Cover
Cover - USD ($) | 12 Months Ended | ||
Oct. 31, 2023 | Jan. 25, 2024 | Apr. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Oct. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity File Number | 001-38154 | ||
Entity Registrant Name | CODA OCTOPUS GROUP, INC. | ||
Entity Central Index Key | 0001334325 | ||
Entity Tax Identification Number | 34-2008348 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 3300 S Hiawassee Rd | ||
Entity Address, Address Line Two | Suite 104-105 | ||
Entity Address, City or Town | Orlando | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32835 | ||
City Area Code | 407 | ||
Local Phone Number | 735 2406 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 37,700,000 | ||
Entity Common Stock, Shares Outstanding | 11,164,483 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 215 | ||
Auditor Name | Frazier & Deeter | ||
Auditor Location | Atlanta, Georgia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 24,448,841 | $ 22,927,371 |
Accounts Receivable | 2,643,461 | 2,870,600 |
Inventory | 11,685,525 | 10,027,111 |
Unbilled Receivables | 894,251 | 602,115 |
Prepaid Expenses | 181,383 | 240,464 |
Other Current Assets | 1,034,626 | 343,061 |
Total Current Assets | 40,888,087 | 37,010,722 |
FIXED ASSETS | ||
Property and Equipment, net | 6,873,320 | 5,832,532 |
OTHER ASSETS | ||
Goodwill | 3,382,108 | 3,382,108 |
Intangible Assets, net | 486,615 | 442,286 |
Deferred Tax Asset | 211,386 | 259,810 |
Total Other Assets | 4,080,109 | 4,084,204 |
Total Assets | 51,841,516 | 46,927,458 |
CURRENT LIABILITIES | ||
Accounts Payable | 1,308,201 | 793,247 |
Accrued Expenses and Other Current Liabilities | 995,630 | 1,731,706 |
Deferred Revenue | 975,537 | 943,569 |
Total Current Liabilities | 3,279,368 | 3,468,522 |
LONG TERM LIABILITIES | ||
Deferred Revenue, less current portion | 133,382 | 76,127 |
Total Liabilities | 3,412,750 | 3,544,649 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Common Stock, $.001 par value; 150,000,000 shares authorized, 11,117,695 issued and outstanding as of October 31, 2023 and 10,916,853 shares issued and outstanding as of October 31, 2022 | 11,118 | 10,918 |
Preferred Stock, $.001 par value; 5,000,000 shares authorized, zero issued and outstanding as of October 31, 2023 and 2022 | ||
Treasury Stock | (46,300) | (28,337) |
Additional Paid-in Capital | 62,958,984 | 62,313,988 |
Accumulated Other Comprehensive Loss | (3,442,549) | (4,737,124) |
Accumulated Deficit | (11,052,487) | (14,176,636) |
Total Stockholders’ Equity | 48,428,766 | 43,382,809 |
Total Liabilities and Stockholders’ Equity | $ 51,841,516 | $ 46,927,458 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2023 | Oct. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 11,117,695 | 10,916,853 |
Common stock, shares outstanding | 11,117,695 | 10,916,853 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Statement [Abstract] | ||
Net Revenues | $ 19,352,088 | $ 22,225,803 |
Cost of Revenues | 6,321,033 | 7,035,115 |
Gross Profit | 13,031,055 | 15,190,688 |
OPERATING EXPENSES | ||
Research & Development | 2,096,467 | 2,237,920 |
Selling, General & Administrative | 8,195,036 | 7,948,704 |
Total Operating Expenses | 10,291,503 | 10,186,624 |
INCOME FROM OPERATIONS | 2,739,552 | 5,004,064 |
OTHER INCOME (EXPENSE) | ||
Other Income | 39,146 | 137,975 |
Interest Income | 642,530 | |
Interest Expense | (9,704) | |
Total Other Income, net | 681,676 | 128,271 |
INCOME BEFORE INCOME TAX EXPENSE | 3,421,228 | 5,132,335 |
INCOME TAX (EXPENSE) BENEFIT | ||
Current Tax Expense | (248,655) | (1,005,140) |
Deferred Tax (Expense) Benefit | (48,424) | 174,026 |
Total Income Tax Expense | (297,079) | (831,114) |
NET INCOME | $ 3,124,149 | $ 4,301,221 |
NET INCOME PER SHARE: | ||
Basic | $ 0.28 | $ 0.40 |
Diluted | $ 0.28 | $ 0.38 |
WEIGHTED AVERAGE SHARES: | ||
Basic | 11,131,469 | 10,863,674 |
Diluted | 11,323,568 | 11,281,347 |
Foreign Currency Translation Adjustment | $ 1,294,575 | $ (3,070,065) |
Total Other Comprehensive Income (Loss) | 1,294,575 | (3,070,065) |
COMPREHENSIVE INCOME | $ 4,418,724 | $ 1,231,156 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Treasury Stock, Common [Member] | Total |
Balance at Oct. 31, 2021 | $ 10,858 | $ 61,183,131 | $ (1,667,059) | $ (18,477,857) | $ 41,049,073 | |
Balance, shares at Oct. 31, 2021 | 10,857,195 | |||||
Employee stock-based compensation | 1,130,917 | 1,130,917 | ||||
Stock issued for options exercised | $ 60 | (60) | (28,337) | $ (28,337) | ||
Stock issued from options exercised, shares | 59,658 | 36,667 | ||||
Foreign currency translation adjustment | (3,070,065) | $ (3,070,065) | ||||
Net Income | 4,301,221 | 4,301,221 | ||||
Balance at Oct. 31, 2022 | $ 10,918 | 62,313,988 | (4,737,124) | (14,176,636) | (28,337) | 43,382,809 |
Balance, shares at Oct. 31, 2022 | 10,916,853 | |||||
Employee stock-based compensation | 645,196 | 645,196 | ||||
Stock issued for options exercised | $ 200 | (200) | (17,963) | $ (17,963) | ||
Stock issued from options exercised, shares | 200,842 | 199,496 | ||||
Foreign currency translation adjustment | 1,294,575 | $ 1,294,575 | ||||
Net Income | 3,124,149 | 3,124,149 | ||||
Balance at Oct. 31, 2023 | $ 11,118 | $ 62,958,984 | $ (3,442,549) | $ (11,052,487) | $ (46,300) | $ 48,428,766 |
Balance, shares at Oct. 31, 2023 | 11,117,695 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 3,124,149 | $ 4,301,221 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation of property plant and equipment | 603,467 | 678,652 |
Amortization of intangible assets | 64,063 | 60,077 |
Stock-based compensation | 645,196 | 1,130,917 |
Deferred income taxes | 48,726 | (193,083) |
(Increase) decrease in operating assets: | ||
Accounts receivable | 291,873 | 992,948 |
Inventory | (1,287,108) | (675,878) |
Unbilled receivables | (281,981) | 447,927 |
Prepaid expenses | 68,836 | 165,010 |
Other current assets | (330,516) | 275,909 |
Increase (decrease) in operating liabilities: | ||
Accounts payable and other current liabilities | (613,239) | 533,996 |
Deferred revenue | 56,410 | (990,729) |
Net Cash Provided by Operating Activities | 2,389,876 | 6,726,967 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (2,021,948) | (466,471) |
Purchases of other intangible assets | (108,392) | (90,089) |
Proceeds from the sale of property and equipment | 609,565 | |
Net Cash Used in Investing Activities | (1,520,775) | (556,560) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayment of notes | (63,559) | |
Purchase of treasury stock | (17,963) | (28,337) |
Net Cash Used in Financing Activities | (17,963) | (91,896) |
EFFECT OF CURRENCY TRANSLATION ON CHANGES IN CASH AND CASH EQUIVALENTS | 670,332 | (898,796) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,521,470 | 5,179,715 |
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | 22,927,371 | 17,747,656 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 24,448,841 | 22,927,371 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 9,704 | |
Cash paid for taxes | 1,406,562 | 74,432 |
SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Purchase of property and equipment previously held in escrow, included in prepaid expenses as of October 31, 2021 | $ 694,664 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Coda Octopus Group, Inc. (“Coda,” “the Company,” or “we”) operates two operating business units. These are the Marine Technology Business (“Products Business,” or “Products Segment”) and the Marine Engineering Business (“Services Business,” “Engineering Business” or “Services Segment”). The Marine Technology Business is an established supplier of underwater technology and solutions, to the underwater/subsea market. Its products and solutions comprise both hardware and software for which it is the innovator, developer, manufacturer and distributor. It has key proprietary 3D/4D/5D/6D imaging sonar technology marketed under the name of Echoscope® and Echoscope PIPE® and diving technology marketed under the name of CodaOctopus ® ® The Engineering Business is an established sub-contractor to prime defense contractors and generally supplies proprietary sub-assemblies for incorporation into broader mission critical defense systems. These sub-assemblies are typically supplied for the life of the program. The Marine Engineering Business’ scope of services for these defense programs typically extends to concept, design, prototype, manufacture, and post-sale support. The manufacturing contracts for these sub-assemblies can run over many years. The consolidated financial statements include the accounts of Coda Octopus Group, Inc. and its wholly owned domestic and foreign subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidated financial statements. |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and the Public Company Accounting Oversight Board (“PCAOB”). The Company’s fiscal year ends on October 31. The Company employs a calendar month-end reporting period for its quarterly reporting. Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include estimates related to the percentage of completion method used to account for contracts including costs and earnings in excess of billings, billings in excess of costs and estimated earnings, the valuation of the deferred tax asset, and the valuation of goodwill. Actual results realized by the Company may differ from management’s estimates. Reclassifications Certain amounts included in the accompanying Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income, and Consolidated Statements of Cash Flows for the year ended October 31, 2022, have been reclassified to conform to the October 31, 2023, presentation. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance obligations. See “Note 4 – Revenue” for a detailed discussion on revenue and revenue recognition. Cost of Revenue Our Cost of Revenues includes the cost of materials and related direct costs. With respect to sales made through the Company’s sales agents distribution network, we include in our costs of revenues the commissions paid to agents for the specific sales they make. All other sales-related expenses, including those related to unsuccessful bids, are included in selling, general and administrative costs. Commissions included as a component of Cost of Revenues were $ 826,719 and $ 631,471 for the years ended October 31, 2023 and 2022, respectively. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Foreign Currency Translation The Company’s operations are split between the United States, United Kingdom, Denmark, and the Netherlands. The foreign subsidiaries’ functional currencies are those of their respective local jurisdictions and are translated into U.S dollar for the purpose of reporting the Company’s consolidated financial results. The translation of assets and liabilities into U.S. dollars for subsidiaries with a functional currency other than the U.S. dollar is performed using exchange rates in effect at the balance sheet date. Stockholders’ equity, fixed assets and long-term investments are recorded at historical exchange rates. The translation of revenues and expenses into U.S. dollars for subsidiaries with a functional currency other than the U.S. dollar is performed using the average exchange rate for the respective period. Gains or losses from cumulative translation adjustments, net of tax, are included as a component of accumulated other comprehensive loss in the Consolidated Balance Sheets. The Company records net foreign exchange transaction gains and losses in the consolidated statements of income and comprehensive income. For the years ended October 31, 2023, and October 31, 2022, the Company recorded an aggregate transaction (loss) gain of $ (190,073) 431,314 Treasury Stock Repurchases of Restricted Stock Awards or common stock are classified as treasury stock on our Consolidated Balance Sheet. We account for treasury stock under the cost method. When treasury stock is re-issued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital in our Consolidated Balance Sheet. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a reduction of retained earnings in our Consolidated Balance Sheet. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s operations are organized into two reportable segments: Marine Technology Business and the Marine Engineering Business. The Company’s organizational structure is based on many factors that the CODM uses to evaluate, view and run the business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by the Company’s CODM to evaluate segment results. The CODM uses several metrics to evaluate the performance of the overall business, including revenue and earnings from operations, and uses these results to allocate resources to each of the segments. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company did not have any cash equivalents as of October 31, 2022. Cash and cash equivalents are maintained with various financial institutions. As of October 31, 2023, approximately $ 23.3 Financial Instruments Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, accounts receivable, trade and other payables, and deferred revenue. The carrying amounts of the Company’s cash equivalents, accounts receivables, unbilled receivables, accounts payables, accrued liabilities and deferred revenue, as reflected in the consolidated financial statements approximate fair value due to the short-term maturity of these items. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The long-term deferred revenue approximates their carrying amounts as assessed by management. The Company’s financial instruments are exposed to certain financial risks, primarily concentration risk. Concentration risk is the risk of financial loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash, cash equivalents and trade receivables. The carrying amount of the financial assets represents the maximum credit exposure. The Company limits its exposure to concentration risk on cash by placing these financial instruments with high-credit, quality financial institutions and only investing in liquid, investment grade securities. The Company’s bank deposits are held with financial institutions both in and outside the United States. At times, such amounts may be in excess of applicable government mandated insurance limits. The Company has not experienced any losses in such accounts or lack of access to its cash. The Company’s accounts receivables are subject to potential concentrations of credit risk, since a significant part of the Company’s sales are to a small number of companies and, even though these are generally established businesses, market fluctuations such as the price of oil may affect our customers’ ability to meet their obligations to us. Furthermore, trade disputes may result in impairment or delays in receivables. Accounts Receivable The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to cash collection. Payment terms and conditions vary by contract type, location of customer and the products or services offered, although terms generally require payment from a customer within 30 days for our Marine Technology Business and between 45-60 days from our Services Business. When the timing of revenue recognition differs from the timing of cash collection, an evaluation is performed to determine whether the contract includes a significant financing component. 