0001437749-20-019556 | 10-Q | XBRL Viewer

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Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Jul. 31, 2020	Sep. 04, 2020
Document Information [Line Items]
Entity Central Index Key	0001000230
Entity Registrant Name	OPTICAL CABLE CORP
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 31, 2020
Document Transition Report	false
Entity File Number	0-27022
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1237042
Entity Address, Address Line One	5290 Concourse Drive
Entity Address, City or Town	Roanoke
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	24019
City Area Code	540
Local Phone Number	265-0690
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	OCC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,537,087

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jul. 31, 2020	Oct. 31, 2019
Current assets:
Cash	$ 998,662	$ 537,330
Trade accounts receivable, net of allowance for doubtful accounts of $531,308 at July 31, 2020 and $99,562 at October 31, 2019	6,799,541	10,347,597
Income taxes refundable - current	50,618	25,004
Other receivables	60,467	69,727
Inventories	17,129,461	18,095,627
Prepaid expenses and other assets	259,173	304,713
Total current assets	25,297,922	29,379,998
Property and equipment, net	9,064,679	10,010,223
Income taxes refundable - noncurrent	0	25,003
Intangible assets, net	664,561	659,280
Other assets, net	1,885,924	32,430
Total assets	36,913,086	40,106,934
Current liabilities:
Note payable, SBA PPP loan - current	2,469,042	0
Current installments of long-term debt	308,979	738,955
Note payable to bank, revolver - current	0	5,650,000
Accounts payable and accrued expenses	3,421,487	5,459,352
Accrued compensation and payroll taxes	1,379,677	1,763,338
Income taxes payable	11,843	15,382
Total current liabilities	7,591,028	13,627,027
Note payable, SBA PPP loan - noncurrent	2,512,358	0
Note payable, revolver - noncurrent	4,577,521	0
Long-term debt, excluding current installments	4,932,239	5,169,668
Other noncurrent liabilities	1,674,301	71,339
Total liabilities	21,287,447	18,868,034
Shareholders’ equity:
Preferred stock, no par value, authorized 1,000,000 shares; none issued and outstanding	0	0
Common stock, no par value, authorized 50,000,000 shares; issued and outstanding 7,537,087 shares at July 31, 2020 and 7,458,981 shares at October 31, 2019	13,961,526	13,853,334
Retained earnings	1,664,113	7,385,566
Total shareholders’ equity	15,625,639	21,238,900
Commitments and contingencies
Total liabilities and shareholders’ equity	$ 36,913,086	$ 40,106,934

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands	Jul. 31, 2020	Oct. 31, 2019
Allowance for doubtful accounts	$ 531,308	$ 99,562
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	50,000,000	50,000,000
Common stock, issued (in shares)	7,537,087	7,458,981
Common stock, outstanding (in shares)	7,537,087	7,458,981

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Net sales	$ 13,639,169	$ 17,367,068	$ 41,389,993	$ 53,074,911
Cost of goods sold	10,167,008	12,875,614	31,516,942	39,711,764
Gross profit	3,472,161	4,491,454	9,873,051	13,363,147
Selling, general and administrative expenses	4,559,970	5,418,438	14,933,595	17,968,897
Royalty (income) expense, net	193,062	216	208,093	(1,272)
Amortization of intangible assets	10,806	9,597	30,973	28,494
Loss from operations	(1,291,677)	(936,797)	(5,299,610)	(4,632,972)
Other expense, net:
Interest expense	(135,725)	(135,648)	(397,198)	(381,819)
Other, net	(1,436)	10	(3,015)	(7,270)
Other expense, net	(137,161)	(135,638)	(400,213)	(389,089)
Loss before income taxes	(1,428,838)	(1,072,435)	(5,699,823)	(5,022,061)
Income tax expense (benefit)	4,992	12,859	15,076	(9,322)
Net loss	$ (1,433,830)	$ (1,085,294)	$ (5,714,899)	$ (5,012,739)
Net loss per share: Basic and diluted (in dollars per share)	$ (0.20)	$ (0.15)	$ (0.78)	$ (0.68)

