 $ 7,617,891 $ 10,029,806 $ 371,732 $ 18,019,429 Year Ended October 31, 2017 $ 7,499,900 $ 9,056,589 $ 1,468,684 $ 18,025,173 |
Summary of Accounting Policie_3
Summary of Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Allowance for doubtful accounts receivable | $ 47,807 | $ 36,553 |
Advertising expenses | 0 | 0 |
Unbilled receivables | 3,013,116 | 2,723,172 |
Deferred revenues | 602,914 | 402,955 |
Component of Deferred Revenue | $ 335,646 | 452,098 |
Finite lived intangible asset amortization period | Customer relationships, non-compete agreements, patents and licenses are being amortized on a straight-line basis over periods of 2 to 15 years. | |
Impairment loss on long lived asset | ||
Reduction on research and development expenses | 140,015 | $ 416,624 |
Cash on hand | 7,500,000 | |
Billed and unbilled receivables | $ 6,300,000 | |
Equipment [Member] | Minimum [Member] | ||
Estimated useful lives of property and equipment | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Estimated useful lives of property and equipment | 5 years | |
Buildings [Member] | ||
Estimated useful lives of property and equipment | 30 years |
Summary of Accounting Policie_4
Summary of Accounting Policies - Schedule of Components of Inventory (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw materials and parts | $ 2,887,505 | $ 2,651,511 |
Work in progress | 472,204 | 501,692 |
Demo goods | 349,480 | |
Finished goods | 463,534 | 149,566 |
Total Inventory | $ 3,823,243 | $ 3,652,249 |
Summary of Accounting Policie_5
Summary of Accounting Policies - Schedule of Earnings Per Share Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Accounting Policies [Abstract] | ||
Net income | $ 4,988,531 | $ 3,339,663 |
Basic weighted average common shares outstanding | 10,093,538 | 9,111,356 |
Conversion of Series C Preferred Stock | 200,000 | |
Diluted outstanding shares | 10,093,538 | 9,311,356 |
Earnings from continuing operations, Basic | $ 0.49 | $ 0.37 |
Earnings from continuing operations, Diluted | $ 0.49 | $ 0.36 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Amortization of intangible assets | $ 47,190 | $ 163,519 |
Total Goodwill | 3,382,108 | 3,382,108 |
Coda Octopus Colmek Inc Coda Octopus Products Ltd Coda Octopus Martech Ltd [Member] | ||
Total Goodwill | $ 3,382,108 | $ 3,382,108 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Carrying Value of Identifiable Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Total identifiable intangible assets - gross carrying value | $ 1,461,571 | $ 1,389,710 |
Less: accumulated amortization | (1,229,727) | (1,182,537) |
Total intangible assets, net | 231,844 | 207,173 |
Customer Relationships [Member] | ||
Total identifiable intangible assets - gross carrying value | $ 896,624 | 896,624 |
Weighted average lives of intangible assets | 10 years | |
Non-Compete Agreements [Member] | ||
Total identifiable intangible assets - gross carrying value | $ 198,911 | 198,911 |
Weighted average lives of intangible assets | 3 years | |
Patents and Other [Member] | ||
Total identifiable intangible assets - gross carrying value | $ 366,036 | $ 294,175 |
Weighted average lives of intangible assets | 10 years |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization Expenses (Details) | Oct. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 46,318 |
2,020 | 39,121 |
2,021 | 34,620 |
2,022 | 34,297 |
2,023 | 30,831 |
Thereafter | 46,657 |
Total | $ 231,844 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Schedule of Goodwill (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Goodwill net | $ 3,382,108 | $ 3,382,108 |
Coda Octopus Colmek Inc [Member] | ||
Goodwill net | 2,038,669 | 2,038,669 |
Coda Octopus Products Ltd [Member] | ||
Goodwill net | 62,315 | 62,315 |
Coda Octopus Martech Ltd [Member] | ||