2,643,461 2,870,600 4,207,996 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Allowance for Credit Losses The allowance for credit losses, which includes the allowance for accounts receivable and unbilled accounts receivable, represents the Company’s best estimate of lifetime expected credit losses inherent in those financial assets. The Company’s lifetime expected credit losses are determined using relevant information about past events (including historical experience), current conditions, and reasonable and supportable forecasts that affect collectability. The Company monitors its credit exposure through ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. In addition, the Company performs routine credit management activities such as timely account reconciliations, dispute resolution, and payment confirmations. The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. The Allowance for Bad Debt was $ 0 Inventory Inventories consist primarily of raw materials and finished goods and are stated at the lower of cost or net realizable value on an aggregate basis. Cost is computed using the average of actual cost, on a first-in, first-out basis. Adjustments to reduce the carrying amount of inventory to the lower of cost or net realizable value are made, if required, for excess or obsolete goods, which includes a review of, among other factors, demand requirements and market conditions. Business Combinations The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. The Company utilizes commonly accepted valuation techniques, such as the income approach and the cost approach, as appropriate, in establishing the fair value of intangible assets. Typically, key assumptions include projections of cash flows that arise from identifiable intangible assets of acquired businesses as well as discount rates based on an analysis of the weighted average cost of capital, adjusted for specific risks associated with the assets. Goodwill and Intangible Assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired under a business combination. Goodwill also includes acquired assembled workforce, which does not qualify as an identifiable intangible asset. The Company reviews impairment of goodwill annually in the fourth quarter, or more frequently if events or circumstances indicate that the goodwill might be impaired. Triggering events for impairment reviews may be indicators such as adverse industry or economic trends, restructuring actions, lower projections of profitability, or a sustained decline in the Company’s market capitalization. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its’ carrying amount, then the quantitative goodwill impairment test is unnecessary. If, based on the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its’ carrying amount, then the Company proceeds to perform the quantitative goodwill impairment test. The Company first determines the fair value of a reporting unit using a Level 1 input which estimates the fair value of the Company’s equity by utilizing the Company’s trading price as of the end of the reporting period. The Company then compares the derived fair value of a reporting unit with the carrying amount. If the carrying value of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As of October 31, 2023, the Company determined it is not more likely than not that the fair value of a reporting unit was less than its’ carrying amount and as a result quantitative goodwill impairment test was unnecessary and there was no impairment charge. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Finite-lived intangible assets consist of acquired patents, customer relationships, and non-compete agreements resulting from business combinations. The Company’s intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 2 to 15 years. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for minor replacements, maintenance and repairs which do not increase the useful lives of the property and equipment are charged to operations as incurred. Major additions and improvements are capitalized. Depreciation and amortization are computed using the straight-line method over their estimated useful lives: SCHEDULE OF PROPERTY AND EQUIPMENT Buildings 50 Office machinery and equipment 3 5 Rental assets 3 7 Furniture, fixtures, and improvements 3 5 Depreciation expense is presented as a component of Selling, General and Administrative expense in the Consolidated Statements of Income and Comprehensive Income. Depreciation expense related to the Products Business “Rental Assets” used for generating rental income is allocated 70 30 Leases The Company owns substantially all its facilities and as a result the effect of Accounting Standards Codification 842, “Leases”, is immaterial. Impairment of Long-Lived Assets Management reviews long-lived assets, including property and equipment and intangible assets, for possible impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Such events and changes may include: a significant decrease in market value, changes in asset use, negative industry or economic trends, and changes in the Company’s business strategy. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Research and Development Research and development costs are comprised primarily of employee-related costs, stock-based compensation expense, engineering consulting expenses associated with new product and technology development, product commercialization, quality assurance and testing costs, as well as costs related to information technology, patent applications and examinations, materials, supplies, and an allocation of facilities costs. All research and development costs are expensed as they are incurred. Stock-Based Compensation The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on stock-based payments. Under the provisions of the guidance, stock-based compensation expense is measured at the grant date based on the fair value of the option using a Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The authoritative guidance also requires that the Company measure and recognize stock-based compensation expense upon modification of the term of a stock award. The stock-based compensation expense for such modification is the sum of any unamortized expense of the award before modification and the modification expense. The modification expense is the incremental amount of the fair value of the award before the modification and the fair value of the award after the modification, measured on the date of modification. In the event the modification results in a longer requisite period than in the original award, the Company has elected to apply the pool method where the aggregate of the unamortized expense and the modification expense is amortized over the new requisite period on a straight-line basis. In addition, any forfeiture will be based on the original requisite period prior to the modification. Calculating stock-based compensation expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility, and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns, which are believed to be representative of future behavior. The Company estimates the volatility of the Company’s common stock on the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted, exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could be significantly different from what was recorded in the current period. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 The Company may grant restricted stock units (“RSUs”) to employees or consultants. RSU awards vest upon grant or fixed term, generally 36 months. The Company uses the closing trading price of its common stock on the date of grant as the fair value of awards of restricted stock units. Stock-based compensation from RSU awards is recognized on a straight-line basis over the RSU awards’ vesting period. Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification 740, Income Taxes Deferred tax assets and liabilities are the amounts by which the Company’s future income taxes are expected to be impacted by these differences as they reverse. Deferred tax assets are based on differences that are expected to decrease future income taxes as they reverse. Correspondingly, deferred tax liabilities are based on differences that are expected to increase future income taxes as they reverse. Note 10 Income Taxes discloses the amounts of deferred tax assets and liabilities, and also presents the impact of significant differences between financial reporting income and taxable income. For income tax purposes, the Company uses the percentage of completion method of recognizing revenues on long-term contracts which is consistent with the Company’s financial reporting under GAAP. From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty. Significant judgment is required in assessing and estimating the tax consequences of these transactions. Accruals for unrecognized tax benefit liabilities, which represent the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized for financial reporting purposes, are recorded when the Company believes it is not more-likely-than-not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Adjustments to unrecognized tax benefits are recognized when facts and circumstances change, such as the closing of a tax audit, notice of an assessment by a taxing authority or the refinement of an estimate. Income tax benefit includes the effects of adjustments to unrecognized tax benefits, as well as any related interest and penalties. Comprehensive Income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Comprehensive income includes gains and losses on foreign currency translation adjustments and is included as a component of stockholders’ equity. Advertising Advertising costs are expenses as incurred and are presented as a component of Selling, General and Administrative expense in the Consolidated Statements of Income and Comprehensive Income, Advertising expenses for the years ended October 31, 2023, and October 31, 2022, were $ 0 Contingencies From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records liability in its consolidated financial statements for these matters when a loss is known or considered probable, and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). The Company does not recognize gain contingencies until they are realized. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Oct. 31, 2023 | |
Unusual or Infrequent Items, or Both [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements to be Adopted On October 27, 2023, the FASB issues ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 will affect how we report segment information, starting with our Form 10-K for the year ended October 31, 2025, and our quarterly reports on Form 10-Q starting with our quarterly report for the quarter ended January 31, 2026. The ASU requires that we provide disclosures of significant segment expenses and other segment items that are regularly provided to our CODM and included in each reported measure of segment profit or loss. We will also have to disclose other segment items by reportable segment (i.e., the difference between reported segment revenues less the significant segment expenses (which are disclosed) less reported segment profit or loss). We will identify the CODM and their position within the company and details about the information that they regularly review to make capital allocation and other operating decisions about each segment, as well as an explanation of how the CODM uses the reported measures and other disclosures. The information needed for these disclosures is available, but we will need to determine the best way to provide that information for these required segment disclosures. On December 13, 2023, the FASB issued Accounting Standards Update 2023-08 entitled Accounting and Disclosure for Crypto Assets (ASU 2023-08,) which changes the accounting model for crypto assets from the existing impairment model to a fair value model. This is a significant change since the impairment model accounted for diminution in value of crypto assets by writing down the crypto asset without the ability to increase the value if prices improved in the future. Under the fair value model, crypto assets will be marked to market at each financial reporting date such that subsequent increases in value of the crypto assets can be recorded. ASU 2023-08 also requires enhanced disclosures about crypto asset transactions. The Company plans to adopt this new standard on November 1, 2025, reserving the option to early adopt ASU 2023-08 if its customers begin to pay for the Company’s products and services with crypto assets. To date, the Company has neither accepted payment for its products and/or services in crypto assets, nor has it received or invested in this class of assets. On December 14, 2023, the FASB issued Accounting Standards Update 2023-09 entitled Improvements to Income Tax Disclosures (ASU 2023-09), which is primarily applicable to public companies and requires a significant expansion of the granularity of the income tax rate reconciliation as well as an expansion of other income tax disclosures. The majority of the disclosures will only be made on an annual basis, although there is a modest expansion of required quarterly income tax disclosures. The amendments in ASU 2023-09 require disclosure of specific income tax categories in the rate and reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. There are also additional disclosures related to taxes paid to local jurisdictions, and to income taxes paid. This information is currently available to the Company but was not a required disclosure. The Company expects to adopt ASU 2023-09 on November 1, 2025. |
REVENUE
REVENUE | 12 Months Ended |
Oct. 31, 2023 | |
Revenue | |
