UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31,April 30, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934--

For the transition period from ________________ to __________________ 

Commission File Number: 0-14443

____________________

INTERNATIONAL baler CORPORATION

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ☒  NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☐  NO ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐  NO ☒

As of March 12,June 11, 2021, there were 5,183,894 shares of common stock of the registrant outstanding.

INTERNATIONAL BALER CORPORATION

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

1. Nature of Business:

International Baler Corporation (the “Company”) is a manufacturer of baling equipment which is designed to compress a variety of materials into bales for easier handling, shipping, disposal, storage, and for recycling. Materials commonly baled include scrap metal, corrugated boxes, newsprint, aluminum cans, plastic bottles, and other solid waste. More sophisticated applications include baling of textile materials, fibers and synthetic rubber. The Company offers a wide variety of balers, standard models as well as custom models, and conveyors to meet specific customer requirements.

The Company’s customers include recycling facilities, distribution centers, textile mills, and companies which generate the materials for baling and recycling. The Company sells its products worldwide with annual sales outside the United States typically ranging from 10% to 35%.

2. Basis of Presentation:

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information in footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. Operating results for the three-month period ended January 31,April 30, 2021 are not necessarily indicative of the results that may be expected for the year ending October 31, 2021. The accompanying balance sheet as of October 31, 2020 was derived from the audited financial statements as of October 31, 2020.

These unaudited condensed financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended October 31, 2020.

The Company is closely monitoring ongoing developments in connection with the COVID-19 global pandemic, which has had an adverse impact on sales as many customers are holding off purchasing new equipment.

As of date of this report, the COVID-19 pandemic has not materially adversely impacted our capital and financial resources. Due to the economic uncertainty that has resulted from the pandemic, and the potential impact of such to our stakeholders, we are unable to predict with certainty any potential impacts to our business. Additionally, because we are unable to determine the ultimate severity or duration of the outbreak or its long-term effects on, among other things, the global, national or local economies, the capital and credit markets, our workforce, our customers or our suppliers, at this time we are unable to predict the adverse extent that the COVID-19 crisis will have on our business, financial condition, liquidity and results of operations.

3. Summary of Significant Accounting Policies:

(a) Accounts Receivable & Allowance for Doubtful Accounts:

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable. The Company reviews its allowance for doubtful accounts monthly including the analysis of historical trends, customer credit worthiness and the aging of receivables. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

(b) Inventories:

Inventories are stated at the lower of cost and net realizable value. Cost is determined by a method that approximates the first-in, first-out method. Work in process and finished goods are valued based on underlying costs to manufacture balers which include direct materials, direct and indirect labor, and overhead. The Company reviews inventory for obsolescence on a regular basis.

(c) Warranties and Service:

The Company typically warrants its products for one (1) year from the date of sale as to materials, three (3) years for structural damage and six (6) months as to labor, and offers services for other required repairs and maintenance. Service is rendered by repairing or replacing parts at the Company’s Jacksonville, Florida facility, by on-site service provided by Company personnel who are based in Jacksonville, Florida or by local service agents who are engaged as needed. The Company maintains an accrued liability for expected warranty claims. The warranty accrual is based on historical warranty costs, the quantity and types of balers currently under warranty, and known warranty issues.

Following is a tabular reconciliation of the changes in the warranty accrual for the three-monthsix-month period ended January 31:April 30:

(d) Fair Value of Financial Instruments:

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, short term certificates of deposit, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.

(e) Advertising Expenses

Advertising costs are expensed as incurred. Advertising expense was $31,752$70,981 and $27,546$59,973 for quartersthe six months ended January 31,April 30, 2021 and 2020, respectively, and are included in selling expense on the accompanying Condensed Statements of Income.

(f) Recent Accounting Pronouncements:

Recently Adopted Accounting Pronouncements:

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs and any not listed below were assessed and determined to be applicable or are expected to have a minimal impact on the Company’s condensed financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases, ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize assets and liabilities for most leases. All leases are required to be recorded on the balance sheet with the exception of short-term leases. This standard was adopted by the Company on November 1, 2019. Prior to adoption, the Company determined that all its lease agreements qualify as short term leases, having a lease term of twelve months or less and no purchase option, and has elected to recognize its lease payments in profit or loss on a straight-line basis over the lease term. Accordingly the Company did not record a transition adjustment.

