Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Apr. 30, 2015 | Jun. 11, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | MamaMancini's Holdings, Inc. | |
Entity Central Index Key | 1520358 | |
Document Type | 10-Q | |
Document Period End Date | 30-Apr-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 26,085,916 | |
Trading Symbol | MMMB | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2016 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
Assets: | ||
Cash | $399,967 | $854,995 |
Accounts receivable, net | 1,265,277 | 2,233,211 |
Inventories | 469,345 | 301,170 |
Prepaid expenses | 112,258 | 107,242 |
Due from manufacturer - related party | 2,205,416 | 2,213,037 |
Deferred offering costs | 10,000 | |
Total current assets | 4,462,263 | 5,709,655 |
Property and equipment, net | 1,123,039 | 1,124,745 |
Debt issuance costs, net | 90,052 | 101,197 |
Total Assets | 5,675,354 | 6,935,597 |
Liabilities: | ||
Accounts payable and accrued expenses | 992,653 | 1,216,436 |
Line of credit | 946,319 | 1,409,098 |
Term loan | 120,000 | 120,000 |
Total current liabilities | 2,058,972 | 2,745,534 |
Term loan - net of current | 410,000 | 440,000 |
Demand notes | 450,000 | |
Convertible note - net of debt discount | 1,646,680 | 1,587,447 |
Total long-term liabilities | 2,506,680 | 2,027,447 |
Total Liabilities | 4,565,652 | 4,772,981 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.00001 par value; 20,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.00001 par value; 250,000,000 shares authorized; 26,085,916 and 26,047,376 shares issued and outstanding, respectively | 260 | 260 |
Additional paid in capital | 12,807,758 | 12,766,116 |
Common stock subscribed, $0.00001 par value; 66,667 and 66,667 shares, respectively | 1 | 1 |
Accumulated deficit | -11,698,317 | -10,603,761 |
Total Stockholders' Equity | 1,109,702 | 2,162,616 |
Total Liabilities and Stockholders' Equity | $5,675,354 | $6,935,597 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 26,085,916 | 26,407,376 |
Common stock, shares outstanding | 26,085,916 | 26,407,376 |
Common stock subscribed, par value | $0.00 | $0.00 |
Common stock subscribed, shares | 66,667 | 66,667 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
Income Statement [Abstract] | ||
Sales - net of slotting fees and discounts | $3,353,279 | $2,583,149 |
Cost of sales | 2,408,299 | 1,780,225 |
Gross profit | 944,980 | 802,924 |
Operating expenses | ||
Research and development | 23,079 | 18,901 |
General and administrative expenses | 1,783,122 | 1,468,278 |
Total operating expenses | 1,806,201 | 1,487,179 |
Loss from operations | -861,221 | -684,255 |
Other expense | ||
Interest expense | -233,335 | -16,634 |
Total other expense | -233,335 | -16,634 |
Net loss | ($1,094,556) | ($700,889) |
Net loss per common share - basic and diluted | ($0.04) | ($0.03) |
Weighted average common shares outstanding - basic and diluted | 26,057,141 | 24,711,719 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $) | Common Stock [Member] | Additional Paid In Capital [Member] | Common Stock Subscribed [Member] | Accumulated Deficit [Member] | Total |
Balance at Jan. 31, 2015 | $260 | $12,766,116 | $1 | ($10,603,761) | $2,162,616 |
Balance, shares at Jan. 31, 2015 | 26,047,376 | ||||
Stock options issued for services | 2,042 | 2,042 | |||
Cashless exercise of warrants | |||||
Cashless exercise of warrants, shares | 8,540 | ||||
Stock issued for debt financing | 39,600 | 39,600 | |||
Stock issued for debt financing, shares | 30,000 | ||||
Net loss | -1,094,556 | -1,094,556 | |||
Balance at Apr. 30, 2015 | $260 | $12,807,758 | $1 | ($11,698,317) | $1,109,702 |
Balance, shares at Apr. 30, 2015 | 26,085,916 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($1,094,556) | ($700,889) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 67,200 | 14,737 |
Amortization of debt issuance costs | 11,145 | 4,091 |
Amortization of debt discount | 98,833 | |
Share-based compensation | 2,042 | 4,172 |
(Increase) Decrease in: | ||
Accounts receivable | 967,934 | -114,311 |
Inventories | -168,175 | -244,287 |
Prepaid expenses | -5,016 | -13,155 |
Due from manufacturer - related party | 7,621 | -148,568 |
Increase (Decrease) in: | ||
Accounts payable and accrued expenses | -223,783 | -11,420 |
Net Cash Used In Operating Activities | -336,755 | -1,209,630 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for fixed assets | -65,494 | -81,467 |
Net Cash Used In Investing Activities | -65,494 | -81,467 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Stock issuance costs | -127,400 | |
Deferred offering costs | -10,000 | |
Proceeds from demand notes | 450,000 | |
Proceeds from common stock subscribed | 980,001 | |
Debt issuance costs | -4,485 | |
Borrowings (repayment) of line of credit, net | -462,779 | -18,971 |
Repayment of term loan | -30,000 | |
Net Cash (Used) Provided By Financing Activities | -52,779 | 829,145 |
Net Decrease in Cash | -455,028 | -461,952 |
Cash - Beginning of Period | 854,995 | 1,541,640 |
Cash - End of Period | 399,967 | 1,079,688 |
Cash Paid During the Period for: | ||
Income taxes | ||
Interest | 16,634 | |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Stock issuance costs paid in the form of warrants | 94,927 | |
Stock issued for debt discount on convertible note | $39,600 |
Nature_of_Operations_and_Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Apr. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1 - Nature of Operations and Basis of Presentation |
Nature of Operations | |
MamaMancini’s Holdings, Inc. (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. | |
Current Business of the Company | |
The Company is a manufacturer and distributor of beef meatballs with sauce, turkey meatballs with sauce, and other similar meats and sauces. The Company’s customers are located throughout the United States, with a large concentration in the Northeast and Southeast, and Canada. | |
Basis of Presentation | |
The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. | |
The unaudited 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, 2015 filed on May 1, 2015. 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 results of operations for the interim periods presented are not necessarily indicative of results for the year ending January 31, 2016. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies | ||||||||
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 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 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 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. | |||||||||
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 the 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 April 30, 2015 or January 31, 2015. | |||||||||
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. | |||||||||
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. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of April 30, 2015 and January 31, 2015, the Company had reserves of $2,000. | |||||||||
Inventories | |||||||||
Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at April 30, 2015 and January 31, 2015: | |||||||||
30-Apr-15 | 31-Jan-15 | ||||||||
Finished goods | $ | 469,345 | $ | 301,170 | |||||
Property and Equipment | |||||||||
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives. | |||||||||
Asset lives for financial statement reporting of depreciation are: | |||||||||
Machinery and equipment | 2-7 years | ||||||||
Furniture and fixtures | 3-5 years | ||||||||
Leasehold improvements | 3-10 years | ||||||||
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. | |||||||||
Stock Issuance Costs | |||||||||
Stock issuance costs are capitalized as incurred. Upon the completion of the offering, the stock issuance costs are reclassified to equity and netted against proceeds. In the event the costs are in excess of the proceeds, the costs are recorded to expense. In the case of an aborted offering, all costs are expensed. Offering costs recorded to equity for the three months ended April 30, 2015 and 2014 were $0 and $222,327, respectively. As of April 30, 2015 and January 31, 2105, there were capitalized costs of $10,000 and $0, respectively. | |||||||||
Research and Development | |||||||||
Research and development is expensed as incurred. Research and development expenses for the three months ended April 30, 2015 and 2014 were $23,079 and $18,901, respectively. | |||||||||
Shipping and Handling Costs | |||||||||
The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of sales. | |||||||||
Revenue Recognition | |||||||||
The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products. | |||||||||
The Company meets these criteria upon shipment. | |||||||||
Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows: | |||||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
30-Apr-15 | 30-Apr-15 | ||||||||
Gross Sales | $ | 3,428,864 | $ | 2,655,011 | |||||
Less: Slotting, Discounts, Allowances | 75,585 | 71,862 | |||||||
Net Sales | $ | 3,353,279 | $ | 2,583,149 | |||||
Cost of Sales | |||||||||
Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight, packaging, and print production costs. | |||||||||
Advertising | |||||||||
Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the three months ended April 30, 2015 and 2014 were $916,932 and $761,999, respectively. | |||||||||
Stock-Based Compensation | |||||||||
The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Accounting for Stock-Based 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 accounts for share-based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services”. | |||||||||
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 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. | |||||||||
For the three months ended April 30, 2015 and 2014, share-based compensation amounted to $2,042 and $99,099, respectively. Of the $2,042 and $99,099 recorded for the three months ended April 30, 2015 and 2014, $0 and $94,927 were direct costs of a stock offering and have been recorded as a reduction in additional paid in capital. | |||||||||
There were no grants during the three months ended April 30, 2015. For the three months ended April 30, 2014, when computing fair value of share-based payments, the Company has considered the following variables: | |||||||||
30-Apr-14 | |||||||||
Risk-free interest rate | 0.68% to 1.71% | ||||||||
Expected life of grants | 1 to 5 years | ||||||||
Expected volatility of underlying stock | 144% to 193% | ||||||||
Dividends | $0 | ||||||||
The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110. 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 determined by the historical volatilities for industry peers and used an average of those volatilities. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. | |||||||||
Earnings (Loss) Per Share | |||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. | |||||||||
The Company had the following potential common stock equivalents at April 30, 2015: | |||||||||
Common stock subscribed | 66,667 | ||||||||
Common stock warrants, exercise price range of $1.00-$2.50 | 1,004,735 | ||||||||
Common stock options, exercise price of $1.00-$2.97 | 496,404 | ||||||||
Total common stock equivalents | 1,567,806 | ||||||||
The Company had the following potential common stock equivalents at April 30, 2014: | |||||||||
Common stock subscribed | 653,335 | ||||||||
Common stock warrants, exercise price of $1.00-$1.50 | 987,401 | ||||||||
Common stock options, exercise price of $1.00 | 444,288 | ||||||||
Total common stock equivalents | 2,085,024 | ||||||||
Since the Company reflected a net loss during the three months ended April 30, 2015 and 2014, the effect of considering any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. | |||||||||
Income Taxes | |||||||||
Income taxes are provided in accordance with ASC No. 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. | |||||||||
The Company is no longer subject to tax examinations by tax authorities for years prior to 2013. | |||||||||
Reclassification | |||||||||
Certain prior period amounts have been reclassified to conform to current period presentation. | |||||||||
Recent Accounting Pronouncements | |||||||||
The U.S. Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, in May 2014. The amendments in this Update supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2011-230—Revenue Recognition (Topic 605) and Proposed Accounting Standards Update 2011–250—Revenue Recognition (Topic 605): Codification Amendments, both of which have been deleted. Accounting Standards Update 2014-09. The amendments in this Update are effective for the Company for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the effects of ASU 2014-09 on the condensed consolidated financial statements. | |||||||||
In March 2015, the Financial Accounting Standards Board issued Accounting issued Accounting Standards Update (ASU) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability). The Company is currently evaluating the effects of ASU 2015-03 on the condensed consolidated financial statements. |
Property_and_Equipment
Property and Equipment | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | Note 3 - Property and Equipment: | ||||||||
Property and equipment on April 30, 2015 and January 31, 2015 are as follows: | |||||||||
30-Apr-15 | 31-Jan-15 | ||||||||
Machinery and Equipment | $ | 1,069,741 | $ | 1,060,066 | |||||
Furniture and Fixtures | 17,942 | 16,887 | |||||||
Leasehold Improvements | 329,331 | 274,567 | |||||||
1,417,014 | 1,351,520 | ||||||||
Less: Accumulated Depreciation | 293,975 | 226,775 | |||||||
$ | 1,123,039 | $ | 1,124,745 | ||||||
At April 30, 2015 and January 31, 2015, fixed assets in the amount of $0 and $854,509, respectively, were not in service. | |||||||||
Depreciation expense charged to income for the three months ended April 30, 2015 and 2014 amounted to $67,200 and $14,737, respectively. |
Investment_in_Meatball_Obsessi
Investment in Meatball Obsession, LLC | 3 Months Ended |
Apr. 30, 2015 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investment in Meatball Obsession, LLC | Note 4 - Investment in Meatball Obsession, LLC |
During 2011 the Company acquired a 34.62% interest in Meatball Obsession, LLC (“MO”) for a total investment of $27,032. This investment is accounted for using the equity method of accounting. Accordingly, investments are recorded at acquisition cost plus the Company’s equity in the undistributed earnings or losses of the entity. | |
At December 31, 2011 the investment was written down to $0 due to losses incurred by MO. | |
The Company’s ownership interest in MO has decreased due to dilution. At April 30, 2015 and January 31, 2015, the Company’s ownership interest in MO was 13% and 13%, respectively. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Apr. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5 - Related Party Transactions |
Joseph Epstein Foods | |
On March 1, 2010, the Company entered into a five year agreement with Joseph Epstein Foods (the “Manufacturer”) who is a related party. The Manufacturer is owned by the CEO and President of the Company. The Company analyzed the relationship with the Manufacturer to determine if the Manufacturer is a variable interest entity as defined by FASB ASC 810 “Consolidation”. Based on this analysis, the Company has determined that the Manufacturer is a variable interest but the Company is not the primary beneficiary of the variable interest entity and therefore consolidation is not required. Under the terms of the agreement, the Company grants to the Manufacturer a revocable license to use the Company’s recipes, formulas, methods and ingredients for the preparation and production of Company’s products, for manufacturing the Company’s product and all future improvements, modifications, substitutions and replacements developed by the Company. The Manufacturer in turn grants the Company the exclusive right to purchase the product. Under the terms of the agreement the Manufacturer agrees to manufacture, package, and store the Company’s products and the Company has the right to purchase products from one or more other manufacturers, distributors or suppliers. The agreement contains a perpetual automatic renewal clause for a period of one year after the expiration of the initial term. During the renewal period either party may cancel the contract with written notice nine months prior to the termination date. | |
Under the terms of the agreement if the Company specifies any change in packaging or shipping materials which results in the manufacturer incurring increased expense for packaging and shipping materials or in the Manufacturer being unable to utilize obsolete packaging or shipping materials in ordinary packaging or shipping, the Company agrees to pay as additional product cost the additional cost for packaging and shipping materials and to purchase at cost such obsolete packaging and shipping materials. If the Company requests any repackaging of the product, other than due to defects in the original packaging, the Company will reimburse the Manufacturer for any labor costs incurred in repackaging. Per the agreement, all product delivery shipping costs are the expense of the Company. | |
In addition, the Company made several unsecured loans to the Manufacturer during 2013. The loan to the Manufacturer is unsecured, does not bear interest and is due on demand. | |
From time to time the Company will make improvements to the Manufacturer’s facility. The improvements are capitalized and depreciated over the estimated useful life of the supply agreement. | |
During the three months ended April 30, 2015 and 2014, the Company purchased substantially all of its inventory from the Manufacturer. | |
During the three months ended April 30, 2015 and 2014, the Manufacturer incurred expenses on behalf of the Company for shared administrative expenses and salary expenses. | |
At April 30, 2015 and January 31, 2015, the amount due from the Manufacturer is $2,205,416 and $2,213,037, respectively. | |
Meatball Obsession, LLC | |
A current director of the Company is the chairman of the board and shareholder of Meatball Obsession LLC (“MO”). | |
For the three months ended April 30, 2015 and 2014, the Company generated approximately $25,408 and $7,366 in revenues from MO, respectively. | |
As of April 30, 2015 and January 31, 2015, the Company had a receivable of $17,174 and $6,768 due from MO, respectively. |
Line_of_Credit
Line of Credit | 3 Months Ended |