Goodwill net | $ 1,281,124 | $ 1,281,124 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 711,218 | $ 790,107 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Property and Equipment - Gross | $ 8,181,528 | $ 7,512,692 |
Less: accumulated depreciation | (2,935,345) | (2,299,411) |
Property and Equipment - net | 5,246,183 | 5,213,281 |
Buildings [Member] | ||
Property and Equipment - Gross | 3,996,860 | 4,082,346 |
Land [Member] | ||
Property and Equipment - Gross | 200,000 | 200,000 |
Office Machinery and Equipment [Member] | ||
Property and Equipment - Gross | 2,875,443 | 2,064,449 |
Furniture Fixtures and Improvements [Member] | ||
Property and Equipment - Gross | $ 1,109,225 | $ 1,165,897 |
Other Current Assets - Summary
Other Current Assets - Summary of Other Current Assets (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits | $ 21,007 | $ 11,255 |
Other receivables | 141,294 | 73,600 |
Prepaid Tax | 57,123 | 235,959 |
Total Other Current Assets | $ 219,424 | $ 320,814 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | Oct. 31, 2018 | Aug. 12, 2018 | Apr. 19, 2018 | Mar. 06, 2018 | Feb. 22, 2018 | Feb. 12, 2018 | Feb. 05, 2018 | Jan. 29, 2018 | Oct. 13, 2017 | Jun. 23, 2017 | Apr. 28, 2017 | Nov. 08, 2016 | Aug. 31, 2017 | Jun. 30, 2017 | Oct. 31, 2018 | Oct. 31, 2017 |
Reverse stock split of our issued and outstanding common stock | one for fourteen (1 for 14) reverse stock split | |||||||||||||||
Reverse stock split reduced the number of issued and outstanding shares of common stock | 9,102,192 | |||||||||||||||
Common stock shares authorized | 150,000,000 | 150,000,000 | 150,000,000 | |||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Number of shares issued for services, value | $ 5,312,732 | |||||||||||||||
Common stock, shares issued | 10,640,416 | 10,640,416 | 9,136,121 | |||||||||||||
Common stock, shares outstanding | 10,640,416 | 10,640,416 | 9,136,121 | |||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Preferred stock, shares undesignated | 4,900,000 | 4,900,000 | ||||||||||||||
Number of shares converted | 200,000 | |||||||||||||||
Series C Preferred stock, shares issued | 0 | 0 | 1,000 | |||||||||||||
Series C Preferred stock, shares outstanding | 0 | 0 | 1,000 | |||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||||
Number of shares issued for services | ||||||||||||||||
Number of shares issued for services, value | ||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock, shares designated | 50,000 | 50,000 | ||||||||||||||
Series C Preferred Stock [Member] | Exchange Agreement [Member] | ||||||||||||||||
Number of shares issued | 1,000 | |||||||||||||||
Number of shares issued, value | $ 1,000 | |||||||||||||||
Preferred stock conversion price per share | $ 5 | |||||||||||||||
Preferred stock redeemable, fixed price | $ 1,000,000 | |||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock, shares designated | 50,000 | 50,000 | ||||||||||||||
Two Individuals [Member] | ||||||||||||||||
Number of shares issued for services | 12,500 | 12,500 | 6,250 | 6,250 | 8,036 | |||||||||||
Number of shares issued for services, value | $ 57,250 | $ 57,250 | $ 15,000 | $ 15,000 | $ 10,500 | |||||||||||
Three Directors [Member] | ||||||||||||||||
Number of shares issued for services | 21,429 | 21,429 | ||||||||||||||
Number of shares issued for services, value | $ 93,738 | $ 93,738 | ||||||||||||||
Two Investors [Member] | Private Placement [Member] | ||||||||||||||||
Number of shares issued for services | 1,125,950 | |||||||||||||||
Number of shares issued for services, value | $ 4,954,180 | |||||||||||||||
Directors [Member] | Private Placement [Member] | ||||||||||||||||
Number of shares issued for services | 75,000 | |||||||||||||||
Number of shares issued for services, value | $ 345,750 | |||||||||||||||
One Investor [Member] | Private Placement [Member] | ||||||||||||||||
Number of shares issued for services | 2,777 | |||||||||||||||
Number of shares issued for services, value | $ 12,802 | |||||||||||||||
