Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Dec. 31, 2016 | Apr. 30, 2016 | |
Document and Entity Information: | |||
Entity Registrant Name | PASSUR AEROSPACE, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2016 | ||
Trading Symbol | pssr | ||
Amendment Flag | false | ||
Entity Central Index Key | 225,628 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Common Stock, Shares Outstanding | 7,690,199 | ||
Entity Public Float | $ 6,582,000 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Current assets: | ||
Cash | $ 1,523,655 | $ 925,508 |
Accounts receivable, net | 1,073,498 | 1,234,986 |
Deferred tax asset, current | 418,889 | 551,671 |
Prepaid expenses and other current assets | 217,410 | 157,930 |
Total current assets | 3,233,452 | 2,870,095 |
PASSUR Network, net | 5,739,753 | 5,902,751 |
Capitalized software development costs, net | 8,263,533 | 7,684,603 |
Property and equipment, net | 1,187,158 | 1,353,532 |
Deferred tax asset, non-current | 1,250,833 | 1,658,557 |
Other assets | 208,755 | 239,861 |
Total assets | 19,883,484 | 19,709,399 |
Current liabilities: | ||
Accounts payable | 356,387 | 880,819 |
Accrued expenses and other current liabilities | 936,272 | 977,900 |
Deferred revenue, current portion | 3,140,292 | 2,680,244 |
Total current liabilities | 4,432,951 | 4,538,963 |
Deferred revenue, long term portion | 423,346 | 197,336 |
Notes payable - related party | 2,700,000 | 3,500,000 |
Total liabilities | 7,556,297 | 8,236,299 |
Commitment and contingencies | ||
Stockholders' equity: | ||
Preferred shares - authorized 5,000,000 shares, par value $0.01 per share; none issued or outstanding | ||
Common shares - authorized 10,000,000 shares, par value $0.01 per share; issued 8,465,526 and outstanding 7,690,199 in fiscal year 2016; issued 8,428,526 and outstanding 7,653,199 in fiscal year 2015 | 84,654 | 84,284 |
Additional paid-in capital | 16,082,865 | 15,663,796 |
Accumulated deficit | (1,944,904) | (2,379,552) |
Stockholders' deficit before treasury stock | 14,222,615 | 13,368,528 |
Treasury stock, at cost, 775,327 and 775,327 shares in fiscal years 2016 and 2015 | (1,895,428) | (1,895,428) |
Total stockholders' equity | 12,327,187 | 11,473,100 |
Total liabilities and stockholders' equity | $ 19,883,484 | $ 19,709,399 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parenthetical - $ / shares | Oct. 31, 2016 | Oct. 31, 2015 |
Consolidated Balance Sheets Parenthetical | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | ||
Preferred stock shares outstanding | ||
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 10,000,000 | 10,000,000 |
Common stock shares issued | 8,465,526 | 8,428,526 |
Common stock shares outstanding | 7,690,199 | 7,653,199 |
Treasury stock shares | 775,327 | 775,327 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Consolidated Statements of Income | ||
Revenues | $ 14,892,495 | $ 12,538,059 |
Cost and expenses: | ||
Cost of revenues | 6,377,104 | 5,433,122 |
Research and development | 826,227 | 724,683 |
Selling, general, and administrative expenses | 6,481,260 | 5,478,454 |
Total costs and expenses | 13,684,591 | 11,636,259 |
Income from operations | 1,207,904 | 901,800 |
Interest expense - related party | 183,333 | 224,542 |
Income before income taxes | 1,024,571 | 677,258 |
Income tax expense | 589,923 | 397,994 |
Net income | $ 434,648 | $ 279,264 |
Net income per common share - basic | $ 0.06 | $ 0.04 |
Net income per common share - diluted | $ 0.06 | $ 0.04 |
Weighted average number of common shares outstanding - basic | 7,679,696 | 7,648,612 |
Weighted average number of common shares outstanding - diluted | 7,730,566 | 7,775,474 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common stock | Additional Paid-in Capital | (Accumulated deficit) Retained Earnings | Treasury Stock | Total |
Balance at Oct. 31, 2014 | $ 82,255 | $ 15,273,524 | $ (2,658,816) | $ (1,623,475) | $ 11,073,488 |
Balance - shares at Oct. 31, 2014 | 7,529,026 | ||||
Exercise of common stock options | $ 2,029 | 49,091 | 51,120 | ||
Exercise of common stock options - shares | 203,000 | ||||
Stock-based compensation expense | 341,181 | 341,181 | |||
Purchase of treasury stock | (271,953) | (271,953) | |||
Purchase of treasury stock - shares | (78,827) | ||||
Net income | 279,264 | 279,264 | |||
Balance at Oct. 31, 2015 | $ 84,284 | 15,663,796 | (2,379,552) | (1,895,428) | 11,473,100 |
Balance - shares at Oct. 31, 2015 | 7,653,199 | ||||
Exercise of common stock options | $ 370 | 17,850 | 18,220 | ||
Exercise of common stock options - shares | 37,000 | ||||
Stock-based compensation expense | 401,219 | 401,219 | |||
Net income | 434,648 | 434,648 | |||
Balance at Oct. 31, 2016 | $ 84,654 | $ 16,082,865 | $ (1,944,904) | $ (1,895,428) | $ 12,327,187 |
Balance - shares at Oct. 31, 2016 | 7,690,199 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Cash flows from operating activities | ||
Net income | $ 434,648 | $ 279,264 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,341,349 | 3,055,214 |
Provision for deferred taxes | 540,505 | 362,143 |
Provision (recovery) of doubtful accounts receivable | 5,982 | 16,950 |
Stock-based compensation expense | 401,219 | 341,181 |
Changes in operating assets and liabilities: | ||
Change in accounts receivable | 155,506 | 116,822 |
Change in prepaid expenses and other current assets | (120,260) | (47,090) |
Change in other assets | 31,106 | (97,380) |
Change in accounts payable | (524,432) | 230,165 |
Change in accrued expenses and other current liabilities | (41,628) | 144,609 |
Change in deferred revenue | 686,058 | 807,029 |
Total adjustments | 4,475,405 | 4,929,643 |
Net cash provided by operating activities | 4,910,053 | 5,208,907 |
Cash flows from investing activities | ||
PASSUR Network | (776,138) | (1,489,117) |
Capitalized software development costs | (2,423,811) | (2,401,994) |
Property and equipment | (330,177) | (455,302) |
Net cash used in investing activities | (3,530,126) | (4,346,413) |
Cash flows from financing activities | ||
Repayments of notes payable - related party | (800,000) | (364,880) |
Purchase of treasury stock | (271,953) | |
Proceeds from exercise of stock options | 18,220 | 51,120 |
Net cash used in financing activities | (781,780) | (585,713) |
Increase in cash | 598,147 | 276,781 |
Cash - beginning of year | 925,508 | 648,727 |
Cash - end of year | 1,523,655 | 925,508 |
Supplemental cash flow information | ||
Cash paid for Interest - related party | 183,000 | 225,000 |
Cash paid for Income taxes | $ 62,000 | $ 35,000 |
1. Description of Business and
1. Description of Business and Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
1. Description of Business and Significant Accounting Policies | 1. Description of Business and Significant Accounting Policies Nature of Business The Company is a business intelligence company, providing predictive analytics and decision support technology for the aviation industry primarily to improve the operational performance and cash flow of airlines and the airports where they operate. The Companys mission is to improve global air traffic efficiencies by connecting the worlds aviation professionals onto a single aviation intelligence platform. The Company believes it operates in one operating segment. Basis of Presentation The consolidated financial statements include the accounts of PASSUR Aerospace, Inc. and its wholly-owned Subsidiary. All significant inter-company transactions and balances have been eliminated in consolidation. Certain financial information in the footnotes has been rounded to the nearest thousand for presentation purposes. Revenue Recognition Policy The Company recognizes revenue in accordance with FASB ASC 605-15, (Revenue Recognition in Financial Statements) which requires that four basic criteria must be met before revenues can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. The Companys revenues are generated by selling: (1) subscription-based, real-time decision and solution information and (2) professional services. Revenues generated from subscription agreements are recognized over the term of such executed agreements and/or customers receipt of such data or services. In accordance with ASC 605-15, the Company recognizes revenue when persuasive evidence of an arrangement exists which is evidenced by a signed agreement, the service has been deployed, as applicable, to its hosted servers, the fee is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company records revenues pursuant to individual contracts on a month-by-month basis, as outlined by the applicable agreement. In many cases, the Company may invoice respective customers in advance of the specified period, either quarterly or annually, which coincides with the terms of the agreement. In such cases, the Company will defer at the close of each month and/or reporting period, any subscription revenues invoiced for which services have yet to be rendered, in accordance with ASC 605-15. Revenues generated by professional services are recognized when services are provided. The individual offerings that are included in arrangements with the Companys customers are identified and priced separately to the customer based upon the relative fair value for each individual element sold in the arrangement irrespective of the combination of products and services which are included in a particular arrangement. As such, the units of accounting are based on each individual element sold, and revenue is allocated to each element based on selling price. Selling price is determined using vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or best estimate of selling price ("BESP") if neither VSOE or TPE is available. BESP must be determined in a manner that is consistent with that used to determine the price to sell the specific elements on a standalone basis. Best estimate of selling price is established considering multiple factors including, but not limited to, pricing practices with different classes of customers, geographies and other factors contemplated in negotiating the arrangement with the customer. The Company uses either VSOE or BESP. From time to time, the Company will enter into an agreement with a customer to receive a one-time fee for rights including, but not limited to, the rights to use certain data at an agreed upon location(s) for a specific use and/or for an unlimited number of users, installation costs associated with the deployment of additions to the Company owned PASSUR Network, or set-up fees associated with new deployments of the Company software solutions. These fees are recognized as revenue ratably over the term of the agreement or relationship period of such arrangement, whichever is longer, but typically five years. Deferred revenue is classified on the Companys balance sheet as a liability until such time as revenue from services is properly recognized as revenue in accordance with ASC 605-15 and the corresponding agreement. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Companys significant estimates include those related to revenue recognition, stock-based compensation, software development costs, the PASSUR Network and income taxes. Actual results could differ from those estimates. Subsequent Events Management has evaluated subsequent events after the balance sheet date, through the issuance of the financial statements, for appropriate accounting and disclosure. Accounts Receivable The Company has a history of successfully collecting all amounts due from its customers under the original terms of its subscription agreements without making concessions. The Company records accounts receivables for agreements where amounts due from customers are contractually required and are non-refundable. The carrying amount of accounts receivables is reduced by a valuation allowance that reflects the Companys best estimate of the amounts that will not be collected. Net accounts receivable is comprised of the monthly, quarterly, or annual committed amounts due from customers pursuant to the terms of each respective customers agreement. Account receivable balances include amounts attributable to deferred revenues. The provision for doubtful accounts was $26,000 and $47,000 as of October 31, 2016, and 2015, respectively. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its reserve, including historical data, experience, customer types, credit worthiness, and economic trends. The Company monitors its outstanding accounts receivable balances and believes the provision is adequate. Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the related assets. Amortization of leasehold improvements is calculated on a straight-line basis over the estimated useful life of the improvements or the term of the lease, including renewal options expected to be exercised, whichever is shorter. PASSUR Network The PASSUR Network is comprised of PASSUR and SMLAT Systems, which include the direct and indirect production, shipping, and installation costs incurred for each PASSUR and SMLAT System, which are recorded at cost, net of accumulated depreciation. Depreciation is charged to cost of revenues and is recorded using the straight-line method over the estimated useful life of the asset, which is estimated at five years for SMLAT Systems and seven years for PASSUR Systems. PASSUR and SMLAT Systems which are not installed, raw materials, work-in-process, and finished goods components are carried at cost and no depreciation is recorded. Capitalized Software Development Costs The Company follows the provisions of ASC 350-40, Internal Use Software. ASC 350-40 provides guidance for determining whether computer software is internal-use software, and on accounting for the proceeds of computer software originally developed or obtained for internal use and then subsequently sold to the public. It also provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. The Company records amortization of the software on a straight-line basis over the estimated useful life of the software, typically five years. Long-Lived Assets The Company reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. Impairment is recognized to the extent the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value. Assets to be disposed of are carried at the lower of their carrying value or fair value, less costs to sell. The Company evaluates the periods of amortization continually in determining whether later events and circumstances warrant revised estimates of useful lives. If estimates are changed, the unamortized costs will be allocated to the increased or decreased number of remaining periods in the revised life. As of October 31, 2016, and 2015 based upon managements evaluation of the above asset groups, there is no impairment of these asset groups. Cost of Revenues Costs associated with subscription and maintenance revenues consist primarily of direct labor, depreciation of PASSUR and SMLAT Network Systems, amortization of capitalized software development costs, communication costs, data feeds, allocated overhead costs, travel and entertainment, and consulting fees. Also, included in cost of revenues are costs associated with upgrades to PASSUR and SMLAT Systems necessary to make such systems compatible with new software applications, as well as the ordinary repair and maintenance of existing PASSUR and SMLAT Systems. Additionally, cost of revenues in each reporting period is impacted by: (1) the number of PASSUR and SMLAT Systems added to the Network, which includes the cost of production, shipment, and installation of these assets, which are capitalized to the PASSUR Network; and (2) new capitalized costs associated with software development projects. Both of these are referred to as Capitalized Assets and are depreciated and/or amortized over their respective useful lives and charged to cost of revenues. Income Taxes The Company follows the liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the temporary differences in the tax bases of the assets or liabilities and their reported amounts in the financial statements. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Companys financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount currently estimated to be realized. The Company follows ASC 740, Income Taxes, where tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. At October 31, 2016 and 2015, the Company did not have any uncertain tax positions or a valuation allowance. As permitted by ASC 740-10, the Companys accounting policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision. Research and Development Costs Research and development costs are expensed as incurred. Net Income per Share Information Basic net income per share is computed based on the weighted average number of shares outstanding. Diluted earnings per share is computed similarly to basic earnings per share, except that it reflects the effect of common shares issuable upon exercise of stock options, using the treasury stock method in periods in which they have a dilutive effect. Shares used to calculate net income per share for fiscal years 2016 and 2015 are as follows: 2016 2015 Basic weighted average shares outstanding 7,679,696 7,648,612 Effect of dilutive stock options 50,870 126,862 Diluted weighted average shares outstanding 7,730,566 7,775,474 Weighted average shares which are not included in the calculation of diluted net income per share because their impact is anti-dilutive Stock options 1,182,000 900,000 Weighted average options to purchase 1,182,000 and 900,000 shares of common stock at prices ranging from $1.40 to $5.00 per share that were outstanding during fiscal years 2016 and 2015 were excluded from each respective years computation of diluted earnings per share. In each of these years, such options exercise prices exceeded the average market price of our common stock, thereby causing the effect of such options to be anti-dilutive. Deferred Revenue Deferred revenue includes amounts attributable to advances received or billings related to customer agreements, which are contractually required and are non-refundable, and may be prepaid either annually, quarterly, or monthly. Deferred revenues from such customer agreements are recognized as revenue ratably over the period that coincides with the respective agreement. The Company recognizes initial set-up fee revenues and associated costs on a straight-line basis over the estimated life of the customer relationship period, typically five years. Fair Value of Financial Instruments The recorded amounts of the Companys cash, receivables, accounts payable, and accrued liabilities approximate their fair values principally because of the short-term nature of these items. The fair value of related party debt is not practicable to determine due primarily to the fact that the Companys related party debt is held by its Chairman and significant shareholder, and the Company does not have any third-party debt with which to compare. Additionally, on a recurring basis, the Company uses fair value measures when analyzing asset impairments. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present, and the review indicates that the assets will not be fully recoverable based on the undiscounted estimated future cash flows expected to result from the use of the asset, their carrying values are reduced to estimated fair value. Stock-Based Compensation The Company follows FASB ASC 718 Compensation-Stock Compensation, which requires measurement of compensation cost for all stock-based awards at fair value on date of grant, and recognition of stock-based compensation expense over the service period for awards expected to vest. The fair value of stock options was determined using the Black-Scholes valuation model. Such fair value is recognized as an expense over the service period, net of forfeitures. Stock-based compensation expense was 401219 341181 Comprehensive Income The Companys comprehensive income is equivalent to that of the Companys total net income for fiscal years 2016 and 2015. Accounting Pronouncements issued but not yet adopted In August 2016, the FASB issued new guidance on presentation and classification of eight specific items within the statement of cash flows, including (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. This update is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017, which for the Company will be the beginning of the annual period ending October 31, 2019. Early adoption, including adoption in an interim period, is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In March 2016, the FASB issued new guidance on accounting for employee share-based payment awards to simplify the accounting related to several aspects of accounting for share-based payment transactions, including income tax consequences of share-based payment transactions, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The new standard is effective for the annual period beginning after December 15, 2016, including interim reporting periods within that period, which for the Company will be the beginning of the annual period ending October 31, 2018. Early adoption, including adoption in an interim period, is permitted. The standard requires the use of several transition methods including a modified retrospective transition method, retrospective method and prospective method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance on leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This new guidance will replace existing guidance on leases in accounting principles generally accepted in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2018, including interim reporting periods within that period, which for the Company will be the annual period ending October 31, 2020. Early application is permitted. The standard requires the use of a modified retrospective transition method; however, certain optional practical expedients may be applied. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued new guidance on the recognition, measurement, presentation and disclosure of financial assets and financial liabilities. The standard (i) requires an entity to measure equity investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring an entity to perform a qualitative assessment to identify impairment, (iii) changes certain presentation and disclosure requirements related to financial assets and financial liabilities, and (iv) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which for the Company will be the annual period ending October 31, 2019. Early adoption, including adoption in an interim period, is not permitted except for certain amendments in this update. The Company has not yet adopted this guidance and currently does not expect the adoption of the new guidance by the Company to have a significant impact on the Company's financial results. In November 2015, the FASB issued new guidance which requires an entity to classify deferred tax liabilities and assets, along with any related valuation allowance, as non-current in its consolidated balance sheet. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, which for the Company will be the annual period ending October 31, 2018. Early adoption, including adoption in an interim period, is permitted. The Company has not yet adopted this guidance and currently does not expect the adoption of the new guidance by the Company to have a significant impact on the Company's financial results. In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2017, including interim reporting periods within that period, which for the Company will be the annual period ending October 31, 2019. Early application as of January 1, 2017, is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its financial reporting. |
2. Property, Plant and Equipmen
2. Property, Plant and Equipment | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
2. Property, Plant and Equipment | 2. Property and Equipment Property and equipment consist of the following as of October 31, 2016 and 2015: Estimated useful lives 2016 2015 Leasehold improvements 3-5 years $ 216,000 $ 207,000 Equipment 5-10 years 5,727,000 5,431,000 Furniture and fixtures 5-10 years 563,000 538,000 6,506,000 6,176,000 Less accumulated depreciation 5,319,000 4,822,000 Total $1,187,000 $ 1,354,000 $1,187,158 $1,353,532 The Company recorded depreciation expense on the assets included in Property and equipment of $496,000 and $425,000 for fiscal years 2016 and 2015, respectively. |
3. Passur Network
3. Passur Network | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
3. Passur Network | 3. PASSUR Network PASSUR Network consist of the following as of October 31, 2016 and 2015: 2016 2015 PASSUR Network, beginning balance $ 18,360,000 $ 16,871,000 Additions -776138 776,000 -1489117 Total capitalized PASSUR Network costs 19,136,000 18,360,000 Less accumulated depreciation 13,396,000 12,457,000 PASSUR Network, ending balance, net $ 5,740,000 $ 5,903,000 5739753 5902751 The Company capitalized $776,000 and $1,489,000 of costs to the PASSUR Network during fiscal years 2016 and 2015, respectively. Depreciation expense related to the Company-owned PASSUR Network was $939,000 and $1,015,000 in fiscal years 2016 and 2015, respectively. Depreciation is charged to cost of revenues and is calculated using the straight-line method over the estimated useful life of the asset, which is estimated at seven and five years for PASSUR and SMLAT systems, respectively. The net carrying balance of the PASSUR Network as of October 31, 2016 and October 31, 2015, was $5,740,000 and $5,903,000, respectively. Included in the net carrying balance as of October 31, 2016, were parts and finished goods for PASSUR and SMLAT Systems totaling $1,000,000 and $1,767,000, respectively, which have not yet been installed. As of October 31, 2015, $1,188,000 and $1,625,000 of parts and finished goods for PASSUR and SMLAT systems, respectively, were included in the net carrying balance of the PASSUR Network. PASSUR and SMLAT Systems which are not installed are carried at cost and not depreciated until installed. As of October 31, 2016, depreciation expense for the PASSUR Network assets where depreciation has commenced is estimated to approximate $739,000, $576,000, $506,000, $435,000, and $191,000, for the fiscal years ended October 31, 2017, 2018, 2019, 2020 and 2021, respectively. The Company did not dispose of or record any impairments related to any of the PASSUR Network assets in fiscal years 2016 or 2015. During fiscal year 2016, the Company paid the son of an Executive Vice President and Director approximately $17,000 as a consultant to assist in the installation and maintenance of the PASSUR Network. |
4. Capitalized Software Develop
4. Capitalized Software Development Costs | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
4. Capitalized Software Development Costs | 4. Capitalized Software Development Costs PASSUR Software Development costs consist of the following as of October 31, 2016 and 2015: 2016 2015 Software development costs, beginning balance $ 15,415,000 $ 13,013,000 Additions 2,424,000 2423811 2,402,000 2401994 Total capitalized software development costs 17,839,000 15,415,000 Less accumulated amortization 9,575,000 7,730,000 Software development costs, ending balance, net $ 8,264,000 8263533 $ 7,685,000 7684603 The Companys capitalization of software development projects was $2,424,000 and $2,402,000 in fiscal years 2016 and 2015. Amortization related to capitalized software development projects was $1,845,000 and $1,562,000 in fiscal years 2016 and 2015, respectively. As of October 31, 2016, amortization expense for capitalized software development costs where amortization has commenced is estimated to approximate $2,121,000, $2,058,000, $1,590,000, $1,409,000, and $896,000, for the fiscal years ended October 31, 2017, 2018, 2019, 2020 and 2021, respectively. As of October 31, 2016, the Company had $2,140,000 of capitalized software development costs relating to projects in development which are not yet subject to amortization. The Company did not record any impairments related to capitalized software development projects in fiscal years 2016 or 2015. |
5. Accrued Expenses and Other C
5. Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
5. Accrued Expenses and Other Current Liabilities | 5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following as of October 31, 2016 and 2015: 2016 2015 Payroll, payroll taxes, and benefits $ 513,000 $ 628,000 Professional fees 148,000 152,000 Travel expenses 142,000 94,000 Other liabilities 133,000 104,000 Total $ 936,000 $ 978,000 $ 936,272 $977,900 Effective for the Companys fiscal year 2017, the Company converted its vacation policy to no longer allow for unused vacation days to be carried forward to future periods or paid if an employee separates from the Company. As a result of the change to the Companys vacation policy, the Company no longer has an accrued vacation obligation and reversed the related accrual of $414,000 of which $176,000, $43,000, and $195,000 was recorded in cost of sales, research and development, and general and administrative expenses, respectively, in the accompanying consolidated income statement. |
6. Notes Payable
6. Notes Payable | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
