Cover
Cover - USD ($) | 12 Months Ended | ||
Oct. 31, 2022 | Jan. 27, 2023 | Apr. 29, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | SKKYNET CLOUD SYSTEMS, INC. | ||
Entity Central Index Key | 0001546853 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Oct. 31, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 53,143,822 | ||
Entity Public Float | $ 2,844,198 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-54747 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 45-3757848 | ||
Entity Address Address Line 1 | 2233 Argentia Road/ Suite 302 | ||
Entity Address City Or Town | Mississauga | ||
Entity Address State Or Province | ON | ||
Entity Address Country | CA | ||
Entity Address Postal Zip Code | L5N 2X7 | ||
City Area Code | 888 | ||
Local Phone Number | 702-7851 | ||
Security 12g Title | Common Stock, par value $0.001 | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | Fruci & Associates II, PLLC | ||
Auditor Location | Spokane, Washington | ||
Auditor Firm Id | 5525 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 729,936 | $ 797,808 |
Accounts receivable | 377,491 | 253,359 |
Receivables - related parties | 4,776 | 6,362 |
Prepaid | 25,733 | 19,770 |
Total current assets | 1,137,936 | 1,077,299 |
Property and equipment, net of accumulated depreciation of $94,357 and $91,794, respectively | 7,058 | 10,414 |
Right of use lease asset | 0 | 16,234 |
Total assets | 1,144,994 | 1,103,947 |
Current liabilities: | ||
Accounts payable and accrued expense | 58,202 | 159,840 |
Accrued liability - related parties | 115,475 | 221,924 |
Deferred income | 281,615 | 204,961 |
Current portion of operating lease liability | 0 | 16,234 |
Total current liabilities | 455,292 | 602,959 |
Long Term Liability | ||
Loan payable | 19,106 | 48,421 |
Total liabilities | 474,398 | 651,380 |
Commitment and Contingencies | 0 | 0 |
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 authorized, 53,143,822 and 51,576,122 issued and outstanding, respectively | 53,145 | 51,577 |
Additional paid-in capital | 6,990,526 | 6,790,306 |
Accumulated other comprehensive income (loss) | 76,011 | 80,908 |
Accumulated deficit | (6,449,285) | (6,470,423) |
Total stockholders' equity | 670,596 | 452,567 |
Total liabilities and stockholders' equity | 1,144,994 | 1,103,947 |
Series B convertible preferred stock [Member] | ||
Stockholders' equity: | ||
Preferred stock; $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding | $ 194 | $ 194 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 | Mar. 31, 2012 |
Property and equipment, net of accumulated depreciation | $ 94,357 | $ 91,794 | |
Stockholders' Equity: | |||
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 | 53,143,822 | 51,576,122 | |
Common stock, Outstanding | 53,143,822 | 51,576,122 | |
Series B convertible preferred stock [Member] | |||
Stockholders' Equity: | |||
Preferred stock, Par value | $ 0.001 | $ 0.001 | |
Preferred stock, Authorized | 500,000 | 500,000 | |
Preferred stock, Issued | 193,661 | 193,661 | 5,000 |
Preferred stock, Outstanding | 193,661 | 193,661 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||
Revenue | $ 2,156,880 | $ 1,830,459 |
Operating expenses: | ||
Salary and wages | 733,475 | 702,468 |
Consultants | 298,072 | 214,654 |
Advertising | 479,041 | 204,603 |
Option discount | 200,220 | 194,926 |
General and administrative expense | 503,957 | 666,945 |
Depreciation | 2,563 | 2,624 |
Operating expense | (2,217,328) | (1,986,220) |
Loss from operations | (60,448) | (155,761) |
Other income (expenses): | ||
Other income | 1,512 | 258 |
Debt recovery | 1,914 | 0 |
Canadian emergency business relief account | 4,362 | 39,385 |
Currency exchange | 46,675 | (73,371) |
Total other income (expense) | 54,463 | (33,728) |
Income (loss) before taxes | (5,985) | (189,489) |
Income taxes | 38,743 | 25,901 |
Net income (loss) | 32,758 | (163,588) |
Preferred dividends | (11,620) | 0 |
Income (loss) to common shareholders | 21,138 | 0 |
Foreign currency translation adjustments | 4,897 | (24,478) |
Comprehensive income (loss) | $ 26,035 | $ (188,066) |
Net income (loss) per share to common shareholders, basic | $ 0 | $ 0 |
Net income (loss) per share to common shareholders, diluted | $ 0 | $ 0 |
Weighted average number of shares outstanding, basic | 52,194,612 | 51,576,122 |
Weighted average number of shares outstanding, diluted | 58,827,062 | 51,576,122 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) | Total | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Series B Preferred convertible stock [Member] |
Balance, shares at Oct. 31, 2020 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2020 | $ 469,376 | $ 51,577 | $ 5 | $ 6,595,380 | $ (6,234,210) | $ 56,430 | $ 194 |
Stock option expenses | 194,926 | 0 | 0 | 194,926 | 0 | 0 | 0 |
Change due to currency exchange | 24,478 | 0 | 0 | 0 | 0 | 24,478 | 0 |
Dividends accrued on Series B preferred shares | (72,625) | 0 | (72,625) | 0 | |||
Net loss | (163,588) | $ 0 | $ 0 | 0 | (163,588) | 0 | $ 0 |
Balance, shares at Oct. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2021 | 452,567 | $ 51,577 | $ 5 | 6,790,306 | (6,470,423) | 80,908 | $ 194 |
Change due to currency exchange | (4,897) | 0 | 0 | 0 | 0 | (4,897) | 0 |
Dividends accrued on Series B preferred shares | (11,620) | 0 | 0 | 0 | (11,620) | 0 | 0 |
Net loss | 32,758 | $ 0 | 0 | 0 | 32,758 | 0 | 0 |
Common stock issued for option exercise, shares | 1,567,700 | ||||||
Common stock issued for option exercise, amount | 1,568 | $ 1,568 | 0 | 0 | 0 | 0 | 0 |
Stock option expense | 200,220 | $ 0 | $ 0 | 200,220 | 0 | 0 | $ 0 |
Balance, shares at Oct. 31, 2022 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2022 | $ 670,596 | $ 1,568 | $ 5 | $ 6,990,526 | $ (6,449,285) | $ 76,011 | $ 194 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 32,758 | $ (163,588) |