Apr. 30, 2015 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 6 - Line of Credit |
Effective January 3, 2014, the Company entered into a Sale and Security Agreement (the “Sale and Security Agreement”) with Faunus Group International, Inc. (“FGI”) to provide for a $1.5 million secured demand credit facility backed by its receivables and inventory (the “FGI Facility”). The Sale and Security Agreement has an initial three year term (the “Original Term”) and shall be extended automatically for an additional one year for each succeeding term unless written notice of termination is given by either party at least sixty days prior to the end of the Original Term or any extension thereof. The Company and certain of its affiliates also entered into guarantees to guarantee the performance of the obligations under the Sale and Security Agreement (the “Guaranty Agreements”). The Company also granted FGI a security interest in and lien upon all of the Company’s right, title and interest in and to all of its assets (as defined in the Sale and Security Agreement). | |
Pursuant to the FGI Facility, FGI can elect to purchase eligible accounts receivables (“Purchased Accounts”) up to 70% of the value of such receivables (retaining a 30% reserve). At FGI’s election, FGI may advance the Company up to 70% of the value of any Purchased Accounts, subject to the FGI Facility. Reserves retained by FGI on any Purchased Accounts are expected to be refunded to the Company net of interest and fees on advances once the receivables are collected from customers. The interest rate on advances or borrowings under the FGI Facility will be the greater of (i) 6.75% per annum and (ii) 2.50% above the prime rate. Any advances or borrowings under the FGI Facility are due on demand. | |
The Company also agreed to pay to FGI monthly collateral management fees of 0.42% of the average monthly balance of Purchased Accounts. The minimum monthly net funds employed during each contract year hereof shall be $500,000. Additionally, the Company paid FGI a one-time facility fee equal to 1% of the FGI Facility upon entry into the Sale and Security Agreement. | |
During the year ended January 31, 2015, the Company terminated its agreement with FGI and paid off all obligations due at the payoff date. Upon termination, additional fees and accrued interest of approximately $48,600 were paid and included in the interest expense. | |
A noted in Note 7, on September 3, 2014, the Company entered into a Loan and Security Agreement (“Loan and Security Agreement”) with Entrepreneur Growth Capital, LLC (“EGC”) which contains a line of credit. As of April 30, 2015 and January 31, 2015, the outstanding balance on the line of credit was $946,319 and $1,409,098, respectively, in relation to the EGC line of credit. |
Loan_and_Security_Agreement
Loan and Security Agreement | 3 Months Ended | ||||
Apr. 30, 2015 | |||||
Loan And Security Agreement | |||||
Loan and Security Agreement | Note 7 - Loan and Security Agreement | ||||
On September 3, 2014, the Company entered into a Loan and Security Agreement (“Loan and Security Agreement”) with Entrepreneur Growth Capital, LLC (“EGC”). The total facility is for an aggregate principal amount of up to $3,100,000. The facility consists of the following: | |||||
● Accounts Revolving Line of Credit: | $ | 2,150,000 | |||
● Inventory Revolving Line of Credit: | $ | 350,000 | |||
● Term Loan: | $ | 600,000 | |||
EGC may from time to time make loans in an aggregate amount not to exceed the Accounts Revolving Line of Credit up to 85% of the net amount of Eligible Accounts (as defined in the Loan and Security Agreement). EGC may from time to time make loans in an aggregate amount not to exceed the Inventory Revolving Line of Credit against Eligible Inventory (as defined in the Loan and Security Agreement) in an amount up to 50% of finished goods and in an amount up to 20% of raw material. | |||||
The revolving interest rates is equal to the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus (a) 2.5% on loans and advances made against eligible accounts and (b) 4.0% on loans made against eligible inventory. The term loan bears interest at a rate of the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus 4.0%. The initial term of the facility is for a period of two years and will automatically renew for an additional one year period. The Company is required to pay a one-time facility fee equal to 2.25% of the total $3,100,000 facility. In the event of default, the Company shall pay 10% above the stated rates of interest per the Agreement. The drawdowns are secured by all of the assets of the Company. | |||||
As of April 30, 2015 and January 31, 2015, the outstanding balance on the line of credit was $946,319 and $1,409,098, respectively. | |||||
On September 3, 2014, the Company also entered into a 5 year $600,000 Secured Promissory Note (“EGC Note”) with EGC. The EGC Note is payable in 60 monthly installments of $10,000. The EGC Note bears interest at the prime rate plus 4.0% and is payable monthly, in arrears. In the event of default, the Company shall pay 10% above the stated rates of interest per the Loan and Security Agreement. The EGC Note is secured by all of the assets of the Company. The outstanding balance on the term loan was $530,000 and $560,000 as of April 30, 2015 and January 31, 2015, respectively. | |||||
Additionally, in connection with the Loan and Security Agreement, Carl Wolf, the Company’s Chief Executive Officer entered into a Guarantee Agreement with EGC, personally guaranteeing all the amounts borrowed on behalf of the Company under the Loan and Security Agreement. |
Demand_Notes
Demand Notes | 3 Months Ended |
Apr. 30, 2015 | |
Demand Notes | |
Demand Notes | Note 8 - Demand Notes |
During April 2015, six directors of the Company entered into demand note agreements for total proceeds to the Company of $450,000. Subsequent to April 30, 2015, the notes were converted into convertible notes (see Note 13) with a maturity date of July 22, 2016. In accordance with ASC Topic 470, “Debt”, the demand notes are presented as long-term on the condensed consolidated balance sheets due to the July 2016 maturity date. |
Convertible_Note
Convertible Note | 3 Months Ended |
Apr. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Note | Note 9 - Convertible Note |
On December 19, 2014, the Company entered into a securities purchase agreement (the “Manatuck Purchase Agreement”) with Manatuck Hill Partners, LLC (“Manatuck”) whereby the Company issued a convertible redeemable debenture (the “Manatuck Debenture”) in favor of Manatuck. The Manatuck Debenture is for $2,000,000 bearing interest at a rate of 14% and matures in February 2016. Upon issuance of the Manatuck Debenture, the Company granted Manatuck 200,000 shares of the Company’s restricted common stock. In April 2015, the maturity date was extended to May 2016 and 30,000 shares of restricted common stock were issued to Manatuck. Based on management’s review, the accounting for debt modification applied. The Company valued the 30,000 shares at the grant date share price of $1.32 and recorded $39,600 to debt discount on the condensed consolidated balance sheet. | |
Optional conversion to convertible preferred stock is available upon completion of a qualified offering (as defined in the Manatuck Purchase Agreement) while the Manatuck Debenture is outstanding. Upon conversion of the Manatuck Debenture, the Company shall issue Manatuck shares of common stock as defined in the Manatuck Purchase Agreement. | |
Upon issuance of the debenture and subsequent extension, a debt discount of $498,350 was recorded for the fees incurred by the buyer as well as the value of the common shares granted to Manatuck. The debt discount will be amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the effective interest method. The amortization of debt discount is included as a component of interest expense in the consolidated statements of operations. There was unamortized debt discount of $353,320 and $412,553 as of April 30, 2015 and January 31, 2015, respectively. |
Concentrations
Concentrations | 3 Months Ended |
Apr. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 10 - Concentrations |
Revenues | |
During the three months ended April 30, 2015, the Company earned revenues from four customers representing approximately 20%, 16%, 15% and 11% of gross sales. As of April 30, 2015, these customers represented approximately 14%, 11%, 23%, and 7% of total gross outstanding receivables, respectively. | |
During the three months ended April 30, 2014, the Company earned revenues from three customers representing approximately 29%, 14%, and 10% of gross sales. As of April 30, 2014, these customers represented approximately 32%, 5% and 6% of total gross outstanding receivables, respectively. | |
Cost of Sales | |
For the three months ended April 30, 2015 and 2014, one vendor (a related party) represented 95% and 100% of the Company’s purchases, respectively. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||||||
Apr. 30, 2015 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Stockholders' Equity | Note 11 - Stockholders’ Equity | ||||||||||||||||||||
(A) Common Stock Transactions | |||||||||||||||||||||
