Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2018 | Oct. 22, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Probility Media Corporation | |
Entity Central Index Key | 1,530,981 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity Emerging Growth Company? | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity EX Transition | false | |
Entity Common Stock, Shares Outstanding | 110,651,221 | |
Document Fiscal Year Focus | 2,018 | |
Document fiscal period focus | Q3 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Current Assets | ||
Cash | $ 255,282 | $ 388,085 |
Accounts receivable, net | 1,120,214 | 908,163 |
Inventory | 565,623 | 771,149 |
Other current assets | 158,227 | 6,500 |
Total current assets | 2,099,346 | 2,073,897 |
Property, plant, and equipment, net | 1,327,983 | 159,641 |
Intangible assets, net | 639,442 | 806,346 |
Security deposit | 7,500 | 7,500 |
Goodwill | 2,537,550 | 967,015 |
Other assets | 155,500 | 0 |
Total Assets | 6,767,321 | 4,014,399 |
Current Liabilities | ||
Current portion of acquisition notes payable | 556,718 | 131,926 |
Current portion - lease payable | 15,821 | 13,837 |
Accounts payable and accrued expenses | 3,017,513 | 1,855,324 |
Accrued expenses - related parties | 902,641 | 416,972 |
Deferred revenue | 48,808 | 0 |
Current portion of convertible notes payable, net of discount of $1,689,404 and $213,077, respectively | 2,970,227 | 640,123 |
Current portion of notes payable, net of discount of $1,006,106 and $281,589, respectively | 2,736,877 | 1,526,615 |
Total current liabilities | 10,248,605 | 4,584,797 |
Long-term liabilities: | ||
Security deposit | 122,979 | 7,000 |
Lease payable | 39,571 | 51,697 |
Shareholder advance | 92,550 | 93,050 |
Convertible notes payable, net of discount of $162,942 and $114,937, respectively | 140,058 | 107,863 |
Notes payable, net of discount of $0 and $0, respectively | 845,053 | 0 |
Derivative liabilities | 4,553,365 | 0 |
Acquisition notes payable, net of current portion | 125,000 | 368,540 |
Contingent liability | 493,080 | 493,080 |
Total long-term liabilities | 6,411,656 | 1,121,230 |
Total liabilities | 16,660,261 | 5,706,027 |
Stockholders' Deficit | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 500,000,000 shares authorized, 67,835,142 and 52,764,720 issued and outstanding as of July 31, 2018 and October 31, 2017, respectively | 67,836 | 52,765 |
Additional paid-in capital | 6,476,102 | 5,160,319 |
Accumulated deficit | (16,436,878) | (6,904,712) |
Total stockholders' deficit | (9,892,940) | (1,691,628) |
Total Liabilities and Stockholders' Deficit | $ 6,767,321 | $ 4,014,399 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Preferred stock, par value (In dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (In dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 67,835,142 | 52,764,720 |
Common stock, shares outstanding | 67,835,142 | 52,764,720 |
Convertible Notes Payable [Member] | ||
Unamortized discount, noncurrent | $ 162,942 | $ 114,937 |
Notes Payable [Member] | ||
Unamortized discount, noncurrent | 0 | 0 |
Convertible Notes Payable [Member] | ||
Unamortized discount, current | 1,689,404 | 213,077 |
Notes Payable [Member] | ||
Unamortized discount, current | $ 1,006,106 | $ 281,589 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,703,470 | $ 3,043,449 | $ 10,456,581 | $ 5,972,276 |
Cost of sales | 2,282,483 | 2,007,006 | 6,917,350 | 4,019,633 |
Gross profit | 420,987 | 1,036,443 | 3,539,231 | 1,952,643 |
Operating expenses: | ||||
General and administrative expenses | 2,336,408 | 3,074,108 | 7,674,051 | 5,890,264 |
Total operating expenses | 2,336,408 | 3,074,108 | 7,674,051 | 5,890,264 |
Operating Loss | (1,915,421) | (2,037,665) | (4,134,820) | (3,937,621) |
Other income (expense): | ||||
Discount amortization | (1,015,730) | (276,336) | (1,283,512) | (301,601) |
Interest expense | (370,788) | (102,260) | (4,021,824) | (215,531) |
Other income | 25,009 | 0 | 123,538 | 0 |
Other expenses | (85,840) | 0 | (147,686) | 0 |
Gain (loss) on debt extinguishment | (47,808) | 0 | (97,528) | 82,240 |
Change in derivative liability | (67,357) | 250,556 | 29,666 | 136,703 |
Total other income (expenses),net | (1,562,514) | (128,040) | (5,397,346) | (298,189) |
Loss before income taxes | (3,477,935) | (2,165,705) | (9,532,166) | (4,235,810) |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Net loss | $ (3,477,935) | $ (2,165,705) | $ (9,532,166) | $ (4,235,810) |
Net loss per common share, basic and diluted | $ (0.06) | $ (0.04) | $ (0.17) | $ (0.09) |
Weighted average number of common shares outstanding, basic and diluted | 57,583,991 | 49,127,229 | 55,822,315 | 45,504,292 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (9,532,166) | $ (4,235,810) |
Adjustments to reconcile net loss to net cash provided by (used in) operations: | ||
Depreciation and amortization | 262,014 | 193,785 |
Bad debt expense | 142,838 | 31,305 |
Share-based compensation | 392,766 | 2,382,834 |
Amortization of debt discount | 860,997 | 301,601 |
Impairment expense | 0 | 387,696 |
Interest expense relating to the initial valuation of derivative liability | 1,602,442 | 0 |
Change in derivative liability | 2,114,450 | (136,703) |
Gain on debt extinguishment | 0 | (82,240) |
Changes in operating assets and liabilities: | ||
Accounts Receivable | 204,960 | (675,013) |
Inventory | 382,944 | 205,649 |
Other assets | 93,652 | (17,661) |
Accounts payable and accrued expenses | 898,173 | 689,258 |
Accounts payable - related parties | 294,122 | 73,985 |
Deferred revenue | 48,808 | 0 |
Net cash used in operating activities | (2,204,001) | (881,314) |
Cash Flows from Investing Activities: | ||
Net cash paid for business acquisitions | (437,203) | (9,425) |
Advances to cost method investee - related party | 0 | (123,672) |
Property, plant and equipment purchases | (216,857) | (19,019) |
Net cash used in investing activities | (654,060) | (152,116) |
Cash Flows from Financing Activities: | ||
Payments on convertible notes payable | (2,377,869) | (60,000) |
Proceeds from convertible note payable | 4,431,395 | 606,000 |
Payments on lease payable | (12,128) | (4,832) |
Proceeds from sale of common stock | 0 | 441,500 |
Payment on debt issuance cost | (97,750) | 0 |
Payments of acquisition notes payable | (68,748) | (19,380) |
Proceeds from notes payable | 6,058,275 | 2,192,138 |
Payments of notes payable | (5,307,917) | (1,949,837) |
Net cash provided by financing activities | 2,725,258 | 1,205,589 |
Net change in cash | (132,803) | 172,159 |
Cash at beginning of period | 388,085 | 68,369 |
Cash at end of period | 255,282 | 240,528 |
Supplemental Cash Flow Disclosure: | ||
Interest paid | 192,465 | 181,243 |
Taxes paid | 0 | 0 |
Common stock issued for stock payable | 0 | 60,287 |
Common stock issued upon conversion of convertible notes payable | 0 | 168,626 |
Discount on convertible notes from beneficial conversion features | 0 | 745,000 |
Common stock issued and issuable for business acquisitions | 850,612 | 0 |
Common stock issued for training materials | 100,000 | 0 |
Warrants issued as debt issuance cost on convertible notes | 213,921 | 0 |
Common stock issued as debt issuance cost | 393,820 | 0 |
Original issue discount on convertible notes | $ 400,050 | $ 0 |
1. Organization and Description
1. Organization and Description of Business | 9 Months Ended |
Jul. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Organization and Business Activity Probility Media Corporation (the “Company” or “ProBility”) was incorporated in the State of Nevada on July 11, 2011. The Company was originally incorporated as New Era Filing Services Inc., and changed its name to Probility Media Corporation on February 1, 2017. ProBility is an Education Technology (EdTech) company that provides education and training for a wide range of industrial trades. The Company utilizes innovation through technology to educate, train and continually develop skill sets for skilled trades such as electricians, plumbers, crane operators, riggers, HVAC, and construction and contractor certification with immersive experiences utilizing virtual reality (VR), augmented reality (AR) and mixed reality (MR) technologies. The Company also offers interactive e-Learning courses that encompass 2D and 3D digital animation for many industries. ProBility operates 5 different e-commerce websites, and has physical facilities in five different locations geared towards vocational trades and training. The Company operates under the brand names of the Company’s subsidiaries, Brown, Brown Technical, One Exam Prep, NEWP, W Marketing, Disco, and North American Crane Bureau. On January 19, 2017, the Company acquired 100% of the membership units of Premier Purchasing and Marketing Alliance LLC, a New York limited liability company, also known as National Electrical Wholesale Providers (“NEWP”). The acquisition of NEWP was effective January 1, 2017. On January 26, 2017, the Company acquired 100% of the membership units of One Exam Prep, LLC, (“One Exam”) a Florida limited liability company. The acquisition of One Exam was effective January 1, 2017. On June 22, 2017, the Company acquired 100% of the outstanding shares of W Marketing Inc. (“W Marketing”) a New York corporation. The acquisition of W Marketing was effective May 1, 2017. On July 31, 2017, the Company acquired 100% of the outstanding shares of Cranbury Associates, LLC (“Cranbury”) a Vermont limited liability company. The acquisition of Cranbury was effective May 1, 2017. On January 30, 2018, the Company acquired 100% of the outstanding shares of North American Crane Bureau Group, Inc. (“NACB”). The acquisition of NACB Group was effective November 1, 2017. On January 30, 2018, the Company acquired 100% of the outstanding shares of Disco Learning Media Inc. (“Disco”). The acquisition of Disco was effective January 1, 2018. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 9 Months Ended |
Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended July 31, 2018 are not necessarily indicative of the final results that may be expected for the year ended October 31, 2018. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended October 31, 2017 included in the Company’s Form 10-K filed with the SEC. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and typically do not bear interest. The Company provides allowances for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company takes into consideration the overall quality of the receivable portfolio along with specifically-identified customer risks. The Company has an allowance for doubtful accounts of $199,432 and $68,990 as of July 31, 2018 and October 31, 2017, respectively. Inventory Inventory, which consists of finished goods, is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. During the three months ended July 31, 2018, the Company evaluated its business operations and the costs associated with maintaining a large and diverse inventory. In order to reduce costs, the Company changed its business model from one in which it carried a wide range of products to one in which it carries little or no inventory and orders products for drop shipment from its suppliers as it receives paid orders from its customers. The Company moved fulfillment of orders from its Houston office to Amazon.com. The Company reduced its inventory on hand and disposed of $628,669 of slow-moving inventory. The Company did not realize any income from the disposal of inventory. The Company has no inventory reserve as of July 31, 2018 and October 31, 2017. Advertising Costs The Company expenses advertising costs as incurred and recorded $100,563 and $128,550 during the three months ended July 31, 2018 and 2017, respectively and $531,468 and $661,033 for the nine months ended July 31, 2018 and 2017, respectively. Fair Value of Financial Instruments The Company believes that the fair value of its financial instruments comprising cash, accounts payable, notes payable, and convertible notes approximate their carrying amounts. As of July 31, 2018 and October 31, 2017, the Company had no Level 1 or Level 2 financial assets or liabilities, and Level 3 financial liabilities consisted of the Company’s derivative liability as of July 31, 2018. The following table presents the fair value measurement information for the Company as of July 31, 2018: Carrying Amount Level 1 Level 2 Level 3 Derivative liability $ 4,553,365 $ – $ – $ 4,553,365 The following table presents the fair value measurement information for the Company as of October 31, 2017: Carrying Amount Level 1 Level 2 Level 3 Derivative liability $ – $ – $ – $ – Business Combinations The Company allocates the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions based on its estimated fair values at the time of acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The most subjective areas include determining the fair value of the following: - Intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, our assumed market segment share, as well as the estimated useful life of intangible assets; - Inventory; property, plant and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and - Goodwill as measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. The Company’s assumptions and estimates are based upon comparable market data and information obtained from management and the management of the acquired companies. The Company allocates goodwill to the reporting units of the business that are expected to benefit from the business combination. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. Intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated lives to the estimated residual values, and reviewed for impairment. The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit's goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment. Loss per Share Basic loss per common share equals net loss divided by weighted average common shares outstanding during the period. Diluted loss per share includes the impact on dilution from all contingently issuable shares, including warrants and convertible securities. The common stock equivalents from contingent shares are determined by the treasury stock method. The Company incurred net losses for the three and nine months ended July 31, 2018 and 2017, and therefore, basic and diluted loss per share for those periods are the same as all potential common equivalent shares would be antidilutive. For the nine months ended July 31, 2018, the Company had 33,000 common stock warrants outstanding, at an exercise price of $6.00 per share, expiring on August 31, 2020, 2,032,526 common stock warrants outstanding, at an exercise price of $0.45 per share, expiring on November 3, 2020, 3,733,500 common stock warrants outstanding, at an exercise price of $0.175 per share, expiring on January 19, 2021, 5,555,557 common stock warrants outstanding, at an exercise price of $0.175 per share, expiring on May 16, 2023, and 356,430,602 shares related to convertible notes payable that were excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive. For the nine months ended July 31, 2017 the Company had 33,000 common stock warrants outstanding, at an exercise price of $6.00 per share, expiring on August 31, 2020. Recent Accounting Pronouncements Deferred Taxes - Classification: Revenue Recognition: The Company is continuing to evaluate the expected impact of this standard on the Company’s financial statements and currently plans to adopt the standard using the modified retrospective method. The Company has not assessed the impact of this standard on its financial statements. Leases: Share-Based Compensation: Statement of Cash Flows: Business Combinations: |
3. Going Concern and Liquity Co
3. Going Concern and Liquity Considerations | 9 Months Ended |