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Oct. 31, 2018	7,694,387
Balances at Oct. 31, 2018	$ 13,816,140	$ 12,994,697	$ 26,810,837
Adoption of accounting standard ASU 2018-07	$ 0	61,763	61,763
Share-based compensation, net (in shares)	257,222
Share-based compensation, net	$ (66,327)	0	(66,327)
Net loss	$ 0	(3,310,020)	(3,310,020)
Share-based compensation, net (in shares)	(257,222)
Repurchase and retirement of common stock (at cost) (in shares)	(258)
Repurchase and retirement of common stock (at cost)	$ 0	(1,257)	(1,257)
Balances (in shares) at Jan. 31, 2019	7,436,907
Balances at Jan. 31, 2019	$ 13,749,813	9,745,183	23,494,996
Balances (in shares) at Oct. 31, 2018	7,694,387
Balances at Oct. 31, 2018	$ 13,816,140	12,994,697	26,810,837
Net loss			(5,012,739)
Balances (in shares) at Jul. 31, 2019	7,459,056
Balances at Jul. 31, 2019	$ 13,814,038	8,042,388	21,856,426
Balances (in shares) at Jan. 31, 2019	7,436,907
Balances at Jan. 31, 2019	$ 13,749,813	9,745,183	23,494,996
Share-based compensation, net (in shares)	(23,628)
Share-based compensation, net	$ 27,169	0	27,169
Net loss	$ 0	(617,425)	(617,425)
Share-based compensation, net (in shares)	23,628
Balances (in shares) at Apr. 30, 2019	7,460,535
Balances at Apr. 30, 2019	$ 13,776,982	9,127,758	22,904,740
Share-based compensation, net (in shares)	1,461
Share-based compensation, net	$ 37,056	0	37,056
Net loss	$ 0	(1,085,294)	(1,085,294)
Share-based compensation, net (in shares)	(1,461)
Repurchase and retirement of common stock (at cost) (in shares)	(18)
Repurchase and retirement of common stock (at cost)	$ 0	(76)	(76)
Balances (in shares) at Jul. 31, 2019	7,459,056
Balances at Jul. 31, 2019	$ 13,814,038	8,042,388	21,856,426
Balances (in shares) at Oct. 31, 2019	7,458,981
Balances at Oct. 31, 2019	$ 13,853,334	7,385,566	21,238,900
Adoption of accounting standard ASU 2018-07	$ 6,554	(6,554)	0
Share-based compensation, net (in shares)	(2,909)
Share-based compensation, net	$ 34,356	0	34,356
Net loss	$ 0	(2,591,888)	(2,591,888)
Share-based compensation, net (in shares)	2,909
Balances (in shares) at Jan. 31, 2020	7,456,072
Balances at Jan. 31, 2020	$ 13,894,244	4,787,124	18,681,368
Balances (in shares) at Oct. 31, 2019	7,458,981
Balances at Oct. 31, 2019	$ 13,853,334	7,385,566	21,238,900
Net loss			(5,714,899)
Balances (in shares) at Jul. 31, 2020	7,537,087
Balances at Jul. 31, 2020	$ 13,961,526	1,664,113	15,625,639
Balances (in shares) at Jan. 31, 2020	7,456,072
Balances at Jan. 31, 2020	$ 13,894,244	4,787,124	18,681,368
Share-based compensation, net	26,677	0	26,677
Net loss	$ 0	(1,689,181)	(1,689,181)
Balances (in shares) at Apr. 30, 2020	7,456,072
Balances at Apr. 30, 2020	$ 13,920,921	3,097,943	17,018,864
Share-based compensation, net (in shares)	81,015
Share-based compensation, net	$ 40,605	0	40,605
Net loss	$ 0	(1,433,830)	(1,433,830)
Share-based compensation, net (in shares)	(81,015)
Balances (in shares) at Jul. 31, 2020	7,537,087
Balances at Jul. 31, 2020	$ 13,961,526	$ 1,664,113	$ 15,625,639

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
Cash flows from operating activities:
Net loss	$ (5,714,899)	$ (5,012,739)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,082,809	1,294,062
Bad debt expense	431,746	56,483
Share-based compensation expense	101,638	941,253
Loss on sale of property and equipment	10,305	2,058
(Increase) decrease in:
Trade accounts receivable	3,116,310	2,811,745
Other receivables	9,260	26,038
Inventories	966,166	(1,337,756)
Prepaid expenses and other assets	45,540	113,565
Income taxes refundable	(611)	(726)
Other assets	(8,180)	21,473
Increase (decrease) in:
Accounts payable and accrued expenses	(2,470,420)	2,714,909
Accrued compensation and payroll taxes	(383,661)	(1,646,435)
Income taxes payable	(3,539)	(451)
Other noncurrent liabilities	381,682	(30,803)
Net cash used in operating activities	(2,435,854)	(47,324)
Cash flows from investing activities:
Purchase of and deposits for the purchase of property and equipment	(94,536)	(483,115)
Investment in intangible assets	(36,254)	(57,425)
Net cash used in investing activities	(130,790)	(540,540)
Cash flows from financing activities:
Payroll taxes withheld and remitted on share-based payments	0	(943,355)
Proceeds from note payable to bank, SBA PPP loan	4,981,400	0
Proceeds from note payable to bank, revolver	350,000	2,850,000
Proceeds from note payable, revolver	5,530,583	0
Payments on note payable to bank, revolver	(6,000,000)	0
Payments on note payable, revolver	(953,062)	0
Principal payments on long-term debt	(667,405)	(395,249)
Payments for financing costs	(213,540)	0
Repurchase of common stock	0	(1,333)
Net cash provided by financing activities	3,027,976	1,510,063
Net increase in cash	461,332	922,199
Cash at beginning of period	537,330	177,413
Cash at end of period	$ 998,662	$ 1,099,612

Note 1 - General

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

(1)

General

The accompanying unaudited condensed consolidated financial statements of Optical Cable Corporation and its subsidiaries (collectively, the “Company” or “OCC^®”) have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all material adjustments considered necessary for a fair presentation have been included. Operating results for the nine months ended July 31, 2020 are not necessarily indicative of the results for the fiscal year ending October 31, 2020 because the following items, among other things, may impact those results: macroeconomic impacts of pandemic diseases (such as disease caused by COVID-19) including related government and private industry mandates in the areas of the world in which we operate, changes in market conditions, seasonality, changes in technology, competitive conditions, timing of certain projects and purchases by key customers, significant variations in sales resulting from high volatility and timing of large sales orders among a limited number of customers in certain markets, ability of management to execute its business plans, continued ability to maintain and/or secure future debt and/or equity financing to adequately finance ongoing operations; as well as other variables, uncertainties, contingencies and risks set forth as risks in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019 (including those set forth in the “Forward-Looking Information” section), or as otherwise set forth in other filings by the Company as variables, contingencies and/or risks possibly affecting future results. The unaudited condensed consolidated financial statements and condensed notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company’s annual consolidated financial statements and notes. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases. The FASB has subsequently issued amendments to the initial guidance under ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, “ASC 842”). ASC 842 requires the recognition of a separate lease liability representing the required lease payments over the lease term and a separate lease asset representing the right to use the underlying asset during the same lease term. Additionally, ASC 842 provides clarification regarding the identification of certain components of contracts that would represent a lease as well as requires additional disclosures in the notes to the financial statements. ASC 842 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. The Company adopted ASC 842 effective November 1, 2019. Upon adoption, the Company recorded right-of-use assets and lease liabilities relating to operating leases of $138,834 and $139,367, respectively. Unamortized deferred rent liability balances were eliminated such that no cumulative effect adjustment to the opening balance of retained earnings was required. See also note 7 for additional information and expanded disclosure under the new standard.

