Income Tax

12 Months Ended

Oct. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax

Note 10 – Income Tax

The Company is subject to federal income taxes and state income tax in the U.S. Significant judgment is required in determining the provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017 and reduced the U.S. federal corporate tax rate from 35% to 21%, eliminated corporate Alternative Minimum Tax, modified rules for expensing capital investment, and limited the deduction of interest expense for certain companies. The Company fulfilled and shipped all the Products from Florida and, thus, it is subject to the state corporate income tax of Florida with a tax rate of 4.458%. There is no difference between the income tax computed at the combined federal and state statutory rate to the income tax effective rate.

Significant components of the tax expense (benefit) recognized in the accompanying statements of operations for the years ended October 31, 2023, and October 31, 2022, are as follows:

	October 31,
	2023		2022
Current Tax Expense:
Federal	$	—	$	—
State		2,348		(18,317	)
Total Current Tax Expense		2,348		(18,317	)
Deferred Tax Expense:
Federal		—		—
State		—		—
Total Deferred Tax Expense		—		—
Tax provision:
Federal		—		—
State		2,348		(18,317	)
Total		2,348		(18,317	)

Total net deferred taxes are comprised of the following on October 31, 2022, and October 31, 2023:

	October 31,
	2023			2022
Deferred Tax Assets:
Stock Compensation Expense – NQSO	$	2,069,641		$	1,694,324
Other		499,203			362,170
Net Operating Loss Carryforwards		4,998,800			2,582,061
Total Deferred Tax Asset		7,567,644			4,638,555
Deferred Tax Liabilities:
Prepaid Expenses		(27,497	)		(92,420	)
Right of Use Asset		(220,859	)		(259,866	)
Total Deferred Tax Liabilities		(248,356	)		(352,286	)
Less: Valuation Allowance		(7,319,288	)		(4,286,269	)
Net Deferred Tax Asset		—			—

The Company has Federal NOL carryforwards of approximately $23.8 million and state NOL carryforwards of approximately $186,000. With the changes instituted by the CARES Act, the Federal NOLs have an indefinite life and will not expire. The Company’s federal and state tax returns for the 2022 and 2021 tax years generally remain subject to examination by U.S. and various state authorities. A valuation allowance is recorded to reduce the deferred tax asset if, based on the weight of the evidence, it is more likely than not that some portion or all the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a valuation allowance of $7,319,288 for the year ended on October 31, 2023, it is necessary to reduce the deferred tax asset to the amount that will more likely than not be realized.