6. Notes Payable | 6. Notes Payable During fiscal year 2016, the Company paid interest to G.S. Beckwith Gilbert of 183333 During fiscal year 2015, the Company paid interest to G.S. Beckwith Gilbert of 224542 $364880 On January 6, 2017, the Company entered into a Third Debt Extension Agreement with G.S. Beckwith Gilbert, effective January 6, 2017, pursuant to which the Company and Mr. Gilbert agreed to modify certain terms and conditions of the existing debt agreement with Mr. Gilbert (the Existing Gilbert Note). The maturity date of the Existing Gilbert Note was due on November 1, 2017, and the total amount of principal and interest due and owing as of January 6, 2017, was $2,700,000. Pursuant to the Third Debt Extension Agreement, the Company issued a new note to Mr. Gilbert in the principal amount of $2,700,000 (the Third Replacement Note) in exchange for the Existing Gilbert Note and the Company agreed to pay the accrued interest under the Existing Gilbert Note as of January 6, 2017, in an amount equal to $30,000, at the time and on the terms set forth in the Existing Gilbert Note. Under the terms of the Third Replacement Note, the maturity date was extended to November 1, 2018, and the annual interest rate remained at 6%. Interest payments under the Third Replacement Note shall be made annually at October 31 of each year. The note payable is secured by the Companys assets. |
7. Operating Leases of Lessee D
7. Operating Leases of Lessee Disclosure | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
7. Operating Leases of Lessee Disclosure | 7. Leases The Companys headquarters, located in Stamford, Connecticut, are subject to a lease through January 31, 2018, at an average annual rental rate of $234,000. The Companys software development and manufacturing facility, located in Bohemia, New York, is subject to a lease through October 31, 2017, at an average annual rental rate of $134,000. These leases provide for additional payments of real estate taxes and other operating expenses over the base amount in the rental agreement. Other short-term operating leases are included below. All other operating leases are under a month-to-month arrangement. Rent expense, which includes utilities, was $590,000 and $439,000 for fiscal years 2016 and 2015, respectively. Fiscal Year Ended October 31: Contractual obligations under operating leases 2017 431,000 2018 122,000 2019 65,000 2020 72,000 Thereafter 61,000 Total minimum contractual obligations $ 751,000 |
8. Income Taxes
8. Income Taxes | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
8. Income Taxes | 8. Income Taxes The Companys provision for income taxes in each fiscal year consists of current federal, state, and local minimum taxes. A reconciliation of the U.S statutory tax rate to the Companys effective tax rate for fiscal years 2016 and 2015 is as follows: 2016 2015 Amount Percent Amount Percent U.S. statutory tax $ 349,000 34.0% $ 230,000 34.0% Stock compensation 125,000 12.2 82,000 12.1 Meals and entertainment 14,000 1.4 16,000 2.3 State tax, net of federal benefit 102,000 9.9 70,000 10.4 Income tax expense (benefit), net $ 590,000 57.6% $ 398,000 58.8% $ 589,923 $ 397,994 The effective tax rate for fiscal year 2016 was 57.6%, as compared to 58.8% in fiscal year 2015. The statutory income tax expense at 34% for fiscal year 2016 was $349,000. This varies from actual income tax expense of $590,000 primarily due to permanent differences of meals and entertainment and ISO stock compensation of $139,000, state income of taxes of $33,000 (net of federal benefit), and a change to the state deferred tax rate of $69,000. The tax effect of temporary differences that give rise to deferred tax assets and liabilities as of October 31, 2016 and 2015 is as follows: 2016 2015 Deferred tax assets and liabilities: Net operating loss carry-forward $ 1,894,000 $ 2,481,000 Accrued vacation - 133,000 Allowance for doubtful accounts receivable 19,000 18,000 Stock compensation-nonqualified 198,000 186,000 Depreciation (441,000) (608,000) Deferred tax assets and liabilities $ 1,670,000 $ 2,210,000 In accordance with accounting standards, the Company has not recorded a deferred tax asset related to the net operating losses resulting from the exercise of disqualifying stock options in the accompanying financial statements. The cumulative amount of unrecognized tax benefits from the exercise of stock options at October 31, 2016 was approximately $1,485,000, and if the Company is able to utilize this benefit in the future, it would result in a credit to additional paid-in capital. The income tax expense for fiscal years ended October 31, 2016 and 2015 is as follows: 2016 2015 Current: Federal $ - $ - State 50,000 36,000 Income tax provision-current $ 50,000 $ 36,000 Deferred: Federal $ 471,000 $ 316,000 State 69,000 46,000 Total income tax expense (benefit), net $ 590,000 $ 398,000 $ 589923 $ 397994 At October 31, 2016, the Company had available a federal net operating loss carry-forward of $6,341,000 for income tax purposes, which will expire in various tax years from fiscal year 2022 through fiscal year 2033. The Company evaluates whether a valuation allowance related to deferred tax assets is required each reporting period. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. At October 31, 2015, the Company had available a federal net operating loss carry-forward of $7,847,000 for income tax purposes, which will expire in various tax years from fiscal year 2022 through fiscal year 2033. At October 31, 2016 and 2015, the Company did not have any uncertain tax positions. As permitted by ASC 740-10, the Companys accounting policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision. The Companys tax return years that are subject to examination by taxing authorities are fiscal years 2013 through 2016. |
9. Stock-Based Compensation
9. Stock-Based Compensation | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
9. Stock-Based Compensation | 9. Stock-Based Compensation In fiscal year 2009, the Companys Board of Directors approved the Companys 2009 stock option plan, which provides for the granting of stock options for up to 500,000 shares of the Companys common stock. During fiscal year 2010, the plan was amended to provide for the granting of another 500,000 stock option shares, for a total provision of 1,000,000 stock option shares of the Companys common stock as of October 31, 2010. During fiscal year 2011, the plan was amended for the granting of another 500,000 stock option shares, for a total provision of 1,500,000 stock option shares of the Companys common stock as of October 31, 2016, and 2015. The Black-Scholes stock option valuation model was developed for use in estimating the fair value of traded stock options, which have no vesting restrictions and are fully transferable. In addition, stock option valuation models require the input of highly subjective assumptions including expected stock price volatility. Information with respect to the Companys stock options for fiscal years 2016 and 2015 is as follows: Number of stock options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Stock options outstanding at November 1, 2014 916,500 $2.64 5.0 $1,405,000 Stock options granted 472,500 $3.22 Stock options exercised (203,000) $0.25 Outstanding at October 31, 2015 1,186,000 $3.27 6.7 $293,000 Stock options granted 240,000 $3.41 Stock options exercised (37,000) $0.49 Stock options forfeited (60,000) $2.49 Stock options outstanding at October 31, 2016 1,329,000 $3.42 3.9 $130,000 Stock options exercisable at October 31, 2016 631,000 $3.51 5.2 $126,000 The weighted average grant date fair value of the Companys stock options granted during fiscal years 2016 and 2015 was $3.41 and $3.22, respectively. The total intrinsic value of stock options exercised was $77,000 and $558,000 during fiscal years 2016 and 2015, respectively. The Companys stock options vest over a period of five years. The fair value for these stock options was estimated at the date of grant using a Black-Scholes stock option pricing model, with the following weighted average assumptions for fiscal years 2016 and 2015: Years ended December 31, 2016 2015 Expected dividend yield 0% 0% Expected volatility 117% 117% Risk-free interest rate 1.41-1.85% 1.18 - 2.10% Expected term (years) 4.9 - 6.5 5.4 - 5.5 Discount for post-vesting restrictions N/A N/A The Company recognized share-based compensation expense for all awards issued under the Companys stock equity plans in the following line items in the consolidated statement of operations: 2016 2015 Cost of revenues $ 25,000 $ 59,000 Research and development 122,000 49,000 Selling, general and administrative 254,000 233,000 $ 401,000 $ 341,000 The following table summarizes the plans under which the Company granted equity compensation as of October 31, 2016: Name of Plan Shares Authorized Shares Available for Grant Shares Outstanding Last Date for Grant of Shares PASSUR Aerospace, Inc., 2009 Stock Incentive Plan 1,500,000 228,000 1,272,000 February 24, 2019 The following table summarizes the Companys equity plans that have expired but that still have equity awards outstanding as of October 31, 2016: Name of Plan Shares Available for Grant Shares Outstanding PASSUR Aerospace, Inc., 1999 Stock Incentive Plan 57,000 All outstanding options granted under the Companys equity plans have terms of ten years. The Companys stock options vest over a period of five years. There was $1,857,000 of unrecognized stock-based compensation costs expected to be recognized over a weighted average period of 3.9 years as of October 31, 2016. The Company had 708,000 shares in unvested stock-based options as of October 31, 2016. |
10. Concentration Risk Disclosu
10. Concentration Risk Disclosure | 12 Months Ended |
Oct. 31, 2016 | |
Notes | |
