LEASE OBLIGATIONS

12 Months Ended

Oct. 31, 2025

NOTE 6 – LEASE OBLIGATIONS

The Company accounts for its leases in accordance with ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). ASC 842 requires lessees to (i) recognize a right of use asset (“ROU asset”) and a lease liability that is measured at the present value of the remaining lease payments on the Consolidated Balance Sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease related cash payments within operating and financing activities.

The Company’s operating lease consists of a lease for office space. The Company’s finance lease activities consist of leases for equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The office lease contains an option to a renewal period of five years at then-current market rates. The equipment leases are non-renewable as the Company owns the equipment at the end of the lease period, for a nominal amount.

In May 2023, the Company executed a new office lease for 2,978 square feet starting July 1, 2023, for its executive offices. The lease term runs through the end of December 2026. The Company recognized an initial operating lease right-of-use asset of $271,396 and an operating lease liability of $271,396. Due to the simplistic nature of the Company’s leases, no retained earnings adjustments were required.

The following table shows the classification and location of the Company’s leases in the Consolidated Balance Sheets:

Leases	Balance Sheet Location	October 31, 2025		October 31, 2024
Assets
Noncurrent:
Operating	Right-of-use asset – operating lease	$	360,681	$	481,825
Finance	Property and equipment, net		-		3,351
Total Lease Assets		$	360,681	$	485,176

Liabilities
Current:
Operating	Operating lease liabilities	$	136,813	$	121,144
Finance	Finance lease liabilities		5,043		12,081
Noncurrent:
Operating	Operating lease liabilities		223,868		360,681
Finance	Finance lease liabilities		-		5,042
Total Lease Liabilities		$	365,724	$	498,948

The following table shows the classification and location of the Company’s lease costs in the Consolidated Statements of Operations:

	Location	2025		2024
	Statements of Operations	Year Ended October 31,
	Location	2025		2024
Operating lease expense	General and administrative expense	$	220,068	$	203,557
Finance lease expense:
Interest on lease liability	Interest expense		722		7,992
Total Lease expense		$	220,790	$	211,549

Minimum contractual obligations for the Company’s leases (undiscounted) as of October 31, 2025 were as follows:

	Operating			Finance
Fiscal year 2026	$	166,760		$	5,150
Fiscal year 2027		84,609			-
Fiscal year 2028		67,734			-
Fiscal year 2029		67,734			-
Thereafter		45,156			-
Total Lease Payments	$	431,993		$	5,150
Less Imputed interest		(71,312	)		(107	)
Total lease liability	$	360,681		$	5,043

The following table shows the weighted average remaining lease term and the weighted average discount rate for the Company’s leases as of the dates indicated:

	October 31, 2025						October 31, 2024
	Operating Leases			Finance Leases			Operating Leases			Finance Leases
Weighted-average remaining lease term (in years)		3.9			0.54			4.0			1.34
Weighted-average discount rate ⁽¹⁾		10.00	%		6.69	%		10.00	%		6.67	%

⁽¹⁾

The discount rate used for the operating lease is based on the Company’s incremental borrowing rate at lease commencement and may be adjusted if modification to lease terms or lease reassessments occur. The discount rate used for finance leases is based on the rates implicit in the leases.

The following table includes other quantitative information for the Company’s leases for the periods indicated:

	2025		2024
	Year Ended October 31,
	2025		2024
Cash paid for amounts included in measurement of lease liabilities:
Cash payments for operating leases	$	164,022	$	180,581
Cash payments for finance leases	$	12,803	$	65,387

The Company recorded amortization of the operating lease right-of-use asset of $121,144 and $106,948 for the years ended October 31, 2025 and 2024, respectively.