Cover
Cover - shares | 9 Months Ended | |
Jul. 31, 2021 | Sep. 13, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | SKKYNET CLOUD SYSTEMS, INC. | |
Entity Central Index Key | 0001546853 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jul. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 51,576,122 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-54747 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 45-3757848 | |
City Area Code | 888 | |
Local Phone Number | 628-2028 | |
Entity Address Address Line 1 | 2233 Argentia Road Suite 306 | |
Entity Address City Or Town | Mississauga | |
Entity Address State Or Province | ON | |
Entity Address Country | CA | |
Entity Address Postal Zip Code | L5N 2X7 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jul. 31, 2021 | Oct. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 753,224 | $ 816,798 |
Accounts receivable | 260,005 | 194,263 |
Receivable related parties | 6,661 | 6,264 |
Prepaid expenses | 12,983 | 17,916 |
Total current assets | 1,032,873 | 1,035,241 |
Property and equipment, net of accumulated depreciation of $84,897 and $82,919 respectively | 11,020 | 12,165 |
Right of use asset | 22,213 | 40,883 |
Total Assets | 1,066,106 | 1,088,289 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 71,102 | 156,668 |
Accrued liabilities - related party | 123,899 | 222,603 |
Deferred revenue | 210,760 | 168,728 |
Current portion of operating lease liability | 20,980 | 20,980 |
Total current liabilities | 426,740 | 568,980 |
Loan payable | 48,159 | 30,032 |
Operating lease liability- net of current portion | 1,233 | 19,903 |
Total liabilities | 476,132 | 618,913 |
Commitments and contingencies | 0 | 0 |
Stockholders' Equity: | ||
Preferred stock value | 5 | 5 |
Common stock; $0.001 par value, 70,000,000 shares authorized, 51,576,122 shares issued and outstanding, respectively | 51,577 | 51,577 |
Additional paid-in capital | 6,741,565 | 6,595,380 |
Accumulative other comprehensive income | 79,129 | 56,430 |
Accumulated deficit | (6,282,497) | (6,234,210) |
Total stockholders' equity | 589,973 | 469,376 |
Total Liabilities and Stockholders' Equity | 1,066,106 | 1,088,289 |
Series B Preferred convertible stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock value | $ 194 | $ 194 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jul. 31, 2021 | Oct. 31, 2020 |
Property and equipment, net of accumulated depreciation | $ 84,897 | $ 82,919 |
Stockholders' Equity: | ||
Preferred stock, Par value | $ 0.001 | $ 0.001 |
Preferred stock, Authorized | 5,000,000 | 5,000,000 |
Preferred stock, Issued | 5,000 | 5,000 |
Preferred stock, Outstanding | 5,000 | 5,000 |
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 70,000,000 | 70,000,000 |
Common stock, Issued | 51,576,122 | 51,576,122 |
Common stock, Outstanding | 51,576,122 | 51,576,122 |
Series B Preferred convertible stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock, Par value | $ 0.001 | $ 0.001 |
Preferred stock, Authorized | 500,000 | 500,000 |
Preferred stock, Issued | 193,661 | 193,661 |
Preferred stock, Outstanding | 193,661 | 193,661 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) | ||||
Revenue | $ 497,375 | $ 316,918 | $ 1,383,414 | $ 1,155,443 |
Cost of goods | 0 | 0 | 0 | 1,214 |
Gross profit | 497,375 | 316,918 | 1,383,414 | 1,154,229 |
Operating Expenses: | ||||
General & administrative expenses | 482,482 | 371,006 | 1,345,590 | 1,201,131 |
Depreciation | 691 | 604 | 1,978 | 1,831 |
Income (loss) from operations | 14,202 | (54,692) | 35,846 | (48,733) |
Other Income (expense) | ||||
Other income (expense) | 5,590 | 29,671 | 25,399 | 29,671 |
Gain (loss) on currency exchange | 8,543 | (35,763) | (65,707) | 10,539 |
Accrued dividends - related party | (69,720) | (69,720) | ||
Total other income (loss) | (55,587) | (6,092) | (110,028) | 40,210 |
Income (loss) before taxes | (41,385) | (60,784) | (74,182) | (8,423) |
Income tax refund | 25,895 | 0 | 25,895 | 15,913 |
Net income (loss) | (15,490) | (60,784) | (48,287) | 7,390 |
Preferred dividends | (2,905) | (2,905) | (8,715) | (8,715) |
Net income (loss) to common shareholders | (18,395) | (63,689) | (57,002) | (1,325) |
Foreign currency translation adjustment | (6,300) | 29,186 | 22,699 | (11,704) |