4. Revenue from Contracts with Customers:

a) Overview

The Company recognizes revenues from the sale of finished products upon shipment and the transfer of control to the customer. The other elements may include installation and, generally, a one-year warranty. Equipment installation revenue is valued based on estimated service person hours to complete installation and is recognized when the labor has been completed and the equipment has been accepted by the customer, which is generally within a couple days of the delivery of the equipment. Warranty revenue, if sold separately, is valued based on estimated service person hours to complete a service and generally is recognized over the contract period. Revenue from service plans is recognized over time based on the term of the service agreement.

All other product sales with customer specific acceptance provisions are recognized at a point in time upon customer acceptance and the delivery of the parts or service. Revenues related to spare part sales are recognized upon shipment or delivery based on the trade terms.

Generally, pricing is fixed with payment terms of thirty days after shipment. The majority of the Company’s contracts have short duration and a single performance obligation to deliver a configured to order baler and related equipment to the customer. The Company has elected to expense shipping and handling costs as incurred.

In the first quartersix months ended in January 31,on April 30, 2021 deferred revenue of $375,493$382,557 from the fiscal year ended October 31, 2020 was recognized.

b) Disaggregation of Revenue

Disaggregated revenue is by primary geographic market is as follows:

5. Related Party Transactions:

The Estate of Leland E. Boren is a stockholder of the Company and is the owner of

Avis Industrial Corporation (Avis). The Estate controls over 80% of the outstanding shares of the Company. Avis owns 100% of The American Baler Company, a competitor of the Company. On January 1, 2014, Avis acquired The Harris Waste Management Group, Inc. (Harris), also a competitor of the Company. On July 31, 2014 Harris acquired the assets of IPS Balers, Inc. in Baxley, Georgia, another competitor of the Company. These baler companies operate completely independent of each other. The company had no purchases from these companies in the first quarterhalf of fiscal 2021 and in the fiscal year ending October 31, 2020. The Company had no sales to The American Baler Company in the first quarterhalf of fiscal 2021 and in the fiscal year ended October 31, 2020. The Company had no sales to Harris Waste Management in the first quarterhalf of fiscal 2021 or in the fiscal year ended October 31, 2020.

6. Inventories:

Inventories consisted of the following:

7. Debt:

The Company hadhas a $1,650,000$1,000,000 line of credit agreement with First Merchants Bank of Muncie, Indiana which was renewed on May 15, 2020 with a $1,000,000 credit limit.2021. The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2021.2022. The line of credit had no outstanding balance at January 31,April 30, 2021 and at October 31, 2020.

On April 16, 2020 the Company received a $626,466 loan made pursuant to the terms of the Paycheck Protection Program (PPP) authorized by the CARES Act. The loan has a two year term and accrues simple interest at a fixed annual rate of 1.00%. Under the terms of the CARES Act guidelines, a portion of the loan up to 100% may be forgiven by the U.S. Small Business Administration if the amount spent is within the timeframe and under guidelines that have been set for forgiveness. On December 7, 2020 the Company was notified by its bank that the SBA has stated that this loan was forgiven. The Company reversed this liability during the quarter ended January 31, 2021 and the resulting gain was recognized as other income in the accompanying condensed statements of income.

8. Income Taxes:

Tax assets are recognized in the balance sheet if it is more likely than not that they will be realized on future tax returns. Factors considered include historical results of operations, volatility of the economic conditions and projected earnings based on current operations. Based on this evidence, it is more likely than not that the deferred tax assets would be realized. Accordingly, there is no valuation allowance as of January 31,April 30, 2021 and at October 31, 2020. However, if it is determined that all or part of the deferred tax assets will not be used in the future, an adjustment to the deferred tax assets would be charged against net income in the period such determination is made. As of January 31,April 30, 2021 and October 31, 2020, net deferred tax assets were $77,890.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.

