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Segment Analysis

9 Months Ended

Jul. 31, 2019

Segment Reporting [Abstract]

Segment Analysis

NOTE 14 – SEGMENT ANALYSIS

We operate in two reportable segments, which are managed separately based upon fundamental differences in their operations. Coda Octopus Martech and Coda Octopus Colmek (together “Marine Engineering Business” or “Service Segments”) operate as contractors and Coda Octopus Products operations are comprised primarily of product sales, rental of equipment and/or software and associated services (“Marine Technology Business” or “Products Segment”).

Segment operating income is total segment revenue reduced by operating expenses identifiable with the business segment. Corporate includes general corporate administrative costs (“Overheads”).

The Company evaluates performance and allocates resources based upon segment operating income. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies in our Consolidated Financial Statements of October 31, 2018.

There are inter-segment sales which have been eliminated in our financial statements but are disclosed in the tables below for information purposes.

The following table summarizes segment asset and operating balances by reportable segment as of and for the three and nine months ended July 31, 2019 and 2018, respectively.

The Company’s reportable business segments operate in four geographic locations:

	●	Americas
	●	Europe
	●	Australia/Asia
	●	Middle East/Africa

Information concerning principal geographic areas is presented below according to the area where the activity has taken place for the three and nine months ended July 31, 2019 and 2018 respectively:

		Marine Technology Business (Products)				Marine Engineering Business (Services)				Overhead				Total
Three Months Ended July 31, 2019
Revenues from External Customers		$	3,231,510			$	3,436,988			$	-			$	6,668,498
Cost of Revenues			592,585				1,528,095				-				2,120,680
Gross Profit			2,638,925				1,908,893				-				4,547,818
Research & Development			503,540				32,991				95,159				631,690
Selling, General & Administrative			590,981				659,398				525,530				1,775,909
Total Operating Expenses			1,094,521				692,389				620,689				2,407,599
Income (Loss) from Operations			1,544,404				1,216,504				(620,689	)			2,140,219
Other Income (Expense)
Other Income			6,398				-				-				6,398
Interest Expense			(2,197	)			(2,150	)			(15,928	)			(20,275	)
Total Other Income (Expense)			4,201				(2,150	)			(15,928	)			(13,877	)
Net Income (Loss) before Income Taxes			1,548,605				1,214,354				(636,617	)			2,126,342
Income Tax Benefit (Expense)
Current Tax Benefit (Expense)			(5,172	)			4,460				674				(38	)
Deferred Tax (Expense)			(47,768	)			(214,144	)			(88,705	)			(350,617	)
Total Income Tax (Expense)			(52,940	)			(209,684	)			(88,031	)			(350,655	)
Net Income (Loss)		$	1,495,665			$	1,004,670			$	(724,648	)		$	1,775,687
Supplemental Disclosures
Total Assets		$	18,200,970			$	13,876,685			$	1,266,254			$	33,343,909
Total Liabilities		$	2,169,195			$	870,492			$	1,388,509			$	4,428,196
Revenues from Intercompany Sales - eliminated from sales above		$	136,128			$	75,729			$	675,000			$	886,857
Depreciation and Amortization		$	132,392			$	63,724			$	4,078			$	200,194
(Sales) Purchases of Long-lived Assets		$	(262,062	)		$	5,937			$	34,303			$	(221,822	)

