UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: ~~October~~July 31, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to ____________

Commission File Number: 001-40597

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc.

(Exact name of Registrant as specified in its charter)

Nevada		27-0607116
(State or other jurisdiction of incorporation)		(IRS Employer ID No.)

25 Branca Road

East Rutherford, NJ 07073

(Address of principal executive offices and zip Code)

(201) 531-1212

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(g) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on which registered
Common Stock, par value $0.00001		~~MMMB~~MAMA		NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging Growth Company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~December 12, 2022,~~September 11, 2023, there were ~~36,317,857~~37,443,387 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

			Page
	Cautionary Statement Regarding Forward-Looking Statements	1
	~~PART I – FINANCIAL INFORMATION~~
	PART I – FINANCIAL INFORMATION

Item 1.		Financial Statements.	F-1

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12

Item 3.		Quantitative and Qualitative Disclosures About Market Risk.	65

Item 4.		Controls and Procedures.	65

		PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	~~Legal Proceedings.~~	76

Item 1A.	Risk Factors.	~~Risk Factors.~~	76

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds.	713

Item 3.		Defaults Upon Senior Securities.	713

Item 4.		Mine Safety Disclosures.	713

~~Item 5.~~		~~Other Information~~	7

Item 6.	Exhibits.	~~Exhibits.~~	814

Signatures		15

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act. The forward-looking statements involve substantial risks and uncertainties. All statements, other than statements related to present facts or current conditions or of historical facts, contained in this report, including statements regarding our strategy, future operations, future financial position, future revenues, and projected costs, prospects, plans and objectives of management, are forward-looking statements. Accordingly, these statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in them. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are not guarantees of future performance and our actual results could differ materially from the results discussed in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

	●	the impacts of the COVID-19 pandemic on our business, financial condition and results of operations, and our inability to mitigate such impacts;
~~Signatures~~	9●	the adequacy of our liquidity to pursue our business objectives;
	●	reliance on a limited number of customers;
	●	loss or retirement of key executives, including prior to identifying a successor;
	●	adverse economic conditions or intense competition;
	●	pricing pressures in the market and lack of control over the pricing of raw materials and freight;
	●	entry of new competitors and products;
	●	adverse federal, state and local government regulation (including, but not limited to, the Food and Drug Administration);
	●	liability related to the consumption of our products
	●	ability to secure placement of our products in key retail locations;
	●	our ability to integrate acquisitions and related businesses including Chef Inspirational Foods, LLC;
	●	wage and price inflation;
	●	maintenance of quality control; and
	●	issues related to the enforcement of our intellectual property rights.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to “Item 1A. Risk Factors” in this report and “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K, and to subsequent reports and registration statements filed from time to time with the SEC. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this report. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

~~MAMAMANCINI’S HOLDINGS, INC.~~Mama’s Creations, Inc.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~October~~July 31, ~~2022~~2023

	Page(s)

Condensed Consolidated Balance Sheets as of ~~October~~July 31, ~~2022~~2023 (unaudited) and January 31, ~~2022~~2023	F-2

Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 (unaudited)	F-3

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the ~~Period from August 1,~~Three and Six Months Ended July 31, 2023 and 2022 ~~through October 31, 2022 and the Period from August 1, 2021 through October 31, 2021~~ (unaudited)	F-4

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Period from February 1, 2022 through October 31, 2022 and the Period from February 1, 2021 through October 31, 2021 (unaudited)	~~F-5~~

Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~October~~July 31, 2023 and 2022 ~~and 2021~~ (unaudited)	F-6

Notes to Condensed Consolidated Financial Statements (unaudited)	F-7

F-1

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc.

Condensed Consolidated Balance Sheets


	October 31, 2022			January 31, 2022			July 31, 2023			January 31, 2023
	(unaudited)						(Unaudited)
Assets:

Current Assets:
Cash	$	3,479,287		$	850,598		$	5,560,176		$	4,378,383
Accounts receivable, net		6,892,699			7,627,717			8,843,756			6,832,046
Inventories		3,563,959			2,890,793
Prepaid expenses		380,135			269,209
Inventories, net								3,308,513			3,635,881
Prepaid expenses and other current assets								474,301			828,391
Total current assets		14,316,080			11,638,317			18,186,746			15,674,701

Property and equipment, net		3,579,437			3,678,532
Intangibles, net		1,617,693			1,984,979
Property, plant, and equipment, net								4,067,648			3,423,096
Intangible assets, net								5,754,182			1,502,510
Goodwill		8,633,334			8,633,334			8,633,334			8,633,334
Operating lease right of use assets, net		3,323,390			3,596,317			3,124,449			3,236,690
Deferred tax asset		350,895			448,501			67,908			717,559
Equity method investment in Chef Inspirational		1,290,464			-
Equity method investment								-			1,343,486
Deposits		52,249			52,249			65,410			53,819
Total Assets	$	33,163,542		$	30,032,229		$	39,899,677		$	34,585,195

Liabilities and Stockholders’ Equity:

Liabilities:
Current Liabilities:
Accounts payable and accrued expenses	$	8,065,749		$	6,479,140		$	8,872,582		$	9,063,256
Term loan, net of debt discount of $48,726 and $57,771, respectively		1,502,998			1,235,333
Operating lease liability		378,223			292,699
Term loan, net of debt discount of $49,022 and $60,082, respectively								1,502,702			1,491,642
Operating lease liabilities								414,937			391,802
Finance leases payable		180,085			218,039			335,119			182,391
Promissory note – related party		839,170			759,917
Series B Preferred Shares to be issued, net		185,000			-
Promissory notes – related parties								1,950,000			750,000
Total current liabilities		11,151,225			8,985,128			13,075,340			11,879,091

Line of credit		990,000			765,000			500,000			890,000
Operating lease liability – net of current		2,992,603			3,339,255
Operating lease liabilities – net of current								2,739,208			2,897,205
Finance leases payable – net of current		295,805			376,132			906,476			248,640
Promissory note – related party, net of current		2,250,000			2,250,000
Promissory notes – related parties, net of current								3,000,000			1,500,000
Term loan – net of current		5,043,104			6,206,896			3,879,318			4,655,181
Total long-term liabilities		11,571,512			12,937,283			11,025,002			10,191,026

Total Liabilities		22,722,737			21,922,411			24,100,342			22,070,117

Commitments and contingencies (Note 10)		-
Commitments and contingencies (Notes 10 and 11)								-			-

Stockholders’ Equity:
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of October 31, 2022 and January 31, 2022, 0 shares outstanding as of October 31, 2022 and January 31, 2022		-			-
Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 47,200 and 0 issued and outstanding as of October 31, 2022 and January 31, 2022		-			-
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of July 31, 2023 and January 31, 2023, respectively, 0 shares outstanding as of July 31, 2023 and January 31, 2023, respectively								-			-
Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 0 and 54,600 issued and outstanding as of July 31, 2023 and January 31, 2023 respectively								-			-
Preferred stock, $0.00001 par value; 19,680,000 shares authorized; no shares issued and outstanding		-			-			-			-
Preferred stock, value		-			-

Common stock, $0.00001 par value; 250,000,000 shares authorized; 36,317,857 and 35,758,792 shares issued and outstanding as of October 31, 2022 and January 31, 2022		364			359
Common stock, $0.00001 par value; 250,000,000 shares authorized; 37,343,387 and 36,317,857 shares issued and outstanding as of July 31, 2023 and January 31, 2023								374			364
Additional paid in capital		22,472,793			20,587,789			22,912,383			22,724,440
Accumulated deficit		(11,882,852	)		(12,328,830	)		(6,963,922	)		(10,060,226	)
Less: Treasury stock, 230,000 shares at cost, respectively		(149,500	)		(149,500	)
Less: Treasury stock, 230,000 shares at cost								(149,500	)		(149,500	)
Total Stockholders’ Equity		10,440,805			8,109,818			15,799,335			12,515,078
Total Liabilities and Stockholders’ Equity	$	33,163,542		$	30,032,229		$	39,899,677		$	34,585,195

See accompanying notes to the condensed consolidated financial ~~statements~~statements.

F-2

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

													2023			2022			2023			2022
	For the Three Months Ended October 31,						For the Nine Months Ended October 31,						For the Three Months Ended July 31,						For the Six Months Ended July 31,
	2022			2021			2022			2021			2023			2022			2023			2022

Sales-net of slotting fees and discounts	$	25,693,913		$	10,852,682		$	70,370,967		$	33,230,666
Net sales													$	24,790,085		$	22,846,474		$	47,910,901		$	44,677,054

Costs of sales		19,129,707			8,206,939			57,384,953			24,006,920			17,283,847			20,119,862			34,033,663			38,090,179

Gross profit		6,564,206			2,645,743			12,986,014			9,223,746			7,506,238			2,726,612			13,877,238			6,586,875

Operating expenses:
Research and development		24,432			33,866			92,759			87,843			94,871			41,792			166,056			68,327
General and administrative		5,041,213			2,610,676			11,965,016			7,697,590
Selling, general and administrative														5,135,537			3,516,115			9,492,568			7,088,870
Total operating expenses		5,065,645			2,644,542			12,057,775			7,785,433			5,230,408			3,557,907			9,658,624			7,157,197

Income from operations		1,498,561			1,201			928,239			1,438,313
Income (loss) from operations														2,275,830			(831,295	)		4,218,614			(570,322	)

Other income (expenses)
Interest		(183,844	)		(8,731	)		(447,159	)		(26,710	)
Interest, net														(181,658	)		(139,064	)		(359,052	)		(263,315	)
Amortization of debt discount		(3,015	)		-			(9,670	)		-			(5,530	)		(3,015	)		(11,060	)		(6,655	)
Other income		-			-			2,596			37,704			7,449			2,596			27,449			2,596
Total other income (expenses)		(186,859	)		(8,731	)		(454,233	)		10,994
Total other expenses														(179,739	)		(139,483	)		(342,663	)		(267,374	)

Net income (loss) before income tax provision and income from equity method investment		1,311,702			(7,530	)		474,006			1,449,307			2,096,091			(970,778	)		3,875,951			(837,696	)

Income from equity method investment in Chef Inspirational		71,924			-			90,464			-
Income tax benefit (provision)		(285,686	)		2,075			(106,079	)		(391,313	)
Income from equity method investment														77,584			18,540			223,342			18,540
Income tax (provision) benefit														(429,764	)		208,992			(954,456	)		179,607

Net income (loss)		1,097,940			(5,455	)		458,391			1,057,994			1,743,911			(743,246	)		3,144,837			(639,549	)

Less: Class B preferred dividends		(12,413	)		-			(12,413	)		-
Less: series B preferred dividends														(21,233	)		-			(48,533	)		-

Net income (loss) available to common stockholders		1,085,527		$	(5,455	)	$	445,978		$	1,057,994
Net Income available to common stockholders														1,722,678			(743,246	)		3,096,304			(639,549	)

Net income (loss) per common share
– basic	$	0.03		$	(0.00	)	$	0.01		$	0.03		$	0.05		$	(0.02	)	$	0.09		$	(0.02	)
– diluted	$	0.03		$	(0.00	)	$	0.01		$	0.03		$	0.05		$	(0.02	)	$	0.08		$	(0.02	)

Weighted average common shares outstanding
– basic		36,317,857			35,728,821			36,020,209			35,683,484			36,855,181			35,811,087			36,628,429			35,785,719
– diluted		36,614,635			35,728,821			36,348,534			36,176,949			37,490,567			35,811,087			37,195,314			35,785,719

See accompanying notes to the condensed consolidated financial ~~statements~~statements.

F-3

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

For the Period from ~~August~~May 1, ~~2022~~2023 through ~~October~~July 31, ~~2022~~2023

Series A Series B Additional
Preferred Stock Preferred Stock Common Stock Treasury Stock Paid-in Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, August 1, 2022 - $ - - $ - 36,317,857 $ 364 (230,000 ) $ (149,500 ) $ 21,326,367 $ (12,968,379 ) $ 8,208,852

Stock options issued for services - - - - - - - - 15,955 - 15,955

Common stock issued for services - - - - - - - - 7,671 - 7,671

Issuance of Preferred B Shares, net of issuance costs - - 47,200 - - - - - 1,122,800 - 1,122,800

Series B Preferred dividend - - - - - - - - - (12,413 ) (12,413 )

Net income - - - - - - - - - 1,097,940 1,097,940
Think
Balance, October 31, 2022 - $ - 47,200 $ - 36,317,857 $ 364 (230,000 ) $ (149,500 ) $ 22,472,793 $ (11,882,852 ) $ 10,440,805

	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
	Series A Preferred Stock				Series B Preferred Stock					Common Stock				Treasury Stock						Additional Paid In			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance, May 1, 2023		-	$	-		54,600		$	-		36,484,777	$	366		(230,000	)	$	(149,500	)	$	22,799,322		$	(8,686,600	)	$	13,963,588

Stock based compensation		-		-		-			-		19,960		-		-			-			104,789			-			104,789

Stock issued for the exercise of options and warrants		-		-		-			-		19,650		-		-			-			8,280			-			8,280

Conversion of series B preferred stock to common stock		-		-		(54,600	)		-		819,000		8		-			-			(8	)		-			-

Series B Preferred dividend		-		-		-			-		-		-		-			-			-			(21,233	)		(21,233	)

Net income		-		-		-			-		-		-		-			-			-			1,743,911			1,743,911

Balance, July 31, 2023		-	$	-		-		$	-		37,343,387	$	374		(230,000	)	$	(149,500	)	$	22,912,383		$	(6,963,922	)	$	15,799,335

For the Period from ~~August~~May 1, ~~2021~~2022 through ~~October~~July 31, ~~2021~~2022

Series A
Preferred Stock
Common Stock Treasury Stock
Additional
Paid In
Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, August 1, 2021 - $ - 35,725,041 $ 359 (230,000 ) $ (149,500 ) $ 20,555,657 $ (11,013,455 ) $ 9,393,061

Common stock issued for services - - - - - - 18,933 - 18,933

Stock options issued for services - - - - - - 748 - 748

Stock issued for the exercise of options - - 26,751 - - - - - -

Net loss - - - - - - - (5,455 ) (5,455 )
Balance, October 31, 2021 - $ - 35,751,792 $ 359 (230,000 ) $ (149,500 ) $ 20,575,338 $ (11,018,910 ) $ 9,407,287

~~See accompanying notes to the condensed consolidated financial statements~~

	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
	Series A Preferred Stock				Common Stock				Treasury Stock						Additional Paid In		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
Balance, May 1, 2022		-	$	-		35,774,468	$	359		(230,000	)	$	(149,500	)	$	20,587,789	$	(12,225,133	)	$	8,213,515

Stock issued for the exercise of options		-		-		41,417		-		-			-			26,250		-			26,250

Stock options issued for services		-		-		-		-		-			-			12,333		-			12,333

Stock issued for the acquisition of equity investment in Chef Inspirational		-		-		501,972		5		-			-			699,995		-			700,000

Net loss		-		-		-		-		-			-			-		(743,246	)		(743,246	)

Balance, July 31, 2022		-	$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	21,326,367	$	(12,968,379	)	$	8,208,852

F-4

~~MamaMancini’s Holdings, Inc.~~For the Period from February 1, 2023 through July 31, 2023

~~Condensed Consolidated Statements of Changes in Stockholders’ Equity~~

~~(Unaudited)~~

	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
	Series A Preferred Stock				Series B Preferred Stock					Common Stock				Treasury Stock						Additional Paid In			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance, February 1, 2023		-	$	-		54,600		$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	22,724,440		$	(10,060,226	)	$	12,515,078

Stock based compensation		-		-		-			-		19,960		-		-			-			160,173			-			160,173

Stock issued for the exercise of options and warrants		-		-		-			-		186,570		2		-			-			27,778			-			27,780

Conversion of series B preferred stock to common stock		-		-		(54,600	)		-		819,000		8		-			-			(8	)		-			-

Series B Preferred dividend		-		-		-			-		-		-		-			-			-			(48,533	)		(48,533	)

Net income		-		-		-			-		-		-		-			-			-			3,144,837			3,144,837

Balance, July 31, 2023		-	$	-		-		$	-		37,343,387	$	374		(230,000	)	$	(149,500	)	$	22,912,383		$	(6,963,922	)	$	15,799,335

For the Period from February 1, 2022 through ~~October~~July 31, 2022

Series A Series B Additional
Preferred Stock Preferred Stock Common Stock Treasury Stock Paid-in Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, February 1, 2022 - $ - - $ - 35,758,792 $ 359 (230,000 ) $ (149,500 ) $ 20,587,789 $ (12,328,830 ) $ 8,109,818

Stock options issued for services - - - - - - - - 28,288 - 28,288

Common stock issued for services - - - - - - - - 7,671 - 7,671

Stock issued for the exercise of options - - - - 57,093 - - - 26,250 - 26,250

Stock issued for the acquisition of equity investment in Chef Inspirational - - - - 501,972 5 - - 699,995 - 700,000

Issuance of Preferred B Shares, net of issuance costs - - 47,200 - - - - - 1,122,800 - 1,122,800

Series B Preferred dividend - - - - - - - - - (12,413 ) (12,413 )

Net income - - - - - - - - - 458,391 458,391

Balance, October 31, 2022 - $ - 47,200 $ - 36,317,857 $ 364 (230,000 ) $ (149,500 ) $ 22,472,793 $ (11,882,852 ) $ 10,440,805

	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
	Series A Preferred Stock				Common Stock				Treasury Stock						Additional Paid In		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
Balance, February 1, 2022		-	$	-		35,758,792	$	359		(230,000	)	$	(149,500	)	$	20,587,789	$	(12,328,830	)	$	8,109,818
Beginning balance, value		-	$	-		35,758,792	$	359		(230,000	)	$	(149,500	)	$	20,587,789	$	(12,328,830	)	$	8,109,818

Stock issued for the exercise of options		-		-		57,093		-		-			-			26,250		-			26,250

Stock options issued for services		-		-		-		-		-			-			12,333		-			12,333

Stock issued for the acquisition of equity investment in Chef Inspirational		-		-		501,972		5		-			-			699,995		-			700,000

Net loss		-		-		-		-		-			-			-		(639,549	)		(639,549	)
Net income (loss)		-		-		-		-		-			-			-		(639,549	)		(639,549	)

Balance, July 31, 2022		-	$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	21,326,367	$	(12,968,379	)	$	8,208,852
Ending balance, value		-	$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	21,326,367	$	(12,968,379	)	$	8,208,852

~~For~~See accompanying notes to the ~~Period from February 1, 2021 through October 31, 2021~~condensed consolidated financial statements.

