Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2020 | Mar. 23, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | SKKYNET CLOUD SYSTEMS, INC. | |
Entity Central Index Key | 0001546853 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jan. 31, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 51,576,122 | |
EntityFileNumber | 000-54747 | |
EntityAddressAddressLine1 | 2233 Argentia Road | |
EntityAddressAddressLine2 | Suite 306 | |
EntityAddressPostalZipCode | L5N 2X7 | |
EntityTaxIdentificationNumber | 453757848 | |
EntityAddressCityOrTown | Mississauga Ontario | |
LocalPhoneNumber | 628-2028 | |
CityAreaCode | 888 | |
EntityAddressStateOrProvince | CANADA (FEDERAL LEVEL) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jan. 31, 2020 | Oct. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 646,124 | $ 700,410 |
Accounts receivable | 163,042 | 146,277 |
Prepaid expenses | 4,321 | 10,690 |
Total current assets | 813,487 | 857,377 |
Property and equipment, net of accumulated depreciation of $81,246 and $81,653 respectively | 10,275 | 8,469 |
Right of use asset | 62,869 | |
Total Assets | 886,631 | 865,846 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 73,235 | 96,979 |
Accrued liabilities - related party | 76,821 | |
Deferred revenue | 117,058 | 111,732 |
Current portion of operating lease liability | 20,980 | |
Total current liabilities | 211,273 | 285,532 |
Operating lease liability- net of current portion | 41,889 | |
Total liabilities | 253,162 | 285,532 |
Stockholders' Equity: | ||
Preferred stock; $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding | 5 | 5 |
Common stock; $0.001 par value, 70,000,000 shares authorized, 51,576,122 and 51,576,122 shares issued and outstanding, respectively | 51,577 | 51,577 |
Additional paid-in capital | 6,259,761 | 6,192,476 |
Accumulated other comprehensive income | 59,823 | 65,472 |
Accumulated deficit | (5,931,358) | (5,922,877) |
Total shareholders' equity | 633,469 | 580,314 |
Total Liabilities and Stockholders' Equity | 886,631 | 865,846 |
Series B Preferred convertible stock [Member] | ||
Stockholders' Equity: | ||
Series B Preferred convertible stock: $0.001 par value, 500,000 shares authorized, 193,661 issued and 193,661 outstanding, respectively | $ 193,661 | $ 193,661 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jan. 31, 2020 | Oct. 31, 2018 |
Property and equipment, Accumulated depreciation | $ 81,246 | $ 81,653 |
Stockholders' Deficit: | ||
Preferred stock, Par value | $ 0.001 | $ 0.001 |
Preferred stock, Authorized | 5,000,000 | 5,000,000 |
Preferred stock, Issued | 5,000 | 5,000 |
Preferred stock, Outstanding | 5,000 | 5,000 |
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 70,000,000 | 70,000,000 |
Common stock, Issued | 51,576,122 | 51,576,122 |
Common stock, Outstanding | 51,576,122 | 51,576,122 |
Series B Preferred convertible stock [Member] | ||
Stockholders' Deficit: | ||
Preferred stock, Par value | $ 0.001 | $ 0.001 |
Preferred stock, Authorized | 500,000 | 500,000 |
Preferred stock, Issued | 193,661 | 193,661 |
Preferred stock, Outstanding | 193,661 | 193,661 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) | ||
Revenue | $ 419,482 | $ 262,989 |
Operating Expenses: | ||
General and administrative expense | 431,126 | 395,423 |
Depreciation | 627 | 120 |
Loss from operations | (12,271) | (132,554) |
Other Income: | ||
Other income | 3 | 1 |
Currency exchange | 3,787 | 6,436 |
Total other income | 3,790 | 6,437 |
Loss before taxes | (8,481) | (126,117) |
Income taxes | ||
Loss from continuing operations | (8,481) | (126,117) |
Loss from discontinued operations | 28,195 | |
Net loss | (8,481) | (154,312) |
Preferred dividends | (2,905) | (2,905) |
Net loss to common shareholders | (11,386) | (157,217) |
Foreign currency translation adjustments | (5,649) | (8,746) |
Comprehensive loss | $ (17,035) | $ (165,963) |
Net loss per common share from continuing operations, basic and diluted | $ 0 | $ 0 |
Net loss per common share from discontinued operations-basic and diluted | 0 | 0 |
Net loss per share to common shareholders | $ 0 | $ 0 |
Weighted average number of shares outstanding | 51,576,122 | 51,363,022 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited) - USD ($) | Total | Series B Preferred convertible stock [Member] | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss (Income) [Member] |