REVENUE | NOTE 4 – REVENUE Revenue Recognition The Company recognizes revenue under the Financial Accounting Standards Board’s Topic 606, Revenue from Contracts with Customers CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Topic 606 has established a five-step process to determine the amount of revenue to record from contracts with customers. The five steps are: ● Determine if we have a contract with a customer; ● Determine the performance obligations in that contract; ● Determine the transaction price; ● Allocate the transaction price to the performance obligations; and ● Determine when to recognize revenue. Revenues are earned under formal contracts with our customers and are derived from both sales and rental of underwater technologies and equipment for real time 3D imaging, mapping, defense, and survey applications and from the engineering services which we provide primarily to prime defense contractors. Our contracts do not include the possibility for additional contingent consideration so that our determination of the contract price does not involve having to consider potential additional variable consideration. Our sales do not include a right of return by the customer. For the Marine Technology Business, all of our products are sold on a stand-alone basis and those market prices are evidence of the value of the products. To the extent that we also provide services (e.g., installation, training, post-sales technical support etc.), those services are either included as part of the product or are subject to written contracts based on the stand-alone value of those services. Revenue from the sale of services is recognized when those services have been provided to the customer and evidence of the provision of those services exists. Revenue derived from either our subscription package offerings or rental of our equipment is recognized when performance obligations are met, in particular, on a daily basis during the subscription or rental period. For arrangements with multiple performance obligations, we recognize product revenue by allocating the transaction revenue to each performance obligation based on the relative fair value of each deliverable and recognize revenue when performance obligations are met including when equipment is delivered, and for rental of equipment, when installation and other services are performed. Our contracts sometimes require customer payments in advance of revenue recognition and are recognized as revenue when the Company has fulfilled its obligations under the respective contracts. Until such time, we recognize this prepayment as deferred revenue. For software license sales for which any services rendered are not considered distinct to the functionality of the software, we recognize revenue upon delivery of the software. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 With respect to revenues related to our Services Business, there are contracts in place that specify the fixed hourly rate and other reimbursable costs to be billed based on material and direct labor hours incurred and, revenue is recognized on these contracts based on material and the direct labor hours incurred. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of costs incurred (materials and direct labor hours) to date to estimated total services (materials and direct labor hours) for each contract. This method is used as we consider expenditures for direct materials and labor hours to be the best available measure of progress on these contracts. On a quarterly basis, we examine all our fixed-price contracts to determine if there are any losses to be recognized during the period. Any such loss is recorded in the quarter in which the loss first becomes apparent based upon costs incurred to date and the estimated costs to complete as determined by experience from similar contracts. Variations from estimated contract performance could result in adjustments to operating results. Recoverability of Deferred Costs In accordance with Topic 606, we defer costs on projects for service revenue. Deferred costs consist primarily of incremental direct costs to customize and install systems, as defined in individual customer contracts, including costs to acquire hardware and software from third parties and payroll costs for our employees and other third parties. The pricing of these service contracts is intended to provide for the recovery of these types of deferred costs over the life of the contract. We recognize such costs in accordance with our revenue recognition policy by contract. For revenue recognized under the percentage of completion method, costs are recognized as products are delivered or services are provided in accordance with the percentage of completion calculation. For revenue recognized over time, costs are recognized ratably over the term of the contract, commencing on the date of revenue recognition. At each quarterly balance sheet date, we review deferred costs, to ensure they are ultimately recoverable. Any anticipated losses on uncompleted contracts are recognized when evidence indicates the estimated total cost of a contract exceeds its estimated total revenue. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Other Revenue Disclosures See Note 15 – “Disaggregation of Revenue” for a breakdown of revenues from external customers and cost of those revenues between our Product Segment and Services Segment including information on the split of revenues by geography. Contracts in Progress (Unbilled Receivables and Deferred Revenue) Unbilled Receivables includes earned revenue in excess of billings on incomplete contracts representing accumulated project expenses plus fees which have not been invoiced to customers as of the date of the balance sheet. The amount of unbilled contracts receivable may not exceed their net realizable value. Unbilled Receivables were $ 894,251 602,115 Sales of equipment include a provision for warranty or through life support (TLS) services and is treated as deferred revenue, along with extended warranty sales or TLS, which may be purchased by customers. These amounts are amortized over the relevant warranty or TLS period (12 months is our standard warranty contract obligation or for TLS 24, 36 or 60 months) from the date of sale. Deferred Revenue (current) includes paid customer invoices prior to delivery of the agreed service, customer prepaid support to be delivered within twelve months and provision for warranty services to be provided within twelve months. Deferred Revenue was $ 975,537 943,569 Deferred Revenue (current) consisted of the following as of October 31, 2023, 2022 and 2021: SCHEDULE OF DEFERRED REVENUE 2023 2022 2021 Deferred Revenue $ 420,611 $ 430,962 $ 604,049 Customer Technical Support Obligations 324,218 283,369 1,117,855 Product Warranty 230,708 229,238 277,937 Total Deferred Revenue (Current) $ 975,537 $ 943,569 $ 1,999,841 Deferred Revenue (current) includes customer prepaid support, TLS, to be delivered past the initial twelve months and provision for extended warranty services to be provided past the initial twelve months. Deferred Revenue (non-current) was $ 133,382 76,127 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Oct. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | NOTE 5 – FAIR VALUE The Company follows the authoritative guidance for fair value measurement and the fair value option for financial assets and financial liabilities. The Company carries its financial instruments at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets. Level 2 Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. When applying fair value principles in the valuation of assets, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs. There were no |
COMPOSITION OF CERTAIN FINANCIA
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | 12 Months Ended |
Oct. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS | NOTE 6 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Certified Deposit Interest Bearing Accounts The Company established certified deposit interest-bearing accounts with its current bankers HSBC NA and Jyske Bank in February 2023. These interest-bearing accounts are for rolling fixed short-term periods not exceeding 3 months and are classified in our financial statements as “cash equivalent”. In addition, we have an interest-bearing deposit account in the UK that tracks the Bank of England base rate, which has no restrictions on access and has a current rate of 5.0 SCHEDULE OF INTEREST RATES AND AMOUNT HELD IN CERTIFIED DEPOSIT INTEREST BEARING ACCOUNTS Currency Denomination Amount HSBC Jyske Bank USD $ 15,201,579 5.28 % GBP £ 750,000 4.80 % GBP (Unrestricted access) £ 500,000 5.00 % *USD $ 2,400,000 4.0 % *Held in Jyske Bank USD Account Inventory consisted of the following as of: SCHEDULE OF COMPONENTS OF INVENTORY October 31, October 31, 2023 2022 Raw materials and parts $ 8,994,482 $ 7,219,344 Work in progress 483,227 383,427 Finished goods 2,207,816 2,424,340 Total Inventory $ 11,685,525 $ 10,027,111 Other current assets consisted of the following as of: SUMMARY OF OTHER CURRENT ASSETS October 31, October 31, 2023 2022 Deposits and other assets $ 23,081 $ 18,631 Other US Tax Receivables/Prepaid Taxes 450,625 151,217 Employee Retention Credit Receivables 212,300 173,213 Other Foreign Tax Receivables 348,620 - Total Other Current Assets $ 1,034,626 $ 343,061 Property and equipment consisted of the following as of: SCHEDULE OF PROPERTY AND EQUIPMENT October 31, October 31, 2023 2022 Buildings $ 6,386,705 $ 5,419,946 Land 200,000 200,000 Office machinery and equipment 1,596,026 1,556,030 Rental assets 2,323,446 2,252,292 Furniture, fixtures and improvements 1,172,169 1,108,787 Total 11,678,346 10,537,055 Less: accumulated depreciation (4,805,026 ) (4,704,523 ) Total Property and Equipment, net $ 6,873,320 $ 5,832,532 Depreciation expense for the years ended October 31, 2023, and 2022 was $ 603,467 678,652 Property and equipment, net, by geographic areas was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET, BY GEOGRAPHIC AREAS October 31, October 31, 2023 2022 USA 1,751,260 1,825,858 Europe 5,122,060 4,006,674 Total Property and Equipment, net $ 6,873,320 $ 5,832,532 Accrued Expenses and Other Current Liabilities consisted of the following as of: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES October 31, October 31, 2023 2022 Accruals $ 384,880 $ 1,474,744 Other Tax Payables 525,565 144,158 Employee Related 85,185 112,804 Total $ 995,630 $ 1,731,706 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Total Other Income, net consisted of the following for the year ended: SCHEDULE OF OTHER INCOME October 31, October 31, 2023 2022 Employee Retention Credits $ - $ 88,917 Other Income 39,146 49,058 Total Other Income, $ 39,146 $ 137,975 Interest Income 642,530 - Interest (Expense) - (9,704 ) Total Other Income, net $ 681,676 $ 128,271 |
GOODWILL AND IDENTIFIED INTANGI
GOODWILL AND IDENTIFIED INTANGIBLE ASSETS | 12 Months Ended |
Oct. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND IDENTIFIED INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS Intangibles consisted of the following as of: SCHEDULE OF OTHER INTANGIBLE ASSETS October 31, 2023 October 31, 2022 Average Life Gross Accumulated Gross Accumulated Finite-lived intangible assets (Years) Asset Amortization Net Asset Amortization Net Customer Relationships 10 $ 919,503 $ (906,422 ) $ 13,081 $ 919,503 $ (883,922 ) $ 35,581 Patents and others 10 780,650 (307,116 ) 473,534 669,751 (263,046 ) 406,705 Total intangible assets $ 1,700,153 $ (1,213,538 ) $ 486,615 $ 1,589,254 $ (1,146,968) $ 442,286 SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSES 2024 $ 56,104 2025 42,514 2026 39,434 2027 36,657 Thereafter 311,906 Totals $ 486,615 Amortization of intangible assets for the years ended October 31, 2023, and 2022 was $ 64,063 60,077 Goodwill consisted of the following as of: SCHEDULE OF GOODWILL October 31, October 31, 2023 2022 Coda Octopus Colmek, Inc. $ 2,038,669 $ 2,038,669 Coda Octopus Products, Ltd 62,315 62,315 Coda Octopus Martech, Ltd 1,281,124 1,281,124 Total Goodwill $ 3,382,108 $ 3,382,108 |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Oct. 31, 2023 | |
NET INCOME PER SHARE: | |
NET INCOME PER SHARE | NOTE 8 – NET INCOME PER SHARE The following table sets forth the computation of basic and fully diluted loss per common share for the years ended: SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED Year Year Ended Ended October 31, October 31, Fiscal Period 2023 2022 Numerator: Net Income $ 3,124,149 $ 4,301,221 Denominator: Basic weighted average common shares outstanding 11,131,469 10,863,674 Effect of dilutive options and restricted stock awards 192,099 417,673 Diluted outstanding shares 11,323,568 11,281,347 Net income per share Basic $ 0.28 $ 0.40 Diluted $ 0.28 $ 0.38 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Oct. 31, 2023 | |
Equity [Abstract] | |
CAPITAL STOCK | NOTE 9 – CAPITAL STOCK Common Stock 2017 Stock Incentive Plan On December 6, 2017, the Board of Directors adopted the 2017 Stock Incentive Plan (the “2017 Plan”). The purpose of the Plan is to advance the interests of the Company and its stockholders by enabling the Company and its subsidiaries to attract and retain qualified individuals through opportunities for equity participation in the Company, and to reward those individuals who contribute to the Company’s achievement of its economic objectives. The Plan was adopted subject to stockholders’ approval and was approved by Stockholders at the Company’s Annual General Meeting held on July 24, 2018. The maximum number of shares of Common Stock available for issuance under the 2017 Plan is 913,612 2021 Stock Incentive Plan On July 12, 2021, the Board of Directors adopted the 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan was approved by the Company’s stockholders at its Annual General Meeting held on September 14, 2021. The 2021 Plan is identical to the 2017 Plan in all material respects, except that the number of shares available for issuance thereunder is 1,000,000 As of October 31, 2023, there were a total of 1,370,300 A summary of stock options activity is as follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Weighted Number of Average Average Shares Subject Exercise Price Per Remaining Contractual Aggregate Intrinsic to Options Share Life (in years) Value Balance at October 31, 2021 383,668 $ 4.65 Granted - - Vested - - Exercises (36,667 ) $ 4.65 Forfeited or cancelled (39,834 ) $ 4.65 Balance at October 31, 2022 307,167 - Granted - - Vested - - Exercises (199,496 ) $ 4.62 Forfeited or cancelled (3,000 ) $ 6.23 Balance at October 31, 2023 104,671 $ 4.67 1.41 $ 202,419 Vested and expected to vest at October 31, 2023 104,671 $ 4.67 1.41 $ 202,419 Exercisable at October 31, 2023 104,671 $ 4.67 1.41 $ 202,419 The following table summarizes information about stock options outstanding and exercisable under the Company’s Stock Option Plan at October 31, 2023: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Weighted Weighted Range of Weighted Average Weighted Average Exercise Average Remaining Range of Average Remaining Prices per Number Exercise Price Per Contractual Life Exercise Prices per Number Exercise Price Per Contractual Life Share Outstanding Share (in years) Share Exercisable Share (in years) $ 4.62 101,671 $ 4.62 2.15 $ 4.62 101,671 $ 4.62 2.15 $ 6.23 3,000 $ 6.23 0.05 $ 6.23 3,000 $ 6.23 0.05 104,671 $ 4.67 104,671 $ 4.67 Unamortized compensation expense in future years is $ 0 . CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 A summary of restricted stock award activity is as follows: SCHEDULE OF RESTRICTED STOCK AWARDS Shares Weighted Average Grant Date Fair Value Non-Vested Weighted Average Grant Date Fair Value Outstanding at October 31, 2021 122,000 $ 8.80 122,000 $ 8.80 Granted 64,687 $ 7.15 64,687 $ 7.15 Vested (53,733 ) $ 5.05 (53,733 ) $ 5.05 Treasury Stock (5,467 ) $ 5.18 (5,467 ) $ 5.18 Forfeited or cancelled (16,981 ) $ 8.43 (16,981 ) $ 8.43 Outstanding at October 31, 2022 110,506 $ 8.10 110,506 $ 8.10 Granted 100,428 $ 7.10 98,546 $ 6.96 Vested (108,568 ) $ 7.91 (108,568 ) $ 7.91 Treasury Stock (1,932 ) $ 9.30 (1,932 ) $ 9.30 Forfeited or cancelled (13,006 ) $ 5.77 (13,006 ) $ 5.77 Outstanding at October 31, 2023 87,428 $ 7.04 85,546 $ 7.04 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that option holders would have realized had all option holders exercised their options on the last trading day of fiscal years 2023 and 