Series A
Preferred Stock
Common Stock Treasury Stock
Additional
Paid In
Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, February 1, 2021 - $ - 35,603,731 $ 357 (230,000 ) $ (149,500 ) $ 20,535,793 $ (12,076,904 ) $ 8,309,746

Common stock issued for services - - - - - - 18,933 - 18,933

Stock options issued for services - - - - - - 1,534 - 1,534

Stock issued for the exercise of options - - 148,061 2 - - 19,078 - 19,080

Net income - - - - - - - 1,057,994 1,057,994
Net income (loss) - - - - - - - 1,057,994 1,057,994
Balance, October 31, 2021 - $ - 35,751,792 $ 359 (230,000 ) $ (149,500 ) $ 20,575,338 $ (11,018,910 ) $ 9,407,287

F-5

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

							2023			2022
	For the Nine Months Ended October 31,						For the Six Months Ended July 31,
	2022			2021			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	458,391		$	1,057,994
Net income (loss)							$	3,144,837		$	(639,549	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		678,710			572,238			511,589			401,126
Amortization of debt discount		9,670			-			11,060			6,655
Amortization of right of use assets		272,927			163,141			112,241			182,862
Amortization of intangibles		367,286			-			303,949			230,156
Share-based compensation		35,959			20,467
Stock-based compensation								110,173			12,333
Allowance for obsolete inventory								93,238			-
Change in deferred tax asset		97,606			383,313			649,651			(188,080	)
Income from equity method investment in Chef Inspirational		(90,464	)		-
Income from equity method investment								(223,342	)		(18,540	)
Paid in kind interest								-			53,356
Changes in operating assets and liabilities:
Allowance for doubtful accounts								140,442			-
Accounts receivable		735,018			12,445			1,126,867			749,959
Inventories		(673,166	)		(419,527	)		234,130			(1,302,933	)
Prepaid expenses		(111,551	)		(75,184	)
Prepaid expenses and other current assets								346,709			(248,113	)
Security deposits		-			(2,979	)		(17,941	)		-
Accounts payable and accrued expenses		1,664,762			562,095			(3,049,114	)		1,170,280
Operating lease liability		(261,128	)		(141,206	)		(134,862	)		(176,534	)
Net Cash Provided by Operating Activities		3,184,020			2,132,797			3,359,627			232,978

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for fixed assets		(507,547	)		(657,607	)		(252,853	)		(305,547	)
Cash paid for investment in Chef Inspirational		(500,000	)		-
Cash paid for investment in Chef Inspirational Foods, LLC, net								(645,641	)		(500,000	)
Net Cash (Used in) Investing Activities		(1,007,547	)		(657,607	)		(898,494	)		(805,547	)
					-
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds in advance of preferred stock offering		185,000			-			-			515,000
Proceeds from preferred stock offering		1,180,000			-
Payment of stock offering costs		(57,200	)		-
Repayment of term loan		(905,172	)		-			(775,863	)		(517,241	)
Borrowings of line of credit, net		225,000			-
(Repayment) borrowings of line of credit, net								(390,000	)		1,725,000
Repayment of finance lease obligations		(190,349	)		(144,910	)		(92,724	)		(130,626	)
Payment of Preferred B dividends		(11,313	)		-
Payment of Series B Preferred dividends								(48,533	)		-
Proceeds from exercise of options		26,250			19,080			27,780			26,250
Net Cash Provided by (Used in) Financing Activities		452,216			(125,830	)
Net Cash (Used in) Provided by Financing Activities								(1,279,340	)		1,618,383

Net Increase in Cash		2,628,689			1,349,360			1,181,793			1,045,814

Cash - Beginning of Period		850,598			3,190,560			4,378,383			850,598

Cash - End of Period	$	3,479,287		$	4,539,920		$	5,560,176		$	1,896,412

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes	$	9,170		$	6,830		$	112,500		$	-
Interest	$	369,400		$	28,748		$	313,488		$	182,873

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of series b preferred stock to common stock							$	8		$	-
Finance lease asset additions	$	72,068		$	128,050		$	903,288		$	34,268
Operating lease asset additions	$	-		$	347,585
Related party debt incurred for purchase of Chef Inspirational Foods, LLC							$	2,700,000			-
Non-cash consideration paid in common stock for equity investment in Chef Inspirational	$	700,000		$	-		$	-		$	700,000
Preferred B accrued dividends	$	1,100		$	-
Settlement of liability in common stock							$	50,000		$	-

See accompanying notes to the condensed consolidated financial ~~statements~~statements.

F-6

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc.

Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements

~~October~~July 31, ~~2022~~2023

Note 1 - Nature of Operations and Basis of Presentation

Nature of Operations

~~MamaMancini’s Holdings,~~Mama’s Creations, Inc. ~~(the~~(together with its subsidiaries, the “Company”), ~~(formerly known as Mascot Properties, Inc.)~~ was organized on July 22, 2009 as a Nevada corporation. The Company has a year-end of January 31.

~~The Company~~Our subsidiary, MamaMancini’s Inc., a Delaware Corporation (“Mamas”) is a marketer, manufacturer and distributor of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, sausage & peppers, chicken parmesan and other similar meats and sauces. In addition, the Company continues to diversify its product line by introducing new products such as ready to serve ~~dinners,~~meals, single-size ~~Pasta Bowls,~~pasta bowls, bulk deli, and packaged refrigerated ~~and frozen~~protein products. ~~The Company’s~~Mamas products were submitted to the United States Department of Agriculture (the “USDA”) and approved as all natural. The USDA defines all natural as a product that contains no artificial ingredients, coloring ingredients or chemical preservatives and is minimally processed. ~~The Company’s customers are located throughout the United States, with large concentrations in the Northeast and Southeast.~~

On December 29, 2021, the Company made two acquisitions which ~~expand~~expanded the Company’s core product lines, occasions, and access to specific cohorts and markets. T&L Creative Salads, Inc. (“T&L”) and Olive Branch, LLC (“~~OB”~~Olive Branch”), are related premier gourmet food manufacturers based in New York. T&L offers a full line of foods for retail food chains and club stores, delis, bagel stores, caterers and provision distributors. T&L uses high-quality meats, seafood and vegetables, prepared to meet the standards set forth by the USDA and the ~~FDA.~~Food and Drug Administration (“FDA”). Olive Branch ~~started operations six years ago as~~offers a ~~separate company to concentrate on selling~~full line of olives, olive mixes, and savory products to ~~a limited number of large~~ retail ~~customers,~~food chains and club stores, delis, bagel stores, caterers and provision distributors, primarily in pre-packaged containers.

On June 28, 2022, the Company acquired a 24% minority interest in Chef Inspirational Foods, ~~Inc.~~LLC (“CIF”), a leading developer, innovator, marketer and sales company selling ~~fresh and frozen~~ prepared foods, for an investment of $1.2 ~~million, at an implied enterprise value for CIF of $~~5million. The investment ~~consists~~consisted of $500,000 in cash and $700,000 in the Company’s common stock. The ~~Company also was granted the option to purchase the remaining seventy-six percent (~~76~~%) interest in CIF within one year of June 28, 2022. The option purchase price is an additional $3.8~~ ~~million, of which $3.5~~ ~~million would be paid in cash and $300,000~~ ~~in common stock, which would be paid within a two-year period from June 28, 2022. The~~ acquisition of the interest in CIF ~~is being~~was accounted for under the equity method of accounting for ~~investments.~~investments up until the Company acquired the remaining interest of CIF (the “CIF Acquisition”). On June 28, 2023, the Company completed the acquisition of the remaining 76% of CIF, in accordance with the terms of the Membership Interest Purchase Agreement dated June 28, 2023 by and among the Company, Siegel Suffolk Family, LLC, and R&I Loeb Family, LLC (the “Sellers”). Per the terms of the Membership Interest Purchase Agreement the purchase price was $3.65 million, including $950 thousand in cash at closing and $2.7 million in a promissory note. The promissory note requires a principal payment of $1.2 million in cash on the first anniversary of the closing date, and a payment of $1.5 million in common stock of the Company on the second anniversary of the closing date.

The following presents the unaudited results of operations for the period February 1, 2023 through June 28, ~~2022 (acquisition date) through October 31, 2022~~2023 of CIF.

Schedule of Results of Operations

For the Period
June 28, 2022
through
October 31, 2022
Revenues $ 11,628,434
Net income $ 370,167

~~Note 2 –~~ ~~Business Acquisitions~~

~~The Company accounts for acquisitions in accordance with FASB ASC 805,~~ ~~“Business Combinations”~~ ~~(“ASC 805”), and goodwill in accordance with ASC 350, “~~~~Intangibles — Goodwill and Other”~~ (“ASC 350”). The excess of the purchase price over the estimated fair value of net assets acquired in a business combination is recorded as goodwill. ASC 805 specifies criteria to be used in determining whether intangible assets acquired in a business combination must be recognized and reported separately from goodwill. Amounts assigned to goodwill and other identifiable intangible assets are based on independent appraisals or internal estimates.

	For the Period February 1, 2023 through June 28, 2023
Revenues	$	13,720,817
Net income	$	930,592

On ~~December 23, 2021,~~July 31, 2023, MamaMancini’s Holdings, Inc. filed an amendment to the ~~Company announced~~Articles of Incorporation with the ~~signing~~Secretary of definitive agreements for two acquisitions – T&L and OB, which are gourmet food manufacturers based in New York. The closing of these transactions was completed on December 29, 2021. The Company acquired T&L and OB for a combined purchase price of $~~14.0~~ ~~million, including $11.0~~ ~~million in cash at closing and $3.0~~ ~~million in a promissory note. The promissory note requires annual principal payments of $750,000~~ ~~payable on each anniversary~~State of the ~~closing, together with accrued interest~~State of Nevada to change the Company’s name from “MamaMancini’s Holdings, Inc.” to “Mama’s Creations, Inc.” (the “Name Change”). The Name Change, which was approved by the Company’s stockholders at ~~a rate of three and one-half (3.5%) per annum. The holder of~~its annual meeting on July 31, 2023, did not alter the ~~Note is T&L Acquisition Corp., a wholly-owned subsidiary~~voting powers or relative rights of the Company ~~is guaranteed by~~Common Stock, reflects the ~~Company. The holder has a right~~evolution of ~~set-off against the balance due for any matters which are the subject of an indemnification under the transaction agreements. The cash payment was funded through cash on hand and a $7.5~~ ~~million long-term acquisition note from M&T Bank (see below). Anthony Morello, Jr. will remain as CEO of T&L Acquisition Corp.~~

~~On December 29, 2021,~~ the Company ~~entered into~~from its origins as a ~~Multiple Disbursement Term Loan (“Loan”) with M&T Bank~~home style, old world Italian food company to a broader provider of all-natural specialty prepared refrigerated foods for sale in retailers around the ~~original principal amount of $7,500,000~~ ~~payable in monthly installments over a~~ 60~~-month amortization period.~~country. The ~~Maturity Date of~~Company also amended and restated its Amended and Restated Bylaws, solely to reflect the ~~Loan is~~ ~~January 17, 2027. Interest is payable on~~name change (as amended, the ~~unpaid principal amount of the Loan at a variable rate per annum based on the Company’s Senior Funded Debt/EBITDA Ratio (as defined in the Credit Agreement between Borrower~~“Second Amended and ~~Bank) established with respect to the Borrower as of the date of any advance under the Loan as follows:~~ if the Senior Funded Debt/EBITDA ratio is: (i) greater than 2.25 but less than or equal to 2.50, 4.12 percentage point(s) above one-day (i.e., overnight) SOFR (as defined); (ii) greater than 1.50 but less than or equal to 2.25, 3.62 percentage points above one-day SOFR; or (iii) 1.50 or less, 3.12 percentage points above one-day SOFR. In all events set forth at subsections (i) through (iii) in the preceding sentence, if SOFR shall at any time be less than 0.25%, one-day SOFR shall be deemed to be 0.25% and the foregoing margins shall be applied to the SOFR Index FloorRestated Bylaws”).

~~All of the proceeds of the Loan were utilized to fund the acquisition of T&L and OB.~~

F-7

~~For the three months ended October 31, 2022, T&L had revenue and net income before taxes of approximately $12.6~~ ~~million and approximately $1.7~~ ~~million, respectively. For the three months ended October 31, 2022, OB had revenue and net income before taxes of approximately $1.8~~ ~~million and approximately $257,100, respectively. For the nine months ended October 31, 2022, T&L had revenue and net income before taxes of approximately $30.7~~ ~~million and approximately $1.7~~ ~~million respectively. For the nine months ended October 31, 2022, OB had revenue and net income before taxes of approximately $5.0~~ ~~million and approximately $305,200, respectively. These amounts are included in the condensed statements of operations for the three and nine months ended October 31, 2022.~~

The following presents the unaudited pro-forma combined results of operations for the three and nine months ended October 31, 2021 of T&L and OB with the Company as if the entities were combined on February 1, 2021.

~~Schedule of Pro-forma Combined Results of Operation~~

For the Three
Months Ended
October 31, 2021

For the Nine
Months Ended
October 31, 2021

Revenues $ 18,737,715 $ 48,228,884
Net income $ 281,716 $ 1,469,571
Net income per share - basic $ 0.01 $ 0.04
Weighted average number of shares outstanding 35,728,821 35,683,484

The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisitions been completed as of February 1, 2021 or to project potential operating results as of any future date or for any future periods.

ASC 805 defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date the acquirer achieves control. ASC 805 requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquirer (if any) at the acquisition date, measured at their fair values as of that date. ASC 805 also requires the acquirer to recognize contingent consideration (if any) at the acquisition date, measured at its fair value at that date.

~~The following summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:~~

~~Schedule of Asset Acquired and Liabilities Assumed~~

Assets:
Cash $ 591,458
Accounts receivable 2,715,515
Inventories 1,221,055
Fixed assets, net 503,907
Intangibles 10,574,334
Total identified assets acquired $ 15,606,269

Liabilities:
Accounts payable and accrued expenses $ 1,606,269
Total liabilities assumed 1,606,269

Total net assets acquired $ 14,000,000

The acquisition method of accounting requires extensive use of estimates and judgments to allocate the considerations transferred to the identifiable tangible and intangible assets acquired and liabilities assumed. The amounts used in computing the purchase price differ from the amounts in the purchase agreements due to fair value measurement conventions prescribed by accounting standards.

~~F-8~~

~~The intangible assets acquired include the trademarks and customer relationships.~~

~~The allocation of purchase price is still deemed to be a preliminary allocation because of potential changes in the valuation of intangibles and the acquired fixed assets.~~

~~The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition. All of the goodwill is deductible for tax purposes.~~

Note 32 - Summary of Significant Accounting Policies

Basis of Presentation

The ~~condensed consolidated financial statements and related notes~~accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“~~US GAAP~~”U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of July 31, 2023, and the results of its operations and its cash flows for the periods presented. The unaudited Condensed Consolidated Financial Statements herein should be read together with the historical consolidated financial statements of the Company for the years ended January 31, 2023 and 2022 included in our 2023 Form 10-K. Operating results for the three and six months ended July 31, 2023 are not necessarily indicative of the results that may be expected for the year ending January 31, 2024.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of the Company and its ~~wholly-owned~~wholly owned subsidiaries. All intercompany balances ~~and transactions~~ have been eliminated in consolidation.

The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended January 31, 2022 filed on May 27, 2022. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at January 31, 2022 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending January 31, 2023.

~~Principles of Consolidation~~

The condensed consolidated financial statements include all accounts of the entities as of the reporting period ending dates and for the reporting periods. All inter-company balances and transactions have been eliminated.

Use of Estimates

The preparation of ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements in ~~conformity~~accordance with U.S. ~~generally accepted accounting principles~~GAAP requires management to make estimates and assumptions that affect the amounts reported in the ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements and accompanying notes. The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates and assumptions impact, among others, the following: allowance for doubtful accounts, ~~inventory obsolescence, purchase price accounting and~~ the fair value of ~~share-based payments.~~stock-based payments, valuation of the acquisition of the remaining interest of CIF (which was accounted for as an asset acquisition as substantially all of the fair value is concentrated in customer relationships), inventory reserves, and estimates for unrealized returns, discounts, and other allowances that are netted against revenue.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the ~~condensed consolidated financial statements,~~Condensed Consolidated Financial Statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

Risks and Uncertainties

The Company operates in an industry that is subject to intense competition and ~~change~~changes in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure.

~~F-9~~

The Company has experienced, and in the future expects to continue to experience variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the grocery industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.

Cash

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022.~~2023.

The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. ~~At October 31, 2022, the Company had approximately $2.8~~ ~~million in cash balances that exceed federally insured limits.~~

F-8

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. As of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022,~~2023, the reserve for uncollectible accounts was approximately $~~246,678~~93,000 and $~~2,000~~233,000, respectively. During the three and six months ended July 31, 2023 the Company wrote off approximately $140,000 accounts that were deemed to be uncollectible.

Inventories

~~Inventories are stated~~The Company values its inventory at the lower of cost or net realizable value ~~using~~(“NRV”) and include direct material, direct labor, warehousing, and overhead costs. NRV is defined as the estimated selling prices less the costs of completion, disposal, and transportation. The cost of inventory is determined on the first-in, first-out ~~(FIFO) valuation method. Inventory was comprised~~basis. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on management’s review of ~~the following at October~~inventories on hand compared to estimated future usage and sales. The reserve for obsolescence as of July 31, ~~2022~~2023 and January 31, ~~2022:~~2023 was approximately $126,000 and $32,000, respectively.

Inventories by major category are as follows:

Schedule of Inventories

October 31, 2022 January 31, 2022
Raw Materials $ 1,840,274 $ 1,854,156
Work in Process 135,206 244,974
Finished goods 1,588,479 791,663
Inventories $ 3,563,959 $ 2,890,793

	July 31, 2023		January 31, 2023
Raw materials and packaging	$	1,495,179	$	1,883,270
Work in process		200,437		98,910
Finished goods		1,612,897		1,653,701
Total	$	3,308,513	$	3,635,881

Property, Plant and Equipment

Property, plant, and equipment are recorded at cost net of depreciation. Depreciation expense is computed using straight-line methods over the estimated useful lives.