Comprehensive income (loss) | $ (24,695) | $ (34,503) | $ (34,303) | $ (13,029) |
Net income (loss) per share to common shareholders-basic and dilutive | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares outstanding -basic | 51,576,122 | 51,576,122 | 51,576,122 | 51,576,122 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited) - USD ($) | Total | Common Stock [Member] | Preferred Stock [Member] | Series B, Preferred Convertible Stock [Member] | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss (Income) |
Balance, shares at Oct. 31, 2019 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2019 | $ 580,314 | $ 51,577 | $ 5 | $ 193,661 | $ 6,192,476 | $ (5,922,877) | $ 65,472 |
Stock option expense | 67,285 | 0 | 0 | 0 | 67,285 | 0 | 0 |
Change due to currency translation | (5,649) | $ 0 | $ 0 | $ 0 | 0 | 0 | (5,649) |
Net loss | (8,481) | (8,481) | |||||
Balance, shares at Jan. 31, 2020 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2020 | 633,469 | $ 51,577 | $ 5 | $ 193,661 | 6,259,761 | (5,931,358) | 59,823 |
Balance, shares at Oct. 31, 2019 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2019 | 580,314 | $ 51,577 | $ 5 | $ 193,661 | 6,192,476 | (5,922,877) | 65,472 |
Net loss | 7,390 | ||||||
Balance, shares at Jul. 31, 2020 | 51,577,122 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2020 | 738,053 | $ 51,577 | $ 5 | $ 193,661 | 6,354,529 | (5,915,487) | 53,768 |
Balance, shares at Jan. 31, 2020 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2020 | 633,469 | $ 51,577 | $ 5 | $ 193,661 | 6,259,761 | (5,931,358) | 59,823 |
Stock option expense | 47,384 | 47,384 | |||||
Change due to currency translation | (35,241) | (35,241) | |||||
Net loss | 76,655 | 76,655 | |||||
Balance, shares at Apr. 30, 2020 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Apr. 30, 2020 | 722,267 | $ 51,577 | $ 5 | $ 193,661 | 6,307,145 | (5,854,703) | 24,582 |
Stock option expense | 47,384 | 0 | 0 | 0 | 47,384 | 0 | 0 |
Change due to currency translation | 29,186 | $ 0 | 0 | 0 | 0 | 29,186 | |
Net loss | (60,784) | $ 0 | $ 0 | 0 | (60,784) | 0 | |
Balance, shares at Jul. 31, 2020 | 51,577,122 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2020 | 738,053 | $ 51,577 | $ 5 | $ 193,661 | 6,354,529 | (5,915,487) | 53,768 |
Balance, shares at Oct. 31, 2020 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2020 | 469,376 | $ 51,577 | $ 5 | $ 194 | 6,595,380 | (6,234,210) | 56,430 |
Net loss | (41,712) | $ 0 | $ 0 | 0 | (41,712) | 0 | |
Change due to currency translation | 8,636 | 0 | 0 | 8,636 | |||
Stock option expense | 48,703 | 48,703 | |||||
Balance, shares at Jan. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2021 | 485,003 | $ 51,577 | $ 5 | $ 194 | 6,644,083 | (6,275,922) | 65,066 |
Balance, shares at Oct. 31, 2020 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Oct. 31, 2020 | 469,376 | $ 51,577 | $ 5 | $ 194 | 6,595,380 | (6,234,210) | 56,430 |
Net loss | (48,287) | ||||||
Balance, shares at Jul. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2021 | 589,973 | $ 51,577 | $ 5 | $ 194 | 6,741,565 | (6,282,497) | 79,129 |
Balance, shares at Jan. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jan. 31, 2021 | 485,003 | $ 51,577 | $ 5 | $ 194 | 6,644,083 | (6,275,922) | 65,066 |
Net loss | 8,915 | $ 0 | $ 0 | 0 | 8,915 | 0 | |
Change due to currency translation | 20,363 | 20,363 | |||||
Stock option expense | 48,741 | 48,741 | |||||
Balance, shares at Apr. 30, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Apr. 30, 2021 | 563,022 | $ 51,577 | $ 5 | $ 194 | 6,692,824 | (6,267,007) | 85,429 |
Net loss | (15,490) | $ 0 | $ 0 | 0 | (15,490) | 0 | |
Change due to currency translation | (6,300) | (6,300) | |||||
Stock option expense | 48,741 | 48,741 | |||||
Balance, shares at Jul. 31, 2021 | 51,576,122 | 5,000 | 193,661 | ||||
Balance, amount at Jul. 31, 2021 | $ 589,973 | $ 51,577 | $ 5 | $ 194 | $ 6,741,565 | $ (6,282,497) | $ 79,129 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Jul. 31, 2021 | Jul. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (48,287) | $ 7,390 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,987 | 1,831 |
Option based compensation | 146,185 | 162,053 |
