Thanksgiving Coffee (TCCI) 10-Q 9 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2017shares
Document and Entity Information [Abstract]
Entity Registrant Name	THANKSGIVING COFFEE CO INC
Entity Central Index Key	949,852
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	1,236,744

Balance Sheets

Balance Sheets - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash	$ 168,261	$ 149,936
Accounts receivable, net of allowance	205,966	239,738
Inventories	203,014	279,751
Prepaid expenses	75,965	109,974
Total current assets	653,206	779,399
Property and equipment
Property and equipment	1,437,358	1,418,820
Accumulated depreciation	(1,080,096)	(992,441)
Total property and equipment	357,262	426,379
Other assets
Deposits and other assets	3,112	12,242
Note receivables	0	29,728
Total other assets	3,112	41,970
Total assets	1,013,580	1,247,748
Current liabilities
Accounts payable	156,080	286,852
Accrued Liabilities	45,822	67,344
Current portion of long term debt	38,004	38,004
Total current liabilities	239,906	392,200
Long term debt
Long-term debt	101,337	130,297
Less current portion of long term debt	(38,004)	(38,004)
Total long term debt	63,333	92,293
Total liabilities	303,239	484,493
Shareholders' equity
Common stock, no par value, 1,960,000 shares authorized, 1,236,744 shares issued and outstanding	861,816	861,816
Additional paid in capital	24,600	24,600
Accumulated deficit	(176,075)	(123,161)
Total shareholders' equity	710,341	763,255
Total liabilities and shareholders' equity	$ 1,013,580	$ 1,247,748

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value
Common stock, shares authorized	1,960,000	1,960,000
Common stock, shares issued	1,236,744	1,236,744
Common stock, shares outstanding	1,236,744	1,236,744

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income
Net sales	$ 856,952	$ 903,403	$ 2,625,044	$ 2,660,735
Cost of sales	481,066	543,324	1,501,060	1,570,470
Gross profit	375,886	360,079	1,123,984	1,062,265
Operating expenses
Selling, general and administrative expenses	370,867	398,542	1,077,586	1,113,331
Depreciation and amortization	22,203	22,495	66,661	64,605
Total operating expenses	393,070	421,037	1,144,247	1,177,936
Operating loss	(17,184)	(60,958)	(20,263)	(115,671)
Other income (expense)
Miscellaneous income/ (expense)	(1,107)	143	(31,710)	(1,246)
Total other income (expense)	(1,107)	143	(31,710)	(1,246)
Loss before income taxes	(18,291)	(60,815)	(51,973)	(116,917)
Income tax expense	0	0	(800)	(800)
Net Loss	$ (18,291)	$ (60,815)	$ (52,773)	$ (117,717)
Loss per share (basic and dilutive)	$ (0.015)	$ (0.049)	$ (0.043)	$ (0.095)
Weighted average number of shares	1,236,744	1,236,744	1,236,744	1,236,744

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities
Net loss	$ (52,773)	$ (117,717)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization	92,215	92,696
(Increase) decrease in:
Accounts receivable	33,772	(30,424)
Inventories	76,737	39,663
Prepaid expenses	34,009	47,170
Deposits and other assets	9,130
Increase (decrease) in:
Accounts payable	(130,772)	1,687
Accrued liabilities	(21,522)	(21,052)
Net cash provided by operating activities	43,796	12,023
Investing activities
Purchases of property and equipment	(18,538)	(93,058)
Net cash (used in) investing activities	(18,538)	(93,058)
Financing activities
Decreases in notes receivable	29,728
(Repayments) increases of notes payable and capital leases	(36,661)	79,528
Net cash (used in) provided by financing activities	(6,933)	79,528
Decrease in cash	18,325	(1,507)
Cash at beginning of period	149,936	213,193
Cash at end of period	$ 168,261	$ 211,686

Statements of Cash Flows (Paren

Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Statement of Cash Flows [Abstract]
Cash paid for income taxes	$ 800	$ 800