Asset lives for financial statement reporting of depreciation are:

Schedule of Property and Equipment Estimated Useful Lives

Machinery and equipment			2-7 years
Furniture and fixtures			3-5 years
Leasehold improvements			-**

(*)	Amortized on a straight-line basis over the remaining lease term ofat the ~~lease or~~time the ~~estimated useful lives,~~asset was placed in service, whichever period is shorter.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the ~~condensed~~ consolidated statements of operations.

~~F-10~~

Goodwill and Other Intangible Assets

~~Software~~Goodwill

~~The Company accounts for acquired internal-use software licenses and certain costs within~~Goodwill represents the ~~scope~~excess of ~~ASC 350-40,~~ ~~Intangibles - Goodwill and Other - Internal-Use Software~~ ~~as intangible assets. The Company capitalized $87,639~~ ~~of costs incurred in~~ the ~~year ended January 31, 2021 to implement cloud computing arrangements. Acquired internal-use software licenses are amortized~~purchase price over the ~~term~~fair values of the ~~arrangement on a straight-line basis to the line item within the condensed consolidated statements~~underlying net assets of operations that reflects the nature of the license. In November 2021, the Company finalized the implementation process and began to use the software license. During the three and nine months ended October 31, 2022, the Company recorded amortization of $~~35,410~~ ~~and $66,512, respectively.~~

~~Additionally, the Company evaluates its accounting for fees paid in~~ an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred.

~~Goodwill~~

~~The Company does not amortize goodwill or indefinite-lived intangible assets.~~acquired business. The Company tests goodwill for impairment ~~annually as~~on an annual basis during the fourth quarter of ~~January 31~~its fiscal year, or immediately if ~~an event occurs or circumstances change~~conditions indicate that ~~indicate~~such impairment could exist. The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of the entity, or the reporting unit, may be below its carrying amount (a “triggering event”). Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative factors, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions, industry and market considerations, overall financial performance, Company specific events and share price trends, an assessment of whether each relevant factor will impact the impairment test positively or negatively, and the magnitude of an such impact.

If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

~~Management evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine~~value and whether ~~events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life,~~ it is ~~amortized prospectively over its estimated remaining useful life.~~necessary to perform goodwill impairment process.

As of ~~October~~July 31, ~~2022,~~2023 and January 31, 2023, there were no impairment losses recognized for goodwill.

F-9

Other ~~Intangibles~~Intangible Assets

Other ~~intangibles~~intangible assets consist of trademarks, trade names and customer relationships. Intangible asset lives for financial statement reporting of amortization are:

Schedule of Other Intangible Assets Impairment Losses Recognized for Goodwill

Tradenames and trademarks			3 years
Customer relationships			4 -– 5 years

~~During the three and nine months ended October 31, 2022, the Company recognized amortization of $~~~~101,360~~ ~~and $300,774~~ ~~related to other intangible assets, respectively.~~

~~F-11~~

Fair Value of Financial Instruments

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

Research and Development

Research and development is expensed as incurred. Research and development expenses for the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 were $~~24,432~~94,871 and $~~33,866~~41,792, respectively. Research and development expenses for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 were $~~92,759~~166,056 and $~~87,843~~68,327, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with FASB Topic 606, Revenue from Contracts with Customers (Topic 606).

The Company’s sales ~~predominantly~~ are generated from the sale of finished products to customers, ~~contain~~which contains a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are ~~shipped to~~received and accepted by the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. The Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in selling, general and administrative expenses on the condensed consolidated statements of operations.

The Company promotes its products with ~~advertising,~~ consumer incentives and trade promotions. These programs include discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of a period. The Company derives these estimates principally on historical utilization and redemption rates. The Company does not receive a distinct service in relation to the ~~advertising,~~ consumer incentives and trade ~~promotions.~~promotions and as a result, these incentives and promotions are accounted for as a reduction of the transaction price.

Payment terms in the Company’s invoices are based on the billing schedule established in contracts and purchase orders with customers. The Company recognizes the related trade receivable when the goods are ~~shipped.~~received by the customer.

~~F-12~~

Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows:

Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues

	October 31, 2022		October 31, 2021		July 31, 2023		July 31, 2022
	For the Three Months Ended				For the Three Months Ended
	October 31, 2022		October 31, 2021		July 31, 2023		July 31, 2022
Gross Sales	$	26,044,732	$	11,165,524	$	25,414,735	$	23,631,857
Less: Slotting, Discounts, Allowances		350,819		312,842		624,650		785,383
Net Sales	$	25,693,913	$	10,852,682	$	24,790,085	$	22,846,474

October 31, 2022 October 31, 2021
For the Nine Months Ended
October 31, 2022 October 31, 2021
Gross Sales $ 72,025,181 $ 34,373,119
Less: Slotting, Discounts, Allowances 1,654,214 1,142,453
Net Sales $ 70,370,967 $ 33,230,666
F-10
July 31, 2023 July 31, 2022
For the Six Months Ended
July 31, 2023 July 31, 2022
Gross Sales $ 49,014,645 $ 45,980,449
Less: Slotting, Discounts, Allowances 1,103,744 1,303,395
Net Sales $ 47,910,901 $ 44,677,054

Disaggregation of Revenue from Contracts with Customers. The following table disaggregates gross revenue by significant geographic area for the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:
Schedule of Disaggregates Gross Revenue by Significant Geographic Area
October 31, 2022 October 31, 2021 July 31, 2023 July 31, 2022
For the Three Months Ended For the Three Months Ended
October 31, 2022 October 31, 2021 July 31, 2023 July 31, 2022
Northeast $ 10,326,572 $ 3,542,894 $ 9,385,210 $ 9,066,443
Southeast 7,396,600 4,338,967 7,191,911 6,857,963
Midwest 3,449,245 1,155,233 3,987,565 2,560,178
West 2,452,946 952,910 2,693,758 2,543,230
Southwest 2,419,369 1,175,520 2,156,291 2,604,043
Total revenue $ 26,044,732 $ 11,165,524
Total gross sales $ 25,414,735 $ 23,631,857

The following table disaggregates gross revenue by significant geographic area for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:

October 31, 2022 October 31, 2021 July 31, 2023 July 31, 2022
For the Nine Months Ended For the Six Months Ended
October 31, 2022 October 31, 2021 July 31, 2023 July 31, 2022
Northeast $ 29,453,025 $ 10,270,568 $ 17,951,303 $ 17,755,723
Southeast 19,549,838 13,220,822 13,887,317 12,365,760
Midwest 9,670,751 3,515,194 8,254,563 5,384,977
West 6,931,914 3,818,925 4,615,326 5,442,086
Southwest 6,419,653 3,547,610 4,306,136 5,031,903
Total revenue $ 72,025,181 $ 34,373,119
Total gross sales $ 49,014,645 $ 45,980,449
Cost of Sales

Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include ~~product development,~~production costs, freight-in, packaging, and print production costs.

~~F-13~~
Advertising

Costs incurred for ~~producing and communicating~~ advertising for the Company are charged to ~~operations~~selling, general and administrative expenses as incurred. ~~Producing and communicating advertising~~Advertising expenses for the three months ended ~~October~~July 31, 2023 and 2022 ~~and 2021~~ were approximately $~~99,736~~95,000 and $~~196,495~~119,000 respectively. ~~Producing and communicating advertising~~Advertising expenses for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 were $~~400,655~~304,000 and $~~441,556~~307,000, respectively.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation” (“ASC 718”), which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. ~~The Company accounts for compensation cost for stock option plans in accordance with ASC 718.~~

The Company recognizes all forms of ~~share-based~~stock-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.

~~Share-based~~Stock-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of ~~share-based~~stock-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the ~~share-based~~stock-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold, or selling general and administrative expenses, or research and development, depending on the nature of the services provided, in the condensed consolidated statements of operations. ~~Share-based~~Stock-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction inof additional paid in capital.

~~For the three months ended October 31, 2022 and 2021, share-based compensation amounted to $23,626~~ ~~and $19,681, respectively.~~
~~For the nine months ended October 31, 2022 and 2021, share-based compensation amounted to $35,959~~ ~~and $20,467, respectively.~~
~~F-14~~F-11

For the ~~nine~~three months ended ~~October~~July 31, 2023 and 2022, stock-based compensation related to options amounted to approximately $18,000and ~~2021,~~$12,000, respectively.
For the six months ended July 31, 2023 and 2022, stock-based compensation related to options amounted to approximately $41,000 and $12,000, respectively.
For the three and six months ended July 31, 2023, the Company issued 19,960 shares valued at approximately $50,000 to certain employees as compensation.
For the six months ended July 31, 2023 and 2022, when computing fair value of ~~share-based~~stock-based payments, the Company has considered the following variables:
Schedule of Fair Value of Share-Based Payments
~~October~~July 31, ~~2022~~2023 ~~October~~July 31, ~~2021~~2022
Risk-free interest rate ~~2.77~~N/A % ~~N/A~~ 2.77 %
Expected life of grants ~~6.5~~ ~~years~~N/A ~~N/A~~7.5 years
Expected volatility of underlying stock ~~85.74~~N/A % ~~N/A~~
~~Dividends~~ -85.74 %
Dividends N/A 0 %

The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.
The expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods.
Earnings ~~(Loss)~~ Per Share

~~Earnings~~Basic net income per share ~~(“EPS”) is the amount of earnings~~ attributable to ~~each share of~~ common ~~stock. For convenience, the term~~stockholders excludes dilution and is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing net income ~~available~~or loss attributable to common stockholders ~~(the numerator)~~during the period by the ~~weighted-average~~weighted average number of common shares outstanding ~~(the denominator)~~ during the period. ~~Income available~~Diluted net income or loss per share reflects potential dilution and is computed by dividing net income attributable to common stockholders ~~shall be computed~~ by ~~deducting both~~ the ~~dividends declared in~~weighted average number of common shares outstanding during the period, on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominatorwhich is increased ~~to include~~by the number of additional common shares that would have been outstanding if the ~~dilutive~~ potential common shares had been ~~issued during~~issued. However, if the ~~period to reflect~~effect of any additional securities are anti-dilutive (i.e., resulting in a higher net income per share or lower net loss per share), they are excluded from the ~~potential dilution that could occur from common shares issuable through contingent shares issuance arrangement,~~dilutive net income computation. The dilutive effect of stock options, ~~or warrants.~~warrants, and restricted stock is calculated using the treasury-stock method and the dilutive effect of the Series B Preferred Stock is calculated using the if-converted method.

The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share.
Schedule of Earnings Per Share, Basic and Diluted
October 31, 2022 October 31, 2021
For the Three Months Ended
October 31, 2022 October 31, 2021
Numerator:
Net income (loss) attributable to common stockholders $ 1,085,527 (5,455 )
Effect of dilutive securities: — —

Diluted net income (loss) $ 1,085,527 $ (5,455 )

Denominator:
Weighted average common shares outstanding - basic 36,317,857 35,728,821
Dilutive securities (a):
Series B Preferred - -
Options 296,778 -
Warrants - -

Weighted average common shares outstanding and assumed conversion – diluted 36,614,635 35,728,821

Basic net income (loss) per common share $ 0.03 $ (0.00 )

Diluted net income (loss) per common share $ 0.03 $ (0.00 )

(a) - Anti-dilutive securities excluded:
Series B Preferred shares 708,000 -
Options 30,000 -
Warrants 11,800 -
July 31, 2023 July 31, 2022
For the Three Months Ended
July 31, 2023 July 31, 2022
Numerator:
Net (loss) income attributable to common stockholders $ 1,722,678 (743,246 )
Effect of dilutive securities: 21,233 —

Diluted net income (loss) $ 1,743,911 $ (743,246 )

Denominator:
Weighted average common shares outstanding – basic 36,855,181 35,811,087
Dilutive securities (a):
Restricted stock 251,017 -
Options 384,369
-

Weighted average common shares outstanding and assumed conversion – diluted 37,490,567 35,811,087

Basic net (loss) income per common share $ 0.05 $ (0.02 )

Diluted net (loss) income per common share $ 0.05 $ (0.02 )

(a) – Anti-dilutive securities excluded: - 689,000

~~F-15~~F-12

October 31, 2022 October 31, 2021
For the Nine Months Ended
October 31, 2022 October 31, 2021
Numerator:
Net income attributable to common stockholders $ 445,978 1,057,994
Effect of dilutive securities: — —

Diluted net income $ 445,978 $ 1,057,994

Denominator:
Weighted average common shares outstanding - basic 36,020,209 35,683,484
Dilutive securities (a):
Series B Preferred - -
Options 328,324 493,465
Warrants - -

Weighted average common shares outstanding and assumed conversion – diluted 36,348,534 36,176,949

Basic net income per common share $ 0.01 $ 0.03

Diluted net income per common share $ 0.01 $ 0.03

(a) - Anti-dilutive securities excluded:
Series B Preferred shares 708,000 -
Options 30,000 -
Warrants 11,800 -
Anti-dilutive securities 11,800 -
July 31, 2023 July 31, 2022
For the Six Months Ended
July 31, 2023 July 31, 2022
Numerator:
Net (loss) income attributable to common stockholders $ 3,096,304 (639,549 )
Effect of dilutive securities: 48,533 —

Diluted net income $ 3,144,837 $ (639,549 )

Denominator:
Weighted average common shares outstanding – basic 36,628,429 35,785,719
Dilutive securities (a):
Restricted stock 222,280 -
Options 344,605 -
-

Weighted average common shares outstanding and assumed conversion – diluted 37,195,314 35,785,719

Basic net (loss) income per common share $ 0.09 $ (0.02 )

Diluted net income (loss) per common share $ 0.08 $ (0.02 )

(a) – Anti-dilutive securities excluded: - 689,000

Income Taxes

Income taxes are provided in accordance with ASC 740, “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense ~~(benefit)~~ results from the net change during the period of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets ~~and liabilities~~ are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022,~~2023, the Company recognized a deferred tax asset of $~~350,895~~67,908 and $~~448,501~~717,559, respectively, which is included in other long-term assets on the condensed consolidated balance sheets. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset.

~~Reclassification~~
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported income, total assets, or stockholders’ equity as previously reported.
Recent Accounting Pronouncements
~~In May 2021, the FASB issued accounting standards update ASU 2021-04,~~ “Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in an interim period. The Company adopted the new standard on February 1, 2022 and the adoption of the new standard did not have a significant impact on the Company’s condensed consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies an issuer’s accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance. This update will be effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the new guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The ~~Company is currently evaluating the impact of the pending~~ adoption of the new standard is not expected to have a significant impact on ~~its~~the Company’s consolidated financial ~~statements and intends to adopt the standard as of January 1, 2024.~~statements.
F-13

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying ~~condensed~~ consolidated financial statements.

~~F-16~~
Note ~~4 -~~3 – Property Plant and Equipment:

Property plant and equipment on ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022~~2023 are as follows:
Schedule of Property and Equipment
October 31, 2022 January 31, 2022
July 31, 2023
January 31, 2023
Machinery and Equipment $ 5,311,531 $ 4,934,855 $ 3,669,137 $ 5,387,255
Furniture and Fixtures 281,781 233,615 236,645 284,781
Leasehold Improvements 3,473,116 3,346,610 2,841,159 3,480,061
Property and Equipment, Gross 9,066,428 8,515,080 6,746,941 9,152,097
Less: Accumulated Depreciation 5,486,991 4,836,548 2,679,293 5,729,001
Property and Equipment, Net $ 3,579,437 $ 3,678,532
Total $ 4,067,648 $ 3,423,096

Depreciation expense ~~charged to income~~ for the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 amounted to $~~277,584~~263,176 and $~~145,506~~192,297, respectively. Depreciation expense ~~charged to income~~ for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 amounted to $~~678,710~~511,589 and $~~572,238~~401,126, respectively.

Note 4 – Acquisition of CIF
As described in Note 1, on June 28, 2023, the Company completed the CIF Acquisition. The acquisition of the remaining interest in CIF was accounted for as an asset acquisition as substantially all of the fair value was concentrated in customer relationships. CIF’s assets (except for cash and working capital) were measured and recognized as an allocation of the transaction price based on their relative fair values as of the transaction date. The fair value of total consideration was $5,216,828. The following table is a summary of the purchase price calculation.
Schedule of Purchase Price Calculation
Cash transferred upon acquisition 950,000
Related party debt issued upon acquisition 2,700,000
Sub-total 3,650,000
Carrying value of the Company’s equity method investment in CIF 1,566,828
Total purchase price 5,216,828
The allocation of the purchase price was as follows (amounts in thousands):
Schedule of Allocation of Purchase Price

Cash and cash equivalents $ 304,359
Net working capital (excluding cash) 356,848
Customer relationships 4,555,621
Net assets acquired $ 5,216,828
Note 5 – ~~Intangibles,~~Intangible assets, net

~~Intangibles,~~Intangible assets, net consisted of the following at ~~October~~July 31, ~~2022:~~2023:
Schedule of Intangibles Assets

Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Weighted
Average
Remaining
Life (years)

Software $ 87,639 $ (87,639 ) $ - -
Customer relationships 6,417,621 (700,666 ) 5,716,955 3.79
Tradename and trademarks 79,000 (41,773 ) 37,227 1.41
$ 6,584,260 $ (830,078 ) $ 5,754,182

Gross
Carrying
Amount
Accumulated
Amortization Net Carrying
Amount
Weighted
Average
Remaining
Life

Software $ 87,639 $ (73,815 ) $ 13,824 0.06
Customer relationships 1,862,000 (315,054 ) 1,546,946 4.13
Tradename and trademarks 79,000 (22,077 ) 56,923 2.16
$ 2,028,639 $ (410,946 ) $ 1,617,693
F-14

Intangibles, net consisted of the following at January 31, ~~2022:~~2023:

Gross
Carrying
Amount
Accumulated
Amortization Net Carrying
Amount Weighted
Average
Remaining
Life
Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Weighted
Average
Remaining
Life

Software $ 87,639 $ (7,303 ) $ 80,336 2.91 $ 87,639 $ (87,639 ) $ - -
Customer relationships 1,862,000 (33,976 ) 1,828,024 4.87 1,862,000 (409,776 ) 1,452,224 3.41
Tradename and trademarks 79,000 (2,381 ) 76,619 2.91 79,000 (28,714 ) 50,286 1.91
$ 2,028,639 $ (43,660 ) $ 1,984,979 $ 2,028,639 $ (526,129 ) $ 1,502,510
As described in Note 1 and 4, on June 28, 2023, the Company completed the CIF Acquisition which resulted in the recognition of Customer relationships in the amount of $4,555,621.