Balance, shares at Oct. 31, 2018 | 193,661 | 51,363,022 | 5,000 | ||||
Balance, amount at Oct. 31, 2018 | $ 656,089 | $ 193,661 | $ 51,364 | $ 5 | $ 5,832,725 | $ (5,347,023) | $ (74,643) |
Stock option expense | 59,844 | 59,844 | |||||
Change due to currency translation | (8,746) | (8,746) | |||||
Net Income (Loss) | $ (154,312) | $ (154,312) | |||||
Balance, shares at Jan. 31, 2019 | 193,661 | 51,363,022 | 5,000 | ||||
Balance, amount at Jan. 31, 2019 | $ 552,875 | $ 193,661 | $ 51,364 | $ 5 | $ 5,892,569 | $ (5,501,335) | $ (83,389) |
Balance, shares at Oct. 31, 2019 | 193,661 | 51,576,122 | 5,000 | ||||
Balance, amount at Oct. 31, 2019 | $ 580,314 | $ 193,661 | $ 51,577 | $ 5 | $ 6,192,476 | $ (5,922,877) | $ 65,472 |
Stock option expense | 67,285 | 67,285 | |||||
Change due to currency translation | (5,649) | (5,649) | |||||
Net Income (Loss) | $ (8,481) | $ (8,481) | |||||
Balance, shares at Jan. 31, 2020 | 193,661 | 51,576,122 | 5,000 | ||||
Balance, amount at Jan. 31, 2020 | $ 633,469 | $ 193,661 | $ 51,577 | $ 5 | $ 6,259,761 | $ (5,931,358) | $ 59,823 |
CONSOLDIATED STATEMENTS OF CASH
CONSOLDIATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (8,481) | $ (154,312) |
Loss from discontinued operations | 28,195 | |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 627 | 120 |
Option based compensation | 67,285 | 59,844 |
Non-cash lease expense | 5,715 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (16,765) | 95,262 |
Accounts payable and accrued expense | (23,744) | 25,093 |
Accrued liability-related party | (76,821) | (3,872) |
Prepaid expenses and other assets | 6,369 | (35,477) |
Operating lease liability | (7,109) | |
Deferred income | 5,326 | (8,080) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (47,598) | 6,773 |
DISCONTINUED OPERATIONS | ||
Net cash used in operating activities | (10,422) | |
Net cash used in discontinued operations | (10,422) | |
Effect of foreign exchange on cash and cash equivalents | (6,688) | (10,351) |
Net increase in cash and cash equivalents | (54,286) | (14,000) |
Cash and cash equivalents - beginning of year | 700,410 | 677,303 |
Cash and cash equivalents - end of year | 646,124 | 656,827 |
SUPPLEMENTAL CASH FLOWS INFORMATION | ||
Interest paid | ||
Income taxes paid | ||
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Capitalization of right to use asset and operating liability | $ 68,584 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Jan. 31, 2020 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | Skkynet Cloud Systems, Inc. (“Skkynet” or “the Company”) is a Nevada corporation formed on August 31, 2011 and headquartered in Toronto, Canada. Skkynet operates its business through its wholly-owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), Skkynet Corp. (Canada) and Skkynet, Inc. (USA). Skkynet was formed primarily for the purpose of taking the existing business lines of Cogent and its current and future customers and integrating these businesses with Cloud based systems. We also intend to expand the areas of business activity to which the kinds of products and services we provide are applied. The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, 2019 Annual Report on form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the consolidated financial statements for the most recent fiscal year end October 31, 2019 as reported on Form 10-K, have been omitted. On August 1, 2019 the Company disposed of its wholly owned subsidiary Skkynet Japan which represented a strategic shift in the Company’s operations. The assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheet for the periods presented. The operating results related to this subsidiary have been included in discontinued operations in the Company’s consolidated statements of operations and comprehensive loss for all periods presented. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement and recorded a right to use asset and operating lease liability of $68,584 as of November 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption of the policy did not have a cumulative impact on retained earnings. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Jan. 31, 2020 | |
REVENUE RECOGNITION | |