9. Commitments and Contingencies:

The Company, in the ordinary course of business, is subject to claims made, and from time to time is named as a defendant in legal proceedings relating to the sales of its products. The Company believes that the reserves reflected in its financial statements are adequate to pay losses and loss adjustment expenses which may result from such claims and proceedings; however, such estimates may be more or less than the amount ultimately paid when the claims are settled. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or liquidity.

On December 1, 2017 the Company was served with a complaint related to an injury to an employee working at Integrated Coating and Seed Technology Inc.,(INCOTEC). The employee was operating a baler manufactured by the Company in 1994. The injury occurred on December 4, 2015. The plaintiff is Star Insurance Company. The Company’s insurer settled this claim in March 2020. The Company’s liability on this settlement of the claim was $20,645 which has been paid.

On March 22, 2021, the Company was served with a complaint related to an injury to an employee working at a Stericycle facility in North Little Rock, Arkansas. The employee was working on a baler manufactured by the Company in 2003. The employee suffered an injury to his left hand on April 10, 2018. The plaintiff is Scott Tinsley, the injured employee. The Company’s insurance policy related to this complaint has a deductible of $20,000 and the Company has recorded a reserve for this amount.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Quarterly Report on Form 10-Q, the terms “Company,” “we,” “us,” and “our,” refer to International Baler Corporation.

Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons, including, but not limited to, changes in general economic conditions, changing competition and our ability to market and sell our commercial and industrial balers. These risks and uncertainties, as well as other risks and uncertainties, could cause our actual results to differ significantly from management’s expectations. The forward-looking statements included in this Quarterly Report on Form 10-Q reflect the beliefs of our management on the date of this Quarterly Report. We undertake no obligation to update publicly any forward-looking statements for any reason.

General

The following discussion should be read together with our unaudited condensed financial statements and the related notes thereto included in Part I, Item 1 “Financial Statements”. For further information, refer to the Company’s Annual Report on Form 10-K for the year ended October 31, 2020, and the Management Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q.

Results of Operations: Three Month Comparison

Three Months Ended January 31,April 30, 2021 (“firstsecond quarter of fiscal 2021”) compared to the three months ended January 31,April 30, 2020 (“firstsecond quarter of fiscal 2020”)

In the firstsecond quarter ended January 31,April 30, 2021, the Company had net sales of $2,349,904$2,638,010 compared to net sales of $2,010,261$2,014,943 in the firstsecond quarter of fiscal 2020, an increase of 16.9%30.9%. Equipment sales included twentytwenty-eight balers and conveyers at an average price of $78,211$58,965 in the firstsecond quarter of fiscal 2021 while in the same quarter of fiscal 2020, the Company sold sixteentwenty-one balers and conveyers at an average costprice of $90,186.$60,340. Parts and service sales were significantly higher, 38.5%, in the firstcurrent quarter were, $986,987, compared to $747,802, an increase of 32.7%. The higher sales in the second quarter of Fiscal 2021 were the result of improved market conditions as the COVID-19 pandemic affected the results of the second quarter of fiscal 2021, $785,684, compared to the first quarter of fiscal 2020, $567,280.2020.

Gross profit increased to $199,717$411,539 in the firstsecond quarter of fiscal 2021, compared to $77,467$252,168 in the firstsecond quarter of fiscal 2020. The higher gross profit is primarily the result of higher baler sales and parts and service sales in the firstsecond quarter in fiscal 2021. Parts and service sales have higher gross profit margins than equipment sales gross profit margins.

Total operating expense, consisting of selling and administrative expense, increased by 8.6%22.1% to $373,735$416,485 in the firstsecond quarter of fiscal 2021 compared to $325,798$341,102 in the firstsecond quarter of fiscal 2020. The higher selling and administrative expense were the result of higher advertising expenses, legal expenses, and the reserve for the deductible on the products liability claim ($20,000).

The Company had a pre-tax loss of $4,046 in the second quarter of fiscal 2021 compared to a pre-tax loss of $83,590 in the same quarter of fiscal 2020. The Company did not layoff or furlough any employees as a result of the COVID-19 pandemic.

