Debt (Tables)

12 Months Ended

Oct. 31, 2015

Debt [Abstract]

Schedule of long-term debt

	October 31,
	2015		2014
Term Note A dated October 7, 2013, due in monthly installments of $50,000 plus interest payments equal to the prime rate of interest plus 2% maturing April 1, 2017, collateralized by substantially all of the assets of the Company	$	8,750,000	$	9,850,000
Installment notes payable to banks, due in monthly installments plus interest at rates approximating the bank’s prime rate or the prime rate subject to various floors maturing in various periods ranging from November 2015-October 2017, collateralized by equipment and vehicles.		634,998		475,908
Notes payable to shareholders. The shareholder note of $2.5 million plus all accrued interest was initially due in one balloon payment in September 2014; pursuant to Term Note A, the maturity was adjusted to April 2015. The interest is accrued on this note at a rate of 3.25%. See discussion below for more detail. (1)		2,500,000		2,500,000
Note payable to a bank, due November 2015 ($0.45 million) and January 2016 ($0.3 million), including interest accrued at 5.00%, collateralized by specific accounts receivable of the Company. (2)		750,000		750,000
Capital lease obligation for printing equipment at an imputed interest rate of 6.02% per annum		28,380		43,312
Note, payable to a bank in monthly installments of $8,441 including interest at 5.00% collateralized by equipment		443,208		-
Note, payable to a bank in monthly installments of $4,197 including an imputed interest rate of 0.0% collateralized by equipment		147,694		-
Unamortized debt discount		-		(138,520)
		13,254,280		13,480,700
Less current portion long-term debt		1,179,358		10,197,218
Less short-term notes payable to related party (1)		2,500,000		2,500,000
Less current portion obligation under capital lease		15,852		14,931
Less short-term debt (2)		750,000		750,000
Less debt discount		-		(138,520)
Long-term debt, net of current portion and capital lease obligation	$	8,809,070	$	157,071
Continuing operations:
Long-term debt, net of current portion	$	8,796,542	$	128,690
Long-term capital lease obligation		12,528		28,381
Current portion of long-term debt		1,179,358		10,197,218
Short-term notes payable to related party (1)		2,500,000		2,500,000
Short-term debt (2)		750,000		750,000
Current portion of capital lease obligation		15,852		14,931
Debt Discount		-		(138,520)
Total indebtedness	$	13,254,280	$	13,480,700

(1) On June 15, 2015 the Company’s Board of Directors approved the conversion of the Company’s $2.5 million related party debt to Preferred Stock equity. The Preferred Stock will pay a 6.00% or 0.00% annual dividend contingent on the Company’s income after income taxes. If the Company's income after income taxes is $1.0 million or greater, the dividend rate is 6.00%; if the Company's income after income taxes is less than $1.0 million, the dividend rate is 0.00%.

This conversion will reduce the Company’s liabilities by $2.5 million and increase its equity by $2.5 million. In addition, this conversion will reduce the Company’s annual interest expense by $0.1 million. However, contingent on the after income tax income, this conversion could trigger the payment of an annual Preferred Stock dividend of $0.2 million or zero. If the $1.0 million after income tax income target is achieved, the Company’s annual cash outflow would increase $0.1 million, or decrease $0.1 million if the $1.0 million after income tax income target is not achieved.

This conversion is pending a shareholder vote to amend the Company’s Articles of Incorporation to allow for the issuance of Preferred Stock. This will be part of the Company's definitive Proxy Statement, expected to be dated January 25, 2016, with respect to the Annual Meeting of Shareholders to be held on March 21, 2016. The Company will continue to accrue interest on the related party debt equal to the prime rate until such conversion has been consummated.

(2) These notes are short-term borrowings associated with large furniture projects that are on terms of 120 days or less. These borrowings were subsequently paid upon collection of the collateral in November 2015 and January 2016.

Maturities of long-term debt and revolving line of credit

Maturities of debt and capital lease obligations for each of the next five years beginning November 1, 2015 are as follows:

November 1, 2015 through October 31, 2016	$	4,445,210	*
November 1, 2016 through October 31, 2017		8,473,148
November 1, 2017 through October 31, 2018		135,770
November 1, 2018 through October 31, 2019		97,644
November 1, 2019 through October 31, 2020		98,352
Residual		4,156
	$	13,254,280

*Includes $2.5 million debt to shareholder that the Company intends to convert to preferred stock equity. See the discussion on the prior page for more details.