2022. The aggregate intrinsic value is the difference between Coda’s closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of in-the-money options. In certain situations, in 2023 and 2022, certain RSAs that vested were net share settled such that the Company withheld common shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld were 109,154 95,866 All Stock Options and Restricted Stock Awards have been made pursuant to the 2017 Plan. Total stock-based compensation expense from stock options and restricted stock awards is $ 645,196 1,130,917 154,539 87,428 Preferred Stock Series A and Series C Preferred Stock The Company is authorized to issue 5,000,000 0.001 50,000 50,000 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The provision (benefit) for income taxes comprises: SCHEDULE OF PROVISION (BENEFIT) FOR INCOME TAXES October 31, October 31, 2023 2022 Current federal expense $ 264,955 $ 849,580 Current state income tax expense 5,789 159,900 Foreign tax (benefit) (22,089 ) (4,340 ) Total current tax expense 248,655 1,005,140 Deferred federal expense (benefit) 14,941 (174,026 ) Deferred state expense 3,913 - Deferred foreign tax expense 29,570 - Deferred tax expense (benefit) 48,424 (174,026 ) Total Income Tax Expense $ 297,079 $ 831,114 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 The expense for income taxes differed from the U.S. statutory rate due to the following: SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFIT October 31, October 31, 2023 2022 Statutory US tax rate 21.0 % 21.0 % R&D Relief (9.7 )% (10.6 )% Change in valuation allowance (3.4 )% 3.7 % Foreign tax benefit including GILTI, net 2.1 % (0.9 )% State Income Tax (1.3 )% 3.0 % Total 8.7 % 16.2 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES October 31, October 31, 2023 2022 Noncurrent deferred tax assets (liabilities) Temporary differences U.S. NOL carryforwards $ - $ - Deferred Revenue - 4,830 Restricted Stock Awards 263,218 272,841 Book/Tax Depreciation (21,554 ) (17,861 ) Foreign fixed assets (218,045 ) (84,381 Foreign capital loss carryforwards 11,182 - Foreign NOL carryforwards 176,585 409,100 Total 211,386 584,529 Valuation allowance - (324,719 ) Total Deferred Asset $ 211,386 $ 259,810 As of October 31, 2023, we had no remaining U.S. federal net operating loss (NOL) carryforwards. The Company’s tax jurisdictions are USA, UK, Denmark, India, and Australia (our India and Australian operations are currently dormant). As a result, the Company’ foreign derived income is subject to GILTI tax in the United States. The Company has elected to treat GILTI inclusions as period costs. The Company has filed tax returns for federal, state, and foreign jurisdictions. The Company’s evaluation of uncertain tax matters was performed for the tax years ended October 31, 2023, and October 31, 2022. The Company has elected to retain its existing accounting policy with respect to the treatment of interest and penalties attributable to income taxes and continues to reflect interest and penalties attributable to income taxes, to extent they arise, as a component of its income tax provision or benefit as well as its outstanding income tax assets and liabilities. The Company believes that its income tax positions and deductions would be sustained on an audit and does not anticipate any adjustments to result in a material change to its financial position. The Company’s UK Operations, under the applicable UK tax rules, have certain carryforward trading losses (referred to in this Form 10-K disclosure as “NOL carryforwards”). Under the applicable UK tax rules, any trading tax losses incurred from 2017 up to and including the current fiscal year can be surrendered for UK group relief to offset or reduce current year profits and tax liability in any of the Company’s UK Operations. Any tax losses before 2017 in a UK subsidiary can only be used by the subsidiary to which it pertains. The benefit of these tax losses benefit are available indefinitely unless the nature of the business with the tax benefit changes substantially. Under UK tax rules, the UK entities are also eligible for research and development (R&D) Tax Credit. The UK Products Business in any one financial year performs significant R&D work due to the nature of its business (researching and developing products and solutions). In the 2023 FY, this subsidiary was eligible to deduct £ 174,771 158,883 477,271 397,874 79,397 A valuation allowance is required for deferred tax assets, if based on available evidence, it is more likely than not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the future. The valuation allowance was zero 324,719 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
LINE OF CREDIT
LINE OF CREDIT | 12 Months Ended |
Oct. 31, 2023 | |
Line Of Credit | |
LINE OF CREDIT | NOTE 11 – LINE OF CREDIT The Company entered into a $ 4,000,000 0 |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Oct. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 12 – CONCENTRATIONS Significant Customers During the year ended October 31, 2023, the Company had two customers from whom it generated sales greater than 10% of net revenues. Revenues from these customers were $ 4,430,389 22.9 173,930 6.6 During the year ended October 31, 2022, the Company had no customers from whom it generated sales greater than 10% of net revenues. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Oct. 31, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 13 - EMPLOYEE BENEFIT PLANS The Company’s U.S. subsidiaries maintain a 401(k)-retirement plan. The plan allows the Company to make matching contributions of 4 128,988 138,260 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
SEGMENT ANALYSIS
SEGMENT ANALYSIS | 12 Months Ended |
Oct. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT ANALYSIS | NOTE 14 - SEGMENT ANALYSIS Based on the fundamental difference in the types of offering products versus services, we operate two distinct reportable segments which are managed separately. Coda Octopus Products (“Marine Technology Business” or “Products Segment”) operations are comprised primarily of sale of underwater technology sonar solutions, products for underwater operations including hardware and software, and rental of solutions and products to the underwater market. Coda Octopus Martech and Coda Octopus Colmek (“Marine Engineering Business” or “Services Segment”) provides engineering services primarily as sub-contractors to prime defense contractors. Segment operating income is total segment revenue reduced by cost of revenue operating expenses identifiable with the business segment. Corporate includes general corporate administrative costs (“overhead”). The Company evaluates performance and allocates resources based upon segment operating income. There are inter-segment sales which have been eliminated in our financial statements but are disclosed in the tables below for information purposes. The following table summarizes segment asset and operating balances by reportable segment as of and for the years ended October 31, 2023 and 2022, respectively. The Company’s reportable business segments sell their goods and services in four geographic locations: ● Americas ● Europe ● Australia/Asia ● Middle East/Africa CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 SCHEDULE OF SEGMENT REPORTING INFORMATION Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2023 Net Revenues $ 12,119,066 $ 7,233,022 $ - $ 19,352,088 Cost of Revenues 2,819,796 3,501,237 - 6,321,033 Gross Profit 9,299,270 3,731,785 - 13,031,055 Research & Development 2,043,890 52,577 - 2,096,467 Selling, General & Administrative 3,109,566 2,463,087 2,622,383 8,195,036 Total Operating Expenses 5,153,456 2,515,664 2,622,383 10,291,503 Income (Loss) from Operations 4,145,814 1,216,121 (2,622,383 ) 2,739,552 Other Income (Expense) Other Income 39,146 - - 39,146 Interest Income 544,892 97,638 - 642,530 Total Other Income (Expense) 584,038 97,638 - 681,676 Income (Loss) before Income Taxes 4,729,852 1,313,759 (2,622,383 ) 3,421,228 Income Tax (Expense) Benefit Current Tax (Expense) Benefit (272,126 ) (78,876 ) 102,347 (248,655 ) Deferred Tax (Expense) Benefit (115,954 ) 54,382 13,148 (48,424 ) Total Income Tax (Expense) Benefit (388,080 ) (24,494 ) 115,495 (297,079 ) Net Income (Loss) $ 4,341,772 $ 1,289,265 $ (2,506,889 ) $ 3,124,149 Supplemental Disclosures Total Assets $ 36,969,673 $ 13,604,262 $ 1,267,581 $ 51,841,516 Total Liabilities $ 2,263,761 $ 732,582 $ 416,407 $ 3,412,750 Revenues from Intercompany Sales - eliminated from sales above $ 4,602,741 $ 584,622 $ 1,200,000 $ 6,387,363 Depreciation and Amortization $ 523,339 $ 100,689 $ 43,502 $ 667,530 Purchases of Long-lived Assets $ 1,996,544 $ 25,404 $ 108,392 $ 2,130,340 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2022 Net Revenues $ 14,724,688 $ 7,501,115 - $ 22,225,803 Cost of Revenues 2,941,569 4,093,546 - 7,035,115 Gross Profit 11,783,119 3,407,569 - 15,190,688 Research & Development 2,207,500 30,420 - 2,237,920 Selling, General & Administrative 2,563,554 2,654,565 2,730,585 7,948,704 Total Operating Expenses 4,771,054 2,684,985 2,730,585 10,186,624 Income (Loss) from Operations 7,012,065 722,584 (2,730,585 ) 5,004,064 Other Income (Expense) Other Income 55,715 79,204 3,056 137,975 Interest Expense (9,233 ) (71 ) (400 ) (9,704 ) Total Other Income (Expense) 46,482 79,133 2,656 128,271 Income (Loss) before Income Taxes 7,058,547 801,717 (2,727,929 ) 5,132,335 Income Tax (Expense) Benefit Current Tax Benefit (Expense) (868,162 ) 39,422 (176,400 ) (1,005,140 ) Deferred Tax (Expense) Benefit 31,907 (41,657 ) 183,776 174,026 Total Income Tax (Expense) Benefit (836,255 ) (2,235 ) 7,376 (831,114 ) Net Income (Loss) $ 6,222,292 $ 799,482 $ (2,720,553 ) $ 4,301,221 Supplemental Disclosures Total Assets $ 33,348,805 $ 12,662,109 $ 916,544 $ 46,927,458 Total Liabilities $ 2,432,750 $ 526,195 $ 585,704 $ 3,544,649 Revenues from Intercompany Sales - eliminated from sales above $ 2,406,717 $ 396,015 $ 2,720,000 $ 5,522,732 Depreciation and Amortization $ 602,583 $ 96,776 $ 39,370 $ 738,729 Purchases of Long-lived Assets $ 1,123,475 $ 36,862 $ 90,887 $ 1,251,224 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
DISAGGREGATION OF REVENUE
DISAGGREGATION OF REVENUE | 12 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
DISAGGREGATION OF REVENUE | NOTE 15 - DISAGGREGATION OF REVENUE SCHEDULE OF DISAGGREGATE OF REVENUE FROM CONTRACTS FOR SALE WITH CUSTOMERS BY GEOGRAPHIC LOCATION For the Year Ended October 31, 2023 Marine Marine Technology Engineering Grand Business Business Total Disaggregation of Total Net Sales Primary Geographical Markets Americas $ 4,263,883 $ 4,846,615 $ 9,110,498 Europe 2,225,915 2,386,407 4,612,322 Australia/Asia 4,607,786 - 4,607,786 Middle East/Africa 1,021,482 - 1,021,482 Total Revenues $ 12,119,066 $ 7,233,022 $ 19,352,088 Major Goods/Service Lines Equipment Sales $ 8,444,305 $ 944,737 $ 9,389,042 Equipment Rentals 1,264,804 - 1,264,804 Software Sales 851,976 - 851,976 Engineering Parts - 4,075,850 4,075,850 Services 1,557,981 2,212,435 3,770,416 Total Revenues $ 12,119,066 $ 7,233,022 $ 19,352,088 Goods and Services Revenue Goods transferred at a point in time $ 9,296,281 $ 944,737 $ 10,241,018 Services transferred over time 2,822,785 6,288,285 9,111,070 Total Revenues $ 12,119,066 $ 7,233,022 $ 19,352,088 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 For the Year Ended October 31, 2022 Marine Marine Technology Engineering Grand Business Business Total Disaggregation of Total Net Sales Primary Geographical Markets Americas $ 5,668,948 $ 4,566,349 $ 10,235,297 Europe 1,559,778 2,900,906 4,460,684 Australia/Asia 5,723,970 - 5,723,970 Middle East/Africa 1,771,992 33,860 1,805,852 Total Revenues $ 14,724,688 $ 7,501,115 $ 22,225,803 Major Goods/Service Lines Equipment Sales $ 8,771,050 $ 1,544,002 $ 10,315,052 Equipment Rentals 1,844,775 - 1,844,775 Software Sales 1,014,867 - 1,014,867 Engineering Parts - 3,530,407 3,530,407 Services 3,093,996 2,426,706 5,520,702 Total Revenues $ 14,724,688 $ 7,501,115 $ 22,225,803 Goods and Services Revenue Goods transferred at a point in time $ 9,785,917 $ 1,562,799 $ 11,348,716 Services transferred over time 4,938,771 5,938,316 10,877,087 Total Revenues $ 14,724,688 $ 7,501,115 $ 22,225,803 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES Employment Agreements Annmarie Gayle Pursuant to the terms of an employment agreement dated March 16, 2017, the Company employs Ms. Gayle as its Chief Executive Officer on a full-time basis and a member of its Board of Directors. With effect from July 1, 2019, Ms. Gayle’s annual salary is $ 305,000 payable on a monthly basis. Ms. Gayle is also entitled to an annual performance bonus of up to $ 100,000 , upon achieving certain targets that are to be defined on an annual basis. The agreement provides for 30 days of paid holidays in addition to public holidays observed in Denmark. The agreement has no definitive term and may be terminated only upon twelve months’ prior written notice by Ms. Gayle. In the event that the Company terminates her at any time without cause, she is entitled to a payment equal to her annual salary as well as a separation bonus of $ 150,000 Blair Cunningham Under the terms of an employment contract dated January 1, 2013, our wholly owned subsidiary Coda Octopus Products, Inc. employs Blair Cunningham as its Chief Executive Officer and President of Technology. He is being paid an annual base salary of $ 200,000 225,000 The agreement may be terminated only upon twelve months prior written notice without cause. The Company may terminate the agreement for cause, immediately and without notice. Among others, “for cause” includes gross misconduct, a serious or repeated breach of the agreement and negligence and incompetence as reasonably determined by the Company’s Board. The agreement includes an 18-month non-compete and non-solicitation provision. Kevin Kane Pursuant to the terms of an Employment Agreement dated May 7, 2021, as amended and modified, Kevin Kane was appointed the Chief Executive Officer of Colmek commencing July 6, 2021. The Employment Agreement provides for an annual base salary of $ 200,000 . He will also be eligible for an annual performance bonus based on the performance milestones agreed with the Company. As a further inducement, he was granted 15,000 restricted stock units out of the Company’s 2017 Stock Incentive Plan that vest in three equal annual instalments commencing on the first anniversary of grant. The Compensation Committee approved a performance milestone bonus of $ 26,000 The agreement may be terminated by the Company at any time. In the event that the Company terminates the employment agreement for whatever reason, the following severance payments apply: Year 1 of employment 2 Weeks Year 2 of employment 1 Month Year 3 of employment 4 Months The agreement includes a 12-month non-compete and non-solicitation provision. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 **Gayle Jardine Pursuant to an employment agreement with Coda Octopus Products Ltd., the Company’s wholly owned subsidiary, Coda Octopus Products Limited (Scotland operations) Gayle Jardine was appointed European Director of Finance. In that role she is currently being paid an annual salary of £ 78,000 96,720 In May 2023, Ms. Jardine was appointed Interim Chief Financial Officer of the Company. As inducement for assuming the additional duties as Interim CFO, she was paid an additional short-term incentive payment of £ 5,000 6,200 2,500 **Gayle Jardine resumed her position as European Director of Finance on November 27, 2023, when Mr. John Price assumed the role of Chief Financial Officer. Litigation From time to time, we may be a party to or be involved with legal proceedings, governmental investigations or inquiries, claims or litigation that are related to our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business or its financial condition. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 SUBSEQUENT EVENTS On November 27, 2023, John Price assumed the role of Chief Financial Officer at which point Gayle Jardine re-assumed her position as European Director of Finance. On January 16, 2024, the Company sold its flat located in Copenhagen for a price of DKK 5,300,000 781,598) |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and the Public Company Accounting Oversight Board (“PCAOB”). The Company’s fiscal year ends on October 31. The Company employs a calendar month-end reporting period for its quarterly reporting. |
