International Baler (IBAL) 10-K 29 Jan 21 2020 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Oct. 31, 2020	Jan. 15, 2021	Apr. 30, 2020
Document And Entity Information
Entity Registrant Name	International Baler Corporation
Entity Central Index Key	0000781902
Document Type	10-K
Document Period End Date	Oct. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Entity File Number	0-14443
Is Entity's Reporting Status Current?	No
Entity Interactive Data Current	No
Entity Incorporation, State or Country Code	DE
Is Entity Smaller Reporting Company?	true
Is Entity Emerging Growth Company?	false
Is Entity Well Known Seasoned Issuer?	No
Is Entity Voluntary Filer?	No
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 1,045,545
Entity Common Stock, Shares Outstanding		5,183,895
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2020
Is Entity Shell Company?	false

Balance Sheets

Balance Sheets - USD ($)	Oct. 31, 2020	Oct. 31, 2019
Current assets:
Cash and cash equivalents	$ 2,626,221	$ 2,714,764
Certificate of deposit	1,011,824	1,003,389
Accounts receivable, net of allowance for doubtful accounts of $6,000 at October 31, 2020 and $15,000 at October 31, 2019	788,234	644,915
Inventories	4,254,880	4,119,057
Prepaid expense and other current assets	92,195	77,858
Income taxes receivable	332,815	85,286
Total current assets	9,106,169	8,645,269
Property, plant and equipment, at cost	4,440,561	4,336,733
Less: accumulated depreciation	3,161,864	3,026,513
Property, plant and equipment	1,278,697	1,310,220
Other assets:
Deferred income taxes	77,890	161,122
Total other assets	77,890	161,122
TOTAL ASSETS	10,462,756	10,116,611
Current liabilities:
Accounts payable	480,278	329,618
Accrued liabilities	377,898	270,620
Customer deposits	526,725	656,569
Total current liabilities	1,384,901	1,256,807
Long term debt	626,466
Total liabilities	2,011,367	1,256,807
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, par value $.0001, 10,000,000 shares authorized, none issued
Common stock, par value $.01, 25,000,000 shares authorized; 6,429,875 shares issued	64,299	64,299
Additional paid-in capital	6,419,687	6,419,687
Retained earnings	2,648,813	3,057,228
Total stockholders' equity before treasury stock	9,132,799	9,541,214
Less: Treasury stock, 1,245,980 shares, at cost	(681,410)	(681,410)
Total stockholders' equity	8,451,389	8,859,804
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 10,462,756	$ 10,116,611

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)	Oct. 31, 2020	Oct. 31, 2019
Current Assets:
Accounts receivable, net of allowance for doubtful accounts	$ 6,000	$ 15,000
Stockholders' equity:
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, share authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ .01	$ 0.01
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	6,429,875	6,429,875
Treasury stock, shares	1,245,980	1,245,980

Statements of Income

Statements of Income - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Net sales:
Equipment	$ 6,124,892	$ 6,612,826
Parts and service	2,861,132	2,913,749
Total net sales	8,986,024	9,526,575
Cost of sales	8,132,391	8,830,035
Gross profit	853,633	696,540
Operating expense:
Selling expense	584,950	550,614
Administrative expense	868,734	856,221
Total operating expense	1,453,684	1,406,835
Operating loss	(600,051)	(710,295)
Other income:
Interest income	14,371	9,712
Other income	10,500	175,841
Total other income	24,871	185,553
Loss before income taxes	(575,180)	(524,742)
Income tax benefit	(166,765)	(201,128)
Net loss	$ (408,415)	$ (323,614)
Loss per share, basic and diluted	$ (0.08)	$ (0.06)
Weighted average number of shares outstanding	5,183,895	5,183,895

Statements of Stockholders' Equ

Statements of Stockholders' Equity - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Total
Beginning Balace, Shares at Oct. 31, 2018	6,429,875			1,245,980
Beginning Balance, Value at Oct. 31, 2018	$ 64,299	$ 6,419,687	$ 3,380,842	$ (681,410)	$ 9,183,418
Net loss					(323,614)
End Balance, Shares at Oct. 31, 2019	6,429,875			1,245,980
End Balance, Value at Oct. 31, 2019	$ 64,299	6,419,687	3,057,228	$ (681,410)	8,859,804
Net loss			(408,415)		(408,415)
End Balance, Shares at Oct. 31, 2020	6,429,875			1,245,980
End Balance, Value at Oct. 31, 2020	$ 64,299	$ 6,419,687	$ 2,648,813	$ (681,410)	$ 8,451,389