Former Officer [Member] | ||||||||||||||||
Number of shares issued | 63,068 | |||||||||||||||
Number of shares issued, value | $ 277,499 | |||||||||||||||
Consultants [Member] | ||||||||||||||||
Number of shares issued for services | 25,000 | |||||||||||||||
Number of shares issued for services, value | $ 113,750 | |||||||||||||||
Holders [Member] | Series C Preferred Stock [Member] | ||||||||||||||||
Number of shares issued | 200,000 | |||||||||||||||
Number of shares issued, value | $ 1,000,000 | |||||||||||||||
Shares conversion price per share | $ 5 | $ 5 | ||||||||||||||
Number of shares converted | 1,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Net operating loss | $ 525,308 | |
Operating loss expiration description | Expire beginning in 2028 through 2029 | |
Deferred tax asset | $ 1,754,169 | $ 4,172,200 |
Deferred tax benefit | 1,754,169 | |
Net operating loss carry-forward benefit | 1,754,169 | 4,172,200 |
Alternative minimum tax due | $ 7,840 | 27,192 |
Income tax reconciliation description | US Congress passed the Tax Cuts and Jobs Act, which reduced the corporate tax rate from 35% to 21% | |
Corporate tax rate | 21.00% | |
Deferred tax assets, net | $ 1,754,169 | |
Tax Cuts and Jobs Act [Member] | ||
Deferred tax assets, net | 4,172,200 | |
Change in deferred tax assets | 2,246,718 | |
UK and Norway [Member] | ||
Deferred tax asset | 110,314 | |
2026 through 2029 [Member] | ||
Net operating loss | $ 8,353,000 | $ 10,698,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward benefit | $ 1,754,169 | $ 4,172,200 |
Valuation allowance | (4,172,200) | |
Net deferred tax (liability) asset | $ 1,754,169 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense Benefit (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate of 21% as of October 31, 2018 and 35% as of October 31, 2017 | $ 651,609 | $ 1,169,799 |
Alternative Minimum Tax | 7,840 | 27,192 |
Foreign tax expense (benefit) | (139,303) | (24,571) |
Recognition of deferred tax benefit | (1,754,196) | |
Use of NOL losses on consolidated tax returns | (651,609) | (1,169,799) |
Total income tax expense (benefit) | $ 1,885,632 | $ (2,621) |
Income Taxes - Schedule of Re_2
Income Taxes - Schedule of Reconciliation of Income Tax Expense Benefit (Details) (Parenthetical) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 35.00% |
Loans and Notes Payable (Detail
Loans and Notes Payable (Details Narrative) | 12 Months Ended |
Oct. 31, 2018USD ($) | |
Line of credit outstanding, balance | $ 0 |
Unused Lines of Credit [Member] | |
Maximum, line of credit | $ 455,000 |
Loans and Notes Payable - Sched
Loans and Notes Payable - Schedule of Loans and Notes Payable (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Total | $ 2,024,239 | $ 8,279,353 |
Less: current portion | (964,695) | (2,212,951) |
Total Long-Term Loans and Notes Payable | 1,059,544 | 6,066,402 |
Secured Debt One [Member] | ||
Total | 1,524,239 | 7,279,353 |
Secured Debt Two [Member] | ||
Total | $ 500,000 | $ 1,000,000 |
Loans and Notes Payable - Sch_2
Loans and Notes Payable - Schedule of Loans and Notes Payable (Details) (Parenthetical) - USD ($) | Mar. 28, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Secured Debt One [Member] | |||
Loan, annual interest rate | 4.56% | 4.56% | |
Reduced principal outstanding | $ 1,917,602 | ||
Principal and interest payment | $ 43,777 | ||
Secured Debt Two [Member] | |||
Secured debenture, maturity date | Nov. 30, 2018 | Nov. 30, 2018 | |
Debt, interest rate | 4.50% | 4.50% |
Loans and Notes Payable - Sch_3
Loans and Notes Payable - Schedule of Principal Maturities of Notes and Loans Payable (Details) | Oct. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 464,695 |
2,020 | 486,624 |
2,021 | 509,588 |
2,022 | 63,332 |
Totals | $ 1,524,239 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Equity [Abstract] | ||