NOTE 3 - REVENUE RECOGNITION | As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the three month periods ended January 31, 2020 and 2019 the revenue by product line is as follows: Category Percentage 2020 Percentage 2019 Product sales 71 % 297,536 62 % 162,191 Support 27 % 114,559 35 % 92,567 Cloud & Other 2 % 7,387 3 % 8,231 Total 100 % 419,482 100 % 262,989 The Company sells its products on a worldwide basis. During the three month periods ended January 31, 2020 and 2019 the Company’s geographic concentration of revenue is as follows: Area Percentage 2020 Percentage 2019 North America 31 % 130,746 35 % 90,870 Europe 24 % 101,400 49 % 128,977 Asia 21 % 87,759 7 % 19,692 Middle East-Africa 14 % 60,619 6 % 14,656 South America 9 % 38,958 3 % 8,794 Total 100 % 419,482 100 % 262,989 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Jan. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
NOTE 4 - RELATED PARTY TRANSACTIONS | Sakura Software, a corporation owned by our CEO and Chairman of the Board of Directors, Andrew S. Thomas, and Benford Consultancy, a corporation owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively, 72.34% and 27.66% of the issued and outstanding shares of Real Innovations International LLC, (“Real Innovations”) a corporation organized under the laws of Nevis, West Indies. In March 2012, Cogent, our operating subsidiary, assigned all of its intellectual property including the pending patent applications for its real-time data transmission and display technology (the “IP”) to Real Innovations under an assignment of intellectual property agreement (the “Assignment Agreement”). In return for the assignment Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement. Real Innovations, in turn, entered into a master intellectual property license agreement (the “License Agreement”) with Cogent for all of the same IP. Under the License Agreement Real Innovations granted a royalty-free license in perpetuity to Cogent for the use and exploitation of the IP in return for which Cogent agreed to: (i) pay all operating expenses of Real Innovations incurred in connection with the continued prosecution of pending patent applications and others that may be prepared; (ii) prosecute all claims for infringement of the IP; (iii) defend and indemnify Real Innovations from and against all claims of infringement of the IP asserted by third parties against Real Innovations, Cogent or our Company; (iv) purchase liability insurance in favor of Real Innovations for this purpose. Under the termination provision of the licenses agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parities, the Company ceasing doing business, by breach by the Company or by the Company failing to maintain the license and the support to prosecute and protect the license under applicable laws. Under the License Agreement, Messrs. Andrew S. Thomas and Paul Benford will benefit indirectly from their indirect ownership of all of the shares of Real Innovations to the extent of any such payments or other undertakings by Cogent on behalf of Real Innovations, but the exact amount of these benefits cannot be determined at this time. No payments have been made as of January 31, 2020. As of January 31, 2020, and October 31, 2019, the Company had the following outstanding accrued liabilities due to related parties: As of January 31, 2020 October 31, 2019 Accrued liabilities $ --- $ 55,378 Accrued commissions $ --- $ 21,443 Total accrued liabilities $ --- $ 76,821 |
OPTIONS
OPTIONS | 3 Months Ended |
Jan. 31, 2020 | |
OPTIONS | |
NOTE 5 - OPTIONS | The Company, under its 2012 Stock Option Plan, issues options to various officers, directors, and consultants. The options vest in equal annual installments over a five year period with the first 20% vested when the options are granted. All of the options are exercisable at a purchase price based on the last trading price of the Company’s common stock. On December 12, 2019 the Company 336,250 options: 120,000 to two officers, 11,250 to three independent directors and 205,000 to six employees and consultants. The options are exercisable into common stock of the Company at $0.59 per share. The Company calculated a fair value of the options of $132,673 using the Black Scholes option pricing model with computed volatility of 207%, risk-free interest rate of 2%, expected dividend yield 0%, stock price at measurement date of $0.39 and the expected term of ten years. The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year. During the three month period ended January 31, 2020, the Company recognized $67,285 of option expense. The unrecognized future balance to be expensed over the term of the options is $602,135. The following sets forth the options granted and outstanding as of January 31, 2020: Options Weighted Average Exercise price Weighted Average Remaining Contract Life Granted Options Exercisable Intrinsic value Outstanding at October 31, 2019 7,581,400 0.13 7.19 5,470,540 $ 1,827,117 Granted 336,250 0.56 9.75 -- -- Exercised -- -- -- -- -- Forfeited/Expired by termination -- -- -- -- - Outstanding at January 31, 2020 7,917,650 0.15 7.06 5,537,790 $ 2,007,081 |
