0001437749-21-006018 | 10-Q | XBRL Viewer

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Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Jan. 31, 2021	Mar. 05, 2021
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	Q1
Document Fiscal Year Focus	2021
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jan. 31, 2021
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		7,536,116

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jan. 31, 2021	Oct. 31, 2020
Current assets:
Cash	$ 451,960	$ 140,839
Trade accounts receivable, net of allowance for doubtful accounts of $517,093 at January 31, 2021 and $524,617 at October 31, 2020	6,263,921	7,561,334
Income taxes refundable - current	0	25,003
Other receivables	21,774	23,145
Inventories	17,380,161	17,099,767
Prepaid expenses and other assets	369,268	472,516
Total current assets	24,487,084	25,322,604
Property and equipment, net	8,579,203	8,811,863
Intangible assets, net	669,991	665,731
Other assets, net	1,628,407	1,757,614
Total assets	35,364,685	36,557,812
Current liabilities:
Current installments of long-term debt	315,269	312,109
Accounts payable and accrued expenses	4,136,965	2,861,343
Accrued compensation and payroll taxes	1,596,825	1,463,307
Income taxes payable	16,761	13,986
Total current liabilities	9,363,007	6,266,149
Note payable, revolver - noncurrent	4,932,377	4,988,660
Long-term debt, excluding current installments	4,773,854	4,853,457
Other noncurrent liabilities	1,452,191	1,823,632
Total liabilities	22,205,642	21,297,894
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 7,536,116 shares at January 31, 2021 and 7,537,087 shares at October 31, 2020	14,042,735	14,002,130
Retained earnings (accumulated deficit)	(883,692)	1,257,788
Total shareholders’ equity	13,159,043	15,259,918
Commitments and contingencies
Total liabilities and shareholders’ equity	35,364,685	36,557,812
Paycheck Protection Program CARES Act [Member]
Current liabilities:
Note payable, SBA PPP loan - current	3,297,187	1,615,404
Note payable, SBA PPP loan - noncurrent	1,684,213	$ 3,365,996
Long-term debt, excluding current installments	$ 1,684,213

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands	Jan. 31, 2021	Oct. 31, 2020
Allowance for doubtful accounts	$ 517,093	$ 524,617
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)	7,536,116	7,537,087
Common stock, outstanding (in shares)	7,536,116	7,537,087

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Net sales	$ 11,876,573	$ 12,887,396
Cost of goods sold	9,567,183	10,483,256
Gross profit	2,309,390	2,404,140
Selling, general and administrative expenses	4,307,924	4,824,124
Royalty (income) expense, net	(6,967)	17,558
Amortization of intangible assets	10,894	9,991
Loss from operations	(2,002,461)	(2,447,533)
Other expense, net:
Interest expense	(173,983)	(136,687)
Other, net	2,628	(2,635)
Other expense, net	(171,355)	(139,322)
Loss before income taxes	(2,173,816)	(2,586,855)
Income tax expense (benefit)	(32,336)	5,033
Net loss	$ (2,141,480)	$ (2,591,888)
Net loss per share: Basic and diluted (in dollars per share)	$ (0.29)	$ (0.35)

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Cumulative Effect, Period of Adoption, Adjustment [Member] Common Stock [Member]	Cumulative Effect, Period of Adoption, Adjustment [Member] Retained Earnings [Member]	Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Oct. 31, 2019				7,458,981
Balances (Accounting Standards Update 2018-17 [Member]) at Oct. 31, 2019	$ 6,554	$ (6,554)	$ 0
Balances at Oct. 31, 2019				$ 13,853,334	$ 7,385,566	$ 21,238,900
Share-based compensation, net (in shares)				(2,909)
Share-based compensation, net				$ 34,356	0	34,356
Net income (loss)				$ 0	(2,591,888)	(2,591,888)
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, 2020				7,537,087
Balances at Oct. 31, 2020				$ 14,002,130	1,257,788	15,259,918
Share-based compensation, net (in shares)				(971)
Share-based compensation, net				$ 40,605	0	40,605
Net income (loss)				$ 0	(2,141,480)	(2,141,480)
Balances (in shares) at Jan. 31, 2021				7,536,116
Balances at Jan. 31, 2021				$ 14,042,735	$ (883,692)	$ 13,159,043