Statements of Cash Flows

Statements of Cash Flows - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Cash flow from operating activities:
Net loss	$ (408,415)	$ (323,614)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	214,523	205,065
Deferred income taxes	83,232	(99,628)
Gain on sale of fixed assets	(10,500)
Changes in operating assets and liabilities:
Accounts receivable	(143,319)	(88,249)
Inventories	(135,823)	138,028
Prepaid expenses and other assets	(14,337)	88,746
Income taxes receivable	(247,529)	(101,500)
Accounts payable	150,660	(252,033)
Accrued liabilities	107,278	(99,582)
Customer deposits	(129,844)	(238,010)
Net cash used in operating activities	(534,074)	(770,777)
Cash flows from investing activities:
Purchase of property and equipment	(183,000)	(244,580)
Acquisition of certificate of deposit		(1,003,389)
Proceeds received on sale of fixed assets	10,500
Interest earned on certificates of deposit	(8,435)
Net cash used in investing activities	(180,935)	(1,247,969)
Cash flows from financing activities:
Proceeds from PPP loan	626,466
Net cash provided by financing activities	626,466
Net decrease in cash and cash equivalents	(88,543)	(2,018,746)
Cash and cash equivalents at beginning of year	2,714,764	4,733,510
Cash and cash equivalents at end of year	2,626,221	2,714,764
Cash paid during year for:
Income taxes

Nature of Business

Nature of Business	12 Months Ended
	Oct. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business:	(1) Nature of Business International Baler Corporation (the “Company”) is a manufacturer of baling equipment which utilizes technical, hydraulic and electrical mechanisms to compress a variety of materials into bales for easier handling, shipping, disposal, storage, and for recycling. Materials commonly baled include scrap metal, corrugated boxes, newsprint, aluminum cans, plastic bottles, and other solid waste. More sophisticated applications include baling of textile materials, fibers and synthetic rubber. The Company offers a wide variety of balers, standard models as well as custom models to meet specific customer requirements. The Company’s customers include recycling facilities, paper mills, textile mills, and the companies which generate the materials for baling and recycling.

