Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Apr. 30, 2019 | Jun. 07, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | COFFEE HOLDING CO INC | |
Entity Central Index Key | 0001007019 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 5,569,349 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 |
CURRENT ASSETS: | ||
Cash | $ 3,163,494 | $ 4,611,384 |
Accounts receivable, net of allowances of $144,000 for 2019 and 2018 | 8,741,240 | 9,914,297 |
Inventories | 16,414,475 | 15,271,106 |
Prepaid expenses and other current assets | 510,335 | 578,861 |
Prepaid and refundable income taxes | 230,515 | 383,206 |
TOTAL CURRENT ASSETS | 29,060,059 | 30,758,854 |
Machinery and equipment, at cost, net of accumulated depreciation of $6,582,909 and $6,251,828 for 2019 and 2018, respectively | 2,305,849 | 2,350,208 |
Customer list and relationships, net of accumulated amortization of $128,834 and $108,875 for 2019 and 2018, respectively | 556,166 | 576,125 |
Trademarks and tradenames | 1,488,000 | 1,488,000 |
Other intangible assets | 331,124 | 331,124 |
Non-compete, net of accumulated amortization of $19,800 and $9,900 for 2019 and 2018, respectively | 79,200 | 89,100 |
Goodwill | 2,157,661 | 2,157,661 |
Equity method investments | 89,698 | 89,776 |
Deferred income tax asset | 520,273 | 440,325 |
Deposits and other assets | 664,089 | 552,904 |
TOTAL ASSETS | 37,252,119 | 38,834,077 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 2,896,135 | 4,833,548 |
Line of credit | 5,767,540 | 6,260,014 |
Due to broker | 626,434 | 22,046 |
Note payable | 70,255 | |
Income taxes payable | 15,114 | 1,505 |
TOTAL CURRENT LIABILITIES | 9,305,223 | 11,187,368 |
Deferred income tax liabilities | 847,932 | 882,022 |
Deferred rent payable | 218,042 | 242,143 |
Deferred compensation payable | 474,997 | 532,726 |
TOTAL LIABILITIES | 10,846,194 | 12,844,259 |
Coffee Holding Co., Inc. stockholders' equity: | ||
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,494,680 shares issued; 5,569,349 shares outstanding as of April 30 2019 and October 31, 2018 | 6,494 | 6,494 |
Additional paid-in capital | 16,129,075 | 16,104,075 |
Retained earnings | 13,481,014 | 13,404,767 |
Less: Treasury stock, 925,331 common shares, at cost as of April 30, 2019 and October 31, 2018 | (4,633,560) | (4,633,560) |
Total Coffee Holding Co., Inc. Stockholders' Equity | 24,983,023 | 24,881,776 |
Noncontrolling interest | 1,422,902 | 1,108,042 |
TOTAL EQUITY | 26,405,925 | 25,989,818 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 37,252,119 | $ 38,834,077 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 144,000 | $ 144,000 |
Accumulated depreciation | 6,582,909 | 6,251,828 |
Customer list and relationships, accumulated amortization | 128,834 | 108,875 |
Non-compete, accumulated amortization | $ 19,800 | $ 9,900 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 6,494,680 | 6,494,680 |
Common stock, shares outstanding | 5,569,349 | 5,569,349 |
Treasury stock, shares | 925,331 | 925,331 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Income Statement [Abstract] | ||||
NET SALES | $ 20,716,491 | $ 22,193,898 | $ 44,350,299 | $ 44,277,116 |
COST OF SALES (including $4.1 and $4.4 million of related party costs for the six months ended April 30, 2019 and 2018, respectively. Including $2.3 and $3.0 million for the three months ended April 30, 2019 and 2018, respectively.) | 17,174,825 | 18,326,914 | 36,239,592 | 36,614,421 |
GROSS PROFIT | 3,541,666 | 3,866,984 | 8,110,707 | 7,662,695 |
OPERATING EXPENSES: | ||||
Selling and administrative | 3,477,254 | 2,833,248 | 7,152,915 | 5,570,082 |
Officers' salaries | 157,154 | 170,250 | 360,500 | 340,500 |
TOTAL | 3,634,408 | 3,003,498 | 7,513,415 | 5,910,582 |
INCOME (LOSS) FROM OPERATIONS | (92,742) | 863,486 | 597,292 | 1,752,113 |
OTHER INCOME (EXPENSE) | ||||
Interest income | 3,565 | 4,690 | 5,353 | 7,737 |
Gain (loss) from equity method investment | (184) | 257 | (78) | (4,558) |
Interest expense | (64,091) | (94,141) | (130,331) | (186,649) |
TOTAL | (60,710) | (89,194) | (125,056) | (183,470) |
INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY | (153,452) | 774,292 | 472,236 | 1,568,643 |
Provision (benefit) for income taxes | (44,790) | 181,152 | 81,130 | 394,916 |
NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY | (108,662) | 593,140 | 391,106 | 1,173,727 |
Less: Net (income) attributable to the non-controlling interest | (129,806) | (82,291) | (314,859) | (231,491) |
NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ (238,468) | $ 510,849 | $ 76,247 | $ 942,236 |
Basic and diluted earnings per share | $ (0.04) | $ 0.09 | $ 0.01 | $ .16 |
Weighted average common shares outstanding: | ||||
Basic and diluted | 5,569,349 | 5,721,635 | 5,569,349 | 5,743,967 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Income Statement [Abstract] | ||||
Related party costs | $ 2,300,000 | $ 3,000,000 | $ 4,100,000 | $ 4,400,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Total |
Balance, beginning of period at Oct. 31, 2017 | $ 6,494 | $ (3,504,510) | $ 16,104,075 | $ 639,912 | $ 12,345,490 | |
Stock based compensation | ||||||
Purchase of treasury stock | (437,998) | (792) | ||||
Noncontrolling interest | 231,492 | 231,491 | ||||
Net (loss) income | 942,236 | 942,236 | ||||
Balance, end of period at Apr. 30, 2018 | 6,494 | (3,942,508) | 16,103,283 | 871,404 | 13,287,726 | 26,326,399 |
Balance, beginning of period at Jan. 31, 2018 | 5,743 | (3,768,687) | 16,104,075 | 789,111 | 12,776,877 | |
Purchase of treasury stock | 751 | (173,821) | (792) | |||
Noncontrolling interest | 82,293 | 82,291 | ||||
Net (loss) income | 510,849 | 510,849 | ||||
Balance, end of period at Apr. 30, 2018 | 6,494 | (3,942,508) | 16,103,283 | 871,404 | 13,287,726 | 26,326,399 |
Balance, beginning of period at Oct. 31, 2018 | 6,494 | (4,633,560) | 16,104,075 | 1,108,042 | 13,404,767 | 25,989,818 |
Stock based compensation | 25,000 | 25,000 | ||||
Noncontrolling interest | 314,860 | 314,859 | ||||
Net (loss) income | 76,247 | 76,247 | ||||
Balance, end of period at Apr. 30, 2019 | 6,494 | (4,633,560) | 16,129,075 | 1,422,902 | 13,481,014 | 26,405,925 |