- 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

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Cash flows from operating activities:
Net loss	$ (2,141,480)	$ (2,591,888)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	324,261	392,978
Bad debt recovery	(7,524)	(14,838)
Share-based compensation expense	40,605	34,356
Loss on sale of property and equipment	3,167	2,782
(Increase) decrease in:
Trade accounts receivable	1,304,937	3,563,267
Other receivables	1,371	43,381
Inventories	(280,394)	915,488
Prepaid expenses and other assets	103,248	(73,124)
Income taxes refundable	25,003	0
Other assets	84,519	0
Increase (decrease) in:
Accounts payable and accrued expenses	1,277,881	(1,103,593)
Accrued compensation and payroll taxes	133,518	(632,415)
Income taxes payable	2,775	4,025
Other noncurrent liabilities	(346,441)	3,212
Net cash provided by operating activities	525,446	543,631
Cash flows from investing activities:
Purchase of and deposits for the purchase of property and equipment	(41,445)	(46,702)
Investment in intangible assets	(15,154)	(21,060)
Net cash used in investing activities	(56,599)	(67,762)
Cash flows from financing activities:
Proceeds from note payable, revolver	13,147,167	0
Payments on note payable, revolver	(13,203,450)	0
Principal payments on long-term debt	(76,443)	(319,459)
Payments for financing costs	(25,000)	0
Net cash used in financing activities	(157,726)	(319,459)
Net increase in cash	311,121	156,410
Cash at beginning of period	140,839	537,330
Cash at end of period	$ 451,960	$ 693,740

Note 1 - General

3 Months Ended

Jan. 31, 2021

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 three months ended January 31, 2021 are not necessarily indicative of the results for the fiscal year ending October 31, 2021 because the following items, among other things, may impact those results: impacts of the COVID-19 pandemic including (but not limited to) 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, 2020 (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, 2020.

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

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

(2)

Stock Incentive Plans and Other Share‑Based Compensation

As of January 31, 2021, there were approximately 363,000 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 ended January 31, 2021 and 2020 was $40,605 and $34,356, 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.

Restricted stock award activity during the three months ended January 31, 2021 consisted of restricted stock forfeited totaling 971 shares. 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 January 31, 2021, 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 1.7 year weighted-average period is approximately $351,000.

Note 3 - Allowance for Doubtful Accounts for Trade Accounts Receivable

3 Months Ended

Jan. 31, 2021

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 three months ended January 31, 2021 and 2020 follows:

	Three Months Ended
	January 31,
	2021			2020
Balance at beginning of period	$	524,617		$	99,562
Bad debt recovery		(7,524	)		(14,838	)
Balance at end of period	$	517,093		$	84,724

Note 4 - Inventories

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Inventory Disclosure [Text Block]

(4)

Inventories

Inventories as of January 31, 2021 and October 31, 2020 consist of the following:

	January 31,		October 31,
	2021		2020
Finished goods	$	5,289,945	$	4,663,978
Work in process		3,560,464		4,165,289
Raw materials		8,268,453		8,010,794
Production supplies		261,299		259,706
Total	$	17,380,161	$	17,099,767

Note 5 - Product Warranties

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

(5)

Product Warranties

As of January 31, 2021 and October 31, 2020, the Company’s accrual for estimated product warranty claims totaled $85,000 and is included in accounts payable and accrued expenses. Warranty claims expense for the three months ended January 31, 2021 totaled $18,348. Warranty claims recovery for the three months ended January 31, 2020 totaled $37,257.

The following table summarizes the changes in the Company’s accrual for product warranties during the three months ended January 31, 2021 and 2020:

	Three Months Ended
	January 31,
	2021			2020
Balance at beginning of period	$	85,000		$	120,000
Liabilities accrued for warranties issued during the period		50,251			69,549
Warranty claims and costs paid during the period		(18,348	)		(12,743	)
Changes in liability for pre-existing warranties during the period		(31,903	)		(106,806	)
Balance at end of period	$	85,000		$	70,000

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

3 Months Ended

Jan. 31, 2021

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 January 31, 2021 and October 31, 2020 consists of the following:

	January 31,		October 31,
	2021		2020
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	$	4,065,818	$	4,119,850
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		1,023,305		1,045,716
Total long-term debt		5,089,123		5,165,566
Less current installments		315,269		312,109
Long-term debt, excluding current installments	$	4,773,854	$	4,853,457

In fiscal year 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 Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The interest rate is fixed at 1.00% per year, and the Company has accrued interest expense of $39,851 on the PPP Loan as of January 31, 2021. Under the CARES Act and The Paycheck Protection Program Flexibility Act of 2020, all or a portion of this loan (principal and interest) may be forgiven if certain requirements are met. The Company believes it has met these requirements and applied for forgiveness of the entire balance of the loan (including accrued interest), submitting an application to Pinnacle on February 22, 2021. If the loan is not forgiven, the Company will pay principal and interest payments of approximately $560,000 every month, beginning ten months following the coverage period which ended September 29, 2020. 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 January 31, 2021, the current portion of the PPP Loan was $3,297,187 and the noncurrent portion was $1,684,213.