Amortization expense for the three and ~~nine~~six months ended ~~October~~July 31, 2023 was $202,053 and $303,949, respectively.
Amortization expense for the three and six months ended July 31, 2022 was $~~137,131~~116,986 and $~~367,286~~230,156, respectively.

We expect the estimated aggregate amortization expense for each of the five succeeding fiscal years to be as follows:
Schedule of Estimated Aggregate Amortization Expense

2023 (remaining) $ 115,184
2024 402,133
2025 400,782
2026 374,216
2027 325,378
Total $ 1,617,693
~~F-17~~

2024 (Remaining) $ 768,954
2025 1,538,766
2026 1,513,238
2027 1,466,741
2028 466,483
Total $ 5,754,182
Note 6 - – Related Party Transactions
~~WWS, Inc.~~
~~Alfred D’Agostino, a director of the Company, is an affiliate of WWS, Inc.~~
~~For the three months ended October 31, 2022 and 2021, the Company recorded $12,000~~ ~~in commission expense from WWS, Inc. generated sales. For the nine months ended October 31, 2022 and 2021, the Company recorded $36,000~~ ~~in commission expense from WWS, Inc. generated sales.~~

Promissory Note – Related Party

Upon consummation of the acquisition of T&L and Olive Branch on December 29, 2021, the Company executed a $3,000,000 promissory note with the sellers. The promissory note requires annual principal payments of $750,000 payable on each anniversary of the closing, together with accrued interest at a rate of three and one-half (3.5%) per annum. As of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022,~~2023, the outstanding balance under the note ~~including~~was $2,250,000, respectively, of which $750,000 is recorded as Promissory notes – related parties and $1,500,000 is recorded as Promissory notes – related parties, net of current in the Company’s Condensed Consolidated Balance Sheets. For the three and six months ended July 31, 2023 interest expense for this note was $20,137 and $39,451 respectively. For the three and six months ended July 31, 2022 interest expense for this note was $27,237 and $53,356 respectively. As of July 31, 2023 and January 31, 2023, accrued interest was $~~3,089,170~~46,140 and $~~3,009,917, respectively. Interest expense related to this note was $25,897~~ ~~and $79,253~~ ~~for the three and nine months ended October 31, 2022, respectively. As of October 31, 2022 and January 31, 2022, accrued interest was $89,170~~ ~~and $9,917~~6,688, respectively.

As part of the purchase price of the remaining interest in CIF, the Company agreed to pay $600,000 to each Seller in cash by bank check(s) or wire transfer(s), without interest, on the first anniversary of the closing date and $750,000 shall be paid by the Company to each seller in common stock of the Company, without interest, on the second anniversary of the Closing Date. As of July 31, 2023 $1,200,000 is recorded as Promissory notes – related parties and $1,500,000 is recorded as Promissory notes – related parties, net of current in the Company’s Condensed Consolidated Balance Sheet.
F-15
Lease – Related Party

The Company leases a fully contained facility in Farmingdale, NY from 148 Allen Blvd LLC for production and distribution of T&L Creative Salads and Olive Branch products. 148 Allen Blvd LLC is owned by Anthony Morello, Jr., ~~CEO~~President of T&L ~~Acquisition Corp., a 100% owned subsidiary of the Company.~~and various individuals related to Mr. Morello. This lease term is through November 30, 2031 with the option to extend the lease for two additional ten-year terms with base rent of $20,200 per month through December 31, 2026, increasing after that date to $23,567 through the end of the initial lease term. The exercise of optional renewal is uncertain and therefore excluded from the calculation of the right of use asset. Rent expense and other ancillary charges pursuant to the lease for the three and ~~nine~~six months ended ~~October~~July 31, 2023 was $105,691 and $171,299, respectively. Rent expense and other ancillary charges pursuant to the lease for the three and six months ended July 31, 2022 was $65,608 and $~~196,824~~131,216, respectively.

Chef Inspirational Foods, ~~Inc.~~LLC – Related Party

As noted above in Note 1, the Company ~~acquired~~owned a 24% minority interest in ~~Chef Inspirational Foods, Inc. (“CIF”)~~CIF (until June 28, 2023). ~~During~~For the ~~three~~period from May 1, 2023 to June 28,2023 and ~~nine months ended October 31, 2022, T&L~~the period from February 1, 2023 to June 28, 2023, the Company recorded sales of $~~5,388,611~~4,349,203 and $~~7,339,502~~10,889,277 with ~~CIF, respectively,~~CIF. As of ~~which $1,258,015~~ ~~was outstanding and included in accounts~~January 31, 2023, the Company had an account receivable ~~on the accompanying condensed consolidated~~ balance ~~sheets at October 31, 2022. During the three and nine months ended October 31, 2022, OB recorded commission expense~~with CIF of $~~75,465~~1,449,009. On June 28, 2023 the Company acquired the remaining interest in CIF (refer to Note 1 and $~~80,565~~ ~~based on its transactions with CIF, respectively, of which $53,392~~ ~~was due to CIF and is included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets at October 31, 2022.~~4).
~~Other Related Party Transactions~~
~~During the nine months ended October 31, 2022, the members of the board of directors and the CFO exercised~~ ~~130,000~~ ~~options at an average exercise price of $1.03~~ ~~per share in exchange for~~ ~~57,093~~ ~~shares of common stock. During the nine months ended October 31, 2021, six employees exercised~~ ~~200,000~~ ~~options with an average exercise price of $0.81~~ ~~in exchange for~~ ~~148,061~~ ~~shares of common stock.~~
Note 7 -– Loan and Security ~~Agreement~~Agreements

M&T Bank

~~Effective, January 4, 2019, the~~The Company ~~obtained~~has a $~~3.5~~ ~~million~~ working capital line ~~of credit~~ with M&T Bank ~~at LIBOR plus four points~~(the “Credit Agreement”) with a ~~two-year~~ ~~expiration. On January 29, 2020, the facility was amended to increase the~~ total available ~~balance to~~borrowings of $~~4.0~~5.5 ~~million as well as extend~~million. On July 18, 2023 the ~~maturity date to~~ ~~June 30, 2022. On June 11, 2021, the line was amended to increase the available borrowings to $4.5~~ ~~million and~~Company extended the maturity ~~date to~~ ~~June 30, 2023. On October 26, 2022,~~of the working capital line ~~was amended to increase the available borrowings to $5.5~~ ~~million and extended the maturity date to~~ from June 30, 2024 to October 31, 2025~~, interest~~. Interest is payable on the unpaid principal amount of the Loan at a variable rate per annum based on the Company’s Senior Funded Debt/EBITDA Ratio (as defined in the Credit ~~Agreement between Borrower and Bank) established with respect to the Borrower~~Agreement) as of the date of any advance under the ~~Loan~~Credit Agreement as follows: if the Senior Funded Debt/EBITDA ratio is: (i) greater than 2.25, ~~but less than or equal to 2.50, 4.12~~3.87 percentage point(s) above one-day (i.e., overnight) SOFR (as defined); (ii) greater than 1.50 but less than or equal to 2.25, ~~3.62~~3.37 percentage points above one-day SOFR; or (iii) 1.50 or less, ~~3.12~~2.87 percentage points above one-day SOFR. In all events set forth at subsections (i) through (iii) in the preceding sentence, if SOFR shall at any time be less than 0.25%, one-day SOFR shall be deemed to be 0.25% and the foregoing margins shall be applied to the SOFR Index Floor. ~~As part of the extension in June 2021 the Company incurred financing fees of $5,000~~. These fees are recorded as deferred financing fees and are included in prepaid expenses and other current assets on the balance sheet. These fees are amortized over the remaining life of the line of credit. As of October 31, 2022 and January 31, 2022, there were unamortized fees of $~~2,917~~ ~~and $3,542, respectively.~~ The ~~facility~~Credit Agreement is ~~supported~~secured by a first priority security interest in all of the Company’s business assets and is further subject to various affirmative and negative financial covenants. The Company was in compliance with the covenants as of ~~October~~July 31, ~~2022. The covenants were waived by the bank as of~~2023 and January 31, ~~2022.~~2023. Advances under the line of credit are limited to eighty percent (80%) of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration provisions) and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation). All advances under the line of credit are due upon ~~maturity.~~maturity. The outstanding balance on the line of credit was $~~990,000~~500,000 and $~~765,000~~890,000 as of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022,~~2023, respectively. During the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company incurred interest of $~~33,760~~26,244 and $032,943, respectively, pursuant to ~~M&T Bank for~~borrowings under the ~~line of credit agreement, respectively.~~Credit Agreement. During the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company incurred interest of $~~79,732~~46,776 and $049,053, respectively, pursuant to ~~M&T Bank for~~borrowings under the ~~line of credit agreement, respectively.~~Credit Agreement.

~~F-18~~
~~As discussed above in Note 2, on~~On December 29, 2021, the Company entered into a ~~loan~~Multiple Disbursement Term Loan with M&T Bank, which was amended and restated on October 26, 2022, for the original principal amount of $7,500,000payable in equal monthly principal installments over a 60-month amortization period (the ~~“Acquisition Note”~~“Term Loan Agreement”). The ~~Maturity Date~~maturity date of the ~~Acquisition Note~~Term Loan Agreement is January 17, 2027. Interest is payable on the unpaid ~~Principal Amount of~~principal under the ~~Acquisition Note~~Term Loan Agreement at a variable rate per annum based on the Company’s Senior Funded Debt/EBITDA Ratio (as defined in the ~~Credit Agreement between Borrower and Bank) established with respect to the Borrower~~Term Loan Agreement) as of the date of any advance under the ~~Acquisition Note~~Term Loan Agreement as follows: if the Senior Funded Debt/EBITDA ratio is: (i) greater than ~~2.00 but less than or equal to~~ 2.25, ~~3.87~~4.12 percentage point(s) above ~~one-day (i.e., overnight) applicable~~the Variable Loan Rate (as defined in the agreement); (ii) greater than 1.50 but less than or equal to 2.25, ~~3.37~~3.62 percentage points above Variable Loan Rate; or (iii) less than or equal to 1.50, ~~or less, 2.87~~3.12 percentage points above applicable Variable Loan Rate. In all events set forth at subsections (i) through (iii) in the preceding sentence, if SOFR shall at any time be less than 0.25%, one-day SOFR shall be deemed to be 0.00% and the foregoing margins shall be applied to the Variable Loan ~~Rates.~~Rates ~~The Company recorded a debt~~. All disbursements available under the Term Loan Agreement have been previously made. As of July 31, 2023, the outstanding balance and unamortized discount of the Term Loan Agreement was $~~58,750~~ ~~in relation to the debt. For the three and nine months ended October 31, 2022, the Company recorded $3,015~~5,431,042 and $~~9,045~~49,022 ~~in accretion of the debt discount,~~, respectively. As of ~~October~~January 31, ~~2022,~~2023, the outstanding balance and unamortized discount of the Acquisition Note was $~~6,594,828~~6,206,905 and $~~48,726, respectively. As of January 31, 2022, the outstanding balance and unamortized discount of the Acquisition Note was $7,500,000~~ ~~and $57,771~~60,082, respectively. During the three and ~~nine~~six months ended ~~October~~July 31, 2023, the Company incurred interest of $117,606 and $237,315 for the Acquisition Note, respectively. During the three and six months ended July 31, 2022, the Company incurred interest of $~~114,408~~73,484 and $~~233,572~~148,606 for the Acquisition Note, respectively.

F-16
Note 8 -– Concentrations

Revenues

~~During~~For the ~~three~~six months ended ~~October~~July 31, 2023, the Company’s revenue was concentrated in three customers that accounted for approximately 22%, 13%, and 11% of gross revenue, respectively. For the six months ended July 31, 2022, ~~and 2021~~ the Company’s ~~concentration~~revenue was concentrated in three customers that accounted for approximately 24%, 13%, and 12% respectively, of ~~revenue is as follows:~~
~~Schedule of Concentration of Revenue~~
For the Three Months
Ended
October 31,
2022 October 31,
2021

Customer
A 28 % -* %
B 13 % 23 %
C 8 % 13 %
D 7 % -* %
E 5 % 29 %
~~Notes:~~
* ~~% - Not a customer during the period~~
~~A - These amounts are sales from Chef Inspiration Foods, a related party.~~gross revenue.

For the three months ended ~~October~~July 31, ~~2022,~~2023, the ~~largest 3~~Company’s revenue was concentrated in three customers ~~represent~~that accounted for approximately 2818%, 1317%, and 8~~% totaling~~ 4910% of gross ~~sales with the largest 5 customers representing~~ 61~~% of gross sales in the same period.~~revenue, respectively. For the three months ended ~~October~~July 31, ~~2021,~~2022, the Company’s revenue was concentrated in three ~~largest~~ customers ~~represented~~that accounted for approximately 2923%, 2314%, and 12% ~~and~~ 13~~% totaling~~ 65%respectively, of gross ~~sales.~~revenue.

~~During the nine months ended October 31, 2022 and 2021 the Company’s concentration of revenue is as follows:~~Receivables
For the Nine
Months Ended
October 31,
2022 October 31,
2021

Customer
A 26 % -* %
B 13 % 20 %
C 10 % 32 %
D 7 % -* %
E 6 % 11 %
~~Notes:~~As of July 31, 2023 one customer represented approximately 40
* ~~% - Not a customer during the period~~
~~A - These amounts are sales from Chef Inspiration Foods, a related party.~~
~~F-19~~
~~For~~% of the ~~nine months ended October~~total gross outstanding receivables. As of January 31, ~~2022, the largest 3~~2023, three customers ~~represent~~represented approximately 2620%, 13~~% and~~ 10~~% of gross sales with the largest 5 customers representing~~ 62~~% of gross sales in the same period. For the nine months ended October 31, 2021, the three largest customers represented~~ 31%, 2215% and 11%, totaling 64~~% of gross sales.~~
~~As of October 31, 2022, five customers represented approximately~~ 1846%,13%, 13%, 4~~% and~~ 6~~% totaling~~ 54~~% of total gross outstanding receivables, respectively. As of October 31, 2021, these three customers represented approximately~~ 26%, 17~~% and~~ 14% of total gross outstanding receivables, respectively.

Note 9 -– Stockholders’ Equity

Preferred Stock and Series BA Preferred Stock

The Company is authorized to issue 20,000,000 shares of Preferred Stock, $0.00001 par value per share. The Company has designated 120,000 shares of Preferred Stock as Series A Convertible Preferred stock. As of July 31, 2023 and January 31, 2023, no shares of Series A Convertible Preferred Stock are issued and outstanding. The Company has designated 200,000 shares of preferred stock, $~~0.00001~~ ~~par value per share, for each of the~~ Series B ~~Preferred.~~ Preferred Stock.
Series B Preferred Stock
The holders of the Series B Preferred Stock shall be entitled to receive, upon liquidation, dissolution or winding up of the Company, the original issue price, plus any dividends declared but unpaid or the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares of Series B Preferred Stock if such shares had been converted to common stock immediately prior to such liquidation.

Holders of the Series B Preferred Stock ~~are~~were entitled to receive cumulative cash dividends at an annual rate of eight percent (8%). Holders of the Series B Preferred Stock ~~shall have~~had no voting rights.Each share of Series B Preferred Stock ~~shall be~~was convertible, at the option of the holder, into shares of common stock at a rate of 1 share of Series B Preferred Stock into 15 shares of common stock. ~~During~~The Company was able to force conversion at $2.00 per share of Common Stock at any time after six (6) months after issue if the ~~three and nine~~Common Stock has a closing price of $2.00 or higher in any 20 consecutive trading days. After 18 months, ~~ended October 31, 2022,~~ the Company ~~declared dividends of $12,413, of which~~could force holders to convert at a 20% discount to the most recent 20-day average closing price per share. The Company ~~paid $11,313~~.also has the right to cause a conversion following a Fundamental Change.

On September 13, 2022, the Company closed the first round of the Series B Preferred Stock offering with the sale of 47,200 shares, raising gross proceeds of $1,180,000. On November 17, 2022, the company held a final closing of its offering of Series B Preferred Stock, wherein it sold an additional 7,400 shares of Series B. Preferred Stock for gross proceeds of $185,000

As of January 31, 2023 there were 54,600 shares of Series B Preferred Stock outstanding. On June 22, 2023, all the holders of the Series B Preferred Stock converted the shares of Series B Preferred Stock into 819,000 shares of Common Stock of the Company. As of July 31, 2023, no shares of Series B Preferred Stock remain outstanding.
During the three months ended July 31, 2023 and 2022, the Company paid dividends of $21,233 and $0, respectively.
During the six months ended July 31, 2023 and 2022, the Company paid dividends of $48,533 and $0 respectively.
F-17
Restricted Stock Units

During the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, the Company awarded ~~the CEO a grant of~~ ~~147,059~~39,733 restricted stock units (“RSUs”) to certain employees with aan aggregate grant date fair value of $~~200,000~~70,000. The RSUs will be expensed over the requisite service period. The terms of the RSUs include vesting provisions based solely on continued service. If the service criteria ~~are~~is satisfied, the RSUs will vest ~~during September 2023, September 2024, September 2025 and September 2026. As of October 31, 2022, there were~~ ~~147,059~~ ~~unvested shares.~~
~~During the three and nine months ended October 31, 2022, the Company recognized share-based compensation related to restricted stock units of an aggregate of $7,671and unrecognized share-based compensation of $192,329~~.in equal installments over a three-year period.