provided by operating activities: | ||
Depreciation and amortization expense | 2,563 | 2,624 |
Option based compensation | 200,220 | 194,926 |
Non-cash lease expense | 16,234 | 24,649 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (124,132) | (59,096) |
Operating lease liability | (16,234) | (24,649) |
Prepaid and other assets | (5,963) | (1,854) |
Accounts payable and accrued expense | (101,638) | 3,172 |
Accrued liability-related party | (116,483) | (73,402) |
Deferred revenue | 76,654 | 36,233 |
Net cash used in operating activities | (36,021) | (60,985) |
Cash flows from financing activities: | ||
Proceeds from loan | 0 | 15,678 |
Repayment of loan | (29,315) | 0 |
Proceeds from exercise of stock options- related parties | 1,568 | 0 |
Net cash provided by (used in) financing activities | (27,747) | 15,678 |
Effect of foreign exchange on cash and cash equivalents | (4,104) | 26,317 |
Net increase (decrease) in cash and cash equivalents | (67,872) | (18,990) |
Cash and cash equivalents- beginning of year | 797,808 | 816,798 |
Cash and cash equivalents- end of year | 729,936 | 797,808 |
SUPPLEMENT DISCLOSURES: | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
NON MONETARY TRANSACTIONS | ||
Dividends accrued on series B preferred shares | $ 11,620 | $ 72,625 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Oct. 31, 2022 | |
NATURE OF BUSINESS | |
NATURE OF BUSINESS | NOTE 1 - NATURE OF BUSINESS Skkynet Cloud Systems, Inc. (“Skkynet”, the “Company”), a Nevada Corporation headquartered in Toronto, Canada was formed on August 31, 2011. Skkynet operates it business through its wholly-owned subsidiaries Cogent Real-Time Systems, Inc. (Cogent)(Canada), 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. In March 2012, we completed the acquisition of all of the issued and outstanding shares of common stock of Cogent from Sakura Software Inc. and Benford Consultancy Inc. in exchange for a total of thirty million (30,000,000) restricted shares of our common stock, as a result of which Cogent became our wholly-owned subsidiary. As part of the exchange transaction, we also issued 5,000 Series A Preferred share to Sakura Software and Benford Consultancy. Prior to the closing of the exchange transaction, we did not have any operating revenues and we had nineteen million (19,000,000) shares outstanding and $8,720 of net assets. This transaction was accounted for as a reverse merger and recapitalization. At the acquisition closing, Cogent’s business consisted primarily of providing connectivity and data acquisition to a wide variety of industrial and office hardware and software products, and then making that data available over a network using industry-standard protocols. Cogent currently markets its products and services primarily to manufacturers in industrial processes and financial services companies. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries Cogent Real Time Systems, Inc (Canada), Skkynet Corp. (Canada) and Skkynet Inc (US). All material intercompany balances and transactions have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash deposits are insured up to US$250,000 in US banks and CDN $100,000 in Canadian banks. The concentration of the Company’s cash deposits at times may exceed the insured amount, leaving the Company exposed to a credit risk on it deposits. Revenue Recognition In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are: 1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfied the performance obligations. Effective November 1, 2018, the Company implemented the transition using the modified retrospective method of transition. Under this method, the determination date of open contracts which could affect any adjustments was November 1, 2018. The open contracts at the time period are the unfulfilled portions of the maintenance contracts. The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are: 1. Sale of software direct to the end customer 2. Sale of software through distributors and channel partners 3. Maintenance support services 4. Cloud services Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement. Revenue from cloud services is recognized over time (typically, on a monthly basis) as service is provided. Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. As of October 31, 2022 and 2021 the deferred revenue was $281,615 and $204,961, respectively. Accounts Receivable Accounts Receivable are carried at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable include receivables from customers that have received software and support from the Company. Bad debt expense is a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the year. No allowance for bad debt was considered necessary for the years ended October 31, 2022 and October 31, 2021, respectively. Advertising Advertising costs are expensed as incurred. Advertising expenses for the years ended October 31, 2022 and 2021 were $479,041 and $ 204,603, respectively. Property and Equipment Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Foreign Currency Translation The Company’s reporting currency is in U.S. dollars. The functional currency of the Company’s foreign operations is their local currency. The financial statements of the Company’s subsidiaries in Canada are translated to U.S. dollars in accordance with ASC 830-30, “ Foreign Currency Translation” Impairment of Long-lived Assets The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value. Basic and Diluted Net Loss Per Share Basic and diluted net income per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. For the years ended October 31, 2022 and 2021, 6,632,450 and 7,958,900, respectively, of potentially issuable shares of common stock from stock options have been included in the calculations as of October 31, 2022. Income Taxes Income taxes are provided in accordance with Accounting Standards Codification (“ASC”), Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Income taxes for subsidiaries Cogent Real-Time Systems are subject to the tax statutes in their country of domicile which is Canada. