Cover
Cover - shares | 9 Months Ended | |
Jul. 31, 2023 | Sep. 14, 2023 | |
Cover [Abstract] | ||
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 | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jul. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 53,143,822 | |
Document Quarterly Report | true | |
Entity File Number | 000-54747 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 45-3757848 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 2233 Argentia Road | |
Entity Address Address Line 2 | 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 | |
Document Transition Report | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jul. 31, 2023 | Oct. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 858,370 | $ 729,936 |
Accounts receivable | 324,085 | 377,491 |
Receivable related parties | 4,905 | 4,776 |
Prepaid expenses | 10,876 | 25,733 |
Total current assets | 1,198,236 | 1,137,936 |
Property and equipment, net of accumulated depreciation of $96,196 and $94,357 respectively | 5,380 | 7,058 |
Total Assets | 1,203,616 | 1,144,994 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 109,778 | 58,202 |
Accrued liabilities - related party | 153,332 | 115,475 |
Deferred revenue | 356,809 | 281,615 |
Total current liabilities | 619,919 | 455,292 |
Long Term Liability | ||
Loan payable | 0 | 19,106 |
Total liabilities | 619,919 | 474,398 |
Commitments and contingencies | 0 | 0 |
Stockholders' Equity: | ||
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively | 5 | 5 |
Common stock; $0.001 par value, 70,000,000 shares authorized, 53,143,822 shares issued and outstanding, respectively | 53,145 | 53,145 |
Additional paid-in capital | 7,069,314 | 6,990,526 |
Accumulative other comprehensive income | 84,442 | 76,011 |
Accumulated deficit | (6,623,403) | (6,449,285) |
Total stockholders' equity | 583,697 | 670,596 |
Total Liabilities and Stockholders' Equity | 1,203,616 | 1,144,994 |
Series B Convertible Preferred Shares Member | ||
Stockholders' Equity: | ||
Preferred stock: $0.001 par value, 5,000,000 shares authorized, 5,000 shares issued and outstanding, respectively | $ 194 | $ 194 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jul. 31, 2023 | Oct. 31, 2022 |
Depreciation on property, plant and equipment | $ 96,196 | $ 94,357 |
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 | 53,143,822 |
Common stock, Outstanding | 53,143,822 | 53,143,822 |
Series B Convertible Preferred Shares Member | ||
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 | 9 Months Ended | ||
Jul. 31, 2023 | Jul. 31, 2022 | Jul. 31, 2023 | Jul. 31, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) | ||||
Revenue | $ 630,040 | $ 530,075 | $ 1,747,623 | $ 1,547,347 |
Operating Expenses: | ||||
Depreciation | 618 | 641 | 1,839 | 1,943 |
Salary and wages | 316,883 | 262,912 | 1,066,013 | 707,082 |
Advertising | 127,061 | 97,731 | 347,658 | 387,473 |
Stock compensation | 12,679 | 50,773 | 78,788 | 149,447 |
General & administrative expenses | 106,916 | 92,003 | 438,929 | 429,136 |
Operating expense | 564,157 | 504,060 | 1,933,227 | 1,675,081 |
Income (loss) from operations | 65,883 | 26,015 | (185,604) | (127,734) |
Other income | 14,900 | 1,906 | 14,960 | 6,398 |
Currency exchange | (15,165) | (9,555) | (24,727) | 8,216 |
Total other income (expense) | (265) | (7,649) | (9,767) | 14,614 |
Income (loss) before taxes | 65,618 | 18,366 | (195,371) | (113,120) |
Income taxes refund | 0 | 0 | 29,968 | 39,367 |
Net income (loss) | 65,618 | 18,366 | (165,403) | (73,753) |
Preferred dividends | (2,905) | (2,905) | (8,715) | (8,715) |
Income (loss) to common stockholders | 62,713 | 15,461 | (174,118) | (82,468) |
Foreign currency translation adjustment | 6,967 | 1,819 | 8,431 | 19,753 |
Comprehensive income (loss) | $ 69,680 | $ 17,280 | $ (165,687) | $ (62,715) |
Net income (loss) per share to common stockholders- basic | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares outstanding -basic | 53,143,822 | 52,454,723 | 53,143,822 | 51,880,474 |
Net income (loss) per share to common stockholders - diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares outstanding - diluted | 60,013,772 | 59,087,173 | 53,143,822 | 51,880,474 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited) - USD ($) | Total | Common Stock | Preferred Stock | Series B, Preferred Shares | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated other comprehensive loss |