Other comprehensive income (loss) | $ (190,232) | $ 299,006 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Equity [Abstract] | ||
Balance, beginning of year | $ (2,038,431) | $ (2,337,437) |
Total other comprehensive income for the year - foreign currency translation adjustment | (190,232) | 299,006 |
Balance, end of period | $ (2,228,663) | $ (2,038,431) |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Accounts receivable from customer | $ 3,326,623 | $ 1,418,114 |
One Customer [Member] | ||
Percentage of sales from customers | 10.00% | 10.00% |
One Customer [Member] | Revenue [Member] | ||
Percentage of sales from customers | 16.00% | 22.00% |
Revenue from customer | $ 2,882,761 | $ 4,036,591 |
One Customer [Member] | Accounts Receivable [Member] | ||
Percentage of sales from customers | 1.00% | 21.00% |
Accounts receivable from customer | $ 24,993 | $ 289,571 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Employee contributions | $ 1,850 | |
Employee benefit costs | $ 51,693 | $ 53,498 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Leases [Abstract] | ||
Leases expire | Feb. 28, 2019 | |
Rent expense | $ 93,773 | $ 93,797 |
Operating Leases - Schedule of
Operating Leases - Schedule of Future Minimum Lease Payments (Details) | Oct. 31, 2018USD ($) |
Leases [Abstract] | |
2,019 | $ 35,373 |
Totals | $ 35,373 |
Segment Analysis (Details Narra
Segment Analysis (Details Narrative) | 12 Months Ended |
Oct. 31, 2018Integer | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Analysis - Schedule of
Segment Analysis - Schedule of Segment Reporting Information (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Revenues from External Customers | $ 18,019,429 | $ 18,025,173 |
Cost of Revenues | 5,357,067 | 6,057,448 |
Gross Profit | 12,662,362 | 11,967,725 |
Research & Development | 2,571,714 | 1,380,381 |
Selling, General & Administrative | 6,779,881 | 6,769,327 |
Total Operating Expenses | 9,351,595 | 8,149,708 |
Income (Loss) from Operations | 3,310,767 | 3,818,017 |
Other Income | 41,222 | 121,278 |
Interest (Expense) Income | (249,090) | (597,011) |
Total Other Income (Expense) | (207,868) | (475,733) |
Net Income (Loss) before income taxes | 3,102,899 | 3,342,284 |
Current income benefit (expense) | 131,463 | (2,621) |
Deferred tax benefit | 1,754,169 | |
Income benefit (expense) | 1,885,632 | (2,621) |
Net Income (Loss) | 4,988,531 | 3,339,663 |
Total Assets | 28,736,611 | 24,060,073 |
Total Liabilities | 4,349,661 | 10,232,653 |
Revenues from Intercompany Sales - eliminated from sales above | 4,713,825 | 4,079,932 |
Depreciation and Amortization | 758,408 | 953,626 |
Purchases of Long-lived Assets | 637,152 | 2,561,551 |
USA [Member] | ||
Revenues from External Customers | 7,617,891 | 7,499,900 |
Europe [Member] | ||
Revenues from External Customers | 10,029,806 | 9,056,589 |
Australia [Member] | ||
Revenues from External Customers | 371,732 | 1,468,684 |
Marine Technology Business (Products) [Member] | ||
Revenues from External Customers | 11,449,416 | 10,986,268 |
Cost of Revenues | 1,894,808 | 2,246,881 |
Gross Profit | 9,554,608 | 8,739,387 |
Research & Development | 2,048,285 | 919,863 |
Selling, General & Administrative | 2,882,049 | 3,220,635 |
Total Operating Expenses | 4,930,334 | 4,140,498 |
Income (Loss) from Operations | 4,624,274 | 4,598,889 |
Other Income | 39,122 | 117,106 |
Interest (Expense) Income | (12,154) | (709,763) |
Total Other Income (Expense) | 26,968 | (592,657) |
Net Income (Loss) before income taxes | 4,651,242 | 4,006,233 |
Current income benefit (expense) | 133,419 | |
Deferred tax benefit | ||
Income benefit (expense) | 133,419 | 22,578 |
Net Income (Loss) | 4,784,661 | 4,028,810 |
Total Assets | 15,061,693 | 12,374,214 |
Total Liabilities | 1,142,661 | 1,109,003 |
Revenues from Intercompany Sales - eliminated from sales above | 1,176,438 | 1,895,015 |
Depreciation and Amortization | 461,429 | 528,667 |
Purchases of Long-lived Assets | 499,262 | 2,419,093 |