On December 19, 2014, the Company issued a convertible redeemable debenture (the “Manatuck Debenture” as discussed in Note 9). In April 2015 the maturity date of the note was extended until May 2016. Upon execution of the extension, the Company granted Manatuck 30,000 shares of the Company’s restricted common stock. | |||||||||||||||||||||
During the three months ended April 30, 2015, the Company issued 8,540 shares of its common stock for a cashless conversion of 22,666 warrants. | |||||||||||||||||||||
(B) Options | |||||||||||||||||||||
The following is a summary of the Company’s option activity: | |||||||||||||||||||||
Options | Weighted | ||||||||||||||||||||
Average | |||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – January 31, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Exercisable – January 31, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Forfeited/Cancelled | - | $ | - | ||||||||||||||||||
Outstanding – April 30, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Exercisable – April 30, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Exercise | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||
Contractual Life | |||||||||||||||||||||
(in years) | |||||||||||||||||||||
$ | 1 | 487,404 | 2.47 years | $ | 1 | 487,404 | $ | 1 | |||||||||||||
$ | 2.97 | 9,000 | 4.01 years | $ | 2.97 | 9,000 | $ | 2.97 | |||||||||||||
At April 30, 2015 and January 31, 2015, the total intrinsic value of options outstanding and exercisable was $87,733 and $219,332, respectively. | |||||||||||||||||||||
As of April 30, 2015, the Company has $1,013 in stock-based compensation related to stock options that is yet to be vested. The weighted average remaining life of the options is 2.50 years. | |||||||||||||||||||||
(C) Warrants | |||||||||||||||||||||
The following is a summary of the Company’s warrant activity: | |||||||||||||||||||||
Warrants | Weighted | ||||||||||||||||||||
Average | |||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – January 31, 2015 | 1,027,401 | $ | 1.27 | ||||||||||||||||||
Exercisable – January 31, 2015 | 1,027,401 | $ | 1.27 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | (22,666 | ) | $ | 1.25 | |||||||||||||||||
Forfeited/Cancelled | - | $ | - | ||||||||||||||||||
Outstanding – April 30, 2015 | 1,004,735 | $ | 1.27 | ||||||||||||||||||
Exercisable – April 30, 2015 | 1,004,735 | $ | 1.27 | ||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||
Range of | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Exercise Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||
Contractual | |||||||||||||||||||||
Life | |||||||||||||||||||||
(in years) | |||||||||||||||||||||
$1.00-$2.50 | 1,004,735 | 2.88 years | $ | 1.27 | 1,004,735 | $ | 1.27 | ||||||||||||||
At April 30, 2015 and January 31, 2015, the total intrinsic value of warrants outstanding and exercisable was $88,925 and $227,430, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||||
Apr. 30, 2015 | ||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||
Commitments and Contingencies | Note 12 - Commitments and Contingencies | |||||
Litigations, 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 (the “Agreement”). Under the terms of the Agreement the Licensor shall 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 to develop Licensor Products that are acceptable to Licensee. 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 License Agreement. | ||||||
The term of the Agreement (the “Term”) shall consist of the Exclusive Term and the Non-Exclusive Term. The 12-month period beginning on each January 1 and ending on each December 31 is referred to herein as an “Agreement Year”. | ||||||
The Exclusive Term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date, unless terminated or extended as provided herein. Licensor, at its option, may terminate the Exclusive Term by notice in writing to Licensee, delivered between the 60th and the 90th day following the end of any Agreement Year if, on or before the 60th day following the end of such Agreement Year, Licensee has not paid Licensor Royalties with respect to such Agreement Year at least equal to the minimum royalty (the “Minimum Royalty”) for such Agreement Year. Subject to the foregoing sentence, and provided Licensee has not breached this Agreement and failed to cure such breach in accordance herewith, Licensee may extend the Exclusive Term for an additional twenty five (25) years, by notice in writing to Licensor, delivered on or before the 50th anniversary of the Effective Date. | ||||||
The Non-Exclusive Term begins upon expiration of the Exclusive Term and continues indefinitely thereafter, until terminated by Licensor due to a material breach hereof by Licensee that remains uncured after notice and opportunity to cure in accordance herewith, or until terminated by Licensee. | ||||||
Either party may terminate this Agreement in the event that the other party materially breaches its obligations and fails to cure such material breach within sixty (60) days following written notice from the non-breaching party specifying the nature of the breach. The following termination rights are in addition to the termination rights provided elsewhere in the agreement | ||||||
● | Termination by Licensee - Licensee shall have the right to terminate this Agreement at any time on sixty (60) days written notice to Licensor. In such event, all moneys paid to Licensor shall be deemed non-refundable. | |||||
Under the terms of the Agreement the Company is required to pay quarterly royalty fees as follows: | ||||||
During the Exclusive Term and the Non-Exclusive Term the Company will pay a royalty equal to the royalty rate (the “Royalty Rate”), multiplied by Company’s “Net Sales”. As used herein, “Net Sales” means gross invoiced sales of Products, directly or indirectly to unrelated third parties, less (a) discounts (including cash discounts), and retroactive price reductions or allowances actually allowed or granted from the billed amount (collectively “Discounts”); (b) credits, rebates, and allowances actually granted upon claims, rejections or returns, including recalls (voluntary or otherwise) (collectively, “Credits”); (c) freight, postage, shipping and insurance charges; (d) taxes, duties or other governmental charges levied on or measured by the billing amount, when included in billing, as adjusted for rebates and refunds; and (e) provisions for uncollectible accounts determined in accordance with reasonable accounting methods, consistently applied. | ||||||
The Royalty Rate shall be: 6% of net sales up to $500,000 of net sales for each Agreement year; 4% of Net Sales from $500,000 up to $2,500,000 of Net Sales for each Agreement year; 2% of Net Sales from $2,500,000 up to $20,000,000 of Net Sales for each Agreement year; and 1% of Net Sales in excess of $20,000,000 of Net Sales for each Agreement year. | ||||||
In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: | ||||||
Agreement Year | Minimum Royalty to be Paid with | |||||
Respect to Such Agreement Year | ||||||
1st and 2nd | $ | - | ||||
3rd and 4th | $ | 50,000 | ||||
5th, 6th and 7th | $ | 75,000 | ||||
8th and 9th | $ | 100,000 | ||||
10th and thereafter | $ | 125,000 | ||||
The Company incurred $85,837 and $78,630 of royalty expenses for the three months ended April 30, 2015 and 2014. Royalty expenses are included in general and administrative expenses on the Condensed Consolidated Statement of Operations. | ||||||
Agreements with Placement Agents and Finders | ||||||
(A) October 22, 2013 | ||||||
The Company entered into a third Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective October 22, 2013 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, Spartan will act, for a minimum of twenty-four months from the date of the agreement, as the Company’s exclusive financial advisor and placement agent to assist the Company in connection with a best efforts private placement (the “Financing”) of up to $2.5 million of the Company’s equity and/or debt securities and/or convertible instruments (the “Securities”). | ||||||
The Company upon closing of the Financing shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing and 3% of the aggregate gross proceeds raised in the Financing for expenses incurred by Spartan. The Company shall grant and deliver to Spartan at the closing of the Financing, for nominal consideration, five year warrants (the “Warrants”) to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of shares of Common Stock (and/or shares of Common Stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The Warrants shall be exercisable at any time during the five year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of Common Stock paid by investors in the Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing. | ||||||
(B) April 1, 2015 | ||||||
