Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES: CLASS ACTION COMPLAINT The Company was named as a defendant in a putative class action lawsuit filed in the United States District Court for the Northern District of Illinois on or about December 21, 2020. The plaintiffs, Eileen Brodsky and Rhonda Diamond, purporting to represent a class of individuals who purchased coffee products at Aldi, Inc. (“Aldi”), a supermarket chain, generally allege that Aldi sold private label coffee products manufactured by us and by Pan American Coffee Co., LLC (“Pan American”), which falsely described the number of cups of coffee that could be made from the amount of product purchased. Aldi and Pan American are also named as defendants in the action. The complaint asserts a variety of claims under New York and California consumer protection laws, and seeks unspecified monetary damages, including disgorgement and restitution, as well as other forms of relief including class certification, declaratory and injunctive relief, attorneys’ fees, and interest. The Company believes the allegations in the complaint are wholly without merit and that the claims asserted are legally deficient, and the company intends to vigorously defend the action. As of the filing of this Form 10-Q, the Company has not been served with the complaint. Therefore, the Company is unable to predict the ultimate outcome of this lawsuit. A significant customer of the Company was named as a defendant in a putative class action lawsuit filed in the United States District Court for the District of Massachusetts on or about February 2, 2021, concerning the labeling on private label coffee productions we sold to the customer. The plaintiff, David Cohen, purporting to represent a class of individuals who purchased coffee products from our customer, generally allege that the customer sold private label coffee products manufactured by the Company which falsely described the number of cups of coffee that could be made from the amount of product purchased. The Company is not named as a defendant in the action, but has agreed to indemnify the customer for the costs and expenses incurred in defending the lawsuit and for any liability the customer may suffer as a result. The complaint asserts a variety of claims under Massachusetts consumer protection laws, and seeks unspecified monetary damages as well as other forms of relief including class certification, declaratory and injunctive relief, attorneys’ fees, and interest. The Company believes the allegations in the complaint are wholly without merit and that the claims asserted are legally deficient, and intends to vigorously support the customer in defending the action. As of the filing of this Form 10-Q, the Company is unable to predict the ultimate outcome of this lawsuit. The following summarizes the Company’s operating leases: January 31, 2021 Right-of-use operating lease assets $ 2,004,641 Current lease liability $ 360,119 Non-current lease liability $ 1,780,306 January 31, 2021 Average remaining lease term 3.1 Discount rate 4.75 % Maturities of lease liabilities by year for our operating leases are as follows: 2021 $ 456,558 2022 535,920 2023 531,807 2024 316,477 2025 168,288 Thereafter 434,744 Total lease payments $ 2,443,794 Less: imputed interest (303,369 ) Present value of operating lease liabilities $ 2,140,425 The aggregate cash payments under these leasing agreements was $150,153 for the three months ended January 31, 2021. |