The Company had a loss from operations of $174,018 in the first quarter of fiscal 2021 compared to a loss from operations of $248,331 in the first quarter of fiscal 2020.

Results of Operations: Six Month Comparison

Six Months Ended April 30, 2021 (“second half of fiscal 2021) compared to the six months ended April 30, 2020 (“second half of fiscal 2020”).

The Company had net sales of $4,987,915 in the first six months of fiscal 2021, compared to net sales of $4,025,204 in the same period of fiscal 2020. The higher net sales in the first half of fiscal 2021 was the result of improved market conditions, particularly related to the COVID-19 pandemic in the second quarter of fiscal 2020. Equipment sales included forty-eight balers and conveyors in the first half of fiscal 2021 versus equipment sales of thirty-eight balers and conveyors in the same period of 2020. Parts and service sales were $457,589 higher in the first half of fiscal 2021 compared to the first half of fiscal 2020. This increase was due to market conditions.

Gross profit increased to $611,256 in the first six months of fiscal 2021 compared to $329,635 in the first six months of fiscal 2020. The higher gross profit was the result of the higher net sales.

Selling and administrative expenses increased from $666,900 in fiscal 2020 to $790,220 in fiscal 2021, an increase of 18.5%. The largest increases in cost were legal expenses, sales salaries, advertising, and the reserve for the products liability claim.

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The Company recorded income of $626,466 from the Paycheck Protection Program (PPP) loan which was forgiven. For the first quarter of fiscal 2020. The Company had pre-tax income of $453,339 compared to a pre-tax loss of $242,481forgiven in the first quarter of fiscal 2020. The2021. In the first half of fiscal 2021, the Company had pre-tax income of $449,293. For the first six months of fiscal 2021, the Company had an income tax benefitoperating loss of $36,000 in the first quarter of fiscal 2021$178,964 compared to an income tax benefitoperating loss of $58,000$337,265 in the first quarter ofsame period in fiscal 2020. Income from the forgiven PPP loan is not taxable.

The sales order backlog was approximately $2,700,000$2,310,000 at January 31,April 30, 2021 and $1,950,000$3,040,000 at January 31,April 30, 2020.

Financial Condition and Liquidity:

Net working capital at January 31,April 30, 2021 was $7,604,133$7,631,639 as compared to $7,721,268 at October 31, 2020. The Company currently believes that it will have sufficient cash flow to be able to fund operating activities for the next twelve months.

Average days sales outstanding (DSO) in the first threesix months of fiscal 2021 were 25.329.3 days, as compared to 33.739.3 days in the first threesix months of fiscal 2020. Days sales outstanding was negatively impacted in fiscal 2020 as the Company sold a prototype baler for $546,000 without receiving a customer deposit on this equipment. DSO is calculated by dividing the total of the month-end net accounts receivable balances for the period by three, and dividing that result by the average day’s sales for the period (period sales ÷ 91.25)181).

During the threesix months ended January 31,April 30, 2021 and 2020, the Company made additions to property, plant and equipment of $35,808$60,656 and $11,037$76,623 respectively.

The Company hadhas a $1,650,000$1,000,000 line of credit agreement with First Merchants Bank of Muncie, Indiana which was renewed on May 15, 2020 with a $1,000,000 credit limit.2021. The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2021. The line of credit had no outstanding balance at January 31,April 30, 2021 and at October 31, 2020.

In the event that the Company’s line of credit would not be available, the Company would pursue a line of credit from other sources, and take steps to minimize expenditures, such as delaying capital expenditures and reducing overhead costs.

The Company had cash deposits in banks of $3,569,115$2,969,208 and $3,275,135 above the FDIC insured limit of $250,000 per bank at January 31,April 30, 2021 and October 31, 2020, respectively.

Off-Balance Sheet Arrangements

As of January 31,April 30, 2021, we have no material off-balance sheet arrangements with unconsolidated entities.

Critical Accounting Estimates

There have been no material changes to the critical accounting policies disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020.