Estimates | Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include estimates related to the percentage of completion method used to account for contracts including costs and earnings in excess of billings, billings in excess of costs and estimated earnings, the valuation of the deferred tax asset, and the valuation of goodwill. Actual results realized by the Company may differ from management’s estimates. |
Reclassifications | Reclassifications Certain amounts included in the accompanying Consolidated Balance Sheets, Consolidated Statements of Income and Comprehensive Income, and Consolidated Statements of Cash Flows for the year ended October 31, 2022, have been reclassified to conform to the October 31, 2023, presentation. |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance obligations. See “Note 4 – Revenue” for a detailed discussion on revenue and revenue recognition. |
Cost of Revenue | Cost of Revenue Our Cost of Revenues includes the cost of materials and related direct costs. With respect to sales made through the Company’s sales agents distribution network, we include in our costs of revenues the commissions paid to agents for the specific sales they make. All other sales-related expenses, including those related to unsuccessful bids, are included in selling, general and administrative costs. Commissions included as a component of Cost of Revenues were $ 826,719 and $ 631,471 for the years ended October 31, 2023 and 2022, respectively. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
Foreign Currency Translation | Foreign Currency Translation The Company’s operations are split between the United States, United Kingdom, Denmark, and the Netherlands. The foreign subsidiaries’ functional currencies are those of their respective local jurisdictions and are translated into U.S dollar for the purpose of reporting the Company’s consolidated financial results. The translation of assets and liabilities into U.S. dollars for subsidiaries with a functional currency other than the U.S. dollar is performed using exchange rates in effect at the balance sheet date. Stockholders’ equity, fixed assets and long-term investments are recorded at historical exchange rates. The translation of revenues and expenses into U.S. dollars for subsidiaries with a functional currency other than the U.S. dollar is performed using the average exchange rate for the respective period. Gains or losses from cumulative translation adjustments, net of tax, are included as a component of accumulated other comprehensive loss in the Consolidated Balance Sheets. The Company records net foreign exchange transaction gains and losses in the consolidated statements of income and comprehensive income. For the years ended October 31, 2023, and October 31, 2022, the Company recorded an aggregate transaction (loss) gain of $ (190,073) 431,314 |
Treasury Stock | Treasury Stock Repurchases of Restricted Stock Awards or common stock are classified as treasury stock on our Consolidated Balance Sheet. We account for treasury stock under the cost method. When treasury stock is re-issued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital in our Consolidated Balance Sheet. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a reduction of retained earnings in our Consolidated Balance Sheet. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s operations are organized into two reportable segments: Marine Technology Business and the Marine Engineering Business. The Company’s organizational structure is based on many factors that the CODM uses to evaluate, view and run the business operations, which include, but are not limited to, customer base and homogeneity of products and technology. The segments are based on this organizational structure and information reviewed by the Company’s CODM to evaluate segment results. The CODM uses several metrics to evaluate the performance of the overall business, including revenue and earnings from operations, and uses these results to allocate resources to each of the segments. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. The Company did not have any cash equivalents as of October 31, 2022. Cash and cash equivalents are maintained with various financial institutions. As of October 31, 2023, approximately $ 23.3 |
Financial Instruments | Financial Instruments Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, accounts receivable, trade and other payables, and deferred revenue. The carrying amounts of the Company’s cash equivalents, accounts receivables, unbilled receivables, accounts payables, accrued liabilities and deferred revenue, as reflected in the consolidated financial statements approximate fair value due to the short-term maturity of these items. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The long-term deferred revenue approximates their carrying amounts as assessed by management. The Company’s financial instruments are exposed to certain financial risks, primarily concentration risk. Concentration risk is the risk of financial loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash, cash equivalents and trade receivables. The carrying amount of the financial assets represents the maximum credit exposure. The Company limits its exposure to concentration risk on cash by placing these financial instruments with high-credit, quality financial institutions and only investing in liquid, investment grade securities. The Company’s bank deposits are held with financial institutions both in and outside the United States. At times, such amounts may be in excess of applicable government mandated insurance limits. The Company has not experienced any losses in such accounts or lack of access to its cash. The Company’s accounts receivables are subject to potential concentrations of credit risk, since a significant part of the Company’s sales are to a small number of companies and, even though these are generally established businesses, market fluctuations such as the price of oil may affect our customers’ ability to meet their obligations to us. Furthermore, trade disputes may result in impairment or delays in receivables. |
Accounts Receivable | Accounts Receivable The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to cash collection. Payment terms and conditions vary by contract type, location of customer and the products or services offered, although terms generally require payment from a customer within 30 days for our Marine Technology Business and between 45-60 days from our Services Business. When the timing of revenue recognition differs from the timing of cash collection, an evaluation is performed to determine whether the contract includes a significant financing component. 2,643,461 2,870,600 4,207,996 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses, which includes the allowance for accounts receivable and unbilled accounts receivable, represents the Company’s best estimate of lifetime expected credit losses inherent in those financial assets. The Company’s lifetime expected credit losses are determined using relevant information about past events (including historical experience), current conditions, and reasonable and supportable forecasts that affect collectability. The Company monitors its credit exposure through ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. In addition, the Company performs routine credit management activities such as timely account reconciliations, dispute resolution, and payment confirmations. The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. The Allowance for Bad Debt was $ 0 |
Inventory | Inventory Inventories consist primarily of raw materials and finished goods and are stated at the lower of cost or net realizable value on an aggregate basis. Cost is computed using the average of actual cost, on a first-in, first-out basis. Adjustments to reduce the carrying amount of inventory to the lower of cost or net realizable value are made, if required, for excess or obsolete goods, which includes a review of, among other factors, demand requirements and market conditions. |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related costs are expensed as incurred. Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition date. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. The Company utilizes commonly accepted valuation techniques, such as the income approach and the cost approach, as appropriate, in establishing the fair value of intangible assets. Typically, key assumptions include projections of cash flows that arise from identifiable intangible assets of acquired businesses as well as discount rates based on an analysis of the weighted average cost of capital, adjusted for specific risks associated with the assets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and identified intangible assets acquired under a business combination. Goodwill also includes acquired assembled workforce, which does not qualify as an identifiable intangible asset. The Company reviews impairment of goodwill annually in the fourth quarter, or more frequently if events or circumstances indicate that the goodwill might be impaired. Triggering events for impairment reviews may be indicators such as adverse industry or economic trends, restructuring actions, lower projections of profitability, or a sustained decline in the Company’s market capitalization. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its’ carrying amount, then the quantitative goodwill impairment test is unnecessary. If, based on the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its’ carrying amount, then the Company proceeds to perform the quantitative goodwill impairment test. The Company first determines the fair value of a reporting unit using a Level 1 input which estimates the fair value of the Company’s equity by utilizing the Company’s trading price as of the end of the reporting period. The Company then compares the derived fair value of a reporting unit with the carrying amount. If the carrying value of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As of October 31, 2023, the Company determined it is not more likely than not that the fair value of a reporting unit was less than its’ carrying amount and as a result quantitative goodwill impairment test was unnecessary and there was no impairment charge. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Finite-lived intangible assets consist of acquired patents, customer relationships, and non-compete agreements resulting from business combinations. The Company’s intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 2 to 15 years. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for minor replacements, maintenance and repairs which do not increase the useful lives of the property and equipment are charged to operations as incurred. Major additions and improvements are capitalized. Depreciation and amortization are computed using the straight-line method over their estimated useful lives: SCHEDULE OF PROPERTY AND EQUIPMENT Buildings 50 Office machinery and equipment 3 5 Rental assets 3 7 Furniture, fixtures, and improvements 3 5 Depreciation expense is presented as a component of Selling, General and Administrative expense in the Consolidated Statements of Income and Comprehensive Income. Depreciation expense related to the Products Business “Rental Assets” used for generating rental income is allocated 70 30 |
Leases | Leases The Company owns substantially all its facilities and as a result the effect of Accounting Standards Codification 842, “Leases”, is immaterial. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Management reviews long-lived assets, including property and equipment and intangible assets, for possible impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Such events and changes may include: a significant decrease in market value, changes in asset use, negative industry or economic trends, and changes in the Company’s business strategy. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. |