In June 2018, the FASB issued Accounting Standards Update 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. The Company adopted ASU 2018-07 effective November 1, 2019. The adoption did not have a material impact on the Company's opening balance of retained earnings, results of operations, financial position or liquidity or its related financial statement disclosures.

In June 2018, the FASB issued Accounting Standards Update 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made (“ASU 2018-08”). ASU 2018-08 applies to entities that receive or make contributions, which primarily are not-for-profit entities but also affects business entities that make contributions. In the context of business entities that make contributions, the FASB clarified that a contribution is conditional if the arrangement includes both a barrier for the recipient to be entitled to the assets transferred and a right of return for the assets transferred (or a right of release of the business entity’s obligation to transfer assets). The recognition of contribution expense is deferred for conditional arrangements and is immediate for unconditional arrangements. ASU 2018-08 requires modified prospective transition to arrangements that have not been completed as of the effective date or that are entered into after the effective date, but full retrospective application to each period presented is permitted. ASU 2018-08 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. The Company adopted ASU 2018-08 effective November 1, 2019. The adoption of ASU 2018-08 did not have a material impact on the Company's results of operations, financial position or liquidity or its related financial statement disclosures.

Note 2 - Stock Incentive Plans and Other Share-based Compensation

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

(2)

Stock Incentive Plans and Other Share-Based Compensation

As of July 31, 2020, there were approximately 362,000 remaining shares available for grant under the Optical Cable Corporation 2017 Stock Incentive Plan (“2017 Plan”).

Share-based compensation expense for employees, a consultant and non-employee Directors recognized in the condensed consolidated statements of operations for the three months and nine months ended July 31, 2020 was $40,605 and $101,638, respectively, and for the three months and nine months ended July 31, 2019 was $42,549 and $941,253, respectively. Share-based compensation expense is entirely related to expense recognized in connection with the vesting of restricted stock awards or other stock awards.

Restricted and Other Stock Awards

The Company has granted, and anticipates granting from time to time, restricted stock awards subject to approval by the Compensation Committee of the Board of Directors. Since fiscal year 2004, the Company has exclusively used restricted stock awards for all share-based compensation of employees and consultants, and restricted stock awards or stock awards to non-employee members of the Board of Directors.

During the three months ended July 31, 2020, OCC granted restricted stock awards totaling 58,880 shares to non-employee Directors under the 2017 Plan. The shares are subject to a one-year vesting period and are part of the non-employee Directors’ annual compensation for service on the Board of Directors. The Company recorded expense totaling $35,917 and $95,245, respectively, during the three months and nine months ended July 31, 2020 and recorded expense totaling $35,597 and $89,241, respectively, during the three and nine months ended July 31, 2019 related to the grants to non-employee Directors.

During the three months ended July 31, 2020, the Company also granted a restricted stock award totaling 25,000 shares to a consultant under the 2017 Plan. The shares vest annually in equal amounts over five years beginning January 31, 2022.

Restricted stock award activity during the nine months ended July 31, 2020 consisted of restricted stock grants totaling 83,880 shares and restricted shares forfeited totaling 5,774. OCC restricted stock grants provide the participant with the option to surrender shares to pay for withholding tax obligations resulting from any vesting restricted shares, or to pay cash to the Company or taxing authorities in the amount of the withholding taxes owed on the value of any vesting restricted shares in order to avoid surrendering shares.

As of July 31, 2020, the estimated amount of compensation cost related to unvested equity-based compensation awards in the form of service-based and operational performance-based shares that the Company will recognize over a 2.0 year weighted-average period is approximately $435,000.

Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Allowance for Doubtful Accounts for Trade Accounts Receivable Disclosure [Text Block]

(3)

Allowance for Doubtful Accounts for Trade Accounts Receivable

A summary of changes in the allowance for doubtful accounts for trade accounts receivable for the nine months ended July 31, 2020 and 2019 follows:

	Nine Months Ended
	July 31,
	2020		2019
Balance at beginning of period	$	99,562	$	64,242
Bad debt expense		431,746		56,483
Losses charged to allowance		—		(25,061	)
Balance at end of period	$	531,308	$	95,664

Note 4 - Inventories

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

(4)

Inventories

Inventories as of July 31, 2020 and October 31, 2019 consist of the following:

	July 31		October 31,
	2020		2019
Finished goods	$	5,111,049	$	5,845,973
Work in process		3,343,469		3,321,216
Raw materials		8,411,730		8,632,230
Production supplies		263,213		296,208
Total	$	17,129,461	$	18,095,627

Note 5 - Product Warranties

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

(5)

Product Warranties

As of July 31, 2020 and October 31, 2019, the Company’s accrual for estimated product warranty claims totaled $110,000 and $120,000, respectively, and is included in accounts payable and accrued expenses. Warranty claims expense for the three months and nine months ended July 31, 2020 totaled $44,347 and $55,736, respectively. Warranty claims expense for the three months and nine months ended July 31, 2019 totaled $69,075 and $225,629, respectively.

The following table summarizes the changes in the Company’s accrual for product warranties during the nine months ended July 31, 2020 and 2019:

	Nine Months Ended
	July 31
	2020			2019
Balance at beginning of period	$	120,000		$	180,000
Liabilities accrued for warranties issued during the period		141,033			222,520
Warranty claims and costs paid during the period		(65,736	)		(205,629	)
Changes in liability for pre-existing warranties during the period		(85,297	)		3,109
Balance at end of period	$	110,000		$	200,000

Note 6 - Long-term Debt and Notes Payable to Bank

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Long-term Debt [Text Block]

(6)

Long-term Debt and Notes Payable to Bank

The Company has credit facilities consisting of a real estate term loan, as amended and restated (the “Virginia Real Estate Loan”), a supplemental real estate term loan, as amended and restated (the “North Carolina Real Estate Loan”), a Revolving Credit Master Promissory Note and related agreements (collectively, the “Revolver”) and a Paycheck Protection Program loan (“PPP Loan”) implemented by the United States Small Business Administration (“SBA”).