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the fair value recognition provision of the Financial Accounting Standards Board(“FASB”) Accounting Standards Codification (“ASC”) No 718. The Company issues restricted stock to employees and consultants for their services. Cost of these transactions are measured at fair value of the equity instrument issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as the expense in the period granted. The Company recognized consulting expense and a corresponding increase to the additional paid in capital related to the stock issued for services. For agreements requiring future services the consulting expense is to be recognized ratably over the requisite service period. Related Parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.” Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments- Credit Losses (Topic 326)". The Change in this announcement requires immediate recognition of management’s estimates of current expected losses (CELC). Under the prior model, losses were recognized only as the incurred. The amendment was effective for smaller reporting Companies for the fiscal years beginning after December 15,2022. The Company is reviewing the standard on its financial reporting based on the Company’s experience requiring prepayment for it services. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Oct. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following at October 31, 2022 and 2021: 2022 2021 Property and equipment $ 101,415 $ 102,208 Less: accumulation depreciation (94,357 ) (91,794 ) Net property and equipment $ 7,058 $ 10,414 Depreciation expense totaled $2,624 and $2,563 for the years ended October 31, 2021 and 2022, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 4 - INCOME TAXES The Company follows Accounting Standards Codification 740, Accounting for Income Taxes. During 2009, there was a change in control of the Company. Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry forwards. For federal income tax purposes, the Company uses the accrual basis of accounting, the same that is used for financial reporting purposes. The Company’s deferred tax assets for the U.S. parent company and its US subsidiary consisted of the following as of October 31, 2022, and 2021: 2022 2021 Income/(Loss) Before Income Taxes $ 163,722 $ (262,983 ) Income Tax Recovery 39,129 (55,226 ) Valuation Allowance (39,129 ) 55,226 Net Operating Losses $ 2,302,664 $ 2,466,386 Tax Rate 21 % 21 % Deferred Tax Assets 483,559 517,941 Valuation Allowance (483,559 ) (517,941 ) Net Deferred Tax Assets $ - $ - The US companies had a net income of $163,722, and a net loss $262,983 for the years ended October 31, 2022 and 2021, respectively. As of October 31, 2022, the US Companies had a net operating loss carry forward of $2,302,664 which can be used to offset future taxable income. Beginning December 31, 2022, 80% of the qualified net operating loss can be carried forward and applied against future net income. A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, 2022 and 2021 is as follows: 2022 2021 U.S. federal statutory rate 21% 21% Net operating loss (21%) (21%) Effective tax rate -% -% The US Companies due to their loss have not filed US Corporate tax returns and is subject to examination back to October 31, 2012. The Company’s deferred tax assets for the Canadian subsidiary companies consisted of the following as of October 31, 2022, and 2021: 2022 2021 Income/(Loss) Before Income Taxes $ (147,658 ) $ 24,572 Income Tax Expense 39,129 6,512 Valuation Allowance (39,129 ) (6,512 ) Net Operating Losses $ 211,128 $ 59,050 Tax Rate 26.5 % 26.5 % Deferred Tax Assets 54,778 15,648 Valuation Allowance (54,778 ) (15,648 ) Net Deferred Tax Assets $ - $ - The Canadian Companies had net loss of $147,658 and net income of $ 24,572 for the years ended October 31, 2022 and 2021, respectively. As of October 31, 2022, the Company had a net operating loss carry forward of $206,708 which can be used to offset future taxable income. The carry forwards will begin to expire in 2038, or twenty years after the loss is first incurred, if not used prior to that date. A reconciliation of income taxes at the federal statutory rate to amounts provided for the years ended October 31, 2022 and 2021 is as follows: 2022 2021 Canadian federal statutory rate 26.5% 26.5% Net operating loss (26.5%) (26.5%) Effective tax rate -% -% The Canadian Companies have filed corporate tax returns through October 31, 2022 and returns since 2014 are open to examination. During the years ended October 31, 2022 and 2021 Cogent received tax refunds of $38,743 and $25,901, respectively. The refunds are received under a scientific research and development program. |
OPTIONS
OPTIONS | 12 Months Ended |
Oct. 31, 2022 | |
OPTIONS | |