Jul. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN AND LIQUIDITY CONSIDERATIONS | NOTE 3 – GOING CONCERN AND LIQUIDITY CONSIDERATIONS The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a cumulative net loss since inception of $16,436,878, negative working capital of $8,149,259 and has required additional capital raises, debt issuances and credit card advances to support its operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern for at least the next twelve months. The Company’s continuation as a going concern is dependent upon its ability to create positive cash flows from operations and its ability to continue receiving capital from shareholders and other related parties and obtain financing from third parties. No assurance can be given that the Company will be successful in these efforts. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
4. Property and Equipment
4. Property and Equipment | 9 Months Ended |
Jul. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and Equipment Property and equipment consists of the following: July 31, October 31, 2018 2017 Equipment $ 159,655 $ 68,182 Web sites 195,226 60,343 Leasehold improvements 31,626 19,002 Office equipment 77,539 98,213 Software 146,825 41,661 Vehicles 52,413 – Land 200,000 – Building 684,694 – Property and equipment 1,547,978 287,401 Less: accumulated depreciation (219,995 ) (127,760 ) Property and equipment, net $ 1,327,983 $ 159,641 Depreciation expense for the nine months ended July 31, 2018 and 2017, is $92,235 and $21,615, respectively. |
5. Intangible Assets
5. Intangible Assets | 9 Months Ended |
Jul. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS Intangible assets consisted of the following as of July 31, 2018, and October 31, 2017: July 31, 2018 Asset Useful life (yr) Cost Accumulated Amortization Carrying Value Customer Relationships 3-5 $ 482,875 $ 161,768 $ 321,107 Copyrights 5 73,000 22,338 50,662 Trade Names 4 327,000 110,452 216,548 Non-Compete 5 75,000 23,875 51,125 Totals $ 957,875 $ 318,433 $ 639,442 October 31, 2017 Asset Useful life (yr) Cost Accumulated Amortization Carrying Value Customer Relationships 3-5 $ 480,000 $ 72,235 $ 407,765 Copyrights 5 73,000 11,488 61,512 Trade Names 4 327,000 52,306 274,694 Non-Compete 5 75,000 12,625 62,375 Totals $ 955,000 $ 148,654 $ 806,346 Amortization expense for the nine months ended July 31, 2018 and 2017 is $169,779 and $172,169, respectively. |
6. Related Party Transactions
6. Related Party Transactions | 9 Months Ended |
Jul. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS As of July 31, 2018 and October 31, 2017, total advances from certain officers, directors and shareholders of the Company were $92,550 and $93,050, respectively, which was used for payment of general operating expenses. The related parties advances have no conversion provisions into equity, are due on demand and do not incur interest. On January 30, 2017, the Company borrowed $70,000 from a trust related to Richard Corbin, the former Vice Chairman of the Board. The loan was originally due on February 10, 2017, at which time the Company was to repay the loan and $1,000 of interest. The loan has been amended and the maturity date was extended to June 2020. As of July 31, 2018 and October 31, 2017, the outstanding balance was $45,000. The Company uses credit cards of related parties to pay for certain operational expenses. The Company has agreed to pay the credit card balances, including related interest. As of July 31, 2018 and October 31, 2017, the Company has outstanding balances on these credit cards of $902,641 and $416,972, respectively. |
7. Notes Payable
7. Notes Payable | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE Notes payable consists of the following unsecured notes: July 31, October 31, 2018 2017 Note payable dated September 9, 2016, bearing interest at 14.9% per annum, due April 2018, at which time it was paid in full. $ – $ 160,912 Note payable dated May 14, 2015 bearing interest at 18% per annum, due September 2018, guaranteed by the officers of the Company. The note is in default at July 31, 2018, which had no impact on the interest rate. 89,847 72,104 Note payable dated October 23, 2014, bearing interest at 10% per annum and due in August 2017. This note was renewed at maturity and the due date was extended to August 2018, at which time it was paid in full. 204,054 9,019 Note payable dated March 16, 2015 bearing interest at 9%, due September 30, 2018. The note is in default at July 31, 2018, which had no impact on the interest rate. 51,000 51,000 Note payable dated January 1, 2017 bearing interest at 8%, due September 30, 2017. The note is secured by the membership interest of Premier Purchasing and Marketing Alliance, LLC held by the Company. The note is in default; however, no notice of default has been received at the date of filing. 50,000 50,000 Note payable dated January 1, 2017 bearing interest at 0.0%, due in three installments ending March 31, 2017. This note was paid in full. – 50,000 Non-interest bearing note payable dated January 1, 2017, due on March 1, 2017. The note is secured by the membership interest of Premier Purchasing and Marketing Alliance, LLC held by the Company, which has a net book value of $210,388. The note is in default; however, no notice of default has been received at the date of filing. 36,830 36,830 Note payable dated January 17, 2017 bearing interest at 7%, due January 17, 2018 and guaranteed by the officers of the Company. This note was paid in full at maturity. – 95,695 Note payable dated March 14, 2017 bearing interest at 9%, due March 14, 2018, at which time it was paid in full. – 44,212 Note payable dated July 26, 2017 bearing interest at 16.216%, due on July 26, 2018. The note is in default at July 31, 2018, which had no impact on the interest rate. 232,282 158,266 Note payable dated October 2, 2017 with an original principal of $498,750 requiring daily payments of $1,979. The payments are subject to adjustments based on future revenue. A discount of $142,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The note was paid in full. – 465,107 Note payable dated October 2, 2017 with an original principal of $498,750 requiring daily payments of $1,979. The payments are subject to adjustments based on future revenue. A discount of $142,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The note was paid in full. – 469,065 Line of credit with a maximum value of $125,000 dated January 4, 2008 bearing interest at the prime rate plus 2%. The line of credit is renewable annually and is due December 31, 2018. The Company expects to renew the line of credit at that time. 21,146 44,269 Note payable dated October 11, 2017 with an original principal of $108,025 requiring daily payments of $450 and due on August 27, 2018. The payments are subject to adjustments based on future revenue. A discount of $33,525 was recorded with this issuance of the debt and is being amortized over the life of the note. The remaining balance of the note was paid in full on August 16, 2018. The Company is currently in default on this note. 8,668 101,725 Note payable dated January 22, 2018, with an original principal of $97,000, bearing interest at 30%, due on January 22, 2019. The Company is currently in default on this note. 75,004 – Note payable dated January 5, 2018, with an original principal of $32,000, bearing interest at 30%, due on Jan 5, 2019. The Company is currently in default on this note. 17,722 – Acquired with NACB. Four secured notes payable to acquire vehicles by NACB prior to the acquisition. Interest rates range from 0% to 4.99%. Notes mature from December 2018 to June 2021. 16,149 – Acquired with NACB. Note payable due to a former shareholder dated February 2, 2015, maturing January 2021 and bearing interest at 1%. 88,848 – Acquired with NACB. Note payable dated July 28, 2008 secured by the land and building of NACB. The note accrues interest at 8.56% and matures August 5, 2033. The Company is current with its payments on this note. 502,821 – Acquired with NACB. Note payable dated December 17, 2008 secured by the land and building of NACB. The note accrues interest at 6.30% and matures February 1, 2028. 338,132 – Acquired with NACB. Line of credit dated March 27, 2015. The note accrues interest at 5.75% and is due upon demand. This note was paid off in September 2018. 56,725 – Note payable dated June 7, 2018 with an original principal of $45,598 bearing an effect interest rate of 136.47%, due on December 10, 2018 requiring daily payments of $345. A discount of $15,097 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 32,771 – Note payable dated March 23, 2018 with an original principal of $291,800 requiring daily payments of $2,918, due September 7, 2018. The payments are subject to adjustments based on future revenue. A discount of $91,800 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 64,970 – Note payable dated February 8, 2018 with an original principal of $750,000 requiring weekly payments of $19,950, balance due on February 8, 2019. The payments are subject to adjustments based on future revenue. A discount of $247,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 582,244 – Note payable dated February 8, 2018 with an original principal of $750,000 requiring weekly payments of $19, balance due on February 8, 2019. The payments are subject to adjustments based on future revenue. A discount of $247,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 582,244 – Note payable dated April 15, 2018 with an original principal amount of $55,000 and an original issue discount of $5,000. The note is due on May 5, 2018. If the note is not repaid at maturity, interest will accrue at the rate of 20% per annum. This note was not repaid on May 5, 2018 and is therefore accruing interest at 20%. The Company is currently in default on this note. 55,000 – Note payable dated April 27, 2018 with an original principal of $218,850 requiring daily payments of $2,432, balance due on August 31, 2018. The payments are subject to adjustments based on future revenue. A discount of $68,850 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 100,016 – Note payable dated April 27, 2018 with an original principal of $218,850 requiring daily payments of $2,432, balance due on August 31, 2018. The payments are subject to adjustments based on future revenue. A discount of $68,850 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is in default on this note. 100,017 – Note payable dated March 8, 2018 with an original principal of $168,950 requiring daily payments of $854, balance due on March 9, 2019. The payments are subject to adjustments based on future revenue. A discount of $13,950 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 109,339 – Note payable dated April 2, 2018 with an original principal of $72,000 bearing an effective interest rate of 8%, balance due on April 2, 2019. A discount of $5,760 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 46,254 – Note payable dated March 7, 2018 with an original principal of $100,000 requiring daily payments of $1,499, balance due on July 20, 2018. The payments are subject to adjustments based on future revenue. A discount of $45,900 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 94,934 – Note payable dated June 25, 2018 with an original principal of $51,840 bearing an effective interest rate of 63.48%, balance due on November 1, 2019. A discount of $15,840 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 38,880 – Note payable dated July 5, 2018 with an original principal of $344,700 bearing an effective interest rate of 287.09% due on October 25, 2018 requiring daily payments of $4,310. A discount of $114,770 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 94,550 – Note payable dated June 13, 2018 with an original principal of $163,300 bearing an effective interest rate of 137.53% due on December 18, 2018. A discount of $48,300 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 120,350 – Note payable dated May 13, 2018 with an original principal of $342,500 bearing an effective interest rate of 109.54% due on January 1, 2019. A discount of $92,500 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 138,976 – Note payable dated June 13, 2018 with an original principal of $132,050 bearing an effective interest rate of 86.27% due on April 4, 2019. A discount of $37,050 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 112,514 – Note payable dated July 10, 2018 with an original principal of $119,200 bearing an effective interest rate of 286.04% due on November 6, 2018. A discount of $39,200 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 103,410 – Note payable dated May 11, 2018 with an original principal of $187,375 bearing an effective interest rate of 367.45% due on August 3, 2018. A discount of $62,375 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 39,967 – Note payable dated May 11, 2018 with an original principal of $187,375 bearing an effective interest rate of 186.78% due on October 26, 2018. A discount of $62,375 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 56,209 – Note payable dated May 3, 2018 with an original principal of $342,500 bearing an effective interest rate of 90.67% due on March 21, 2019. A discount of $92,500 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 282,430 – Note payable dated June 4, 2018 with an original principal of $57,200 bearing an effective interest rate of 146.18% due on December 6, 2018. A discount of $17,200 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 43,733 – Total notes payable 4,588,036 1,808,204 Less: net discount on notes payable (1,006,106 ) (281,589 ) Less, current portion (2,736,877 ) (1,526,615 ) Long term portion of notes payable $ 845,053 $ – Effective September 27, 2018, the Company reached a settlement agreement with 11 out of 13 merchant cash advance lenders included in notes payable that called for the note holders to waive penalties and legal fees due under the note agreements and to accept a modified repayment plan as further discussed in footnote 15. |
8. Acquisition Notes Payable
8. Acquisition Notes Payable | 9 Months Ended |
Jul. 31, 2018 | |
Acquisition Notes Payable | |
Acquisition Notes Payable | NOTE 8 – ACQUISITION NOTES PAYABLE Notes payable related to certain acquisitions consists of the following: July 31, October 31, 2018 2017 Note payable dated June 22, 2017 bearing interest at 8% per annum, due August 22, 2018 with monthly principal and interest payments totaling $3,306 beginning August 22, 2017. The notes are to the former owners of W Marketing. The Company is in default on these notes. $ 12,686 $ 56,250 Note payable dated July 31, 2017, bearing interest at 6% per annum and due November 30, 2019 with monthly principal and interest payments totaling $4,153 beginning November 1, 2017. The notes are to the former owner of Cranbury. The Company is in default on this note. 78,871 100,000 Notes payable dated January 31, 2014 bearing interest at 8%, due February 1, 2019 with monthly principal and interest payments totaling $4,629. The notes are due to the former owners of Brown Book Store. The Company is in default on these notes. 340,161 344,216 Notes payable dated January 30, 2018 bearing interest at 1.68%, due in two equal installments on the first and second anniversary of the purchase of NACB. The note is due to the former owners of NACB. 250,000 – Total acquisition notes payable 681,718 500,466 Less, acquisition notes payable current portion (556,718 ) (131,926 ) Long term portion of acquisition notes payable $ 125,000 $ 368,540 |
9. Convertible Notes Payable
