a Octopus (CODA) - 2025 Q1 - Quarterly Report

Financial Performance - Net revenues for the three months ended January 31, 2025, increased to $5,209,715, a 16.7$4,461,191 in the same period of 2024[15] - Gross profit for the same period rose to $3,428,470, reflecting a gross margin of approximately 65.8$3,086,736 in 2024[15] - Net income for the three months ended January 31, 2025, was $912,975, representing a 45$629,888 in the prior year[15] - The combined net revenue for Coda Octopus Group and Precision Acoustics for the three months ended January 31, 2025, was $5,209,715, compared to$5,572,237 for the same period in 2024, a decrease of 6.5%[65] - Basic earnings per share increased to $0.08 for the three months ended January 31, 2025, up from$0.06 in the prior year[82] - Total revenues for the three months ended January 31, 2025, were $5,209,715, a decrease from$4,461,191 in the same period of 2024, representing a year-over-year decline of approximately 17%[99] Assets and Liabilities - Total current assets decreased slightly to $42,719,311 from$42,982,015 as of October 31, 2024[8] - Total liabilities decreased to $3,784,241 from$4,416,021 as of October 31, 2024, indicating improved financial stability[11] - Total assets as of January 31, 2025, amounted to $56,897,298, compared to$53,012,943 as of January 31, 2024, indicating a 7% increase[95] - The company reported total liabilities of $3,784,241 as of January 31, 2025, compared to$2,863,265 as of January 31, 2024, representing a 32% increase[95] - The accumulated deficit improved to $(6,493,516) from$(7,406,491), showing a reduction of approximately 12.3%[12] Cash Flow and Expenses - Cash and cash equivalents at the end of the period were $22,541,963, a slight increase from$22,479,072 at the beginning of the period[20] - Net cash provided by operating activities was $641,511, compared to a net cash used of$(297,959) in the same period last year[20] - Operating expenses totaled $2,766,448, compared to$2,531,352, with R&D expenses increasing to $543,126 from$485,977[15] - Total stock compensation expense for the three months ended January 31, 2025, was $100,145, up from$77,076 in the prior year, reflecting a 30% increase[86] Research and Development - Research and development expenses increased to $543,126, up from$485,977 in the same quarter of 2024, indicating a focus on innovation[15] - Research and Development expenses totaled $543,126, representing about 10.4$6,538,569, with a net cash outlay of $4,605,285 after accounting for PAL's cash balance[63] - PAL contributed revenues of$1,312,261 and earnings of $556,049 to the consolidated results for the current quarter[65] - The estimated future annual amortization expenses related to the PAL acquisition for fiscal year 2025 is projected to be$460,872[71] - The goodwill from the PAL acquisition is expected to provide future economic benefits, including synergies from integrating PAL's products with existing offerings[69] Revenue Recognition - Revenue from the Marine Technology Business is recognized upon delivery and passing of risks, with contracts sometimes requiring customer payments in advance[27] - The Company recognizes revenue from fixed-price contracts using the percentage of completion method, which is based on the costs incurred to date relative to the estimated total costs[37] - Revenue from goods transferred at a point in time was $2,774,625, while services transferred over time accounted for$1,686,566[100] Inventory and Receivables - Total inventory as of January 31, 2025, was $13,433,561, down from$13,975,529 as of October 31, 2024, indicating a decrease of about 3.9%[50] - Unbilled receivables increased to $2,259,419 as of January 31, 2025, up from$1,657,827 as of October 31, 2024, indicating a growth of 36.3%[55] - Deferred revenue decreased to $1,004,800 as of January 31, 2025, from$1,225,634 as of October 31, 2024, representing a decline of 18.0%[56] Geographic Revenue Breakdown - Major geographic markets for net sales included the Americas ($1,298,837), Europe ($1,901,884), Australia/Asia ($1,964,279), and Middle East/Africa ($44,715)[99] - The Americas generated $1,298,837 in total revenues, a 63.8$792,486 in the same quarter of 2024[99] Taxation - The effective tax rate for the three months ended January 31, 2025, was 2.3%, significantly lower than 19.5% for the same period in 2024[102] - The company did not generate any taxable income in the current quarter, leading to a tax benefit for U.S. companies[102] - A deferred tax benefit of $26,989 was recorded in the current quarter, compared to a deferred tax expense of$187,071 in the previous quarter[102] Other Financial Metrics - The company experienced a foreign currency translation adjustment loss of $1,028,586 during the period[15] - The company incurred commission costs of$245,509 for the three-month period ended January 31, 2025, compared to $293,184 for the same period in 2024, reflecting a decrease of approximately 16.3$205,646, compared to $173,292 for the same period in 2024, representing an increase of approximately 18.7%[52]