The following is a summary of the Company’s restricted stock units activity:
Schedule of Restricted Stock Option Activity

Restricted
Stock Units
Weighted Average
Exercise Price
Restricted
Stock Units

Weighted Average
Exercise Price

Unvested – February 1, 2022 14,000 $ 2.83
Unvested – February 1, 2023 367,647 $ 1.36
Granted 147,059 $ 1.36 39,773 $ 1.76
Vested - $ - - $ -
Forfeited (14,000 ) $ 2.83 - $ -
Outstanding – October 31, 2022 147,059 $ 1.36
Outstanding – July 31, 2023 407,420 $ 1.40

~~For~~During the three and ~~nine~~six months ended ~~October~~July 31, ~~2021,~~2023, the Company recognized ~~share-based~~stock-based compensation related to restricted stock units of an aggregate of $37,083 and $~~18,933~~69,612, respectively, which was recorded to selling, general and administrative expense on the Condensed Consolidated Statement of Operations, and there was unrecognized stock-based compensation of $449,960 as of July 31, 2023 related to future vesting of restricted stock units.
~~F-20~~

Options

The following is a summary of the Company’s option activity:
Summary of Option Activity
Options Weighted Average
Exercise Price
Outstanding – February 1, 2022 669,000 $ 0.66
Exercisable – February 1, 2022 666,500 $ 0.65
Granted 150,000 $ 1.48
Exercised (130,000 ) $ 1.00
Outstanding – October 31, 2022 689,000 $ 0.77
Exercisable – October 31, 2022 539,000 $ 0.57
Options
Weighted Average
Exercise Price

Weighted
Average
Remaining
Contractual Life
(in years)

Aggregate Intrinsic Value

Outstanding – February 1, 2023 689,000 $ 0.77 2.95 $ 544,760
Granted - $ -
Exercised 206,000 $ 0.40
Expired/forfeited - -
Outstanding – July 31, 2023 483,000 $ 0.92 2.68 $ 1,347,410
Exercisable – July 31, 2023 370,500 $ 0.75 1.55 $ 1,096,535

During the three months ended July 31, 2023, there were 6,000
~~Summary~~ options exercised at a weighted average exercise price of ~~Option Outstanding~~$1.38 per share and ~~Exercisable~~
Options Outstanding Options Exercisable
Exercise Price Number
Outstanding Weighted
Average
Remaining
Contractual
Life
(in years) Weighted
Average
Exercise Price Number
Exercisable Weighted
Average
Exercise
Price
$ 0.39 – 1.48 689,000 2.57 $ 0.77 539,000 $ 0.57
~~At October 31, 2022,~~resulted in the ~~total intrinsic value~~issuance of ~~options outstanding and exercisable was~~6,000 shares of common stock. The Company received $~~257,379~~8,280. for the exercise of these options.

During the ~~nine~~six months ended ~~October~~July 31, ~~2022, the members of the board of directors and the CFO exercised~~2023, there were ~~130,000~~206,000 options exercised at ana weighted average exercise price of $~~1.00~~0.40 per share and resulted in ~~exchange for~~the issuance of ~~57,093~~172,920 shares of common stock. The Company received $27,780
~~During~~ for the ~~nine months ended October 31, 2021, seven employees exercised~~exercise of these options, as a ~~total~~portion of ~~200,000~~the options ~~at an average exercise price of $0.81~~ ~~per share for aggregate proceeds of $19,080~~ ~~in exchange for~~ ~~148,061~~ ~~shares of common stock.~~were cashless exercised.

For the ~~three~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company recognized ~~share-based~~stock-based compensation related to options of an aggregate of $~~15,955~~40,561 and $~~748~~12,333, respectively, which is included in selling, general and administrative expenses on the accompanying ~~condensed consolidated statements of operations. For the nine months ended October 31, 2022 and 2021, the Company recognized share-based compensation related to options of an aggregate of $28,288~~ ~~and $1,534, respectively, which is included in general and administrative expenses on the accompanying condensed~~ consolidated statements of operations. At ~~October~~July 31, ~~2022,~~2023, there was unrecognized ~~share-based~~stock-based compensation related to the issuance of options of $~~144,115~~79,928.

F-18
Warrants

~~In conjunction with the Series B Preferred offering, the placement agent received one warrant for every $100~~ ~~invested. The fair value of the warrants as of grant date was $16,520~~ ~~and was valued using a Black-Scholes option pricing model using the following assumptions:~~
~~Schedule of Warrants Fair Value Assumption~~
September 13,
2022
~~Risk-free interest rate~~ ~~3.58~~ %
~~Expected life of grants~~ 5 ~~years~~
~~Expected volatility of underlying stock~~ ~~82.52~~ %
~~Dividends~~ 0 %
The following is a summary of the Company’s warrant activity:
Schedule of Warrants Activity
Warrants Weighted Average
Exercise Price
Outstanding – February 1, 2022 - $ -
Exercisable – February 1, 2022 - $ -
Granted 11,800 $ 2.25
Exercised - $ -
Outstanding – October 31, 2022 11,800 $ 2.25
Exercisable – October 31, 2022 11,800 $ 2.25
Warrants Weighted Average Exercise Price
Outstanding – February 1, 2023 13,650 $ 2.25
Exercisable – February 1, 2023 13,650 $ 2.25
Granted - $
Exercised 13,650 $ -
Outstanding – July 31, 2023 - $ -
Exercisable – July 31, 2023 - $ -

~~Schedule~~During the three months ended July 31, 2023, the Company issued 13,650 shares of ~~Warrants Outstanding and Exercisable~~common stock upon the cashless exercise of the warrants.
Warrants Outstanding Warrants Exercisable
Exercise Price Number
Outstanding Weighted
Average
Remaining
Contractual
Life
(in years) Weighted
Average
Exercise
Price Number
Exercisable Weighted
Average
Exercise
Price
$ 2.25 11,800 4.87 $ 2.25 11,800 $ 2.25
~~At October 31, 2022, the total intrinsic value of warrants outstanding and exercisable was $~~0.
~~F-21~~
Note 10 - Commitments and Contingencies
~~Insurance Claim~~
The Company maintains insurance for both property damage and business interruption relating to catastrophic events, such as fires. Insurance recoveries received for property damage and business interruption in excess of the net book value of damaged assets, clean-up and demolition costs, and post-event costs are recognized as income in the period received or committed when all contingencies associated with the recoveries are resolved. Gains on insurance recoveries related to business interruption are recorded within “Cost of sales” and any gains or losses related to property damage are recorded within “Other income (expense)” on the condensed consolidated statements of income.
On December 7, 2020, the Company experienced a fire at its plant in a spiral oven. The spiral oven was rebuilt and was fully put back into service in late February 2021. The estimated loss was approximately $~~656,700~~ which included loss of business, the rebuild of the spiral oven, additional expenses to clean plant and lost material and packaging. During the nine months ended October 31, 2021, the Company received $~~152,850~~ relating to business interruption insurance which was recorded as a component of costs of sales on the condensed consolidated statements of income. The Company received the remaining amount of proceeds for the property damage claim, resulting in other income of $~~91,312. This amount was offset by repairs and maintenance expense of $12,475~~ ~~as well as the costs of additions and parts of the oven and roof totaling $47,669. No additional proceeds were received or costs incurred during the nine months ended October 31, 2022.~~
Litigation, Claims and Assessments

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
Licensing and Royalty Agreements

On March 1, 2010, the Company was assigned a Development and License agreement, dated January 1, 2009, with Daniel Dougherty (the ~~“Agreement”~~“License Agreement”). Under the terms of the License Agreement the ~~Licensor~~licensor shall exclusively develop for the Company a line of beef meatballs with sauce, turkey meatballs with sauce and other similar meats and sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and collectively the “Licensor Products”). Licensor shall work with ~~Licensee~~the Company to develop Licensor Products that are acceptable to ~~Licensee.~~the Company. Upon acceptance of a Licensor Product by Licensee, Licensor’s trade secret recipes, formulas methods and ingredients for the preparation and production of such Licensor Products (the “Recipes”) shall be subject to ~~this Development and~~the License Agreement.

The ~~Exclusive Term~~exclusive term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date.

The ~~Royalty Rate shall be:~~royalty rate payable by the Company is: 6% of net sales up to $500,000 of net sales (as defined in the agreement) for each ~~Agreement year;~~year under the License Agreement; 4% of ~~Net Sales~~net sales from $500,000 up to $2,500,000 of ~~Net Sales~~net sales for each ~~Agreement year;~~year under the License Agreement; 2% of ~~Net Sales~~net sales from $2,500,000 up to $20,000,000 of ~~Net Sales~~net sales for each ~~Agreement year;~~year under the License Agreement; and 1% of ~~Net Sales~~net sales in excess of $20,000,000 of ~~Net Sales~~net sales for each ~~Agreement year.~~year under the License Agreement.
~~F-22~~

In order to continue ~~the Exclusive term,~~exclusivity, the Company shall pay a minimum royalty ~~with respect to the preceding Agreement year as follows:~~of $125,000 each year.
~~Schedule of Royalty Minimum Payment by Preceding Agreement Year~~
Agreement Year Minimum Royalty
to be Paid with
Respect to Such
Agreement Year
1^stand 2^nd $ -
3^rdand 4^th $ 50,000
5^th, 6^thand 7^th $ 75,000
8^thand 9^th $ 100,000
10^thand thereafter $ 125,000

The Company incurred approximately $~~116,912~~129,000 and $~~99,457~~125,000 of royalty expenses for the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The Company incurred approximately $~~391,887~~318,000 and $~~391,433~~275,000 of royalty expenses for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, respectively. Royalty expenses are included in selling, general and administrative expenses on the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations.~~
~~Agreements with Placement Agents and Finders~~
~~Spartan Capital, LLC~~
The Company entered into a fourth Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective April 1, 2015 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, if the Company enters into a change of control transaction during the term of the agreement through October 1, 2022, the Company shall pay to Spartan a fee equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction. Upon consummation of the acquisition of T&L and OB in December 2021, the Company paid Spartan $~~401,322~~ ~~pursuant to the advisory agreement. Based on this agreement with Spartan, during the nine months ended October 31, 2022, the Company paid Spartan $36,000~~ ~~upon the consummation of CIF purchase.~~
~~AGES Financial Services. Ltd.~~
On July 6, 2022, the Company executed a Proposed Offering Engagement Letter with AGES Financial Services. Ltd. (“AGES”) to act as a non-exclusive (i) dealer-manager, (ii) placement agent and/or (iii) financial advisor for a proposed issuance, or series of issuances, for up to $~~5,000,000~~ of the Company’s Series B Convertible Preferred Stock (“Proposed Offering”) in a private placement to be conducted by the Company pursuant to the exemption from the registration requirements of the Securities Act provided by Rule 506(b) of Regulation D promulgated by the Commission under the Securities Act of 1933, as amended. Unless terminated prior to December 31, 2022, the period of the Engagement runs from July 5, 2022 through December 31, 2022.
In consideration for its services in the Proposed Offering, AGES shall be entitled a cash fee equal to four percent (4%) of the net dollar amount received by the Company from investors sourced by AGES plus five-year warrants to buy Common Stock of the Company at the rate of 1 warrant for every $100 of such net dollar amount. The Company shall be responsible for payment of all expenses relating to the proposed offering, including but not limited to costs associated with the registration of any Common Stock which may be issued upon conversion of the Series B Convertible Preferred Stock.
~~Series B Preferred Shares to be Issued~~
~~During October 2022, the Company received net proceeds of $185,000~~ from accredited investors pursuant to the above Offering which has yet to close and the shares have yet to be issued. The funds received are to be used for working capital purposes. The outstanding amount as of October 31, 2022 was $~~185,000~~ ~~and is shown as “Liability for Series B Preferred Shares to be issued, net” on the accompanying condensed consolidated balance sheets.~~ ~~On November 17, 2022, the Company held a final closing of its offering of Series B Preferred Stock, wherein it sold an additional~~ ~~7,400~~ ~~shares of Series B Preferred Stock for gross proceeds of $185,000~~.
~~F-23~~
~~Appointment of Chief Executive Officer~~
On June 21, 2022, the Board approved the appointment of Mr. Adam L. Michaels as the Company’s Chief Executive Officer and member of the Board of Directors, effective as of September 6, 2022. As compensation for his services, the Company shall pay Mr. Michaels an annual base salary of $~~325,000~~ for a 5-year period ending September 5, 2027. In addition to his base salary, Mr. Michaels is eligible for an annual bonus and equity awards. These equity awards include annual restricted stock units, sign on stock units, performance stock units and profit-sharing units which will vest as defined in the employment agreement.
~~Appointment of Chief Financial Officer~~
On September 12, 2022, the Board approved the appointment of Mr. Anthony J. Gruber as the Company’s Chief Financial Officer, effective as of September 12, 2022. As compensation for his services, the Company shall pay Mr. Gruber an annual base salary of $~~250,000~~ for a 5-year period ending September 11, 2027. In addition to his base salary, Mr. Gruber is eligible for an annual bonus and equity awards. These equity awards include performance stock units which will vest as defined in the employment agreement.Operations.

Note 11 –Leases
We account for leases in accordance with ASC 842 “Leases” (“ASC 842”). We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration.
We have operating leases for offices and other facilities used for our operations. We also have finance leases comprised primarily of machinery and equipment. Our leases have remaining lease terms of approximately 1 year to 8.25 years.
F-19
Supplemental cash flow and other information related to leases was as follows:
Schedule of Supplemental Cash Flow and Other Information Related to Leases
July 31, 2023 July 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases $ (134,862 ) $ (176,534 )
Financing cash flows from finance leases (92,724 ) (130,626 )
The following table shows the weighted average lease term and weighted average discount rate for our ROU assets:
July 31, 2023 January 31, 2023
Weighted average remaining lease term (in years)
Operating leases 7.00 7.50
Finance leases 4.28 2.60

Weighted average discount rate:
Operating leases 4.85 % 4.85 %
Finance Leases 5.86 % 3.41 %
Maturities of lease liabilities for each of the succeeding fiscal years are as follows:
Schedule of Future Minimum Payments Required Under Maturities of Lease Liabilities
For the Twelve months ended January 31,
2024 $ 486,910
2025 951,205
2026 847,464
2027 691,145
2028 713,501
Thereafter 1,454,059
Total lease payments $ 5,144,284
Less: amounts representing interest (748,544 )
Total lease obligations $ 4,395,740
Note 12 - Income ~~Taxes~~Tax Provision

The Company’s effective tax rate for the three and ~~nine~~six months ending ~~October~~July 31, ~~2022~~2023 is ~~21.8~~19.8%% and ~~22.4~~23.2%~~%, respectively.~~. Differences with statutory rate primarily relate to state taxes. Deferred tax assets are net operating loss carryforwards and other assets.

Deferred taxes are caused primarily by net operating loss carryforwards. ~~U.S. Tax Legislation enacted in 2017 (the “TCJA”) has significantly changed certain aspects of U.S. federal income taxation.~~ Net Operating Losses (“NOLs”) generated in 2017 and prior years can be carried forward for 20 years. NOLs generated in 2018 – 2020, as enacted by the CARES Act, can be carried forward indefinitely. However, NOLs generated in 2021 are also carried forward indefinitely but limited to 80% of taxable ~~income.~~income.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. There was no valuation allowance as of ~~October~~July 31, ~~2022~~2023 or January 31, ~~2022.~~2023.

The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

The actual yearly tax rate will vary due to numerous factors, such as level and geographic mix of income and losses, acquisitions, investments, intercompany transactions, our stock price, changes in our deferred tax assets and liabilities and their valuation, changes in the laws, regulations, administrative practices, principles, and interpretations related to tax, including changes to the global tax framework and other laws and accounting rules in various ~~jurisdictions~~
~~Note 12 –~~ ~~Subsequent Events~~
~~On November 17, 2022, the Company held a final closing of its offering of Series B Preferred Stock, wherein it sold an additional~~ ~~7,400~~ ~~shares of Series B Preferred Stock for gross proceeds of $185,000~~.jurisdictions.

~~F-24~~F-20

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD- LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” DETAILED IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K, OTHER PRIOR COMPANY FILINGS AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

Results of Operations for the ~~Quarter ended October~~Three Months Ended July 31, ~~2022~~2023 and ~~2021~~2022

The following table sets forth the summary of the condensed consolidated statements of operations for the ~~quarter~~three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:

For the Three Months Ended For the Three Months Ended
October 31, 2022 October 31, 2021 July 31, 2023 July 31, 2022

Sales - Net of Slotting Fees and Discounts $ 25,693,913 $ 10,852,682
Net Sales $ 24,790,085 $ 22,846,474
Cost of Sales $ 17,283,847 $ 20,119,862
Gross Profit $ 6,564,206 $ 2,645,743 $ 7,506,238 $ 2,726,612
Operating Expenses $ (5,065,645 ) $ (2,644,542 ) $ 5,230,408 $ 3,557,907
Other Expenses $ (186,859 ) $ (8,731 ) $ (179,739 ) $ (139,483 )
Income Tax Benefit (Provision) $ (285,686 ) $ 2,075
Income from equity method investment in Chef Inspirational $ 71,924 $ -
Income Tax (Provision) Benefit $ (429,764 ) $ 208,992
Income from equity method investment in Chef Inspirational Foods, LLC $ 77,584 $ 18,540
Net Income (Loss) $ 1,097,940 $ (5,455 ) $ 1,743,911 $ (743,246 )

For the ~~quarters~~three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company reported net income ~~(loss)~~ of ~~$1,097,940~~$1,743,911 and ~~$(5,455)~~a net loss of $(743,246), respectively. The change in net income ~~(loss)~~ between the ~~quarter~~three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021~~2022 reflects strong sales, ~~and~~successful pricing actions, same-customer cross-selling, product additions, normalization of costs for commodities, and as other materials, and freight ~~as well as~~efficiencies and other improvements in manufacturing ~~efficiencies.~~execution.

~~Sales:~~Net sales: Net Sales ~~net of slotting fees and discounts~~ increased by approximately ~~137%~~9% to ~~$25,693,913~~$24,790,085 during the ~~quarter~~three months ended ~~October~~July 31, ~~2022,~~2023, from ~~$10,852,682~~$22,846,474 during the ~~quarter~~three months ended ~~October~~July 31, ~~2021. Sales included the third full quarter from~~2022. The increase in sales is due to both volume gains and successful pricing actions. Volume gains were driven by the acquisition of ~~T&L Creative Salads, Inc.~~new customers, same-customer cross-selling, the acquisition of CIF, and ~~Olive Branch LLC in December 2021. During the quarter ended October 31, 2022, MamaMancini’s Inc. and T&L Salads continued to successfully accelerate~~ product ~~portfolio synergies by adding new T&L products to existing MamaMancini’s customers in both club stores and retail chains in addition to increasing the average SKU’s carried per location.~~additions.