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Basis of Presentation	1. Basis of Presentation The unaudited condensed financial statements in this Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q Article 10 of Regulation S-X. We have continued to follow the accounting policies disclosed in the financial statements included in our 2016 Form 10-K filed with the Securities and Exchange Commission (SEC). It is suggested that these statements be read in conjunction with the December 31, 2016 audited financial statements and the accompanying notes on Form 10-K, as filed with the Securities and Exchange Commission. The interim financial information in this Form 10-Q reflects all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of our results of operations for the interim periods. The results of operations for the nine months ended September 30, 2017 are not necessarily indicative of results to be expected for the full year. Concentration of Risk For the nine months period ending September 2017, one customer accounted for 11.24% of the Company’s revenue. This customer has purchased from the Company since 1992, and has several locations. A loss of this customer account or any other large account, or a significant reduction in sales to any of the Company’s principal customers, could have an adverse impact on the Company. Income Taxes The Company accounts for income taxes under the asset and liability method as prescribed by ASC 740, Accounting for Income Taxes A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Accordingly, actual results could differ from those estimates.

Accounts Receivable

Accounts Receivable	9 Months Ended
	Sep. 30, 2017
Receivables [Abstract]
Accounts Receivable	2. Accounts Receivable Accounts receivable consist of the following: 9/30/2017 12/31/2016 Accounts receivable $ 211,518 $ 246,616 Less: allowance for doubtful accounts (5,552 ) (6,878 ) Net accounts receivable $ 205,966 $ 239,738 The Company utilizes a percentage method to establish the allowance for doubtful accounts. The estimated allowance ranges from 1% to 10% of outstanding receivables based on factors pertaining to the credit risk of specific customers, historical trends and other information. Delinquent accounts are written off when it is determined that amounts are uncollectible. Bad debt expense (recovery) for the nine months ended September 30, 2017 and 2016 was $(1,326) and $(661), respectively.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Inventories	3. Inventories Inventories consist of the following: 9/30/2017 12/31/2016 Coffee Unroasted $ 81,782 $ 168,003 Roasted 61,501 55,066 Tea 2,444 1,690 Packaging, supplies and other merchandise held for sale 57,286 54,992 Total inventories $ 203,014 $ 279,751

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2017
Property, Plant and Equipment [Abstract]
Property and Equipment	4. Property and Equipment Property and equipment consist of the following: 9/30/2017 12/31/2016 Equipment $ 516,229 $ 506,939 Furniture and fixtures 143,410 138,715 Leasehold improvements 352,237 352,237 Transportation equipment 150,686 146,133 Package design 41,000 41,000 Capitalized website development costs 19,000 19,000 Property held under capital leases 214,796 214,796 Total property and equipment $ 1,437,358 $ 1,418,820 Accumulated depreciation (1,080,096 ) (992,441 ) Property and equipment, net $ 357,262 $ 426,379 Depreciation and amortization expense for the nine months ended September 30, 2017 and 2016 was $92,215 and $92,696, respectively. Included in cost of goods sold is $25,554 and $28,064 of depreciation expense, respectively, for the nine months ending September 30, 2017 and September 30, 2016.

Long Term Debt

Long Term Debt	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Long Term Debt	5. Long Term Debt Capital Lease Obligations 9/30/2017 12/31/2016 Bank of the West payable in monthly installments of $787.03, including interest at 9.234% collateralized by equipment, final payment due on January 1, 2021. $ 26,430 $ 31,486 Bank of the West payable in monthly installments of $1,465, including interest at 9.227%, collateralized by equipment, final payment due on January 1, 2020. 36,778 47,020 Hansel Ford, payable in monthly installments of $385.18, including interest at .90%, collateralized by equipment, final payment due on March 14, 2019. 6,883 10,290 Hansel Ford, payable in monthly installments of $385.18, including interest at .90%, collateralized by equipment, final payment due on March 14, 2019. 6,883 10,290 Hansel Ford, payable in monthly installments of $806.38, including interest at 1.939%, collateralized by equipment, final payment due on April 10, 2020. 24,363 31,211 $ 101,337 $ 130,297 Less current portion (38,004 ) (38,004 ) Long term portion of notes payable $ 63,333 $ 92,293 Interest paid for the nine months ended September 30, 2017 and 2016 was $5,500 and $6,784, respectively. As of September 30, 2017, maturities of notes payable and capital lease obligations for each of the next four years and in the aggregate were as follows: Years Ending September 30, 2018 $ 38,004 2019 40,554 2020 22,779 $ 101,337