LEASES
LEASES | 3 Months Ended |
Jan. 31, 2020 | |
LEASES | |
NOTE 6 - LEASES | The Company leases office space located at 2233 Argentia Road Suite 306 Mississauga, Ontario Canada L5N 2X7. During May 2017, the Company signed a new 5 year lease for the Company’s office being effective on August 1, 2017 through July 31, 2022. The lease is for approximately 2,210 square feet of office space with a base monthly rental cost including common area charges of $2,369. The yearly rental obligations including the lease agreements are as follows: Fiscal Year 2020 $ 28,428 2021 $ 28,428 2022 $ 14,215 Total lease payments $ 71,071 Less present value discount $ (8,202 ) $ 62,869 Less operating lease short term $ (20,980 ) Operating lease liability, long term $ 41,899 Under the new standards the lease has been determined to be a right to use operating lease and is recognized based on the present value of the lease payments over the lease term at the commencement date which upon adoption of ASC 842 the value was determined to be $68,584 which is presented in the balance sheet as an asset labeled “right to use asset” offset by a liability labeled “ operating lease liability”. The amount was determined as the net present value of the lease over a 30 month period and discount using an 8% interest rate. During the three months ended January 31, 2020 the asset was amortized by $5,715 and liability was reduced by $7,109. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Jan. 31, 2020 | |
Discontinued Operation, Equity Investment [Abstract] | |
NOTE 7 - DISCONTINUED OPERATIONS | On August 1, 2019, the Company disposed its wholly owned subsidiary Skkynet Japan by entering into a share purchase agreement with the former owners. The following table presents the breakdown of the results of operations related to the discontinued operations for the three months ended January 31, 2019: Operating Results of Discontinued Operations For the Three Months Ended January 31, 2019 Revenue included in discontinued operations $ 30,140 Operating costs and expenses included in discontinued operations Cost of goods sold 6,154 General and administrative expenses 52,181 Net loss from Discontinued operations $ (28,195 ) Net loss per share of discontinued operations basic & diluted $ (0.00 ) |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 3 Months Ended |
Jan. 31, 2020 | |
MAJOR CUSTOMERS | |
NOTE 8 - MAJOR CUSTOMERS | The Company sells to their end-user customers both directly and through resellers. Five resellers accounted for 51% of sales of which two resellers accounted for 19% and 11% individually in the three month period ended January 31, 2020 and five resellers accounted for 53% of sales in the same period in 2019. The Company maintains all the information on their end user customers, and should a reseller discontinue operations, the Company can sell directly to the end user. In the three month period ended January 31, 2020, no end user customers were responsible for more than 10% of our revenues and thirteen end user customers were responsible for approximately 50% of gross revenue. In the same period in 2019, fifteen end user customers were responsible for approximately 50% of gross revenue of which one end user customer was responsible for 11% of revenue |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES(Policies) | 3 Months Ended |
Jan. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Recently Adopted Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement and recorded a right to use asset and operating lease liability of $68,584 as of November 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption of the policy did not have a cumulative impact on retained earnings. |
REVENUE RECOGNITION (Table)
REVENUE RECOGNITION (Table) | 3 Months Ended |
Jan. 31, 2020 | |
