Leases

12 Months Ended

Oct. 31, 2021

Leases

Leases

Note 4 – Leases

The Company capitalizes all leased assets pursuant to ASU 2016-02, “Leases (Topic 842),” which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. The Company excludes short-term leases having initial terms of 12 months or less from Topic 842 as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. The Company adopted the standard in the fourth quarter of fiscal year 2020. The adoption of the amended ASU 2016-02 did not have any impact on the Company’s previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings

The Company does not have financing leases and only one operating lease for office space, with a related party. The operating lease is for a term of 5 five years, beginning August 1, 2020, with rent of $1,000 payable monthly. Certain of the Company’s leases include renewal options and have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the option. As the operating lease does not provide for an implicit interest rate, we estimated a current borrowing rate of 4.5% in determining the present value of the lease. As of October 31, 2021, the right-to-use (“ROU”) lease asset, net of accumulated amortization, was $55,604. The initial recognition of the ROU operating lease was $73,749 for both the ROU asset and ROU liability. The amortization expense for ROU asset for the twelve months ended October 31, 2021 was $14,529 and no payments were made on the ROU liability. The amortization for the expense ROU asset for the twelve months ended October 31, 2020 was $3,616 and three payments on the ROU liability were $2,836. At October 31, 2021, short-term ROU lease liability was $13,020 and long-term liability was $46,185, totaling $59,205.

	2021		2022		2023		2024		Total
Lease payments	$	13,500	$	15,300	$	18,000	$	13,500	$	60,300
Less discount imputed interest										(1,095	)
Present value of future payments										59,205
Less current obligations										(13,020	)
Long term lease obligations									$	46,185

On November 1, 2021 the Company entered into a month-to-month lease agreement with Ranger Enterprises, LLC, located in Seymour, Indiana, to store product inventory at this satellite location. The Company made one payment on this lease in the amount of $2,143 on October 31, 2021. On November 11, 2021 the Company entered into a month- to-month lease agreement with FFE Solutions Group, located in Salt Lake City Utah, to store additional product inventory at this satellite location. The Company made one payment on this lease in the amount of $10,713 on December 15, 2021.