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 issued 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. On December 15, 2020, the Company issued 41,250 options: 11,250 to three independent directors and 30,000 to three consultants. The options are exercisable into common stock of the Company at $0.64 per share. The Company calculated a fair value of the options of $27,190 using the Black Scholes option pricing model with computed volatility of 201%, risk-free interest rate of 2%, expected dividend yield 0%, stock price at measurement date of $0.68 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. On February 4, 2022, the Company granted 37,500 options to three directors and four Company personnel. . The Company calculated a fair value of the options of $11,267 using the Black Scholes option pricing model with computed volatility of 185.85%, risk-free interest rate of 1.80%, expected dividend yield 0%, stock price at measurement date of $0.32 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. On March 14, 2022, the Company granted 3,750 options to three directors. The Company calculated a fair value of the options of $786 using the Black Scholes option pricing model with computed volatility of 185.85%, risk-free interest rate of 1.80%, expected dividend yield 0%, stock price at measurement date of $0.21 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. On July 1, 2022, the Company granted 200,000 options to 2 consultants. The Company calculated a fair value of the options of $27,922 using the Black Scholes option pricing model with computed volatility of 188%, risk-free interest rate of 1%, expected dividend yield 0%, stock price at measurement date of $0.14 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. The Company has elected to amortize the options over the vesting period of the option as stock-based compensation. During the year ended October 31, 2022, the Company expensed $200,220 for options. The unrecognized future balance to be expensed over the term of the options is $120,930. During the year ended October 31, 2022, five officers and directors exercised 1,567,700 options for 1,567,700 shares of common stock with an exercise value of $1,568. The number of outstanding options as of year ended October 31, 2022 was 6,632,450. The following sets forth the options granted and outstanding as of October 31, 2022: Weighted Weighted Average Average Remaining Granted Exercise Contract Options Intrinsic Options Price Life Exercisable Value Outstanding at Year Ended October 31, 2020 7,917,650 0.15 6.16 5,765,680 $ 3,627,845 Granted 41,250 0.64 9.63 -- -- Exercised - - -- -- -- Forfeited - - -- -- -- Outstanding at Yar Ended October 31, 2021 7,958,900 0.15 5.16 6,081,250 $ 3,805,201 Granted 241,250 0.17 9.00 -- -- Exercised (1,567,300 ) 0.001 -- -- -- Forfeited/Expired by termination - - -- -- -- Outstanding at October 31, 2022 6,632,450 0.15 4.25 5,100,960 $ 256,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 6 - 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 license 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 payment have been made as of October 31, 2022. During the years ended October 31, 2022 and 2021 the Company recognized but did not pay dividends of $11,620 each year. As of the year ended October 31, 2022, the total amount of dividends due to the preferred shareholders was $84,245. During the year ended October 31, 2022, Ms. Shizuka Thomas, wife of Mr. Andrew S. Thomas, was paid $41,947 for services as a Japanese business manager and translator. As of October 31, 2022, and 2021 the Company had the following outstanding accrued liabilities due to related parties: As of October 31, 2022 2021 Accrued liabilities - related parties $ 31,230 $ 149,299 Accrued commissions - - Accrued dividends preferred shares 84,245 72,625 Total accrued liabilities- related parties $ 115,475 $ 221,924 During the year ended October 31, 2022, five officers and directors exercised 1,567,700 options for 1,567,700 shares of common stock with an exercise value of $1,568. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Oct. 31, 2022 | |
MAJOR CUSTOMERS | |
MAJOR CUSTOMERS | NOTE 7 - MAJOR CUSTOMERS The Company sells to their end-user customers both directly and through resellers. Seven (7) resellers accounted for 50% of sales in 2022 and six (6) resellers accounted for 50% of sales in 2021. 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. No reseller has exclusivity in their territory. In 2022, no end user customers were responsible for more than 10% of our revenues and twenty-seven (27) end user customers were responsible for approximately 50% of gross revenue. In 2021, no end user customer was responsible for more than 10% of revenue and twenty-six (26) end user customers were responsible for approximately 50% of gross revenue |
REVENUE BY PRODUCT LINES AND GE
REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS | 12 Months Ended |
Oct. 31, 2022 | |
REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS | |
REVENUE BY PRODUCT LINES AND GEOGRAPHIC | NOTE 8 - REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS The Company revenue by product line during the years ended October 31, 2022 and 2021 was as follows: 2022 2021 Category Percent Amount Percent Amount Software sales 70 % $ 1,511,936 71 % $ 1,298,692 Support sales 29 % 613,512 28 % 506,246 Other sales 1 % 31,433 1 % 25,521 Total 100 % $ 2,156,880 100 % $ 1,830,459 The Company sells its products on a worldwide basis. During the years ended October 31, 2022 and 2021 the Company’s revenue resulted in the following amounts geographically: 2022 2021 Area Percent Amount Percent Amount North America 33 % 714,506 33 % $ 605,371 Europe 35 % 746,896 39 % 713,564 Asia Pacific 22 % 468,105 14 % 261,751 South America 3 % 71,783 4 % 64,778 Other 7 % 155,590 10 % 184,995 Total 100 % $ 2,156,880 100 % $ 1,830,459 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 - COMMITMENTS AND CONTINGENCIES The Company leased office space located at 2233 Argentia Road Suite 306 Mississauga, Ontario Canada L5N 2X7. During May 2017, the Company signed a 5-year lease for the Company’s office being effective on August 1, 2017 through July 31, 2022. The lease terminated on July 31, 2022 and was not renewed. The Company pays CDN $100 per month, on a month per month basis, for the use of an address at the location. |
LOAN PAYABLE
LOAN PAYABLE | 12 Months Ended |
Oct. 31, 2022 | |
LOAN PAYABLE | |