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2) Summary of Significant Accounting Policies (a) Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, valuation of deferred tax assets, valuation of inventory, and estimates for warranty claims. Actual results could differ from those estimates. (b) Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. (c) Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable. The Company reviews its allowance for doubtful accounts monthly including the analysis of historical trends, customer credit worthiness and the aging of receivables. In addition, past due balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. (d) Inventories Inventories are stated at the lower of cost or market. Cost is determined by a method that approximates the first-in, first-out method. Work in process and finished goods are valued based on underlying costs to manufacture balers which include direct materials, direct and indirect labor, and overhead. The Company reviews inventory for obsolescence on a regular basis. (e) Property, Plant, and Equipment Property, plant and equipment are stated at cost net of accumulated depreciation. The cost of property, plant, and equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed primarily using the straight-line method over the estimated lives of 5-20 years for machinery and equipment and 31-40 years for buildings. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value less costs to sell, and depreciation ceases. (f) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the amounts rely upon the determination of the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law and expiration of statutes of limitations, effectively settled issues under audit, and audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses. (g) Revenue Recognition The Company adopted ASC 606 on November 1, 2018. The Company recognizes revenues from the sale of finished products upon shipment and the transfer of control to the customer. The other elements may include installation and, generally, a one-year warranty. Equipment installation revenue is valued based on estimated service person hours to complete installation and is recognized when the labor has been completed and the equipment has been accepted by the customer, which is generally within a couple of days of the delivery of the equipment. Warranty revenue is recognized over the contract period. Revenue from service plans is recognized over time based on term of the service agreement. All other product sales with customer specific acceptance provisions are recognized at a point in time upon customer acceptance and the delivery of the parts or service. Revenues related to spare part sales are recognized upon shipment or delivery based on the trade terms. Generally, pricing is fixed with payment terms of thirty days after shipment. The majority of the Company’s contracts have short duration and a single performance obligation to deliver a configured to order baler and related equipment to the customer. The Company has elected to expense shipping and handling costs as incurred. (h) Disaggregation of Revenue Disaggregated revenue is by primary geographic market is as follows: Revenue by Geographic Area Twelve Months Ended Twelve Months Ended United States $ 8,101,360 $ 8,199,936 International 884,664 1,326,639 Total $ 8,986,024 $ 9,526,575 (i) Contract Assets and Liabilities Contract liabilities arise when payment is received before the Company transfers products to a customer and are reported as Customer Deposits on the accompanying balance sheet. The change in contract liabilities is due to the timing of customer deposits for baler orders offset by customer deposits of $566,300 and $876,900 which were recognized as revenue during the fiscal years ended October 31, 2020 and 2019, respectively. Contract Costs The Company expenses incremental costs of obtaining or fulfilling a contract. (j) Warranties and Service The Company typically warrants its products for one (1) year from the date of sale as to materials, three (3) years for structural damage, and six (6) months as to labor, and offers services for other required repairs and maintenance. Service is rendered by repairing or replacing parts at the Company’s Jacksonville, Florida, facility, by on-site service provided by Company personnel who are based in Jacksonville, Florida, or by local service agents who are engaged as needed. The Company maintains an accrued liability for expected warranty claims. The warranty accrual is based on historical warranty costs, the quantity and type of balers currently under warranty, and known warranty issues. Following is a tabular reconciliation of the changes in the warranty accrual: 2020 2019 Beginning balance $ 60,000 $ 80,000 Warranty service provided (120,069 ) (152,977 ) New product warranties 122,498 132,257 Changes to pre-existing warranty accruals (22,429 ) 720 Ending balance $ 40,000 $ 60,000 (k) Advertising Advertising costs are expensed as incurred. Advertising expense was $124,719 and $199,808 for the fiscal years ended October 31, 2020 and 2019, respectively. (l) Leases The Company records short-term lease cost on a straight-line basis over the lease term. During fiscal years ended October 31, 2020 and 2019, all leases had a term of one month or less. (m) Earnings Per Share Basic earnings per share are calculated using the weighted average number of common shares outstanding during each year. Diluted earnings per share include the net number of shares that would be issued upon the exercise of stock options using the treasury stock method. Options are not considered in loss years as they would be anti-dilutive. There were no stock options outstanding for the years ended October 31, 2020 and 2019, respectively. (n) Business Reporting Segments The Company operates in one segment based on the information monitored by the Company’s operating decision makers to manage the business. (o) Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, short term certificates of deposit, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities. (p) Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements: In May 2014, the FASB issued ASU 2014-09 establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard effective November 1, 2018 using modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Based on an evaluation of the impact of ASC 606 the Company concluded that ASC 606 did not have a material impact on the process for, timing of, and presentation and disclosure of revenue recognition from customers therefore the Company did not record a cumulative transition adjustment. In February 2016, the FASB issued ASU No. 2016-02, Leases, Recently Issued Accounting Standards Not Yet Adopted In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815, and Leases (Topic 841). This new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. While the Company is continuing to assess the potential impacts of ASU 2019-10, it does not expect ASU 2019-10 to have a material effect on its financial statements. (q) Reclassification The Company reclassified income taxes receivable of $85,286 from accrued liabilities on the accompanying balance sheet as of October 31, 2019 to conform with the current year presentation.

Related Party Transactions

Related Party Transactions	12 Months Ended
	Oct. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	(3) Related Party Transactions The Estate of Leland E. Boren is a shareholder of the Company and is the owner of Avis Industrial Corporation (Avis). The Estate of Mr. Boren controls over 80% of the outstanding shares of the Company. Avis owns 100% of The American Baler Company, a competitor of the Company. On January 1, 2014, Avis acquired The Harris Waste Management Group, Inc., also a competitor of the Company. On July 31, 2014 Harris acquired the assets of IPS Balers, Inc. in Baxley, Georgia, another competitor of the Company. These baler companies operate independent of each other. The Company had no purchases from these companies in the fiscal years ended October 31, 2020 and 2019. The Company had no sales to The American Baler Company in the fiscal years ended October 31, 2020 and 2019. The Company had no equipment sales to Harris Waste Management in fiscal 2020 and sold two closed door horizontal balers for $122,950 in the fiscal year ended October 31, 2019.