9. Convertible Notes Payable | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 9 – CONVERTIBLE NOTES PAYABLE July 31, October 31, Description 2018 2017 On August 20, 2015, the Company executed a convertible note payable to Typenex Co-Investment, L.LC. in the original principal amount of $247,000 for net proceeds of $220,000, payable on March 31, 2018 bearing interest at 10% per annum. This note is convertible into the Company’s common stock at $7.50 per share unless the market capitalization of the Company falls below $15,000,000, at which point the conversion price will equal the market price of the Company’s common stock on the date of conversion. On October 29, 2015, the market capitalization of the Company fell below $15,000,000 and the variable conversion feature became permanent. The note is unsecured. On May 12, 2017 the note holder sold this note to an unrelated third party. The note was paid in full during the first quarter of 2018. $ – $ 125,000 During the year ended October 31, 2016, the Company sold convertible promissory notes in aggregate amount of $87,000 to three investors. During the nine months ending July 31, 2017, the Company sold an additional note with a face value of $50,000. The notes bear interest at 10% per annum and may be converted into the common stock of the Company upon the completion of a capital raise of $500,000 by December 31, 2016 (a “Qualified Raise”). The notes may be converted into common stock at 75% of the price of the capital raised in the Qualified Raise. On December 31, 2016, notes with a principal and accrued interest balance of $88,626 were converted into 709,008 shares of the Company’s common stock. The remaining note was due on December 31, 2017 and is in default. 50,000 50,000 On January 20, 2017, the Company executed a non-interest-bearing convertible note in the original principal amount of $300,000, payable on January 20, 2018. The note is convertible into the Company’s common stock at $0.50 per share, no earlier than one year from the date of the note. The note is secured by the membership units of One Exam Prep, LLC held by the Company, which have a net book value of $399,118. The holder has not yet requested a conversion. The Company is in default on this note. 300,000 300,000 In June 2017, the Company sold convertible notes payable of $356,000 to 8 investors. The notes bear interest at 15%, are due in one year and are convertible at $0.15 per share. In connection with the issuance, the Company recorded a discount of $356,000 from the beneficial conversion feature that will be amortized over the life of the note. As of the date of this filing, one note in the amount of $20,000 has been converted, notes with a principal balance of $336,000 are due as of this filing. 356,000 356,000 In June 2017, the Company sold a convertible note payable of $200,000 to an investor. The note bears interest at 12% and is due in June 2020 and is convertible at $0.25 per share. The Company is obligated to make monthly principal and interest payments of $2,000 per month to the note holder. In connection with the issuance, the Company recorded a discount of $184,000 from the beneficial conversion feature that will be amortized over the life of the note. 200,000 200,000 On June 18, 2017, the former Vice Chairman of the Board, who holds a $45,000 note dated January 30, 2017, with the Company agreed to convert the principal balance on his note into a convertible note that bears interest at 12% and is due in June 2020 and is convertible at $0.25 per share. The Company is obligated to make monthly principal and interest payments of $500 per month to the note holder. The Company is in default on this note. 45,000 45,000 On November 3, 2017, along with several institutional accredited investors, the Company completed a first closing of its promissory notes. Additional details are below. The Company is in default on these notes. 1,511,336 – On January 29, 2018, along with several institutional accredited investors, the Company completed a second closing of its promissory notes. Additional details are below. The Company is in default on these notes. 1,270,072 – On May 18, 2018, along with several institutional accredited investors, the Company completed a bridge financing of its promissory notes. Additional details are below. 972,223 – On June 21, 2018, the Company issued a convertible note payable to an institutional accredited investor bearing interest at 8% and convertible at a price equal to 61% of the average of the lowest three trading prices of the Company’s common stock during the fifteen day trading period ending on the latest complete trading day prior to the conversion date. The note is due June 21, 2019. The Company recorded a discount of $158,000 on the note, which is being amortized over the term of the note. 158,000 – On July 20, 2018, the Company issued three convertible notes payable to institutional accredited investors bearing interest at 8% and convertible at a price equal to 61% of the average of the lowest three trading prices of the Company’s common stock during the fifteen day trading period ending on the latest complete trading day prior to the conversion date. The note is due July 20, 2019. The Company recorded a discount of $22,950 on the notes, which is being amortized over the term of the note. 100,000 – Total convertible notes payable, net 4,962,631 1,076,000 Less: net discount on convertible notes payable, current portion (1,689,404 ) (213,077 ) Less: current portion, net of discounts (2,970,227 ) (640,123 ) Less: net discount on convertible notes payable, long term portion (162,942 ) (114,937 ) Long term portion of convertible notes payable $ 140,058 $ 107,863 First Closing of Amortizable Promissory Note and Warrant Private Placement On November 3, 2017, pursuant to a Securities Purchase Agreement, dated as of November 3, 2017, with several institutional accredited investors, the Company originally completed a private placement of its original issue discount amortizable promissory notes (referred to as the notes) in the aggregate principal amount of $3,383,325 for net proceeds of $2,900,000. The transaction was structured in two tranches. The investors funded notes with a face value of $1,633,325 and net proceeds of $1,400,000 at the first closing of the private placement on November 6, 2017, and agreed to fund the remaining notes with a face value of up to $1,750,000 and net proceeds of up to $1,500,000 at a second closing to occur 45 to 90 days after the first closing, subject to the satisfaction of certain closing conditions including the execution of definitive documents to effect the consummation of a contemplated acquisition transaction. Subsequently, the Securities Purchase Agreement was amended such that the face value of the notes at the second closing was $1,166,725, and the net proceeds were $1,000,000. See below. Each note was issued at a price equal to 85% of its principal amount, or $3,000,000 in aggregate purchase price. The notes mature on July 3, 2019 (18 months after the date of their issuance) and do not bear regularly scheduled interest. The Company also agreed to issue 227,250 shares of its common stock, having a fair market value of $140,895 as a debt discount and will be amortized over the life of the note, to the investors and to issue warrants to purchase up to 3,888,886 shares of the Company’s common stock at a price of $0.45 per share (See Note 12). The warrants have a five-year term. Warrants to purchase up to 1,814,749 shares of the Company’s common stock were issued in connection with the first closing. The fair value of the warrants of $1,125,094 was recorded as a debt discount and will be amortized over the life of the notes. Beginning on February 4, 2018 (90 days after the issuance date), the Company is required to make monthly amortization payments, consisting of 1/18th of the outstanding aggregate principal amount, until the notes are no longer outstanding. In June 2018 the Company defaulted on these payments. The investors may elect to receive each monthly payment in cash, or in shares of the Company’s common stock (in-kind) if certain equity conditions are satisfied. The equity conditions require that the Company’s total trading volume in common stock over the 30 days prior to a monthly payment be equal to or greater than ten times the amount of shares derived in the in-kind payment price of the monthly payment. If the equity conditions are satisfied, and the investor elects to receive a monthly payment in common stock, then the shares of common stock to be delivered will be calculated as the amount of the monthly payment divided by the in-kind payment price. The in-kind payment price will be equal to 75% of the lowest three trade prices of the common stock during the 20 trading days immediately preceding the monthly payment date. If an event of default under the notes is in effect, the investors have the right to receive common stock at 65% of the lowest trade price of the common stock during the 20 trading days immediately preceding the monthly payment date. The notes are not redeemable or subject to voluntary prepayment by the Company prior to maturity without the consent of the note holders. The notes are identical for all of the investors except for principal amount. Pickwick Capital Partners LLC (Pickwick) acted as the placement agent for the private placement. At the first closing, the Company paid a cash placement fee of $98,000 to Pickwick for acting in this capacity and issued a warrant to Pickwick to purchase 217,777 shares of ProBility common stock on the same terms given to the investors. The fair value of the warrants of $126,018 was recorded as a debt discount and will be amortized over the life of the note. These notes require timely filing of the Company’s periodic reports with the SEC. The Company was in default on these notes when it did not file its Form 10-K on the due date of February 13, 2018. A default notice related to the Company’s filing had not been received and the default will be cured upon filing the delinquent reports. In the event of a default, the interest rate on the note becomes 24% per annum, and the note and all accrued interest become due and payable at 110% of the outstanding principal balance plus accrued interest. In May 2018, the Company received a notice of default, and on May 17, 2018 the Company and the investors entered into an agreement to waive the default in exchange for a 20% increase in the outstanding balance of the notes. This penalty interest of $267,777 was recorded as of April 30, 2018. Second Closing and Amendment to Securities Purchase Agreement On January 29, 2018, pursuant to the Securities Purchase Agreement, dated as of November 3, 2017, as amended on January 29, 2018, with several institutional accredited investors, the Company completed the second closing of its private placement of original issue discount amortizable promissory notes (referred to as the notes) in the aggregate principal amount of $1,166,725, and net proceeds of $1,000,000, upon the satisfaction of certain closing conditions including the entry into definitive documents to effect the consummation of the NACB Group and Disco Learning acquisition transactions. As part of the second closing, the Company, the original investors and one new investor entered into Amendment No. 1 to the Securities Purchase Agreement, dated as of January 19, 2018, to provide for the addition of a new investor, clarify the use of proceeds from the second closing, increase the number of “commitment shares” to be issued at the second closing and decrease the exercise price of the warrants to be issued at the second closing, as discussed below. The Company issued to the investors at the second closing three-year common stock purchase warrants (referred to as the warrants) to purchase up to 3,333,500 shares of ProBility common stock at an exercise price of $0.175 per share (compared to a warrant exercise price of $0.45 per share at the first closing), having a fair market value of $732,561, and issued 941,851 shares of ProBility common stock to the investors at the second closing as “commitment shares” in consideration for entering into the private placement, having a fair market value of $164,824, as required by Amendment No. 1 to the Securities Purchase Agreement. The shares were issued in February 2018. The fair value of the common stock and common stock purchase warrants was recorded as a debt discount and will be amortized over the life of the note. The commitment shares were issued in February 2018. The Company used the net proceeds from the second closing of the private placement to fund the closing of the NACB Group and Disco Learning acquisition transactions. Pickwick acted as the placement agent for the private placement. At the second closing, the Company paid a cash placement fee of $70,000 to Pickwick for acting in this capacity and issued a warrant to Pickwick to purchase 400,000 shares of ProBility common stock on the same terms given to the investors. The fair value of the warrants of $87,903 was recorded as a debt discount and will be amortized over the life of the note. These notes require timely filing of the Company’s periodic reports with the SEC. The Company was in default on these notes when it did not file its Form 10-K on the due date of February 13, 2018 A default notice related to the Company’s filing had not been received and the default will be cured upon filing the delinquent reports. In the event of a default, the interest rate on the note becomes 24% per annum, and the note and all accrued interest become due and payable at 110% of the outstanding principal balance plus accrued interest. In May 2018, the Company received a notice of default, and on May 17, 2018 the Company and the investors entered into a settlement agreement to waive the default in exchange for a 20% increase in the outstanding balance of the notes, the terms of which are discussed above. This penalty interest of $233,345 was recorded as of April 30, 2018. Bridge Financing On May 17, 2018, pursuant to a Securities Purchase Agreement, dated as of May 17, 2018, with several institutional investors, the Company completed a private placement of the Company’s 10% original issue discount senior secured convertible promissory notes (referred to as the convertible notes), receiving gross and net proceeds of $972,222 and $875,000, respectively. Each convertible note was issued at a purchase price equal to 90% of its principal amount. The convertible notes mature nine months after the date of their issuance and bear interest at 5% per annum. Investors may convert their convertible notes into shares of the Company’s common stock at any time and from time to time on and after the maturity date at a conversion price of $0.14 per share. In the event of a default under the convertible notes, the conversion price may be reduced to a price equal to 60% of the lowest closing price of the Company’s common stock during the prior 20 trading days. The Company is in default on these notes. The convertible notes are secured obligations of the Company, and rank senior to general liabilities. The convertible notes are not redeemable. Prior to maturity, the Company may prepay the convertible notes at any time in an amount equal to 110% of the outstanding principal amount for the first 90 days after the issuance date and 120% of the outstanding principal amount from 91 to 181 days after the issuance date, upon ten trading days’ written notice to the investors. The convertible notes are identical for all of the investors except for principal amount. As part of the financing, the Company agreed to grant the investors a right of participation in any offering of securities or conventional debt issued by the Company for a period of 18 months following the closing date, other than in connection with strategic investments and other permitted exceptions. The Company also issued to the investors five-year common stock purchase warrants to purchase up to 5,555,557 shares of the Company’s common stock at an exercise price of $0.175 per share. The warrants may be exercised on a cashless basis at any time if the underlying shares have not been fully registered for resale with the SEC. The warrants are not callable. The warrants and the convertible notes each contain a provision for a “full ratchet” anti-dilution adjustment in the event of a subsequent equity financing at a price less than the respective warrant exercise price or convertible note conversion price. In conjunction with the private placement of the Bridge Notes, , in consideration for the waiver of any and all defaults under the First Closing of Amortizable Promissory Note and Warrant Private Placement and Second Closing and Amendment to Securities Purchase Agreement (the Prior Notes), (i) the Company agreed to increase by 20% the principal amount of the Prior Notes held by those investors participating in this private placement, (ii) the Company agreed to fix the conversion price of the Prior Notes at $0.14 per share, and (iii) the Company granted the holders of the Prior Notes a one-time option to convert all of their Prior Notes into shares of the Company’s common stock at $0.10 per share. The principal of the prior notes was increased by $501,122, effective April 30, 2018. |