Research and Development | Research and Development Research and development costs are comprised primarily of employee-related costs, stock-based compensation expense, engineering consulting expenses associated with new product and technology development, product commercialization, quality assurance and testing costs, as well as costs related to information technology, patent applications and examinations, materials, supplies, and an allocation of facilities costs. All research and development costs are expensed as they are incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on stock-based payments. Under the provisions of the guidance, stock-based compensation expense is measured at the grant date based on the fair value of the option using a Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The authoritative guidance also requires that the Company measure and recognize stock-based compensation expense upon modification of the term of a stock award. The stock-based compensation expense for such modification is the sum of any unamortized expense of the award before modification and the modification expense. The modification expense is the incremental amount of the fair value of the award before the modification and the fair value of the award after the modification, measured on the date of modification. In the event the modification results in a longer requisite period than in the original award, the Company has elected to apply the pool method where the aggregate of the unamortized expense and the modification expense is amortized over the new requisite period on a straight-line basis. In addition, any forfeiture will be based on the original requisite period prior to the modification. Calculating stock-based compensation expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility, and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns, which are believed to be representative of future behavior. The Company estimates the volatility of the Company’s common stock on the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted, exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could be significantly different from what was recorded in the current period. CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 The Company may grant restricted stock units (“RSUs”) to employees or consultants. RSU awards vest upon grant or fixed term, generally 36 months. The Company uses the closing trading price of its common stock on the date of grant as the fair value of awards of restricted stock units. Stock-based compensation from RSU awards is recognized on a straight-line basis over the RSU awards’ vesting period. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification 740, Income Taxes Deferred tax assets and liabilities are the amounts by which the Company’s future income taxes are expected to be impacted by these differences as they reverse. Deferred tax assets are based on differences that are expected to decrease future income taxes as they reverse. Correspondingly, deferred tax liabilities are based on differences that are expected to increase future income taxes as they reverse. Note 10 Income Taxes discloses the amounts of deferred tax assets and liabilities, and also presents the impact of significant differences between financial reporting income and taxable income. For income tax purposes, the Company uses the percentage of completion method of recognizing revenues on long-term contracts which is consistent with the Company’s financial reporting under GAAP. From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty. Significant judgment is required in assessing and estimating the tax consequences of these transactions. Accruals for unrecognized tax benefit liabilities, which represent the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized for financial reporting purposes, are recorded when the Company believes it is not more-likely-than-not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Adjustments to unrecognized tax benefits are recognized when facts and circumstances change, such as the closing of a tax audit, notice of an assessment by a taxing authority or the refinement of an estimate. Income tax benefit includes the effects of adjustments to unrecognized tax benefits, as well as any related interest and penalties. |
Comprehensive Income | Comprehensive Income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Comprehensive income includes gains and losses on foreign currency translation adjustments and is included as a component of stockholders’ equity. |
Advertising | Advertising Advertising costs are expenses as incurred and are presented as a component of Selling, General and Administrative expense in the Consolidated Statements of Income and Comprehensive Income, Advertising expenses for the years ended October 31, 2023, and October 31, 2022, were $ 0 |
Contingencies | Contingencies From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records liability in its consolidated financial statements for these matters when a loss is known or considered probable, and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). The Company does not recognize gain contingencies until they are realized. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
SUMMARY OF ACCOUNTING POLICIE_2
SUMMARY OF ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Depreciation and amortization are computed using the straight-line method over their estimated useful lives: SCHEDULE OF PROPERTY AND EQUIPMENT Buildings 50 Office machinery and equipment 3 5 Rental assets 3 7 Furniture, fixtures, and improvements 3 5 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Revenue | |
SCHEDULE OF DEFERRED REVENUE | Deferred Revenue (current) consisted of the following as of October 31, 2023, 2022 and 2021: SCHEDULE OF DEFERRED REVENUE 2023 2022 2021 Deferred Revenue $ 420,611 $ 430,962 $ 604,049 Customer Technical Support Obligations 324,218 283,369 1,117,855 Product Warranty 230,708 229,238 277,937 Total Deferred Revenue (Current) $ 975,537 $ 943,569 $ 1,999,841 |
COMPOSITION OF CERTAIN FINANC_2
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF INTEREST RATES AND AMOUNT HELD IN CERTIFIED DEPOSIT INTEREST BEARING ACCOUNTS | SCHEDULE OF INTEREST RATES AND AMOUNT HELD IN CERTIFIED DEPOSIT INTEREST BEARING ACCOUNTS Currency Denomination Amount HSBC Jyske Bank USD $ 15,201,579 5.28 % GBP £ 750,000 4.80 % GBP (Unrestricted access) £ 500,000 5.00 % *USD $ 2,400,000 4.0 % *Held in Jyske Bank USD Account |
SCHEDULE OF COMPONENTS OF INVENTORY | Inventory consisted of the following as of: SCHEDULE OF COMPONENTS OF INVENTORY October 31, October 31, 2023 2022 Raw materials and parts $ 8,994,482 $ 7,219,344 Work in progress 483,227 383,427 Finished goods 2,207,816 2,424,340 Total Inventory $ 11,685,525 $ 10,027,111 |
SUMMARY OF OTHER CURRENT ASSETS | Other current assets consisted of the following as of: SUMMARY OF OTHER CURRENT ASSETS October 31, October 31, 2023 2022 Deposits and other assets $ 23,081 $ 18,631 Other US Tax Receivables/Prepaid Taxes 450,625 151,217 Employee Retention Credit Receivables 212,300 173,213 Other Foreign Tax Receivables 348,620 - Total Other Current Assets $ 1,034,626 $ 343,061 |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following as of: SCHEDULE OF PROPERTY AND EQUIPMENT October 31, October 31, 2023 2022 Buildings $ 6,386,705 $ 5,419,946 Land 200,000 200,000 Office machinery and equipment 1,596,026 1,556,030 Rental assets 2,323,446 2,252,292 Furniture, fixtures and improvements 1,172,169 1,108,787 Total 11,678,346 10,537,055 Less: accumulated depreciation (4,805,026 ) (4,704,523 ) Total Property and Equipment, net $ 6,873,320 $ 5,832,532 |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET, BY GEOGRAPHIC AREAS | Property and equipment, net, by geographic areas was as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET, BY GEOGRAPHIC AREAS October 31, October 31, 2023 2022 USA 1,751,260 1,825,858 Europe 5,122,060 4,006,674 Total Property and Equipment, net $ 6,873,320 $ 5,832,532 |
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Accrued Expenses and Other Current Liabilities consisted of the following as of: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES October 31, October 31, 2023 2022 Accruals $ 384,880 $ 1,474,744 Other Tax Payables 525,565 144,158 Employee Related 85,185 112,804 Total $ 995,630 $ 1,731,706 |
SCHEDULE OF OTHER INCOME | Total Other Income, net consisted of the following for the year ended: SCHEDULE OF OTHER INCOME October 31, October 31, 2023 2022 Employee Retention Credits $ - $ 88,917 Other Income 39,146 49,058 Total Other Income, $ 39,146 $ 137,975 Interest Income 642,530 - Interest (Expense) - (9,704 ) Total Other Income, net $ 681,676 $ 128,271 |
GOODWILL AND IDENTIFIED INTAN_2
GOODWILL AND IDENTIFIED INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER INTANGIBLE ASSETS | Intangibles consisted of the following as of: SCHEDULE OF OTHER INTANGIBLE ASSETS October 31, 2023 October 31, 2022 Average Life Gross Accumulated Gross Accumulated Finite-lived intangible assets (Years) Asset Amortization Net Asset Amortization Net Customer Relationships 10 $ 919,503 $ (906,422 ) $ 13,081 $ 919,503 $ (883,922 ) $ 35,581 Patents and others 10 780,650 (307,116 ) 473,534 669,751 (263,046 ) 406,705 Total intangible assets $ 1,700,153 $ (1,213,538 ) $ 486,615 $ 1,589,254 $ (1,146,968) $ 442,286 |
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSES | SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSES 2024 $ 56,104 2025 42,514 2026 39,434 2027 36,657 Thereafter 311,906 Totals $ 486,615 |
SCHEDULE OF GOODWILL | Goodwill consisted of the following as of: SCHEDULE OF GOODWILL October 31, October 31, 2023 2022 Coda Octopus Colmek, Inc. $ 2,038,669 $ 2,038,669 Coda Octopus Products, Ltd 62,315 62,315 Coda Octopus Martech, Ltd 1,281,124 1,281,124 Total Goodwill $ 3,382,108 $ 3,382,108 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
NET INCOME PER SHARE: | |
SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED | The following table sets forth the computation of basic and fully diluted loss per common share for the years ended: SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED Year Year Ended Ended October 31, October 31, Fiscal Period 2023 2022 Numerator: Net Income $ 3,124,149 $ 4,301,221 Denominator: Basic weighted average common shares outstanding 11,131,469 10,863,674 Effect of dilutive options and restricted stock awards 192,099 417,673 Diluted outstanding shares 11,323,568 11,281,347 Net income per share Basic $ 0.28 $ 0.40 Diluted $ 0.28 $ 0.38 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Equity [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of stock options activity is as follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Weighted Number of Average Average Shares Subject Exercise Price Per Remaining Contractual Aggregate Intrinsic to Options Share Life (in years) Value Balance at October 31, 2021 383,668 $ 4.65 Granted - - Vested - - Exercises (36,667 ) $ 4.65 Forfeited or cancelled (39,834 ) $ 4.65 Balance at October 31, 2022 307,167 - Granted - - Vested - - Exercises (199,496 ) $ 4.62 Forfeited or cancelled (3,000 ) $ 6.23 Balance at October 31, 2023 104,671 $ 4.67 1.41 $ 202,419 Vested and expected to vest at October 31, 2023 104,671 $ 4.67 1.41 $ 202,419 Exercisable at October 31, 2023 104,671 $ 4.67 1.41 $ 202,419 |
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE | The following table summarizes information about stock options outstanding and exercisable under the Company’s Stock Option Plan at October 31, 2023: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Weighted Weighted Range of Weighted Average Weighted Average Exercise Average Remaining Range of Average Remaining Prices per Number Exercise Price Per Contractual Life Exercise Prices per Number Exercise Price Per Contractual Life Share Outstanding Share (in years) Share Exercisable Share (in years) $ 4.62 101,671 $ 4.62 2.15 $ 4.62 101,671 $ 4.62 2.15 $ 6.23 3,000 $ 6.23 0.05 $ 6.23 3,000 $ 6.23 0.05 104,671 $ 4.67 104,671 $ 4.67 |
SCHEDULE OF RESTRICTED STOCK AWARDS | SCHEDULE OF RESTRICTED STOCK AWARDS Shares Weighted Average Grant Date Fair Value Non-Vested Weighted Average Grant Date Fair Value Outstanding at October 31, 2021 122,000 $ 8.80 122,000 $ 8.80 Granted 64,687 $ 7.15 64,687 $ 7.15 Vested (53,733 ) $ 5.05 (53,733 ) $ 5.05 Treasury Stock (5,467 ) $ 5.18 (5,467 ) $ 5.18 Forfeited or cancelled (16,981 ) $ 8.43 (16,981 ) $ 8.43 Outstanding at October 31, 2022 110,506 $ 8.10 110,506 $ 8.10 Granted 100,428 $ 7.10 98,546 $ 6.96 Vested (108,568 ) $ 7.91 (108,568 ) $ 7.91 Treasury Stock (1,932 ) $ 9.30 (1,932 ) $ 9.30 Forfeited or cancelled (13,006 ) $ 5.77 (13,006 ) $ 5.77 Outstanding at October 31, 2023 87,428 $ 7.04 85,546 $ 7.04 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROVISION (BENEFIT) FOR INCOME TAXES | The provision (benefit) for income taxes comprises: SCHEDULE OF PROVISION (BENEFIT) FOR INCOME TAXES October 31, October 31, 2023 2022 Current federal expense $ 264,955 $ 849,580 Current state income tax expense 5,789 159,900 Foreign tax (benefit) (22,089 ) (4,340 ) Total current tax expense 248,655 1,005,140 Deferred federal expense (benefit) 14,941 (174,026 ) Deferred state expense 3,913 - Deferred foreign tax expense 29,570 - Deferred tax expense (benefit) 48,424 (174,026 ) Total Income Tax Expense $ 297,079 $ 831,114 |
SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFIT | The expense for income taxes differed from the U.S. statutory rate due to the following: SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFIT October 31, October 31, 2023 2022 Statutory US tax rate 21.0 % 21.0 % R&D Relief (9.7 )% (10.6 )% Change in valuation allowance (3.4 )% 3.7 % Foreign tax benefit including GILTI, net 2.1 % (0.9 )% State Income Tax (1.3 )% 3.0 % Total 8.7 % 16.2 % |
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES | Significant components of the Company’s deferred tax assets and liabilities are as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES October 31, October 31, 2023 2022 Noncurrent deferred tax assets (liabilities) Temporary differences U.S. NOL carryforwards $ - $ - Deferred Revenue - 4,830 Restricted Stock Awards 263,218 272,841 Book/Tax Depreciation (21,554 ) (17,861 ) Foreign fixed assets (218,045 ) (84,381 Foreign capital loss carryforwards 11,182 - Foreign NOL carryforwards 176,585 409,100 Total 211,386 584,529 Valuation allowance - (324,719 ) Total Deferred Asset $ 211,386 $ 259,810 |
SEGMENT ANALYSIS (Tables)
SEGMENT ANALYSIS (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING INFORMATION | SCHEDULE OF SEGMENT REPORTING INFORMATION Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2023 Net Revenues $ 12,119,066 $ 7,233,022 $ - $ 19,352,088 Cost of Revenues 2,819,796 3,501,237 - 6,321,033 Gross Profit 9,299,270 3,731,785 - 13,031,055 Research & Development 2,043,890 52,577 - 2,096,467 Selling, General & Administrative 3,109,566 2,463,087 2,622,383 8,195,036 Total Operating Expenses 5,153,456 2,515,664 2,622,383 10,291,503 Income (Loss) from Operations 4,145,814 1,216,121 (2,622,383 ) 2,739,552 Other Income (Expense) Other Income 39,146 - - 39,146 Interest Income 544,892 97,638 - 642,530 Total Other Income (Expense) 584,038 97,638 - 681,676 Income (Loss) before Income Taxes 4,729,852 1,313,759 (2,622,383 ) 3,421,228 Income Tax (Expense) Benefit Current Tax (Expense) Benefit (272,126 ) (78,876 ) 102,347 (248,655 ) Deferred Tax (Expense) Benefit (115,954 ) 54,382 13,148 (48,424 ) Total Income Tax (Expense) Benefit (388,080 ) (24,494 ) 115,495 (297,079 ) Net Income (Loss) $ 4,341,772 $ 1,289,265 $ (2,506,889 ) $ 3,124,149 Supplemental Disclosures Total Assets $ 36,969,673 $ 13,604,262 $ 1,267,581 $ 51,841,516 Total Liabilities $ 2,263,761 $ 732,582 $ 416,407 $ 3,412,750 Revenues from Intercompany Sales - eliminated from sales above $ 4,602,741 $ 584,622 $ 1,200,000 $ 6,387,363 Depreciation and Amortization $ 523,339 $ 100,689 $ 43,502 $ 667,530 Purchases of Long-lived Assets $ 1,996,544 $ 25,404 $ 108,392 $ 2,130,340 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 Marine Technology Business (Products) Marine Engineering Business (Services) Overhead Total Year Ended October 31, 2022 Net Revenues $ 14,724,688 $ 7,501,115 - $ 22,225,803 Cost of Revenues 2,941,569 4,093,546 - 7,035,115 Gross Profit 11,783,119 3,407,569 - 15,190,688 Research & Development 2,207,500 30,420 - 2,237,920 Selling, General & Administrative 2,563,554 2,654,565 2,730,585 7,948,704 Total Operating Expenses 4,771,054 2,684,985 2,730,585 10,186,624 Income (Loss) from Operations 7,012,065 722,584 (2,730,585 ) 5,004,064 Other Income (Expense) Other Income 55,715 79,204 3,056 137,975 Interest Expense (9,233 ) (71 ) (400 ) (9,704 ) Total Other Income (Expense) 46,482 79,133 2,656 128,271 Income (Loss) before Income Taxes 7,058,547 801,717 (2,727,929 ) 5,132,335 Income Tax (Expense) Benefit Current Tax Benefit (Expense) (868,162 ) 39,422 (176,400 ) (1,005,140 ) Deferred Tax (Expense) Benefit 31,907 (41,657 ) 183,776 174,026 Total Income Tax (Expense) Benefit (836,255 ) (2,235 ) 7,376 (831,114 ) Net Income (Loss) $ 6,222,292 $ 799,482 $ (2,720,553 ) $ 4,301,221 Supplemental Disclosures Total Assets $ 33,348,805 $ 12,662,109 $ 916,544 $ 46,927,458 Total Liabilities $ 2,432,750 $ 526,195 $ 585,704 $ 3,544,649 Revenues from Intercompany Sales - eliminated from sales above $ 2,406,717 $ 396,015 $ 2,720,000 $ 5,522,732 Depreciation and Amortization $ 602,583 $ 96,776 $ 39,370 $ 738,729 Purchases of Long-lived Assets $ 1,123,475 $ 36,862 $ 90,887 $ 1,251,224 |