Recent Accounting Pronouncements

See Note 3(f) to our Financial Statements for a discussion of recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to changes in interest rates as a result of its financing activities, including its borrowings on the revolving line of credit facility. Based on the current level of borrowings, a change in interest rates is not expected to have a material effect on operations or financial position.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosures.

As of January 31,April 30, 2021, the end of the period covered by this Quarterly Report on Form 10-Q, and under the supervision and with the participation of management, including the Company’s CEO and CFO, management evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation and subject to the foregoing, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective.

Management, with the participation of the Company’s principal executive and principal financial officers, also assessed the effectiveness of the Company’s internal control over financial reporting as of January 31, 2021. This assessment was performed using the criteria established under the Internal Control-Integrated Framework established by Committee of Sponsoring Organization of the Treadway Commission (“COSO”). 

During an analysis of the physical inventory values and the reconciliation to the Company’s recorded book inventory, management discovered that certain procedures were not followed on some occasions. Specifically, the unit prices on some inventory invoices were not matched to the unit prices on the related purchase orders and adjusted to the invoice amount if different. The correction of these pricing errors was immaterial to the financial statements of the Company at October 31, 2020, however management considers this pricing error to be a material weakness in its controls and procedures for the fiscal year ended October 31, 2020. In order to remediate this material weakness, management added two additional review steps to adjust inventory pricing to invoiced amounts if different from the purchase order amount.

Management, with the participation of the Company’s principal executive and principal financial officer, assessed the effectiveness of the Company’s internal control over financial reporting as of October 31, 2020. This assessment was performed using the criteria established under the Internal Control-Integrated Framework established by the Committee of Sponsoring Organization of the Treadway Commission ("COSO"). During the year it was determined that management did not obtain Board of Directors approval in accordance with Company by-laws, to apply for a Paycheck Protection Program (PPP) loan authorized by the CARES Act. Management acted quickly in order to secure the loan before the funds were allocated to other applicants, however, management considered this to be a material weakness in the Company’s internal controls over financial reporting. Management has confirmed its requirement to obtain Board approval before incurring any debt.

In designing and evaluating the control systems, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control over Financial Reporting

The Company’s management, including CEO and CFO, confirm that there were no changes

As previously disclosed in Item 4 of our 10-Q for the Company’s internal control over financial reporting during the fiscal quarter ended January 31, 2021, other than thosemanagement concluded that there was a material weakness in internal controls related to management’s failure to obtain Board approval prior to obtaining a PPE loan.

To address the material weaknessesweakness described above the Company engaged its outside law firm to conduct a training seminar for its management team regarding corporate governance procedures and requirements under Delaware law and the Company’s charter documents. The law firm prepared a memo which summarizes the Company’s charter documents and Delaware law. In addition, the Company has developed a monitoring control to ensure that havethe proper corporate governance practices are followed.

The Company believes the actions described above will be sufficient to remediate the identified material weakness and strengthen the internal control over financial reporting.

Except as noted in the preceding paragraphs, there has been no change in internal controls over financial reporting that occurred during the most recent quarter that has materially affected, or areis reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On December 1, 2017 the Company was served with a complaint related to an injury to an employee working at Integrated Coating and Seed Technology Inc., (INCOTEC). The employee was operating a baler manufactured by the Company in 1994. The injury occurred on December 4, 2015. The plaintiff is Star Insurance Company. The Company’s insurer settled this claim in March 2020. The Company’s liability on this settlement of the claim was $20,645 which has been paid.

On March 22, 2021, the Company was served with a complaint related to an injury to an employee working at a Stericycle facility in North Little Rock, Arkansas. The employee was working on a baler manufactured by the company in 2003. The employee suffered an injury to his left hand on April 10, 2018. The plaintiff is Scott Tinsley, the injured employee. The Company’s insurance policy related to this complaint has a deductible of $20,000 and the Company has recorded a reserve for this amount.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

The following exhibits are submitted herewith:

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned there unto duly authorized.

Dated: Septem D Dated: June 11, 2021

INTERNATIONAL BALER CORPORATION

BY: /s/Victor W. Biazis

Victor W. Biazis

Chief Executive Officer

BY:/s/William E. Nielsen

William E. Nielsen

Chief Financial Officer