10. Capitalized Leases
10. Capitalized Leases | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
CAPITALIZED LEASES | NOTE 10 – CAPITALIZED LEASES The Company has an obligation under a capitalized lease for certain equipment with a lease term of five years, expiring through May 2021. The capital lease obligation totaled $55,392 as of July 31, 2018 and requires monthly payments of $2,044. Interest is imputed at an average rate of approximately 18.00%. At July 31, 2018, the cost of rental equipment under capital leases amounted to $76,410 and related accumulated depreciation amounted to $40,540. The rental equipment may be purchased at favorable prices by the Company upon expiration of the lease term (generally at the fair market value of the equipment at the expiration of the lease). The liability under each lease is secured by the underlying equipment on the lease. At July 31, 2018, future minimum lease payments by year and the present value of future minimum capital lease payments are as follows: Years ending July 31, Amount 2019 $ 24,528 2020 24,528 2021 22,567 Total minimum payments 71,623 Less amount representing interest (16,231 ) Present value of minimum lease payments 55,392 Less: current portion (15,821 ) Total long-term portion $ 39,571 |
11. Derivative Liabilities
11. Derivative Liabilities | 9 Months Ended |
Jul. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 11 – DERIVATIVE LIABILITIES On November 3, 2017, January 29, 2018, May 17, 2018, June 21, 2018 and July 20, 2018, the Company issued convertible note agreements with a variable conversion feature that gave rise to an embedded derivative instrument (See Note 9). The derivative feature has been valued using a binomial lattice-based option valuation model using holding period assumptions developed from the Company’s business plan and management assumptions and expected volatility from the Company’s stock July 31, 2018 Market value of common stock on measurement date (1) $0.0229 - $0.62 Adjusted conversion price (2) $ 0.0084 Risk free interest rate (3) 2.15% - 2.35% Life of the note in months 10 months Expected volatility (4) 285% - 335% Expected dividend yield (5) – (1) The market value of common stock is based on closing market price as of initial valuation date and the period end re-measurement. (2) The adjusted conversion price is calculated based on conversion terms described in the note agreement. (3) The risk-free interest rate was determined by management using the 2-year Treasury Bill as of the respective Offering or measurement date. (4) The volatility factor was estimated by management using the historical volatilities of the Company’s stock. (5) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future. The following table sets forth the components of changes in the ProBility’s outstanding notes payable and warrants which were deemed derivative financial instruments and the associated liability balance for the periods indicated: The following table sets forth the change in fair value of the derivative liability: Date Description Derivative Instrument Liability 10/31/17 Balance – 11/3/17 Value of derivative liability 2,174 1/19/18 Value of derivative liability 1,292 1/31/18 Change in fair value during the three months ended January 31, 2018 (1,620 ) 1/31/18 Balance of derivative financial instruments liability 1,846 4/30/18 Change in fair value during the 3 months ended April 30, 2018 1,524 4/30/18 Balance 3,370 5/17/18 Value of derivative liability 973 6/21/18 Value of derivative liability 140 7/20/18 Value of derivative liability 68 7/31/18 Conversions of convertible notes payable (65 ) 7/31/18 Change in fair value during the 3 months ended July 31, 2018 68 7/31/18 Balance $ 4,554 The initial valuation of the derivative instruments was $3,466,626, of which $1,864,184 was recorded as a debt discount as interest and the remaining balance of $1,602,442 was expensed as interest on the statement of operations. The initial valuation of the derivative instruments issued during the quarter ended July 31, 2018 was $2,219,687, of which $1,180,397 was recorded as a debt discount as interest and the remaining balance of $1,039,290 was expensed as interest on the statement of operations. The valuation of the derivative liability was $4,553,365 and $0 on July 31, 2018 and October 31, 2017, respectively. During the nine months and three months ended July 31, 2018, the Company recognized a loss of $29,666 and $67,357, respectively, related to the change in fair value of the derivative. |
12. Stockholders' Equity
12. Stockholders' Equity | 9 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12 – STOCKHOLDERS’ EQUITY Common stock In July 2018, the Company issued 166,667 shares of the Company’s common stock, to an investor who, in December 2016, paid $25,000 for 166,667 shares of the Company’s common stock. The shares were not issued at that time due to a clerical error. In June 2018, the Company issued 6,410 shares of the Company’s common stock to an employee as compensation, having a fair value of $3,000 on the date of issuance. In July 2018, the Company issued 300,000 shares of the Company’s common stock to an employee as compensation, having a fair value of $3,000 on the date of issuance. In July 2018, the Company issued 6,569,343 shares of the Company’s common stock to the former owners of Disco, one of the companies acquired by the Company under the terms of the Stock Purchase Agreement, having a fair value of $370,000 on the date of issuance. The value of the common stock was recorded as part of the acquisition cost of Disco and corresponding future payment was carried on the balance sheet as a contingent liability at the time of the acquisition. During the quarter ending July 31, 2018, the contingent liability was reduced upon the issuance of the common stock. In July 2018, the Company issued 4,398,484 shares of the Company’s common stock to holders of the November 2017 convertible notes payable upon the conversion of $88,101 in principal. In January 2017, in conjunction with the acquisition of One Exam Prep, LLC (“OEP”), the Company entered into a compensation agreement with the former owner of OEP, Rob Estell, that called for bonus compensation in the form of shares of the Company’s common stock. The bonus is to be paid in shares of the Company’s common stock without regard to the price of the common stock at the time of issuance. The maximum number of shares that can be earned is 1,000,000 shares. In June 2018, the Company agreed to issue Mr. Estell a total of 1,000,000 shares of the Company’s common stock as satisfaction of this liability. Of this total, 754,862 shares of the Company’s common stock were earned under the agreement and an additional 245,138 were allocated as a bonus. The shares had a fair value of $22,638 on July 31, 2018. The shares have not yet been issued. Stock Option Plan On December 11, 2017 the shareholders of the Company approved the 2017 Incentive Compensation Plan. Under the 2017 Plan, the total number of shares of Common Stock that may be subject to the granting of awards under the 2017 Plan (“Awards”) at any time during the term of the Plan shall be equal to up to 18% of the Company’s authorized shares of Common Stock (initially, 10,000,000 shares before proposed reverse stock split). The foregoing limit shall be increased by the number of shares with respect to which Awards previously granted under the 2017 Plan that are forfeited, expire or otherwise terminate without issuance of shares, or that are settled for cash or otherwise do not result in the issuance of shares, and the number of shares that are tendered (either actually or by attestation) or withheld upon exercise of an Award, or any award under the Prior Plan that is outstanding on the Effective Date, to pay the exercise price or any tax withholding requirements. Awards issued in substitution for awards previously granted by a company acquired by the Company or a Related Entity, or with which the Company or any Related Entity combines, do not reduce the limit on grants of Awards under the Plan. Also, shares acquired by the Company on the open market with the proceeds received by the Company for the exercise price of an option awarded under the 2017 Plan, and the tax savings derived by the Company as a result of the exercise of options awarded under the 2017 Plan, are available for Awards under the 2017 Plan. The 2017 Plan imposes individual limitations on the amount of certain Awards in part to comply with Code Section 162(m). Under these limitations, during any fiscal year of the Company during any part of which the Plan is in effect, no Participant may be granted (i) options or stock appreciation rights with respect to more than 2,000,000 shares, or (ii) shares of restricted stock, shares of deferred stock, performance shares and other stock based-awards with respect to more than 2,000,000 shares, subject to adjustment in certain circumstances. The maximum amount that may be paid out as performance units in any 12-month period is $3,000,000 multiplied by the number of full years in the performance period. Currently, no stock options have been issued in favor of any director, officer, consultant or employee of the Company. Common stock warrants In connection with the first closing of the promissory note on November 3, 2017 the Company issued 2,032,526 warrants to purchase shares of common stock at an exercise price of $0.45 per share. The warrants have a term of 4 years. In connection with the second closing of the promissory note on January 19, 2018 the Company issued 3,733,500 warrants to purchase shares of common stock at an exercise price of $0.175 per share. The warrants have a term of 4 years. In connection with the closing of the bridge notes on May 17, 2018, the Company issued 5,555,557 warrants to purchase shares of the common stock at an exercise price of $0.175 per share. The warrants have a term of 5 years. All warrants are exercisable as of July 31, 2018 and have a weighted average remaining term of 3.57 years. The following table summarizes all stock warrant activity for the nine months ending July 31, 2018: Warrants Weighted - Average Exercise Price Per Share Outstanding, October 31, 2017 33,000 $ 6.00 Granted 11,321,583 0.22 Exercised – – Forfeited – – Expired – – Outstanding, July 31, 2018 11,354,583 $ 0.24 |
13. Acquisitions
13. Acquisitions | 9 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 13 – ACQUISITIONS Acquisition of North American Crane Bureau Group Inc. On January 30, 2018, the Company completed the purchase of all of the outstanding shares of common stock of North American Crane Bureau Group, Inc., a provider of crane operator training, certification and inspection (“NACB Group”), pursuant to the terms of a Stock Purchase Agreement, dated as of January 18, 2018 (effective as of November 1, 2017), by and among ProBility Media, NACB Group and the stockholders of NACB Group (the “NACB Stock Purchase Agreement”). The aggregate consideration at closing for the acquisition of NACB Group consisted of (a) a cash payment of $500,000 and (b) the issuance of a promissory note in the principal amount of $250,000, payable in two equal installments of $125,000 on the first and second anniversaries of the closing date. The note bears interest at the rate of 1.68% per year, is not convertible into ProBility shares and is secured by a pledge of the NACB shares acquired by the Company in the transaction. Payments under the note may be withheld to satisfy indemnifiable claims made by the Company with respect to any misrepresentations or breaches of warranty under the NACB Stock Purchase Agreement by NACB Group or the stockholders of NACB Group within two years after the closing of the acquisition. As part of the acquisition, the Company also assumed NACB Group’s loan from BankUnited, N.A. in the approximate amount of $120,000 and note to a former stockholder of NACB Group in the approximate amount of $110,000. At the closing of the acquisition, the Company entered into a three-year Consulting Agreement with Ted L. Blanton Sr., the former principal owner and Chief Executive Officer of NACB Group. Mr. Blanton will continue to be the President of the NACB Group subsidiary of the Company. Under the terms of the Consulting Agreement, ProBility agreed to pay Mr. Blanton a consulting fee of $100,000 per year and issue him 1,500,000 shares of ProBility common stock, payable in three equal installments of 500,000 shares on the closing date, 18 months after the closing date and 36 months after the closing date. The first tranche of 500,000 shares was issued on January 18, 2018. The shares issuable to Mr. Blanton are valued at $329,850 and are accounted for as part of the consideration of NACB Group. The1,500,000 shares of ProBility common stock issued and issuable to Mr. Blanton are subject to a lock-up agreement pursuant to which he may not sell or otherwise transfer the shares for one year following the respective share issuance date and is limited during the second year to a monthly sale amount equal to 10% of the daily volume from the prior month. The Consulting Agreement also contains covenants restricting Mr. Blanton from engaging in any activities competitive with the Company or NACB Group during the term of such agreement and prohibiting him from disclosure of confidential information regarding either company at any time. The following preliminary information summarizes the allocation of the fair values assigned to the assets at the purchase date. The Company is still evaluating what identifiable intangible assets were acquired and the fair value of each: Amount Cash and cash equivalents $ 237,179 Accounts receivable 559,851 Inventory 177,418 Prepaid expenses 39,517 Property and equipment 1,098,662 Other assets 86,195 Goodwill 798,441 Total identifiable assets 2,997,263 Less: liabilities assumed (1,917,413 ) Total purchase price $ 1,079,850 Cash $ 500,000 Notes payable 250,000 Equity issued 109,950 Equity payable 219,900 Total purchase price $ 1,079,850 Acquisition of Disco Learning Media, Inc. On January 30, 2018, the Company completed the purchase of all of the outstanding shares of common stock of Disco Learning Media, Inc., a technology company offering immersive technologies, digital learning and compliance solutions for the education and training markets (“Disco Learning”), pursuant to the terms of a Stock Purchase Agreement, dated as of January 18, 2018 (effective as of January 1, 2018), by and among the Company, Disco Learning and the stockholders of Disco Learning (the “Disco Stock Purchase Agreement”). The aggregate consideration for the acquisition of Disco Learning consisted of (a) a cash payment of $100,000 at closing, and (b) the issuance of $350,000 in the form of shares of ProBility common stock in two tranches of $50,000 in shares at closing and $300,000 in shares on the date that is nine months following