Inventories

Inventories	12 Months Ended
	Oct. 31, 2020
Inventory Disclosure [Abstract]
Inventories	4) Inventories Inventories consisted of the following: 2020 2019 Raw materials $ 2,155,664 $ 2,035,612 Work in process 1,725,596 1,239,861 Finished goods 373,620 843,584 $ 4,254,880 $ 4,119,057

Property, Plant, and Equipment

Property, Plant, and Equipment	12 Months Ended
	Oct. 31, 2020
Property, Plant and Equipment [Abstract]
Property, Plant, and Equipment	(5) Property, Plant, and Equipment The following is a summary of property, plant, and equipment, at cost, less accumulated depreciation and amortization: 2020 2019 Land $ 82,304 $ 82,304 Building and improvements 1,353,097 1,320,710 Machinery and equipment 2,623,089 2,570,981 Vehicles 317,136 326,499 Construction In progress 64,935 36,239 4,440,561 4,336,733 Less accumulated depreciation 3,161,864 3,026,513 $ 1,278,697 $ 1,310,220 Depreciation expense was $214,523 and $205,065 during the years ended October 31, 2020 and 2019, respectively.

Debt

Debt	12 Months Ended
	Oct. 31, 2020
Debt Disclosure [Abstract]
Debt	(6) Debt The Company had a $1,650,000 line of credit agreement with First Merchants Bank of Muncie, Indiana which was renewed on May 15, 2020 with a $1,000,000 line of credit limit. The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2021. The line of credit had no outstanding balance at October 31, 2020 and at October 31, 2019. On April 16, 2020 the Company received a $626,466 loan made pursuant to the terms of the Paycheck Protection Program authorized by the CARES Act. The loan has a two-year term and accrues simple interest at a fixed rate of 1.00%. Under the terms of the CARES Act guidelines, a portion of the loan up to 100% may be forgiven by the U.S. Small Business Administration if the amount spent is within the timeframe and under the guidelines that have been set for forgiveness. On December 9, 2020 the Company was notified by our bank that the SBA has stated that the entire amount of this loan will be forgiven. The Company anticipates that the income from this loan forgiveness will be recognized in the first quarter of fiscal year ending October 31, 2021.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Oct. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	(7) Commitments and Contingencies The Company in the ordinary course of business is subject to claims and from time to time is named as a defendant in legal proceedings relating to the operations of its business, including the sale of its products. The Company believes that the reserves reflected in its financial statements are adequate to pay losses and loss adjustment expenses which may result from such claims and proceedings; however, such estimates may be more or less than the amount ultimately paid when the claims are settled. 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. On December 1, 2017 the Company was served with a complaint related to an injury to an employee working at Integrated Coating and Seed Technology Inc., (INCOTEC). The employee was operating a baler manufactured by the Company in 1994. The injury occurred on December 4, 2015. The plaintiff is Star Insurance Company. The Company’s insurer settled this claim in March 2020. The Company’s liability on this settlement of the claim was $20,645 which has been paid. In December 2018 the Company discovered an employee theft of Company property. The Company has researched what items were stolen and our estimate is that the value of the stolen items was approximately $200,000. Since the Company conducts a physical inventory at the end of each fiscal year, any losses incurred for the fiscal year ended October 31, 2018 were reflected in the operating results of the Company for that fiscal year. The Company carries Crime Insurance which has an upper limit of $1,000,000 and a deductible of $25,000. In May 2019 the Company’s insurer approved the crime insurance claim and agreed to reimburse the Company $175,841. Insurance proceeds were received in May of 2019 and were recorded as other income in the accompanying statements of income.

Income Taxes

Income Taxes	12 Months Ended
	Oct. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	(8) Income Taxes Income tax provision attributable to income from continuing operations consists of: 2020 2019 Current income tax (benefit) provision: Federal $ (250,054 ) $ (100,898 ) State 57 (601 ) (249,997 ) (101,499 ) Deferred income tax (benefit) provision: Federal 72,356 (86,610 ) State 10,876 (13,019 ) 83,232 (99,629 ) Income tax benefit $ (166,765 ) $ (201,128 ) The differences between income taxes as provided at the federal statutory tax rate of 21% and the Company’s actual income taxes are as follows: 2020 2019 Expected federal income tax expense at Statutory rate $ (120,788 ) (110,196 ) State income tax expense, net of federal income tax effect (13,202 ) (12,306 ) Non-deductible items and perm. differences 6,101 3,292 Credits utilized and other adjustments (38,876 ) (81,918 ) Income tax benefit $ (166,765 ) $ (201,128 ) The Company has state operating loss carryforwards (NOLs) of approximately $504,000 and approximately $295,000 at October 31, 2020 and 2019 respectively, which generally do not expire. Due to changes in the tax laws enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, cumulative federal NOLs of approximately $1 million at October 31, 2020 were carried back to prior years resulting in income tax refunds of approximately $330,000 at October 31, 2020. The Company had federal NOLs of approximately $712,000 at October 31, 2019. Deferred tax assets are recognized in the balance sheet if it is more likely than not that they will be realized on future tax returns. The realization of deferred tax assets will depend on the Company’s ability to continue to generate taxable income in the future and the Company determined it is more likely than not that the results of future operations will generate sufficient taxable income to realize these deferred tax assets and no valuation allowance is deemed necessary. The significant components of the net deferred income taxes at October 31, 2020 and 2019 are as follows: 2020 2019 Deferred tax assets Inventory reserve $ 53,860 $ 38,639 Other reserves and allowances 36,509 36,904 Capitalized inventory costs 67,701 52,817 NOL Carryforward 28,447 166,879 Total deferred tax assets 186,517 295,239 Deferred tax liabilities Property, plant and equipment 108,627 134,117 Net deferred income taxes $ 77,890 $ 161,122 For the years ended October 31, 2020 and 2019, the Company did not have any unrecognized tax benefits or obligations as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. Our evaluation was performed for the tax years ended October 31, 2018 through October 31, 2020, the tax years which remain subject to examination by tax jurisdictions as of October 31, 2020.