Marine Engineering Business (Services) [Member] | ||
Revenues from External Customers | 6,570,013 | 7,038,905 |
Cost of Revenues | 3,462,259 | 3,810,567 |
Gross Profit | 3,107,754 | 3,228,338 |
Research & Development | 523,429 | 460,518 |
Selling, General & Administrative | 2,366,226 | 2,714,054 |
Total Operating Expenses | 2,889,655 | 3,174,572 |
Income (Loss) from Operations | 218,099 | 53,766 |
Other Income | 2,100 | 4,172 |
Interest (Expense) Income | (59,599) | (56,697) |
Total Other Income (Expense) | (57,499) | (52,525) |
Net Income (Loss) before income taxes | 160,600 | 1,241 |
Current income benefit (expense) | ||
Deferred tax benefit | ||
Income benefit (expense) | ||
Net Income (Loss) | 160,600 | 1,241 |
Total Assets | 11,674,640 | 11,479,953 |
Total Liabilities | 1,498,828 | 1,475,442 |
Revenues from Intercompany Sales - eliminated from sales above | 437,387 | 387,142 |
Depreciation and Amortization | 282,836 | 412,220 |
Purchases of Long-lived Assets | 61,329 | 129,989 |
Overhead [Member] | ||
Revenues from External Customers | ||
Cost of Revenues | ||
Gross Profit | ||
Research & Development | ||
Selling, General & Administrative | 1,531,606 | 834,638 |
Total Operating Expenses | 1,531,606 | 834,638 |
Income (Loss) from Operations | (1,531,606) | (834,638) |
Other Income | ||
Interest (Expense) Income | (177,337) | 169,449 |
Total Other Income (Expense) | (177,337) | 169,449 |
Net Income (Loss) before income taxes | (1,708,943) | (665,189) |
Current income benefit (expense) | (1,956) | |
Deferred tax benefit | 1,754,169 | |
Income benefit (expense) | 1,752,213 | (25,199) |
Net Income (Loss) | 43,270 | (690,388) |
Total Assets | 2,000,278 | 205,906 |
Total Liabilities | 1,708,172 | 7,648,208 |
Revenues from Intercompany Sales - eliminated from sales above | 3,100,000 | 1,797,775 |
Depreciation and Amortization | 14,143 | 12,739 |
Purchases of Long-lived Assets | $ 76,561 | $ 12,470 |
Commitments (Details Narrative)
Commitments (Details Narrative) | 12 Months Ended | ||
Oct. 31, 2018USD ($)ft² | Oct. 31, 2018GBP (£)ft² | Oct. 31, 2017USD ($) | |
Lease expired | Feb. 28, 2019 | Feb. 28, 2019 | |
Annual rent | $ 93,773 | $ 93,797 | |
Employment Agreement [Member] | Annmarie Gayle [Member] | |||
Annual base salary | 230,000 | ||
Annual salary as well as a separation bonus | 150,000 | ||
Employment Agreement [Member] | Annmarie Gayle [Member] | Maximum [Member] | |||
Annual performance bonus | 100,000 | ||
Employment Agreement [Member] | Michael Midgley [Member] | |||
Annual base salary | $ 200,000 | ||
Edinburgh, Scotland [Member] | |||
Lease expired | Feb. 28, 2019 | Feb. 28, 2019 | |
Edinburgh, Scotland [Member] | GBP [Member] | |||
Annual rent | £ | £ 54,130 | ||
Coda Octopus Products, Inc. [Member] | Blair Cunningham [Member] | |||
Annual base salary | $ 175,000 | ||
Coda Octopus Products, Inc. [Member] | Orlando, Florida [Member] | |||
Lease premises on a month to month basis | $ 5,176 | ||
Coda Octopus Products Ltd [Member] | Edinburgh, Scotland [Member] | |||
Leases office space | ft² | 4,099 | 4,099 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Dec. 24, 2018USD ($) | Nov. 16, 2018USD ($)shares | Nov. 16, 2018GBP (£)shares | Oct. 31, 2018USD ($) | Oct. 31, 2017USD ($) |
Purchase property | $ 637,152 | $ 2,561,551 | |||
Repayment of loan outstanding | $ 6,255,114 | $ 746,571 | |||
Subsequent Event [Member] | Coda Octopus Products Ltd [Member] | |||||
Purchase property | $ 669,350 | ||||
Foreign exchange rate | 1.2837 | 1.2837 | |||
Number of shares of common stock purchased | shares | 23,965 | 23,965 | |||
Issuance of common stock purchase price | $ 105,446 | ||||
Subsequent Event [Member] | Coda Octopus Products Ltd [Member] | CEO Member | |||||
Repayment of loan outstanding | $ 500,000 | ||||
Subsequent Event [Member] | Coda Octopus Products Ltd [Member] | GBP [Member] | |||||
Purchase property | £ | £ 521,400 |