Both the Virginia Real Estate Loan and the North Carolina Real Estate Loan are with Pinnacle Bank (“Pinnacle”), have a fixed interest rate of 3.95% and are secured by a first lien deed of trust on the Company’s real property.

Long-term debt as of July 31, 2020 and October 31, 2019 consists of the following:

	July 31,		October 31,
	2020		2019
Virginia Real Estate Loan ($6.5 million original principal) payable in monthly installments of $31,812, including interest (at 3.95%), with final payment of $3,644,211 due May 1, 2024	$	4,173,324	$	4,580,173
North Carolina Real Estate Loan ($2.24 million original principal) payable in monthly installments of $10,963, including interest (at 3.95%), with final payment of $1,255,850 due May 1, 2024		1,067,894		1,328,450
Total long-term debt		5,241,218		5,908,623
Less current installments		308,979		738,955
Long-term debt, excluding current installments	$	4,932,239	$	5,169,668

On April 15, 2020, the Company obtained an unsecured PPP Loan through Pinnacle in the amount of $4,981,400. The loan was made through the SBA as part of the PPP under the CARES Act. The interest rate is fixed at 1.00% per year. Under the CARES Act, all or a portion of this loan may be forgiven if certain requirements are met. If the loan is not forgiven, the Company will pay principal and interest payments of $280,335 every month, beginning seven months from the effective date of the PPP Loan. The Company can repay the PPP Loan without any prepayment penalty. All remaining principal and accrued interest is due and payable two years from the effective date of the PPP Loan ( April 15, 2022). As of July 31, 2020, the current portion of the PPP Loan was $2,469,042 and the noncurrent portion was $2,512,358.

On July 24, 2020, OCC terminated its Revolving Credit Note with Pinnacle and, along with its wholly owned subsidiaries, entered into a Loan and Security Agreement (“Loan Agreement”) with North Mill Capital LLC (“North Mill”). As part of the refinancing transaction, OCC also entered into a Revolving Credit Master Promissory Note with North Mill dated July 24, 2020 (the “Revolver”) and a Collateral Assignment of Patents and Trademarks (“Collateral Assignment”) dated July 24, 2020 along with certain other supporting ancillary documents.

Under the Loan Agreement, North Mill agreed to provide the Company with one or more advances in an amount up to: (a) 85% of the aggregate outstanding amount of eligible accounts (the “eligible accounts loan value”); plus (b) the lowest of (i) an amount up to 35% of the aggregate value of eligible inventory, (ii) $5,000,000, and (iii) an amount not to exceed 100% of the then outstanding eligible accounts loan value; minus (c) $1,500,000.

The maximum aggregate principal amount subject to the Revolver is $18,000,000. Interest accrues on the daily balance at the per annum rate of 1.5% above the Prime Rate in effect from time to time, but not less than 4.75% (the “Applicable Rate”). In the event of a default, interest may become 6% above the Applicable Rate. As of July 31, 2020, the Revolver accrued interest at the prime lending rate plus 1.5% (resulting in a 4.75% rate at July 31, 2020). The initial term of the Revolver is three years, with a termination date of July 24, 2023. After the initial term and unless otherwise terminated, the loan may be extended in one year periods subject to the agreement of North Mill.

The Revolver is secured by all of the following assets: properties, rights and interests in property of the Company whether now owned or existing, or hereafter acquired or arising, and wherever located; all accounts, equipment, commercial tort claims, general intangibles, chattel paper, inventory, negotiable collateral, investment property, financial assets, letter-of-credit rights, supporting obligations, deposit accounts, money or assets of the Company, which hereafter come into the possession, custody, or control of North Mill; all proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing; any and all tangible or intangible property resulting from the sale, lease, license or other disposition of any of the foregoing, or any portion thereof or interest therein, and all proceeds thereof; and any other assets of the Company which may be subject to a lien in favor of North Mill as security for the obligations under the Loan Agreement.

Prior to the refinancing of the Revolver with North Mill Capital on July 24, 2020, the Revolving Credit Note with Pinnacle (as amended and modified) provided the Company with a $6.5 million revolving line of credit for its working capital needs. Under the Revolving Credit Note, Pinnacle provided the Company with one or more revolving loans in a collective maximum principal amount of $6.5 million. The Company could borrow, repay, and reborrow at any time or from time to time while the Revolving Credit Note was in effect.

As of July 31, 2020 the Company had $4.6 million of outstanding borrowings on its Revolver and $2.2 million in available credit. As of October 31, 2019, the Company had $5.7 million of outstanding borrowings on its Revolving Credit Note and $850,000 in available credit.

Note 7 - Leases

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

(7)

Leases

The Company elected the optional transition method provided by the FASB in ASU 2018-11, Leases (Topic 842): Targeted Improvements, and as a result, has not restated its condensed consolidated financial statements for prior periods presented. The Company has elected the package of practical expedients upon transition which allowed the Company to retain the lease classification for any leases that existed prior to adoption, to not reassess whether any contracts entered into prior to adoption are leases, and to not reassess initial direct costs for any leases that existed prior to adoption.

The Company has an operating lease agreement for approximately 34,000 square feet of office, manufacturing and warehouse space in Plano, Texas (near Dallas). The initial lease term expired November 30, 2019, and was amended shortly thereafter to run through November 30, 2024.