Balance, beginning of period at Jan. 31, 2019 | 6,494 | (4,633,560) | 16,104,075 | 1,293,096 | 13,719,482 | |
Stock based compensation | 25,000 | 25,000 | ||||
Noncontrolling interest | 129,806 | 129,806 | ||||
Net (loss) income | (238,468) | (238,468) | ||||
Balance, end of period at Apr. 30, 2019 | $ 6,494 | $ (4,633,560) | $ 16,129,075 | $ 1,422,902 | $ 13,481,014 | $ 26,405,925 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | Apr. 24, 2018 | Apr. 30, 2019 | Apr. 30, 2018 |
OPERATING ACTIVITIES: | |||
Net income | $ 391,106 | $ 1,173,727 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 360,940 | 352,777 | |
Stock-based compensation | 25,000 | ||
Unrealized loss (gain) on commodities | 604,388 | (852,908) | |
Loss (gain) on equity method investments | 78 | 4,558 | |
Deferred rent | (24,101) | 882 | |
Deferred income taxes | (114,038) | 307,450 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,173,057 | (403,173) | |
Inventories | (1,143,369) | 1,105,528 | |
Prepaid expenses and other current assets | 68,526 | 306,413 | |
Prepaid green coffee | 58,953 | ||
Prepaid and refundable income taxes | 152,691 | 25,463 | |
Accounts payable and accrued expenses | (1,937,413) | (1,513,226) | |
Deposits and other assets | (168,914) | ||
Income taxes payable | 13,609 | (1,046) | |
Net cash (used in) provided by operating activities | (598,440) | 565,398 | |
INVESTING ACTIVITIES: | |||
Cash paid for business acquisition | (2,740,217) | ||
Purchases of machinery and equipment | (286,721) | (280,128) | |
Net cash used in investing activities | (286,721) | (3,020,345) | |
FINANCING ACTIVITIES: | |||
Advances under bank line of credit | 7,526 | 3,800,200 | |
Purchase of treasury stock | (438,790) | ||
Principal payment on note payable | (70,255) | ||
Principal payments under bank line of credit | (500,000) | ||
Net cash (used in) provided by financing activities | (562,729) | 3,361,410 | |
NET (DECREASE) INCREASE IN CASH | (1,447,890) | 906,463 | |
CASH, BEGINNING OF PERIOD | 4,611,384 | 2,325,650 | |
CASH, END OF PERIOD | 3,163,494 | 3,232,113 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | |||
Interest paid | 131,901 | 178,293 | |
Income taxes paid | $ 28,868 | $ 26,863 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Accounts receivable | $ 86,442 | ||
Inventory | 1,140,893 | ||
Equipment | 450,000 | ||
Prepaid expenses | 62,882 | ||
Non-compete | 150,000 | ||
Goodwill | 1,000,000 | ||
Less: Note payable | 150,000 | ||
Net cash paid | $ 2,740,217 |
Business Activities
Business Activities | 6 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Activities | NOTE 1 - BUSINESS ACTIVITIES: Coffee Holding Co., Inc. (the “Company”) conducts wholesale coffee operations, including manufacturing, roasting, packaging, marketing and distributing roasted and blended coffees for private labeled accounts and its own brands, and it sells green coffee. The Company also manufactures and sells coffee roasters. The Company’s core product, coffee, can be summarized and divided into three product categories (“product lines”) as follows: Wholesale Green Coffee: Private Label Coffee: Branded Coffee: The Company’s private label and branded coffee sales are primarily to customers that are located throughout the United States with limited sales in Canada and certain countries in Asia. Such customers include supermarkets, wholesalers, and individually-owned and multi-unit retailers. The Company’s unprocessed green coffee, which includes over 90 specialty coffee offerings, is sold primarily to specialty gourmet roasters and to coffee shop operators in the United States with limited sales in Australia, Canada, England and China. The Company’s wholesale green, private label, and branded coffee product categories generate revenues and cost of sales individually but incur selling, general and administrative expenses in the aggregate. There are no individual product managers and discrete financial information is not available for any of the product lines. The Company’s product portfolio is used in one business and it operates and competes in one business activity and economic environment. In addition, the three product lines share customers, manufacturing resources, sales channels, and marketing support. Thus, the Company considers the three product lines to be one single reporting segment. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policy | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policy | NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICY: The following (a) condensed consolidated balance sheet as of October 31, 2018, which has been derived from audited financial statements, and (b) the unaudited interim condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s latest shareholders’ annual report on Form 10-K filed with the SEC on January 29, 2019 for the fiscal year ended October 31, 2018 (“Form 10-K”). In the opinion of management, all adjustments (which include normal and recurring nature adjustments) necessary to present a fair statement of the Company’s financial position as of April 30, 2019, and results of operations for the three and six months ended April 30, 2019 and the cash flows for the six months ended April 30, 2019 as applicable, have been made. The results of operations for the three and six months ended April 30, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future periods. The condensed consolidated financial statements include the accounts of the Company, the Company’s subsidiaries, Organic Products Trading Company, LLC (“OPTCO”), Sonofresco, LLC (“SONO”), Comfort Foods, Inc. (“CFI”) and Generations Coffee Company, LLC (“GCC”), the entity formed as a result of the Company’s joint venture with Caruso’s Coffee, Inc. The Company owns a 60% equity interest in GCC. All significant inter-company transactions and balances have been eliminated in consolidation. Significant Accounting Policy Revenue Recognition The Company’s significant accounting policy for revenue was updated as a result of the adoption of ASU 2014-09. The Company has adopted the new standard on November 1, 2018 and has used the modified retrospective method. The majority of the Company’s business is ship and bill. Based on our analysis, the