the closing date, in each case valuing the shares based on the three trading day average closing price per share prior to the applicable payment date (but not at a price of more than $0.50 per share). On January 18, 2018, 230,841 shares were issued in satisfaction of the first tranche of shares due under the Disco Stock Purchase Agreement. Additionally, the Company agreed to make three contingent earn-out payments to the stockholders of Disco Learning, subject to the continued employment of at least one of the principal stockholders. For the year ending December 31, 2018, for achieving stand-alone Disco Learning revenue in excess of $900,000, the Company agreed to deliver to the stockholders an amount equal to $350,000, payable all in the form of shares of ProBility Media common stock. For the year ending December 31, 2018, for achieving (A) stand-alone Disco Learning revenue in excess of $900,000, the Company agreed to deliver to the stockholders an amount equal to $100,000, or (B) Disco Learning revenue in excess of $1,200,000, the Company agreed to deliver to the stockholders an amount equal to $200,000, in each case payable 25% of such amount in the form of cash and the remaining 75% of such amount in the form of shares of ProBility common stock. For the year ending December 31, 2019, for achieving (A) stand-alone Disco Learning revenue in excess of $1,800,000, the Company agreed to deliver to the stockholders an amount equal to $100,000, or (B) Disco Learning revenue in excess of $2,400,000, the Company agreed to deliver to the stockholders an amount equal to $200,000, in each case payable 25% of such amount in the form of cash and the remaining 75% of such amount in the form of shares of ProBility common stock. Payment in the form of shares of ProBility common stock will be based on the three trading day average closing price per share of the ProBility common stock prior to the applicable payment date, as reported by the OTCQB Venture Market or the primary stock market on which the ProBility common stock is then traded. At the closing of the acquisition, the Company entered into an Employment Agreement with each of Juan Garcia and Coleman Tharpe, former executive officers and principal stockholders of Disco Learning, for a three-year term commencing as of January 30, 2018. Pursuant to the Employment Agreements, Messrs. Garcia and Harris have agreed to devote their time to the business of the Company as the President and the Director of Digital Training and Development of the Disco Learning subsidiary, respectively. The Employment Agreements provide that Messrs. Garcia and Tharpe are entitled to receive a salary of $125,550 and $100,200, respectively. The Employment Agreements provide for termination by ProBility Media upon death or disability (as defined therein) or for Cause (as defined therein). The Employment Agreements contain covenants (i) restricting the executive from engaging in any activities competitive with the business of the Company or Disco Learning during the term of the agreement and for a period of one year thereafter, and from soliciting the Company’s or Disco Learning’s employees, customers and prospective customers for a period of one year after the termination of the agreement, and (ii) prohibiting the executive from disclosing confidential information regarding the Company or Disco Learning. In March 2018, the Company issued 486,587 shares of its common stock, having a fair value of $107,000, to Pickwick Capital Partners, LLC and its assignees as an investment banking success based fee for this transaction, which is accounted for as transaction costs related to the Disco acquisition. The following preliminary information summarizes the allocation of the fair values assigned to the assets at the purchase date. The Company is still evaluating what identifiable intangible assets were acquired and the fair value of each: Amount Cash and cash equivalents $ 45,618 Prepaid expenses 4,893 Property and equipment 1,629 Other assets 600 Goodwill 772,094 Total identifiable assets 824,834 Less: liabilities assumed (4,072 ) Total purchase price $ 820,762 Cash $ 100,000 Common shares 50,762 Deferred consideration payable in shares 300,000 Contingent consideration 370,000 Total purchase price $ 820,762 Combined Information On January 19, 2017, the Company acquired 100% of the membership units of Premier Purchasing and Marketing Alliance LLC, a New York limited liability company, also known as National Electrical Wholesale Providers (“NEWP”). The acquisition of NEWP was effective January 1, 2017. On January 26, 2017, the Company acquired 100% of the membership units of One Exam Prep, LLC, (“One Exam”) a Florida limited liability company. The acquisition of One Exam was effective January 1, 2017. On June 22, 2017, the Company acquired 100% of the outstanding shares of W Marketing Inc. (“W Marketing”) a New York corporation. The acquisition of W Marketing was effective May 1, 2017. On July 31, 2017, the Company acquired 100% of the outstanding shares of Cranbury Associates, LLC (“Cranbury”) a Vermont limited liability company. The acquisition of Cranbury was effective May 1, 2017. On January 30, 2018, the Company acquired 100% of the outstanding shares of North American Crane Bureau Group, Inc. (“NACB”). The acquisition of NACB Group was effective November 1, 2017. On January 30, 2018, the Company acquired 100% of the outstanding shares of Disco Learning Media Inc. (“Disco”). The acquisition of NACB Group was effective January 1, 2018. The following schedule contains pro-forma consolidated results of operations for the nine months ended July 31, 2018 and 2017 as if the acquisitions occurred on November 1, 2016. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on November 1, 2016, or of results that may occur in the future. 2018 2017 As Reported Pro Forma As Reported Pro Forma Revenue $ 10,456,581 $ 10,456,826 $ 5,972,276 $ 11,513,693 Operating loss (4,134,820 ) (4,197,538 ) (3,937,621 ) (4,319,934 ) Net loss (9,532,165 ) (9,594,883 ) (4,235,810 ) (4,654,031 ) Loss per common share-Basic (0.17 ) (0.17 ) (0.09 ) (0.10 ) Loss per common share-Diluted (0.17 ) (0.17 ) (0.09 ) (0.10 ) |
14. Lease Commitments
14. Lease Commitments | 9 Months Ended |
Jul. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEASE COMMITMENTS | NOTE 14 – LEASE COMMITMENTS The Company is obligated under long-term leases for office space that generally provides for annual rent of $155,400 per year. The Company sub-leases a portion of this space to third parties and collects $93,252 per year on the sub leases. For the nine months ended July 31, 2018 and 2017, net rent expense under these lease arrangements was $62,148 and $14,536, respectively. In addition, the Company leases a suite in a strip center in Florida related to One Exam Prep. The lease expires on July 14, 2025 and has a monthly rent of $6,908 for years one and two. Thereafter, monthly rent increases 3% per year for years three through seven. |
15. Subsequent Events
15. Subsequent Events | 9 Months Ended |
Jul. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 - SUBSEQUENT EVENTS Notes payable In August 2018, the Company issued convertible notes payable to five accredited institutional investors totaling $125,000. The notes bear interest at 8%, are due in 6 months and are convertible at $0.02 per share. In conjunction with the issuance of the convertible notes, the Company issued warrants to purchase 6,250,000 shares of the Company’s common stock at a price of $0.02. The warrants have a five-year term. In September 2018, the Company issued convertible notes payable to five accredited institutional investors totaling $200,000. The notes bear interest at 8%, are due in 6 months and are convertible at the lower of $0.02 per share or 60% of the lowest closing price in the prior 20 trading days. In conjunction with the issuance of the convertible notes, the Company issued warrants to purchase 10,000,000 shares of the Company’s common stock at a price of $0.02. The warrants have a five-year term. MCA Settlement Agreement In September 2018, the Company entered into three settlement agreements with the merchant cash advance lenders (the Lenders) with whom it has defaulted (the Settlement Agreements). One of the Settlement Agreements covers 9 of the 13 Lenders. Each of the other two Settlement Agreements covers one Lender. Accordingly, we have reached an agreement with 11 of the 13 Lenders. The terms of the Settlement Agreements call for the Lenders to waive penalty charges, such as increases in principal balances and payment of legal fees, and accept payment in the form of a combination of cash and/or cash and preferred stock. The balance due to the 13 Lenders was $1,916,900 at July 31, 2018. The Company will have to raise additional capital in order to satisfy these commitments. Common Stock Subsequent to quarter end, convertible note holders converted $159,120 of principal and $3,748 of interest payable into 42,816,079 shares of the Company’s common stock. Preferred Stock In October 2018, the Company issued 3,000 shares of Series A Convertible Preferred Shares (the Shares) to the members of the executive management as compensation. Each issued and outstanding Share is entitled to the number of votes equal to the result of: (i) the number of shares of common stock of the Company (the Common Shares) issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Shares issued and outstanding at the time of such vote. The Shares shall vote together with the holders of Common Shares as a single class. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended July 31, 2018 are not necessarily indicative of the final results that may be expected for the year ended October 31, 2018. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended October 31, 2017 included in the Company’s Form 10-K filed with the SEC. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and typically do not bear interest. The Company provides allowances for doubtful accounts related to accounts receivable for estimated losses resulting from the inability of its customers to make required payments. The Company takes into consideration the overall quality of the receivable portfolio along with specifically-identified customer risks. The Company has an allowance for doubtful accounts of $199,432 and $68,990 as of July 31, 2018 and October 31, 2017, respectively. |
Inventory | Inventory Inventory, which consists of finished goods, is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. During the three months ended July 31, 2018, the Company evaluated its business operations and the costs associated with maintaining a large and diverse inventory. In order to reduce costs, the Company changed its business model from one in which it carried a wide range of products to one in which it carries little or no inventory and orders products for drop shipment from its suppliers as it receives paid orders from its customers. The Company moved fulfillment of orders from its Houston office to Amazon.com. The Company reduced its inventory on hand and disposed of $628,669 of slow-moving inventory. The Company did not realize any income from the disposal of inventory. The Company has no inventory reserve as of July 31, 2018 and October 31, 2017. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred and recorded $100,563 and $128,550 during the three months ended July 31, 2018 and 2017, respectively and $531,468 and $661,033 for the nine months ended July 31, 2018 and 2017, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company believes that the fair value of its financial instruments comprising cash, accounts payable, notes payable, and convertible notes approximate their carrying amounts. As of July 31, 2018 and October 31, 2017, the Company had no Level 1 or Level 2 financial assets or liabilities, and Level 3 financial liabilities consisted of the Company’s derivative liability as of July 31, 2018. The following table presents the fair value measurement information for the Company as of July 31, 2018: Carrying Amount Level 1 Level 2 Level 3 Derivative liability $ 4,553,365 $ – $ – $ 4,553,365 The following table presents the fair value measurement information for the Company as of October 31, 2017: Carrying Amount Level 1 Level 2 Level 3 Derivative liability $ – $ – $ – $ – |
Business Combinations | Business Combinations The Company allocates the purchase price paid for assets acquired and liabilities assumed in connection with our acquisitions based on its estimated fair values at the time of acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The most subjective areas include determining the fair value of the following: - Intangible assets, including the valuation methodology, estimations of future cash flows, discount rates, market segment growth rates, our assumed market segment share, as well as the estimated useful life of intangible assets; - Inventory; property, plant and equipment; pre-existing liabilities or legal claims; deferred revenue; and contingent consideration, each as may be applicable; and - Goodwill as measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. The Company’s assumptions and estimates are based upon comparable market data and information obtained from management and the management of the acquired companies. The Company allocates goodwill to the reporting units of the business that are expected to benefit from the business combination. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. Intangible assets with estimable useful lives are amortized on a straight-line basis over their respective estimated lives to the estimated residual values, and reviewed for impairment. The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit's goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment. |
Loss per Share | Loss per Share Basic loss per common share equals net loss divided by weighted average common shares outstanding during the period. Diluted loss per share includes the impact on dilution from all contingently issuable shares, including warrants and convertible securities. The common stock equivalents from contingent shares are determined by the treasury stock method. The Company incurred net losses for the three and nine months ended July 31, 2018 and 2017, and therefore, basic and diluted loss per share for those periods are the same as all potential common equivalent shares would be antidilutive. For the nine months ended July 31, 2018, the Company had 33,000 common stock warrants outstanding, at an exercise price of $6.00 per share, expiring on August 31, 2020, 2,032,526 common stock warrants outstanding, at an exercise price of $0.45 per share, expiring on November 3, 2020, 3,733,500 common stock warrants outstanding, at an exercise price of $0.175 per share, expiring on January 19, 2021, 5,555,557 common stock warrants outstanding, at an exercise price of $0.175 per share, expiring on May 16, 2023, and 356,430,602 shares related to convertible notes payable that were excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive. For the nine months ended July 31, 2017 the Company had 33,000 common stock warrants outstanding, at an exercise price of $6.00 per share, expiring on August 31, 2020. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Deferred Taxes - Classification: Revenue Recognition: The Company is continuing to evaluate the expected impact of this standard on the Company’s financial statements and currently plans to adopt the standard using the modified retrospective method. The Company has not assessed the impact of this standard on its financial statements. Leases: Share-Based Compensation: Statement of Cash Flows: Business Combinations: |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of derivative liabilities | The following table presents the fair value measurement information for the Company as of July 31, 2018: Carrying Amount Level 1 Level 2 Level 3 Derivative liability $ 4,553,365 $ – $ – $ 4,553,365 The following table presents the fair value measurement information for the Company as of October 31, 2017: Carrying Amount Level 1 Level 2 Level 3 Derivative liability $ – $ – $ – $ – |