The Company entered into an operating lease agreement in April 2015 for approximately 36,000 square feet of warehouse space in Roanoke, Virginia. The lease term was for twelve months and terminated on April 30, 2016. The Company exercised all four (4) one year options to renew the lease extending the lease term to April 30, 2020. On February 6, 2020 the Company entered into a First Amendment to the lease agreement dated April 25, 2015 extending the term of the lease for an additional thirty-six months, extending its lease termination date until April 30, 2023.

The Company also leases certain office equipment under operating leases with initial 60 month terms.

The Company’s lease contracts may include options to extend or terminate the lease. The Company exercises judgment to determine the term of those leases when such options are present and include such options in the calculation of the lease term when it is reasonably certain that it will exercise those options.

The Company includes contract lease components in its determination of lease payments, while non-lease components of the contracts, such as taxes, insurance, and common area maintenance, are expensed as incurred. At commencement, right-of-use assets and lease liabilities are measured at the present value of future lease payments over the lease term. The Company uses its incremental borrowing rate based on information available at the time of lease commencement to measure the present value of future payments.

Operating lease expense is recognized on a straight-line basis over the lease term. Short term leases with an initial term of 12 months or less are expensed as incurred. The Company’s short term leases have month-to-month terms.

Operating lease right-of-use assets of $1,349,149 were included in other assets at July 31, 2020. Operating lease liabilities of $327,869 and $1,030,929, respectively, were included in accounts payable and accrued expenses and other noncurrent liabilities at July 31, 2020. Operating lease expense recognized during the three month and nine month periods ended July 31, 2020 totaled $99,327 and $293,756, respectively.

The weighted average remaining lease term was 47.1 months and the weighted average discount rate was 5.1% as of July 31, 2020.

The Company’s future payments due under operating leases reconciled to the lease liability are as follows:

Fiscal Year	Future Payments
2020 (1)	$	96,681
2021		389,398
2022		389,807
2023		327,071
2024		274,132
Thereafter		26,370
Total undiscounted lease payments		1,503,459
Present value discount		(144,661	)
Total operating lease liability	$	1,358,798

(1) Remaining three months of fiscal year 2020.

For the three months and nine months ended July 31, 2020, cash paid for operating lease liabilities totaled $96,681 and $286,131, respectively. For the nine months ended July 31, 2020, right-of-use assets obtained in exchange for new operating lease liabilities totaled $1,462,817.

Note 8 - Fair Value Measurements

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(8)

Fair Value Measurements

The carrying amounts reported in the condensed consolidated balance sheets as of July 31, 2020 and October 31, 2019 for cash, trade accounts receivable, income taxes refundable – current, other receivables, note payable to bank, revolver, note payable, SBA PPP Loan – current and accounts payable and accrued expenses, including accrued compensation and payroll taxes, approximate fair value because of the short maturity of these instruments. The carrying values of the Company’s note payable, SBA Loan – noncurrent, note payable, revolver - noncurrent and long-term debt approximate fair value based on similar long-term debt issues available to the Company as of July 31, 2020 and October 31, 2019. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 9 - Net Loss Per Share

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

(9)

Net Loss Per Share

Basic net loss per share excludes dilution and is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the net loss of the Company.

The following is a reconciliation of the numerators and denominators of the net loss per share computations for the periods presented:

	Three months ended						Nine months ended
	July 31,						July 31,
	2020			2019			2020			2019
Net loss (numerator)	$	(1,433,830	)	$	(1,085,294	)	$	(5,714,899	)	$	(5,012,739	)
Shares (denominator)		7,352,673			7,319,274			7,354,579			7,409,465
Basic and diluted net loss per share	$	(0.20	)	$	(0.15	)	$	(0.78	)	$	(0.68	)

Weighted average unvested shares for the three months and nine months ended July 31, 2020 totaling 173,115 and 125,877, respectively, while issued and outstanding, were not included in the computation of basic and diluted net loss per share for the three months and nine months ended July 31, 2020 (because to include such shares would have been antidilutive, or in other words, to do so would have reduced the net loss per share for those periods).

Weighted average unvested shares for the three months and nine months ended July 31, 2019 totaling 141,257 and 124,242, respectively, while issued and outstanding, were not included in the computation of basic and diluted net loss per share for the three months and nine months ended July 31, 2019 (because to include such shares would have been antidilutive, or in other words, to do so would have reduced the net loss per share for those periods).

Note 10 - Segment Information and Business and Credit Concentrations

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

(10)

Segment Information and Business and Credit Concentrations

The Company provides credit, in the normal course of business, to various commercial enterprises, governmental entities and not-for-profit organizations. Concentration of credit risk with respect to trade receivables is normally limited due to the Company’s large number of customers. The Company also manages exposure to credit risk through credit approvals, credit limits and monitoring procedures. Management believes that credit risks as of July 31, 2020 have been adequately provided for in the condensed consolidated financial statements.

For the three months and nine months ended July 31, 2020, 16.1% and 13.7% of consolidated net sales were attributable to one customer. For the three months ended July 31, 2019, 15.1% of consolidated net sales was attributable to one customer. For the nine months ended July 31, 2019, 14.5% and 14.1% of consolidated net sales were attributable to two customers.

The Company has a single reportable segment for purposes of segment reporting.

Note 11 - Revenue Recognition

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(11)

Revenue Recognition

Revenues consist of product sales that are recognized at a specific point in time under the core principle of recognizing revenue when control transfers to the customer. The Company considers customer purchase orders, governed by master sales agreements or the Company’s standard terms and conditions, to be the contract with the customer. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. The Company evaluates each customer’s credit risk when determining whether to accept a contract.

In determining transaction prices, the Company evaluates whether fixed order prices are subject to adjustment to determine the net consideration to which the Company expects to be entitled. Contracts do not include financing components, as payment terms are generally due 30 to 90 days after shipment. Taxes assessed by governmental authorities and collected from the customer including, but not limited to, sales and use taxes and value-added taxes, are not included in the transaction price and are not included in net sales.