10. Concentration Risk Disclosure | 10. Major Customers The Companys principal business is to provide predictive analytics and decision support technology for the aviation industry to primarily improve the operational performance and cash flow of airlines. The Company believes it operates in one operating segment. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Credit losses historically have been immaterial. Three customers accounted for 45%, or $6,698,000, of total revenues in fiscal year 2016. One customer accounted for 17% or $2,555,000, a second customer accounted for 17% or $2,460,000, and a third customer accounted for 11% or $1,683,000 of total revenues in fiscal year 2016. One of the Companys customers, who accounted for 11% of total revenues during fiscal year 2016, did not renew a contract that expired on December 31, 2016. Three customers accounted for 41%, or $5,094,000, of total revenues in fiscal year 2015. One customer accounted for 14% or $1,740,000, a second customer accounted for 13% or $1,692,000, and a third customer accounted for 13% or $1,662,000 of total revenues in fiscal year 2015. As of October 31, 2016, the Company had three customers each of which accounted for 10% or more of the accounts receivable balance. One customer accounted for 30%, or $330,000, a second customer accounted for 19%, or $213,000, and a third customer accounted for 14%, or $157,000. As of October 31, 2015, the Company had two customers each of which accounted for 10% or more of the accounts receivable balance. One customer accounted for 17%, or $215,000, and a second customer accounted for 15%, or $192,000. There were no significant past due accounts receivable balances for any customers as of the fiscal year ended October 31, 2016. The Company had foreign sales of $220,000 and $162,000 in fiscal years 2016 and 2015, respectively. All sales, including foreign sales, are denominated in U.S. dollars. |
1. Description of Business an17
1. Description of Business and Significant Accounting Policies: Nature of Business (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Nature of Business | Nature of Business The Company is a business intelligence company, providing predictive analytics and decision support technology for the aviation industry primarily to improve the operational performance and cash flow of airlines and the airports where they operate. The Companys mission is to improve global air traffic efficiencies by connecting the worlds aviation professionals onto a single aviation intelligence platform. The Company believes it operates in one operating segment. |
1. Description of Business an18
1. Description of Business and Significant Accounting Policies: Basis of Presentation (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of PASSUR Aerospace, Inc. and its wholly-owned Subsidiary. All significant inter-company transactions and balances have been eliminated in consolidation. Certain financial information in the footnotes has been rounded to the nearest thousand for presentation purposes. |
1. Description of Business an19
1. Description of Business and Significant Accounting Policies: Revenue Recognition Policy (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Revenue Recognition Policy | Revenue Recognition Policy The Company recognizes revenue in accordance with FASB ASC 605-15, (Revenue Recognition in Financial Statements) which requires that four basic criteria must be met before revenues can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. The Companys revenues are generated by selling: (1) subscription-based, real-time decision and solution information and (2) professional services. Revenues generated from subscription agreements are recognized over the term of such executed agreements and/or customers receipt of such data or services. In accordance with ASC 605-15, the Company recognizes revenue when persuasive evidence of an arrangement exists which is evidenced by a signed agreement, the service has been deployed, as applicable, to its hosted servers, the fee is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company records revenues pursuant to individual contracts on a month-by-month basis, as outlined by the applicable agreement. In many cases, the Company may invoice respective customers in advance of the specified period, either quarterly or annually, which coincides with the terms of the agreement. In such cases, the Company will defer at the close of each month and/or reporting period, any subscription revenues invoiced for which services have yet to be rendered, in accordance with ASC 605-15. Revenues generated by professional services are recognized when services are provided. The individual offerings that are included in arrangements with the Companys customers are identified and priced separately to the customer based upon the relative fair value for each individual element sold in the arrangement irrespective of the combination of products and services which are included in a particular arrangement. As such, the units of accounting are based on each individual element sold, and revenue is allocated to each element based on selling price. Selling price is determined using vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or best estimate of selling price ("BESP") if neither VSOE or TPE is available. BESP must be determined in a manner that is consistent with that used to determine the price to sell the specific elements on a standalone basis. Best estimate of selling price is established considering multiple factors including, but not limited to, pricing practices with different classes of customers, geographies and other factors contemplated in negotiating the arrangement with the customer. The Company uses either VSOE or BESP. From time to time, the Company will enter into an agreement with a customer to receive a one-time fee for rights including, but not limited to, the rights to use certain data at an agreed upon location(s) for a specific use and/or for an unlimited number of users, installation costs associated with the deployment of additions to the Company owned PASSUR Network, or set-up fees associated with new deployments of the Company software solutions. These fees are recognized as revenue ratably over the term of the agreement or relationship period of such arrangement, whichever is longer, but typically five years. Deferred revenue is classified on the Companys balance sheet as a liability until such time as revenue from services is properly recognized as revenue in accordance with ASC 605-15 and the corresponding agreement. |
1. Description of Business an20
1. Description of Business and Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Companys significant estimates include those related to revenue recognition, stock-based compensation, software development costs, the PASSUR Network and income taxes. Actual results could differ from those estimates. |
1. Description of Business an21
1. Description of Business and Significant Accounting Policies: Subsequent Events (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Subsequent Events | Subsequent Events Management has evaluated subsequent events after the balance sheet date, through the issuance of the financial statements, for appropriate accounting and disclosure. |
1. Description of Business an22
1. Description of Business and Significant Accounting Policies: Accounts Receivable (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Accounts Receivable | Accounts Receivable The Company has a history of successfully collecting all amounts due from its customers under the original terms of its subscription agreements without making concessions. The Company records accounts receivables for agreements where amounts due from customers are contractually required and are non-refundable. The carrying amount of accounts receivables is reduced by a valuation allowance that reflects the Companys best estimate of the amounts that will not be collected. Net accounts receivable is comprised of the monthly, quarterly, or annual committed amounts due from customers pursuant to the terms of each respective customers agreement. Account receivable balances include amounts attributable to deferred revenues. The provision for doubtful accounts was $26,000 and $47,000 as of October 31, 2016, and 2015, respectively. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its reserve, including historical data, experience, customer types, credit worthiness, and economic trends. The Company monitors its outstanding accounts receivable balances and believes the provision is adequate. |
1. Description of Business an23
1. Description of Business and Significant Accounting Policies: Property, Plant and Equipment (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Property, Plant and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the related assets. Amortization of leasehold improvements is calculated on a straight-line basis over the estimated useful life of the improvements or the term of the lease, including renewal options expected to be exercised, whichever is shorter. |
1. Description of Business an24
1. Description of Business and Significant Accounting Policies: Capitalized Software Development Costs (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company follows the provisions of ASC 350-40, Internal Use Software. ASC 350-40 provides guidance for determining whether computer software is internal-use software, and on accounting for the proceeds of computer software originally developed or obtained for internal use and then subsequently sold to the public. It also provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred. The Company records amortization of the software on a straight-line basis over the estimated useful life of the software, typically five years. |
1. Description of Business an25
1. Description of Business and Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Long-lived Assets | Long-Lived Assets The Company reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. Impairment is recognized to the extent the sum of undiscounted estimated future cash flows expected to result from the use of the asset is less than the carrying value. Assets to be disposed of are carried at the lower of their carrying value or fair value, less costs to sell. The Company evaluates the periods of amortization continually in determining whether later events and circumstances warrant revised estimates of useful lives. If estimates are changed, the unamortized costs will be allocated to the increased or decreased number of remaining periods in the revised life. As of October 31, 2016, and 2015 based upon managements evaluation of the above asset groups, there is no impairment of these asset groups. |