Balance, shares at Oct. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2021 | $ 452,567 | $ 51,577 | $ 5 | $ 194 | $ 6,790,306 | $ (6,470,423) | $ 80,908 |
Stock option expense | 49,337 | 0 | 0 | 0 | 49,337 | 0 | 0 |
Change due to currency translation | (16,549) | 0 | 0 | 0 | 0 | 0 | (16,549) |
Dividends accrued on series B preferred shares | (2,905) | 0 | 0 | 0 | 0 | (2,905) | 0 |
Net loss | (74,164) | $ 0 | $ 0 | $ 0 | 0 | (74,164) | 0 |
Balance, shares at Jan. 31, 2022 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2022 | 408,286 | $ 51,577 | $ 5 | $ 194 | 6,839,643 | (6,547,492) | 64,359 |
Balance, shares at Oct. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2021 | 452,567 | $ 51,577 | $ 5 | $ 194 | 6,790,306 | (6,470,423) | 80,908 |
Dividends accrued on series B preferred shares | 8,715 | ||||||
Net loss | (73,753) | ||||||
Balance, shares at Jul. 31, 2022 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2022 | 501,361 | $ 53,145 | $ 5 | $ 194 | 6,939,753 | (6,552,891) | 61,155 |
Balance, shares at Jan. 31, 2022 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2022 | 408,286 | $ 51,577 | $ 5 | $ 194 | 6,839,643 | (6,547,492) | 64,359 |
Stock option expense | 49,337 | 0 | 0 | 0 | 49,337 | 0 | 0 |
Change due to currency translation | (1,385) | 0 | 0 | 0 | 0 | 0 | (1,385) |
Dividends accrued on series B preferred shares | (2,905) | 0 | 0 | 0 | 0 | (2,905) | 0 |
Net loss | (17,955) | $ 0 | $ 0 | $ 0 | 0 | (17,955) | 0 |
Balance, shares at Apr. 30, 2022 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Apr. 30, 2022 | 435,378 | $ 51,577 | $ 5 | $ 194 | 6,888,980 | (6,568,352) | 62,974 |
Stock option expense | 50,773 | 0 | 0 | 0 | 50,773 | 0 | 0 |
Change due to currency translation | (1,819) | 0 | 0 | 0 | 0 | 0 | (1,819) |
Net loss | 18,366 | 0 | 0 | 0 | 0 | 18,366 | 0 |
Dividend accrued on series preferred shares | (2,905) | $ 0 | 0 | 0 | 0 | (2,905) | 0 |
Common stock issued for option conversion, shares | 1,567,700 | ||||||
Common stock issued for option conversion, amount | 1,568 | $ 1,568 | $ 0 | $ 0 | 0 | 0 | 0 |
Balance, shares at Jul. 31, 2022 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2022 | 501,361 | $ 53,145 | $ 5 | $ 194 | 6,939,753 | (6,552,891) | 61,155 |
Balance, shares at Oct. 31, 2022 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2022 | 670,596 | $ 53,145 | $ 5 | $ 194 | 6,990,526 | (6,449,285) | 76,011 |
Stock option expense | 52,283 | 0 | 0 | 0 | 52,283 | 0 | 0 |
Change due to currency translation | 5,484 | 0 | 0 | 0 | 0 | 0 | 5,484 |
Net loss | (147,206) | 0 | 0 | 0 | 0 | (147,206) | 0 |
Dividend accrued on series B preferred shares | (2,905) | $ 0 | $ 0 | $ 0 | 0 | (2,905) | 0 |
Balance, shares at Jan. 31, 2023 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2023 | 578,252 | $ 53,145 | $ 5 | $ 194 | 7,042,809 | (6,599,396) | 81,495 |
Balance, shares at Oct. 31, 2022 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2022 | 670,596 | $ 53,145 | $ 5 | $ 194 | 6,990,526 | (6,449,285) | 76,011 |
Dividends accrued on series B preferred shares | 8,715 | ||||||
Net loss | (165,403) | ||||||
Balance, shares at Jul. 31, 2023 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2023 | 583,697 | $ 53,145 | $ 5 | $ 194 | 7,069,314 | (6,623,403) | 84,442 |
Balance, shares at Jan. 31, 2023 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2023 | 578,252 | $ 53,145 | $ 5 | $ 194 | 7,042,809 | (6,599,396) | 81,495 |
Stock option expense | 13,826 | 0 | 0 | 0 | 13,826 | 0 | 0 |
Change due to currency translation | (4,020) | 0 | 0 | 0 | 0 | 0 | (4,020) |
Net loss | (83,815) | 0 | 0 | 0 | 0 | (83,815) | 0 |
Dividend accrued on series B preferred shares | (2,905) | $ 0 | $ 0 | $ 0 | 0 | (2,905) | 0 |
Balance, shares at Apr. 30, 2023 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Apr. 30, 2023 | 501,338 | $ 53,145 | $ 5 | $ 194 | 7,056,635 | (6,686,116) | 77,475 |
Stock option expense | 12,679 | 0 | 0 | 0 | 12,679 | 0 | 0 |
Change due to currency translation | 6,967 | 0 | 0 | 0 | 0 | 0 | 6,967 |
Net loss | 65,618 | 0 | 0 | 0 | 0 | 65,618 | 0 |