4. Property and Equipment (Tabl
4. Property and Equipment (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | July 31, October 31, 2018 2017 Equipment $ 159,655 $ 68,182 Web sites 195,226 60,343 Leasehold improvements 31,626 19,002 Office equipment 77,539 98,213 Software 146,825 41,661 Vehicles 52,413 – Land 200,000 – Building 684,694 – Property and equipment 1,547,978 287,401 Less: accumulated depreciation (219,995 ) (127,760 ) Property and equipment, net $ 1,327,983 $ 159,641 |
5. Intangible Assets (Tables)
5. Intangible Assets (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | July 31, 2018 Asset Useful life (yr) Cost Accumulated Amortization Carrying Value Customer Relationships 3-5 $ 482,875 $ 161,768 $ 321,107 Copyrights 5 73,000 22,338 50,662 Trade Names 4 327,000 110,452 216,548 Non-Compete 5 75,000 23,875 51,125 Totals $ 957,875 $ 318,433 $ 639,442 October 31, 2017 Asset Useful life (yr) Cost Accumulated Amortization Carrying Value Customer Relationships 3-5 $ 480,000 $ 72,235 $ 407,765 Copyrights 5 73,000 11,488 61,512 Trade Names 4 327,000 52,306 274,694 Non-Compete 5 75,000 12,625 62,375 Totals $ 955,000 $ 148,654 $ 806,346 |
7. Notes Payable (Tables)
7. Notes Payable (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | July 31, October 31, 2018 2017 Note payable dated September 9, 2016, bearing interest at 14.9% per annum, due April 2018, at which time it was paid in full. $ – $ 160,912 Note payable dated May 14, 2015 bearing interest at 18% per annum, due September 2018, guaranteed by the officers of the Company. The note is in default at July 31, 2018, which had no impact on the interest rate. 89,847 72,104 Note payable dated October 23, 2014, bearing interest at 10% per annum and due in August 2017. This note was renewed at maturity and the due date was extended to August 2018, at which time it was paid in full. 204,054 9,019 Note payable dated March 16, 2015 bearing interest at 9%, due September 30, 2018. The note is in default at July 31, 2018, which had no impact on the interest rate. 51,000 51,000 Note payable dated January 1, 2017 bearing interest at 8%, due September 30, 2017. The note is secured by the membership interest of Premier Purchasing and Marketing Alliance, LLC held by the Company. The note is in default; however, no notice of default has been received at the date of filing. 50,000 50,000 Note payable dated January 1, 2017 bearing interest at 0.0%, due in three installments ending March 31, 2017. This note was paid in full. – 50,000 Non-interest bearing note payable dated January 1, 2017, due on March 1, 2017. The note is secured by the membership interest of Premier Purchasing and Marketing Alliance, LLC held by the Company, which has a net book value of $210,388. The note is in default; however, no notice of default has been received at the date of filing. 36,830 36,830 Note payable dated January 17, 2017 bearing interest at 7%, due January 17, 2018 and guaranteed by the officers of the Company. This note was paid in full at maturity. – 95,695 Note payable dated March 14, 2017 bearing interest at 9%, due March 14, 2018, at which time it was paid in full. – 44,212 Note payable dated July 26, 2017 bearing interest at 16.216%, due on July 26, 2018. The note is in default at July 31, 2018, which had no impact on the interest rate. 232,282 158,266 Note payable dated October 2, 2017 with an original principal of $498,750 requiring daily payments of $1,979. The payments are subject to adjustments based on future revenue. A discount of $142,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The note was paid in full. – 465,107 Note payable dated October 2, 2017 with an original principal of $498,750 requiring daily payments of $1,979. The payments are subject to adjustments based on future revenue. A discount of $142,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The note was paid in full. – 469,065 Line of credit with a maximum value of $125,000 dated January 4, 2008 bearing interest at the prime rate plus 2%. The line of credit is renewable annually and is due December 31, 2018. The Company expects to renew the line of credit at that time. 21,146 44,269 Note payable dated October 11, 2017 with an original principal of $108,025 requiring daily payments of $450 and due on August 27, 2018. The payments are subject to adjustments based on future revenue. A discount of $33,525 was recorded with this issuance of the debt and is being amortized over the life of the note. The remaining balance of the note was paid in full on August 16, 2018. The Company is currently in default on this note. 8,668 101,725 Note payable dated January 22, 2018, with an original principal of $97,000, bearing interest at 30%, due on January 22, 2019. The Company is currently in default on this note. 75,004 – Note payable dated January 5, 2018, with an original principal of $32,000, bearing interest at 30%, due on Jan 5, 2019. The Company is currently in default on this note. 17,722 – Acquired with NACB. Four secured notes payable to acquire vehicles by NACB prior to the acquisition. Interest rates range from 0% to 4.99%. Notes mature from December 2018 to June 2021. 16,149 – Acquired with NACB. Note payable due to a former shareholder dated February 2, 2015, maturing January 2021 and bearing interest at 1%. 88,848 – Acquired with NACB. Note payable dated July 28, 2008 secured by the land and building of NACB. The note accrues interest at 8.56% and matures August 5, 2033. The Company is current with its payments on this note. 502,821 – Acquired with NACB. Note payable dated December 17, 2008 secured by the land and building of NACB. The note accrues interest at 6.30% and matures February 1, 2028. 338,132 – Acquired with NACB. Line of credit dated March 27, 2015. The note accrues interest at 5.75% and is due upon demand. This note was paid off in September 2018. 56,725 – Note payable dated June 7, 2018 with an original principal of $45,598 bearing an effect interest rate of 136.47%, due on December 10, 2018 requiring daily payments of $345. A discount of $15,097 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 32,771 – Note payable dated March 23, 2018 with an original principal of $291,800 requiring daily payments of $2,918, due September 7, 2018. The payments are subject to adjustments based on future revenue. A discount of $91,800 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 64,970 – Note payable dated February 8, 2018 with an original principal of $750,000 requiring weekly payments of $19,950, balance due on February 8, 2019. The payments are subject to adjustments based on future revenue. A discount of $247,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 582,244 – Note payable dated February 8, 2018 with an original principal of $750,000 requiring weekly payments of $19, balance due on February 8, 2019. The payments are subject to adjustments based on future revenue. A discount of $247,500 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 582,244 – Note payable dated April 15, 2018 with an original principal amount of $55,000 and an original issue discount of $5,000. The note is due on May 5, 2018. If the note is not repaid at maturity, interest will accrue at the rate of 20% per annum. This note was not repaid on May 5, 2018 and is therefore accruing interest at 20%. The Company is currently in default on this note. 55,000 – Note payable dated April 27, 2018 with an original principal of $218,850 requiring daily payments of $2,432, balance due on August 31, 2018. The payments are subject to adjustments based on future revenue. A discount of $68,850 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 100,016 – Note payable dated April 27, 2018 with an original principal of $218,850 requiring daily payments of $2,432, balance due on August 31, 2018. The payments are subject to adjustments based on future revenue. A discount of $68,850 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is in default on this note. 100,017 – Note payable dated March 8, 2018 with an original principal of $168,950 requiring daily payments of $854, balance due on March 9, 2019. The payments are subject to adjustments based on future revenue. A discount of $13,950 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 109,339 – Note payable dated April 2, 2018 with an original principal of $72,000 bearing an effective interest rate of 8%, balance due on April 2, 2019. A discount of $5,760 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 46,254 – Note payable dated March 7, 2018 with an original principal of $100,000 requiring daily payments of $1,499, balance due on July 20, 2018. The payments are subject to adjustments based on future revenue. A discount of $45,900 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 94,934 – Note payable dated June 25, 2018 with an original principal of $51,840 bearing an effective interest rate of 63.48%, balance due on November 1, 2019. A discount of $15,840 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 38,880 – Note payable dated July 5, 2018 with an original principal of $344,700 bearing an effective interest rate of 287.09% due on October 25, 2018 requiring daily payments of $4,310. A discount of $114,770 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 94,550 – Note payable dated June 13, 2018 with an original principal of $163,300 bearing an effective interest rate of 137.53% due on December 18, 2018. A discount of $48,300 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 120,350 – Note payable dated May 13, 2018 with an original principal of $342,500 bearing an effective interest rate of 109.54% due on January 1, 2019. A discount of $92,500 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 138,976 – Note payable dated June 13, 2018 with an original principal of $132,050 bearing an effective interest rate of 86.27% due on April 4, 2019. A discount of $37,050 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 112,514 – Note payable dated July 10, 2018 with an original principal of $119,200 bearing an effective interest rate of 286.04% due on November 6, 2018. A discount of $39,200 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 103,410 – Note payable dated May 11, 2018 with an original principal of $187,375 bearing an effective interest rate of 367.45% due on August 3, 2018. A discount of $62,375 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 39,967 – Note payable dated May 11, 2018 with an original principal of $187,375 bearing an effective interest rate of 186.78% due on October 26, 2018. A discount of $62,375 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 56,209 – Note payable dated May 3, 2018 with an original principal of $342,500 bearing an effective interest rate of 90.67% due on March 21, 2019. A discount of $92,500 was recorded with the issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 282,430 – Note payable dated June 4, 2018 with an original principal of $57,200 bearing an effective interest rate of 146.18% due on December 6, 2018. A discount of $17,200 was recorded with this issuance of the debt and is being amortized over the life of the note. The Company is currently in default on this note. 43,733 – Total notes payable 4,588,036 1,808,204 Less: net discount on notes payable (1,006,106 ) (281,589 ) Less, current portion (2,736,877 ) (1,526,615 ) Long term portion of notes payable $ 845,053 $ – |
8. Acquisition Notes Payable (T
8. Acquisition Notes Payable (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Acquisition Notes Payable | |
Table of acquisition notes payable | July 31, October 31, 2018 2017 Note payable dated June 22, 2017 bearing interest at 8% per annum, due August 22, 2018 with monthly principal and interest payments totaling $3,306 beginning August 22, 2017. The notes are to the former owners of W Marketing. The Company is in default on these notes. $ 12,686 $ 56,250 Note payable dated July 31, 2017, bearing interest at 6% per annum and due November 30, 2019 with monthly principal and interest payments totaling $4,153 beginning November 1, 2017. The notes are to the former owner of Cranbury. The Company is in default on this note. 78,871 100,000 Notes payable dated January 31, 2014 bearing interest at 8%, due February 1, 2019 with monthly principal and interest payments totaling $4,629. The notes are due to the former owners of Brown Book Store. The Company is in default on these notes. 340,161 344,216 Notes payable dated January 30, 2018 bearing interest at 1.68%, due in two equal installments on the first and second anniversary of the purchase of NACB. The note is due to the former owners of NACB. 250,000 – Total acquisition notes payable 681,718 500,466 Less, acquisition notes payable current portion (556,718 ) (131,926 ) Long term portion of acquisition notes payable $ 125,000 $ 368,540 |
9. Convertible Notes Payable (T
9. Convertible Notes Payable (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | July 31, October 31, Description 2018 2017 On August 20, 2015, the Company executed a convertible note payable to Typenex Co-Investment, L.LC. in the original principal amount of $247,000 for net proceeds of $220,000, payable on March 31, 2018 bearing interest at 10% per annum. This note is convertible into the Company’s common stock at $7.50 per share unless the market capitalization of the Company falls below $15,000,000, at which point the conversion price will equal the market price of the Company’s common stock on the date of conversion. On October 29, 2015, the market capitalization of the Company fell below $15,000,000 and the variable conversion feature became permanent. The note is unsecured. On May 12, 2017 the note holder sold this note to an unrelated third party. The note was paid in full during the first quarter of 2018. $ – $ 125,000 During the year ended October 31, 2016, the Company sold convertible promissory notes in aggregate amount of $87,000 to three investors. During the nine months ending July 31, 2017, the Company sold an additional note with a face value of $50,000. The notes bear interest at 10% per annum and may be converted into the common stock of the Company upon the completion of a capital raise of $500,000 by December 31, 2016 (a “Qualified Raise”). The notes may be converted into common stock at 75% of the price of the capital raised in the Qualified Raise. On December 31, 2016, notes with a principal and accrued interest balance of $88,626 were converted into 709,008 shares of the Company’s common stock. The remaining note was due on December 31, 2017 and is in default. 50,000 50,000 On January 20, 2017, the Company executed a non-interest-bearing convertible note in the original principal amount of $300,000, payable on January 20, 2018. The note is convertible into the Company’s common stock at $0.50 per share, no earlier than one year from the date of the note. The note is secured by the membership units of One Exam Prep, LLC held by the Company, which have a net book value of $399,118. The holder has not yet requested a conversion. The Company is in default on this note. 300,000 300,000 In June 2017, the Company sold convertible notes payable of $356,000 to 8 investors. The notes bear interest at 15%, are due in one year and are convertible at $0.15 per share. In connection with the issuance, the Company recorded a discount of $356,000 from the beneficial conversion feature that will be amortized over the life of the note. As of the date of this filing, one note in the amount of $20,000 has been converted, notes with a principal balance of $336,000 are due as of this filing. 