REVENUE RECOGNITION | |
Schedule of revenue by product line and geographic area | Category Percentage 2020 Percentage 2019 Product sales 71 % 297,536 62 % 162,191 Support 27 % 114,559 35 % 92,567 Cloud & Other 2 % 7,387 3 % 8,231 Total 100 % 419,482 100 % 262,989 |
Schedule of geographic concentration of revenue | Area Percentage 2020 Percentage 2019 North America 31 % 130,746 35 % 90,870 Europe 24 % 101,400 49 % 128,977 Asia 21 % 87,759 7 % 19,692 Middle East-Africa 14 % 60,619 6 % 14,656 South America 9 % 38,958 3 % 8,794 Total 100 % 419,482 100 % 262,989 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
Schedule of outstanding accrued liabilities | As of January 31, 2020 October 31, 2019 Accrued liabilities $ --- $ 55,378 Accrued commissions $ --- $ 21,443 Total accrued liabilities $ --- $ 76,821 |
OPTIONS (Tables)
OPTIONS (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
OPTIONS | |
Schedule of Options granted and outstanding | Options Weighted Average Exercise price Weighted Average Remaining Contract Life Granted Options Exercisable Intrinsic value Outstanding at October 31, 2019 7,581,400 0.13 7.19 5,470,540 $ 1,827,117 Granted 336,250 0.56 9.75 -- -- Exercised -- -- -- -- -- Forfeited/Expired by termination -- -- -- -- - Outstanding at January 31, 2020 7,917,650 0.15 7.06 5,537,790 $ 2,007,081 |
LEASES (Table)
LEASES (Table) | 3 Months Ended |
Jan. 31, 2020 | |
LEASES | |
Schedule of rental obligations lease agreements | Fiscal Year 2020 $ 28,428 2021 $ 28,428 2022 $ 14,215 Total lease payments $ 71,071 Less present value discount $ (8,202 ) $ 62,869 Less operating lease short term $ (20,980 ) Operating lease liability, long term $ 41,899 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
DISCONTINUED OPERATIONS (Tables) | |
Schedule of discontinued operations | Operating Results of Discontinued Operations For the Three Months Ended January 31, 2019 Revenue included in discontinued operations $ 30,140 Operating costs and expenses included in discontinued operations Cost of goods sold 6,154 General and administrative expenses 52,181 Net loss from Discontinued operations $ (28,195 ) Net loss per share of discontinued operations basic & diluted $ (0.00 ) |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Details Narrative) | 3 Months Ended |
Jan. 31, 2020 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
State of incorporation | Nevada |
Date of Incorporation | Aug. 31, 2011 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | ||
Capitalization of right to use asset and operating liability | $ 68,584 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Total Revenue | $ 419,482 | $ 262,989 |
Revenue percentage | 100.00% | 100.00% |
Product Sales [Member] | ||
Total Revenue | $ 297,536 | $ 162,191 |
Revenue percentage | 71.00% | 62.00% |
Support sales [Member] | ||
Total Revenue | $ 114,559 | $ 92,567 |
Revenue percentage | 27.00% | 35.00% |
Cloud & Other [Member] | ||
Total Revenue | $ 7,387 | $ 8,231 |
Revenue percentage | 2.00% | 3.00% |
REVENUE RECOGNITION (Details1)
REVENUE RECOGNITION (Details1) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Total revenue | $ 419,482 | $ 262,989 |
Revenue percentage | 100.00% | 100.00% |
Geographically [Member] | ||
Total revenue | $ 419,482 | $ 262,989 |
Revenue percentage | 100.00% | 100.00% |
North America [Member] | ||
Total revenue | $ 130,746 | $ 90,870 |
Revenue percentage | 31.00% | 35.00% |
Europe [Member] | ||
Total revenue | $ 101,400 | $ 128,977 |
Revenue percentage | 24.00% | 49.00% |
Asia [Member] | ||
Total revenue | $ 87,759 | $ 19,692 |
Revenue percentage | 21.00% | 7.00% |
MiddleEast-Africa[Member] | ||
Total revenue | $ 60,619 | $ 14,656 |
Revenue percentage | 14.00% | 6.00% |
South America [Member] | ||
Total revenue | $ 38,958 | $ 8,794 |
Revenue percentage | 9.00% | 3.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jan. 31, 2020 | Oct. 31, 2019 |
RELATED PARTY TRANSACTIONS | ||
Accrued liabilities | $ 55,378 | |
Accrued commissions | 21,443 | |
Total accrued liabilities | $ 76,821 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) | Jan. 31, 2020USD ($) |
One time payment to be made by Real Innovations in return of assignment to Cogent | $ 30,000 |
Andrew Thomas [Member] | |
Ownership percentage in Real Innovations hold by related parties | 72.34% |
Paul Benford [Member] | |
Ownership percentage in Real Innovations hold by related parties | 27.66% |