Employees' Benefit Plan

Employees' Benefit Plan	12 Months Ended
	Oct. 31, 2020
Retirement Benefits [Abstract]
Employees' Benefit Plan	(9) Employee Benefit Plan The Company has a defined contribution plan and profit sharing program for its employees. The Company made no contributions to these plans during the years ended October 31, 2020 and 2019.

Business and Credit Concentrati

Business and Credit Concentrations	12 Months Ended
	Oct. 31, 2020
Risks and Uncertainties [Abstract]
Business and Credit Concentrations	(10) Business and Credit Concentrations Export sales were approximately 10% and 14% of net sales for the years ended October 31, 2020 and 2019, respectively. The principal international markets served by the Company, include Canada, China, Mexico, United Kingdom, India, Korea, Japan, Russia, Saudi Arabia, Singapore, and Brazil. In fiscal 2020, three customers accounted for 20.0%, 16.5% and 7.0% of net sales, respectively, while in fiscal 2019, three customers accounted for 17.8%, 6.5% and 4.7% of net sales, respectively. Three customers accounted for 22.0%, 14.1%, and 13.2% respectively, of the Company’s accounts receivable at October 31, 2020 and three customers accounted for 24.8%, 14.3%, and 13.3%, respectively, of the Company accounts receivable at October 31, 2019. The Company had cash deposits in banks of $3,275,135 and $3,411,825 above the FDIC insured limit of $250,000 per bank at October 31, 2020 and October 31, 2019 respectively.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Use of Estimates	(a) Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, valuation of deferred tax assets, valuation of inventory, and estimates for warranty claims. Actual results could differ from those estimates.
Cash and Cash Equivalents	(b) Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
Accounts Receivable and Allowance for Doubtful Accounts	(c) Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable. The Company reviews its allowance for doubtful accounts monthly including the analysis of historical trends, customer credit worthiness and the aging of receivables. In addition, past due balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Inventories	(d) Inventories Inventories are stated at the lower of cost or market. Cost is determined by a method that approximates the first-in, first-out method. Work in process and finished goods are valued based on underlying costs to manufacture balers which include direct materials, direct and indirect labor, and overhead. The Company reviews inventory for obsolescence on a regular basis.
Property, Plant, and Equipment	(e) Property, Plant, and Equipment Property, plant and equipment are stated at cost net of accumulated depreciation. The cost of property, plant, and equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed primarily using the straight-line method over the estimated lives of 5-20 years for machinery and equipment and 31-40 years for buildings. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value less costs to sell, and depreciation ceases.
Income Taxes	(f) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the amounts rely upon the determination of the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law and expiration of statutes of limitations, effectively settled issues under audit, and audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.
Revenue Recognition	(g) Revenue Recognition The Company adopted ASC 606 on November 1, 2018. The Company recognizes revenues from the sale of finished products upon shipment and the transfer of control to the customer. The other elements may include installation and, generally, a one-year warranty. Equipment installation revenue is valued based on estimated service person hours to complete installation and is recognized when the labor has been completed and the equipment has been accepted by the customer, which is generally within a couple of days of the delivery of the equipment. Warranty revenue is recognized over the contract period. Revenue from service plans is recognized over time based on term of the service agreement. All other product sales with customer specific acceptance provisions are recognized at a point in time upon customer acceptance and the delivery of the parts or service. Revenues related to spare part sales are recognized upon shipment or delivery based on the trade terms. Generally, pricing is fixed with payment terms of thirty days after shipment. The majority of the Company’s contracts have short duration and a single performance obligation to deliver a configured to order baler and related equipment to the customer. The Company has elected to expense shipping and handling costs as incurred.
Disaggregation of Revenue	(h) Disaggregation of Revenue Disaggregated revenue is by primary geographic market is as follows: Revenue by Geographic Area Twelve Months Ended Twelve Months Ended United States $ 8,101,360 $ 8,199,936 International 884,664 1,326,639 Total $ 8,986,024 $ 9,526,575