1. Description of Business an26
1. Description of Business and Significant Accounting Policies: Cost of Revenues (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Cost of Revenues | Cost of Revenues Costs associated with subscription and maintenance revenues consist primarily of direct labor, depreciation of PASSUR and SMLAT Network Systems, amortization of capitalized software development costs, communication costs, data feeds, allocated overhead costs, travel and entertainment, and consulting fees. Also, included in cost of revenues are costs associated with upgrades to PASSUR and SMLAT Systems necessary to make such systems compatible with new software applications, as well as the ordinary repair and maintenance of existing PASSUR and SMLAT Systems. Additionally, cost of revenues in each reporting period is impacted by: (1) the number of PASSUR and SMLAT Systems added to the Network, which includes the cost of production, shipment, and installation of these assets, which are capitalized to the PASSUR Network; and (2) new capitalized costs associated with software development projects. Both of these are referred to as Capitalized Assets and are depreciated and/or amortized over their respective useful lives and charged to cost of revenues. |
1. Description of Business an27
1. Description of Business and Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Income Taxes | Income Taxes The Company follows the liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the temporary differences in the tax bases of the assets or liabilities and their reported amounts in the financial statements. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Companys financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount currently estimated to be realized. The Company follows ASC 740, Income Taxes, where tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. At October 31, 2016 and 2015, the Company did not have any uncertain tax positions or a valuation allowance. As permitted by ASC 740-10, the Companys accounting policy is to prospectively classify accrued interest and penalties related to any unrecognized tax benefits in its income tax provision. |
1. Description of Business an28
1. Description of Business and Significant Accounting Policies: Research and Development Costs (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. |
1. Description of Business an29
1. Description of Business and Significant Accounting Policies: Net Income Per Share Information (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Net Income Per Share Information | Net Income per Share Information Basic net income per share is computed based on the weighted average number of shares outstanding. Diluted earnings per share is computed similarly to basic earnings per share, except that it reflects the effect of common shares issuable upon exercise of stock options, using the treasury stock method in periods in which they have a dilutive effect. Shares used to calculate net income per share for fiscal years 2016 and 2015 are as follows: 2016 2015 Basic weighted average shares outstanding 7,679,696 7,648,612 Effect of dilutive stock options 50,870 126,862 Diluted weighted average shares outstanding 7,730,566 7,775,474 Weighted average shares which are not included in the calculation of diluted net income per share because their impact is anti-dilutive Stock options 1,182,000 900,000 Weighted average options to purchase 1,182,000 and 900,000 shares of common stock at prices ranging from $1.40 to $5.00 per share that were outstanding during fiscal years 2016 and 2015 were excluded from each respective years computation of diluted earnings per share. In each of these years, such options exercise prices exceeded the average market price of our common stock, thereby causing the effect of such options to be anti-dilutive. |
1. Description of Business an30
1. Description of Business and Significant Accounting Policies: Deferred Revenue (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Deferred Revenue | Deferred Revenue Deferred revenue includes amounts attributable to advances received or billings related to customer agreements, which are contractually required and are non-refundable, and may be prepaid either annually, quarterly, or monthly. Deferred revenues from such customer agreements are recognized as revenue ratably over the period that coincides with the respective agreement. The Company recognizes initial set-up fee revenues and associated costs on a straight-line basis over the estimated life of the customer relationship period, typically five years. |
1. Description of Business an31
1. Description of Business and Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The recorded amounts of the Companys cash, receivables, accounts payable, and accrued liabilities approximate their fair values principally because of the short-term nature of these items. The fair value of related party debt is not practicable to determine due primarily to the fact that the Companys related party debt is held by its Chairman and significant shareholder, and the Company does not have any third-party debt with which to compare. Additionally, on a recurring basis, the Company uses fair value measures when analyzing asset impairments. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present, and the review indicates that the assets will not be fully recoverable based on the undiscounted estimated future cash flows expected to result from the use of the asset, their carrying values are reduced to estimated fair value. |
1. Description of Business an32
1. Description of Business and Significant Accounting Policies: Stock-based Compensation (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Stock-based Compensation | Stock-Based Compensation The Company follows FASB ASC 718 Compensation-Stock Compensation, which requires measurement of compensation cost for all stock-based awards at fair value on date of grant, and recognition of stock-based compensation expense over the service period for awards expected to vest. The fair value of stock options was determined using the Black-Scholes valuation model. Such fair value is recognized as an expense over the service period, net of forfeitures. Stock-based compensation expense was 401219 341181 |
1. Description of Business an33
1. Description of Business and Significant Accounting Policies: Comprehensive Income (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Comprehensive Income | Comprehensive Income The Companys comprehensive income is equivalent to that of the Companys total net income for fiscal years 2016 and 2015. |
1. Description of Business an34
1. Description of Business and Significant Accounting Policies: Accounting Pronouncements Issued But Not Yet Adopted (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
Policies | |
Accounting Pronouncements Issued But Not Yet Adopted | Accounting Pronouncements issued but not yet adopted In August 2016, the FASB issued new guidance on presentation and classification of eight specific items within the statement of cash flows, including (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. This update is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017, which for the Company will be the beginning of the annual period ending October 31, 2019. Early adoption, including adoption in an interim period, is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In March 2016, the FASB issued new guidance on accounting for employee share-based payment awards to simplify the accounting related to several aspects of accounting for share-based payment transactions, including income tax consequences of share-based payment transactions, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The new standard is effective for the annual period beginning after December 15, 2016, including interim reporting periods within that period, which for the Company will be the beginning of the annual period ending October 31, 2018. Early adoption, including adoption in an interim period, is permitted. The standard requires the use of several transition methods including a modified retrospective transition method, retrospective method and prospective method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance on leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This new guidance will replace existing guidance on leases in accounting principles generally accepted in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2018, including interim reporting periods within that period, which for the Company will be the annual period ending October 31, 2020. Early application is permitted. The standard requires the use of a modified retrospective transition method; however, certain optional practical expedients may be applied. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued new guidance on the recognition, measurement, presentation and disclosure of financial assets and financial liabilities. The standard (i) requires an entity to measure equity investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring an entity to perform a qualitative assessment to identify impairment, (iii) changes certain presentation and disclosure requirements related to financial assets and financial liabilities, and (iv) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which for the Company will be the annual period ending October 31, 2019. Early adoption, including adoption in an interim period, is not permitted except for certain amendments in this update. The Company has not yet adopted this guidance and currently does not expect the adoption of the new guidance by the Company to have a significant impact on the Company's financial results. In November 2015, the FASB issued new guidance which requires an entity to classify deferred tax liabilities and assets, along with any related valuation allowance, as non-current in its consolidated balance sheet. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, which for the Company will be the annual period ending October 31, 2018. Early adoption, including adoption in an interim period, is permitted. The Company has not yet adopted this guidance and currently does not expect the adoption of the new guidance by the Company to have a significant impact on the Company's financial results. In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2017, including interim reporting periods within that period, which for the Company will be the annual period ending October 31, 2019. Early application as of January 1, 2017, is permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its financial reporting. |