The Revolver with SLR Business Credit, formerly known as North Mill Capital LLC, (“SLR”) provides 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 6.0% above the Applicable Rate. As of January 31, 2021, the Revolver accrued interest at the prime lending rate plus 1.5% (resulting in a 4.75% rate at January 31, 2021). 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 SLR.

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 SLR; 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 SLR as security for the obligations under the Loan Agreement.

As of January 31, 2021 the Company had $4.9 million of outstanding borrowings on its Revolver and $1.2 million in available credit. As of October 31, 2020, the Company had $5.0 million of outstanding borrowings on its Revolver and $1.6 million in available credit.

Note 7 - Leases

3 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

(7)

Leases

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 lease term expires on November 30, 2024.

The Company has an operating lease agreement for approximately 36,000 square feet of warehouse space in Roanoke, Virginia. The lease term expires on 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 $1,180,674 and $1,265,194 were included in other assets at January 31, 2021 and October 31, 2020, respectively. Operating lease liabilities of $337,331 and $860,196, respectively, were included in accounts payable and accrued expenses and other noncurrent liabilities at January 31, 2021. Operating lease liabilities of $332,329 and $946,653, respectively, were included in accounts payable and accrued expenses and other noncurrent liabilities at October 31, 2020.

Operating lease expense recognized during the three months ended January 31, 2021 and 2020 totaled $100,348 and $95,871, respectively.

The weighted average remaining lease term was 41.5 months and the weighted average discount rate was 5.1% as of January 31, 2021.

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

Fiscal Year	Future Payments
2021 (1)	$	292,098
2022		389,807
2023		327,071
2024		274,132
Thereafter		26,370
Total undiscounted lease payments		1,309,478
Present value discount		(111,951	)
Total operating lease liability	$	1,197,527

(1) Remaining nine months of fiscal year 2021

For the three months ended January 31, 2021 and 2020, cash paid for operating lease liabilities totaled $97,300 and $94,199, respectively. For the three months ended January 31, 2021 there were no right-of-use assets obtained in exchange for new operating lease liabilities. For the three months ended January 31, 2020, right-of-use assets obtained in exchange for new operating lease liabilities totaled $1,088,719.

Note 8 - Fair Value Measurements

3 Months Ended

Jan. 31, 2021

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 January 31, 2021 and October 31, 2020 for cash, trade accounts receivable, income taxes refundable – current, other receivables, 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 January 31, 2021 and October 31, 2020. 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

3 Months Ended

Jan. 31, 2021

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
	January 31,
	2021			2020
Net loss (numerator)	$	(2,141,480	)	$	(2,591,888	)
Shares (denominator)		7,352,781			7,322,195
Basic and diluted net loss per share	$	(0.29	)	$	(0.35	)

Weighted average unvested shares for the three months ended January 31, 2021 and 2020 totaling 183,346 and 136,786, respectively, while issued and outstanding, were not included in the computation of basic and diluted net loss per share for the three months ended January 31, 2021 and 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).

Note 10 - Segment Information and Business and Credit Concentrations

3 Months Ended

Jan. 31, 2021

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 January 31, 2021 have been adequately provided for in the condensed consolidated financial statements. The Company includes all entities under common ownership for the purpose of calculating business concentrations.

For the three months ended January 31, 2021, 23.3% of consolidated net sales were attributable to one national distributor customer. For the three months ended January 31, 2020, 14.8% of consolidated net sales was attributable to a national distributor customer.

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

Note 11 - Revenue Recognition

3 Months Ended

Jan. 31, 2021

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 $104,225 as of January 31, 2021 and $63,283 as of October 31, 2020.

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 $138,733 as of January 31, 2021 and $119,989 as of October 31, 2020.

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 ended January 31, 2021 and 2020:

	Three months ended
	January 31,
	2021		2020
United States	$	9,703,610	$	10,488,348
Outside the United States		2,172,963		2,399,048
Total net sales	$	11,876,573	$	12,887,396

- 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
-Publisher FASB
-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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

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

+ Details

Note 12 - Contingencies

3 Months Ended

Jan. 31, 2021

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 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

3 Months Ended

Jan. 31, 2021

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 adoption of ASU 2019-12 is not expected to have a material impact on the Company’s results of operations, financial position or liquidity or 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)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

	Three Months Ended
	January 31,
	2021			2020
Balance at beginning of period	$	524,617		$	99,562
Bad debt recovery		(7,524	)		(14,838	)
Balance at end of period	$	517,093		$	84,724