The Company recognizes revenue at the point in time when products are shipped or delivered from its manufacturing facility to its customer, in accordance with the agreed upon shipping terms. Since the Company typically invoices the customer at the same time that performance obligations are satisfied, no contract assets are recognized. The Company’s contract liability represents advance consideration received from customers prior to transfer of the product. This liability was $110,937 as of July 31, 2020 and $19,850 as of October 31, 2019.

Sales to certain customers are made pursuant to agreements that provide price adjustments and limited return rights with respect to the Company’s products. The Company maintains a reserve for estimated future price adjustment claims, rebates and returns as a refund liability. The Company’s refund liability was $118,675 as of July 31, 2020 and $273,512 as of October 31, 2019.

The Company offers standard product warranty coverage which provides assurance that its products will conform to contractually agreed-upon specifications for a limited period from the date of shipment. Separately-priced warranty coverage is not offered. The warranty claim is generally limited to a credit equal to the purchase price or a promise to repair or replace the product for a specified period of time at no additional charge.

The Company accounts for shipping and handling activities related to contracts with customers as a cost to fulfill its promise to transfer control of the related product. Shipping and handling costs are included in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

The Company incurs sales commissions to acquire customer contracts that are directly attributable to the contracts. The commissions are expensed as selling expenses during the period that the related products are transferred to customers.

Disaggregation of Revenue

The following table presents net sales attributable to the United States and all other countries in total for the three months and nine months ended July 31, 2020 and 2019:

	Three months ended				Nine months ended
	July 31				July 31
	2020		2019		2020		2019
United States	$	11,086,545	$	14,421,221	$	33,432,451	$	43,460,603
Outside the United States		2,552,624		2,945,847		7,957,542		9,614,308
Total net sales	$	13,639,169	$	17,367,068	$	41,389,993	$	53,074,911

OPTICAL CABLE CORPORATION

Condensed Notes to Condensed Consolidated Financial Statements

Nine Months Ended July 31, 2020

(Unaudited)

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Note 12 - Contingencies

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(12)

Contingencies

From time to time, the Company is involved in various claims, legal actions and regulatory reviews arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

The COVID-19 pandemic has had a significant impact on businesses and individuals in the United States and globally. Actions taken by governments and private industry to limit the spread of the disease have resulted in an unprecedented disruption of normal activities as businesses have been forced to shut down or operate on a limited basis. The Company is obligated and continues to operate during the COVID-19 pandemic because the Company’s workforce is classified a “Defense Industrial Base Essential Critical Infrastructure Workforce” under guidelines from the U.S. Department of Defense and an “Essential Critical Infrastructure Workforce” under guidelines by the U.S. Department of Homeland Security, Cybersecurity and Infrastructure Security Agency (CISA).

While continuing to operate, the Company has been negatively impacted by the COVID-19 pandemic: revenues in its markets, production volumes and operations and access to capital markets have all been negatively impacted. The Company also experienced some minor disruptions in its supply chain as well as delays in cash receipts from customers.

The Company made a number of changes to business operations in response to the COVID-19 pandemic, including: severely limiting business travel and face-to-face meetings, having a portion of its non-manufacturing employees work remotely, and implementing strict social distancing, symptom self-assessments and mask protocols within its facilities.

The extent to which the COVID-19 pandemic will affect the Company in the future will depend on ongoing developments, which are highly uncertain and cannot be reasonably predicted, including, but not limited to, the duration and severity of the outbreak, the timing and extent of the easing of restrictions on businesses and individuals, the timing of recovery in certain of the Company’s markets, the potential for a resurgence of the virus, as well as a variety of other unknowable factors. The longer the various impacts of COVID-19 persist, the greater the potential negative financial effects on the Company.

Note 13 - New Accounting Standards Not Yet Adopted

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

(13)

New Accounting Standards Not Yet Adopted

In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2019-12 on its results of operations, financial position and liquidity and its related financial statement disclosures.

There are no other new accounting standards issued, but not yet adopted by the Company, which are expected to materially impact the Company’s financial position, operating results or financial statement disclosures.

Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Summary of Changes in the Allowance for Doubtful Accounts for Trade Accounts Receivable [Table Text Block]

	Nine Months Ended
	July 31,
	2020		2019
Balance at beginning of period	$	99,562	$	64,242
Bad debt expense		431,746		56,483
Losses charged to allowance		—		(25,061	)
Balance at end of period	$	531,308	$	95,664

Note 4 - Inventories (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	July 31		October 31,
	2020		2019
Finished goods	$	5,111,049	$	5,845,973
Work in process		3,343,469		3,321,216
Raw materials		8,411,730		8,632,230
Production supplies		263,213		296,208
Total	$	17,129,461	$	18,095,627

Note 5 - Product Warranties (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	Nine Months Ended
	July 31
	2020			2019
Balance at beginning of period	$	120,000		$	180,000
Liabilities accrued for warranties issued during the period		141,033			222,520
Warranty claims and costs paid during the period		(65,736	)		(205,629	)
Changes in liability for pre-existing warranties during the period		(85,297	)		3,109
Balance at end of period	$	110,000		$	200,000

Note 6 - Long-term Debt and Notes Payable to Bank (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Schedule of Debt [Table Text Block]

	July 31,		October 31,
	2020		2019
Virginia Real Estate Loan ($6.5 million original principal) payable in monthly installments of $31,812, including interest (at 3.95%), with final payment of $3,644,211 due May 1, 2024	$	4,173,324	$	4,580,173
North Carolina Real Estate Loan ($2.24 million original principal) payable in monthly installments of $10,963, including interest (at 3.95%), with final payment of $1,255,850 due May 1, 2024		1,067,894		1,328,450
Total long-term debt		5,241,218		5,908,623
Less current installments		308,979		738,955
Long-term debt, excluding current installments	$	4,932,239	$	5,169,668