1. Description of Business an35
1. Description of Business and Significant Accounting Policies: Net Income Per Share Information: Schedule of earnings per share calculations (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of earnings per share calculations | 2016 2015 Basic weighted average shares outstanding 7,679,696 7,648,612 Effect of dilutive stock options 50,870 126,862 Diluted weighted average shares outstanding 7,730,566 7,775,474 Weighted average shares which are not included in the calculation of diluted net income per share because their impact is anti-dilutive Stock options 1,182,000 900,000 |
2. Property, Plant and Equipm36
2. Property, Plant and Equipment: Property, Plant and Equipment (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Property, Plant and Equipment | Estimated useful lives 2016 2015 Leasehold improvements 3-5 years $ 216,000 $ 207,000 Equipment 5-10 years 5,727,000 5,431,000 Furniture and fixtures 5-10 years 563,000 538,000 6,506,000 6,176,000 Less accumulated depreciation 5,319,000 4,822,000 Total $1,187,000 $ 1,354,000 $1,187,158 $1,353,532 |
3. Passur Network_ Schedule of
3. Passur Network: Schedule of Passur Network (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Passur Network | 2016 2015 PASSUR Network, beginning balance $ 18,360,000 $ 16,871,000 Additions -776138 776,000 -1489117 Total capitalized PASSUR Network costs 19,136,000 18,360,000 Less accumulated depreciation 13,396,000 12,457,000 PASSUR Network, ending balance, net $ 5,740,000 $ 5,903,000 5739753 5902751 |
4. Capitalized Software Devel38
4. Capitalized Software Development Costs: Schedule of Capitalized Software Development Costs (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Capitalized Software Development Costs | 2016 2015 Software development costs, beginning balance $ 15,415,000 $ 13,013,000 Additions 2,424,000 2423811 2,402,000 2401994 Total capitalized software development costs 17,839,000 15,415,000 Less accumulated amortization 9,575,000 7,730,000 Software development costs, ending balance, net $ 8,264,000 8263533 $ 7,685,000 7684603 |
5. Accrued Expenses and Other39
5. Accrued Expenses and Other Current Liabilities: Schedule of Accrued Liabilities (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Accrued Liabilities | 2016 2015 Payroll, payroll taxes, and benefits $ 513,000 $ 628,000 Professional fees 148,000 152,000 Travel expenses 142,000 94,000 Other liabilities 133,000 104,000 Total $ 936,000 $ 978,000 $ 936,272 $977,900 |
7. Operating Leases of Lessee40
7. Operating Leases of Lessee Disclosure: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | Fiscal Year Ended October 31: Contractual obligations under operating leases 2017 431,000 2018 122,000 2019 65,000 2020 72,000 Thereafter 61,000 Total minimum contractual obligations $ 751,000 |
8. Income Taxes_ Schedule of Co
8. Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | 2016 2015 Amount Percent Amount Percent U.S. statutory tax $ 349,000 34.0% $ 230,000 34.0% Stock compensation 125,000 12.2 82,000 12.1 Meals and entertainment 14,000 1.4 16,000 2.3 State tax, net of federal benefit 102,000 9.9 70,000 10.4 Income tax expense (benefit), net $ 590,000 57.6% $ 398,000 58.8% $ 589,923 $ 397,994 |
8. Income Taxes_ Schedule of De
8. Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | 2016 2015 Deferred tax assets and liabilities: Net operating loss carry-forward $ 1,894,000 $ 2,481,000 Accrued vacation - 133,000 Allowance for doubtful accounts receivable 19,000 18,000 Stock compensation-nonqualified 198,000 186,000 Depreciation (441,000) (608,000) Deferred tax assets and liabilities $ 1,670,000 $ 2,210,000 |
8. Income Taxes_ Schedule of In
8. Income Taxes: Schedule of Income before Income Tax, Domestic and Foreign (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Income before Income Tax, Domestic and Foreign | 2016 2015 Current: Federal $ - $ - State 50,000 36,000 Income tax provision-current $ 50,000 $ 36,000 Deferred: Federal $ 471,000 $ 316,000 State 69,000 46,000 Total income tax expense (benefit), net $ 590,000 $ 398,000 $ 589923 $ 397994 |
9. Stock-Based Compensation_ Sc
9. Stock-Based Compensation: Schedule of Share-based Compensation, Activity (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Share-based Compensation, Activity | Number of stock options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Stock options outstanding at November 1, 2014 916,500 $2.64 5.0 $1,405,000 Stock options granted 472,500 $3.22 Stock options exercised (203,000) $0.25 Outstanding at October 31, 2015 1,186,000 $3.27 6.7 $293,000 Stock options granted 240,000 $3.41 Stock options exercised (37,000) $0.49 Stock options forfeited (60,000) $2.49 Stock options outstanding at October 31, 2016 1,329,000 $3.42 3.9 $130,000 Stock options exercisable at October 31, 2016 631,000 $3.51 5.2 $126,000 |
9. Stock-Based Compensation_ 45
9. Stock-Based Compensation: Schedule of Assumptions Used (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Assumptions Used | Years ended December 31, 2016 2015 Expected dividend yield 0% 0% Expected volatility 117% 117% Risk-free interest rate 1.41-1.85% 1.18 - 2.10% Expected term (years) 4.9 - 6.5 5.4 - 5.5 Discount for post-vesting restrictions N/A N/A |
9. Stock-Based Compensation_ 46
9. Stock-Based Compensation: Schedule of Share-Based Compensation Expense (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Share-Based Compensation Expense | 2016 2015 Cost of revenues $ 25,000 $ 59,000 Research and development 122,000 49,000 Selling, general and administrative 254,000 233,000 $ 401,000 $ 341,000 |
9. Stock-Based Compensation_ 47
9. Stock-Based Compensation: Schedule of Stockholders Equity (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Stockholders Equity | The following table summarizes the plans under which the Company granted equity compensation as of October 31, 2016: Name of Plan Shares Authorized Shares Available for Grant Shares Outstanding Last Date for Grant of Shares PASSUR Aerospace, Inc., 2009 Stock Incentive Plan 1,500,000 228,000 1,272,000 February 24, 2019 The following table summarizes the Companys equity plans that have expired but that still have equity awards outstanding as of October 31, 2016: Name of Plan Shares Available for Grant Shares Outstanding PASSUR Aerospace, Inc., 1999 Stock Incentive Plan 57,000 |
1. Description of Business an48
1. Description of Business and Significant Accounting Policies: Accounts Receivable (Details) - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Details | ||
Allowance for Doubtful Accounts Receivable | $ 26,000 | $ 47,000 |
1. Description of Business an49
1. Description of Business and Significant Accounting Policies: Net Income Per Share Information: Schedule of earnings per share calculations (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Weighted average number of common shares outstanding - basic | 7,679,696 | 7,648,612 |
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units | $ 50,870 | $ 126,862 |
Weighted average number of common shares outstanding - diluted | 7,730,566 | 7,775,474 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,182,000 | 900,000 |
1. Description of Business an50
1. Description of Business and Significant Accounting Policies: Net Income Per Share Information (Details) - shares | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,182,000 | 900,000 |
1. Description of Business an51
1. Description of Business and Significant Accounting Policies: Stock-based Compensation (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Stock-based compensation expense | $ 401,219 | $ 341,181 |
2. Property, Plant and Equipm52
2. Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Property, Plant and Equipment, Gross | $ 6,506,000 | $ 6,176,000 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 5,319,000 | 4,822,000 |
Property and equipment, net | 1,187,158 | 1,353,532 |
Leasehold Improvements | ||
Property, Plant and Equipment, Gross | $ 216,000 | 207,000 |
Leasehold Improvements | Minimum | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Leasehold Improvements | Maximum | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Equipment | ||
Property, Plant and Equipment, Gross | $ 5,727,000 | 5,431,000 |
Equipment | Minimum | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Equipment | Maximum | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Furniture and Fixtures | ||
Property, Plant and Equipment, Gross | $ 563,000 | $ 538,000 |
Furniture and Fixtures | Minimum | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Furniture and Fixtures | Maximum | ||
Property, Plant and Equipment, Useful Life | 10 years |
2. Property, Plant and Equipm53
2. Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Depreciation | $ 496,000 | $ 425,000 |
3. Passur Network_ Schedule o54
3. Passur Network: Schedule of Passur Network (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Passur Network, Gross | $ 18,360,000 | $ 16,871,000 |
PASSUR Network | (776,138) | (1,489,117) |
PASSUR Network, net | 5,739,753 | 5,902,751 |
PASSUR Network | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 13,396,000 | $ 12,457,000 |
3. Passur Network (Details)
3. Passur Network (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Capitalized costs of PASSUR Network | $ 776,000 | $ 1,489,000 |
Passur Network Depreciation | 939,000 | 1,015,000 |
Cost of uninstalled PASSUR Systems | 1,000,000 | 1,188,000 |
Cost of uninstalled SMLAT Systems | 1,767,000 | $ 1,625,000 |
Other Cost of Services | 17,000 | |
PASSUR Network | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 739,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 576,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 506,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 435,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 191,000 |
4. Capitalized Software Devel56
4. Capitalized Software Development Costs: Schedule of Capitalized Software Development Costs (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Capitalized Computer Software, Gross | $ 15,415,000 | $ 13,013,000 |
Capitalized Computer Software, Additions | 2,423,811 | 2,401,994 |
Capitalized software development costs, net | 8,263,533 | 7,684,603 |
Capitalized Software Development Costs | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 9,575,000 | $ 7,730,000 |
4. Capitalized Software Devel57
4. Capitalized Software Development Costs (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Capitalized Computer Software, Amortization | $ 1,845,000 | $ 1,562,000 |
Capitalized software development costs not yet subject to amortization | 2,140,000 | |
Capitalized Software Development Costs | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 2,121,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 2,058,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1,590,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,409,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 896,000 |
5. Accrued Expenses and Other58
5. Accrued Expenses and Other Current Liabilities: Schedule of Accrued Liabilities (Details) - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Details | ||
Accrued Salaries, Current | $ 513,000 | $ 628,000 |
Accrued Professional Fees, Current | 148,000 | 152,000 |
Accrued travel expense | 142,000 | 94,000 |
Other Accrued Liabilities, Current | 133,000 | 104,000 |
Accrued expenses and other current liabilities | $ 936,272 | $ 977,900 |
6. Notes Payable (Details)
6. Notes Payable (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Interest expense - related party | $ 183,333 | $ 224,542 |
Repayments of notes payable - related party | 800,000 | 364,880 |
Notes payable - related party | $ 2,700,000 | $ 3,500,000 |
7. Operating Leases of Lessee60
7. Operating Leases of Lessee Disclosure (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Operating Leases, Rent Expense, Net | $ 590,000 | $ 439,000 |
StamfordCtPropertyMember | ||
Annual Rental Rate | 234,000 | |
BohemiaNyPropertyMember | ||
Annual Rental Rate | $ 134,000 |
7. Operating Leases of Lessee61
7. Operating Leases of Lessee Disclosure: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Oct. 31, 2016USD ($) |
Details | |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 431,000 |
Operating Leases, Future Minimum Payments, Due in Two Years | 122,000 |
Operating Leases, Future Minimum Payments, Due in Three Years | 65,000 |
Operating Leases, Future Minimum Payments, Due in Four Years | 72,000 |
Operating Leases, Future Minimum Payments, Due Thereafter | 61,000 |
Operating Leases, Future Minimum Payments Due | $ 751,000 |
8. Income Taxes_ Schedule of 62
8. Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 349,000 | $ 230,000 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount | $ 125,000 | $ 82,000 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Percent | 12.20% | 12.10% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Meals and Entertainment, Amount | $ 14,000 | $ 16,000 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Meals and Entertainment, Percent | 1.40% | 2.30% |
State and Local Income Tax Expense (Benefit), Continuing Operations | $ 102,000 | $ 70,000 |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 9.90% | 10.40% |
Income Tax Expense Benefit Percentage | 57.60% | 58.80% |
Income tax expense | $ 589,923 | $ 397,994 |
8. Income Taxes_ Schedule of 63
8. Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Details | ||
Deferred Tax Assets, Tax Credit Carryforwards | $ 1,894,000 | $ 2,481,000 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits | 133,000 | |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts | 19,000 | 18,000 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost | 198,000 | 186,000 |
Deferred Tax Assets, Tax Deferred Expense, Other | (441,000) | (608,000) |
Deferred Tax Assets, Gross | $ 1,670,000 | $ 2,210,000 |
8. Income Taxes (Details)
8. Income Taxes (Details) - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Details | ||
Unrecognized Tax Benefits | $ 1,485,000 | |
Operating Loss Carryforwards | $ 6,341,000 | $ 7,847,000 |
8. Income Taxes_ Schedule of 65
8. Income Taxes: Schedule of Income before Income Tax, Domestic and Foreign (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Current State and Local Tax Expense (Benefit) | $ 50,000 | $ 36,000 |
Current Income Tax Expense (Benefit), Total | 50,000 | 36,000 |
Deferred Federal Income Tax Expense (Benefit) | 471,000 | 316,000 |
Deferred State and Local Income Tax Expense (Benefit) | 69,000 | 46,000 |
Income tax expense | $ 589,923 | $ 397,994 |
9. Stock-Based Compensation_ 66
9. Stock-Based Compensation: Schedule of Share-based Compensation, Activity (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Details | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance | 1,329,000 | 1,186,000 | 916,500 |
ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeOutstandingOptionsWeightedAverageExercisePriceStartingBalance | $ 3.42 | $ 3.27 | $ 2.64 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 3 years 10 months 24 days | 6 years 8 months 12 days | 5 years |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 130,000 | $ 293,000 | $ 1,405,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 240,000 | 472,500 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 3.41 | $ 3.22 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (37,000) | (203,000) | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.49 | $ 0.25 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (60,000) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 2.49 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options, Ending Balance | 631,000 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price | $ 3.51 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | 5 years 2 months 12 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 126,000 |
9. Stock-Based Compensation (De
9. Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 77,000 | $ 558,000 |
Unrecognized stock-based compensation costs expected to be recognized over a weighted average period | $ 1,857,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 708,000 |
9. Stock-Based Compensation_ 68
9. Stock-Based Compensation: Schedule of Assumptions Used (Details) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 117.00% | 117.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.41% | 1.18% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 4 years 10 months 24 days | 5 years 4 months 24 days |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.85% | 2.10% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 6 months | 5 years 6 months |
9. Stock-Based Compensation_ 69
9. Stock-Based Compensation: Schedule of Share-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Allocated Share-based Compensation Expense | $ 401,000 | $ 341,000 |
Cost of Sales | ||
Allocated Share-based Compensation Expense | 25,000 | 59,000 |
Research and Development Expense | ||
Allocated Share-based Compensation Expense | 122,000 | 49,000 |
Selling, General and Administrative Expenses | ||
Allocated Share-based Compensation Expense | $ 254,000 | $ 233,000 |
10. Concentration Risk Disclo70
10. Concentration Risk Disclosure (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||
Concentration Risk, Customer | Three customers accounted for 45%, or $6,698,000, of total revenues in fiscal year 2016. One customer accounted for 17% or $2,555,000, a second customer accounted for 17% or $2,460,000, and a third customer accounted for 11% or $1,683,000 of total revenues in fiscal year 2016. One of the Company’s customers, who accounted for 11% of total revenues during fiscal year 2016, did not renew a contract that expired on December 31, 2016 | Three customers accounted for 41%, or $5,094,000, of total revenues in fiscal year 2015. One customer accounted for 14% or $1,740,000, a second customer accounted for 13% or $1,692,000, and a third customer accounted for 13% or $1,662,000 of total revenues in fiscal year 2015 |
Concentration Risk, Accounts Receivable | As of October 31, 2016, the Company had three customers each of which accounted for 10% or more of the accounts receivable balance. One customer accounted for 30%, or $330,000, a second customer accounted for 19%, or $213,000, and a third customer accounted for 14%, or $157,000 | As of October 31, 2015, the Company had two customers each of which accounted for 10% or more of the accounts receivable balance. One customer accounted for 17%, or $215,000, and a second customer accounted for 15%, or $192,000 |
Foreign Sales | $ 220,000 | $ 162,000 |