Non-cash lease expense | 18,670 | 15,510 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (65,742) | 7,656 |
Accounts payable and accrued expenses | (85,566) | (40,850) |
Accrued liabilities - related parties | (99,101) | (76,821) |
Prepaid expenses and other assets | 4,933 | 6,443 |
Operating lease liability | (18,670) | (15,510) |
Deferred income | 42,032 | 16,686 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (103,559) | 84,388 |
CASH FLOWS FROM FINANCING ACTIVITY | ||
Proceeds from Canadian loan activity | 15,678 | 28,717 |
NET CASH PROVIDED BY FINANCING ACTIVITY | 15,678 | 28,717 |
Effect of exchange rate changes on cash and cash equivalents | 24,307 | (16,646) |
Net increase (decrease) in cash and cash equivalents | (63,574) | 96,459 |
Cash and cash equivalents, beginning of period | 816,798 | 700,410 |
Cash and cash equivalents, end of period | 753,224 | 796,869 |
SUPPLEMENTAL CASH FLOWS INFORMATION | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Capitalization of right to use asset and operating liability | $ 0 | $ 62,869 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Jul. 31, 2021 | |
ORGANIZATION AND BASIS OF PRESENTATION | |
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION | NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION Skkynet Cloud Systems, Inc. (“Skkynet” or “the Company”) is a Nevada corporation formed on August 31, 2011 and headquartered in Toronto, Canada. Skkynet operates its business through its wholly-owned subsidiaries Cogent Real-Time Systems, Inc. (“Cogent”), Skkynet Corp. (Canada) and Skkynet, Inc. (USA). Skkynet was formed primarily for the purpose of taking the existing business lines of Cogent and its current and future customers and integrating these businesses with Cloud based systems. We also intend to expand the areas of business activity to which the kinds of products and services we provide are applied. The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (the “SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s October 31, 2020 Annual Report on form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the consolidated financial statements for the most recent fiscal year end October 31, 2020 as reported on Form 10-K, have been omitted. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement and recorded a right to use asset and operating lease liability of $68,584 as of November 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption of the policy did not have a cumulative impact on retained earnings. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Jul. 31, 2021 | |
REVENUE RECOGNITION | |
NOTE 3 - REVENUE RECOGNITION | NOTE 3 - REVENUE RECOGNITION As part of the revenue recognition reporting, the Company reports revenue by product line and geographic area. During the nine months period ended July 31, 2021 and 2020, the revenue by product line is as follows: Category Percentage 2021 Percentage 2020 Product sales 71 % 977,945 69 % 797,967 Support 28 % 383,164 30 % 346,505 Cloud & Other 1 % 22,305 1 % 10,971 Total 100 % 1,383,414 100 % 1,155,443 The Company sells its products on a worldwide basis. During the nine months period ended July 31, 2021 and 2020 the Company’s geographic concentration of revenue is as follows: Area Percentage 2021 Percentage 2020 North America 36 % 494,135 46 % 417,279 Europe 40 % 546,650 35 % 398,546 Asia Pacific 13 % 174,041 13 % 152,730 South America 1 % 32,869 4 % 50,188 Middle East-Africa/Other 10 % 135,718 12 % 136,700 Total 100 % 1,383,414 100 % 1,155,443 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jul. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 4 - RELATED PARTY TRANSACTIONS | NOTE 4 - RELATED PARTY TRANSACTIONS Sakura Software, a corporation owned by our CEO and Chairman of the Board of Directors, Andrew S. Thomas, and Benford Consultancy, a corporation owned by our COO and a member of our Board of Directors, Paul Benford, own, respectively, 72.34% and 27.66% of the issued and outstanding shares of Real Innovations International LLC, (“Real Innovations”) a corporation organized under the laws of Nevis, West Indies. In March 2012, Cogent, our operating subsidiary, assigned all of its intellectual property including the