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income Taxes	6. Income Taxes Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company’s deferred tax assets consist of the benefit from net operating loss (NOL) carryforwards and temporary differences. The net operating loss carryforward expires in various years through 2036. The Company’s deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operation loss carryforwards. Net operating loss carryforwards may be further limited by a change in the company ownership and other provisions of the tax laws.

Operating Leases

Operating Leases	9 Months Ended
	Sep. 30, 2017
Leases [Abstract]
Operating Leases	7. Operating Leases The Company leases some office equipment under non cancelable operating leases. As of September 30, 2017, minimum annual lease payments due under these agreements for each of the next five years and in the aggregate were: Years Ending September 30, 2018 $ 9,626 2021 326 $ 9,953 Total operating lease payments for the nine months ended September 30, 2017 and 2016 were $6,094 and $5,526 respectively.

Long Term Leases

Long Term Leases	9 Months Ended
	Sep. 30, 2017
Long Term Leases [Abstract]
Long Term Leases	8. Long Term Leases The Company leases its corporate headquarters, warehouse and waterfront facilities from Paul and Joan Katzeff (the Company’s majority shareholders). The lease is classified as an operating lease and provides for monthly rental payments of $8,600. The Company is responsible for all real estate taxes, insurance and maintenance costs related to the facilities. The ten-year lease term ends May 31, 2025. As of September 30, 2017, minimum future rental payments under non cancelable facilities operating leases for each of the next five years and in the aggregate are as follows: Years ending September 30, 2018 $ 103,200 2019 103,200 2020 103,200 2021 103,200 2022 103,200 Thereafter 275,200 $ 791,200

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2017
Related Party Transactions [Abstract]
Related Party Transactions	9. Related Party Transactions As of September 30, 2017, the Company has green coffee contracts with three cooperatives in Nicaragua. Ethical Trading and Investment Company of Nicaragua (ETICO) is the importer for the transactions. Nicholas Hoskyns, a director of the company, is the managing director of ETICO. As of September 30, 2017, amounts owed to ETICO totaled $40,083. All the amounts owed are current and were paid in accordance with our standard vendor payment policies. The loss of the ETICO relationship could have an adverse effect on the Company’s business in the short term. Management believes other options are available that could be utilized in the event the ETICO relationship was terminated. The total rent payments made to the majority shareholders in connection with these related transactions for the nine months ended September 30, 2017 and September 30, 2016 were $77,400 and $77,400, respectively.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Concentration of Risk	Concentration of Risk For the nine months period ending September 2017, one customer accounted for 11.24% of the Company’s revenue. This customer has purchased from the Company since 1992, and has several locations. A loss of this customer account or any other large account, or a significant reduction in sales to any of the Company’s principal customers, could have an adverse impact on the Company.
Income Taxes	Income Taxes The Company accounts for income taxes under the asset and liability method as prescribed by ASC 740, Accounting for Income Taxes A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Accordingly, actual results could differ from those estimates.