Company did not identify a cumulative effect adjustment to retained earnings at November 1, 2018. The Company recognizes revenue in accordance with the five-step model as prescribed by ASU 2014-09 in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASU 2014-09, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 11 for revenue disaggregated by product line. Share-Based Payment The Company accounts for share-based payments using the fair value method. For employees and directors, the fair value of the award is measured, as discussed below, on the grant date. The Company has granted stock options at an exercise price equal to the closing price of the Company’s common stock as reported by Nasdaq. Upon exercise of an option, the Company issues new shares of common stock out of its authorized shares. The weighted-average fair value of options has been estimated on the grant date using the Black-Scholes pricing model. The fair value of each instrument is estimated on the grant date utilizing certain assumptions for a risk-free interest rate, volatility and expected remaining lives of the awards. The risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. Beginning with the current year quarter, the fair value of stock-based payment awards issued was estimated using a volatility derived from comparable companies share price. The assumptions used in calculating the fair value of share-based payment awards represents management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgement. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different. The Black Scholes assumptions are as follows: April 30, 2019 Expected Life 10 years Risk free interest rate 2.42% ˗ 2.57 % Expected volatility 43.0% ˗ 64.2 % Expected dividend yield 0 % Forfeiture rate 0 % |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements Affecting the Company | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements Affecting the Company | NOTE 3 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY: The FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-01 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Nonpublic business entities should apply the amendments for fiscal years beginning after December 15, 2019 (i.e., January 1, 2020, for a calendar year entity), and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company is currently evaluating the impact of adopting this guidance. The FASB issued ASU 2016-09 Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). The amendment simplifies several aspects of the accounting for share-based payments, including immediate recognition of all excess tax benefits and deficiencies in the income statement, changing the threshold to qualify for equity classification up to the employees’ maximum statutory tax rates, allowing an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur, and clarifying the classification on the statement of cash flows for the excess tax benefit and employee taxes paid when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period. There was no material impact to the condensed consolidated financial statements upon adoption. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” which addresses narrow issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. Part I of this Update addresses the complexity of accounting for certain financial instruments with down round features. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this Update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments in Part II of this update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. These amendments in Part I of this update are effective for annual and interim periods beginning after December 15, 2018, early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied in either of the following ways: (1) Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective. (2) Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part I and Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. |
Business Acquisition
Business Acquisition | 6 Months Ended |
Apr. 30, 2019 | |
Business Combinations [Abstract] | |
Business Acquisition | NOTE 4 – BUSINESS ACQUISITION: Steep & Brew, Inc. Acquisition Pursuant to the terms of an Asset Purchase Agreement dated April 24, 2018 (the “Generations Agreement”), by and among Generations Coffee Company, LLC (“GCC”), the entity formed as a result of the Company’s joint venture with Caruso’s Coffee, Inc., Steep & Brew, Inc. (“the Seller”) a Wisconsin corporation and the stockholder of the Seller. GCC purchased substantially all the assets, including equipment, inventory, customer list and relationships (the “Assets”) of the Seller. This was accounted for as a business combination. Pro Forma Results of Operations (unaudited) The following pro forma results of operations for the three and six months ended April 30, 2018 have been prepared as though the business acquisition had occurred as of November 1, 2017. There is no proforma information included here for the three and six months ended April 30, 2019 because the Steep & Brew, Inc. numbers are included in the actual April 30, 2019 results. This pro forma financial information is not indicative of the results of operations that the Company would have attained had the acquisition occurred at the beginning of the periods presented, nor is the pro forma financial information indicative of the results of operations that may occur in the future: Three Months Ended April 30, 2018 Six Months Ended April 30, 2018 Pro forma sales $ 24,542,639 $ 49,680,884 Pro forma net income 378,773 837,063 Pro forma basic and diluted earnings per share .07 .15 |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Apr. 30, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 5 - ACCOUNTS RECEIVABLE: Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 60 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The reserve for sales discounts represents the estimated discount that customers will take upon payment. The reserve for other allowances represents the estimated amount of returns, slotting fees and volume based discounts estimated to be incurred by the Company from its customers. The allowances are summarized as follows: April 30, 2019 October 31, 2018 Allowance for doubtful accounts $ 65,000 $ 65,000 Reserve for other allowances 35,000 35,000 Reserve for sales discounts 44,000 44,000 Totals $ 144,000 $ 144,000 |