DISAGGREGATION OF REVENUE (Tabl
DISAGGREGATION OF REVENUE (Tables) | 12 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DISAGGREGATE OF REVENUE FROM CONTRACTS FOR SALE WITH CUSTOMERS BY GEOGRAPHIC LOCATION | SCHEDULE OF DISAGGREGATE OF REVENUE FROM CONTRACTS FOR SALE WITH CUSTOMERS BY GEOGRAPHIC LOCATION For the Year Ended October 31, 2023 Marine Marine Technology Engineering Grand Business Business Total Disaggregation of Total Net Sales Primary Geographical Markets Americas $ 4,263,883 $ 4,846,615 $ 9,110,498 Europe 2,225,915 2,386,407 4,612,322 Australia/Asia 4,607,786 - 4,607,786 Middle East/Africa 1,021,482 - 1,021,482 Total Revenues $ 12,119,066 $ 7,233,022 $ 19,352,088 Major Goods/Service Lines Equipment Sales $ 8,444,305 $ 944,737 $ 9,389,042 Equipment Rentals 1,264,804 - 1,264,804 Software Sales 851,976 - 851,976 Engineering Parts - 4,075,850 4,075,850 Services 1,557,981 2,212,435 3,770,416 Total Revenues $ 12,119,066 $ 7,233,022 $ 19,352,088 Goods and Services Revenue Goods transferred at a point in time $ 9,296,281 $ 944,737 $ 10,241,018 Services transferred over time 2,822,785 6,288,285 9,111,070 Total Revenues $ 12,119,066 $ 7,233,022 $ 19,352,088 CODA OCTOPUS GROUP, INC. Notes to the Consolidated Financial Statements October 31, 2023 and 2022 For the Year Ended October 31, 2022 Marine Marine Technology Engineering Grand Business Business Total Disaggregation of Total Net Sales Primary Geographical Markets Americas $ 5,668,948 $ 4,566,349 $ 10,235,297 Europe 1,559,778 2,900,906 4,460,684 Australia/Asia 5,723,970 - 5,723,970 Middle East/Africa 1,771,992 33,860 1,805,852 Total Revenues $ 14,724,688 $ 7,501,115 $ 22,225,803 Major Goods/Service Lines Equipment Sales $ 8,771,050 $ 1,544,002 $ 10,315,052 Equipment Rentals 1,844,775 - 1,844,775 Software Sales 1,014,867 - 1,014,867 Engineering Parts - 3,530,407 3,530,407 Services 3,093,996 2,426,706 5,520,702 Total Revenues $ 14,724,688 $ 7,501,115 $ 22,225,803 Goods and Services Revenue Goods transferred at a point in time $ 9,785,917 $ 1,562,799 $ 11,348,716 Services transferred over time 4,938,771 5,938,316 10,877,087 Total Revenues $ 14,724,688 $ 7,501,115 $ 22,225,803 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 11,678,346 | $ 10,537,055 |
Less: accumulated depreciation | (4,805,026) | (4,704,523) |
Total Property and Equipment, net | $ 6,873,320 | 5,832,532 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 50 years | |
Total | $ 6,386,705 | 5,419,946 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Assets [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Assets [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 200,000 | 200,000 |
Office Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 1,596,026 | 1,556,030 |
Rental Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 2,323,446 | 2,252,292 |
Furniture Fixtures and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,172,169 | $ 1,108,787 |
SUMMARY OF ACCOUNTING POLICIE_3
SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Accounting Policies [Abstract] | |||
Cost of revenue commissions | $ 826,719 | $ 631,471 | |
Gain loss on foreign currency translation | (190,073) | 431,314 | |
Federal deposit insurance limits | 23,300,000 | ||
Accounts receivable | 2,643,461 | 2,870,600 | $ 4,207,996 |
Allowance for doubtful accounts receivable | $ 0 | 0 | $ 0 |
Finite lived intangible asset amortization period | The Company’s intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 2 to 15 years. | ||
Depreciation cost of goods sold allocation percentage | 70% | ||
Depreciation of general and administration expense percentage | 30% | ||
Advertising Expense | $ 0 | $ 0 |
SCHEDULE OF DEFERRED REVENUE (D
SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 |
Total Deferred Revenue (Current) | $ 975,537 | $ 943,569 | $ 1,999,841 |
Deferred Revenue [Member] | |||
Total Deferred Revenue (Current) | 420,611 | 430,962 | 604,049 |
Customer Technical Support Obligations [Member] | |||
Total Deferred Revenue (Current) | 324,218 | 283,369 | 1,117,855 |
Product Warrant [Member] | |||
Total Deferred Revenue (Current) | $ 230,708 | $ 229,238 | $ 277,937 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 |
Revenue | |||
Unbilled receivables | $ 894,251 | $ 602,115 | |
Deferred revenue | 975,537 | 943,569 | $ 1,999,841 |
Deferred revenue, less current portion | $ 133,382 | $ 76,127 |
FAIR VALUE (Details Narrative)
FAIR VALUE (Details Narrative) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Marketable Securities | $ 0 | $ 0 |
SCHEDULE OF INTEREST RATES AND
SCHEDULE OF INTEREST RATES AND AMOUNT HELD IN CERTIFIED DEPOSIT INTEREST BEARING ACCOUNTS (Details) | Oct. 31, 2023 USD ($) |
HSBC [Member] | |
Amount | $ 15,201,579 |
Deposit interest rate | 5.28% |
HSBC [Member] | United Kingdom, Pounds | |
Amount | $ 750,000 |
Deposit interest rate | 4.80% |
HSBC [Member] | United Kingdom, Pounds | Unrestricted Access [Member] | |
Amount | $ 500,000 |
Deposit interest rate | 5% |
Jyske Bank [Member] | |
Amount | $ 2,400,000 |
Deposit interest rate | 4% |
SCHEDULE OF COMPONENTS OF INVEN
SCHEDULE OF COMPONENTS OF INVENTORY (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials and parts | $ 8,994,482 | $ 7,219,344 |
Work in progress | 483,227 | 383,427 |
Finished goods | 2,207,816 | 2,424,340 |
Total Inventory | $ 11,685,525 | $ 10,027,111 |
SUMMARY OF OTHER CURRENT ASSETS
SUMMARY OF OTHER CURRENT ASSETS (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deposits and other assets | $ 23,081 | $ 18,631 |
Other US Tax Receivables/Prepaid Taxes | 450,625 | 151,217 |
Employee Retention Credit Receivables | 212,300 | 173,213 |
Other Foreign Tax Receivables | 348,620 | |
Total Other Current Assets | $ 1,034,626 | $ 343,061 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT, NET, BY GEOGRAPHIC AREAS (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Total Property and Equipment, net | $ 6,873,320 | $ 5,832,532 |
UNITED STATES | ||
Total Property and Equipment, net | 1,751,260 | 1,825,858 |
Europe [Member] | ||
Total Property and Equipment, net | $ 5,122,060 | $ 4,006,674 |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accruals | $ 384,880 | $ 1,474,744 |
Other Tax Payables | 525,565 | 144,158 |
Employee Related | 85,185 | 112,804 |
Total | $ 995,630 | $ 1,731,706 |
SCHEDULE OF OTHER INCOME (Detai
SCHEDULE OF OTHER INCOME (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Employee Retention Credits | $ 88,917 | |
Other Income | 39,146 | 49,058 |
Total Other Income, | 39,146 | 137,975 |
Interest Income | 642,530 | |
Interest (Expense) | (9,704) | |
Total Other Income, net | $ 681,676 | $ 128,271 |
COMPOSITION OF CERTAIN FINANC_3
COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Current rate | 5% | |
Depreciation expense | $ 603,467 | $ 678,652 |
SCHEDULE OF OTHER INTANGIBLE AS
SCHEDULE OF OTHER INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite lived intangible assets, gross | $ 1,700,153 | $ 1,589,254 |
Finite lived intangible assets, accumulated amortization | (1,213,538) | (1,146,968) |
Total identifiable intangible assets - net | $ 486,615 | 442,286 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average lives of intangible assets | 10 years | |
Finite lived intangible assets, gross | $ 919,503 | 919,503 |
Finite lived intangible assets, accumulated amortization | (906,422) | (883,922) |
Total identifiable intangible assets - net | $ 13,081 | 35,581 |
Patents and Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average lives of intangible assets | 10 years | |
Finite lived intangible assets, gross | $ 780,650 | 669,751 |
Finite lived intangible assets, accumulated amortization | (307,116) | (263,046) |
Total identifiable intangible assets - net | $ 473,534 | $ 406,705 |
SCHEDULE OF ESTIMATED FUTURE AM
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSES (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 56,104 | |
2025 | 42,514 | |
2026 | 39,434 | |
2027 | 36,657 | |
Thereafter | 311,906 | |
Totals | $ 486,615 | $ 442,286 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Total Goodwill | $ 3,382,108 | $ 3,382,108 |
Coda Octopus Colmek, Inc. [Member] | ||
Total Goodwill | 2,038,669 | 2,038,669 |
Coda Octopus Products, Ltd [Member] | ||
Total Goodwill | 62,315 | 62,315 |
Coda Octopus Martech, Ltd [Member] | ||
Total Goodwill | $ 1,281,124 | $ 1,281,124 |
GOODWILL AND IDENTIFIED INTAN_3
GOODWILL AND IDENTIFIED INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Adjustment of intangible assets | $ 64,063 | $ 60,077 |
SCHEDULE OF EARNINGS PER SHARE
SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
NET INCOME PER SHARE: | ||
Net Income | $ 3,124,149 | $ 4,301,221 |
Basic weighted average common shares outstanding | 11,131,469 | 10,863,674 |
Effect of dilutive options and restricted stock awards | 192,099 | 417,673 |
Diluted outstanding shares | 11,323,568 | 11,281,347 |
Basic | $ 0.28 | $ 0.40 |
Diluted | $ 0.28 | $ 0.38 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Equity [Abstract] | ||
Number of shareds subject to options, beginning balance | 307,167 | 383,668 |
Weighted average exercise price per share, beginning balance | $ 4.65 | |
Number of shareds subject to options, granted | ||
Weighted average exercise price per share, granted | ||
Number of shareds subject to options, vested | ||
Weighted average exercise price per share, vested | ||
Number of shareds subject to options, exercise | (199,496) | (36,667) |
Weighted average exercise price per share, exercises | $ 4.62 | $ 4.65 |
Number of shareds subject to options, forfeited or cancelled | (3,000) | (39,834) |
Weighted average exercise price per share, forfeited or cancelled | $ 6.23 | $ 4.65 |
Number of shareds subject to options, ending balance | 104,671 | 307,167 |
Weighted average exercise price per share, ending balance | $ 4.67 | |
Weighted average remaining contractual life | 1 year 4 months 28 days | |
Aggregate interinsic value | $ 202,419 | |
Number of shareds subject to options, vested and expected to vest | 104,671 | |
Weighted average exercise price per share, vested and expected to vest | $ 4.67 | |
Weighted average remaining contractual life, vested and expected to vest | 1 year 4 months 28 days | |
Aggregate interinsic value, vested and expected to vest | $ 202,419 | |
Number of shareds subject to options, exercisable | 104,671 | |
Weighted average exercise price per share, exercisable | $ 4.67 | |
Weighted average remaining contractual life, exercisable | 1 year 4 months 28 days | |
Aggregate interinsic value, vested and expected to vest | $ 202,419 |
SCHEDULE OF STOCK OPTIONS OUTST
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE (Details) - $ / shares | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of options outstanding | 104,671 | 307,167 | 383,668 |
Weighted average exercise price per share, options outstanding | $ 4.67 | $ 4.65 | |
Weighted average remaining contractual life, options outstanding | 1 year 4 months 28 days | ||
Number of outstanding options exercisable | 104,671 | ||
Weighted average exercise price per share, options exercisable | $ 4.67 | ||
Weighted average remaining contractual life, exercisable | 1 year 4 months 28 days | ||
Range One [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Exercise price per share, options outstanding | $ 4.62 | ||
Number of options outstanding | 101,671 | ||
Weighted average exercise price per share, options outstanding | $ 4.62 | ||
Weighted average remaining contractual life, options outstanding | 2 years 1 month 24 days | ||
Exercise price per share, options exercisable | $ 4.62 | ||
Number of outstanding options exercisable | 101,671 | ||
Weighted average exercise price per share, options exercisable | $ 4.62 | ||
Weighted average remaining contractual life, exercisable | 2 years 1 month 24 days | ||
Range Two [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Exercise price per share, options outstanding | $ 6.23 | ||
Number of options outstanding | 3,000 | ||
Weighted average exercise price per share, options outstanding | $ 6.23 | ||
Weighted average remaining contractual life, options outstanding | 18 days | ||
Exercise price per share, options exercisable | $ 6.23 | ||
Number of outstanding options exercisable | 3,000 | ||
Weighted average exercise price per share, options exercisable | $ 6.23 | ||
Weighted average remaining contractual life, exercisable | 18 days |
SCHEDULE OF RESTRICTED STOCK AW
SCHEDULE OF RESTRICTED STOCK AWARDS (Details) - $ / shares | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Equity [Abstract] | ||
Number of restricted stock awards, beginning balance | 110,506 | 122,000 |
Weighted average exercise price of restricted stock awards, beginning | $ 8.10 | $ 8.80 |
Number of restricted stock awards, outstanding non-vested, beginning | 110,506 | 122,000 |
Weighted average exercise price of restricted stock awards, outstanding non-vested, beginning | $ 8.10 | $ 8.80 |
Number of restricted stock awards, beginning balance | 100,428 | 64,687 |
Weighted average exercise price of restricted stock awards, beginning | $ 7.10 | $ 7.15 |
Number of restricted stock awards, outstanding non-vested, beginning | 98,546 | 64,687 |
Weighted average exercise price of restricted stock awards, outstanding non-vested, beginning | $ 6.96 | $ 7.15 |
Number of restricted stock awards, beginning balance | (108,568) | (53,733) |
Weighted average exercise price of restricted stock awards, beginning | $ 7.91 | $ 5.05 |
Number of restricted stock awards, outstanding non-vested, beginning | (108,568) | (53,733) |
Weighted average exercise price of restricted stock awards, outstanding non-vested, beginning | $ 7.91 | $ 5.05 |
Number of restricted stock awards, beginning balance | (1,932) | (5,467) |
Weighted average exercise price of restricted stock awards, beginning | $ 9.30 | $ 5.18 |
Number of restricted stock awards, outstanding non-vested, beginning | (1,932) | (5,467) |
Weighted average exercise price of restricted stock awards, outstanding non-vested, beginning | $ 9.30 | $ 5.18 |
Number of restricted stock awards, beginning balance | (13,006) | (16,981) |
Weighted average exercise price of restricted stock awards, beginning | $ 5.77 | $ 8.43 |
Number of restricted stock awards, outstanding non-vested, beginning | (13,006) | (16,981) |
Weighted average exercise price of restricted stock awards, outstanding non-vested, beginning | $ 5.77 | $ 8.43 |
Number of restricted stock awards, beginning balance | 87,428 | 110,506 |
Weighted average exercise price of restricted stock awards, beginning | $ 7.04 | $ 8.10 |
Number of restricted stock awards, outstanding non-vested, beginning | 85,546 | 110,506 |