Note 7 - Leases (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Fiscal Year	Future Payments
2020 (1)	$	96,681
2021		389,398
2022		389,807
2023		327,071
2024		274,132
Thereafter		26,370
Total undiscounted lease payments		1,503,459
Present value discount		(144,661	)
Total operating lease liability	$	1,358,798

Note 9 - Net Loss Per Share (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended						Nine months ended
	July 31,						July 31,
	2020			2019			2020			2019
Net loss (numerator)	$	(1,433,830	)	$	(1,085,294	)	$	(5,714,899	)	$	(5,012,739	)
Shares (denominator)		7,352,673			7,319,274			7,354,579			7,409,465
Basic and diluted net loss per share	$	(0.20	)	$	(0.15	)	$	(0.78	)	$	(0.68	)

Note 11 - Revenue Recognition (Tables)

9 Months Ended

Jul. 31, 2020

Notes Tables

Revenue from External Customers by Geographic Areas [Table Text Block]

	Three months ended				Nine months ended
	July 31				July 31
	2020		2019		2020		2019
United States	$	11,086,545	$	14,421,221	$	33,432,451	$	43,460,603
Outside the United States		2,552,624		2,945,847		7,957,542		9,614,308
Total net sales	$	13,639,169	$	17,367,068	$	41,389,993	$	53,074,911

Note 1 - General (Details Textual) - USD ($)	Jul. 31, 2020	Nov. 01, 2019
Operating Lease, Liability, Total	$ 1,358,798
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset		$ 138,834
Operating Lease, Liability, Total		$ 139,367

Note 2 - Stock Incentive Plans and Other Share-based Compensation (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)			83,880
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in shares)			5,774
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			2 years
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 435,000		$ 435,000
Plan 2017 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)	362,000		362,000
Plan 2017 [Member] \| Employees, Consultant and Non-employee Directors [Member]
Share-based Payment Arrangement, Expense	$ 40,605	$ 42,549	$ 101,638	$ 941,253
Plan 2017 [Member] \| Non-employee Directors [Member] \| Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	58,880
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	1 year
Plan 2017 [Member] \| Consultant [Member] \| Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	25,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	5 years
The 2017 Stock Incentive Plan [Member] \| Restricted Stock [Member]
Deferred Compensation Arrangement with Individual, Allocated Share-based Compensation Expense	$ 35,917	$ 35,597	$ 95,245	$ 89,241

Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable - Summary of Changes in the Allowance for Doubtful Accounts for Trade Accounts Receivable (Details) - USD ($)	9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
Balance at beginning of period	$ 99,562	$ 64,242
Bad debt expense	431,746	56,483
Losses charged to allowance	0	(25,061)
Balance at end of period	$ 531,308	$ 95,664

Note 4 - Inventories - Components of Inventories (Details) - USD ($)	Jul. 31, 2020	Oct. 31, 2019
Finished goods	$ 5,111,049	$ 5,845,973
Work in process	3,343,469	3,321,216
Raw materials	8,411,730	8,632,230
Production supplies	263,213	296,208
Total	$ 17,129,461	$ 18,095,627

Note 5 - Product Warranties (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
Note 5 - Product Warranties (Details Textual) - USD ($)	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019	Oct. 31, 2019	Oct. 31, 2018
Standard and Extended Product Warranty Accrual, Ending Balance	$ 110,000	$ 200,000	$ 110,000	$ 200,000	$ 120,000	$ 180,000
Product Warranty Expense	44,347	$ 69,075	55,736	$ 225,629
Accounts Payable and Accrued Liabilities [Member]
Standard and Extended Product Warranty Accrual, Ending Balance	$ 110,000		$ 110,000		$ 120,000

Note 5 - Product Warranties - Changes in Accrual for Product Warranties (Details) - USD ($)	9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019
Balance at beginning of period	$ 120,000	$ 180,000
Liabilities accrued for warranties issued during the period	141,033	222,520
Warranty claims and costs paid during the period	(65,736)	(205,629)
Changes in liability for pre-existing warranties during the period	(85,297)	3,109
Balance at end of period	$ 110,000	$ 200,000

Note 6 - Long-term Debt and Notes Payable to Bank (Details Textual) - USD ($)				9 Months Ended
	Jul. 31, 2020	Jul. 24, 2020	Apr. 15, 2020	Jul. 31, 2020	Jul. 31, 2019	Oct. 31, 2019
Proceeds from Paycheck Protection Program Under CARES Act			$ 4,981,400	$ 4,981,400	$ 0
Notes Payable, SBA PPP Loan, Periodic Payment,			$ 280,335
Notes Payable, SBA PPP Loan, Current	$ 2,469,042			2,469,042		$ 0
Notes Payable, SBA PPP Loan, Noncurrent	2,512,358			2,512,358		0
Pinnacle Financial Partners [Member] \| Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 6,500,000
Long-term Line of Credit, Noncurrent	4,600,000			4,600,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 2,200,000			$ 2,200,000		850,000
Line of Credit, Current						$ 5,700,000
North Mill Capital LLC [Member] \| Revolving Credit Facility [Member]
Line of Credit Facility, Percent of Eligible Accounts		85.00%
Line of Credit Facility, Percent of Eligible Inventory		35.00%
Line of Credit Facility, Additional Capacity for Advances		$ 5,000,000
Line of Credit Facility, Restricted Capacity for Advances		1,500,000
Line of Credit Facility, Maximum Borrowing Capacity		$ 18,000,000
Debt Instrument, Interest Rate, Effective Percentage	4.75%	4.75%		4.75%
Debt Instrument, Term (Year)	3 years
Debt Instrument, Term Extensions (Year)		1 year
North Mill Capital LLC [Member] \| Revolving Credit Facility [Member] \| Maximum [Member]
Debt Instrument, Interest Rate, Effective Percentage		6.00%
North Mill Capital LLC [Member] \| Revolving Credit Facility [Member] \| Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate		1.50%		1.50%
Virginia Real Estate Loan and North Carolina Real Estate Loan [Member] \| Pinnacle Financial Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage	3.95%			3.95%