Accounts Receivable (Tables)

Accounts Receivable (Tables)	9 Months Ended
	Sep. 30, 2017
Receivables [Abstract]
Schedule of accounts receivable	9/30/2017 12/31/2016 Accounts receivable $ 211,518 $ 246,616 Less: allowance for doubtful accounts (5,552 ) (6,878 ) Net accounts receivable $ 205,966 $ 239,738

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Schedule of inventories	9/30/2017 12/31/2016 Coffee Unroasted $ 81,782 $ 168,003 Roasted 61,501 55,066 Tea 2,444 1,690 Packaging, supplies and other merchandise held for sale 57,286 54,992 Total inventories $ 203,014 $ 279,751

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2017
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	9/30/2017 12/31/2016 Equipment $ 516,229 $ 506,939 Furniture and fixtures 143,410 138,715 Leasehold improvements 352,237 352,237 Transportation equipment 150,686 146,133 Package design 41,000 41,000 Capitalized website development costs 19,000 19,000 Property held under capital leases 214,796 214,796 Total property and equipment $ 1,437,358 $ 1,418,820 Accumulated depreciation (1,080,096 ) (992,441 ) Property and equipment, net $ 357,262 $ 426,379

Long Term Debt (Tables)

Long Term Debt (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of long term debt	Capital Lease Obligations 9/30/2017 12/31/2016 Bank of the West payable in monthly installments of $787.03, including interest at 9.234% collateralized by equipment, final payment due on January 1, 2021. $ 26,430 $ 31,486 Bank of the West payable in monthly installments of $1,465, including interest at 9.227%, collateralized by equipment, final payment due on January 1, 2020. 36,778 47,020 Hansel Ford, payable in monthly installments of $385.18, including interest at .90%, collateralized by equipment, final payment due on March 14, 2019. 6,883 10,290 Hansel Ford, payable in monthly installments of $385.18, including interest at .90%, collateralized by equipment, final payment due on March 14, 2019. 6,883 10,290 Hansel Ford, payable in monthly installments of $806.38, including interest at 1.939%, collateralized by equipment, final payment due on April 10, 2020. 24,363 31,211 $ 101,337 $ 130,297 Less current portion (38,004 ) (38,004 ) Long term portion of notes payable $ 63,333 $ 92,293
Schedule of maturities of notes payable and capital lease obligations	Years Ending September 30, 2018 $ 38,004 2019 40,554 2020 22,779 $ 101,337

Operating Leases (Tables)

Operating Leases (Tables)	9 Months Ended
	Sep. 30, 2017
Leases [Abstract]
Schedule of minimum annual lease payments due under these agreements	Years Ending September 30, 2018 $ 9,626 2021 326 $ 9,953

Long Term Leases (Tables)

Long Term Leases (Tables)	9 Months Ended
	Sep. 30, 2017
Long Term Leases [Abstract]
Schedule of minimum future rental payments under non cancelable facilities operating leases	Years ending September 30, 2018 $ 103,200 2019 103,200 2020 103,200 2021 103,200 2022 103,200 Thereafter 275,200 $ 791,200

Basis of Presentation (Details)

Basis of Presentation (Details) - Sales Revenue, Net [Member]	9 Months Ended
	Sep. 30, 2017Customer
Concentration risk, percentage	11.24%
Number of customer	1

Accounts Receivable (Details)

Accounts Receivable (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Receivables [Abstract]
Accounts receivable	$ 211,518	$ 246,616
Less: allowance for doubtful accounts	(5,552)	(6,878)
Net accounts receivable	$ 205,966	$ 239,738

Accounts Receivable (Details Te

Accounts Receivable (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Receivables [Abstract]
Percentage method to establish the allowance for doubtful accounts, Description	The estimated allowance ranges from 1% to 10% of outstanding receivables based on factors pertaining to the credit risk of specific customers, historical trends and other information.
Bad debt expense (recovery)	$ (1,326)	$ (661)

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Inventory [Line Items]
Total inventories	$ 203,014	$ 279,751
Tea [Member]
Inventory [Line Items]
Total inventories	2,444	1,690
Coffee Unroasted [Member]
Inventory [Line Items]
Total inventories	81,782	168,003
Coffee Roasted [Member]
Inventory [Line Items]
Total inventories	61,501	55,066
Packaging, Supplies And Other Merchandise [Member]
Inventory [Line Items]
Total inventories	$ 57,286	$ 54,992