		Marine Technology Business (Products)				Marine Engineering Business (Services)				Overhead				Total
Three Months Ended July 31, 2018
Revenues from External Customers		$	3,926,491			$	1,851,982			$	-			$	5,778,473
Cost of Revenues			650,669				933,531				-				1,584,200
Gross Profit			3,275,822				918,451				-				4,194,273
Research & Development			440,202				90,190				-				530,392
Selling, General & Administrative			723,155				566,692				350,995				1,640,842
Total Operating Expenses			1,163,357				656,882				350,995				2,171,234
Income (Loss) from Operations			2,112,465				261,569				(350,995	)			2,023,039
Other Income (Expense)
Other Income			3,941				31				-				3,972
Interest Expense			(2,480	)			(15,802	)			(11,139	)			(29,421	)
Total Other Income (Expense)			1,461				(15,771	)			(11,139	)			(25,449	)
Net Income (Loss) before Income Taxes			2,113,926				245,798				(362,134	)			1,997,590
Current Tax Benefit			-				-				20				20
Net Income (Loss)		$	2,113,926			$	245,798			$	(362,114	)		$	1,997,610
Supplemental Disclosures
Total Assets		$	14,016,131			$	11,378,558			$	553,927			$	25,948,616
Total Liabilities		$	865,138			$	1,660,291			$	1,891,374			$	4,416,803
Revenues from Intercompany Sales - eliminated from sales above		$	44,180			$	183,800			$	675,000			$	902,980
Depreciation and Amortization		$	137,426			$	66,435			$	5,728			$	209,589
Purchases of Long-lived Assets		$	232,575			$	(6,122	)		$	30,667			$	257,120

		Marine Technology Business (Products)				Marine Engineering Business (Services)				Overhead				Total
Nine Months Ended July 31, 2019
Revenues from External Customers		$	9,481,229			$	9,729,049			$	-			$	19,210,278
Cost of Revenues			1,798,800				4,605,926				-				6,404,726
Gross Profit			7,682,429				5,123,123				-				12,805,552
Research & Development			1,533,544				130,205				284,494				1,948,243
Selling, General & Administrative			2,089,442				1,864,503				1,137,921				5,091,866
Total Operating Expenses			3,622,986				1,994,708				1,422,415				7,040,109
Income (Loss) from Operations			4,059,443				3,128,415				(1,422,415	)			5,765,443
Other Income (Expense)
Other Income			65,467				-				-				65,467
Interest (Expense)			(8,063	)			(11,849	)			(49,771	)			(69,683	)
Total Other Income (Expense)			57,404				(11,849	)			(49,771	)			(4,216	)
Net Income (Loss) before Income Taxes			4,116,847				3,116,566				(1,472,186	)			5,761,227
Income Tax Benefit (Expense)
Current Tax Benefit			20,496				39,445				18,013				77,954
Deferred Tax (Expense)			(199,073	)			(447,540	)			(204,374	)			(850,987	)
Total Income Tax (Expense)			(178,577	)			(408,095	)			(186,361	)			(773,033	)
Net Income (Loss)		$	3,938,270			$	2,708,471			$	(1,658,547	)		$	4,988,194
Supplemental Disclosures
Total Assets		$	18,200,970			$	13,876,685			$	1,266,254			$	33,343,909
Total Liabilities		$	2,169,195			$	870,492			$	1,388,509			$	4,428,196
Revenues from Intercompany Sales - eliminated from sales above		$	1,044,595			$	304,658			$	2,025,000			$	3,374,253
Depreciation and Amortization		$	391,516			$	191,402			$	11,688			$	594,606
Purchases of Long-lived Assets		$	1,803,206			$	40,383			$	34,303			$	1,877,892

		Marine Technology Business (Products)				Marine Engineering Business (Services)				Overhead				Total
Nine Months Ended July 31, 2018
Revenues from External Customers		$	8,142,724			$	4,212,702			$	-			$	12,355,426
Cost of Revenues			1,298,022				2,173,143				-				3,471,165
Gross Profit			6,844,702				2,039,559				-				8,884,261
Research & Development			1,385,994				455,414				-				1,841,408
Selling, General & Administrative			2,150,168				1,813,357				1,208,704				5,172,229
Total Operating Expenses			3,536,162				2,268,771				1,208,704				7,013,637
Income (Loss) from Operations			3,308,540				(229,212	)			(1,208,704	)			1,870,624
Other Income (Expense)
Other Income			92,514				2,128				-				94,642
Interest Expense			(9,289	)			(45,503	)			(158,118	)			(212,910	)
Total Other Income (Expense)			83,225				(43,375	)			(158,118	)			(118,268	)
Net Income (Loss) before Income Taxes			3,391,765				(272,587	)			(1,366,822	)			1,752,356
Current Tax Benefit (Expense)			(6,596	)			-				6,586				(10	)
Net Income (Loss)		$	3,385,169			$	(272,587	)		$	(1,360,236	)		$	1,752,346
Supplemental Disclosures
Total Assets		$	14,016,131			$	11,378,558			$	553,927			$	25,948,616
Total Liabilities		$	865,138			$	1,660,291			$	1,891,374			$	4,416,803
Revenues from Intercompany Sales - eliminated from sales above		$	831,352			$	196,103			$	2,025,000			$	3,052,455
Depreciation and Amortization		$	374,076			$	218,649			$	12,920			$	605,645
Purchases of Long-lived Assets		$	486,604			$	43,839			$	55,452			$	585,895