Contract Assets and Liabilities	(i) Contract Assets and Liabilities Contract liabilities arise when payment is received before the Company transfers products to a customer and are reported as Customer Deposits on the accompanying balance sheet. The change in contract liabilities is due to the timing of customer deposits for baler orders offset by customer deposits of $566,300 and $876,900 which were recognized as revenue during the fiscal years ended October 31, 2020 and 2019, respectively. Contract Costs The Company expenses incremental costs of obtaining or fulfilling a contract.
Warranties and Service	(j) Warranties and Service The Company typically warrants its products for one (1) year from the date of sale as to materials, three (3) years for structural damage, and six (6) months as to labor, and offers services for other required repairs and maintenance. Service is rendered by repairing or replacing parts at the Company’s Jacksonville, Florida, facility, by on-site service provided by Company personnel who are based in Jacksonville, Florida, or by local service agents who are engaged as needed. The Company maintains an accrued liability for expected warranty claims. The warranty accrual is based on historical warranty costs, the quantity and type of balers currently under warranty, and known warranty issues. Following is a tabular reconciliation of the changes in the warranty accrual: 2020 2019 Beginning balance $ 60,000 $ 80,000 Warranty service provided (120,069 ) (152,977 ) New product warranties 122,498 132,257 Changes to pre-existing warranty accruals (22,429 ) 720 Ending balance $ 40,000 $ 60,000
Advertising	(k) Advertising Advertising costs are expensed as incurred. Advertising expense was $124,719 and $199,808 for the fiscal years ended October 31, 2020 and 2019, respectively.
Leases	(l) Leases The Company records short-term lease cost on a straight-line basis over the lease term. During fiscal years ended October 31, 2020 and 2019, all leases had a term of one month or less.
Earnings Per Share	(m) Earnings Per Share Basic earnings per share are calculated using the weighted average number of common shares outstanding during each year. Diluted earnings per share include the net number of shares that would be issued upon the exercise of stock options using the treasury stock method. Options are not considered in loss years as they would be anti-dilutive. There were no stock options outstanding for the years ended October 31, 2020 and 2019, respectively.
Business Reporting Segments	(n) Business Reporting Segments The Company operates in one segment based on the information monitored by the Company’s operating decision makers to manage the business.
Fair Value of Financial Instruments	(o) Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, short term certificates of deposit, accounts receivable, accounts payable, accrued liabilities, and customer deposits, approximate their fair value due to the short-term nature of these assets and liabilities.
Recent Accounting Pronouncements	(p) Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements: In May 2014, the FASB issued ASU 2014-09 establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard effective November 1, 2018 using modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Based on an evaluation of the impact of ASC 606 the Company concluded that ASC 606 did not have a material impact on the process for, timing of, and presentation and disclosure of revenue recognition from customers therefore the Company did not record a cumulative transition adjustment. In February 2016, the FASB issued ASU No. 2016-02, Leases, Recently Issued Accounting Standards Not Yet Adopted In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815, and Leases (Topic 841). This new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. While the Company is continuing to assess the potential impacts of ASU 2019-10, it does not expect ASU 2019-10 to have a material effect on its financial statements.
Reclassification	(q) Reclassification The Company reclassified income taxes receivable of $85,286 from accrued liabilities on the accompanying balance sheet as of October 31, 2019 to conform with the current year presentation.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Disaggregation of Revenue	Disaggregated revenue is by primary geographic market is as follows: Revenue by Geographic Area Twelve Months Ended Twelve Months Ended United States $ 8,101,360 $ 8,199,936 International 884,664 1,326,639 Total $ 8,986,024 $ 9,526,575
Warranty Accrual	Following is a tabular reconciliation of the changes in the warranty accrual: 2020 2019 Beginning balance $ 60,000 $ 80,000 Warranty service provided (120,069 ) (152,977 ) New product warranties 122,498 132,257 Changes to pre-existing warranty accruals (22,429 ) 720 Ending balance $ 40,000 $ 60,000