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, the Company shall pay to Spartan a non-refundable monthly fee of $10,000 through October 1, 2015. The monthly fee shall survive any termination of the Agreement. Additionally, (i) if at least $4,000,000 is raised in the Financing, the Company shall pay to Spartan a non-refundable fee of $5,000 per month from November 1, 2015 through October 2017; and (ii) if at least $5,000,000 is raised in the Financing, the Company shall pay to Spartan a non-refundable fee of $5,000 per month from November 1, 2017 through October 2019. If $10,000,000 or more is raised in the Financing, the Company shall issue to Spartan shares of its common stock having an aggregate value of $5,000 (as determined by reference to the average volume weighted average trading price for the last five trading days of the immediately preceding month) on the first day of each month during the period from November 1, 2015 through October 1, 2019. | ||||||
The Company upon closing of the Financing shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing and 3% of the aggregate gross proceeds raised in the Financing for expenses incurred by Spartan. The Company shall grant and deliver to Spartan at the closing of the Financing, for nominal consideration, five year warrants (the “Warrants”) to purchase a number of shares of the Company’s Common Stock equal to 10% of the number of shares of Common Stock (and/or shares of Common Stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The Warrants shall be exercisable at any time during the five year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of Common Stock paid by investors in the Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing. | ||||||
During the three months ended April 30, 2015, the Company paid to Spartan financing fees of $30,000 and a one-time engagement fee of $10,000. | ||||||
Operating Lease | ||||||
In January 2015, the Company began a lease agreement for office space in East Rutherford, NJ. The lease is for a 48 month term expiring on March 31, 2019 with annual payments of $18,848. | ||||||
Total future minimum payments required under operating lease as of April 30, 2015 are as follows. | ||||||
For the Twelve Month Period Ending April 30, | ||||||
2016 | $ | 18,848 | ||||
2017 | 18,848 | |||||
2018 | 18,848 | |||||
2019 | 17,277 | |||||
$ | 73,821 |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Apr. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 - Subsequent Events |
On May 15, 2015 and June 4, 2015, the Company’s Chief Executive Officer advanced the Company $200,000 and $100,000, respectively, in the form of a demand notes payable (together the “Demand Notes”). The Company and its Chief Executive Officer have agreed that the principal amount of the Demand Notes will be converted into Units as described further below. | |
On May 22, 2015, the Company issued an aggregate of $450,000 in Convertible Debentures in favor of six (6) of the Company’s directors (the “Management Investors”) in exchange for the existing demand notes payable of $450,000. The Debentures pay interest at a rate of 8% per annum and are due on July 22, 2016. The Debentures have since been converted into Units as described further below. | |
On June 11, 2015, the Company conducted the initial closing of a private placement offering of a minimum of $1,000,000 of 20 units (the “Minimum Offering”) up to $10,000,000 or 200 units (the “Maximum Offering”), subject to increase of the Maximum Offering by up to $2,000,000, or an additional 40 units (the “Over-Allotment”), of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred”) and warrants (the “Warrants”) to purchase the Company’s common stock to accredited investors (the “Offering”). Each Unit is comprised of (i) five hundred (500) shares of Series A Preferred (“Unit Shares”) convertible into the Company’s common stock at a conversion price of $1.25 per share and (ii) one (1) Warrant to purchase 100% of the number of Conversion Shares (as defined below) initially issuable upon conversion of the Unit Shares to the purchaser at the exercise price of $1.25 per share. Each registered holder of Unit Shares shall have the right, at any time commencing after the issuance, to convert the stated value ($100 per Unit Share) of such shares, as well as accrued but unpaid declared dividends on the Series A Preferred into fully paid and non-assessable shares of Common Stock of the Company (the “Conversion Shares”). |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Use of Estimates | 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 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 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 | Risks and Uncertainties | ||||||||
The Company operates in an industry that is subject to intense competition and change 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. | |||||||||
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 the 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 | 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 April 30, 2015 or January 31, 2015. | |||||||||
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. | |||||||||
Accounts Receivable and Allowance for Doubtful Accounts | 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. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of April 30, 2015 and January 31, 2015, the Company had reserves of $2,000. | |||||||||
Inventories | Inventories | ||||||||
Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at April 30, 2015 and January 31, 2015: | |||||||||
30-Apr-15 | 31-Jan-15 | ||||||||
Finished goods | $ | 469,345 | $ | 301,170 | |||||
Property and Equipment | Property and Equipment | ||||||||
Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives. | |||||||||
Asset lives for financial statement reporting of depreciation are: | |||||||||
Machinery and equipment | 2-7 years | ||||||||
Furniture and fixtures | 3-5 years | ||||||||
Leasehold improvements | 3-10 years | ||||||||
Fair Value of Financial Instruments | 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. | |||||||||
Stock Issuance Costs | Stock Issuance Costs | ||||||||
Stock issuance costs are capitalized as incurred. Upon the completion of the offering, the stock issuance costs are reclassified to equity and netted against proceeds. In the event the costs are in excess of the proceeds, the costs are recorded to expense. In the case of an aborted offering, all costs are expensed. Offering costs recorded to equity for the three months ended April 30, 2015 and 2014 were $0 and $222,327, respectively. As of April 30, 2015 and January 31, 2105, there were capitalized costs of $10,000 and $0, respectively. | |||||||||
Research and Development | Research and Development | ||||||||
Research and development is expensed as incurred. Research and development expenses for the three months ended April 30, 2015 and 2014 were $23,079 and $18,901, respectively. | |||||||||
Shipping and Handling Costs | Shipping and Handling Costs | ||||||||
The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of sales. | |||||||||
Revenue Recognition | Revenue Recognition | ||||||||
The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products. | |||||||||
The Company meets these criteria upon shipment. | |||||||||
Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows: | |||||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
30-Apr-15 | 30-Apr-15 | ||||||||
Gross Sales | $ | 3,428,864 | $ | 2,655,011 | |||||
Less: Slotting, Discounts, Allowances | 75,585 | 71,862 | |||||||
Net Sales | $ | 3,353,279 | $ | 2,583,149 | |||||
Cost of Sales | Cost of Sales | ||||||||
Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight, packaging, and print production costs. | |||||||||
Advertising | Advertising | ||||||||
Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the three months ended April 30, 2015 and 2014 were $916,932 and $761,999, respectively. | |||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||
The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Accounting for Stock-Based 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 accounts for share-based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services”. | |||||||||
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 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. | |||||||||
For the three months ended April 30, 2015 and 2014, share-based compensation amounted to $2,042 and $99,099, respectively. Of the $2,042 and $99,099 recorded for the three months ended April 30, 2015 and 2014, $0 and $94,927 were direct costs of a stock offering and have been recorded as a reduction in additional paid in capital. | |||||||||
There were no grants during the three months ended April 30, 2015. For the three months ended April 30, 2014, when computing fair value of share-based payments, the Company has considered the following variables: | |||||||||
30-Apr-14 | |||||||||
Risk-free interest rate | 0.68% to 1.71% | ||||||||
Expected life of grants | 1 to 5 years | ||||||||
Expected volatility of underlying stock | 144% to 193% | ||||||||
Dividends | $0 | ||||||||
The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110. 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 determined by the historical volatilities for industry peers and used an average of those volatilities. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. | |||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share | ||||||||
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. | |||||||||
The Company had the following potential common stock equivalents at April 30, 2015: | |||||||||