		For the Three Months Ended July 31, 2019
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Disaggregation of Total Net Sales
Americas
Equipment Sales		$	493,261			$	-			$	493,261
Equipment Rentals			221,567				-				221,567
Software Sales			-				-				-
Engineering Parts			-				2,259,717				2,259,717
Services			95,698				767,024				862,722
Europe
Equipment Sales			418,557				3,235				421,792
Equipment Rentals			322,887				-				322,887
Software Sales			19,259				-				19,259
Engineering Parts			-				347,459				347,459
Services			150,216				59,553				209,769
Australia/Asia
Equipment Sales			648,640				-				648,640
Equipment Rentals			260,474				-				260,474
Software Sales			81,541				-				81,541
Services			204,273				-				204,273
Middle East & Africa
Equipment Sales			290,386				-				290,386
Equipment Rentals			-				-				-
Software Sales			21,261				-				21,261
Services			3,490				-				3,490
Total Net Sales		$	3,231,510			$	3,436,988			$	6,668,498

		For the Three Months Ended July 31, 2019
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Geographic Area
Americas		$	810,526			$	3,026,741			$	3,837,267
Europe			910,919				410,247				1,321,166
Australia/Asia			1,194,928				-				1,194,928
Middle East & Africa			315,137				-				315,137
Total Net Sales		$	3,231,510			$	3,436,988			$	6,668,498

		For the Three Months Ended July 31, 2019
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Product Line
Equipment Sales		$	1,850,844			$	3,235			$	1,854,079
Equipment Rentals			804,928				-				804,928
Software Sales			122,061				-				122,061
Engineering Parts			-				2,607,176				2,607,176
Services			453,677				826,577				1,280,254
Total Net Sales		$	3,231,510			$	3,436,988			$	6,668,498

		For the Three Months Ended July 31, 2018
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Disaggregation of Total Net Sales
Americas
Equipment Sales		$	118,488			$	-			$	118,488
Equipment Rentals			323,763				-				323,763
Software Sales			18,625				-				18,625
Engineering Parts			-				1,456,962				1,456,962
Services			134,870				7,496				142,366
Europe
Equipment Sales			109,410				-				109,410
Equipment Rentals			737,126				-				737,126
Software Sales			29,256				-				29,256
Engineering Parts			-				387,524				387,524
Services			323,022				-				323,022
Australia/Asia
Equipment Sales			1,175,276				-				1,175,276
Equipment Rentals			(3,245	)			-				(3,245	)
Software Sales			211,193				-				211,193
Services			136,395				-				136,395
Middle East & Africa
Equipment Sales			584,417				-				584,417
Equipment Rentals			-				-				-
Software Sales			14,223				-				14,223
Services			13,672				-				13,672
Total Net Sales		$	3,926,491			$	1,851,982			$	5,778,473

		For the Three Months Ended July 31, 2018
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Geographic Area
Americas		$	595,746			$	1,464,458			$	2,060,204
Europe			1,198,814				387,524				1,586,338
Australia/Asia			1,519,619				-				1,519,619
Middle East & Africa			612,312				-				612,312
Total Net Sales		$	3,926,491			$	1,851,982			$	5,778,473