Inventories (Tables)

Inventories (Tables)	12 Months Ended
	Oct. 31, 2020
Inventory Disclosure [Abstract]
Inventories	(4) Inventories Inventories consisted of the following: 2020 2019 Raw materials $ 2,155,664 $ 2,035,612 Work in process 1,725,596 1,239,861 Finished goods 373,620 843,584

Property, Plant, and Equipment

Property, Plant, and Equipment (Tables)	12 Months Ended
	Oct. 31, 2020
Property, Plant and Equipment [Abstract]
Property, plant and equipment	(5) Property, Plant, and Equipment The following is a summary of property, plant, and equipment, at cost, less accumulated depreciation and amortization: 2020 2019 Land $ 82,304 $ 82,304 Building and improvements 1,353,097 1,320,710 Machinery and equipment 2,623,089 2,570,981 Vehicles 317,136 326,499 Construction In progress 64,935 36,239 4,440,561 4,336,733 Less accumulated depreciation 3,161,864 3,026,513 $ 1,278,697 $ 1,310,220

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Oct. 31, 2020
Income Tax Disclosure [Abstract]
Income Tax Benefit	Income tax provision attributable to income from continuing operations consists of: 2020 2019 Current income tax (benefit) provision: Federal $ (250,054 ) $ (100,898 ) State 57 (601 ) (249,997 ) (101,499 ) Deferred income tax (benefit) provision: Federal 72,356 (86,610 ) State 10,876 (13,019 ) 83,232 (99,629 ) Income tax benefit $ (166,765 ) $ (201,128 )
Income tax provide by federal statutory rate	The differences between income taxes as provided at the federal statutory tax rate of 21% and the Company’s actual income taxes are as follows: 2020 2019 Expected federal income tax expense at Statutory rate $ (120,788 ) (110,196 ) State income tax expense, net of federal income tax effect (13,202 ) (12,306 ) Non-deductible items and perm. differences 6,101 3,292 Credits utilized and other adjustments (38,876 ) (81,918 ) Income tax benefit $ (166,765 ) $ (201,128 )
Net Deferred Income Taxes	The significant components of the net deferred income taxes at October 31, 2020 and 2019 are as follows: 2020 2019 Deferred tax assets Inventory reserve $ 53,860 $ 38,639 Other reserves and allowances 36,509 36,904 Capitalized inventory costs 67,701 52,817 NOL Carryforward 28,447 166,879 Total deferred tax assets 186,517 295,239 Deferred tax liabilities Property, plant and equipment 108,627 134,117 Net deferred income taxes $ 77,890 $ 161,122

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Disaggregated revenue (Details) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Total	$ 8,986,024	$ 9,526,575
United States
Total	8,101,360	8,199,936
International
Total	$ 884,664	$ 1,326,639

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Warranty Accrual (Details) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Accounting Policies [Abstract]
Beginning balance	$ 60,000	$ 80,000
Warranty service provided	(120,069)	(152,977)
New product warranties	122,498	132,257
Changes to pre-existing warranty accruals	(22,429)	720
Ending balance	$ 40,000	$ 60,000

Summary of Significant Accoun_6

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Change in contract liabilities	$ 566,300	$ 876,900
Advertising expense	124,719	199,808
Income taxes receivable	$ 332,815	$ 85,286
Stock options outstanding	0	0
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant, and Equipment useful life	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant, and Equipment useful life	20 years
Building [Member] | Minimum [Member]
Property, Plant, and Equipment useful life	31 years
Building [Member] | Maximum [Member]
Property, Plant, and Equipment useful life	40 years

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Oct. 31, 2016
Sales	$ 8,986,024	$ 9,526,575
Harris Waste Management
Sales	$ 0	$ 122,950
Avis Industrial Corp.
Ownership of The American Baler			100.00%
Leland E. Boren
Ownership of Avis			80.00%

Inventories - Inventories (Deta

Inventories - Inventories (Details) - USD ($)	Oct. 31, 2020	Oct. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 2,155,664	$ 2,035,612
Work in process	1,725,596	1,239,861
Finished goods	373,620	843,584
Inventories	$ 4,254,880	$ 4,119,057