pending patent applications for its real-time data transmission and display technology (the “IP”) to Real Innovations under an assignment of intellectual property agreement (the “Assignment Agreement”). In return for the assignment Real Innovations required a one-time payment of $30,000 to Cogent. Cogent elected to forgo the payment allowing Real Innovations to offset future expenses against the payment. There is no ongoing royalty payment or other form of compensation from Real Innovations to Cogent under the Assignment Agreement. Real Innovations, in turn, entered into a master intellectual property license agreement (the “License Agreement”) with Cogent for all of the same IP. Under the License Agreement Real Innovations granted a royalty-free license in perpetuity to Cogent for the use and exploitation of the IP in return for which Cogent agreed to: (i) pay all operating expenses of Real Innovations incurred in connection with the continued prosecution of pending patent applications and others that may be prepared; (ii) prosecute all claims for infringement of the IP; (iii) defend and indemnify Real Innovations from and against all claims of infringement of the IP asserted by third parties against Real Innovations, Cogent or our Company; (iv) purchase liability insurance in favor of Real Innovations for this purpose. Under the termination provision of the licenses agreement, there is no unilateral right of termination. Termination may occur by mutual consent of the parities, the Company ceasing doing business, by breach by the Company or by the Company failing to maintain the license and the support to prosecute and protect the license under applicable laws. Under the License Agreement, Messrs. Andrew S. Thomas and Paul Benford will benefit indirectly from their indirect ownership of all of the shares of Real Innovations to the extent of any such payments or other undertakings by Cogent on behalf of Real Innovations, but the exact amount of these benefits cannot be determined at this time. No payments have been made as of July 31, 2021. As of July 31, 2021 the outstanding liabilities due related parties was $123,899. |
OPTIONS
OPTIONS | 9 Months Ended |
Jul. 31, 2021 | |
OPTIONS | |
NOTE 5 - OPTIONS | NOTE 5 - OPTIONS The Company, under its 2012 Stock Option Plan, issues options to various officers, directors, and consultants. The options vest in equal annual installments over a five year period with the first 20% vested when the options are granted. All of the options are exercisable at a purchase price based on the last trading price of the Company’s common stock. On December 12, 2020, the Company issued 41,250 options of which 11,250 options were issued to three independent directors and 30,000 options were issued to three consultants. The options are exercisable into common stock of the Company at $0.64 per share. The Company calculated a fair value of the options of $27,190 using the Black Scholes option pricing model with computed volatility of 201.22%, risk-free interest rate of 2%, expected dividend yield 0%, stock price at measurement date of $0.64 and the expected term of ten years. The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year. During the nine month period ended July 31, 2021, the Company recognized $146,185 of option expense. The unrecognized future balance to be expensed over the term of the options is $181,125. The following sets forth the options granted and outstanding as of July 31, 2021: Options Weighted Average Exercise price Weighted Average Remaining Contract Life Granted Options Exercisable Intrinsic value Outstanding at October 31, 2019 7,581,400 0.13 7.19 5,470,540 $ 1,827,117 Granted 336,250 0.56 9.50 -- -- Exercised -- -- -- -- -- Forfeited/Expired by termination -- -- -- -- - Outstanding at October 31, 2020 7,917,650 0.15 6.16 5,765,680 $ 3,627,845 Granted 41,250 0.64 9.63 -- -- Exercised -- -- -- -- -- Forfeited/Expired by termination -- -- -- -- -- Outstanding at July 31, 2021 7,958,900 0.17 5.31 6,005,750 $ 6,910,038 |
LEASES
LEASES | 9 Months Ended |
Jul. 31, 2021 | |
LEASES | |