Note 4 - Inventories (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	January 31,		October 31,
	2021		2020
Finished goods	$	5,289,945	$	4,663,978
Work in process		3,560,464		4,165,289
Raw materials		8,268,453		8,010,794
Production supplies		261,299		259,706
Total	$	17,380,161	$	17,099,767

Note 5 - Product Warranties (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended
	January 31,
	2021			2020
Balance at beginning of period	$	85,000		$	120,000
Liabilities accrued for warranties issued during the period		50,251			69,549
Warranty claims and costs paid during the period		(18,348	)		(12,743	)
Changes in liability for pre-existing warranties during the period		(31,903	)		(106,806	)
Balance at end of period	$	85,000		$	70,000

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

3 Months Ended

Jan. 31, 2021

Notes Tables

Schedule of Debt [Table Text Block]

	January 31,		October 31,
	2021		2020
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	$	4,065,818	$	4,119,850
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		1,023,305		1,045,716
Total long-term debt		5,089,123		5,165,566
Less current installments		315,269		312,109
Long-term debt, excluding current installments	$	4,773,854	$	4,853,457

Note 7 - Leases (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

Fiscal Year	Future Payments
2021 (1)	$	292,098
2022		389,807
2023		327,071
2024		274,132
Thereafter		26,370
Total undiscounted lease payments		1,309,478
Present value discount		(111,951	)
Total operating lease liability	$	1,197,527

Note 9 - Net Loss Per Share (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

	Three months ended
	January 31,
	2021			2020
Net loss (numerator)	$	(2,141,480	)	$	(2,591,888	)
Shares (denominator)		7,352,781			7,322,195
Basic and diluted net loss per share	$	(0.29	)	$	(0.35	)

Note 11 - Revenue Recognition (Tables)

3 Months Ended

Jan. 31, 2021

Notes Tables

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

	Three months ended
	January 31,
	2021		2020
United States	$	9,703,610	$	10,488,348
Outside the United States		2,172,963		2,399,048
Total net sales	$	11,876,573	$	12,887,396

Note 2 - Stock Incentive Plans and Other Share-based Compensation (Details Textual) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)	971
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 8 months 12 days
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 351,000
Plan 2017 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)	363,000
Plan 2017 [Member] \| Employees, Consultant and Non-employee Directors [Member]
Share-based Payment Arrangement, Expense	$ 40,605	$ 34,356

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 ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Balance at beginning of period	$ 524,617	$ 99,562
Bad debt recovery	(7,524)	(14,838)
Balance at end of period	$ 517,093	$ 84,724

Note 4 - Inventories - Components of Inventories (Details) - USD ($)	Jan. 31, 2021	Oct. 31, 2020
Finished goods	$ 5,289,945	$ 4,663,978
Work in process	3,560,464	4,165,289
Raw materials	8,268,453	8,010,794
Production supplies	261,299	259,706
Total	$ 17,380,161	$ 17,099,767

Note 5 - Product Warranties (Details Textual) - USD ($)	3 Months Ended
Note 5 - Product Warranties (Details Textual) - USD ($)	Jan. 31, 2021	Jan. 31, 2020	Oct. 31, 2020	Oct. 31, 2019
Standard and Extended Product Warranty Accrual, Ending Balance	$ 85,000	$ 70,000	$ 85,000	$ 120,000
Product Warranty Expense	18,348	$ 37,257
Accounts Payable and Accrued Liabilities [Member]
Standard and Extended Product Warranty Accrual, Ending Balance	$ 85,000		$ 85,000

Note 5 - Product Warranties - Changes in Accrual for Product Warranties (Details) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Balance at beginning of period	$ 85,000	$ 120,000
Liabilities accrued for warranties issued during the period	50,251	69,549
Warranty claims and costs paid during the period	(18,348)	(12,743)
Changes in liability for pre-existing warranties during the period	(31,903)	(106,806)
Balance at end of period	$ 85,000	$ 70,000

Note 6 - Long-term Debt and Notes Payable to Bank (Details Textual) - USD ($)		11 Months Ended	12 Months Ended
	Jul. 24, 2020	Sep. 29, 2020	Oct. 31, 2020	Jan. 31, 2021
Loans Payable, Noncurrent, Total			$ 4,853,457	$ 4,773,854
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Unsecured Debt			4,981,400
Interest Payable				39,851
Debt Instrument, Periodic Payment, Total		$ 560,000
Notes Payable, Current, Total			1,615,404	3,297,187
Loans Payable, Noncurrent, Total				1,684,213
Pinnacle Financial Partners [Member] \| Revolving Credit Facility [Member]
Long-term Line of Credit, Total			5,000,000.0	4,900,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 1,600,000	$ 1,200,000
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%
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%
Virginia Real Estate Loan and North Carolina Real Estate Loan [Member] \| Pinnacle Financial Partners [Member]
Debt Instrument, Interest Rate, Stated Percentage				3.95%

