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Business Acquisition | 12 Months Ended
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Oct. 31, 2018
Business Combinations [Abstract] |
Business Acquisition | NOTE 5 – BUSINESS ACQUISITION: Pursuant to the terms of an Asset Purchase Agreement dated April 24, 2018 (the “Generations Agreement”), by and among Generations Coffee Company, LLC (“GCC”), the entity formed as a result of the Company’s joint venture with Caruso’s Coffee, Inc., Steep & Brew, Inc. (“the Seller”) a Wisconsin corporation and the stockholder of the Seller. GCC purchased substantially all the assets, including equipment, inventory, customer list and relationships (the “Assets”) of the Seller. This was accounted for as a business combination. GCC purchased the Assets for a purchase price consisting of $2,677,335 in cash and a Seller held promissory note for $140,510 plus assumed liabilities of $10,210. The Seller held promissory note calls for two payments of $75,000 each of principle and interest. The first payment of principal only is due October 24, 2018 and the final payment is due April 24, 2019. As part of the transaction, all of the employees of the Seller will be leased to GCC for a transitional period ending July 31, 2018 (or earlier date as may be agreed in writing between GCC and the Seller). In addition, on April 24, 2018, GCC entered into a three month advisory agreement (the “Advisory Agreement”), with one of the Seller’s executives (the “Executive”), on an independent contractor basis, to ensure continuity of the business and to continue to operate the business located in Wisconsin. After completion of the first three month term, the Advisory Agreement will automatically expire, subject to renewal by mutual agreement of the parties. Pursuant to the terms of the Advisory Agreement, the Executive is entitled to cash compensation of $7,000 per month, as well as reimbursement by GCC of the Executive of up to $815 per month for health insurance benefits for the Executive paid by the seller. The Company has not yet completed its full analysis of the fair value of tangible assets acquired and liabilities assumed and the allocation of any excess acquisition cost over the fair value of the net tangible net assets acquired to any separately identifiable intangible assets. Pursuant to ASC No. 805-10-25, if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, but during the allowed measurement period (which is not to exceed one year from the acquisition date), the Company retrospectively adjusts the provisional amounts recognized at the acquisition date by means of adjusting the amount recognized for goodwill. The following table summarizes the amounts of assets purchased:
Assets acquired: |  |  |
Accounts receivable |  | $ | 86,442 |
Inventory |  |  | 1,116,021 |
Equipment |  |  | 221,283 |
Prepaid expenses |  |  | 28,913 |
Non-compete |  |  | 99,000 |
Customer lists |  |  | 245,000 |
Tradename |  |  | 668,000 |
Goodwill |  |  | 363,396 |
Assets acquired: |  | $ | 2,828,055 |
Purchase of assets funded by: |  |  |  |
Cash paid |  | $ | 2,677,335 |
Liability assumed |  |  | 10,210 |
Note payable to seller |  |  | 140,510 |
|  | $ | 2,828,055 |
Pro Forma Results of Operations (unaudited) The following pro forma results of operations for the twelve months ended October 31, 2018 and 2017 have been prepared as though the business acquisition had occurred as of October 31, 2017. This pro forma financial information is not indicative of the results of operations that the Company would have attained had the acquisition occurred at the beginning of the periods presented, nor is the pro forma financial information indicative of the results of operations that may occur in the future:
|  | Twelve Months Ended October 31, |
|  | 2018 |  |  | 2017 |
Pro forma sales |  | $ | 95,900,631 |  |  | $ | 88,923,392 |
Pro forma net income (loss) |  | $ | 940,437 |  |  | $ | 523,577 |
Pro forma basic and diluted earnings per share |  | $ | .17 |  |  | $ | .09 |
The operations have been included in the Company’s consolidated statement of operations since the date of the acquisition on April 24, 2018. The total revenue included for the year ended October 31, 2018 is $5,512,930 the net income included is $186,600.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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