LOAN PAYABLE | NOTE 10 - LOAN PAYABLE On April 30, 2020, the Company’s subsidiary Cogent Systems issued a two year note for US$30,032 (CDN $40,000) under the Canadian Emergency Business Account (CEBA). The CEBA provides interest free loans to small businesses to help cover operating costs during a period when their revenues may have been reduced due to the impact of COVID-19. The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. The note was repaid as of October 31, 2022. On December 15, 2020, the Company’s subsidiary Cogent Systems issued a two year note for US$15,678 (CDN $20,000) under the Canadian Emergency Business Account (CEBA). The CEBA provides interest free loans to small businesses to help cover operating costs during a period when their revenues may have been reduced due to the impact of COVID-19. The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. As of October 31, 2022, the note was extended to December 31, 2023. |
EQUITY
EQUITY | 12 Months Ended |
Oct. 31, 2022 | |
EQUITY | |
EQUITY | NOTE 11 - EQUITY The Company’s authorized shares of common stock is 70,000,000 with a par value of $0.001. as of October 31, 2022 the total shares outstanding were 53,143,822. The Company’s authorized shares of preferred stock is 5,000,000 with a par value of $0.001. On March 31, 2012 the Company issued 5,000 shares of Series A preferred stock at $0.001 per share with a value of $5 as founders to two related parties. The preferred shares contain certain voting rights allowing the holders of the shares to elect a majority of the Board of Directors until December 31, 2016 at which time the rights expired. On July 31, 2015, the Company authorized 500,000 shares of Series B preferred with a stated value of $1.00 per share and an annual dividend of 6% of the stated value of the Company. As of October 31, 2022 the number of outstanding shares of Series B was 193,661 with accrued dividends of $84,245. The preferred shares may be convertible into common stock by dividing the state price of the preferred shares by the VWAP value of the common stock on July 31, 2015. During year ended October 31, 2022, five officers and directors exercised 1,567,700 options for 1,567,700 shares of common stock with an exercise value of $1,568. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 - SUBSEQUENT EVENTS On December 9, 2022, the Company issued 137,500 options, 7,500 to three directors and 130,000 to four consultants. The options have an exercise price of $0.22 per option. The Company has evaluated subsequent events to determine events occurring after October 31, 2022 through the filing of this report that would have a material impact on the Company’s financial results or require disclosure and have determined none exist other than the ones indicated above. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES(Policies) | 12 Months Ended |
Oct. 31, 2022 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates. |
Principles of Consolidation | The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries Cogent Real Time Systems, Inc (Canada), Skkynet Corp. (Canada) and Skkynet Inc (US). All material intercompany balances and transactions have been eliminated. |
Cash and Cash Equivalents | The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash deposits are insured up to US$250,000 in US banks and CDN $100,000 in Canadian banks. The concentration of the Company’s cash deposits at times may exceed the insured amount, leaving the Company exposed to a credit risk on it deposits. |
Revenue recognition | In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are: 1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when (or as) the entity satisfied the performance obligations. Effective November 1, 2018, the Company implemented the transition using the modified retrospective method of transition. Under this method, the determination date of open contracts which could affect any adjustments was November 1, 2018. The open contracts at the time period are the unfulfilled portions of the maintenance contracts. The Company has four revenue streams, each of which the revenue is recognized in accordance to the five steps included in Topic 606. The revenue streams are: 1. Sale of software direct to the end customer 2. Sale of software through distributors and channel partners 3. Maintenance support services 4. Cloud services Revenue for the sale of software both directly to end users and through the distributor and channel partners is recognized upon delivery of the software and code required for the customer to install the software. Maintenance support services are recognized as revenue on a straight-line basis over the service period of the arrangement. Revenue from cloud services is recognized over time (typically, on a monthly basis) as service is provided. Payments received in advance of services being rendered are recorded as deferred revenue and recognized to revenue when earned. As of October 31, 2022 and 2021 the deferred revenue was $281,615 and $204,961, respectively. |
Accounts receivable | Accounts Receivable are carried at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable include receivables from customers that have received software and support from the Company. Bad debt expense is a recognition of uncollectable receivables based on past years’ experience and management’s estimate of likely losses for the year. No allowance for bad debt was considered necessary for the years ended October 31, 2022 and October 31, 2021, respectively. |
Advertising | Advertising costs are expensed as incurred. Advertising expenses for the years ended October 31, 2022 and 2021 were $479,041 and $ 204,603, respectively. |