Cost of sales: Cost of sales decreased by approximately 14% to $17,283,847 during the three months ended July 31, 2023, from $20,119,862 during the three months ended July 31, 2022. The decrease in cost of sales is due to improvements in procurement and manufacturing efficiencies and normalization of costs for commodities.
Gross ~~Profit:~~Profit Margin: The gross profit margin was ~~26%~~30% and ~~24%~~12% for the ~~quarters~~three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~quarter~~change in gross profits between the three months ended ~~October~~July 31, 2023 and 2022 ~~marks the return~~is due to ~~normalcy of target margins based on improved~~successful pricing actions, improvements in procurement, manufacturing and ~~strong sales growth. The Company continues to identify procurement~~logistics efficiencies and ~~cost savings through stronger buying power created through the acquisitions~~normalization of ~~T&L Creative Salads and Olive Branch.~~costs for commodities.

Operating Expenses: Operating expenses increased by ~~92%~~47% during the ~~quarter~~three months ended ~~October~~July 31, ~~2022,~~2023, as compared to the ~~quarter~~three months ended ~~October~~July 31, ~~2021.~~2022. Operating expenses ~~decreased~~increased as a percentage of sales to ~~20%~~21% in ~~2022~~2023 compared to ~~24%~~16% in ~~2021.~~2022. The ~~$2,421,103~~$1,672,501 increase in total operating expenses is primarily attributable to the following:

● Payroll and Related Expenses ~~rose~~inclusive of stock-based compensation increased by ~~$659,941~~approximately $1,000,000 related to executive and office hires;
● Insurance Expenses increased by approximately $395,000 due to the ~~executive hires, incremental costs associated with~~growth of the Company and increases in coverage, including enhanced cyber security;
● Professional fees and director fees increased by approximately $135,000 due to the growth of the Company and the use of consultants for upgrades for manufacturing efficiencies as well as information technology integration;
● Amortization of intangible assets increased by approximately $85,000 due to the acquisition of ~~T&L Creative Salads management and office salaries;~~CIF;

● Commission Expenses ~~rose $253,144~~and Royalty Expenses decreased by approximately $39,000 due to ~~increased sales;~~
●
~~Allowance for Doubtful Accounts rose by $245,354 due to our anticipation of increasing macroeconomic risk;~~
● ~~Professional Fees rose $158,448 due to higher third-party accounting and technical expertise and auditing fees related to~~product mix sold during the ~~additional complexity of the acquisitions;~~period; and

● Freight ~~charges rose $110,153~~related expenses decreased by approximately $220,000 due to ~~increased Finished Goods transportation rate increases~~the addition of dedicated logistics employees and ~~fuel surcharges.~~capabilities
2

Other ~~Income (Expenses):~~Expenses: Other expenses increased by ~~$178,128~~$40,256 to ~~$186,859~~$179,739 for the ~~quarter~~three months ended ~~October~~July 31, ~~2022~~2023 as compared to ~~$8,731 during~~$139,483 for the ~~quarter~~three months ended ~~October~~July 31, ~~2021.~~2022. For the ~~quarter~~three months ended ~~October~~July 31, ~~2022,~~2023, other income (expenses) consisted of ~~$183,844~~$181,658 in interest expense on the Company’s financing arrangements and $5,530 in amortization of debt discount partially offset by $7,449 in other income. For the three months ended July 31, 2022, other expenses consisted of $139,064 in interest expense incurred on the Company’s financing arrangements and $3,015 in amortization of debt ~~discount. For the three months ended October 31, 2021,~~discount and other ~~expenses consisted~~income of ~~$8,731 in interest expense incurred on the Company’s financing arrangements.~~$2,596.

1
Results of Operations for the ~~Nine~~Six Months ~~ended October~~Ended July 31, ~~2022~~2023 and ~~2021~~2022

The following table sets forth the summary of the condensed consolidated statements of operations for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:

For the Nine Months Ended
October 31, 2022 October 31, 2021

Sales - Net of Slotting Fees and Discounts $ 70,370,967 $ 33,230,666
Gross Profit $ 12,986,014 $ 9,223,746
Operating Expenses $ (12,057,775 ) $ (7,785,433 )
Other Income (Expenses) $ (454,233 ) $ 10,994
Income Tax Provision $ (106,079 ) $ (391,313 )
Income from equity method investment in Chef Inspirational $ 90,464 $ -
Net Income $ 458,391 $ 1,057,994
For the Six Months Ended
July 31, 2023 July 31, 2022

Net Sales $ 47,910,901 $ 44,677,054
Cost of Sales $ 34,033,663 $ 38,090,179
Gross Profit $ 13,877,238 $ 6,586,875
Operating Expenses $ 9,658,624 $ 7,157,197
Other Expenses $ (342,663 ) $ (267,374 )
Income Tax (Provision) Benefit $ (954,456 ) $ 179,607
Income from equity method investment in Chef Inspirational Foods, LLC $ 223,342 $ 18,540
Net Income (Loss) $ 3,144,837 $ (639,549 )

For the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company reported net income of ~~$458,391~~$3,144,837 and ~~$1,057,994,~~a net loss of $(639,549), respectively. The change in net income between the ~~nine~~six months ended ~~October~~July 31, 2023 and 2022 ~~and 2021~~ reflects ~~the challenges~~strong sales, successful pricing actions, same-customer cross-selling, product additions, normalization of ~~cost inflation of~~costs for commodities, ~~packaging~~as well as other materials, and freight ~~outpacing price increases from February through July 2022 offset by cost normalization~~efficiencies and ~~improved pricing models from August through October 2022.~~other improvements in manufacturing execution.

Net Sales: Net ~~Sales,~~sales, net of slotting fees and discounts increased by approximately ~~112%~~7% to ~~$70,370,967~~$47,910,901 during the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, from ~~$33,230,666~~$44,677,054 during the ~~nine~~six months ended ~~October~~July 31, ~~2021. Sales included the first full nine months from~~2022. The increase in sales is due to both volume gains as well as successful pricing actions. Volume gains were driven by the acquisition of ~~T&L Creative Salads, Inc.~~new customers, same-customer cross-selling, the acquisition of CIF, and ~~Olive Branch LLC in December 2021. Sales for MamaMancini’s, Inc. grew moderately across all channels~~product additions.
Cost of sales: Cost of sales decreased by approximately 11% to $34,033,663 during the ~~nine~~six months ended ~~October~~July 31, ~~2022 versus~~2023, from $38,090,179 during the ~~prior year comparative period. During the nine~~six months ended ~~October~~July 31, ~~2022, MamaMancini’s Inc.~~2022. The decrease in cost of sales is due to improvements in procurement and ~~T&L Salads continued to gain product portfolio synergies by adding new products to existing customers in both club stores~~manufacturing efficiencies and ~~retail chains.~~normalization of costs for commodities.

Gross ~~Profit:~~Profit Margin: The gross profit margin was ~~18%~~29% and 15% for the ~~nine~~six months ended ~~October~~July 31, 2023 and 2022, ~~compared to 28% for~~respectively. The change in gross profits between the quarter ended October 31, 2021. The T&L Creative Salads and Olive Branch LLC acquisition created a different financial model with lower gross margin percentage yet comparable Operating Income margins. In addition, for the first six months ~~inflation~~ended July 31, 2023 and 2022 is due to successful pricing actions, improvements in procurement, manufacturing and logistics efficiencies and normalization of ~~raw materials, packaging and freight~~ costs ~~temporarily out-paced price increases which dissipated in the final 3 months of the quarter.~~for commodities.

Operating Expenses: Operating expenses increased by ~~55%~~35% during the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, as compared to the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022. Operating expenses ~~decreased~~increased as a percentage of sales to ~~17%~~20% in ~~2022~~2023 compared to ~~23%~~16% in ~~2021.~~2022. The ~~$4,272,342~~$2,501,427 increase in total operating expenses is primarily attributable to the following:

● Payroll and Related Expenses ~~rose~~inclusive of stock-based compensation increased by ~~$1,198,146~~approximately $1.7 million related to ~~the acquisition of T&L Creative Salads management~~executive and office ~~salaries, newly hired executives, additional accounting staff at MamaMancini’s and severance pay;~~hires;

● ~~Freight charges rose $611,733~~Insurance Expenses increased by approximately $469,000 due to ~~increased Finished Goods transportation rate~~the growth of the Company and increases ~~and fuel surcharges;~~in coverage, including enhanced cyber security;

● Professional ~~Fees rose $571,496~~fees and director fees increased by approximately $111,000 due to ~~one-time legal fees associated with investment in Chef Inspirational Foods, higher Auditing Fees~~the growth of the Company and ~~third-party accounting/technical expertise related~~the use of consultants for upgrades for manufacturing efficiencies as well as information technology integration;
● Amortization of intangible assets increased by approximately $74,000 due to the ~~additional complexity~~acquisition of ~~the acquisitions;~~CIF;

● Commission and Royalty Expenses ~~rose $480,986~~increased by approximately $133,000 due to increased sales; and

● ~~Insurance Expenses rose $310,627~~Freight related expenses decreased by approximately $460,000 due to ~~account for~~ the ~~acquisition~~addition of ~~T&L Creative Salads~~dedicated logistics employees and ~~Olive Branch LLC.~~capabilities;

Other ~~Income (Expenses):~~Expenses: Other expenses ~~changed~~increased by ~~$465,227~~$75,289 to ~~$(454,233)~~$342,663 for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 as compared to ~~income of $10,994 during~~$267,374 for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022. For the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, other income (expenses) consisted of ~~$447,259~~$359,052 in interest expense on the Company’s financing arrangements ~~$9,670~~and $11,060 in amortization of debt discount ~~and $2,596 of~~partially offset by $27,449 in other income. For the ~~nine~~six months ended ~~October~~July 31, ~~2021,~~2022, other ~~income (expenses)~~expenses consisted of ~~$(26,710)~~$263,315 in interest expense incurred on the Company’s financing arrangements ~~which was offset by the net insurance proceeds relating to the property damage claim~~and $6,655 in amortization of ~~$37,704.~~debt discount and $2,596 of other income.

2
Liquidity and Capital Resources
We finance our operations with internally generated funds, supplemented by credit arrangements with third parties and, potentially, capital market financing.
3
Working Capital

The following table summarizes total current assets, liabilities and working capital at ~~October~~July 31, ~~2022~~2023 compared to January 31, ~~2022:~~2023:

October 31,
2022 January 31,
2022 Change
July 31,
2023
January 31, 2023 Change
Current Assets $ 14,316,080 $ 11,638,317 $ 2,677,763 $ 18,186,746 $ 15,674,701 $ 2,512,045
Current Liabilities $ 11,151,225 $ 8,985,128 $ 2,166,097 13,075,340 11,879,091 1,196,249
Working Capital $ 3,164,855 $ 2,653,189 $ 511,666 $ 5,111,406 $ 3,795,610 $ 1,315,796

As of ~~October~~July 31, ~~2022,~~2023, we had working capital of ~~$3,164,855~~$5,111,406 as compared to working capital of ~~$2,653,189~~$3,795,610 as of January 31, ~~2022,~~2023, an increase of ~~$511,666.~~$1,315,796. The increase in working capital is primarily attributable to an increase in cash of ~~$2,628,689,~~approximately $1,200,000, and an increase of ~~inventories~~accounts receivables of ~~$673,166 based on robust sales increases,~~approximately $2,000,000, partially offset by an increase in ~~prepaid expenses~~related party promissory notes of ~~$110,926 and~~approximately $1,200,000, a ~~decreases~~decrease in ~~the short term portion~~inventory of ~~finance lease payable of $37,954 offset by better cash management~~approximately $327,000 and a decrease in ~~accounts receivable~~prepaid expenses and other current assets of ~~$735,018, an increase~~$354,000.
Long Term Requirements
As discussed above, as of July 31, 2023, we have $500,000 outstanding under our Credit Agreement and $5,431,042 outstanding under our Term Loan Agreement, each with M&T Bank. The Credit Agreement and Term Loan Agreement have maturity dates of October 31, 2025 and January 17, 2027, respectively. In addition to a principal payment in ~~accounts payable~~December 2023, we will be required to make two additional payments of $750,000 (plus accrued interest) on each of December 29, 2024 and ~~accrued liabilities~~2025 pursuant to promissory notes issued to the sellers of ~~$1,586,609, an increase~~T&L and Olive Branch, as discussed in Item 1. Note 6. We also have operating leases for offices and other facilities used for our operations, and finance leases comprised primarily of machinery and equipment, as discussed in Note 11. Our Farmingdale, NY lease term is through November 30, 2031, with the ~~term loan~~option to extend the lease for two additional ten-year terms with base rent of ~~$267,665, an increase in~~$20,200 per month through December 31, 2026, increasing after that date to $23,567 through the ~~short term portion~~end of the ~~operating~~initial lease ~~payable~~term, refer to Item 1. Note 6 for additional information.
Cash Flows
The following table summarizes the key components of ~~$85,524, an increase in~~our cash flows for the ~~related party promissory note of $79,253~~six months ended July 31, 2023 and ~~the receipt of proceeds from the Series B Preferred Stock to be issued of $185,000.~~2022.
For the Six Months Ended July 31,
2023 2022
USD USD
Net cash provided by operating activities $ 3,359,627 $ 232,978
Net cash (used in) investing activities (898,494 ) (805,547 )
Net cash (used in) provided by financing activities (1,279,340 ) 1,618,383
Net changes in cash 1,181,793 1,045,814
Cash, beginning of period 4,378,383 850,598
Cash, end of period $ 5,560,176 $ 1,896,412

Net cash provided by operating activities for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 was ~~$3,184,020~~$3,359,627 compared to net cash provided by operating activities for the ~~nine~~six months ended ~~October~~July 31, ~~2021~~2022 of ~~$2,132,797.~~$232,978. The net income (loss) for the ~~nine~~six months ended ~~October~~July 31, 2023 and 2022 was $3,144,837 and ~~2021 was $458,391 and $1,057,994,~~$(639,549), respectively. During the ~~nine~~six months ended ~~October~~July 31, 2023, net income was affected by non-cash adjustments of $1,568,559 and by changes in operating activities which used cash of $(1,353,769). During the six months ended July 31, 2022, net income was affected by non-cash adjustments ~~to net income~~ of ~~$1,371,694 and~~$679,868 offset by changes in operating activities which provided cash of ~~$1,353,935. During the nine months ended October 31, 2021, net income was affected by adjustments to net income of $1,139,159 offset by changes in operating activities which used cash of $64,356.~~$192,659.

Net cash used in investing activities for ~~the nine~~six months ended ~~October~~July 31, ~~2022~~2023 was ~~$1,007,547~~$(898,494) as compared to ~~$657,607~~$(805,547) for the ~~nine~~six months ended ~~October~~July 31, ~~2021,~~2022, respectively. For the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, the Company used cash of ~~$507,547~~$252,853 to purchase new machinery and ~~equipment. In addition, the Company paid cash of $500,000~~equipment and used $645,641 for the acquisition of ~~a 24% minority~~the remaining interest ~~in Chef Inspirational Foods, Inc.~~of CIF. For the ~~nine~~six months ended ~~October~~July 31, ~~2021,~~2022, the cash used in investing activities of $305,547 was to purchase new machinery and ~~equipment.~~equipment and $500,000 was used to purchase a 24% interest in CIF.

Net cash ~~provided by all financing activities for the nine months ended October 31, 2022 was $452,216 as compared to $125,830~~ used in financing activities for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2023 was $(1,279,340) as compared to $1,618,383 provided by financing activities for the six months ended July 31, 2022. During the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, the Company ~~received net proceeds~~had repayments of ~~$225,000~~$390,000 from borrowings pursuant to the line of credit, ~~which were offset by~~ payments of the ~~acquisition related~~ term loan and finance lease payments of ~~$905,172~~$775,863, and ~~$190,349, respectively, and payment of offering costs of $57,200.~~$92,724, respectively. In addition, during the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, the Company received proceeds of ~~$26,250~~$27,780 for the exercise of ~~options and $1,365,000 from the first and second tranches of the sale of Series B Convertible Preferred Stock, of which $185,000 was received in advance of share issuance.~~options. During the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, the Company paid dividends on the Series B Preferred stock of ~~$11,313.~~ $48,533. During the ~~nine~~six months ended ~~October~~July 31, ~~2021,~~2022, the Company received net proceeds of ~~$19,080~~$1,725,000 from borrowings pursuant to the line of credit and $515,000 from the ~~exercise~~sale of ~~options. These cash in-flows~~Series B Preferred Stock, which were offset by payments of ~~$144,910 paid for~~the term loan and finance lease ~~payments.~~payments of $517,241 and $130,626, respectively.
4

Although the expected revenue growth and control of expenses lead management to believe that it is probable that the Company’s cash resources will be sufficient to meet its cash requirements through ~~December 12, 2023,~~at least the next twelve months, based on current and projected levels of operations, the Company may require additional funding to finance growth ~~and~~or achieve its strategic objectives. If such financing is required, there can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. In the event funding is not available on reasonable terms, the Company might be required to change its growth strategy and/or seek funding on an alternative basis, but there is no guarantee it will be able to do so.

3
Recent Accounting Pronouncements

~~In May 2021, the FASB issued accounting standards update ASU 2021-04, “~~Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in an interim period. The Company adopted the new standard on February 1, 2022 and the adoptionAs of the ~~new standard did not have a~~filing date of this report, there were no significant ~~impact on the Company’s condensed consolidated financial statements.~~
~~In August 2020, the FASB issued ASU No. 2020-06,~~ ~~Accounting~~changes in our critical accounting estimates from those discussed in our 2023 Form 10-K. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for ~~Convertible Instruments and Contracts in an Entity’s Own Equity~~ ~~(“ASU 2020-06”), which simplifies an issuer’s~~ accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance. This update will be effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the new guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company is currently evaluating the impact of the pending adoption of the new standard on its financial statements and intends to adopt the standard as of January 1, 2024.
~~Management does not believe that any recently~~pronouncements issued but not yet ~~effective accounting pronouncements, when~~ adopted ~~will have a material effect on~~that may impact the ~~accompanying condensed~~Company’s consolidated financial ~~statements.~~position, earnings, cash flows or disclosures.”