Common stock subscribed | 66,667 | ||||||||
Common stock warrants, exercise price range of $1.00-$2.50 | 1,004,735 | ||||||||
Common stock options, exercise price of $1.00-$2.97 | 496,404 | ||||||||
Total common stock equivalents | 1,567,806 | ||||||||
The Company had the following potential common stock equivalents at April 30, 2014: | |||||||||
Common stock subscribed | 653,335 | ||||||||
Common stock warrants, exercise price of $1.00-$1.50 | 987,401 | ||||||||
Common stock options, exercise price of $1.00 | 444,288 | ||||||||
Total common stock equivalents | 2,085,024 | ||||||||
Since the Company reflected a net loss during the three months ended April 30, 2015 and 2014, the effect of considering any common stock equivalents, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. | |||||||||
Income Taxes | Income Taxes | ||||||||
Income taxes are provided in accordance with ASC No. 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. | |||||||||
The Company is no longer subject to tax examinations by tax authorities for years prior to 2013. | |||||||||
Reclassification | Reclassification | ||||||||
Certain prior period amounts have been reclassified to conform to current period presentation. | |||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||
The U.S. Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, in May 2014. The amendments in this Update supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2011-230—Revenue Recognition (Topic 605) and Proposed Accounting Standards Update 2011–250—Revenue Recognition (Topic 605): Codification Amendments, both of which have been deleted. Accounting Standards Update 2014-09. The amendments in this Update are effective for the Company for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the effects of ASU 2014-09 on the condensed consolidated financial statements. | |||||||||
In March 2015, the Financial Accounting Standards Board issued Accounting issued Accounting Standards Update (ASU) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments is permitted for financial statements that have not been previously issued. The amendments should be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (i.e., debt issuance cost asset and the debt liability). The Company is currently evaluating the effects of ASU 2015-03 on the condensed consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Inventories | Inventories are stated at average cost using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at April 30, 2015 and January 31, 2015: | ||||||||
30-Apr-15 | 31-Jan-15 | ||||||||
Finished goods | $ | 469,345 | $ | 301,170 | |||||
Schedule of Property and Equipment Estimated Useful Lives | Asset lives for financial statement reporting of depreciation are: | ||||||||
Machinery and equipment | 2-7 years | ||||||||
Furniture and fixtures | 3-5 years | ||||||||
Leasehold improvements | 3-10 years | ||||||||
Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues | Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows: | ||||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
30-Apr-15 | 30-Apr-15 | ||||||||
Gross Sales | $ | 3,428,864 | $ | 2,655,011 | |||||
Less: Slotting, Discounts, Allowances | 75,585 | 71,862 | |||||||
Net Sales | $ | 3,353,279 | $ | 2,583,149 | |||||
Schedule of Fair Value of Share Based Payments | The Company has considered the following variables: | ||||||||
30-Apr-14 | |||||||||
Risk-free interest rate | 0.68% to 1.71% | ||||||||
Expected life of grants | 1 to 5 years | ||||||||
Expected volatility of underlying stock | 144% to 193% | ||||||||
Dividends | $0 | ||||||||
Schedule of Common Stock Equivalents | The Company had the following potential common stock equivalents at April 30, 2015: | ||||||||
Common stock subscribed | 66,667 | ||||||||
Common stock warrants, exercise price range of $1.00-$2.50 | 1,004,735 | ||||||||
Common stock options, exercise price of $1.00-$2.97 | 496,404 | ||||||||
Total common stock equivalents | 1,567,806 | ||||||||
The Company had the following potential common stock equivalents at April 30, 2014: | |||||||||
Common stock subscribed | 653,335 | ||||||||
Common stock warrants, exercise price of $1.00-$1.50 | 987,401 | ||||||||
Common stock options, exercise price of $1.00 | 444,288 | ||||||||
Total common stock equivalents | 2,085,024 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property and Equipment | Property and equipment on April 30, 2015 and January 31, 2015 are as follows: | ||||||||
30-Apr-15 | 31-Jan-15 | ||||||||
Machinery and Equipment | $ | 1,069,741 | $ | 1,060,066 | |||||
Furniture and Fixtures | 17,942 | 16,887 | |||||||
Leasehold Improvements | 329,331 | 274,567 | |||||||
1,417,014 | 1,351,520 | ||||||||
Less: Accumulated Depreciation | 293,975 | 226,775 | |||||||
$ | 1,123,039 | $ | 1,124,745 |
Loan_and_Security_Agreement_Ta
Loan and Security Agreement (Tables) | 3 Months Ended | ||||
Apr. 30, 2015 | |||||
Loan And Security Agreement | |||||
Schedule of Line of Credit | The facility consists of the following: | ||||
● Accounts Revolving Line of Credit: | $ | 2,150,000 | |||
● Inventory Revolving Line of Credit: | $ | 350,000 | |||
● Term Loan: | $ | 600,000 |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||||||
Apr. 30, 2015 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Summary of Option Activity | The following is a summary of the Company’s option activity: | ||||||||||||||||||||
Options | Weighted | ||||||||||||||||||||
Average | |||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – January 31, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Exercisable – January 31, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | - | $ | - | ||||||||||||||||||
Forfeited/Cancelled | - | $ | - | ||||||||||||||||||
Outstanding – April 30, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Exercisable – April 30, 2015 | 496,404 | $ | 1.04 | ||||||||||||||||||
Summary of Option Outstanding and Exercisable | Options Outstanding | Options Exercisable | |||||||||||||||||||
Exercise | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||
Contractual Life | |||||||||||||||||||||
(in years) | |||||||||||||||||||||
$ | 1 | 487,404 | 2.47 years | $ | 1 | 487,404 | $ | 1 | |||||||||||||
$ | 2.97 | 9,000 | 4.01 years | $ | 2.97 | 9,000 | $ | 2.97 | |||||||||||||
Schedule of Warrants Activity | The following is a summary of the Company’s warrant activity: | ||||||||||||||||||||
Warrants | Weighted | ||||||||||||||||||||
Average | |||||||||||||||||||||
Exercise Price | |||||||||||||||||||||
Outstanding – January 31, 2015 | 1,027,401 | $ | 1.27 | ||||||||||||||||||
Exercisable – January 31, 2015 | 1,027,401 | $ | 1.27 | ||||||||||||||||||
Granted | - | $ | - | ||||||||||||||||||
Exercised | (22,666 | ) | $ | 1.25 | |||||||||||||||||
Forfeited/Cancelled | - | $ | - | ||||||||||||||||||
Outstanding – April 30, 2015 | 1,004,735 | $ | 1.27 | ||||||||||||||||||
Exercisable – April 30, 2015 | 1,004,735 | $ | 1.27 | ||||||||||||||||||
Schedule of Warrants Outstanding and Exercisable | Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||
Range of | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Exercise Price | Outstanding | Average | Average | Exercisable | Average | ||||||||||||||||
Remaining | Exercise Price | Exercise Price | |||||||||||||||||||
Contractual | |||||||||||||||||||||
Life | |||||||||||||||||||||
(in years) | |||||||||||||||||||||
$1.00-$2.50 | 1,004,735 | 2.88 years | $ | 1.27 | 1,004,735 | $ | 1.27 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||||
Apr. 30, 2015 | ||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||
Schedule of Royalty Minimum Payment by Preceding Agreement Year | In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: | |||||
Agreement Year | Minimum Royalty to be Paid with | |||||
Respect to Such Agreement Year | ||||||
1st and 2nd | $ | - | ||||
3rd and 4th | $ | 50,000 | ||||
5th, 6th and 7th | $ | 75,000 | ||||
8th and 9th | $ | 100,000 | ||||
10th and thereafter | $ | 125,000 | ||||
Schedule of Future Minimum Payments Under Operating Leases | Total future minimum payments required under operating lease as of April 30, 2015 are as follows. | |||||
For the Twelve Month Period Ending April 30, | ||||||
2016 | $ | 18,848 | ||||
2017 | 18,848 | |||||
2018 | 18,848 | |||||
2019 | 17,277 | |||||
$ | 73,821 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Jan. 31, 2015 | |
Accounting Policies [Abstract] | |||
Cash equivalents | $0 | $0 | |
Accounts receivable reserves | 2,000 | 2,000 | |
Stock offering cost recorded | 0 | 222,327 | |
Capitalized costs | 10,000 | 0 | |
Research and development expense | 23,079 | 18,901 | |
Advertising expenses | 916,932 | 761,999 | |
Share based compensation | 2,042 | 99,099 | |
Reduction in additional paid in capital | $0 | $94,927 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Inventories (Details) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
Accounting Policies [Abstract] | ||
Finished goods | $469,345 | $301,170 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 3 Months Ended |
Apr. 30, 2015 | |
Minimum [Member] | Machinery And Equipment [Member] | |
Property and equipment estimated useful lives | 2 years |
Minimum [Member] | Furniture And Fixtures [Member] | |