356,000 356,000 In June 2017, the Company sold a convertible note payable of $200,000 to an investor. The note bears interest at 12% and is due in June 2020 and is convertible at $0.25 per share. The Company is obligated to make monthly principal and interest payments of $2,000 per month to the note holder. In connection with the issuance, the Company recorded a discount of $184,000 from the beneficial conversion feature that will be amortized over the life of the note. 200,000 200,000 On June 18, 2017, the former Vice Chairman of the Board, who holds a $45,000 note dated January 30, 2017, with the Company agreed to convert the principal balance on his note into a convertible note that bears interest at 12% and is due in June 2020 and is convertible at $0.25 per share. The Company is obligated to make monthly principal and interest payments of $500 per month to the note holder. The Company is in default on this note. 45,000 45,000 On November 3, 2017, along with several institutional accredited investors, the Company completed a first closing of its promissory notes. Additional details are below. The Company is in default on these notes. 1,511,336 – On January 29, 2018, along with several institutional accredited investors, the Company completed a second closing of its promissory notes. Additional details are below. The Company is in default on these notes. 1,270,072 – On May 18, 2018, along with several institutional accredited investors, the Company completed a bridge financing of its promissory notes. Additional details are below. 972,223 – On June 21, 2018, the Company issued a convertible note payable to an institutional accredited investor bearing interest at 8% and convertible at a price equal to 61% of the average of the lowest three trading prices of the Company’s common stock during the fifteen day trading period ending on the latest complete trading day prior to the conversion date. The note is due June 21, 2019. The Company recorded a discount of $158,000 on the note, which is being amortized over the term of the note. 158,000 – On July 20, 2018, the Company issued three convertible notes payable to institutional accredited investors bearing interest at 8% and convertible at a price equal to 61% of the average of the lowest three trading prices of the Company’s common stock during the fifteen day trading period ending on the latest complete trading day prior to the conversion date. The note is due July 20, 2019. The Company recorded a discount of $22,950 on the notes, which is being amortized over the term of the note. 100,000 – Total convertible notes payable, net 4,962,631 1,076,000 Less: net discount on convertible notes payable, current portion (1,689,404 ) (213,077 ) Less: current portion, net of discounts (2,970,227 ) (640,123 ) Less: net discount on convertible notes payable, long term portion (162,942 ) (114,937 ) Long term portion of convertible notes payable $ 140,058 $ 107,863 |
10. Capitalized Leases (Tables)
10. Capitalized Leases (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of future maturities of capital lease obligation | Years ending July 31, Amount 2019 $ 24,528 2020 24,528 2021 22,567 Total minimum payments 71,623 Less amount representing interest (16,231 ) Present value of minimum lease payments 55,392 Less: current portion (15,821 ) Total long-term portion $ 39,571 |
11. Derivative Liabilities (Tab
11. Derivative Liabilities (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of assumptions used | July 31, 2018 Market value of common stock on measurement date (1) $0.0229 - $0.62 Adjusted conversion price (2) $ 0.0084 Risk free interest rate (3) 2.15% - 2.35% Life of the note in months 10 months Expected volatility (4) 285% - 335% Expected dividend yield (5) – (1) The market value of common stock is based on closing market price as of initial valuation date and the period end re-measurement. (2) The adjusted conversion price is calculated based on conversion terms described in the note agreement. (3) The risk-free interest rate was determined by management using the 2-year Treasury Bill as of the respective Offering or measurement date. (4) The volatility factor was estimated by management using the historical volatilities of the Company’s stock. (5) Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable future. |
Components of derviatives | Date Description Derivative Instrument Liability (in thousands) 10/31/17 Balance – 11/3/17 Value of derivative liability 2,174 1/19/18 Value of derivative liability 1,292 1/31/18 Change in fair value during the three months ended January 31, 2018 (1,620 ) 1/31/18 Balance of derivative financial instruments liability 1,846 4/30/18 Change in fair value during the 3 months ended April 30, 2018 1,524 4/30/18 Balance 3,370 5/17/18 Value of derivative liability 973 6/21/18 Value of derivative liability 140 7/20/18 Value of derivative liability 68 7/31/18 Conversions of convertible notes payable (65 ) 7/31/18 Change in fair value during the 3 months ended July 31, 2018 68 7/31/18 Balance $ 4,554 |
12. Stockholders' Equity (Table
12. Stockholders' Equity (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
Schedule of warrant activity | Warrants Weighted - Average Exercise Price Per Share Outstanding, October 31, 2017 33,000 $ 6.00 Granted 11,321,583 0.22 Exercised – – Forfeited – – Expired – – Outstanding, July 31, 2018 11,354,583 $ 0.24 |
13. Acquisitions (Tables)
13. Acquisitions (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Pro forma information | 2018 2017 As Reported Pro Forma As Reported Pro Forma Revenue $ 10,456,581 $ 10,456,826 $ 5,972,276 $ 11,513,693 Operating loss (4,134,820 ) (4,197,538 ) (3,937,621 ) (4,319,934 ) Net loss (9,532,165 ) (9,594,883 ) (4,235,810 ) (4,654,031 ) Loss per common share-Basic (0.17 ) (0.17 ) (0.09 ) (0.10 ) Loss per common share-Diluted (0.17 ) (0.17 ) (0.09 ) (0.10 ) |
North American Crane Bureau Group [Member] | |
Allocation of purchase price | Amount Cash and cash equivalents $ 237,179 Accounts receivable 559,851 Inventory 177,418 Prepaid expenses 39,517 Property and equipment 1,098,662 Other assets 86,195 Goodwill 798,441 Total identifiable assets 2,997,263 Less: liabilities assumed (1,917,413 ) Total purchase price $ 1,079,850 Cash $ 500,000 Notes payable 250,000 Equity issued 109,950 Equity payable 219,900 Total purchase price $ 1,079,850 |
Disco Learning Media [Member] | |
Allocation of purchase price | Amount Cash and cash equivalents $ 45,618 Prepaid expenses 4,893 Property and equipment 1,629 Other assets 600 Goodwill 772,094 Total identifiable assets 824,834 Less: liabilities assumed (4,072 ) Total purchase price $ 820,762 Cash $ 100,000 Common shares 50,762 Deferred consideration payable in shares 300,000 Contingent consideration 370,000 Total purchase price $ 820,762 |
1. Organization and Descripti_2
1. Organization and Description of Business (Details Narrative) | Jan. 30, 2018 | Jul. 31, 2017 | Jun. 22, 2017 | Jan. 26, 2017 | Jan. 19, 2017 |
National Electrical Wholesale Providers [Member] | |||||
Equity ownership percentage | 100.00% | ||||
One Exam Prep, LLC [Member] | |||||
Equity ownership percentage | 100.00% | ||||
W Marketing [Member] | |||||
Equity ownership percentage | 100.00% | ||||
Cranbury Associates [Member] | |||||
Equity ownership percentage | 100.00% | ||||
North American Crane Bureau Group [Member] | |||||
Equity ownership percentage | 100.00% | ||||
Disco Learning Media [Member] | |||||
Equity ownership percentage | 100.00% |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details - Derivative liabilities) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Derivative liabilities | $ 4,553,365 | $ 0 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative liabilities | $ 4,553,365 | $ 0 |
2. Summary of Significant Acc_5
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Allowance for doubtful accounts | $ 199,432 | $ 199,432 | $ 68,990 | ||
Disposal of inventory | 628,669 | ||||
Inventory reserve | 0 | 0 | $ 0 | ||
Advertising expense | $ 100,563 | $ 128,550 | $ 531,468 | $ 661,033 | |
Warrants 1 [Member] | |||||
Antidilutive securities excluded from EPS | 33,000 | 33,000 | |||
Warrant exercise price | $ 6 | $ 6 | |||
Warrant expiration date | Aug. 31, 2020 | Aug. 31, 2020 | |||
Warrants [Member] | |||||
Warrant exercise price | $ 6 | $ 6 | |||
Warrants 2 [Member] | |||||
Antidilutive securities excluded from EPS | 2,032,526 | ||||
Warrant exercise price | 0.45 | $ 0.45 | |||
Warrant expiration date | Nov. 3, 2019 | ||||
Warrants 3 [Member] | |||||
Antidilutive securities excluded from EPS | 3,733,500 | ||||
Warrant exercise price | 0.175 | $ 0.175 | |||
Warrant expiration date | Jan. 19, 2021 | ||||
Warrants 4 [Member] | |||||
Antidilutive securities excluded from EPS | 5,555,557 | ||||
Warrant exercise price | $ 0.175 | $ 0.175 | |||
Warrant expiration date | May 16, 2023 | ||||
Convertible Notes Payable [Member] | |||||
Antidilutive securities excluded from EPS | 356,430,602 |
3. Going Concern and Liquity _2
3. Going Concern and Liquity Considerations (Details Narrative) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cumulative net loss since inception | $ (16,436,878) | $ (6,904,712) |
Working capital | $ (8,149,259) |
4. Property and Equipment (Deta
4. Property and Equipment (Details) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Property and equipment, gross | $ 1,547,978 | $ 287,401 |
Less: accumulated depreciation and amortization | (219,995) | (127,760) |
Property and equipment, net | 1,327,983 | 159,641 |
Equipment [Member] | ||
Property and equipment, gross | 159,655 | 68,182 |
Websites [Member] | ||
Property and equipment, gross | 195,226 | 60,343 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 31,626 | 19,002 |
Office Equipment [Member] | ||
Property and equipment, gross | 77,539 | 98,213 |
Software [Member] | ||
Property and equipment, gross | 146,825 | 41,661 |
Vehicles [Member] | ||
Property and equipment, gross | 52,413 | 0 |
Land [Member] | ||
Property and equipment, gross | 200,000 | 0 |
Building [Member] | ||
Property and equipment, gross | $ 684,694 | $ 0 |
4. Property and Equipment (De_2
4. Property and Equipment (Details Narrative) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 92,235 | $ 21,615 |
5. Intangible Assets (Details)
5. Intangible Assets (Details) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Intangible assets, gross | $ 957,875 | $ 955,000 |
Accumulated amortization | 318,433 | 148,654 |
Intangible assets, net | 639,442 | 806,346 |
Customer Relationships [Member] | ||
Intangible assets, gross | 482,875 | 480,000 |
Accumulated amortization | 161,768 | 72,235 |
Intangible assets, net | 321,107 | 407,765 |
Copyrights [Member] | ||
Intangible assets, gross | 73,000 | 73,000 |
Accumulated amortization | 22,338 | 11,488 |
Intangible assets, net | 50,662 | 61,512 |
Trade Names [Member] | ||
Intangible assets, gross | 327,000 | 327,000 |
Accumulated amortization | 110,452 | 52,306 |
Intangible assets, net | 216,548 | 274,694 |
Noncompete [Member] | ||
Intangible assets, gross | 75,000 | 75,000 |
Accumulated amortization | 23,875 | 12,625 |
Intangible assets, net | $ 51,125 | $ 62,375 |
5. Intangible Assets (Details N
5. Intangible Assets (Details Narrative) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 169,779 | $ 172,169 |
6. Related Party Transactions (
6. Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Jul. 31, 2018 | |
Due from related parties | $ 93,050 | $ 92,550 |
Accrued expenses - related parties | 416,972 | 902,641 |
Richard Corbin [Member] | ||
Due from related parties | 45,000 | $ 45,000 |
Proceeds from related party | $ 70,000 | |
Debt maturity date | Jun. 30, 2020 |
7. Notes Payable (Details)
7. Notes Payable (Details) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2017 | |
Notes payable | $ 4,588,036 | $ 1,808,204 |
Notes payable, current portion | (2,736,877) | (1,526,615) |
Notes payable, long-term portion | 845,053 | 0 |
Notes Payable [Member] | ||
Unamortized discount | (1,006,106) | (281,589) |
Note Payable 4 [Member] | ||
Notes payable | $ 51,000 | $ 51,000 |
Debt issuance date | Mar. 16, 2015 | |
Debt stated interest rate | 9.00% | |
Date maturity date | Jul. 31, 2017 | |
Note Payable 5 [Member] | ||
Notes payable | $ 50,000 | $ 50,000 |
Debt issuance date | Jan. 1, 2017 | |
Debt stated interest rate | 8.00% | |
Date maturity date | Sep. 30, 2017 | |
Note Payable 6 [Member] | ||
Notes payable | $ 0 | $ 50,000 |
Debt issuance date | Jan. 1, 2017 | |
Debt stated interest rate | 0.00% | |
Date maturity date | Mar. 31, 2017 | |
Note Payable 7 [Member] | ||
Notes payable | $ 36,830 | $ 36,830 |
Debt issuance date | Jan. 1, 2017 | |
Date maturity date | Mar. 1, 2017 | |
Note Payable 8 [Member] | ||
Notes payable | $ 0 | $ 95,695 |
Debt issuance date | Jan. 17, 2017 | |
Debt stated interest rate | 7.00% | |
Date maturity date | Jan. 17, 2018 | |
Note Payable 9 [Member] | ||
Notes payable | $ 0 | $ 44,212 |
Debt issuance date | Mar. 14, 2017 | |
Debt stated interest rate | 9.00% | |
Date maturity date | Mar. 14, 2018 | |
Note Payable 10 [Member] | ||
Notes payable | $ 232,282 | $ 158,266 |
Debt issuance date | Jul. 26, 2017 | |
Debt stated interest rate | 16.216% | |
Date maturity date | Jul. 26, 2018 | |
Note Payable 11 [Member] | ||
Notes payable | $ 0 | $ 465,107 |
Debt face amount | $ 498,750 | |
Debt issuance date | Oct. 2, 2017 | |
Note Payable 12 [Member] | ||
Notes payable | $ 0 | 469,065 |
Debt face amount | 498,750 | |
Debt issuance date | Oct. 2, 2017 | |
Note Payable 13 [Member] | ||
Notes payable | $ 21,146 | 44,269 |
Debt issuance date | Jan. 4, 2018 | |
Debt interest rate range | Prime plus 2% | |
Note Payable 14 [Member] | ||
Notes payable | $ 8,668 | 101,725 |
Debt issuance date | Oct. 11, 2017 | |
Date maturity date | Aug. 27, 2018 | |
Note Payable 15 [Member] | ||
Notes payable | $ 75,004 | 0 |
Debt face amount | $ 97,000 | |
Debt issuance date | Jan. 22, 2018 | |
Debt stated interest rate | 30.00% | |
Date maturity date | Jan. 22, 2019 | |
Note Payable 16 [Member] | ||
Notes payable | $ 17,722 | 0 |
Debt face amount | $ 32,000 | |
Debt issuance date | Jan. 5, 2018 | |
Debt stated interest rate | 30.00% | |
Date maturity date | Jan. 5, 2019 | |
Note Payable 17 [Member] | ||
Notes payable | $ 16,149 | 0 |
Debt interest rate range | 0% to 4.99% | |
Date maturity date | Jun. 30, 2021 | |
Note Payable 18 [Member] | ||
Notes payable | $ 88,848 | 0 |
Debt issuance date | Feb. 2, 2015 | |
Debt stated interest rate | 1.00% | |
Date maturity date | Jan. 30, 2021 | |
Note Payable 19 [Member] | ||
Notes payable | $ 502,821 | 0 |
Debt issuance date | Jul. 28, 2008 | |
Debt stated interest rate | 8.56% | |
Date maturity date | Aug. 31, 2018 | |
Note Payable 20 [Member] | ||
Notes payable | $ 338,132 | 0 |
Debt issuance date | Dec. 17, 2008 | |
Debt stated interest rate | 6.30% | |
Date maturity date | Feb. 1, 2028 | |
Note Payable 21 [Member] | ||
Notes payable | $ 56,725 | 0 |
Debt issuance date | Mar. 27, 2015 | |
Debt stated interest rate | 5.75% | |
Date maturity date | Sep. 30, 2018 | |
Note Payable 22 [Member] | ||
Notes payable | $ 32,771 | 0 |
Debt face amount | $ 45,598 | |
Debt issuance date | Jun. 7, 2018 | |
Debt effective interest rate | 136.47% | |
Date maturity date | Dec. 10, 2018 | |
Note Payable 23 [Member] | ||
Notes payable | $ 64,970 | 0 |
Debt face amount | $ 291,800 | |
Debt issuance date | Mar. 23, 2018 | |
Date maturity date | Sep. 7, 2018 | |
Note Payable 24 [Member] | ||
Notes payable | $ 582,244 | 0 |
Debt face amount | $ 750,000 | |
Debt issuance date | Feb. 8, 2018 | |
Date maturity date | Feb. 8, 2019 | |
Note Payable 25 [Member] | ||
Notes payable | $ 582,244 | 0 |
Debt face amount | $ 750,000 | |
Debt issuance date | Feb. 8, 2018 | |
Date maturity date | Feb. 8, 2019 | |
Note Payable 26 [Member] | ||
Notes payable | $ 55,000 | 0 |
Debt face amount | $ 55,000 | |
Debt issuance date | Apr. 15, 2018 | |
Debt effective interest rate | 20.00% | |
Date maturity date | May 5, 2018 | |
