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Related-Party Transactions
12 Months Ended
Oct. 31, 2021
Related Party Transactions [Abstract]  
Related-Party Transactions

Note 6 – Related-Party Transactions

 

Revenue and Accounts Receivable

 

During the fiscal year ended October 31, 2021, the Company recognized revenue of $154,560 from seven companies owned by Nirajkumar Patel, the Chief Executive Officer of the Company, and/or his wife.

 

During the fiscal year ended October 31, 2020, the Company recognized revenue of $233,955 from seven companies owned by Nirajkumar Patel, the Chief Executive Officer and Chief Financial Officer of the Company, and/or his wife. As of October 31, 2020, the Company had accounts receivable from the related party in the amount of $15,360.

 

Purchases and Accounts Payable

 

During the fiscal year ended October 31, 2021, the Company purchased Products equal to $91,149,783 from Bidi, a related party company that is also owned by Nirajkumar Patel, the Company’s Chief Executive Officer, and after returns of $29,283,452 , resulted in the net amount of $61,866,332  in product purchases. As of October 31, 2021, the Company had accounts payable to Bidi of $12,667,769.

 

During the fiscal year ended October 31, 2021, Lakshmi Distributors Inc., doing business as C Store Master (“C Store Master”), a large customer of the Company, elected to return the inventory associated with the consignment order placed on April 1, 2021, which was located at the staging warehouse in California, to the Company at no cost. The Company then returned this same inventory to Bidi’s warehouse in Florida at no cost. This reduced the Company’s inventory and reduced the related-party amount due to Bidi by $13,846,950

 

During the year ended October 31, 2020, the Company purchased Products with a value of $53,981,351 from Bidi, a related party company, that is also owned by Nirajkumar Patel, our Chief Executive Officer and Chief Financial Officer. As of October 31, 2020, the Company had accounts payable to Bidi of $1,409,561

 

Office Space and Other Leases 

 

 

 

On August 1, 2020, the Company began leasing office space for its main corporate office in Grant, Florida. The five-year lease agreement is with a related party, Just Pick, LLC (“Just Pick”). The Company’s Chief Executive Officer is an officer of Just Pick. During fiscal year 2021 the Company was not being charged for the leased space under the terms and conditions of the lease between the Company and Just Pick, was not being charged for the separate warehouse space provided by Just Pick, and accordingly no payments were made on the lease.

 

Concentration of Purchases and Accounts Payable- Related Party

 

For the years ended October 31, 2021 and 2020, 100%  of the inventories of Products, primarily consisting of the “BIDI® Stick,” were purchased from Bidi, a related party company that is owned by Nirajkumar Patel, our Chief Executive Officer, in the amount of approximately$61.9 million and $54.0 million , respectively.. It also accounted for 100% of the total accounts payable - related party as of October 31, 2021 and 2020 .

 

Concentration of Revenues and Accounts Receivable

 

For the fiscal year ended October 31, 2021, approximately 23%, or $13.9 million, of the revenue from the sale of Products, primarily consisting of the “BIDI® Stick,” was generated from Favs Business LLC (“Favs Business”), approximately 16%, or $9.6 million, of the revenue from the sale of Products was generated from MMS Distributing, LLC (“MMS Distro”), and approximately 14%, or $8.2 million, of the revenue from the sale of Products was generated from C Store Master.

 

Favs Business and C Store Master had outstanding balances of $1 million and, $0.3 million respectively, and accounted for approximately 50%, and 16%, respectively, of the total accounts receivable from customers as of October 31, 2021.

 

For the year ended October 31, 2020, approximately 41% of the revenue from the sale of products, primarily consisting of the “BIDI® Stick,” was generated from Favs Business in the amount of approximately $26.4 million and approximately 6% of the revenue from the sale of products was generated from MMS Distro in the amount of approximately $3.9 million.

 

Go Brands, Inc., with an outstanding balance of approximately $0.3 million and GPM Investment, LLC, with an outstanding balance of approximately $0.6 million, accounted for approximately 33% and 56% of the total accounts receivable from customers, respectively, as of October 31, 2020.