Property and equipment estimated useful lives | 3 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Property and equipment estimated useful lives | 3 years |
Maximum [Member] | Machinery And Equipment [Member] | |
Property and equipment estimated useful lives | 7 years |
Maximum [Member] | Furniture And Fixtures [Member] | |
Property and equipment estimated useful lives | 5 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property and equipment estimated useful lives | 10 years |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues (Details) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
Accounting Policies [Abstract] | ||
Gross Sales | $3,428,864 | $2,655,011 |
Less: Slotting, Discounts, Allowances | 75,585 | 71,862 |
Net Sales | $3,353,279 | $2,583,149 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies - Schedule of Fair Value of Share Based Payments (Details) | 3 Months Ended |
Apr. 30, 2014 | |
Risk-free interest rate, minimum | 0.68% |
Risk-free interest rate, maximum | 1.71% |
Expected volatility of underlying stock, minimum | 144.00% |
Expected volatility of underlying stock, maximum | 193.00% |
Dividend | 0.00% |
Minimum [Member] | |
Expected life of grants | 1 year |
Maximum [Member] | |
Expected life of grants | 5 years |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents (Details) | Apr. 30, 2015 | Jan. 31, 2015 | Apr. 30, 2014 |
Common stock subscribed, shares | 66,667 | 66,667 | 653,335 |
Total common stock equivalents | 1,567,806 | 2,085,024 | |
Common Stock Warrants, Exercise Price Range of $1.00-$2.50 [Member] | |||
Common stock warrants, shares | 1,004,735 | ||
Common Stock Options, Exercise Price of $1.00-$2.97 [Member] | |||
Common stock options, shares | 496,404 | ||
Common Stock Warrants, Exercise Price of $1.00-$1.50 [Member] | |||
Common stock warrants, shares | 987,401 | ||
Common Stock Options, Exercise Price of $1.00 [Member] | |||
Common stock options, shares | 444,288 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents (Details) (Parenthetical) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 | Apr. 30, 2014 |
Common stock options, exercise price | $1.04 | $1.04 | $1 |
Minimum [Member] | |||
Common stock warrants, exercise price range | $1 | $1 | |
Common stock options, exercise price | $1 | ||
Maximum [Member] | |||
Common stock warrants, exercise price range | $2.50 | $1.50 | |
Common stock options, exercise price | $2.97 |
Property_and_Equipment_Details
Property and Equipment (Details Narrative) (USD $) | 3 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Jan. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Fixed assets amount | $0 | $854,509 | |
Depreciation expense | $67,200 | $14,737 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Details) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Machinery and Equipment | $1,069,741 | $1,060,066 |
Furniture and Fixtures | 17,942 | 16,887 |
Leasehold Improvements | 329,331 | 274,567 |
Property Plant And Equipment, Gross | 1,417,014 | 1,351,520 |
Less: Accumulated Depreciation | 293,975 | 226,775 |
Property, plant and equipment, net | $1,123,039 | $1,124,745 |
Investment_in_Meatball_Obsessi1
Investment in Meatball Obsession, LLC (Details Narrative) (Meatball Obsession, LLC [Member], USD $) | 0 Months Ended | ||
Dec. 31, 2011 | Apr. 30, 2015 | Jan. 31, 2015 | |
Meatball Obsession, LLC [Member] | |||
Percentage of equity interest acquired in business combination | 34.62% | ||
Total investment in Meatball Obsession, LLC | $27,032 | ||
Reduction in investment due to losses in affiliates | $0 | ||
Ownership interest percentage | 13.00% | 13.00% |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 3 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Jan. 31, 2015 | |
Due from manufacturer - related party | $2,205,416 | $2,213,037 | |
Meatball Obsession, LLC [Member] | |||
Revenue from related parties | 25,408 | 7,366 | |
Due from related party | $17,174 | $6,768 |
Line_of_Credit_Details_Narrati
Line of Credit (Details Narrative) (USD $) | 3 Months Ended | |||
Apr. 30, 2015 | Apr. 30, 2014 | Jan. 31, 2015 | Jan. 03, 2014 | |
Additional fees and accrued interest paid | $16,634 | |||
Line of credit | 946,319 | 1,409,098 | ||
Faunus Group International, Inc. [Member] | Guaranty Agreements [Member] | ||||
Purchased eligible accounts receivables, percentage | 70.00% | |||
Percentage of reserve on purchased eligible accounts receivables | 30.00% | |||
Interest rate on advances or borrowings under the FGI Facility | The greater of (i) 6.75% per annum and (ii) 2.50% above the prime rate. | |||
Collateral management fees, percentage of average monthly balance of Purchased Accounts | 0.42% | |||
Minimum monthly net funds employed during each contract year | 500,000 | |||
One-time facility fee, percentage of credit facility upon entry into Sale and Security Agreement | 1.00% | |||
Additional fees and accrued interest paid | 48,600 | |||
Secured Demand Credit Facility Backed By Receivables and Inventory [Member] | ||||
Secured demand credit facility backed by its receivables and inventory | $1,500,000 |
Loan_and_Security_Agreement_De
Loan and Security Agreement (Details Narrative) (USD $) | 0 Months Ended | ||
Sep. 03, 2014 | Apr. 30, 2015 | Jan. 31, 2015 | |
Line of credit aggregate value | $600,000 | ||
Line of credit | 946,319 | 1,409,098 | |
Term loan | 530,000 | 560,000 | |
Loan And Security Agreement One [Member] | Entrepreneur Growth Capital LLC [Member] | |||
Line of credit aggregate value | 3,100,000 | ||
Percentage of accounts revolving line of credit maximum | 85.00% | ||
Percentage of finished goods amount | 50.00% | ||
Percentage of raw material amount | 20.00% | ||
Line of credit interest rate description | Generally reported by Citibank, N.A. plus (a) 2.5% on loans and advances made against eligible accounts and (b) 4.0% on loans made against eligible inventory. The term loan bears interest at a rate of the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus 4.0%. | ||
Line of credit annual facility percentage | 2.25% | ||
Line of credit default stated rates of interest | 10.00% | ||
Loan And Security Agreement Two [Member] | Entrepreneur Growth Capital LLC [Member] | |||
Line of credit aggregate value | 600,000 | ||
Line of credit interest rate description | The EGC Note bears interest at the prime rate plus 4.0% and is payable monthly, in arrears. In the event of default | ||
Line of credit default stated rates of interest | 10.00% | ||
Term of loan | 5 years | ||
Repayment of secured debt, monthly installment basis | $10,000 | ||
Note payable, during period | 60 months |
Loan_and_Security_Agreement_Sc
Loan and Security Agreement - Schedule of Line of Credit (Details) (USD $) | Sep. 03, 2014 |
Loan And Security Agreement | |
Accounts Revolving Line of Credit: | $2,150,000 |
Inventory Revolving Line of Credit: | 350,000 |
Term Loan: | $600,000 |
Demand_Notes_Details_Narrative
Demand Notes (Details Narrative) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
Proceeds from demand notes | $450,000 | |
Demand Note Agreements [Member] | ||
Number of directors | 6 | |
Debt maturity date | 22-Jul-16 | |
Demand notes maturity date | Jul-16 |
Convertible_Note_Details_Narra
Convertible Note (Details Narrative) (USD $) | 3 Months Ended | 0 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Dec. 19, 2014 | Jan. 31, 2015 | |
Debt discount | $98,833 | |||
Unamortized debt discount | 353,320 | 412,553 | ||
Manatuck Hill Partners, LLC [Member] | ||||
Debt discount | 498,350 | |||
Manatuck Purchase Agreement [Member] | Manatuck Hill Partners, LLC [Member] | ||||
Convertible debenture | 2,000,000 | |||
Debt bearing interest rate | 14.00% | |||
Debt maturity month year | Feb-16 | |||
Number of restricted common stock shares granted, shares | 30,000 | 200,000 | ||
Debt maturity extended month year | May-16 | |||
Debt discount | $39,600 | |||
Common stock price per shares | $1.32 |
Concentrations_Details_Narrati
Concentrations (Details Narrative) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
Vendor One [Member] | ||
Percentage of cost of sales during period | 95.00% | 100.00% |
Sales Revenue [Member] | Customer A [Member] | ||
Concentrations of risk percentage | 20.00% | 29.00% |
Sales Revenue [Member] | Customer B [Member] | ||
Concentrations of risk percentage | 16.00% | 14.00% |
Sales Revenue [Member] | Customer C [Member] | ||
Concentrations of risk percentage | 15.00% | 10.00% |
Sales Revenue [Member] | Customer D [Member] | ||
Concentrations of risk percentage | 11.00% | |
Accounts Receivable [Member] | Customer A [Member] | ||
Concentrations of risk percentage | 14.00% | 32.00% |
Accounts Receivable [Member] | Customer B [Member] | ||
Concentrations of risk percentage | 11.00% | 5.00% |
Accounts Receivable [Member] | Customer C [Member] | ||
Concentrations of risk percentage | 23.00% | 6.00% |
Accounts Receivable [Member] | Customer D [Member] | ||
Concentrations of risk percentage | 7.00% |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 3 Months Ended | 0 Months Ended | |
Apr. 30, 2015 | Dec. 19, 2014 | Jan. 31, 2015 | |
Number of conversation of warrants | 22,666 | ||
Total intrinsic value of options outstanding and exercisable | $87,733 | $219,332 | |