Inventories
Inventories | 6 Months Ended |
Apr. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 6 - INVENTORIES: Inventories at April 30, 2019 and October 31, 2018 consisted of the following: April 30, 2019 October 31, 2018 Packed coffee $ 4,563,283 $ 3,286,450 Green coffee 8,859,188 9,858,495 Roasters and parts 280,375 270,188 Packaging supplies 2,711,629 1,855,973 Totals $ 16,414,475 $ 15,271,106 |
Commodities Held by Broker
Commodities Held by Broker | 6 Months Ended |
Apr. 30, 2019 | |
Brokers and Dealers [Abstract] | |
Commodities Held by Broker | NOTE 7 - COMMODITIES HELD BY BROKER: The Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce our cost of sales. The commodities held at broker represent the market value of the Company’s trading account, which consists of options and future contracts for coffee held with a brokerage firm. The Company uses options and futures contracts, which are not designated or qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans. Options and futures contracts are recognized at fair value in the condensed consolidated financial statements with current recognition of gains and losses on such positions. The Company’s accounting for options and futures contracts may increase earnings volatility in any particular period. The Company has open position contracts held by the broker, which are summarized as follows: April 30, 2019 October 31, 2018 Option Contracts $ (398,588 ) $ (39,926 ) Future Contracts (227,846 ) 17,880 Total Commodities $ (626,434 ) $ (22,046 ) The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in earnings and not reflected as a net amount as a separate component of stockholders’ equity. At April 30, 2019, the Company held 112 futures contracts (generally with terms of three to four months) for the purchase of 4,200,000 pounds of green coffee at a weighted average price of $0.9280 per pound. The fair market value of coffee applicable to such contracts was $0.9315 per pound at that date. At October 31, 2018, the Company held 22 futures contracts (generally with terms of three to four months) for the purchase of 825,000 pounds of green coffee at a weighted average price of $1.11 per pound. The fair market value of coffee applicable to such contracts was $1.13 per pound at that date. At October 31, 2018, the Company held 65 options covering an aggregate of 2,437,500 pounds of green coffee beans from $1.125 to $1.15 per pound. The fair market value of these options, which was obtained from observable market data of similar instruments was $52,594. The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: Three Months Ended April 30, 2019 2018 Gross realized gains $ 171,955 $ 134,849 Gross realized losses (1,661,913 ) (545,296 ) Unrealized (loss) gain (61,239 ) 737,041 Total $ (1,551,197 ) $ 326,594 Six Months Ended April 30, 2019 2018 Gross realized gains $ 714,551 $ 265,795 Gross realized losses (1,971,526 ) (958,631 ) Unrealized (loss) gain (604,388 ) 852,909 Total $ (1,861,363 ) $ 160,073 |
Line of Credit
Line of Credit | 6 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 8 - LINE OF CREDIT: On April 25, 2017 the Company and OPTCO (together with the Company, collectively referred to herein as the “Borrowers”) entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) and Amended and Restated Loan Facility (the “A&R Loan Facility”) with Sterling National Bank (“Sterling”), which consolidated (i) the financing agreement between the Company and Sterling, dated February 17, 2009, as modified, (the “Company Financing Agreement”) and (ii) the financing agreement between Company, as guarantor, OPTCO and Sterling, dated March 10, 2015 (the “OPTCO Financing Agreement”), amongst other things. Pursuant to the A&R Loan Agreement, the terms of each of the Company Financing Agreement and the OPTCO Financing Agreement were amended and restated to, among other things: (i) provide for a new Maturity Date of February 28, 2018; (ii) consolidate the principal amounts of the Company Financing Agreement and the OPTCO Financing Agreement to provide for a maximum principal amount limit of $12,000,000 for the Borrowers, collectively, provided that On March 23, 2018, the Company reached an agreement for a new loan modification agreement and credit facility with Sterling. The terms of the new agreement among other things: (i) provides for a new maturity date of March 31, 2020; (ii) increases the maximum principal amount to $14,000,000; and (iii) decreases the interest rate per annum to LIBOR plus 2 percent, 4.48% at April 30, 2019. Each of the A&R Loan Facility and A&R Loan Agreement contains covenants, subject to certain exceptions, that place annual restrictions on the Borrowers’ operations, including covenants relating to debt restrictions, capital expenditures, indebtedness, minimum deposit restrictions, tangible net worth, net profit, leverage, employee loan restrictions, dividend and repurchase restrictions (common stock and preferred stock), and restrictions on intercompany transactions. The Company was in compliance with all covenants as of April 30, 2019 and October 31, 2018. The A&R Loan Facility also requires that we maintain a minimum working capital at all times, and the A&R Loan Agreement requires that the Borrowers, on a consolidated basis, maintain a minimum working capital at all times and achieve a minimum net profit amount as of fiscal year end during the term of the A&R Loan Agreement. Each of the A&R Loan Facility and the A&R Loan Agreement is secured by all tangible and intangible assets of the Company. Other than as amended and restated by the A&R Loan Agreement, the Company Financing Agreement and the OPTCO Financing Agreement remains in full force and effect. As of April 30, 2019 and October 31, 2018, the outstanding balance under the bank line of credit was $5,767,540 and $6,260,014, respectively. The Company has announced a dividend plan. We intend to pay a dividend of 30% of our net profits for the fiscal year ending October 31, 2019 to shareholders of record as of October 31, 2019. We expect such dividend to be paid in our second fiscal quarter of 2020. The Company has received a waiver from Sterling National bank allowing this plan. |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 - INCOME TAXES: The Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed for temporary differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The income tax provision or benefit is the tax incurred for the period plus or minus the change during the period in deferred tax assets and liabilities. As of April 30, 2019 and October 31, 2018, the Company did not have any unrecognized tax benefits or open tax positions. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of April 30, 2019 and October 31, 2018, the Company had no accrued interest or penalties related to income taxes. The Company currently has no federal or state tax examinations in progress. The Company files a U.S. federal income tax return and California, Colorado, Connecticut, Idaho, Kansas, Louisiana, Montana, Massachusetts, Michigan, New Jersey, New York, New York City, Oregon, Rhode Island, South Carolina, Tennessee, Virginia, and Texas state tax returns. The Company’s federal income tax return is no longer subject to examination by the federal taxing authority for the years before fiscal 2015. The Company’s California, Colorado and New Jersey income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2012. The Company’s Oregon and New York income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2013. The changes included in the Tax Cuts and Jobs Act (the “Act”) are broad and complex. The final impacts of the Tax Act may differ from the above estimate, possibly materially, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the company has utilized to calculate the transition impact. The Securities Exchange Commission has issued rules that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. We currently anticipate finalizing and recording any resulting adjustments within one year after enactment date of the Tax Act. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Apr. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 10 - EARNINGS PER SHARE: The Company presents “basic” and “diluted” earnings per common share pursuant to the provisions included in the authoritative guidance issued by FASB, “Earnings per Share,” and certain other financial accounting pronouncements. Basic earnings per common share were computed by dividing net income by the sum of the weighted-average number of common shares outstanding. Diluted earnings per common share is computed by dividing the net income by the weighted-average number of common shares outstanding plus the dilutive effect of common shares issuable upon exercise of potential sources of dilution. The weighted average common shares outstanding used in the computation of basic and diluted earnings per share were 5,569,349 for the six and three months ended April 30, 2019 and 5,743,967 and 5,721,635 for the six and three months ended April 30, 2018, respectively. The Company has granted 689,000 options which have not been included in the calculation of diluted earnings per share due to their anti-dilutive nature. |
Economic Dependency
Economic Dependency | 6 Months Ended |
Apr. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Economic Dependency | NOTE 11 - ECONOMIC DEPENDENCY: Approximately 21% of the Company’s sales were derived from five customers during the six months ended April 30, 2019. These customers also accounted for approximately $2,030,000 of the Company’s accounts receivable balance at April 30, 2019. Approximately 20% of the Company’s sales were derived from five customers during the six months ended April 30, 2018. These customers also accounted for approximately $8,012,000 of the Company’s accounts receivable balance at April 30, 2018. Concentration of credit risk with respect to other trade receivables is limited due to the short payment terms generally extended by the Company, by ongoing credit evaluations of customers, and by maintaining an allowance for doubtful accounts that management believes will adequately provide for credit losses. For the six months ended April 30, 2019, approximately 28% of the Company’s purchases were from five vendors. These vendors accounted for approximately $322,000 of the Company’s accounts payable at April 30, 2019. For the six months ended April 30, 2018, approximately 19% of the Company’s purchases were from six vendors. These vendors accounted for approximately $218,000 of the Company’s accounts payable at April 30, 2018. Management does not believe the loss of any one vendor would have a material adverse effect of the Company’s operations due to the availability of many alternate suppliers. Approximately 21% of the Company’s sales were derived from five customers during the three months ended April 30, 2019. Approximately 18% of the Company’s sales were derived from five customers during the three months ended April 30, 2018. For the three months ended April 30, 2019, approximately 25% of the Company’s purchases were from five vendors. For the three months ended April 30, 2018, approximately 18% of the Company’s purchases were from six vendors. The following table presents revenues by product line in the six and three months ended April 30, 2019 and 2018 Six Months Ended April 30, 2019 Three Months Ended April 30, 2019 Six Months Ended April 30, 2018 Three Months Ended April 30, 2018 Green $ 17,178,743 $ 8,021,039 $ 21,776,323 $ 10,929,696 Packaged $ 27,171,556 $ 12,695,452 $ 22,500,793 $ 11,264,202 Totals $ 44,350,299 $ 20,716,491 $ 44,277,116 $ 22,193,898 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Apr. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 - RELATED PARTY TRANSACTIONS: The Company has engaged its 40% partner in GCC as an outside contractor (the “Partner”). Included in contract labor expense are expenses incurred from the Partner during the three and six months ended April 30, 2019 of $106,754 and $207,374, respectively, and $119,557 and $231,225 for the three and six months ended April 30, 2018, respectively, for the processing of finished goods. An employee of one of the top five vendors is a director of the Company. Purchases from that vendor totaled approximately $2,299,000 and $4,095,000 for the three and six months ended April 30, 2019, respectively, and $3,036,000 and $4,434,000 for the three and six months ended April 30, 2018, respectively. The corresponding accounts payable balance to this vendor was approximately $63,000 and $218,000 at April 30, 2019 and 2018, respectively. In January 2005, the Company established the “Coffee Holding Co., Inc. Non-Qualified Deferred Compensation Plan.” Currently, there is only one participant in the plan: the Company’s Chief Executive Officer. Within the plan guidelines, this employee is deferring a portion of his current salary and bonus. The assets are held in a separate trust. The deferred compensation payable represents the liability due to an officer of the Company. The assets are included in the Deposits and other assets in the accompanying balance sheets. The deferred compensation asset and liability at April 30, 2019 and October 31, 2018 were $474,997 and $532,726, respectively. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Apr. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 13 - STOCKHOLDERS’ EQUITY: a. Treasury Stock b. Share Repurchase Program. Stock Options. The Company has an incentive stock plan, the 2013 Equity Compensation Plan (the “2013 Plan”), and on April 19, 2019, has granted stock options to employees, officers and non-employee directors from the 2013 Plan. Options granted under the 2013 Plan may be Incentive Stock Options or Nonqualified Stock Options, as determined by the Administrator at the time of grant. As of April 30, 2019, the Board of Directors approved 1,000,000 options. There were 689,000 options granted from this pool of awards and the remaining 311,000 remaining shares have not yet been granted. During the quarter ended April 30, 2019, the Company granted stock option awards to five board members to purchase an aggregate 59,000 shares of the Company’s common stock at $5.43 per share. The stock options have an expected term of six years and will vest over a twelve month service period. The stock options have an aggregate grant date fair value of approximately $233,320. The Company also granted stock option awards to certain officers to purchase an aggregate of 630,000 shares of the Company’s common stock at an exercise price of $5.43 per share. The stock options have an expected term of six years and will vest over a three year service period. These stock options have an aggregate grant date fair value of approximately $1,524,600. The following table represents stock option activity for the six months ended April 30, 2019: Stock Options Exercise Price Contractual Life Aggregate Intrinsic Outstanding Exercisable Outstanding Exercisable (Years) Value Balance October 31, 2018 - - - - - - Granted 689,000 $ 5.43 - 10 - Exercised - - - - - - Cancelled - - - - - - Balance April 30, 2019 689,000 - $ 5.43 - 10 1,757,920 The Company recorded $25,000 of stock-based compensation in the three months ended April 30, 2019. The outstanding stock compensation expense as of April 30, 2019 was approximately $1,732,650. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Apr. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 - SUBSEQUENT EVENTS: The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required further adjustment or disclosure in the condensed consolidated financial statements. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policy (Policies) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition The Company’s significant accounting policy for revenue was updated as a result of the adoption of ASU 2014-09. The Company has adopted the new standard on November 1, 2018 and has used the modified retrospective method. The majority of the Company’s business is ship and bill. Based on our analysis, the Company did not identify a cumulative effect adjustment to retained earnings at November 1, 2018. The Company recognizes revenue in accordance with the five-step model as prescribed by ASU 2014-09 in which the Company evaluates the transfer of promised goods or services and recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASU 2014-09, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. See Note 11 for revenue disaggregated by product line. |
Share-Based Payment | Share-Based Payment The Company accounts for share-based payments using the fair value method. For employees and directors, the fair value of the award is measured, as discussed below, on the grant date. The Company has granted stock options at an exercise price equal to the closing price of the Company’s common stock as reported by Nasdaq. Upon exercise of an option, the Company issues new shares of common stock out of its authorized shares. The weighted-average fair value of options has been estimated on the grant date using the Black-Scholes pricing model. The fair value of each instrument is estimated on the grant date utilizing certain assumptions for a risk-free interest rate, volatility and expected remaining lives of the awards. The risk-free interest rate used is the United States Treasury rate for the day of the grant having a term equal to the life of the equity instrument. Beginning with the current year quarter, the fair value of stock-based payment awards issued was estimated using a volatility derived from comparable companies share price. The assumptions used in calculating the fair value of share-based payment awards represents management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgement. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different. The Black Scholes assumptions are as follows: April 30, 2019 Expected Life 10 years Risk free interest rate 2.42% ˗ 2.57 % Expected volatility 43.0% ˗ 64.2 % Expected dividend yield 0 % Forfeiture rate 0 % |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policy (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Black Scholes Assumptions | The Black Scholes assumptions are as follows: April 30, 2019 Expected Life 10 years Risk free interest rate 2.42% ˗ 2.57 % Expected volatility 43.0% ˗ 64.2 % Expected dividend yield 0 % Forfeiture rate 0 % |