Critical Accounting Estimates and Policies

~~Our condensed consolidated financial statements and related public financial information are based on~~As of the ~~application~~filing date of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information containedthis report, there were no significant changes in our ~~external disclosures including information regarding contingencies, risk and financial condition. We believe our use of~~critical accounting estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 3 of our condensed consolidated financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those ~~estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on~~discussed in our ~~consolidated results~~2023 Form 10-K. See Note 2 of ~~operations, financial position or liquidity~~Notes to Unaudited Condensed Consolidated Financial Statements for ~~the periods presented in this report.~~
~~We believe the following critical~~ accounting ~~policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements:~~
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~~Use of Estimates~~
The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for doubtful accounts, inventory obsolescence and the fair value of share-based payments.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.
~~Intangible Assets~~
~~Software~~
~~The Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40,~~ ~~Intangibles - Goodwill and Other - Internal-Use Software~~ as intangible assets. The Company capitalized $87,639 of costs incurred in the nine months ended October 31, 2022 to implement cloud computing arrangements. Acquired internal-use software licenses are amortized over the term of the arrangement on a straight-line basis to the line item within the condensed consolidated statements of operations that reflects the nature of the license.
Additionally, the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement doespronouncements issued but not ~~include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred.~~
~~Goodwill~~
The Company does not amortize goodwill or indefinite-lived intangible assets. The Company tests goodwill for impairment annually as of April 30 or if an event occurs or circumstances change that indicate that the fair value of the entity, or the reporting unit, may be below its carrying amount (a “triggering event”). Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative factors, the Company assessed relevant events and circumstancesyet adopted that may impact the fair value and the carrying amount of the reporting unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions, industry and market considerations, overallCompany’s consolidated financial performance, Company specific events and share price trends, an assessment of whether each relevant factor will impact the impairment test positively or negatively, and the magnitude of an such impact.position, earnings, cash flows.
If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.
Management evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, it is amortized prospectively over its estimated remaining useful life.
~~Other Intangibles~~
Amortizable intangible assets, including tradenames and trademarks, are amortized on a straight-line basis over 3 years. Customer relationships are amortized on a straight-line basis over 4 to 5 years.
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~~Revenue Recognition~~
~~The Company recognizes revenue in accordance with FASB Topic 606,~~ ~~Revenue from Contracts with Customers (Topic 606)~~.
The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. Under the new revenue guidance, the Company elected to treat shipping and handling activities as fulfilment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the condensed consolidated statement of operations.
~~Stock-Based Compensation~~
~~The Company accounts for stock-based compensation in accordance with ASC Topic 718, “~~~~Compensation – Stock Compensation”~~ (“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans in accordance with ASC 718.
The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest.
Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the condensed consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital.
~~When computing fair value of share-based payments, the Company has considered the following variables:~~
● ~~The risk-free interest rate assumption is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant.~~
● ~~The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.~~
● ~~The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110.~~
● ~~The term is the life of the grant.~~
● ~~The expected volatility was estimated using the historical volatilities of the Company’s common stock.~~
● ~~The forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%.~~
~~Advertising~~
~~Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred.~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~Smaller reporting companies are not required to provide the information required by this item.~~Not applicable.

Item 4. Controls and Procedures

~~(a) Evaluation of~~ Disclosure Controls and Procedures

~~Based on evaluation~~The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as ofamended (the “Exchange Act”) is recorded, processed, summarized and reported within the ~~end of~~time periods specified in the ~~period covered by this Form 10-Q,~~SEC’s rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, who serves as our principal executive officer and our principal financial officer, respectively, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.
As of July 31, 2023, we evaluated, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures ~~(as defined~~were effective, at the reasonable assurance level, in ~~Rules 13a-15(c) and 15d-15(e) under the Exchange Act) are not effective to ensure~~ensuring that information required to be disclosed by us in ~~report~~the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the ~~U.S. Securities and Exchange Commission’s~~SEC’s rules and forms and ~~to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act~~ is accumulated and communicated to ~~our~~ management, including ~~our chief executive officer~~the Chief Executive Officer and ~~chief financial officer,~~Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
~~As of period covered by this Quarterly Report on Form 10-Q, we have concluded that our internal control over financial reporting was not effective including the following material weakness:~~
1) ~~Lacked sufficient accounting staff to appropriately segregate duties and leverage decision makers to consolidate new entities and complete timely reporting of financial data;~~
2) ~~Lacked sufficient orientation and experience with new ERP systems platform which hindered productivity and required additional supervision delaying timely reporting of financial statements.~~
~~(b) Remedial Measures~~
On September 19, 2022, the Company hired a well-qualified Chief Financial Officer (Anthony Gruber), with significant experience in financial reporting and controls, who reports to the Chief Executive Officer. Effective December 12, 2022, the Company has additionally hired a well-qualified and experienced Corporate Controller with substantial public company experience. The CFO and Controller will be leading a thorough review of the Company’s financial and disclosure controls. In addition, they will focus on the completion of the implementation of the Company’s new financial reporting system.
~~(c)~~ Changes in Internal Control over Financial Reporting

~~Other than the above, there~~There were no changes in our internal control over financial reporting, as such term is defined in ~~Rules 13a-15(f) and 15d-15(f) under the~~ Exchange Act Rule 13a-15, that occurred during our ~~most recently completed fiscal~~last quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be involved in litigation incidental to the conduct of our business. We are currently not involved in any litigation that we believe could have a material ~~adverse~~ effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

~~Smaller reporting companies~~In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of operations which are discussed below and under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended January 31, 2023.
Risks Related to our Business
We have a limited history of profitability.
Since inception on February 22, 2010 and through January 31, 2023, we had raised approximately $22,724,000 in capital. During this same period, we have recorded net accumulated losses totaling $(10,060,226). As of January 31, 2023, we had working capital of $3,795,610. our net income (loss) for the two most recent fiscal years ended January 31, 2023 and January 31, 2022 have been $2,302,674 and $(251,926). Our ability to achieve continued profitability depends upon many factors, including our ability to develop and commercialize products. There can be no assurance that we will be able to achieve growth and profitability consistent with historical performance.
We will need additional capital, which may be difficult to raise for a variety of reasons.
While we believe that we have adequate financing to execute our current growth plan, in the case that we exceed our expected growth, we will need to raise additional capital and/or significantly cut expenses and overhead in order to operate the business through such date. Currently, we have no plan to raise additional capital, and our access to funding is always uncertain. There is no assurance that additional equity or debt financing will be available to us when needed, on acceptable terms or even at all. In the event that we are not able to secure financing, we may have to scale back our development plans or operations.
The majority of our business depends on a limited number of principal customers.
Because we depend on a limited number of customers for a significant portion of our sales, a loss of a small number of these customers could materially adversely affect our business and financial condition. During the twelve months ended January 31, 2023, the Company earned revenues from two customers representing approximately 25%, and 13% of gross sales. As of January 31, 2023, three customers represented approximately 20%, 15% and 11%, of total gross outstanding receivables, respectively. During the twelve months ended January 31, 2022, the Company earned revenues from three customers representing approximately 26%, 21% and 11% of gross sales. As of January 31, 2022, three customers represented approximately 11%, 10% and 7% of total gross outstanding receivables. If these principal customers cease ordering products from us, our business could be materially adversely affected.
Competitive product and pricing pressures in the food industry and the financial condition of customers and suppliers could adversely affect our ability to gain or maintain market share and/or profitability.
We currently operate in the highly competitive food industry, competing with other companies that have varying abilities to withstand changing market conditions. Any significant change in our relationship with a major customer, including changes in product prices, sales volume, or contractual terms may impact financial results. Such changes may result because our competitors may have substantial financial, marketing, and other resources that may change the competitive environment. If we are unable to establish economies of scale, marketing expertise, product innovation, and category leadership positions to respond to changing market trends, or if we are unable to increase prices while maintaining a customer base, our profitability and volume growth could be impacted in a materially adverse way. The success of our business depends, in part, upon the financial strength and viability of our suppliers and customers. The financial condition of those suppliers and customers is affected in large part by conditions and events that are beyond our control. A significant deterioration of their financial condition would adversely affect our financial results.
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We face competition from companies who produce similar products and other prepared foods, many of whom have longer operating histories or who have substantially more financial resources.
Many of our competitors have been in business for a significantly longer period of time than we have and have learned manufacturing techniques which can aid in efficiently producing their products. Additionally, many of these companies have successfully acquired a loyal customer base that would be difficult for us to compete with. Such customers may be unwilling to purchase our products due to brand loyalty or uncertainty in the highly competitive market in which we compete. In addition, if we gain traction in our particular niche of creating gourmet prepared foods, major food companies with substantial marketing and financial resources may attempt to compete more directly with us. In the event that such large companies do directly compete with us, our business may be adversely affected.
Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), U.S. Department of Agriculture (“USDA”), Federal Trade Commission (“FTC”) and other governmental entities and such regulations are subject to change from time to time which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our supplier’s plants and products which could materially impact our ability to manufacture regulated products.
Our food products which are manufactured in facilities that are subject to extensive regulation by the FDA, the USDA and other national, state, and local authorities. For example, we are subject to the Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, packaging, and safety of food. Under this program, the FDA regulates manufacturing practices for foods through, among other things, its current “good manufacturing practices” regulations, or GMP’s, and specifies the recipes for certain foods. Specifically, the USDA defines “all natural” as a product that contains no artificial ingredients, coloring ingredients or chemical preservatives and is minimally processed. The Company’s products were submitted to the USDA and approved as “all natural”. However, should the USDA change their definition of “all natural” at some point in the future, or should the Company change its existing recipes to include ingredients that do not meet the USDA’s definition/ of “all natural”, our results of operations could be adversely affected.
The FTC and other authorities regulate how we market and advertise our products, and we could be the target of claims relating to alleged false or deceptive advertising under federal and state laws and regulations. Changes in these laws or regulations or the introduction of new laws or regulations could increase the costs of doing business for us or our customers or suppliers or restrict our actions, causing our results of operations to be adversely affected.
The need for and effect of product recalls could have a material adverse impact on our business.
If any of our products become misbranded or adulterated, we may need to conduct a product recall. The scope of such a recall could result in significant costs incurred as a result of the recall, potential destruction of inventory, and lost sales. Should consumption of any product cause injury and/or illness, we also may be liable for monetary damages as a result of one or more product liability judgments against us. A significant product recall or product liability case could cause a loss of consumer confidence in our food products and could have a material adverse effect on the value of our brand, results of operations and prospects.
We may be subject to significant liability if the consumption of any of our products causes illness or physical harm.
The sale of food products for human consumption involves the risk of injury or illness to consumers. Such injuries or illness may result from inadvertent mislabeling, tampering or product contamination or spoilage. Under certain circumstances, we may be required to recall or withdraw products, which may have a material adverse effect on our business. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against us. If the consumption of any of our products causes, or is alleged to have caused, a health-related illness, we may become subject to claims or lawsuits relating to such matters. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that our products caused illness or physical harm could adversely affect our reputation with existing and potential distributors, retailers and consumers and our corporate image and brand equity. Moreover, claims or liabilities of this sort might not be covered by insurance or by any rights of indemnity or contribution that we may have against others. A product liability judgment against us or a product recall or market withdrawal could have a material adverse effect on our business, reputation and operating results.
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The impact of various food safety issues, environmental, legal, tax, and other regulations and related developments could adversely affect our sales and profitability.
Our products are subject to numerous food safety and other laws and regulations regarding the manufacturing, marketing, and distribution of food products, particularly the USDA, and state and local agencies. These regulations govern matters such as ingredients, advertising, taxation, relations with distributors and retailers, health and safety matters, and environmental concerns. The ineffectiveness of our or our manufacturer’s planning and policies with respect to these matters, and the need to comply with new or revised laws or regulations with regard to licensing requirements, trade and pricing practices, environmental permitting, or other food or safety matters, or new interpretations or enforcement of existing laws and regulations, as well as any related litigation, may have a material adverse effect on our sales and profitability.
Increases in the cost and restrictions on the availability of raw materials could adversely affect our financial results.
Our products include agricultural commodities such as tomatoes, onions, and meats and other items such as spices and flour, as well as packaging materials such as plastic, metal, paper, fiberboard, and other materials and inputs such as water, in order to manufacture products. The availability or cost of such commodities may fluctuate widely due to government policy and regulation, crop failures or shortages due to plant disease or insect and other pest infestation, weather conditions, potential impact of climate change, increased demand for biofuels, or other unforeseen circumstances. To the extent that any of the foregoing or other unknown factors increase the prices of such commodities or materials and we are unable to increase our prices or adequately hedge against such changes in a manner that offsets such changes, the results of its operations could be materially and adversely affected. Similarly, if supplier arrangements and relationships result in increased and unforeseen expenses, our financial results could be materially and adversely impacted.
Disruption of our supply chain could adversely affect our business.
Damage or disruption to our manufacturing or distribution capabilities due to weather, natural disaster, fire, terrorism, pandemic, strikes, the financial and/or operational instability of key suppliers, distributors, warehousing and transportation providers, or brokers, or other reasons could impair our ability to manufacture or sell our products. To the extent that we are unable to, or cannot financially mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single location, our business and results of operations may be materially adversely affected, and additional resources could be required to restore our supply chain.
Higher energy costs and other factors affecting the cost of producing, transporting, and distributing our products could adversely affect our financial results.
Rising fuel and energy costs may have a significant impact on our cost of operations, including the manufacture, transportation, and distribution of products. Fuel costs may fluctuate due to a number of factors outside of our control, including government policy and regulation and weather conditions. Additionally, we may be unable to maintain favorable arrangements with respect to the manufacturing costs of our products as a result of the rise in costs of procuring raw materials and transportation by our manufacturers. This may result in increased expenses and negatively affect operations.
If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.
During the course of testing our disclosure controls and procedures and internal control over financial reporting, we may identify and disclose material weaknesses or significant deficiencies in internal control over financial reporting that will have to be remedied. Implementing any appropriate changes to our internal control may require specific compliance training of our directors, officers and employees, entail substantial costs to modify our existing accounting systems, and take a significant period of time to complete. Such changes may not, however, be effective in maintaining the adequacy of our internal control over financial reporting, and any failure to maintain that adequacy or inability to produce accurate financial statements on a timely basis could result in our financial statements being unreliable, increase our operating costs and materially impair our ability to operate our business.
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Failure to achieve and maintain effective internal control over financial reporting could result in a loss of investor confidence in our financial reports and could have a material adverse effect on our stock price. Additionally, failure to maintain effective internal control over our financial reporting could result in government investigation or sanctions by regulatory authorities.
Global economic uncertainties continue to affect consumers’ purchasing habits and customer financial stability, which may affect sales volume and profitability on some of our products and have other impacts that we cannot fully predict.
As a result of continuing global economic uncertainties, price-conscious consumers may replace their purchases of our premium and value-added products with lower-cost alternatives, which could affect the price and volume of some of these products. The volume or profitability of our products may be adversely affected if consumers are reluctant to pay a premium for higher quality foods or if they replace purchases of our products with cheaper alternatives. Additionally, distributors and retailers may become more conservative in response to these conditions and seek to reduce their inventories. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing distributors and retailers, to attract new consumers and to provide products that appeal to consumers at prices they are willing and able to pay. Prolonged unfavorable economic conditions may have an adverse effect on our sales and profitability.
We rely on key personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.
Our success depends in large part upon the ~~information~~abilities and continued service of our executive officers and other key employees, particularly Mr. Adam L. Michaels, our Chief Executive Officer and Chairman and Anthony Gruber, our Chief Financial Officer. There can be no assurance that we will be able to retain the services of such officers and employees. Our failure to retain the services of our key personnel could have a materially adverse effect on our business. In order to support our projected growth, we will be required to effectively recruit, hire, train and retain additional qualified management personnel. Our inability to attract and retain necessary personnel could have a materially adverse effect on our business.
The failure of new product or packaging introductions to gain trade and consumer acceptance and address changes in consumer preferences could adversely affect our sales.
Our success is dependent upon anticipating and reacting to changes in consumer preferences, including health and wellness. There are inherent marketplace risks associated with new product or packaging introductions, including uncertainties about trade and consumer acceptance. Moreover, success is dependent upon our ability to identify and respond to consumer trends through innovation. We may be required to increase expenditures for new product development and there is no guarantee that we will be successful in developing new products or improving upon products already in existence. Additionally, our new products may not achieve consumer acceptance and could materially negatively impact sales.
Changes in our promotional activities may impact, and may have a disproportionate effect on, our overall financial condition and results of operations.
We offer a variety of sales and promotion incentives to our customers and to consumers, such as price discounts, consumer coupons, volume rebates, cooperative marketing programs, slotting fees and in-store displays. Our net sales may periodically be influenced by the introduction and discontinuance of sales and promotion incentives. Reductions in overall sales and promotion incentives could impact our net sales and affect our results of operations in any particular fiscal quarter.
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We may not be able to successfully implement our growth strategy on a timely basis or at all.
Our future success depends, in large part, on our ability to implement our growth strategy of expanding distribution and improving placement of our products, attracting new consumers to our brand and introducing new product lines and product extensions. Our ability to implement this ~~item.~~growth strategy depends, among other things, on our ability to:
● enter into distribution and other strategic arrangements with third-party retailers and other potential distributors of our products;
● continue to compete in conventional grocery and mass merchandiser retail channels in addition to the natural and organic channel;
● secure shelf space in key supermarket locations;
● increase our brand awareness;
● expand and maintain brand loyalty; and
● develop new product lines and extensions.
We may not be able to successfully implement our growth strategy. Our sales and operating results will be adversely affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful.
We are currently selling products in supermarkets in the United States. If we are unable to expand into mass-market retailers or sell products in a greater number of supermarkets, we will fall short of our projections and our business and financial condition would be adversely affected.
As a smaller supplier, we may not sell in enough bulk in certain stores and as such our products may not be placed in the most ideal locations to catch the attention of end consumers. If we are unable to gain significant sales growth, our products may never be displayed in the most attractive locations in stores and our sales may suffer.
We may be unable to successfully execute our identified growth strategies or other growth strategies that we determine to pursue.
We currently have a limited corporate infrastructure. In order to pursue growth strategies, we will need to continue to build our infrastructure and operational capabilities. Our ability to do any of these successfully could be affected by any one or more of the following factors:
● our ability to raise substantial amounts of additional capital if needed to fund the implementation of our business plan;
● our ability to execute our business strategy;
● the ability of our products to achieve market acceptance;
● our ability to manage the expansion of our operations and any acquisitions we may make, which could result in increased costs, high employee turnover or damage to customer relationships;
● our ability to attract and retain qualified personnel;
● our ability to manage our third-party relationships effectively; and
● our ability to accurately predict and respond to the rapid market changes in our industry and the evolving demands of the markets we serve.
Our failure to adequately address any one or more of the above factors could have a significant impact on our ability to implement our business plan and our ability to pursue other opportunities that arise.
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We may be unable to maintain quality control.
Although we have entered into raw material supply agreements specifying certain minimum acceptable quality standards, there is no assurance that our current quality assurance procedures will be able to effectively monitor compliance. Additionally, in the event that we expand our operations and increase our output volume, including securing third-party manufacturers, there is no assurance that we will be able to adequately maintain quality controls or that our current manufacturing process is scalable.
There may be products liability and other legal claims.
We currently carry products liability insurance policy. Although we believe that the amount of insurance coverage is sufficient for our operations, there is no assurance that the coverage will be adequate.
Our brand and reputation may suffer from real or perceived issues involving the labeling and marketing of our products as “natural.”
Although the FDA and USDA have each issued statements regarding the appropriate use of the word “natural,” there is no single, U.S. government-regulated definition of the term “natural” for use in the food industry. The resulting uncertainty has led to consumer confusion, distrust and legal challenges. Plaintiffs have commenced legal actions against a number of food companies that market “natural” products, asserting false, misleading and deceptive advertising and labeling claims. Should we become subject to similar claims, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded. Adverse publicity about these matters may discourage consumers from buying our products. The cost of defending against any such claims could be significant. Any loss of confidence on the part of consumers in the truthfulness of our labeling or ingredient claims would be difficult and costly to overcome and may significantly reduce our brand value. Uncertainty as to the ingredients used in our products, regardless of the cause, may have a substantial and adverse effect on our brand and our business, results of operations and financial condition.
Our finished goods inventory is located in a small number of warehouse facilities. Any damage or disruption at a storage facility would have an adverse effect on our business, results of operations and financial condition.
Our finished goods inventory is located in a small number of warehouse facilities. A natural disaster, fire, power interruption, work stoppage or other unanticipated catastrophic event at these facilities would significantly disrupt our ability to deliver our products and operate our business. If any material amount of our inventory were damaged, we would be unable to meet our contractual obligations and, as a result, our business, results of operations and financial condition would suffer.
We may be unable to defend our intellectual property.
Our business could be adversely affected if we are unable to adequately protect our intellectual property. Our current intellectual property consists of trade secret recipes and cooking processes for our products and trademarks. We rely on a combination of trademark, copyright and trade secret laws to establish and protect our proprietary rights. We will also use technical measures to protect our proprietary rights. We may, however, not be able to secure significant protection for service marks or trademarks that we obtain. Our inability to protect our intellectual property from others may impede our brand identity and could lead to consumer confusion.
Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our services and brand.
Our business is largely based upon our recipes which are trade secrets and are not patentable. We may be unable to keep other companies from copying our recipes, or we may be subject to legal actions alleging intellectual property infringement, unfair competition or similar claims against us. Companies may have intellectual property rights covering aspects of our technologies or businesses. Defending ourselves against intellectual property infringement or similar claims would be expensive and would divert management’s attention. Additionally, there is no assurance that we would be successful in defending ourselves against such claims.
11
Risks Related To Our Securities
We currently have a limited trading volume, which can result in higher price volatility for, and reduced liquidity of, our common stock.
Our shares of common stock traded on the OTCQB from 2013 to July 2021 and on the NASDAQ Capital Market from July 2021 to the present date. While we have upgraded our listing, historically there has been limited daily volume of trading in our common stock, which has limited the overall and perceived liquidity of our common stock on that market.
A more active trading market for our shares may never develop or be sustained. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders. The absence of an active trading market increases price volatility and reduces the liquidity of our common stock. As long as this condition continues, the sale of a significant number of shares of common stock at any particular time could be difficult to achieve at the market prices prevailing immediately before such shares are offered and, if an active market for our common stock does not develop, it may be difficult to sell shares without depressing the market price for the shares, or at all. In addition, in the event that an active trading market does not develop, the price of our common stock may not be a reliable indicator of the fair value of our common stock.
Furthermore, if our common stock ceases to be listed on the NASDAQ Capital Market, holders may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, our common stock, and the market value of our common stock would likely decline.
You may experience dilution of your ownership interest because of the future issuance of additional shares of our common stock and our preferred stock.
In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 270,000,000 shares of capital stock consisting of 20,000,000 shares of preferred stock, par value $0.00001 per share and 250,000,000 shares of common stock, par value $0.00001 per share.
We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock are trading.
The concentration of our capital stock ownership with insiders could limit your ability to influence the outcome of key transactions, including a change of control.
Our directors, executive officers and founding shareholders, in the aggregate, beneficially own approximately 23.4% of the outstanding shares of our common stock, based on the number of shares outstanding as of April 26, 2023. These stockholders are able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may have interests that differ from yours and may vote in a manner that is adverse to your interests. This concentration of ownership may have the effect of deterring, delaying or preventing a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.
12
If and when a larger trading market for our common stock develops, the market price of our common stock is still likely to be highly volatile and subject to wide fluctuations, and you may be unable to resell your shares at or above the price at which you acquired them.
The market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including, but not limited to:
● variations in our revenue and operating expenses;
● market conditions in our industry and the economy as a whole;
● actual or expected changes in our growth rates or our competitors’ growth rates;
● announcements of innovations or new products or services by us or our competitors;
● announcements by the government relating to regulations that govern our industry;
● sales of our common stock or other securities by us or in the open market; and
● changes in the market valuations of other comparable companies.
In addition, if the market for food industry stocks or the stock market in general experiences loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or operating results. The trading price of our shares might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. Each of these factors, among others, could harm the value of your investment in our common stock. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, operating results and financial condition.
We do not expect to pay dividends.
We have never declared or paid any cash dividends or distributions on our common stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend. If the Company does not pay dividends, the Company’s common stock may be less valuable because a return on an investor’s investment will only occur if the Company’s stock price appreciates.
If securities or industry analysts do not publish research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the ~~period between February 1, 2022 and December 12, 2022,~~six months ended July 31, 2023, the Company ~~issued the following shares which were not registered:~~had no sales of unregistered securities.
~~Common Stock~~
The Company issued 566,064 shares of common stock to seven holders. Of these issuances, 501,972 shares were issued in connection with an acquisition and the remaining 64,093 shares were issued upon the exercise of certain stock options and pursuant to employment agreements.
~~Series B Preferred Stock~~
~~The Company issued 54,600 shares of series B Preferred Stock for gross proceeds of $1,360,000.~~
~~The proceeds of these sales will be utilized for general working capital and acquisitions.~~