Property, Plant, and Equipmen_2

Property, Plant, and Equipment (Details) - USD ($)	Oct. 31, 2020	Oct. 31, 2019
Property, Plant and Equipment [Abstract]
Land	$ 82,304	$ 82,304
Building and Improvements	1,353,097	1,320,710
Machinery and Equipment	2,623,089	2,570,981
Vehicles	317,136	326,499
Construction In Progress	64,935	36,239
Property, plant and equipment, at cost:	4,440,561	4,336,733
Less: accumulated depreciation	3,161,864	3,026,513
Property, plant and equipment	$ 1,278,697	$ 1,310,220

Property, Plant, and Equipmen_3

Property, Plant, and Equipment (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Property, Plant and Equipment [Abstract]
Depreciation Expense	$ 214,523	$ 205,065

Debt (Details Narrative)

Debt (Details Narrative) - USD ($)	May 15, 2020	Oct. 31, 2020	Oct. 31, 2019
Short-term Debt [Line Items]
Line of Credit Agreement		$ 1,650,000
Line of credit limit	$ 1,000,000
Interest Rate Terms		The line of credit allows the Company to borrow at an interest rate equal to the Wall Street Journal prime rate minus 0.95%, adjusting daily. The line of credit is secured by all assets of the Company and expires on May 15, 2021.
Long term debt		$ 626,466
Line of Credit [Member]
Short-term Debt [Line Items]
Outstanding balance		$ 0	$ 0

Commitment and Contingencies (D

Commitment and Contingencies (Details Narrative) - USD ($)	1 Months Ended		12 Months Ended
	Mar. 31, 2020	Dec. 31, 2018	Oct. 31, 2018	May 31, 2019
Loss Contingency, Information about Litigation Matters [Abstract]
Settlement of the claim	$ 20,645
Lawsuit exposure			$ 25,000
Theft		$ 200,000
Reimbursement from insurance claim				$ 175,841

Income Taxes - Income Tax Benef

Income Taxes - Income Tax Benefit (Details) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Current income tax (benefit) provision:
Federal	$ (250,054)	$ (100,898)
State	57	(601)
Current income tax provision	(249,997)	(101,499)
Deferred income tax (benefit) provision:
Federal	72,356	(86,610)
State	10,876	(13,019)
Deferred income tax provision	83,232	(99,629)
Income tax benefit	$ (166,765)	$ (201,128)

Income Taxes - Income tax provi

Income Taxes - Income tax provide by federal statutory rate (Details) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Income Tax Disclosure [Abstract]
Expected federal income tax expense Statutory rate	$ (120,788)	$ (110,196)
State income tax expense, net federal income tax effect	(13,202)	(12,306)
Non-deductible items and perm. differences	6,101	3,292
Credits utilized and other adjustments	(38,876)	(81,918)
Income tax benefit	$ (166,765)	$ (201,128)

Income Taxes - Net Deferred Inc

Income Taxes - Net Deferred Income Taxes (Details) - USD ($)	Oct. 31, 2020	Oct. 31, 2019
Deferred tax assets
Inventory Reserve	$ 53,860	$ 38,639
Other Reserves and allowances	36,509	36,904
Capitalized inventory costs	67,701	52,817
NOL Carryforward	28,447	166,879
Total deferred tax assets	186,517	295,239
Deferred tax liabilities
Property, plant, and equipment	108,627	134,117
Net deferred income taxes	$ 77,890	$ 161,122

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Operating loss carryforwards	$ 504,000	$ 295,000
Income tax refunds	$ 330,000
Federal statutory tax rate	21.00%
Unrecognized tax benefits	$ 0	0
Federal [Member]
Operating loss carryforwards	$ 1,000,000	$ 712,000

Business and Credit Concentra_2

Business and Credit Concentrations (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Concentration Risk [Line Items]
Concentrations percentage	10.00%	14.00%
Cash deposits	$ 3,275,135	$ 3,411,825
FDIC Insured Limit	$ 250,000	$ 250,000
Revenue Benchmark [Member] | First Customer
Concentration Risk [Line Items]
Concentrations percentage	20.00%	17.80%
Revenue Benchmark [Member] | Second Customer
Concentration Risk [Line Items]
Concentrations percentage	16.50%	6.50%
Revenue Benchmark [Member] | Third Customer
Concentration Risk [Line Items]
Concentrations percentage	7.00%	4.70%
Accounts Receivable [Member] | First Customer
Concentration Risk [Line Items]
Concentrations percentage	22.00%	24.80%
Accounts Receivable [Member] | Second Customer
Concentration Risk [Line Items]
Concentrations percentage	14.10%	14.30%
Accounts Receivable [Member] | Third Customer
Concentration Risk [Line Items]
Concentrations percentage	13.20%	13.30%