Dividend accrued on series B preferred shares | (2,905) | $ 0 | $ 0 | $ 0 | 0 | (2,905) | 0 |
Balance, shares at Jul. 31, 2023 | 53,143,822 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2023 | $ 583,697 | $ 53,145 | $ 5 | $ 194 | $ 7,069,314 | $ (6,623,403) | $ 84,442 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (165,403) | $ (73,753) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,839 | 1,943 |
Option based compensation | 78,788 | 149,447 |
Non-cash lease expense | 0 | 16,234 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 53,406 | 8,746 |
Accounts payable and accrued expenses | 51,576 | (148,082) |
Accrued liabilities - related parties | 29,013 | (94,365) |
Prepaid expenses and other assets | 14,857 | 5,862 |
Operating lease liability | 0 | (16,234) |
Deferred income | 75,194 | 62,692 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 139,270 | (87,510) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from (payment on) Canadian loan activity | (19,106) | (20,139) |
Proceeds from exercise of stock options - related parties | 0 | 1,568 |
NET CASH USED IN FINANCING ACTIVITIES | (19,106) | (18,571) |
Effect of exchange rate changes on cash and cash equivalents | 8,270 | (19,430) |
Net increase (decrease) in cash and cash equivalents | 128,434 | (125,511) |
Cash and cash equivalents, beginning of period | 729,936 | 797,808 |
Cash and cash equivalents, end of period | 858,370 | 672,297 |
SUPPLEMENTAL CASH FLOWS INFORMATION | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Dividends accrued on Series B preferred shares | $ 8,715 | $ 8,715 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Jul. 31, 2023 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
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, 2022 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, 2022 as reported on Form 10-K, have been omitted. Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. The reclassifications have no effect on the net loss or stockholders’ equity. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Jul. 31, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 2- REVENUE RECOGNITION As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the nine month periods ended July 31, 2023 and 2022 the revenue by product line is as follows: Category Percentage 2023 Percentage 2022 Product sales 71 % 1,246,595 70 % 1,081,856 Support 26 % 449,185 29 % 451,664 Cloud & Other 3 % 51,843 1 % 13,827 Total 100 % $ 1,747,623 100 % $ 1,547,347 The Company sells its products on a worldwide basis. During the nine month periods ended July 31, 2023 and 2022 the Company’s geographic concentration of revenue is as follows: Area Percentage 2023 Percentage 2022 Europe 34 % 603,926 35 % 541,255 North America 37 % 642,158 33 % 516,211 Asia Pacific 17 % 292,632 22 % 346,573 Middle East-Africa/Other 10 % 175,670 9 % 131,276 South America 2 % 33,237 1 % 12,031 Total 100 % $ 1,747,623 100 % $ 1,547,347 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jul. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 3- 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 parties, 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 July 31, 2023. As of July 31, 2023, the amount due related parties was $153,332 compared to $115,475 as of October 31, 2022. |
OPTIONS
OPTIONS | 9 Months Ended |
Jul. 31, 2023 | |
OPTIONS | |
OPTIONS | NOTE 4 – 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 15, 2020, the Company issued 41,250 options of which 11,250 options were issued to three independent directors and 30,000 options were issued 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 201.22%, risk-free interest rate of 2%, expected dividend yield 0%, stock price at measurement date of $0.64 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 options are for 10 years and are exercisable into common stock at $0.31 per share. On March 14, 2022, the Company granted 3,750 options to three directors. The options are for 10 years and are exercisable into common stock at $0.21 per share. During the nine month period ended July 31, 2023, the Company recognized $78,788 of option expense. The unrecognized future balance to be expensed over the term of the options is $63,395. The following sets forth the options granted and outstanding as of July 31, 2023: Options Weighted Average Exercise price Weighted Average Remaining Contract Life Granted Options Exercisable Intrinsic value Outstanding at 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 Granted 237,500 0.22 9.90 - - Exercised - - - - - Forfeited/Expired by termination - - - - - Outstanding at July 31, 2023 6,869,950 $ 0.15 3.50 5,616,450 $ 598,018 |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 9 Months Ended |