NOTE 6 - LEASES | NOTE 6 - LEASES The Company leases office space located at 2233 Argentia Road Suite 306 Mississauga, Ontario Canada L5N 2X7. During May 2017, the Company signed a new 5 year lease for the Company’s office being effective on August 1, 2017 through July 31, 2022. The lease is for approximately 2,210 square feet of office space with a base monthly rental cost including common area charges of $2,369. The yearly rental obligations including the lease agreements are as follows: Fiscal Year 2021 $ 5,330 2022 $ 21,321 Total lease payments $ 26,651 Less present value discount (4,438 ) 22,213 Less operating lease short term (20,980 ) Operating lease liability, long term $ 1,233 Under the new standards the lease has been determined to be a right to use operating lease and is recognized based on the present value of the lease payments over the lease term at the commencement date which upon adoption of ASC 842 the value was determined to be $68,584 which is presented in the balance sheet as an asset labeled “right to use lease” offset by a liability labeled “lease liability”. The rate was determined as a fair value of the lease over a 30 month period using an 8% interest rate for the present value calculation. During the nine months ended July 31, 2021 the asset was amortized by $18,670 and liability was reduced by $18,670. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 9 Months Ended |
Jul. 31, 2021 | |
MAJOR CUSTOMERS | |
NOTE 7 - MAJOR CUSTOMERS | NOTE 7 - MAJOR CUSTOMERS The Company sells to their end-user customers both directly and through resellers. Five resellers accounted for 51% of revenue in the three-month period ended July 31, 2020, and nine resellers accounted for 50% of revenue in the same period in 2021. Five resellers accounted for 51% of revenue in the nine-month period ended July 31, 2020, and six resellers accounted for 50% of revenue in the same period in 2021. In the three-month period ended July 31, 2020,no end user customer was responsible for more than 10% of our revenue. In the same period in 2021, no end user customer was responsible for more than 10% of revenue. In the nine-month period ended July 31, 2020, no end user customer was responsible for more than 10% of our revenues. In the same period in 2021, no end user customer was responsible for more than 10% of revenue. The Company maintains all the information on their end user customers, and should a reseller discontinue operations, the Company can sell directly to the end user. |
LOANS PAYABLE
LOANS PAYABLE | 9 Months Ended |
Jul. 31, 2021 | |
LOANS PAYABLE | |
NOTE 8 - LOANS PAYABLE | NOTE 8 - LOANS PAYABLE On April 30, 2020, the Company’s subsidiary Cogent Systems issued a two year note for US$15,678 (CDN $20,000) under the Canadian Emergency Business Account (CEBA). The CEBA provides interest free loans to small businesses to help cover operating costs during a period when their revenues may have been reduced due to the impact of COVID-19. The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. The Company has the option to extend the term of the loan for another 3 years subject to an annual interest of 5% on any balance remaining. On December 15, 2020, the Company’s subsidiary Cogent Systems issued a two year note for US$30,032 (CDN $40,000) under the Canadian Emergency Business Account (CEBA). The CEBA provides interest free loans to small businesses to help cover operating costs during a period when their revenues may have been reduced due to the impact of COVID-19. The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. The Company has the option to extend the term of the loan for another 3 years subject to an annual interest of 5% on any balance remaining |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jul. 31, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 9 - SUBSEQUENT EVENTS | NOTE 9 - SUBSEQUENT EVENTS The Company has evaluated subsequent events to determine events occurring after July 31, 2021 through September 8, 2021 that would have a material impact on the Company’s financial results or require disclosure and have determined none exist. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Recently Adopted Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)". The amendments in this ASU revise the accounting related to lessee accounting. Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018 and are to be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the new accounting pronouncement and recorded a right to use asset and operating lease liability of $68,584 as of November 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The adoption of the policy did not have a cumulative impact on retained earnings. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
