v3.26.1
LEASE OBLIGATIONS
 3 Months Ended
Jan. 31, 2026
Lease Obligations  
LEASE OBLIGATIONS

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.

 

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

 

Leases  Balance Sheet Location  January 31, 2026   October 31, 2025 
Assets             
Noncurrent:             
Operating  Right-of-use asset – operating lease  $328,015   $360,681 
Total Lease Assets     $328,015   $360,681 
              
Liabilities             
Current:             
Operating  Operating lease liabilities  $132,666   $136,813 
Finance  Finance lease liabilities   2,337    5,043 
Noncurrent:             
Operating  Operating lease liabilities   195,349    223,868 
Total Lease Liabilities     $330,352   $365,724 

 

 

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

 

   Location  2026   2025 
   Statements of Operations  Three Months Ended January 31, 
   Location  2026   2025 
Operating lease expense  General and administrative expense  $41,501   $54,944 
Finance lease expense:             
Interest on lease liability  Interest expense   70    1,998 
Total Lease expense     $41,571   $56,942 

 

Minimum contractual obligations for the Company’s leases (undiscounted) as of January 31, 2026 were as follows:

 

   Operating   Finance 
Fiscal year 2026 (nine months remaining)  $125,347   $2,375 
Fiscal year 2027   84,609    - 
Fiscal year 2028   67,734    - 
Fiscal year 2029   67,734    - 
Thereafter   45,156    - 
Total Lease Payments  $390,580   $2,375 
Less Imputed interest   (62,565)   (38)
Total lease liability  $328,015   $2,337 

 

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:

 

   January 31, 2026   October 31, 2025 
   Operating Leases   Finance Leases   Operating Leases   Finance Leases 
Weighted-average remaining lease term (in years)   3.25    0.38    3.9    0.54 
Weighted-average discount rate (1)   10.00%   6.78%   10.00%   6.69%

 

  (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:

 

   2026   2025 
   Three Months Ended January 31, 
   2026   2025 
Cash paid for amounts included in measurement of lease liabilities:          
Cash payments for operating leases  $41,412   $40,757 
Cash payments for finance leases  $2,775   $4,478 

 

The Company recorded amortization of the operating lease right-of-use asset of $32,666 and $28,952 for the three months ended January 31, 2026 and 2025, respectively.