Business Acquisition (Tables)
Business Acquisition (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Pro Forma Results of Operations | This pro forma financial information is not indicative of the results of operations that the Company would have attained had the acquisition occurred at the beginning of the periods presented, nor is the pro forma financial information indicative of the results of operations that may occur in the future: Three Months Ended April 30, 2018 Six Months Ended April 30, 2018 Pro forma sales $ 24,542,639 $ 49,680,884 Pro forma net income 378,773 837,063 Pro forma basic and diluted earnings per share .07 .15 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | The allowances are summarized as follows: April 30, 2019 October 31, 2018 Allowance for doubtful accounts $ 65,000 $ 65,000 Reserve for other allowances 35,000 35,000 Reserve for sales discounts 44,000 44,000 Totals $ 144,000 $ 144,000 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories at April 30, 2019 and October 31, 2018 consisted of the following: April 30, 2019 October 31, 2018 Packed coffee $ 4,563,283 $ 3,286,450 Green coffee 8,859,188 9,858,495 Roasters and parts 280,375 270,188 Packaging supplies 2,711,629 1,855,973 Totals $ 16,414,475 $ 15,271,106 |
Commodities Held by Broker (Tab
Commodities Held by Broker (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Brokers and Dealers [Abstract] | |
Schedule of Contracts Held by Broker | The Company has open position contracts held by the broker, which are summarized as follows: April 30, 2019 October 31, 2018 Option Contracts $ (398,588 ) $ (39,926 ) Future Contracts (227,846 ) 17,880 Total Commodities $ (626,434 ) $ (22,046 ) |
Schedule of Realized and Unrealized Gains and Losses on Contracts | The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: Three Months Ended April 30, 2019 2018 Gross realized gains $ 171,955 $ 134,849 Gross realized losses (1,661,913 ) (545,296 ) Unrealized (loss) gain (61,239 ) 737,041 Total $ (1,551,197 ) $ 326,594 Six Months Ended April 30, 2019 2018 Gross realized gains $ 714,551 $ 265,795 Gross realized losses (1,971,526 ) (958,631 ) Unrealized (loss) gain (604,388 ) 852,909 Total $ (1,861,363 ) $ 160,073 |
Economic Dependency (Tables)
Economic Dependency (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenues by Product line | The following table presents revenues by product line in the six and three months ended April 30, 2019 and 2018 Six Months Ended April 30, 2019 Three Months Ended April 30, 2019 Six Months Ended April 30, 2018 Three Months Ended April 30, 2018 Green $ 17,178,743 $ 8,021,039 $ 21,776,323 $ 10,929,696 Packaged $ 27,171,556 $ 12,695,452 $ 22,500,793 $ 11,264,202 Totals $ 44,350,299 $ 20,716,491 $ 44,277,116 $ 22,193,898 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Equity [Abstract] | |
Summary of Stock Option Activity | The following table represents stock option activity for the six months ended April 30, 2019: Stock Options Exercise Price Contractual Life Aggregate Intrinsic Outstanding Exercisable Outstanding Exercisable (Years) Value Balance October 31, 2018 - - - - - - Granted 689,000 $ 5.43 - 10 - Exercised - - - - - - Cancelled - - - - - - Balance April 30, 2019 689,000 - $ 5.43 - 10 1,757,920 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policy (Details Narrative) | Apr. 30, 2019 |
Generations Coffee Company, LLC [Member] | |
Equity method investment, ownership percentage | 60.00% |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policy - Summary of Black Scholes Assumptions (Details) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Expected Life | 10 years |
Risk free interest rate, minimum | 2.42% |
Risk free interest rate, maximum | 2.57% |
Expected volatility, minimum | 43.00% |
Expected volatility, maximum | 64.20% |
Expected dividend yield | 0.00% |
Forfeiture rate | 0.00% |
Business Acquisition - Schedule
Business Acquisition - Schedule of Pro Forma Results of Operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Apr. 30, 2018 | Apr. 30, 2018 | |
Business Combinations [Abstract] | ||
Pro forma sales | $ 24,542,639 | $ 49,680,884 |
Pro forma net income | $ 378,773 | $ 837,063 |
Pro forma basic and diluted earnings per share | $ 0.07 | $ 0.15 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 65,000 | $ 65,000 |
Reserve for other allowances | 35,000 | 35,000 |
Reserve for sales discounts | 44,000 | 44,000 |
Totals | $ 144,000 | $ 144,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 |
Totals | $ 16,414,475 | $ 15,271,106 |
Packed Coffee [Member] | ||
Totals | 4,563,283 | 3,286,450 |
Green Coffee [Member] | ||
Totals | 8,859,188 | 9,858,495 |
Roasters and Parts [Member] | ||
Totals | 280,375 | 270,188 |
Packaging Supplies [Member] | ||
Totals | $ 2,711,629 | $ 1,855,973 |
Commodities Held by Broker (Det
Commodities Held by Broker (Details Narrative) | 6 Months Ended | 12 Months Ended |
Apr. 30, 2019Integerlb$ / shares | Oct. 31, 2018USD ($)Integerlb$ / shares | |
Number of futures contracts | Integer | 112 | 22 |
Purchase of futures contracts | lb | 4,200,000 | 825,000 |
Futures contracts weighted average price per pound | $ 0.9280 | $ 1.11 |
Fair market value of futures contract per pound | $ 0.9315 | $ 1.13 |
Options [Member] | ||
Number of futures contracts | Integer | 65 | |
Purchase of futures contracts | lb | 2,437,500 | |
Fair market value of options | $ | $ 52,594 | |
Minimum [Member] | ||
Futures contracts term | 3 months | |
Minimum [Member] | Options [Member] | ||
Fair market value of futures contract per pound | $ 1.125 | |
Maximum [Member] | ||
Futures contracts term | 4 months | |
Maximum [Member] | Options [Member] | ||
Fair market value of futures contract per pound | $ 1.15 |
Commodities Held by Broker - Sc
Commodities Held by Broker - Schedule of Contracts Held by Broker (Details) - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 |
Brokers and Dealers [Abstract] | ||
Option Contracts | $ (398,588) | $ (39,926) |
Future Contracts | (227,846) | 17,880 |
Total Commodities | $ (626,434) | $ (22,046) |
Commodities Held by Broker - _2