Weighted average exercise price of restricted stock awards, outstanding non-vested, beginning | $ 7.04 | $ 8.10 |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) - USD ($) | 12 Months Ended | ||||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | Jul. 12, 2021 | Dec. 06, 2017 | |
Class of Stock [Line Items] | |||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 0 | ||||
Shares, vested | |||||
Unrecognised compensation | $ 154,539 | ||||
Number of restricted stock awards | 87,428 | 110,506 | 122,000 | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 50,000 | ||||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 50,000 | ||||
Restricted Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares, vested | 109,154 | 95,866 | |||
Restricted Stock Award [Member] | |||||
Class of Stock [Line Items] | |||||
Share based compensation expense | $ 645,196 | $ 1,130,917 | |||
2017 Stock Incentive Plan [Member] | Board of Director [Member] | Maximum [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock available for issuance | 913,612 | ||||
2017 Plan and 2021 Plan [Member] | Board of Director [Member] | |||||
Class of Stock [Line Items] | |||||
Common stock available for issuance | 1,000,000 | ||||
Common stock available for issuance | 1,370,300 |
SCHEDULE OF PROVISION (BENEFIT)
SCHEDULE OF PROVISION (BENEFIT) FOR INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Current federal expense | $ 264,955 | $ 849,580 |
Current state income tax expense | 5,789 | 159,900 |
Foreign tax (benefit) | (22,089) | (4,340) |
Total current tax expense | 248,655 | 1,005,140 |
Deferred federal expense (benefit) | 14,941 | (174,026) |
Deferred state expense | 3,913 | |
Deferred foreign tax expense | 29,570 | |
Deferred tax expense (benefit) | 48,424 | (174,026) |
Total Income Tax Expense | $ 297,079 | $ 831,114 |
SCHEDULE OF RECONCILIATION OF I
SCHEDULE OF RECONCILIATION OF INCOME TAX BENEFIT (Details) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Statutory US tax rate | 21% | 21% |
R&D Relief | (9.70%) | (10.60%) |
Change in valuation allowance | (3.40%) | 3.70% |
Foreign tax benefit including GILTI, net | 2.10% | (0.90%) |
State Income Tax | (1.30%) | 3% |
Total | 8.70% | 16.20% |
SCHEDULE OF COMPONENTS OF DEFER
SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Oct. 31, 2023 | Oct. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
U.S. NOL carryforwards | ||
Deferred Revenue | 4,830 | |
Restricted Stock Awards | 263,218 | 272,841 |
Book/Tax Depreciation | (21,554) | (17,861) |
Foreign fixed assets | (218,045) | (84,381) |
Foreign capital loss carryforwards | 11,182 | |
Foreign NOL carryforwards | 176,585 | 409,100 |
Total | 211,386 | 584,529 |
Valuation allowance | (324,719) | |
Total Deferred Asset | $ 211,386 | $ 259,810 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended | ||
Oct. 31, 2023 USD ($) | Oct. 31, 2023 GBP (£) | Oct. 31, 2022 USD ($) | |
Operating Loss Carryforwards [Line Items] | |||
Research and development tax expenses | $ 158,883 | £ 174,771 | |
Valuation allowance | $ 324,719 | ||
UK [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | 477,271 | ||
[custom:OperatingLossCarryforwardsIncludingTradingLoss-0] | 397,874 | ||
[custom:OperatingLossCarryforwardsExcludingTradingLoss-0] | $ 79,397 |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Nov. 27, 2019 | |
Line Of Credit | |||
Line of credit maximum borrowing capacity | $ 4,000,000 | ||
Line of credit facility, maximum amount outstanding during period | $ 0 | $ 0 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2021 | |
Concentration Risk [Line Items] | |||
Revenue | $ 19,352,088 | $ 22,225,803 | |
Accounts receivable | 2,643,461 | $ 2,870,600 | $ 4,207,996 |
One Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Revenue | $ 4,430,389 | ||
Concentration risk, percentage | 22.90% | ||
One Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 6.60% | ||
Accounts receivable | $ 173,930 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Employee compensation percentage | 4% | |
Employee benefit costs | $ 128,988 | $ 138,260 |
SCHEDULE OF SEGMENT REPORTING I
SCHEDULE OF SEGMENT REPORTING INFORMATION (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net Revenues | $ 19,352,088 | $ 22,225,803 |
Cost of Revenues | 6,321,033 | 7,035,115 |
Gross Profit | 13,031,055 | 15,190,688 |
Research & Development | 2,096,467 | 2,237,920 |
Selling, General & Administrative | 8,195,036 | 7,948,704 |
Total Operating Expenses | 10,291,503 | 10,186,624 |
INCOME FROM OPERATIONS | 2,739,552 | 5,004,064 |
Other Income (Expense) | ||
Other Income | 39,146 | 137,975 |
Total Other Income, net | 681,676 | 128,271 |
INCOME BEFORE INCOME TAX EXPENSE | 3,421,228 | 5,132,335 |
Income Tax (Expense) Benefit | ||
Current Tax Benefit (Expense) | (248,655) | (1,005,140) |
Deferred Tax (Expense) Benefit | (48,424) | 174,026 |
Total Income Tax Expense | (297,079) | (831,114) |
NET INCOME | 3,124,149 | 4,301,221 |
Supplemental Disclosures | ||
Total Assets | 51,841,516 | 46,927,458 |
Total Liabilities | 3,412,750 | 3,544,649 |
Segment Reporting [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Revenues | 19,352,088 | 22,225,803 |
Cost of Revenues | 6,321,033 | 7,035,115 |
Gross Profit | 13,031,055 | 15,190,688 |
Research & Development | 2,096,467 | 2,237,920 |
Selling, General & Administrative | 8,195,036 | 7,948,704 |
Total Operating Expenses | 10,291,503 | 10,186,624 |
INCOME FROM OPERATIONS | 2,739,552 | 5,004,064 |
Other Income (Expense) | ||
Other Income | 39,146 | 137,975 |
Interest Expense | 642,530 | (9,704) |
Total Other Income, net | 681,676 | 128,271 |
INCOME BEFORE INCOME TAX EXPENSE | 3,421,228 | 5,132,335 |
Income Tax (Expense) Benefit | ||
Current Tax Benefit (Expense) | (248,655) | (1,005,140) |
Deferred Tax (Expense) Benefit | (48,424) | 174,026 |
Total Income Tax Expense | (297,079) | (831,114) |
NET INCOME | 3,124,149 | 4,301,221 |
Supplemental Disclosures | ||
Total Assets | 51,841,516 | 46,927,458 |
Total Liabilities | 3,412,750 | 3,544,649 |
Revenues from Intercompany Sales - eliminated from sales above | 6,387,363 | 5,522,732 |
Depreciation and Amortization | 667,530 | 738,729 |
Purchases of Long-lived Assets | 2,130,340 | 1,251,224 |
Marine Technology Business (Products) [Member] | Segment Reporting [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Revenues | 12,119,066 | 14,724,688 |
Cost of Revenues | 2,819,796 | 2,941,569 |
Gross Profit | 9,299,270 | 11,783,119 |
Research & Development | 2,043,890 | 2,207,500 |
Selling, General & Administrative | 3,109,566 | 2,563,554 |
Total Operating Expenses | 5,153,456 | 4,771,054 |
INCOME FROM OPERATIONS | 4,145,814 | 7,012,065 |
Other Income (Expense) | ||
Other Income | 39,146 | 55,715 |
Interest Expense | 544,892 | (9,233) |
Total Other Income, net | 584,038 | 46,482 |
INCOME BEFORE INCOME TAX EXPENSE | 4,729,852 | 7,058,547 |
Income Tax (Expense) Benefit | ||
Current Tax Benefit (Expense) | (272,126) | (868,162) |
Deferred Tax (Expense) Benefit | (115,954) | 31,907 |
Total Income Tax Expense | (388,080) | (836,255) |
NET INCOME | 4,341,772 | 6,222,292 |
Supplemental Disclosures | ||
Total Assets | 36,969,673 | 33,348,805 |
Total Liabilities | 2,263,761 | 2,432,750 |
Revenues from Intercompany Sales - eliminated from sales above | 4,602,741 | 2,406,717 |
Depreciation and Amortization | 523,339 | 602,583 |
Purchases of Long-lived Assets | 1,996,544 | 1,123,475 |
Marine Engineering Business (Services) [Member] | Segment Reporting [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Revenues | 7,233,022 | 7,501,115 |
Cost of Revenues | 3,501,237 | 4,093,546 |
Gross Profit | 3,731,785 | 3,407,569 |
Research & Development | 52,577 | 30,420 |
Selling, General & Administrative | 2,463,087 | 2,654,565 |
Total Operating Expenses | 2,515,664 | 2,684,985 |
INCOME FROM OPERATIONS | 1,216,121 | 722,584 |
Other Income (Expense) | ||
Other Income | 79,204 | |
Interest Expense | 97,638 | (71) |
Total Other Income, net | 97,638 | 79,133 |
INCOME BEFORE INCOME TAX EXPENSE | 1,313,759 | 801,717 |
Income Tax (Expense) Benefit | ||
Current Tax Benefit (Expense) | (78,876) | 39,422 |
Deferred Tax (Expense) Benefit | 54,382 | (41,657) |
Total Income Tax Expense | (24,494) | (2,235) |
NET INCOME | 1,289,265 | 799,482 |
Supplemental Disclosures | ||
Total Assets | 13,604,262 | 12,662,109 |
Total Liabilities | 732,582 | 526,195 |
Revenues from Intercompany Sales - eliminated from sales above | 584,622 | 396,015 |
Depreciation and Amortization | 100,689 | 96,776 |
Purchases of Long-lived Assets | 25,404 | 36,862 |
Overhead [Member] | Segment Reporting [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Revenues | ||
Cost of Revenues | ||
Gross Profit | ||
Research & Development | ||
Selling, General & Administrative | 2,622,383 | 2,730,585 |
Total Operating Expenses | 2,622,383 | 2,730,585 |
INCOME FROM OPERATIONS | (2,622,383) | (2,730,585) |
Other Income (Expense) | ||
Other Income | 3,056 | |
Interest Expense | (400) | |
Total Other Income, net | 2,656 | |
INCOME BEFORE INCOME TAX EXPENSE | (2,622,383) | (2,727,929) |
Income Tax (Expense) Benefit | ||
Current Tax Benefit (Expense) | 102,347 | (176,400) |
Deferred Tax (Expense) Benefit | 13,148 | 183,776 |
Total Income Tax Expense | 115,495 | 7,376 |
NET INCOME | (2,506,889) | (2,720,553) |
Supplemental Disclosures | ||
Total Assets | 1,267,581 | 916,544 |
Total Liabilities | 416,407 | 585,704 |
Revenues from Intercompany Sales - eliminated from sales above | 1,200,000 | 2,720,000 |
Depreciation and Amortization | 43,502 | 39,370 |
Purchases of Long-lived Assets | $ 108,392 | $ 90,887 |
SCHEDULE OF DISAGGREGATE OF REV
SCHEDULE OF DISAGGREGATE OF REVENUE FROM CONTRACTS FOR SALE WITH CUSTOMERS BY GEOGRAPHIC LOCATION (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 19,352,088 | $ 22,225,803 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 10,241,018 | 11,348,716 |
Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 9,111,070 | 10,877,087 |
Equipment Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 9,389,042 | 10,315,052 |
Equipment Rentals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 1,264,804 | 1,844,775 |
Software Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 851,976 | 1,014,867 |
Engineering Parts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,075,850 | 3,530,407 |
Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 3,770,416 | 5,520,702 |
Marine Technology Business (Products) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 12,119,066 | 14,724,688 |
Marine Technology Business (Products) [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 9,296,281 | 9,785,917 |
Marine Technology Business (Products) [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,822,785 | 4,938,771 |
Marine Technology Business (Products) [Member] | Equipment Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 8,444,305 | 8,771,050 |
Marine Technology Business (Products) [Member] | Equipment Rentals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 1,264,804 | 1,844,775 |
Marine Technology Business (Products) [Member] | Software Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 851,976 | 1,014,867 |
Marine Technology Business (Products) [Member] | Engineering Parts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | ||
Marine Technology Business (Products) [Member] | Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 1,557,981 | 3,093,996 |
Marine Engineering Business (Services) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 7,233,022 | 7,501,115 |
Marine Engineering Business (Services) [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 944,737 | 1,562,799 |
Marine Engineering Business (Services) [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 6,288,285 | 5,938,316 |
Marine Engineering Business (Services) [Member] | Equipment Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 944,737 | 1,544,002 |
Marine Engineering Business (Services) [Member] | Equipment Rentals [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | ||
Marine Engineering Business (Services) [Member] | Software Sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | ||
Marine Engineering Business (Services) [Member] | Engineering Parts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,075,850 | 3,530,407 |
Marine Engineering Business (Services) [Member] | Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,212,435 | 2,426,706 |
Americas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 9,110,498 | 10,235,297 |
Americas [Member] | Marine Technology Business (Products) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,263,883 | 5,668,948 |
Americas [Member] | Marine Engineering Business (Services) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,846,615 | 4,566,349 |
Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,612,322 | 4,460,684 |
Europe [Member] | Marine Technology Business (Products) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,225,915 | 1,559,778 |
Europe [Member] | Marine Engineering Business (Services) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,386,407 | 2,900,906 |
Australia/Asia [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,607,786 | 5,723,970 |
Australia/Asia [Member] | Marine Technology Business (Products) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,607,786 | 5,723,970 |
Australia/Asia [Member] | Marine Engineering Business (Services) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | ||
Middle East/Africa [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 1,021,482 | 1,805,852 |
Middle East/Africa [Member] | Marine Technology Business (Products) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 1,021,482 | 1,771,992 |
Middle East/Africa [Member] | Marine Engineering Business (Services) [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 33,860 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Sep. 01, 2015 USD ($) | Sep. 01, 2015 GBP (£) | May 31, 2023 USD ($) shares | May 31, 2023 GBP (£) shares | Oct. 31, 2023 USD ($) shares | Oct. 31, 2022 shares | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | shares | ||||||
Employment Agreements [Member] | Annmarie Gayle [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Annual base salary | $ 305,000 | |||||
Annual performance bonus | 100,000 | |||||
Annual salary, separation bonus | 150,000 | |||||
Employment Agreements [Member] | Blair Cunningham [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Annual base salary | 200,000 | |||||
Employment Agreements [Member] | Cunningham [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Annual base salary | 225,000 | |||||
Employment Agreements [Member] | Kevin Kane [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Annual base salary | 200,000 | |||||
Annual performance bonus | $ 26,000 | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross | shares | 15,000 | |||||
Employment Agreements [Member] | Gayle Jardine [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Annual base salary | $ 96,720 | £ 78,000 | $ 6,200 | £ 5,000 | ||
Restricted stock award | shares | 2,500 | 2,500 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Jan. 16, 2024 | USD ($) | DKK (kr) |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Sales of stock | $ 781,598 | kr 5,300,000 |