Property and equipment | Property and equipment are carried at the cost of acquisition and depreciated over the estimated useful lives of the assets. Costs associated with repair and maintenance is expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency of our property and equipment are capitalized and depreciated over the remaining life of the related asset. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. |
Foreign currency translation | The Company’s reporting currency is in U.S. dollars. The functional currency of the Company’s foreign operations is their local currency. The financial statements of the Company’s subsidiaries in Canada are translated to U.S. dollars in accordance with ASC 830-30, “ Foreign Currency Translation” |
Impairment of long-lived assets | The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value is estimated based upon either discounted cash flow analysis or estimated salvage value. |
Basic and diluted net loss per share | Basic and diluted net income per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. For the years ended October 31, 2022 and 2021, 6,632,450 and 7,958,900, respectively, of potentially issuable shares of common stock from stock options have been included in the calculations as of October 31, 2022. |
Income Taxes | Income taxes are provided in accordance with Accounting Standards Codification (“ASC”), Topic 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Income taxes for subsidiaries Cogent Real-Time Systems are subject to the tax statutes in their country of domicile which is Canada. |
Stock-Based Compensation | The Company accounts for stock-based compensation in accordance with the fair value recognition provision of the Financial Accounting Standards Board(“FASB”) Accounting Standards Codification (“ASC”) No 718. The Company issues restricted stock to employees and consultants for their services. Cost of these transactions are measured at fair value of the equity instrument issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as the expense in the period granted. The Company recognized consulting expense and a corresponding increase to the additional paid in capital related to the stock issued for services. For agreements requiring future services the consulting expense is to be recognized ratably over the requisite service period. |
Related Parties | A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.” |
Recently Issued Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments- Credit Losses (Topic 326)". The Change in this announcement requires immediate recognition of management’s estimates of current expected losses (CELC). Under the prior model, losses were recognized only as the incurred. The amendment was effective for smaller reporting Companies for the fiscal years beginning after December 15,2022. The Company is reviewing the standard on its financial reporting based on the Company’s experience requiring prepayment for it services. |
PROPERTY AND EQUIPMENT (Table)
PROPERTY AND EQUIPMENT (Table) | 12 Months Ended |
Oct. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and equipment | 2022 2021 Property and equipment $ 101,415 $ 102,208 Less: accumulation depreciation (94,357 ) (91,794 ) Net property and equipment $ 7,058 $ 10,414 |
INCOME TAXES (Table)
INCOME TAXES (Table) | 12 Months Ended |
Oct. 31, 2022 | |
Schedule of deferred tax assets | 2022 2021 Income/(Loss) Before Income Taxes $ 163,722 $ (262,983 ) Income Tax Recovery 39,129 (55,226 ) Valuation Allowance (39,129 ) 55,226 Net Operating Losses $ 2,302,664 $ 2,466,386 Tax Rate 21 % 21 % Deferred Tax Assets 483,559 517,941 Valuation Allowance (483,559 ) (517,941 ) Net Deferred Tax Assets $ - $ - |
Schedule of federal statutory rate | 2022 2021 U.S. federal statutory rate 21% 21% Net operating loss (21%) (21%) Effective tax rate -% -% |
Canadian subsidiary company [Member] | |
Schedule of deferred tax assets | 2022 2021 Income/(Loss) Before Income Taxes $ (147,658 ) $ 24,572 Income Tax Expense 39,129 6,512 Valuation Allowance (39,129 ) (6,512 ) Net Operating Losses $ 211,128 $ 59,050 Tax Rate 26.5 % 26.5 % Deferred Tax Assets 54,778 15,648 Valuation Allowance (54,778 ) (15,648 ) Net Deferred Tax Assets $ - $ - |
Schedule of federal statutory rate | 2022 2021 Canadian federal statutory rate 26.5% 26.5% Net operating loss (26.5%) (26.5%) Effective tax rate -% -% |
OPTIONS (Tables)
OPTIONS (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
OPTIONS | |
Schedule of Options granted and outstanding | Weighted Weighted Average Average Remaining Granted Exercise Contract Options Intrinsic Options Price Life Exercisable Value Outstanding at Year Ended October 31, 2020 7,917,650 0.15 6.16 5,765,680 $ 3,627,845 Granted 41,250 0.64 9.63 -- -- Exercised - - -- -- -- Forfeited - - -- -- -- Outstanding at Yar Ended October 31, 2021 7,958,900 0.15 5.16 6,081,250 $ 3,805,201 Granted 241,250 0.17 9.00 -- -- Exercised (1,567,300 ) 0.001 -- -- -- Forfeited/Expired by termination - - -- -- -- Outstanding at October 31, 2022 6,632,450 0.15 4.25 5,100,960 $ 256,000 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Oct. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of outstanding accrued liabilities | As of October 31, 2022 2021 Accrued liabilities - related parties $ 31,230 $ 149,299 Accrued commissions - - Accrued dividends preferred shares 84,245 72,625 Total accrued liabilities- related parties $ 115,475 $ 221,924 |
REVENUE BY PRODUCT LINES AND _2
REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREA (Table) | 12 Months Ended |
Oct. 31, 2022 | |
REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREA (Table) | |
Schedule of revenue by product line | 2022 2021 Area Percent Amount Percent Amount North America 33 % 714,506 33 % $ 605,371 Europe 35 % 746,896 39 % 713,564 Asia Pacific 22 % 468,105 14 % 261,751 South America 3 % 71,783 4 % 64,778 Other 7 % 155,590 10 % 184,995 Total 100 % $ 2,156,880 100 % $ 1,830,459 |
