Purchase of Business

9 Months Ended

Jul. 31, 2017

Business Combinations [Abstract]

Purchase of Business

NOTE 4 - PURCHASE OF BUSINESS:

Pursuant to the terms of a Stock Purchase Agreement dated February 23, 2017, by and among the Company, Comfort Foods, Inc., a Massachusetts corporation (“CFI”), Stephen J. Beattie (the “Trustee”), as trustee of the Stephen J. Beattie Revocable Trust of 2013 (the “Trust”) and Victor Janovich (together, with the Trustee on behalf of the Trust, the “Sellers”), the Company, acquired all of the outstanding capital stock of CFI. The transaction was accounted for as a business combination and was not a significant acquisition for the Company. The purpose of the transaction was to expand the Company’s presence in the northeast. The Company purchased the shares of capital stock for a purchase price of $2,300,000 in cash, subject to the holdback of $25,000 for a six month period following the consummation of the transaction to secure the Sellers’ indemnification obligations. In addition, immediately following consummation of the transaction, the Company also paid all of the existing bank debt of CFI, totaling approximately $605,173.

As part of the transaction, the employees of CFI remained employees of CFI, with the exception of Stephen Beattie, CFI’s then Chief Executive Officer. Mr. Beattie entered into an advisory agreement (the “Advisory Agreement”) with CFI, dated as of February 23, 2017, pursuant to which Mr. Beattie agreed to provide services to CFI on an independent contractor basis, to ensure continuity of the business and its operations in Massachusetts. The initial term of the Advisory Agreement commenced on April 1, 2017 and was set to expire on December 31, 2017, unless terminated earlier in accordance with the terms and conditions of the Advisory Agreement. On September 6, 2017, the Company terminated the Advisory Agreement. Pursuant to the terms of the Advisory Agreement, Mr. Beattie was paid $5,000 per month.

The following table summarizes the assets purchased and liabilities assumed:

Assets acquired:
Cash	$	11,898
Accounts receivable		584,918
Inventory		1,116,906
Prepaid expenses		32,681
Equipment		229,597
Customer List		170,000
Goodwill		1,359,502
Security deposit		26,551
Less: liabilities assumed		(626,880	)
Net assets acquired:	$	2,905,173
Purchase of assets funded by:
Cash paid	$	2,905,173

The operations of CFI have been included in the Company’s consolidated statement of operations since the date of the acquisition on February 23, 2017. The total revenue included for the period is $1,783,986.