Jul. 31, 2023 | |
MAJOR CUSTOMERS | |
MAJOR CUSTOMERS | NOTE 5 – MAJOR CUSTOMERS The Company sells to their end-user customers both directly and through a network of resellers. Seven resellers accounted for 51% of sales, of which one reseller accounted for 25% in the nine-month period ended July 31, 2023. 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 nine-month period ended July 31, 2023, twenty-five end user customers were responsible for approximately 50% of gross revenue, with no end user customer responsible for more than 10% of revenue. In the same period in 2022, twenty-one end user customers were responsible for approximately 50% of gross revenue, with no end user customers responsible for more than 10% of revenue. |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Jul. 31, 2023 | |
LOANS PAYABLE | |
LOANS PAYABLE | NOTE 6 – LOANS PAYABLE On April 30, 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. The Company has the option to extend the term of the loan for another 3 years subject to an annual interest of 5% on any balance remaining. On December 15, 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 Company has the option to extend the term of the loan for another 3 years subject to an annual interest of 5% on any balance remaining. On May 28, 2023, the outstanding balance of the CEBA loans payable of CDN $20,000, US ($14,756) were forgiven per the terms of the notes agreements leaving the balance of both notes at $0 as of July 31, 2023. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jul. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS The Company has evaluated subsequent events to determine events occurring after July 31, 2023 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 noted above . |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Jul. 31, 2023 | |
REVENUE RECOGNITION | |
Schedule of revenue by product line and geographic area | Category Percentage 2023 Percentage 2022 Product sales 71 % 1,246,595 70 % 1,081,856 Support 26 % 449,185 29 % 451,664 Cloud & Other 3 % 51,843 1 % 13,827 Total 100 % $ 1,747,623 100 % $ 1,547,347 |
Schedule of geographic concentration of revenue | Area Percentage 2023 Percentage 2022 Europe 34 % 603,926 35 % 541,255 North America 37 % 642,158 33 % 516,211 Asia Pacific 17 % 292,632 22 % 346,573 Middle East-Africa/Other 10 % 175,670 9 % 131,276 South America 2 % 33,237 1 % 12,031 Total 100 % $ 1,747,623 100 % $ 1,547,347 |
OPTIONS (Tables)
OPTIONS (Tables) | 9 Months Ended |
Jul. 31, 2023 | |
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, 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 Granted 237,500 0.22 9.90 - - Exercised - - - - - Forfeited/Expired by termination - - - - - Outstanding at July 31, 2023 6,869,950 $ 0.15 3.50 5,616,450 $ 598,018 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2023 | Jul. 31, 2022 | Jul. 31, 2023 | Jul. 31, 2022 | |
Revenue | $ 630,040 | $ 530,075 | $ 1,747,623 | $ 1,547,347 |
Revenue percentage | 100% | 100% | ||
Product sales [Member] | ||||
Revenue | $ 1,246,595 | $ 1,081,856 | ||
Revenue percentage | 71% | 70% | ||
Support [Member] | ||||
Revenue | $ 449,185 | $ 451,664 | ||
Revenue percentage | 26% | 29% | ||
Cloud & Other [Member] | ||||
Revenue | $ 51,843 | $ 13,827 | ||
Revenue percentage | 3% | 1% |
REVENUE RECOGNITION (Details 1)
REVENUE RECOGNITION (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2023 | Jul. 31, 2022 | Jul. 31, 2023 | Jul. 31, 2022 | |
Total revenue | $ 630,040 | $ 530,075 | $ 1,747,623 | $ 1,547,347 |
Revenue percentage | 100% | 100% | ||
Europe [Member] | ||||
Total revenue | $ 603,926 | $ 541,255 | ||
Revenue percentage | 34% | 35% | ||
North America [Member] | ||||