Schedule of geographic concentration of revenue | 2022 2021 Category Percent Amount Percent Amount Software sales 70 % $ 1,511,936 71 % $ 1,298,692 Support sales 29 % 613,512 28 % 506,246 Other sales 1 % 31,433 1 % 25,521 Total 100 % $ 2,156,880 100 % $ 1,830,459 |
NATURE OF BUSINESS (Details Nar
NATURE OF BUSINESS (Details Narrative) - USD ($) | 1 Months Ended | ||
Mar. 31, 2012 | Oct. 31, 2022 | Oct. 31, 2021 | |
Preferred stock, share issued | 5,000 | 5,000 | |
Restricted Stock [Member] | Business Acquisition [Member] | Cogent [Member] | |||
Exchange of common stock, restricted shares | 30,000,000 | ||
Series B convertible preferred stock [Member] | |||
Preferred stock, share issued | 5,000 | 193,661 | 193,661 |
Preferred stock, Outstanding | 19,000,000 | ||
Net assets | $ 8,720 | ||
Series A Preferred Stock [Member] | |||
Preferred stock, share issued | 5,000 | 5,000 | 5,000 |
Series A Preferred Stock [Member] | Business Acquisition [Member] | |||
Preferred stock, share issued | 5,000 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | ||
Oct. 31, 2022 USD ($) shares | Oct. 31, 2021 USD ($) shares | Oct. 31, 2022 CAD ($) shares | |
Advertising costs | $ 479,041 | $ 204,603 | |
Deferred revenue | 281,615 | 204,961 | |
Cash deposits | 729,936 | $ 797,808 | |
UNITED STATES | |||
Cash deposits | $ 250,000 | ||
CANADA | |||
Cash deposits | $ 100,000 | ||
Equity Option | |||
Common stock shares, issuable | shares | 6,632,450 | 7,958,900 | 6,632,450 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
PROPERTY AND EQUIPMENT | ||
Property and equipment | $ 101,415 | $ 102,208 |
Less: accumulation depreciation | (94,357) | (91,794) |
Net property and equipment | $ 7,058 | $ 10,414 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 2,563 | $ 2,624 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
Canadian subsidiary company [Member] | ||
Income/(Loss) Before Income Taxes | $ (147,658) | $ 24,572 |
Income Tax Recovery/Expense | 39,129 | 6,512 |
Valuation allowance | (39,129) | (6,512) |
Net Operating Losses | $ 211,128 | $ 59,050 |
Tax Rate | 26.50% | 26.50% |
Deferred Tax Assets | $ 54,778 | $ 15,648 |
Valuation Allowance | (54,778) | (15,648) |
Net deferred tax asset | 0 | 0 |
U.S. parent company and U.S. subsidiary [Member] | ||
Income/(Loss) Before Income Taxes | 163,722 | (262,983) |
Income Tax Recovery/Expense | 39,129 | (55,226) |
Valuation allowance | (39,129) | 55,226 |
Net Operating Losses | $ 2,302,664 | $ 2,466,386 |
Tax Rate | 21% | 21% |
Deferred Tax Assets | $ 483,559 | $ 517,941 |
Valuation Allowance | (483,559) | (517,941) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Canadian subsidiary company [Member] | ||
U.S. federal statutory rate | 26.50% | 26.50% |
Net operating loss | (26.50%) | (26.50%) |
U.S. parent company and U.S. subsidiary [Member] | ||
U.S. federal statutory rate | 21% | 21% |
Net operating loss | (21.00%) | (21.00%) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Net income (loss) | $ 32,758 | $ (163,588) |
Cogent [Member] | ||
Corporate tax refund | 38,743 | 25,901 |
Canadian subsidiary company [Member] | ||
Operating loss carry forward | 206,708 | |
Net income (loss) | $ (147,658) | 24,572 |
Carry forwards will begin to expire | 2038 | |
U.S. parent company and U.S. subsidiary [Member] | ||
Operating loss carry forward | $ 2,302,664 | |
Net income (loss) | $ 163,722 | $ (262,983) |
OPTIONS (Details)
OPTIONS (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Options | ||
Shares outstanding beginning balance | 7,958,900 | 7,917,650 |
Granted | 241,250 | 41,250 |
Exercised | (1,567,300) | |
Shares outstanding ending balance | 6,632,450 | 7,958,900 |
Weighted Average Exercise Price | ||
Weighted average exercise price of shares outstanding beginning balance | $ 0.15 | $ 0.15 |
Weighted average exercise price of share granted | 0.17 | 0.64 |
Weighted average exercise price of share exercised | 0.001 | 0 |
Weighted average exercise price of share forfeited | 0 | 0 |
Weighted average exercise price of shares outstanding ending balance | $ 0.15 | $ 0.15 |
Weighted Average Remaining Contractual Terms | ||
Weighted average remaining contractual terms of share outstanding, beginning | 5 years 1 month 28 days | 6 years 1 month 28 days |
Weighted average remaining contractual terms of share granted | 9 years | 9 years 7 months 17 days |
Weighted average remaining contractual terms of share outstanding, ending | 4 years 3 months | 5 years 1 month 28 days |
Granted Options Exercisable | ||
Outstanding beginning balance | 6,081,250 | 5,765,680 |
Outstanding ending balance | 5,100,960 | 6,081,250 |
Intrinsic Value | ||
Aggregate intrinsic value of share outstanding beginning balance | $ 3,805,201 | $ 3,627,845 |
Aggregate intrinsic value of share outstanding ending balance | $ 256,000 | $ 3,805,201 |
OPTIONS (Details Narrative)
OPTIONS (Details Narrative) | 12 Months Ended | |
Oct. 31, 2022 USD ($) shares | Oct. 31, 2021 USD ($) | |
Number of options exercisable | shares | 6,632,450 | |
Stock-based compensation | $ 200,220 | $ 194,926 |
Unrecognized future balance to be expensed over the term of the options | $ 120,930 | |
December 12, 2019 [Member] | ||
Options issued | shares | 336,250 | |
Exercise price | 0.59 | |
Fair value of the option | $ 132,673 | |
Computed volatility | 207% | |
Risk-free interest rate | 2% | |
Expected dividend yield | 0% | |
Stock measurement price | 0.39 | |
Options issuance description | 20% upon issuance and 20% for the first and each subsequent year. | |
December 15, 2020 [Member] | ||
Options issued | shares | 41,250 | |
Exercise price | 0.64 | |
Fair value of the option | $ 27,190 | |
Computed volatility | 201% | |
Risk-free interest rate | 2% | |
Expected dividend yield | 0% | |
Stock measurement price | 0.68 | |