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 1,437,358	$ 1,418,820
Accumulated depreciation	(1,080,096)	(992,441)
Property and equipment, net	357,262	426,379
Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	150,686	146,133
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	143,410	138,715
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	352,237	352,237
Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	516,229	506,939
Property Plant And Equipment Under Operating Leases [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	214,796	214,796
Website [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	19,000	19,000
Package Design [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 41,000	$ 41,000

Property and Equipment (Detai28

Property and Equipment (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 92,215	$ 92,696
Depreciation expense	$ 25,554	$ 28,064

Long Term Debt (Details)

Long Term Debt (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt	$ 101,337	$ 130,297
Less current portion	38,004	38,004
Long term portion of notes payable	63,333	92,293
Long Term Debt Three [Member]
Debt Instrument [Line Items]
Long-term debt	6,883	10,290
Long Term Debt Two [Member]
Debt Instrument [Line Items]
Long-term debt	6,883	10,290
Long Term Debt One [Member]
Debt Instrument [Line Items]
Long-term debt	36,778	47,020
Long-term Debt [Member]
Debt Instrument [Line Items]
Long-term debt	26,430	31,486
Long Term Debt Four [Member]
Debt Instrument [Line Items]
Long-term debt	$ 24,363	$ 31,211

Long Term Debt (Details 1)

Long Term Debt (Details 1)	Sep. 30, 2017USD ($)
Maturities of long term debt
2,018	$ 38,004
2,019	40,554
2,020	22,779
Long term debt	$ 101,337

Long Term Debt (Details Textual

Long Term Debt (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Debt Instrument [Line Items]
Interest paid	$ 5,500	$ 6,784
Long Term Debt One [Member]
Debt Instrument [Line Items]
Long term debt monthly installments payable	$ 1,465
Interest rate	9.227%
Long term debt maturity date	Jan. 1, 2020
Long Term Debt Two [Member]
Debt Instrument [Line Items]
Long term debt monthly installments payable	$ 385.18
Interest rate	0.90%
Long term debt maturity date	Mar. 14, 2019
Long Term Debt Three [Member]
Debt Instrument [Line Items]
Long term debt monthly installments payable	$ 385.18
Interest rate	0.90%
Long term debt maturity date	Mar. 14, 2019
Long Term Debt Four [Member]
Debt Instrument [Line Items]
Long term debt monthly installments payable	$ 806.38
Interest rate	1.939%
Long term debt maturity date	Apr. 10, 2020
Long-term Debt [Member]
Debt Instrument [Line Items]
Long term debt monthly installments payable	$ 787.03
Interest rate	9.234%
Long term debt maturity date	Jan. 1, 2021

Income Taxes (Details)

Income Taxes (Details)	9 Months Ended
	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Net operating loss carryforward expires, description	The net operating loss carryforward expires in various years through 2036.

Operating Leases (Details)

Operating Leases (Details) - Office Equipment [Member]	Sep. 30, 2017USD ($)
Years ending September 30,
2,018	$ 9,626
2,021	326
Total future minimum annual lease payments	$ 9,953

Operating Leases (Details Textu

Operating Leases (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Office Equipment [Member]
Operating Leased Assets [Line Items]
Total operating lease payments	$ 6,094	$ 5,526

Long Term Leases (Details)

Long Term Leases (Details) - Majority Shareholder [Member]	Sep. 30, 2017USD ($)
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
2,018	$ 103,200
2,019	103,200
2,020	103,200
2,021	103,200
2,022	103,200
Thereafter	275,200
Total future minimum annual lease payments	$ 791,200

Long Term Leases (Details Textu

Long Term Leases (Details Textual)	9 Months Ended
	Sep. 30, 2017USD ($)
Long-term Purchase Commitment [Line Items]
Operating lease maturity term	The ten-year lease term ends May 31, 2025.
Majority Shareholder [Member]
Long-term Purchase Commitment [Line Items]
Operating lease rental payments	$ 8,600

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Related Party Transactions [Abstract]
Amounts owed to ETICO	$ 40,083
Total rent payments	$ 77,400	$ 77,400