Note 6 - Long-term Debt and Notes Payable - Long-term Debt (Details) - USD ($)	Jan. 31, 2021	Oct. 31, 2020
Long-term Loan	$ 5,089,123	$ 5,165,566
Less current installments	315,269	312,109
Long-term debt, excluding current installments	4,773,854	4,853,457
Virginia Real Estate Loan [Member]
Long-term Loan	4,065,818	4,119,850
North Carolina Real Estate Loan [Member]
Long-term Loan	$ 1,023,305	$ 1,045,716

Note 6 - Long-term Debt and Notes Payable - Long-term Debt (Details) (Parentheticals) - USD ($)	3 Months Ended	12 Months Ended
	Jan. 31, 2021	Oct. 31, 2020
Virginia Real Estate Loan [Member]
Original principal	$ 6,500,000	$ 6,500,000
Debt Instrument, Periodic Payment, Total	$ 31,812	$ 31,812
Debt Instrument, Interest Rate, Stated Percentage	3.95%	3.95%
Final payment	$ 3,644,211	$ 3,644,211
Maturity date	May 01, 2024	May 01, 2024
North Carolina Real Estate Loan [Member]
Original principal	$ 2,240,000	$ 2,240,000
Debt Instrument, Periodic Payment, Total	$ 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
Note 7 - Leases (Details Textual)	Jan. 31, 2021 USD ($) ft²	Jan. 31, 2020 USD ($)	Oct. 31, 2020 USD ($)
Operating Lease, Expense	$ 100,348	$ 95,871
Operating Lease, Weighted Average Remaining Lease Term (Month)	41 months 15 days
Operating Lease, Weighted Average Discount Rate, Percent	5.10%
Operating Lease, Payments	$ 97,300	94,199
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	0	$ 1,088,719
Other Assets [Member]
Operating Lease, Right-of-Use Asset	1,180,674		$ 1,265,194
Accounts Payable and Accrued Liabilities [Member]
Operating Lease, Liability, Current	337,331		332,329
Other Noncurrent Liabilities [Member]
Operating Lease, Liability, Noncurrent	$ 860,196		$ 946,653
Operating Lease for Office, Manufacturing and Warehouse Space in Plano, Texas [Member]
Area of Real Estate Property (Square Foot) \| ft²	34,000
Operating Lease for Warehouse Space in Roanoke, Virginia [Member]
Area of Real Estate Property (Square Foot) \| ft²	36,000
Operating Lease For Office Equipment [Member]
Lessee, Operating Lease, Term of Contract (Month)	60 months

Note 7 - Leases - Future Payments Due (Details)

Jan. 31, 2021

USD ($)

2021 (1)

$ 292,098

^[1]

389,807

327,071

274,132

26,370

Total undiscounted lease payments

1,309,478

Present value discount

(111,951)

Accounts Payable and Accrued Liabilities and Noncurrent Liabilities [Member]

Total operating lease liability

$ 1,197,527

[1]	Remaining nine months of fiscal year 2021

Note 9 - Net Loss Per Share (Details Textual) - shares	3 Months Ended
Note 9 - Net Loss Per Share (Details Textual) - shares	Jan. 31, 2021	Jan. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	183,346	136,786

Note 9 - Net Loss Per Share - Components of Reconciliation of Numerators and Denominators Net Loss Per Share (Details) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Net loss (numerator)	$ (2,141,480)	$ (2,591,888)
Shares (denominator) (in shares)	7,352,781	7,322,195
Basic and diluted net loss per share (in dollars per share)	$ (0.29)	$ (0.35)

- 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
	Jan. 31, 2021
Concentration Risk, Percentage	14.80%
Concentration Risk, Number of Customers	1
One Customer [Member]
Concentration Risk, Percentage	23.30%

Note 11 - Revenue Recognition (Details Textual) - USD ($)	Jan. 31, 2021	Oct. 31, 2020
Contract with Customer, Liability, Total	$ 104,225	$ 63,283
Contract with Customer, Refund Liability, Total	$ 138,733	$ 119,989

Note 11 - Revenue Recognition - Revenue Attributed to United States and All Other Countries (Details) - USD ($)	3 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Net sales	$ 11,876,573	$ 12,887,396
UNITED STATES
Net sales	9,703,610	10,488,348
Non-US [Member]
Net sales	$ 2,172,963	$ 2,399,048

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details