REVENUE RECOGNITION | |
Schedule of revenue by product line and geographic area | Category Percentage 2021 Percentage 2020 Product sales 71 % 977,945 69 % 797,967 Support 28 % 383,164 30 % 346,505 Cloud & Other 1 % 22,305 1 % 10,971 Total 100 % 1,383,414 100 % 1,155,443 |
Schedule of geographic concentration of revenue | Area Percentage 2021 Percentage 2020 North America 36 % 494,135 46 % 417,279 Europe 40 % 546,650 35 % 398,546 Asia Pacific 13 % 174,041 13 % 152,730 South America 1 % 32,869 4 % 50,188 Middle East-Africa/Other 10 % 135,718 12 % 136,700 Total 100 % 1,383,414 100 % 1,155,443 |
OPTIONS (Tables)
OPTIONS (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
OPTIONS | |
Schedule of Options granted and outstanding | Options Weighted Average Exercise price Weighted Average Remaining Contract Life Granted Options Exercisable Intrinsic value Outstanding at October 31, 2019 7,581,400 0.13 7.19 5,470,540 $ 1,827,117 Granted 336,250 0.56 9.50 -- -- Exercised -- -- -- -- -- Forfeited/Expired by termination -- -- -- -- - Outstanding at October 31, 2020 7,917,650 0.15 6.16 5,765,680 $ 3,627,845 Granted 41,250 0.64 9.63 -- -- Exercised -- -- -- -- -- Forfeited/Expired by termination -- -- -- -- -- Outstanding at July 31, 2021 7,958,900 0.17 5.31 6,005,750 $ 6,910,038 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jul. 31, 2021 | |
LEASES | |
Schedule of rental obligations | Fiscal Year 2021 $ 5,330 2022 $ 21,321 Total lease payments $ 26,651 Less present value discount (4,438 ) 22,213 Less operating lease short term (20,980 ) Operating lease liability, long term $ 1,233 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Jul. 31, 2021 | Oct. 31, 2020 |
Right to use asset and operating lease liability | $ 22,213 | $ 40,883 |
November 1, 2019 [Member] | ||
Right to use asset and operating lease liability | $ 68,584 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Total Revenue | $ 497,375 | $ 316,918 | $ 1,383,414 | $ 1,155,443 |
Revenue percentage | 100.00% | 100.00% | ||
Product Sales [Member] | ||||
Total Revenue | $ 977,945 | $ 797,967 | ||
Revenue percentage | 71.00% | 69.00% | ||
Support [Member] | ||||
Total Revenue | $ 383,164 | $ 346,505 | ||
Revenue percentage | 28.00% | 30.00% | ||
Cloud & Other [Member] | ||||
Total Revenue | $ 22,305 | $ 10,971 | ||
Revenue percentage | 1.00% | 1.00% |
REVENUE RECOGNITION (Details 1)
REVENUE RECOGNITION (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Total revenue | $ 497,375 | $ 316,918 | $ 1,383,414 | $ 1,155,443 |
Revenue percentage | 100.00% | 100.00% | ||
North America [Member] | ||||
Total revenue | $ 494,135 | $ 417,279 | ||
Revenue percentage | 36.00% | 46.00% | ||
Europe [Member] | ||||
Total revenue | $ 546,650 | $ 398,546 | ||
Revenue percentage | 40.00% | 35.00% | ||
Asia Pacific [Member] | ||||
Total revenue | $ 174,041 | $ 152,730 | ||
Revenue percentage | 13.00% | 13.00% | ||
Middle East-Africa/Other [Member] | ||||
Total revenue | $ 135,718 | $ 136,700 | ||
Revenue percentage | 10.00% | 12.00% | ||
South America [Member] | ||||
Total revenue | $ 32,869 | $ 50,188 | ||
Revenue percentage | 1.00% | 4.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | Jul. 31, 2021USD ($) |
Due to related parties | $ 123,899 |
One Time Payment Payable Under Agreement | $ 30,000 |
Andrew Thomas [Member] | |
Ownership percentage | 72.34% |
Paul Benford [Member] | |
Ownership percentage | 27.66% |
OPTIONS (Details)
OPTIONS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2021 | Oct. 31, 2020 | |
Options | ||
Beginning balance, options | 7,917,650 | 7,581,400 |
Option granted | 41,250 | 336,250 |
Ending balance, options | 7,958,900 | 7,917,650 |
Weighted Average Exercise Price | ||
Weighted average exercise price of shares outstanding beginning balance | $ 0.15 | $ 0.13 |
Weighted average exercise price of share granted | 0.64 | 0.56 |