OPTIONS (Details)
OPTIONS (Details) | 3 Months Ended |
Jan. 31, 2020USD ($)$ / sharesshares | |
Options | |
Shares outstanding beginning balance | shares | 7,581,400 |
Granted | shares | 336,250 |
Exercised | shares | |
Forfeited | shares | |
Shares outstanding ending balance | shares | 7,917,650 |
Weighted Average Exercise Price | |
Weighted average exercise price of shares outstanding beginning balance | $ / shares | $ 0.13 |
Weighted average exercise price of share granted | $ / shares | 0.56 |
Weighted average exercise price of share exercised | $ / shares | |
Weighted average exercise price of share forfeited | $ / shares | |
Weighted average exercise price of shares outstanding ending balance | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Terms | |
Weighted average remaining contractual terms of share outstanding, beginning | 7 years 2 months 8 days |
Weighted average remaining contractual terms of share granted | 9 years 9 months |
Weighted average remaining contractual terms of share outstanding, ending | 7 years 21 days |
Granted Options Exercisable | |
Outstanding beginning balance | $ / shares | $ 5,470,540 |
Outstanding ending balance | shares | 5,537,790 |
Intrinsic Value | |
Aggregate intrinsic value of share outstanding beginning balance | $ | $ 1,827,117 |
Aggregate intrinsic value of share outstanding ending balance | $ | $ 2,007,081 |
OPTIONS (Details Narrative)
OPTIONS (Details Narrative) - USD ($) | Dec. 12, 2019 | Jan. 31, 2020 | Jan. 31, 2019 |
Unrecognized future balance | $ 602,135 | ||
Option based compensation | $ 67,285 | $ 59,844 | |
Granted | 336,250 | ||
Option [Member] | |||
Granted | 336,250 | ||
Computed volatility | 207.00% | ||
Risk free, interest rate | 2.00% | ||
Expected divident yield | 0.00% | ||
Option excercise | 205,000 | ||
Stock measurment Excercise prce, per share | $ 0.39 | ||
Exercise price | $ 0.59 | ||
Fair value of stock option | $ 132,673 | ||
Expected term maturity date | 10 years | ||
Description of stock option expend | The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year | ||
Option [Member] | Three directors [Member] | |||
Granted | 11,250 | ||
Six employees [Member] | Option [Member] | |||
Granted | 205,000 | ||
Two Officer [Member] | Option [Member] | |||
Granted | 120,000 |
LEASES (Details1)
LEASES (Details1) | Jan. 31, 2020USD ($) |
LEASES | |
2020 | $ 28,428 |
2021 | 28,428 |
2022 | 14,215 |
Total Lease Payments | 71,071 |
Less present value discount | (8,202) |
Total balance | 62,869 |
Less operating lease short term | (20,980) |
Operating lease liability, long term | $ 41,899 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
LEASES | ||
Capitalization of right to use asset and operating liability | $ 68,584 | |
Monthly rental expense | $ 2,369 | |
Lease expiration | Jul. 31, 2022 | |
Lease Term | 5 years | |
Amortization of assets | $ 5,715 | |
Accrued liablility, Decrease | $ 7,109 | |
Operating Lease, Discount Rate | 8.00% | |
Description of Operating Lease | The amount was determined as the net present value of the lease over a 30 month period and discount using an 8% interest rate. |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Total revenue | $ 419,482 | $ 262,989 |
Operating costs and expenses included in discontinued operations | ||
General and administrative expenses | 431,126 | 395,423 |
Net loss | $ (8,481) | (154,312) |
Discontinued Operations [Member] | ||
Total revenue | 30,140 | |
Operating costs and expenses included in discontinued operations | ||
Cost of goods sold | 6,154 | |
General and administrative expenses | 52,181 | |
Net loss | $ (28,195) | |
Net loss per share of discontinued operations basic & diluted | $ 0 |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Concentration risk percentage of revenue, description | No end user customers were responsible for more than 10% of our revenues | |
One resellers [Memebr] | ||
Concentration risk, percentage | 19.00% | |
Two resellers [Member] | ||
Concentration risk, percentage | 11.00% | |
Five resellers [Member] | ||
Concentration risk, percentage | 51.00% | 53.00% |
Thirteen Customers [Member] | ||
Concentration risk, percentage | 50.00% | 50.00% |
Revenue [Member] | One Customers [Member] | ||
Concentration risk, percentage | 11.00% | |
Revenue Member [Member] | Fifteen Customers [Member] | ||
Concentration risk, percentage | 50.00% | 50.00% |