Stock based compensation related to stock option unvested | 1,013 | ||
Weighted average remaining life of options | 2 years 6 months | ||
Common Stock [Member] | |||
Issuance of common stock shares for cashless exercise of warrants | 8,540 | ||
Warrant [Member] | |||
Total intrinsic value of warrants outstanding and exercisable | $88,925 | $227,430 | |
Manatuck Hill Partners, LLC [Member] | Manatuck Purchase Agreement [Member] | |||
Number of restricted common stock shares granted, shares | 30,000 | 200,000 | |
Debt maturity extended month year | May-16 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Option Activity (Details) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
Equity [Abstract] | ||
Options Outstanding, Beginning balance | 496,404 | |
Options Exercisable, Beginning balance | 496,404 | |
Options, Granted | ||
Options, Exercised | ||
Options, Forfeited/Cancelled | ||
Options Outstanding, Ending balance | 496,404 | |
Options Exercisable, Ending balance | 496,404 | |
Options Outstanding, Weighted Average Exercise Price, Beginning balance | $1.04 | $1 |
Options Exercisable, Weighted Average Exercise Price, Beginning balance | $1.04 | |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | ||
Options Outstanding, Weighted Average Exercise Price, Ending balance | $1.04 | $1 |
Options Exercisable, Weighted Average Exercise Price, Ending balance | $1.04 |
Stockholders_Equity_Summary_of1
Stockholders' Equity - Summary of Option Outstanding and Exercisable (Details) (USD $) | 3 Months Ended |
Apr. 30, 2015 | |
Range Of Exercise Price One [Member] | |
Range of exercise price | $1 |
Number of Options Outstanding | 487,404 |
Weighted Average Remaining Contractual Life (in years), Options Outstanding | 2 years 5 months 19 days |
Weighted Average Exercise Price, Options Outstanding | $1 |
Number of Options Exercisable | 487,404 |
Weighted Average Exercise Price, Options Exercisable | $1 |
Range Of Exercise Price Two [Member] | |
Range of exercise price | $2.97 |
Number of Options Outstanding | 9,000 |
Weighted Average Remaining Contractual Life (in years), Options Outstanding | 4 years 4 days |
Weighted Average Exercise Price, Options Outstanding | $2.97 |
Number of Options Exercisable | 9,000 |
Weighted Average Exercise Price, Options Exercisable | $2.97 |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Warrants Activity (Details) (USD $) | 3 Months Ended |
Apr. 30, 2015 | |
Equity [Abstract] | |
Warrants Outstanding, Beginning balance | 1,027,401 |
Warrants Exercisable, Beginning balance | 1,027,401 |
Warrants, Granted | |
Warrants, Exercised | -22,666 |
Warrants, Forfeited/Cancelled | |
Warrants Outstanding, Ending balance | 1,004,735 |
Warrants Exercisable, Ending balance | 1,004,735 |
Warrants Outstanding, Weighted Average Exercise Price, Beginning balance | $1.27 |
Warrants Exercisable, Weighted Average Exercise Price, Beginning balance | $1.27 |
Weighted Average Exercise Price, Granted | |
Weighted Average Exercise Price, Exercised | $1.25 |
Weighted Average Exercise Price, Forfeited/Cancelled | |
Warrants Outstanding, Weighted Average Exercise Price, Ending balance | $1.27 |
Warrants Exercisable, Weighted Average Exercise Price, Ending balance | $1.27 |
Stockholders_Equity_Schedule_o1
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable (Details) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Jan. 31, 2015 | |
Number of Warrants Outstanding | 1,004,735 | 1,027,401 |
Number of Warrants Exercisable | 1,004,735 | 1,027,401 |
Weighted Average Exercise Price, Warrants Exercisable | $1.27 | $1.27 |
Warrant [Member] | ||
Range of exercise price, lower limit | $1 | |
Range of exercise price, higher limit | $2.50 | |
Number of Warrants Outstanding | 1,004,735 | |
Weighted Average Remaining Contractual Life (in Years) | 2 years 10 months 17 days | |
Weighted Average Exercise Price, Warrants Outstanding | $1.27 | |
Number of Warrants Exercisable | 1,004,735 | |
Weighted Average Exercise Price, Warrants Exercisable | $1.27 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Narrative) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Oct. 22, 2013 | Apr. 01, 2015 | Jan. 31, 2015 | |
Royalty expenses | $85,837 | $78,630 | |||
Spartan Capital Securities, LLC [Member] | |||||
Percentage of fee equal to aggregate gross proceeds | 10.00% | ||||
Percentage of fees equal to aggregate gross proceeds for expenses | 3.00% | ||||
Percentage of common stock issuable | 10.00% | ||||
Fee paid amount | 30,000 | ||||
One-time engagement fee | 10,000 | ||||
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | |||||
Proceeds from private placements | 2,500,000 | ||||
Percentage of fee equal to aggregate gross proceeds | 10.00% | ||||
Percentage of fees equal to aggregate gross proceeds for expenses | 3.00% | ||||
Percentage of common stock issuable | 10.00% | ||||
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | October 1, 2015 [Member] | |||||
Non refundable monthlly fee amount | 10,000 | ||||
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | March 31, 2019 [Member] | |||||
Operating lease annual payments | 18,848 | ||||
Operating lease expiration term | 48 months | ||||
Minimum [Member] | Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | |||||
Non refundable monthlly fee amount | 5,000 | ||||
Non refundable monthly fee term | November 1, 2015 through October 2017 | ||||
Aggregate gross proceeds fee | 4,000,000 | ||||
Maximum [Member] | Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | |||||
Non refundable monthlly fee amount | 5,000 | ||||
Non refundable monthly fee term | November 1, 2017 through October 2019 | ||||
Aggregate gross proceeds fee | 5,000,000 | ||||
Year 1 [Member] | |||||
Percentage of royalty rate on net sales | 6.00% | ||||
Royalty net sales | 500,000 | ||||
Year 2 [Member] | |||||
Percentage of royalty rate on net sales | 4.00% | ||||
Year 2 [Member] | Minimum [Member] | |||||
Royalty net sales | 500,000 | ||||
Year 2 [Member] | Maximum [Member] | |||||
Royalty net sales | 2,500,000 | ||||
Year 3 [Member] | |||||
Percentage of royalty rate on net sales | 2.00% | ||||
Year 3 [Member] | Minimum [Member] | |||||
Royalty net sales | 2,500,000 | ||||
Year 3 [Member] | Maximum [Member] | |||||
Royalty net sales | 20,000,000 | ||||
Year 4 [Member] | |||||
Percentage of royalty rate on net sales | 1.00% | ||||
Royalty net sales | 20,000,000 | ||||
$10,000,000 or More Rraised Financing [Member] | Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | |||||
Non refundable monthlly fee amount | 5,000 | ||||
Non refundable monthly fee term | November 1, 2015 through October 1, 2019 | ||||
Aggregate gross proceeds fee | $10,000,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Royalty Minimum Payment by Preceding Agreement Year (Details) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Apr. 30, 2014 | |
Minimum Royalty to be Paid | $85,837 | $78,630 |
Agreement Year 1st and 2nd [Member] | ||
Minimum Royalty to be Paid | ||
Agreement Year 3rd and 4th [Member] | ||
Minimum Royalty to be Paid | 50,000 | |
Agreement Year 5th, 6th and 7th [Member] | ||
Minimum Royalty to be Paid | 75,000 | |
Agreement Year 8th and 9th [Member] | ||
Minimum Royalty to be Paid | 100,000 | |
Agreement Year 10th and thereafter [Member] | ||
Minimum Royalty to be Paid | $125,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Payments Under Operating Leases (Details) (USD $) | Apr. 30, 2015 |
Commitments and Contingencies Disclosure [Abstract] | |
2016 | $18,848 |
2017 | 18,848 |
2018 | 18,848 |
2019 | 17,277 |
Total | $73,821 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | |||||
Jun. 11, 2015 | 22-May-15 | Apr. 30, 2015 | Jan. 31, 2015 | Jun. 04, 2015 | 15-May-15 | |
Demand note payable | ($450,000) | |||||
Subsequent Event [Member] | Unit Shares [Member] | ||||||
Number of convertible preferred stock, shares | 500 | |||||
Stock conversation price per share | $1.25 | |||||
Issuance of warrants to purchase of conversation shares | 1 | |||||
Percentage of warrants to purchase of number of conversation shares | 100.00% | |||||
Shares issued exercise price per share | $1.25 | |||||
Subsequent Event [Member] | Unit Shares [Member] | Each Registered Holder [Member] | ||||||
Stock conversation price per share | $100 | |||||
Subsequent Event [Member] | Minimum Offering [Member] | ||||||
Value of units converted through private placement offering | 1,000,000 | |||||
Number of units converted through private placement offering | 20 | |||||
Subsequent Event [Member] | Maximum Offering [Member] | ||||||
Value of units converted through private placement offering | 1,000,000 | |||||
Number of units converted through private placement offering | 200 | |||||
Subsequent Event [Member] | Over-Allotment [Member] | ||||||
Value of units converted through private placement offering | 2,000,000 | |||||
Number of units converted through private placement offering | 40 | |||||
Subsequent Event [Member] | Six Directors [Member] | ||||||
Convertible debentures in favor of directors | 450,000 | |||||
Exchange for exisiting demand notes payable | 450,000 | |||||
Debt bearing interest rate | 8.00% | |||||
Debt due date | 22-Jul-16 | |||||
Subsequent Event [Member] | Chief Executive Officer [Member] | ||||||
Demand note payable | $100,000 | $200,000 |