		For the Three Months Ended July 31, 2018
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Product Line
Equipment Sales		$	1,987,591			$	-			$	1,987,591
Equipment Rentals			1,057,644				-				1,057,644
Software Sales			273,297				-				273,297
Engineering Parts			-				1,844,486				1,844,486
Services			607,959				7,496				615,455
Total Net Sales		$	3,926,491			$	1,851,982			$	5,778,473

		For the Nine Months Ended July 31, 2019
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Disaggregation of Total Net Sales
Americas
Equipment Sales		$	560,339			$	57,545			$	617,884
Equipment Rentals			446,594				-				446,594
Software Sales			7,250				-				7,250
Engineering Parts			-				6,827,221				6,827,221
Services			915,837				1,646,694				2,562,531
Europe
Equipment Sales			1,189,162				114,214				1,303,376
Equipment Rentals			974,394				-				974,394
Software Sales			167,903				-				167,903
Engineering Parts			-				1,023,822				1,023,822
Services			628,235				59,553				687,788
Australia/Asia
Equipment Sales			2,707,978				-				2,707,978
Equipment Rentals			518,392				-				518,392
Software Sales			283,419				-				283,419
Services			543,314				-				543,314
Middle East & Africa
Equipment Sales			300,859				-				300,859
Equipment Rentals			36,130				-				36,130
Software Sales			58,826				-				58,826
Services			142,597				-				142,597
Total Net Sales		$	9,481,229			$	9,729,049			$	19,210,278

		For the Nine Months Ended July 31, 2019
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Geographic Area
Americas		$	1,930,020			$	8,531,460			$	10,461,480
Europe			2,959,694				1,197,589				4,157,283
Australia/Asia			4,053,103				-				4,053,103
Middle East & Africa			538,412				-				538,412
Total Net Sales		$	9,481,229			$	9,729,049			$	19,210,278

		For the Nine Months Ended July 31, 2019
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Product Line
Equipment Sales		$	4,758,338			$	171,759			$	4,930,097
Equipment Rentals			1,975,510				-				1,975,510
Software Sales			517,398				-				517,398
Engineering Parts			-				7,851,043				7,851,043
Services			2,229,983				1,706,247				3,936,230
Total Net Sales		$	9,481,229			$	9,729,049			$	19,210,278

		For the Nine Months Ended July 31, 2018
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Disaggregation of Total Net Sales
Americas
Equipment Sales		$	712,945			$	-			$	712,945
Equipment Rentals			457,690				-				457,690
Software Sales			52,145				-				52,145
Engineering Parts			-				2,826,029				2,826,029
Services			730,453				95,082				825,535
Europe
Equipment Sales			1,030,167				192,078				1,222,245
Equipment Rentals			1,065,417				-				1,065,417
Software Sales			176,657				-				176,657
Engineering Parts			-				1,099,513				1,099,513
Services			611,154				-				611,154
Australia/Asia
Equipment Sales			1,590,510				-				1,590,510
Equipment Rentals			69,019				-				69,019
Software Sales			369,167				-				369,167
Services			221,940				-				221,940
Middle East & Africa
Equipment Sales			905,933				-				905,933
Equipment Rentals			11,444				-				11,444
Software Sales			75,519				-				75,519
Services			62,564				-				62,564
Total Net Sales		$	8,142,724			$	4,212,702			$	12,355,426

		For the Nine Months Ended July 31, 2018
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Geographic Area
Americas		$	1,953,233			$	2,921,111			$	4,874,344
Europe			2,883,395				1,291,591				4,174,986
Australia/Asia			2,250,636				-				2,250,636
Middle East & Africa			1,055,460				-				1,055,460
Total Net Sales		$	8,142,724			$	4,212,702			$	12,355,426

		For the Nine Months Ended July 31, 2018
		Marine				Marine
		Technology				Engineering				Grand
		Business				Business				Total
Total Net Sales by Product Line
Equipment Sales		$	4,239,555			$	192,078			$	4,431,633
Equipment Rentals			1,603,570				-				1,603,570
Software Sales			673,488				-				673,488
Engineering Parts			-				3,925,542				3,925,542
Services			1,626,111				95,082				1,721,193
Total Net Sales		$	8,142,724			$	4,212,702			$	12,355,426

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X

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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