Options issuance description | The options are expensed over a five-year period with 20% upon issuance and 20% for the first and each subsequent year. | |
February 4, 2022 [Member] | ||
Options issued | shares | 37,500 | |
Exercise price | 0 | |
Fair value of the option | $ 11,267 | |
Computed volatility | 185.85% | |
Risk-free interest rate | 1.80% | |
Expected dividend yield | 0% | |
Stock measurement price | 0.32 | |
Options issuance description | 20% upon issuance and 20% for the first and each subsequent year. | |
March 14, 2022 [Member] | ||
Options issued | shares | 3,750 | |
Exercise price | 0 | |
Fair value of the option | $ 786 | |
Computed volatility | 185.85% | |
Risk-free interest rate | 1.80% | |
Expected dividend yield | 0% | |
Stock measurement price | 0.21 | |
Options issuance description | 20% upon issuance and 20% for the first and each subsequent year. | |
July 1, 2022 [Member] | ||
Options issued | shares | 200,000 | |
Exercise price | 0 | |
Fair value of the option | $ 27,922 | |
Computed volatility | 188% | |
Risk-free interest rate | 1% | |
Expected dividend yield | 0% | |
Stock measurement price | 0.14 | |
Options issuance description | 20% upon issuance and 20% for the first and each subsequent year. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Oct. 31, 2022 | Oct. 31, 2021 |
RELATED PARTY TRANSACTIONS | ||
Accrued liabilities related parties | $ 31,230 | $ 149,299 |
Accrued commissions | 0 | 0 |
Accrued dividends preferred shares | 84,245 | 72,625 |
Total accrued liabilities | $ 115,475 | $ 221,924 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2020 | Oct. 31, 2021 | |
Accrued dividend | $ 11,620 | $ 11,620 | |
Dividends | 84,245 | ||
One time payment to be made by Real Innovations in return of assignment to Cogent | $ 30,000 | ||
Common stock | 53,143,822 | 51,576,122 | |
Common stock value | $ 53,145 | $ 51,577 | |
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% | ||
Shizuka Thomas, wife of Andrew Thomas [Member] | |||
Paid for services | $ 41,947 | ||
Five Officers And Directors [Member] | |||
Exercised option | 1,567,700 | ||
Common stock | 1,567,700 | ||
Common stock value | $ 1,568 |
REVENUE BY PRODUCT LINES AND _3
REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Revenue | $ 2,156,880 | $ 1,830,459 |
Product line [Member] | ||
Revenue | $ 2,156,880 | $ 1,830,459 |
Revenue percentage | 100% | 100% |
Software sales [Member] | ||
Revenue | $ 1,511,936 | $ 1,298,692 |
Revenue percentage | 70% | 71% |
Support sales [Member] | ||
Revenue | $ 613,512 | $ 506,246 |
Revenue percentage | 29% | 28% |
Other sales [Member] | ||
Revenue | $ 31,433 | $ 25,521 |
Revenue percentage | 1% | 1% |
REVENUE BY PRODUCT LINES AND _4
REVENUE BY PRODUCT LINES AND GEOGRAPHIC AREAS (Details1) - USD ($) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Total revenue | $ 2,156,880 | $ 1,830,459 |
Geographically [Member] | ||
Total revenue | $ 2,156,880 | $ 1,830,459 |
Revenue percentage | 100% | 100% |
North America [Member] | ||
Total revenue | $ 714,506 | $ 605,371 |
Revenue percentage | 33% | 33% |
Europe [Member] | ||
Total revenue | $ 746,896 | $ 713,564 |
Revenue percentage | 35% | 39% |
Asia Pacific [Member] | ||
Total revenue | $ 468,105 | $ 261,751 |
Revenue percentage | 22% | 14% |
South America [Member] | ||
Total revenue | $ 71,783 | $ 64,778 |
Revenue percentage | 3% | 4% |
Other [Member] | ||
Total revenue | $ 155,590 | $ 184,995 |
Revenue percentage | 7% | 10% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - August 1, 2017 through July 31, 2022 [Member] | 1 Months Ended |
May 31, 2017 USD ($) | |
Monthly rental expense | $ 100 |
Lease expiration | Jul. 31, 2022 |
Lease Term | 5 years |
LOAN PAYABLE (Details Narrative
LOAN PAYABLE (Details Narrative) - Cogent Systems [Member] - USD ($) | 1 Months Ended | |
Dec. 15, 2020 | Apr. 30, 2020 | |
Description of loan payable | The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. As of October 31, 2022, the note was extended to December 31, 2023. | The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. The note was repaid as of October 31, 2022. |
Notes payable | $ 15,678 | $ 30,032 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 1 Months Ended | |||
Jul. 31, 2015 | Oct. 31, 2022 | Oct. 31, 2021 | Mar. 31, 2012 | |
Preferred stock, Par value | $ 0.001 | $ 0.001 | ||
Authorized shares of common stock | 70,000,000 | 70,000,000 | ||
Common stock, shares par vale | $ 0.001 | $ 0.001 | ||
Authorized shares of preferred stock | 5,000,000 | 5,000,000 | ||
Common stock, shares outstanding | 53,143,822 | 51,576,122 | ||
Preferred stock value | $ 5 | $ 5 | $ 5 | |
Preferred stock shares outstanding | 5,000 | 5,000 | ||
Preferred stock shares issued | 5,000 | 5,000 | ||
Common stock | 53,143,822 | 51,576,122 | ||
Common stock value | $ 53,145 | $ 51,577 | ||
Five Officers And Directors [Member] | ||||
Exercised option | 1,567,700 | |||
Common stock | 1,567,700 | |||
Common stock value | $ 1,568 | |||
Series A Preferred Stock [Member] | ||||
Preferred stock, Par value | $ 0.001 | $ 0.001 | ||
Preferred stock value | $ 5 | $ 5 | ||
Preferred stock shares issued | 5,000 | 5,000 | 5,000 | |
Series A Preferred Stock [Member] | Business Acquisition [Member] | ||||
Preferred stock shares issued | 5,000 | |||
Series B Preferred Stock [Member] | ||||
Preferred stock, Par value | $ 1 | |||
Authorized shares of preferred stock | 500,000 | |||
Annual dividend of percentage of the stated value | 6% | |||
Preferred stock shares outstanding | 193,661 | |||
Accrued dividends | $ 84,245 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | Dec. 09, 2022 $ / shares shares |
Total number of option issued | 137,500 |
Exercise price | $ / shares | $ 0.22 |
Three Director [Member] | |
Total number of option issued | 7,500 |
Consultants [Member] | |
Total number of option issued | 130,000 |