Total revenue | $ 642,158 | $ 516,211 | ||
Revenue percentage | 37% | 33% | ||
Asia [Member] | ||||
Total revenue | $ 292,632 | $ 346,573 | ||
Revenue percentage | 17% | 22% | ||
Middle East-Africa/Other [Member] | ||||
Total revenue | $ 175,670 | $ 131,276 | ||
Revenue percentage | 10% | 9% | ||
South America [Member] | ||||
Total revenue | $ 33,237 | $ 12,031 | ||
Revenue percentage | 2% | 1% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jul. 31, 2023 | Oct. 31, 2022 |
One time payment to be made by Real Innovations in return of assignment to Cogent | $ 30,000 | |
Accrued liabilities - related party | $ 153,332 | $ 115,475 |
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) - USD ($) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2023 | Oct. 31, 2022 | |
Options | ||
Shares outstanding beginning balance | 6,632,450 | 7,958,900 |
Granted | 237,500 | 241,250 |
Exercised | 0 | (1,567,300) |
Forfeited/Expired by termination | 0 | 0 |
Shares outstanding ending balance | 6,869,950 | 6,632,450 |
Weighted Average Exercise Price | ||
Weighted average exercise price of shares outstanding beginning balance | $ 0.15 | $ 0.15 |
Weighted average exercise price of share granted | 0.22 | 0.17 |
Weighted average exercise price of share exercised | 0 | 0.001 |
Weighted average exercise price of share Forfeited/Expired by termination | 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 | 4 years 3 months | 5 years 1 month 28 days |
Weighted average remaining contractual terms of share granted | 9 years 10 months 24 days | 9 years |
Weighted average remaining contractual terms of share outstanding, ending | 3 years 6 months | 4 years 2 months 30 days |
Granted Options Exercisable | ||
Outstanding beginning balance | 5,100,960 | 6,081,250 |
Outstanding ending balance | 5,616,450 | 5,100,960 |
Intrinsic Value | ||
Aggregate intrinsic value of share outstanding beginning balance | $ 256,000 | $ 3,805,201 |
Aggregate intrinsic value of share outstanding ending balance | $ 598,018 | $ 256,000 |
OPTIONS (Details Narrative)
OPTIONS (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 14, 2022 $ / shares shares | Feb. 04, 2022 $ / shares shares | Jul. 31, 2023 USD ($) $ / shares | Jul. 31, 2022 USD ($) | Jul. 31, 2023 USD ($) $ / shares shares | Jul. 31, 2022 USD ($) | Oct. 31, 2022 $ / shares | Oct. 31, 2021 $ / shares | |
Stock-based compensation | $ | $ 12,679 | $ 50,773 | $ 78,788 | $ 149,447 | ||||
Unrecognized future balance to be expensed over the term of the options | $ | $ 63,395 | |||||||
Options exercised | $ / shares | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | ||||
Directors [Member] | ||||||||
Options issued | shares | 11,250 | |||||||
Option Expiration | 10 years | 10 years | ||||||
Options granted | shares | 3,750 | 37,500 | ||||||
Options exercised | $ / shares | $ 0.21 | $ 0.31 | ||||||
Consultants [Member] | ||||||||
Options issued | shares | 30,000 | |||||||
Black Scholes option [Member] | ||||||||
Exercise price | 0.64 | |||||||
Fair value of the option | $ | $ 27,190 | |||||||
Computed volatility | 201.22% | |||||||
Risk-free interest rate | 2% | |||||||
Expected dividend yield | 0% | |||||||
Stock measurement price | 0.64 | |||||||
Options issuance description | 20% upon issuance and 20% for the first and each subsequent year |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) | 9 Months Ended | |
Jul. 31, 2023 | Jul. 31, 2022 | |
Seven Reseller [Member] | ||
Percentage of sales | 51% | |
One Reseller [Member] | ||
Percentage of sales | 25% | |
No End User [Member] | ||
Responsible percentage of revenue not more than | 10% | |
Twenty five End User [Member] | ||
Responsible for gross revenue | 50% | |
Responsible percentage of revenue not more than | 10% | |
Twenty One End User [Member] | ||
Responsible for gross revenue | 50% |
LOAN PAYABLE (Details Narrative
LOAN PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | ||||
Dec. 15, 2020 | May 28, 2023 | Apr. 30, 2020 | Jul. 31, 2023 | Oct. 31, 2022 | |
Loans Payable | $ 0 | $ 19,106 | |||
Fogiveness of debt | $ 14,756 | ||||
Cogent Systems [Member] | |||||
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 | 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 | |||
Notes payable | $ 15,678 | $ 30,032 |