Note 6 - Long-term Debt and Note Payable to Bank - Long-term Debt (Details) - USD ($)	Jul. 31, 2020	Oct. 31, 2019
Long-term Loan	$ 5,241,218	$ 5,908,623
Less current installments	308,979	738,955
Long-term debt, excluding current installments	4,932,239	5,169,668
Virginia Real Estate Loan [Member]
Long-term Loan	4,173,324	4,580,173
North Carolina Real Estate Loan [Member]
Long-term Loan	$ 1,067,894	$ 1,328,450

Note 6 - Long-term Debt and Note Payable to Bank - Long-term Debt (Details) (Parentheticals) - USD ($)	9 Months Ended	12 Months Ended
	Jul. 31, 2020	Oct. 31, 2019
Virginia Real Estate Loan [Member]
Original principal	$ 6,500,000	$ 6,500,000
Monthly installments	$ 31,812	$ 31,812
Debt Instrument, Interest Rate, Stated Percentage	3.95%	3.95%
Final payment	$ 3,644,211
North Carolina Real Estate Loan [Member]
Original principal	2,240,000	$ 2,240,000
Monthly installments	$ 10,963	$ 10,963
Debt Instrument, Interest Rate, Stated Percentage	3.95%	3.95%
Final payment	$ 1,255,850	$ 1,255,850
Maturity date	May 01, 2024	May 01, 2024

Note 7 - Leases (Details Textual)	3 Months Ended	9 Months Ended
Note 7 - Leases (Details Textual)	Jul. 31, 2020 USD ($) ft²	Jul. 31, 2020 USD ($) ft²	Feb. 06, 2020	Apr. 30, 2015 ft²
Operating Lease, Expense	$ 99,327	$ 293,756
Operating Lease, Weighted Average Remaining Lease Term (Month)	47 months 3 days	47 months 3 days
Operating Lease, Weighted Average Discount Rate, Percent	5.10%	5.10%
Operating Lease, Payments	$ 96,681	$ 286,131
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability		1,462,817
Other Assets [Member]
Operating Lease, Right-of-Use Asset	1,349,149	1,349,149
Accounts Payable and Accrued Liabilities [Member]
Operating Lease, Liability, Current	327,869	327,869
Other Noncurrent Liabilities [Member]
Operating Lease, Liability, Noncurrent	$ 1,030,929	$ 1,030,929
Operating Lease for Office, Manufacturing and Warehouse Space in Plano, Texas [Member]
Area of Real Estate Property (Square Foot) \| ft²	34,000	34,000
Operating Lease for Warehouse Space in Roanoke, Virginia [Member]
Area of Real Estate Property (Square Foot) \| ft²				36,000
Lessee, Operating Lease, Term of Contract (Month)				12 months
Lease Term, Extension, Term (Year)		1 year
Lessee, Operating Lease, Renewal Term (Month)			36 months
Operating Lease For Office Equipment [Member]
Lessee, Operating Lease, Term of Contract (Month)	60 months	60 months

Note 7 - Leases - Future Payments Due (Details)

Jul. 31, 2020

USD ($)

2020 (1)

$ 96,681

^[1]

389,398

389,807

327,071

274,132

26,370

Total undiscounted lease payments

1,503,459

Present value discount

(144,661)

Total operating lease liability

$ 1,358,798

[1]	Remaining three months of fiscal year 2020.

Note 9 - Net Loss Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
Note 9 - Net Loss Per Share (Details Textual) - shares	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	173,115	141,257	125,877	124,242

Note 9 - Net Loss Per Share - Components of Reconciliation of Numerators and Denominators Net Loss Per Share (Details) - USD ($)	3 Months Ended						9 Months Ended
	Jul. 31, 2020	Apr. 30, 2020	Jan. 31, 2020	Jul. 31, 2019	Apr. 30, 2019	Jan. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Net loss (numerator)	$ (1,433,830)	$ (1,689,181)	$ (2,591,888)	$ (1,085,294)	$ (617,425)	$ (3,310,020)	$ (5,714,899)	$ (5,012,739)
Shares (denominator) (in shares)	7,352,673			7,319,274			7,354,579	7,409,465
Basic and diluted net loss per share (in dollars per share)	$ (0.20)			$ (0.15)			$ (0.78)	$ (0.68)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Note 10 - Segment Information and Business and Credit Concentrations (Details Textual) - Customer Concentration Risk [Member] - Revenue Benchmark [Member]	3 Months Ended		9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Concentration Risk, Number of Customers	1	1	1	2
One Customer [Member]
Concentration Risk, Percentage	16.10%	15.10%	13.70%
Customer One [Member]
Concentration Risk, Percentage				14.50%
Customer Two [Member]
Concentration Risk, Percentage				14.10%

Note 11 - Revenue Recognition (Details Textual) - USD ($)	Jul. 31, 2020	Oct. 31, 2019
Contract with Customer, Liability, Total	$ 110,937	$ 19,850
Contract with Customer, Refund Liability, Total	$ 118,675	$ 273,512

Note 11 - Revenue Recognition - Revenue Attributed to United States and All Other Countries (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Jul. 31, 2020	Jul. 31, 2019
Net sales	$ 13,639,169	$ 17,367,068	$ 41,389,993	$ 53,074,911
UNITED STATES
Net sales	11,086,545	14,421,221	33,432,451	43,460,603
Non-US [Member]
Net sales	$ 2,552,624	$ 2,945,847	$ 7,957,542	$ 9,614,308

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

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+ Details