Commodities Held by Broker - Schedule of Realized and Unrealized Gains and Losses on Contracts (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Brokers and Dealers [Abstract] | ||||
Gross realized gains | $ 171,955 | $ 134,849 | $ 714,551 | $ 265,795 |
Gross realized losses | (1,661,913) | (545,296) | (1,971,526) | (958,631) |
Unrealized (loss) gain | (61,239) | 737,041 | (604,388) | 852,909 |
Total | $ (1,551,197) | $ 326,594 | $ (1,861,363) | $ 160,073 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | Mar. 23, 2018 | Apr. 25, 2017 | Apr. 30, 2019 | Oct. 31, 2018 |
Line of credit interest rate | 4.48% | |||
Bank Line of Credit [Member] | ||||
Line of credit, maximum principal amount | $ 5,767,540 | $ 6,260,014 | ||
Shareholders [Member] | October 31, 2019 [Member] | ||||
Percentage of dividend from net profits | 30.00% | |||
Amended and Restated Loan and Security Agreement [Member] | ||||
Line of credit, maximum principal amount | $ 12,000,000 | |||
Amended and Restated Loan and Security Agreement [Member] | Borrowers [Member] | ||||
Line of credit expire date | Feb. 28, 2018 | |||
Line of credit, maximum principal amount | $ 3,000,000 | |||
Line of credit interest rate | 85.00% | |||
Amended and Restated Loan and Security Agreement [Member] | Borrowers [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Line of credit interest rate | 2.40% | |||
Prepayment premium percentage | 1.00% | |||
Maximum obligation amount | $ 1,000,000 | |||
Amended and Restated Loan and Security Agreement [Member] | Borrowers [Member] | Accounts Receivable [Member] | ||||
Line of credit maximum borrowing capacity | 2,000,000 | |||
Amended and Restated Loan and Security Agreement [Member] | Borrowers [Member] | Accounts Receivable [Member] | OPTCO [Member] | ||||
Line of credit maximum borrowing capacity | $ 1,500,000 | |||
Organic Products Trading Company [Member] | ||||
Prepayment premium percentage | 0.50% | |||
New Loan Modification Agreement and Credit Facility [Member] | ||||
Line of credit expire date | Mar. 31, 2020 | |||
Line of credit, maximum principal amount | $ 14,000,000 | |||
New Loan Modification Agreement and Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Line of credit interest rate | 2.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Apr. 30, 2019 | Oct. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | ||
Accrued interest or penalties |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding: Basic and diluted | 5,569,349 | 5,721,635 | 5,569,349 | 5,743,967 |
Stock options, granted | 689,000 |
Economic Dependency (Details Na
Economic Dependency (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | |
Accounts receivable | $ 144,000 | $ 144,000 | $ 144,000 | ||
Five Customers [Member] | |||||
Accounts receivable | $ 2,030,000 | $ 2,030,000 | |||
Five Customers [Member] | Sales Revenue [Member] | |||||
Concentration risk percentage | 21.00% | 18.00% | 21.00% | 20.00% | |
Four Customers [Member] | |||||
Accounts receivable | $ 8,012,000 | $ 8,012,000 | |||
Five Vendors [Member] | |||||
Concentration risk percentage | 25.00% | 28.00% | |||
Accounts payable | $ 322,000 | $ 322,000 | |||
Six Vendors [Member] | |||||
Concentration risk percentage | 18.00% | 19.00% | |||
Accounts payable | $ 218,000 | $ 218,000 |
Economic Dependency - Schedule
Economic Dependency - Schedule of Revenues by Product Line (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Totals | $ 20,716,491 | $ 22,193,898 | $ 44,350,299 | $ 44,277,116 |
Green [Member] | ||||
Totals | 8,021,039 | 10,929,696 | 17,178,743 | 21,776,323 |
Packaged [Member] | ||||
Totals | $ 12,695,452 | $ 11,264,202 | $ 27,171,556 | $ 22,500,793 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | |
Contract labor expense | $ 106,754 | $ 119,557 | $ 207,374 | $ 231,225 | |
Purchases from related party vendor | 2,299,000 | 3,036,000 | 4,095,000 | 4,434,000 | |
Accounts payable from related party vendor | 63,000 | $ 218,000 | 63,000 | $ 218,000 | |
Deferred compensation payable | $ 474,997 | $ 474,997 | $ 532,726 | ||
Generations Coffee Company, LLC [Member] | |||||
Related party transaction percentage | 40.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | Sep. 10, 2017 | |
Number of treasury stock shares | 236,586 | ||||
Number of treasury stock shares, value | $ 1,129,050 | ||||
Share-based compensation, options, number of shares authorized | 1,000,000 | 1,000,000 | |||
Stock options granted | 689,000 | ||||
Stock options purchase price per share | $ 5.43 | ||||
Stock-based compensation | $ 25,000 | $ 25,000 | |||
Outstanding stock compensation expense | $ 1,732,650 | $ 1,732,650 | |||
Five Board Members [Member] | |||||
Stock options granted | 59,000 | ||||
Stock options purchase price per share | $ 5.43 | ||||
Stock options expected term | P6Y | ||||
Stock options vesting period | 12 months | ||||
Stock options aggregate grant date fair value | $ 233,320 | ||||
Certain Officers [Member] | |||||
Stock options granted | 630,000 | ||||
Stock options purchase price per share | $ 5.43 | ||||
Stock options expected term | P6Y | ||||
Stock options vesting period | 3 years | ||||
Stock options aggregate grant date fair value | $ 1,524,600 | ||||
2013 Equity Compensation Plan [Member] | |||||
Share-based compensation, remaining shares available for grant | 311,000 | 311,000 | |||
2017 Share Repurchase Program [Member] | |||||
Number of treasury stock shares | 236,586 | ||||
Number of treasury stock shares, value | $ 1,129,050 | ||||
Number of common stock repurchase | 2,000,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Details) | 6 Months Ended |
Apr. 30, 2019USD ($)$ / sharesshares | |
Equity [Abstract] | |
Stock Options, begining balance | shares | |
Stock Options, Granted | shares | 689,000 |
Stock Options, Exercised | shares | |
Stock Options, Cancelled | shares | |
Stock Options, ending balance | shares | 689,000 |
Exercise Price, begining balance | $ / shares | |
Exercise Price, Granted | $ / shares | 5.43 |
Exercise Price, Exercised | $ / shares | |
Exercise Price, Cancelled | $ / shares | |
Exercise Price, ending balance | $ / shares | $ 5.43 |
Stock option, Contractual Life | 10 years |
Aggregate Intrinsic Value, ending balance | $ | $ 1,757,920 |