Note Payable 27 [Member] | ||
Notes payable | $ 100,016 | 0 |
Debt face amount | $ 218,850 | |
Debt issuance date | Apr. 27, 2018 | |
Date maturity date | Aug. 31, 2018 | |
Note Payable 28 [Member] | ||
Notes payable | $ 100,017 | 0 |
Debt face amount | $ 218,850 | |
Debt issuance date | Apr. 27, 2018 | |
Date maturity date | Aug. 31, 2018 | |
Note Payable 29 [Member] | ||
Notes payable | $ 109,339 | 0 |
Debt face amount | $ 168,950 | |
Debt issuance date | Mar. 8, 2018 | |
Date maturity date | Mar. 9, 2019 | |
Note Payable 30 [Member] | ||
Notes payable | $ 46,254 | 0 |
Debt face amount | $ 72,000 | |
Debt issuance date | Apr. 2, 2018 | |
Debt effective interest rate | 8.00% | |
Date maturity date | Apr. 2, 2019 | |
Note Payable 31 [Member] | ||
Notes payable | $ 94,934 | 0 |
Debt face amount | $ 100,000 | |
Debt issuance date | Mar. 7, 2018 | |
Date maturity date | Jul. 20, 2018 | |
Note Payable 32 [Member] | ||
Notes payable | $ 38,880 | 0 |
Debt face amount | $ 51,840 | |
Debt issuance date | Jun. 25, 2018 | |
Debt effective interest rate | 63.48% | |
Date maturity date | Nov. 1, 2019 | |
Note Payable 33 [Member] | ||
Notes payable | $ 94,550 | 0 |
Debt face amount | $ 344,700 | |
Debt issuance date | Jul. 5, 2018 | |
Debt effective interest rate | 287.09% | |
Date maturity date | Oct. 25, 2019 | |
Note Payable 34 [Member] | ||
Notes payable | $ 120,350 | 0 |
Debt face amount | $ 163,300 | |
Debt issuance date | Jun. 13, 2018 | |
Debt effective interest rate | 137.53% | |
Date maturity date | Dec. 18, 2018 | |
Note Payable 35 [Member] | ||
Notes payable | $ 138,976 | 0 |
Debt face amount | $ 342,500 | |
Debt issuance date | May 13, 2018 | |
Debt effective interest rate | 109.54% | |
Date maturity date | Jan. 1, 2019 | |
Note Payable 36 [Member] | ||
Notes payable | $ 112,514 | 0 |
Debt face amount | $ 132,050 | |
Debt issuance date | Jun. 13, 2018 | |
Debt effective interest rate | 86.27% | |
Date maturity date | Apr. 4, 2019 | |
Note Payable 37 [Member] | ||
Notes payable | $ 103,410 | 0 |
Debt face amount | $ 119,200 | |
Debt issuance date | Jul. 10, 2018 | |
Debt effective interest rate | 286.04% | |
Date maturity date | Nov. 6, 2018 | |
Note Payable 38 [Member] | ||
Notes payable | $ 39,967 | 0 |
Debt face amount | $ 187,375 | |
Debt issuance date | May 11, 2018 | |
Debt effective interest rate | 367.45% | |
Date maturity date | Aug. 3, 2018 | |
Note Payable 39 [Member] | ||
Notes payable | $ 56,209 | 0 |
Debt face amount | $ 187,375 | |
Debt issuance date | May 11, 2018 | |
Debt effective interest rate | 186.78% | |
Date maturity date | Oct. 26, 2018 | |
Note Payable 40 [Member] | ||
Notes payable | $ 282,430 | 0 |
Debt face amount | $ 342,500 | |
Debt issuance date | May 3, 2018 | |
Debt effective interest rate | 90.67% | |
Date maturity date | Mar. 21, 2019 | |
Note Payable 41 [Member] | ||
Notes payable | $ 43,733 | 0 |
Debt face amount | $ 57,200 | |
Debt issuance date | Jun. 4, 2018 | |
Debt effective interest rate | 146.18% | |
Date maturity date | Dec. 6, 2018 | |
Note Payable 1 [Member] | ||
Notes payable | $ 0 | $ 160,912 |
Debt issuance date | Sep. 9, 2016 | |
Debt stated interest rate | 14.90% | |
Date maturity date | Apr. 30, 2018 | |
Note Payable 2 [Member] | ||
Notes payable | $ 89,847 | $ 72,104 |
Debt issuance date | May 14, 2015 | |
Debt stated interest rate | 18.00% | |
Date maturity date | Sep. 30, 2018 | |
Note Payable 3 [Member] | ||
Notes payable | $ 204,054 | $ 9,019 |
Debt issuance date | Oct. 23, 2014 | |
Debt stated interest rate | 10.00% | |
Date maturity date | Jan. 31, 2018 |
8. Acquisition Notes Payable (D
8. Acquisition Notes Payable (Details) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2017 | |
Acquisition notes payable | $ 681,718 | $ 500,466 |
Acquisition notes payable, current | (556,718) | (131,926) |
Acquisition notes payable, noncurrent | 125,000 | 368,540 |
Acquisition Note 1 [Member] | ||
Acquisition notes payable | $ 12,686 | 56,250 |
Debt issuance date | Jun. 22, 2017 | |
Debt stated interest rate | 8.00% | |
Date maturity date | Aug. 22, 2018 | |
Debt payment frequency | monthly | |
Debt periodic payment | $ 3,306 | |
Acquisition Note 2 [Member] | ||
Acquisition notes payable | $ 78,871 | 100,000 |
Debt issuance date | Jul. 31, 2017 | |
Debt stated interest rate | 6.00% | |
Date maturity date | Nov. 30, 2019 | |
Debt payment frequency | monthly | |
Debt periodic payment | $ 4,153 | |
Acquisition Note 3 [Member] | ||
Acquisition notes payable | $ 340,161 | 344,216 |
Debt issuance date | Jan. 31, 2014 | |
Debt stated interest rate | 8.00% | |
Date maturity date | Feb. 1, 2019 | |
Debt payment frequency | monthy | |
Debt periodic payment | $ 4,629 | |
Acquisition Note 4 [Member] | ||
Acquisition notes payable | $ 250,000 | $ 0 |
Debt issuance date | Jan. 30, 2018 | |
Debt stated interest rate | 1.68% |
9. Convertible Notes Payable (D
9. Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2017 | |
Convertible notes payable | $ 4,962,631 | $ 1,076,000 |
Convertible notes payable, current | (2,970,227) | (640,123) |
Convertible notes payable, noncurrent | 140,058 | 107,863 |
Convertible Notes Payable [Member] | ||
Unamortized discount, noncurrent | (162,942) | (114,937) |
Convertible Notes Payable 1 [Member] | ||
Convertible notes payable | $ 0 | 125,000 |
Debt issuance date | Aug. 20, 2015 | |
Debt face amount | $ 247,000 | |
Debt maturity date | Mar. 31, 2018 | |
Debt stated interest | 10.00% | |
Convertible Notes Payable 2 [Member] | ||
Convertible notes payable | $ 50,000 | 50,000 |
Debt maturity date | Dec. 31, 2017 | |
Convertible Notes Payable 3 [Member] | ||
Convertible notes payable | $ 300,000 | 300,000 |
Debt issuance date | Jan. 20, 2017 | |
Debt face amount | $ 300,000 | |
Debt maturity date | Jan. 20, 2018 | |
Convertible Notes Payable 4 [Member] | ||
Convertible notes payable | $ 356,000 | 356,000 |
Debt issuance date | Jun. 1, 2017 | |
Debt face amount | $ 356,000 | |
Debt maturity date | Jun. 1, 2018 | |
Debt stated interest | 15.00% | |
Convertible Notes Payable 5 [Member] | ||
Convertible notes payable | $ 200,000 | 200,000 |
Debt issuance date | Jun. 1, 2017 | |
Debt face amount | $ 200,000 | |
Debt maturity date | Jun. 30, 2020 | |
Debt stated interest | 12.00% | |
Convertible Notes Payable 6 [Member] | ||
Convertible notes payable | $ 45,000 | 45,000 |
Debt issuance date | Jun. 18, 2017 | |
Debt maturity date | Jun. 30, 2020 | |
Debt stated interest | 12.00% | |
Convertible Notes Payable 7 [Member] | ||
Convertible notes payable | $ 1,511,336 | 0 |
Debt issuance date | Nov. 3, 2017 | |
Convertible Notes Payable 8 [Member] | ||
Convertible notes payable | $ 1,270,072 | 0 |
Debt issuance date | Jan. 29, 2018 | |
Convertible Notes Payable 9 [Member] | ||
Convertible notes payable | $ 972,223 | 0 |
Debt issuance date | May 18, 2018 | |
Convertible Notes Payable 10 [Member] | ||
Convertible notes payable | $ 158,000 | 0 |
Debt issuance date | Jun. 21, 2018 | |
Debt maturity date | Jun. 21, 2019 | |
Debt stated interest | 8.00% | |
Convertible Notes Payable 11 [Member] | ||
Convertible notes payable | $ 100,000 | 0 |
Debt issuance date | Jul. 20, 2018 | |
Debt maturity date | Jul. 20, 2019 | |
Debt stated interest | 8.00% | |
Convertible Notes Payable [Member] | ||
Unamortized discount, current | $ (1,689,404) | $ (213,077) |
9. Convertible Notes Payable _2
9. Convertible Notes Payable (Details Narrative) | 9 Months Ended |
Jul. 31, 2018USD ($)$ / sharesshares | |
Bridge Financing [Member] | |
Debt issuance date | May 17, 2018 |
Proceeds from private placement | $ 875,000 |
Warrants issued, shares | shares | 5,555,557 |
Warrant exercise price | $ / shares | $ 0.175 |
Proceeds from private placement gross | $ 972,222 |
Conversion price | $ / shares | $ 0.14 |
First Closing [Member] | |
Debt issuance date | Nov. 3, 2017 |
Debt face amount | $ 3,383,325 |
Proceeds from private placement | $ 3,000,000 |
Debt maturity date | Jul. 3, 2019 |
Warrants issued, shares | shares | 1,814,749 |
Warrants issued, fair value | $ 1,125,094 |
Warrant exercise price | $ / shares | $ 0.45 |
Stock issued new, shares | shares | 227,250 |
Stock issued new, value | $ 140,895 |
First Closing [Member] | Pickwick Capital [Member] | |
Warrants issued, shares | shares | 217,777 |
Warrants issued, fair value | $ 126,018 |
Payment of stock issuance costs | 98,000 |
First Closing [Member] | Tranche 1 [Member] | |
Debt face amount | 1,633,325 |
Proceeds from private placement | $ 1,400,000 |
Second Closing [Member] | |
Debt issuance date | Jan. 29, 2018 |
Debt face amount | $ 1,166,725 |
Proceeds from private placement | $ 1,000,000 |
Warrants issued, shares | shares | 3,333,500 |
Warrants issued, fair value | $ 732,561 |
Warrant exercise price | $ / shares | $ 0.175 |
Second Closing [Member] | Pickwick Capital [Member] | |
Warrants issued, shares | shares | 400,000 |
Warrants issued, fair value | $ 87,903 |
Payment of stock issuance costs | $ 70,000 |
Second Closing [Member] | Commitment Shares [Member] | |
Stock issued new, shares | shares | 941,851 |
Stock issued new, value | $ 164,824 |
10. Capitalized Leases (Details
10. Capitalized Leases (Details) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Debt Disclosure [Abstract] | ||
Future maturity of capital lease, 2019 | $ 24,528 | |
Future maturity of capital lease, 2020 | 24,528 | |
Future maturity of capital lease, 2021 | 22,567 | |
Total minimum payments | 71,623 | |
Less amount representing interest | (16,231) | |
Present value of minimum lease payments | 55,392 | |
Less: current portion | (15,821) | $ (13,837) |
Total long-term portion | $ 39,571 | $ 51,697 |
10. Capitalized Leases (Detai_2
10. Capitalized Leases (Details Narrative) | 9 Months Ended |
Jul. 31, 2018USD ($) | |
Debt Disclosure [Abstract] | |
Monthly capital lease payments | $ 2,044 |
Capital lease interest rate | 18.00% |
Cost of equipment under capital leases | $ 76,410 |
Accumulated depreciation of capital leased assets | $ 40,540 |
Capital lease expiration date | May 2,021 |
11. Derivative Liabilities (Det
11. Derivative Liabilities (Details - Assumptions) | 9 Months Ended |
Jul. 31, 2018 | |
Measurement Input Offered Price [Member] | |
Assumptions for convertible note agreements | $0.0229 - $0.62 |
Measurement Input Conversion Price [Member] | |
Assumptions for convertible note agreements | 0.0084 |
Measurement Input, Risk Free Interest Rate [Member] | |
Assumptions for convertible note agreements | 2.15% - 2.35% |
Measurement Input Expected Term [Member] | |
Assumptions for convertible note agreements | 10 months |
Measurement Input, Price Volatility [Member] | |
Assumptions for convertible note agreements | 285% - 335% |
Measurement Input Expected Dividend Rate [Member] | |
Assumptions for convertible note agreements | none |
11. Derivative Liabilities (D_2
11. Derivative Liabilities (Details - Rollforward) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Change in value of derivative liability | $ (67,357) | $ 250,556 | $ 29,666 | $ 136,703 | ||
Derivative Instrument Liability [Member] | ||||||
Derivative liability, beginning balance | 3,370,000 | $ 1,846,000 | $ 0 | 0 | ||
Value of derivative liability | 1,181,000 | 3,466,000 | ||||
Conversions of convertible notes payable | (65,000) | |||||
Change in value of derivative liability | 68,000 | 1,524,000 | (1,620,000) | |||
Derivative liability, ending balance | $ 4,554,000 | $ 3,370,000 | $ 1,846,000 | $ 4,554,000 |
11. Derivative Liabilities (D_3
11. Derivative Liabilities (Details Narrative) - USD ($) | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Initial derivative liability | $ 4,553,365 | $ 0 | |
Change in value of derivative liability | (1,752,599) | $ (82,357) | |
Derivative liability | 4,553,365 | $ 0 | |
Convertible Notes [Member] | |||
Initial derivative liability | 3,466,626 | ||
Debt discount | $ 1,864,184 |
12. Stockholders' Equity (Detai
12. Stockholders' Equity (Details) - Warrants [Member] | 9 Months Ended |
Jul. 31, 2018$ / sharesshares | |
Warrants outstanding, beginning balance | 33,000 |
Warrants granted | 11,321,583 |
Warrants exercised | 0 |
Warrants forfeited | 0 |
Warrants expired | 0 |
Warrants outstanding, ending balance | 11,354,583 |
Weighted average exercise price, warrants outstanding, beginning balance | $ / shares | $ 6 |
Weighted average exercise price, warrants granted | $ / shares | 0.22 |
Weighted average exercise price, warrants outstanding, ending balance | $ / shares | $ 0.24 |
12. Stockholders' Equity (Det_2
12. Stockholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jul. 31, 2018 | May 17, 2018 | Jan. 19, 2018 | Nov. 03, 2017 | |
Promissory Note [Member] | |||||
Warrants issued, shares | 3,733,500 | 2,032,526 | |||
Warrant exercise price | $ 0.175 | $ 0.45 | |||
Warrants weighted average remaining term | 3 years 6 months 25 days | ||||
Bridge Notes [Member] | |||||
Warrants issued, shares | 5,555,557 | ||||
Warrant exercise price | $ 0.175 | ||||
Securities Purchase Agreement [Member] | |||||
Stock issued for acquisition, shares | 6,569,343 | ||||
Stock issued for acquisition, value | $ 370,000 | ||||
Investor [Member] | |||||
Stock issued new, shares | 166,667 | ||||
Stock issued new, value | $ 25,000 | ||||
Employee [Member] | |||||
Stock issued for compensation, shares | 6,410 | 300,000 | |||
Stock issued for compensation, value | $ 3,000 | $ 3,000 | |||
Stock issued for conversion of debt, shares | 4,398,484 | ||||
Stock issued for conversion of debt, value | $ 88,101 | ||||
One Consultant [Member] | |||||
Stock issued for services, shares | 294,868 | ||||
Stock issued for services, value | $ 50,000 |
13. Acquisitions (Details - Acq
13. Acquisitions (Details - Acquisition allocation) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 30, 2018 | Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Intangible assets | $ 639,442 | $ 806,346 | ||
Goodwill | 2,537,550 | $ 967,015 | ||
Cash | 437,203 | $ 9,425 | ||
Notes payable | $ 6,058,275 | $ 2,192,138 | ||
North American Crane Bureau Group [Member] | ||||
Cash and cash equivalents | $ 237,179 | |||
Accounts receivable | 559,851 | |||
Inventory | 177,418 | |||
Prepaid expenses | 39,517 | |||
Property and equipment | 1,098,662 | |||
Other assets | 86,195 | |||
Goodwill | 798,441 | |||
Total identifiable net assets | 2,997,263 | |||
Less liabilities assumed | (1,917,413) | |||
Total purchase price | 1,079,850 | |||
Cash | 500,000 | |||
Common shares/Equity issued | 109,950 | |||
Notes payable | 250,000 | |||
Equity payable | 219,900 | |||
Total purchase price | 1,079,850 | |||
Disco Learning Media [Member] | ||||
Cash and cash equivalents | 45,618 | |||
Prepaid expenses | 4,893 | |||
Property and equipment | 1,629 | |||
Other assets | 600 | |||
Goodwill | 772,094 | |||
Total identifiable net assets | 824,834 | |||
Less liabilities assumed | (4,072) | |||
Total purchase price | 820,762 | |||
Cash | 100,000 | |||
Common shares/Equity issued | 50,762 | |||
Deferred consideration payable in shares | 300,000 | |||
Contingent consideration | 370,000 | |||
Total purchase price | $ 820,762 |
13. Acquisitions (Details - Pr
13. Acquisitions (Details - Pro Forma) - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue | $ 10,456,581 | $ 5,972,276 |
Operating loss | (4,134,820) | (3,937,621) |
Net loss | $ (9,532,165) | $ (4,235,810) |
Loss per common share-Basic | $ (0.17) | $ (0.09) |
Loss per common share-Diluted | $ (0.17) | $ (0.09) |
Pro Forma [Member] | ||
Revenue | $ 10,456,826 | $ 11,513,693 |
Operating loss | (4,197,538) | (4,319,934) |
Net loss | $ (9,594,883) | $ (4,654,031) |
Loss per common share-Basic | $ (0.17) | $ (0.10) |
Loss per common share-Diluted | $ (0.17) | $ (0.10) |
14. Lease Commitments (Details
14. Lease Commitments (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Office Space [Member] | |||
Sublease income | $ 93,252 | ||
Net rent expense | $ 62,148 | $ 14,536 | |
One Exam Prep Florida [Member] | |||
Monthly rent | $ 6,908 |