Item 3. Defaults upon Senior Securities.

There has been no material default in payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

~~Item 5. Other Information.~~
~~There is no other information required to be disclosed under this item which was not previously disclosed.~~
713

Item 6. Exhibits.

Exhibit
No.
Description

~~31.1~~3.1 Articles of Incorporation of Mama’s Creations, Inc. (incorporated by reference from Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed on May 24, 2011).
3.2 Certificate of Amendment to Certificate of Incorporation of Mama’s Creations, Inc. (incorporated by reference from Exhibit 3.4 to the Company’s Current Report on Form 8-K filed on March 8, 2013).
3.3 Second Amended and Restated Series A Convertible Preferred Stock Certificate of Designation (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 10, 2015).
3.4 Series B Preferred Stock Certificate of Designation (incorporated by reference from Exhibit 3.4 to the Company’s Registration Statement on Form S-3 filed on June 2, 2023).
3.5 Second Amended and Restated Bylaws of Mama’s Creations, Inc. (incorporated by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on August 1, 2023).
10.1 Membership Interest Purchase Agreement dated June 28, 2023 by and among the Company, Siegel Suffolk Family, LLC, R&I Loeb Family, LLC, Jeffrey Siegel, and Ronald Loeb (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 29, 2023).
10.2 Letter Amendment to the Revolving Line of Credit Loan by and between M&T Bank, the Company and T&L Acquisition Corp.*
31.1 Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
31.2
~~31.2~~ Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
32.1
~~32.1~~ Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2
~~32.2~~ Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS Inline XBRL Instance Document**
~~101.INS~~101.SCH Inline XBRL Instance Document**
~~101.SCH~~ Inline XBRL Taxonomy Extension Schema Document**
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document**
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document**
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.
** Furnished herewith.

814

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~MAMAMANCINI’S HOLDINGS,~~MAMA’S CREATIONS, INC.

Date: ~~December~~September 12, ~~2022~~2023 By: /s/ Adam L. Michaels
Name: Adam L. Michaels
Title: Chief Executive Officer
(Principal Executive Officer)
By: /s/ Anthony Gruber
Name: Anthony Gruber
Title: Chief Financial Officer (Principal Financial Officer)
915


	Series A				Series B														Additional
	Preferred Stock				Preferred Stock				Common Stock				Treasury Stock						Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity

Balance, August 1, 2022		-	$	-		-	$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	21,326,367	$	(12,968,379	)	$	8,208,852

Stock options issued for services		-		-		-		-		-		-		-			-			15,955		-			15,955

Common stock issued for services		-		-		-		-		-		-		-			-			7,671		-			7,671

Issuance of Preferred B Shares, net of issuance costs		-		-		47,200		-		-		-		-			-			1,122,800		-			1,122,800

Series B Preferred dividend		-		-		-		-		-		-		-			-			-		(12,413	)		(12,413	)

Net income		-		-		-		-		-		-		-			-			-		1,097,940			1,097,940
Think
Balance, October 31, 2022		-	$	-		47,200	$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	22,472,793	$	(11,882,852	)	$	10,440,805

	For the Period June 28, 2022 through October 31, 2022
Revenues	$	11,628,434
Net income	$	370,167

	For the Three Months Ended October 31, 2021		For the Nine Months Ended October 31, 2021
Revenues	$	18,737,715	$	48,228,884
Net income	$	281,716	$	1,469,571
Net income per share - basic	$	0.01	$	0.04
Weighted average number of shares outstanding		35,728,821		35,683,484

Assets:
Cash	$	591,458
Accounts receivable		2,715,515
Inventories		1,221,055
Fixed assets, net		503,907
Intangibles		10,574,334
Total identified assets acquired	$	15,606,269

Liabilities:
Accounts payable and accrued expenses	$	1,606,269
Total liabilities assumed		1,606,269

Total net assets acquired	$	14,000,000

	October 31, 2022		January 31, 2022
Raw Materials	$	1,840,274	$	1,854,156
Work in Process		135,206		244,974
Finished goods		1,588,479		791,663
Inventories	$	3,563,959	$	2,890,793

	October 31, 2022		October 31, 2021
	For the Nine Months Ended
	October 31, 2022		October 31, 2021
Gross Sales	$	72,025,181	$	34,373,119
Less: Slotting, Discounts, Allowances		1,654,214		1,142,453
Net Sales	$	70,370,967	$	33,230,666

	July 31, 2023		July 31, 2022
	For the Six Months Ended
	July 31, 2023		July 31, 2022
Gross Sales	$	49,014,645	$	45,980,449
Less: Slotting, Discounts, Allowances		1,103,744		1,303,395
Net Sales	$	47,910,901	$	44,677,054

	~~October~~July 31, ~~2022~~2023			~~October~~July 31, ~~2021~~2022
Risk-free interest rate		~~2.77~~N/A	%		~~N/A~~	2.77	%
Expected life of grants		~~6.5~~ ~~years~~N/A			~~N/A~~7.5 years
Expected volatility of underlying stock		~~85.74~~N/A	%		~~N/A~~
~~Dividends~~		-85.74	%
Dividends		N/A			0	%

	October 31, 2022		January 31, 2022		July 31, 2023		January 31, 2023
Machinery and Equipment	$	5,311,531	$	4,934,855	$	3,669,137	$	5,387,255
Furniture and Fixtures		281,781		233,615		236,645		284,781
Leasehold Improvements		3,473,116		3,346,610		2,841,159		3,480,061
Property and Equipment, Gross		9,066,428		8,515,080		6,746,941		9,152,097
Less: Accumulated Depreciation		5,486,991		4,836,548		2,679,293		5,729,001
Property and Equipment, Net	$	3,579,437	$	3,678,532
Total					$	4,067,648	$	3,423,096


Cash transferred upon acquisition			950,000
Related party debt issued upon acquisition			2,700,000
Sub-total			3,650,000
Carrying value of the Company’s equity method investment in CIF			1,566,828
Total purchase price			5,216,828


Cash and cash equivalents	$	304,359
Net working capital (excluding cash)		356,848
Customer relationships		4,555,621
Net assets acquired	$	5,216,828

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (years)
Software	$	87,639	$	(87,639	)	$	-		-
Customer relationships		6,417,621		(700,666	)		5,716,955		3.79
Tradename and trademarks		79,000		(41,773	)		37,227		1.41
	$	6,584,260	$	(830,078	)	$	5,754,182

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life
Software	$	87,639	$	(73,815	)	$	13,824		0.06
Customer relationships		1,862,000		(315,054	)		1,546,946		4.13
Tradename and trademarks		79,000		(22,077	)		56,923		2.16
	$	2,028,639	$	(410,946	)	$	1,617,693


2023 (remaining)	$	115,184
2024		402,133
2025		400,782
2026		374,216
2027		325,378
Total	$	1,617,693


2024 (Remaining)	$	768,954
2025		1,538,766
2026		1,513,238
2027		1,466,741
2028		466,483
Total	$	5,754,182

	For the Three Months Ended
	October 31, 2022			October 31, 2021

Customer
A		28	%		-*	%
B		13	%		23	%
C		8	%		13	%
D		7	%		-*	%
E		5	%		29	%

	For the Nine Months Ended
	October 31, 2022			October 31, 2021

Customer
A		26	%		-*	%
B		13	%		20	%
C		10	%		32	%
D		7	%		-*	%
E		6	%		11	%

	Restricted Stock Units			Weighted Average Exercise Price		Restricted Stock Units		Weighted Average Exercise Price
Unvested – February 1, 2022		14,000		$	2.83
Unvested – February 1, 2023							367,647	$	1.36
Granted		147,059		$	1.36		39,773	$	1.76
Vested		-		$	-		-	$	-
Forfeited		(14,000	)	$	2.83		-	$	-
Outstanding – October 31, 2022		147,059		$	1.36
Outstanding – July 31, 2023							407,420	$	1.40

	Options			Weighted Average Exercise Price
Outstanding – February 1, 2022		669,000		$	0.66
Exercisable – February 1, 2022		666,500		$	0.65
Granted		150,000		$	1.48
Exercised		(130,000	)	$	1.00
Outstanding – October 31, 2022		689,000		$	0.77
Exercisable – October 31, 2022		539,000		$	0.57

		Options Outstanding						Options Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.39 – 1.48		689,000		2.57	$	0.77		539,000	$	0.57

	September 13, 2022
~~Risk-free interest rate~~		~~3.58~~	%
~~Expected life of grants~~		5 ~~years~~
~~Expected volatility of underlying stock~~		~~82.52~~	%
~~Dividends~~		0	%

	Warrants		Weighted Average Exercise Price
Outstanding – February 1, 2022		-	$	-
Exercisable – February 1, 2022		-	$	-
Granted		11,800	$	2.25
Exercised		-	$	-
Outstanding – October 31, 2022		11,800	$	2.25
Exercisable – October 31, 2022		11,800	$	2.25

	Warrants		Weighted Average Exercise Price
Outstanding – February 1, 2023		13,650	$	2.25
Exercisable – February 1, 2023		13,650	$	2.25
Granted		-	$
Exercised		13,650	$	-
Outstanding – July 31, 2023		-	$	-
Exercisable – July 31, 2023		-	$	-

		Warrants Outstanding						Warrants Exercisable
Exercise Price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	2.25		11,800		4.87	$	2.25		11,800	$	2.25

Agreement Year	Minimum Royalty to be Paid with Respect to Such Agreement Year
1^stand 2^nd	$	-
3^rdand 4^th	$	50,000
5^th, 6^thand 7^th	$	75,000
8^thand 9^th	$	100,000
10^thand thereafter	$	125,000

	July 31, 2023			July 31, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(134,862	)	$	(176,534	)
Financing cash flows from finance leases		(92,724	)		(130,626	)

	July 31, 2023			January 31, 2023
Weighted average remaining lease term (in years)
Operating leases		7.00			7.50
Finance leases		4.28			2.60

Weighted average discount rate:
Operating leases		4.85	%		4.85	%
Finance Leases		5.86	%		3.41	%

For the Twelve months ended January 31,
2024	$	486,910
2025		951,205
2026		847,464
2027		691,145
2028		713,501
Thereafter		1,454,059
Total lease payments	$	5,144,284
Less: amounts representing interest		(748,544	)
Total lease obligations	$	4,395,740

●	Payroll and Related Expenses ~~rose~~inclusive of stock-based compensation increased by ~~$659,941~~approximately $1,000,000 related to executive and office hires;

●	Insurance Expenses increased by approximately $395,000 due to the ~~executive hires, incremental costs associated with~~growth of the Company and increases in coverage, including enhanced cyber security;

●	Professional fees and director fees increased by approximately $135,000 due to the growth of the Company and the use of consultants for upgrades for manufacturing efficiencies as well as information technology integration;

●	Amortization of intangible assets increased by approximately $85,000 due to the acquisition of ~~T&L Creative Salads management and office salaries;~~CIF;

●	Commission Expenses ~~rose $253,144~~and Royalty Expenses decreased by approximately $39,000 due to ~~increased sales;~~

●	~~Allowance for Doubtful Accounts rose by $245,354 due to our anticipation of increasing macroeconomic risk;~~
●	~~Professional Fees rose $158,448 due to higher third-party accounting and technical expertise and auditing fees related to~~product mix sold during the ~~additional complexity of the acquisitions;~~period; and

●	Freight ~~charges rose $110,153~~related expenses decreased by approximately $220,000 due to ~~increased Finished Goods transportation rate increases~~the addition of dedicated logistics employees and ~~fuel surcharges.~~capabilities