Weighted average exercise price of share exercised | 0 | 0 |
Weighted average exercise price of share forfeited | 0 | 0 |
Weighted average exercise price of shares outstanding ending balance | $ 0.17 | $ 0.15 |
Weighted Average Remaining Contractual Terms | ||
Weighted average remaining contractual terms of share outstanding, beginning | 7 years 2 months 8 days | 7 years 2 months 9 days |
Weighted average remaining contractual terms of share granted | 9 years 7 months 17 days | 9 years 6 months |
Weighted average remaining contractual terms of share outstanding, ending | 5 years 3 months 21 days | 6 years 1 month 28 days |
Granted Options Exercisable | ||
Option exercisable, beginning balance | 5,765,680 | 5,470,540 |
Option exercisable, ending balance | 6,005,750 | 5,765,680 |
Intrinsic Value | ||
Aggregate intrinsic value of share outstanding beginning balance | $ 3,627,845 | $ 1,827,117 |
Aggregate intrinsic value of share outstanding ending balance | $ 6,910,038 | $ 3,627,845 |
OPTIONS (Details Narrative)
OPTIONS (Details Narrative) - USD ($) | Dec. 12, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | Oct. 31, 2020 |
Unrecognized future balance | $ 181,125 | |||
Option based compensation | $ 146,185 | $ 162,053 | ||
Granted | 41,250 | 336,250 | ||
Exercise price | $ 0 | $ 0 | ||
Option [Member] | ||||
Computed volatility | 201.22% | |||
Risk free, interest rate | 2.00% | |||
Expected divident yield | 0.00% | |||
Stock measurment Excercise price, per share | $ 0.64 | |||
Exercise price | $ 0.64 | |||
Fair value of stock option | $ 27,190 | |||
Expected term | 10 years | |||
Description of stock option | The options are expensed over a five year period with 20% upon issuance and 20% for the first and each subsequent year | |||
Option [Member] | Three directors [Member] | ||||
Granted | 11,250 | |||
Total option issued | 41,250 | |||
Three Consultants [Member] | Option [Member] | ||||
Granted | 30,000 |
LEASES (Details)
LEASES (Details) - USD ($) | Jul. 31, 2021 | Oct. 31, 2020 |
LEASES | ||
2021 | $ 5,330 | |
2022 | 21,321 | |
Total lease payments | 26,651 | |
Less present value discount | (4,438) | |
Total balance | 22,213 | |
Less operating lease short term | (20,980) | |
Operating lease liability, long term | $ 1,233 | $ 19,903 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 9 Months Ended |
Jul. 31, 2021USD ($)ft² | |
LEASES | |
Lease liability | $ 68,584 |
Lease area | ft² | 2,210 |
Lease rental expense, monthly | $ 2,369 |
Lease expiration | Jul. 31, 2022 |
Lease Term | 5 years |
Amortization of assets | $ 18,670 |
Accrued liablility, Decrease | $ 18,670 |
Operating Lease, Discount Rate | 8.00% |
Description of Operating Lease | The rate was determined as a fair value of the lease over a 30 month period using an 8% interest rate for the present value calculation |
MAJOR CUSTOMERS (Details Narrat
MAJOR CUSTOMERS (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Jul. 31, 2020 | Jul. 31, 2021 | Jul. 31, 2020 | |
Sales [Member] | No end user customers [Member] | ||||
Concentration risk percentage of revenue, description | no end user customer was responsible for more than 10% of revenue | no end user customer was responsible for more than 10% of our revenue | ||
Sales [Member] | Resellers Six [Member] | ||||
Concentration risk, percentage | 50.00% | |||
Sales [Member] | Resellers Five [Member] | ||||
Concentration risk, percentage | 51.00% | 51.00% | ||
Sales [Member] | Resellers Nine [Member] | ||||
Concentration risk, percentage | 50.00% | |||
Revenue [Member] | ||||
Concentration risk percentage of revenue, description | no end user customer was responsible for more than 10% of revenue | no end user customer was responsible for more than 10% of our revenues |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - Cogent Systems [Member] - USD ($) | Dec. 15, 2020 | Apr. 30, 2020 |
Description of loan payable | The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. | The loan is subject to zero interest and 25% of the amount will be forgiven if 75% of the loan amount is repaid on or before December 31, 2022. |
Interest rate | 5.00% | 5.00% |
Extended term of note | 3 years | 3 years |
Notes payable | $ 30,032 | $ 15,678 |