Cover
Cover - shares | 9 Months Ended | |
Oct. 31, 2021 | Dec. 10, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 31, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --01-31 | |
Entity File Number | 000-54954 | |
Entity Registrant Name | MamaMancini’s Holdings, Inc. | |
Entity Central Index Key | 0001520358 | |
Entity Tax Identification Number | 27-0607116 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 25 Branca Road | |
Entity Address, City or Town | East Rutherford | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07073 | |
City Area Code | (201) | |
Local Phone Number | 531-1212 | |
Title of 12(b) Security | Common Stock, par value $0.00001 | |
Trading Symbol | MMMB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 35,751,792 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Current Assets: | ||
Cash | $ 4,539,920 | $ 3,190,560 |
Accounts receivable, net | 3,961,348 | 3,973,793 |
Inventories | 1,614,738 | 1,195,211 |
Prepaid expenses | 595,071 | 519,887 |
Total current assets | 10,711,077 | 8,879,451 |
Property and equipment, net | 3,177,021 | 2,963,602 |
Intangibles | 87,639 | 87,639 |
Operating lease right of use assets | 1,536,927 | 1,352,483 |
Deferred tax asset, net | 361,660 | 744,973 |
Deposits | 23,156 | 20,177 |
Total Assets | 15,897,480 | 14,048,325 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 4,269,206 | 3,707,111 |
Operating lease liability | 188,590 | 147,684 |
Finance leases payable | 226,111 | 190,554 |
Total current liabilities | 4,683,907 | 4,045,349 |
Operating lease liability – net of current portion | 1,383,960 | 1,218,487 |
Finance leases payable – net of current portion | 422,326 | 474,743 |
Total long-term liabilities | 1,806,286 | 1,693,230 |
Total Liabilities | 6,490,193 | 5,738,579 |
Commitments and contingencies (See Note 10) | ||
Stockholders’ Equity: | ||
Preferred stock, value | ||
Common stock, $0.00001 par value; 250,000,000 shares authorized; 35,751,792 and 35,603,731 shares issued and outstanding as of October 31, 2021 and January 31, 2021 | 359 | 357 |
Additional paid in capital | 20,575,338 | 20,535,793 |
Accumulated deficit | (11,018,910) | (12,076,904) |
Less: Treasury stock, 230,000 shares at cost, respectively as of October 31, 2021 and January 31, 2021 | (149,500) | (149,500) |
Total Stockholders’ Equity | 9,407,287 | 8,309,746 |
Total Liabilities and Stockholders’ Equity | 15,897,480 | 14,048,325 |
Series A Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2021 | Jan. 31, 2021 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 19,880,000 | 19,880,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 35,751,792 | 35,603,731 |
Common stock, shares outstanding | 35,751,792 | 35,603,731 |
Treasury Stock, Shares | 230,000 | 230,000 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 120,000 | 120,000 |
Preferred stock, shares issued | 23,400 | 23,400 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Income Statement [Abstract] | ||||
Sales-net of slotting fees and discounts | $ 10,852,682 | $ 9,684,195 | $ 33,230,666 | $ 30,766,700 |
Costs of sales | 8,123,517 | 6,773,662 | 23,787,864 | 21,317,384 |
Gross profit | 2,729,165 | 2,910,533 | 9,442,802 | 9,449,316 |
Operating expenses: | ||||
Research and development | 33,866 | 30,765 | 87,843 | 86,103 |
General and administrative | 2,694,098 | 2,092,640 | 7,916,646 | 6,793,366 |
Total operating expenses | 2,727,964 | 2,123,405 | 8,004,489 | 6,879,469 |
Income from operations | 1,201 | 787,128 | 1,438,313 | 2,569,847 |
Other income (expenses) | ||||
Interest | (8,731) | (45,822) | (26,710) | (171,872) |
Amortization of debt discount | (7,164) | (17,864) | ||
Other income | 37,704 | |||
Total other income (expenses) | (8,731) | (52,986) | 10,994 | (189,736) |
Net income (loss) before income tax provision | (7,530) | 734,142 | 1,449,307 | 2,380,111 |
Income tax (benefit) provision | (2,075) | 391,313 | ||
Net income (loss) | $ (5,455) | $ 734,142 | $ 1,057,994 | $ 2,380,111 |
– basic | $ 0 | $ 0.02 | $ 0.03 | $ 0.07 |
– diluted | $ 0 | $ 0.02 | $ 0.03 | $ 0.07 |
– basic | 35,728,821 | 34,225,446 | 35,683,484 | 32,832,450 |
– diluted | 35,728,821 | 35,725,984 | 36,176,949 | 34,322,988 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member]Series A Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Jan. 31, 2020 | $ 321 | $ (149,500) | $ 16,695,352 | $ (16,144,110) | $ 402,063 | |
Beginning balance, shares at Jan. 31, 2020 | 31,991,241 | (230,000) | ||||
Stock options issued for services | 51,435 | 51,435 | ||||
Common stock issued for exercise of options | 7,200 | 7,200 | ||||
Common stock issued for exercise of options, shares | 12,000 | |||||
Common stock issued for exercise of warrants | $ 27 | 2,735,670 | 2,735,697 | |||
Common stock issued for exercise of warrants, shares | 2,764,600 | |||||
Net income | 2,380,111 | 2,380,111 | ||||
Ending balance, value at Oct. 31, 2020 | $ 348 | $ (149,500) | 19,489,657 | (13,763,999) | 5,576,506 | |
Ending balance, shares at Oct. 31, 2020 | 34,767,841 | (230,000) | ||||
Beginning balance, value at Jul. 31, 2020 | $ 336 | $ (149,500) | 18,229,615 | (14,498,141) | 3,582,310 | |
Beginning balance, shares at Jul. 31, 2020 | 33,517,101 | (230,000) | ||||
Stock options issued for services | 1,460 | 1,460 | ||||
Common stock issued for exercise of warrants | $ 12 | 1,258,852 | 1,258,594 | |||
Common stock issued for exercise of warrants, shares | 1,250,740 | |||||
Net income | 734,142 | 734,142 | ||||
Ending balance, value at Oct. 31, 2020 | $ 348 | $ (149,500) | 19,489,657 | (13,763,999) | 5,576,506 | |
Ending balance, shares at Oct. 31, 2020 | 34,767,841 | (230,000) | ||||
Beginning balance, value at Jan. 31, 2021 | $ 357 | $ (149,500) | 20,535,793 | (12,076,904) | 8,309,746 | |
Beginning balance, shares at Jan. 31, 2021 | 35,603,731 | (230,000) | ||||
Common stock issued for services | 18,933 | 18,933 | ||||
Stock options issued for services | 1,534 | 1,534 | ||||
Common stock issued for exercise of options | $ 2 | 19,078 | 19,080 | |||
Common stock issued for exercise of options, shares | 148,061 | |||||
Net income | 1,057,994 | 1,057,994 | ||||
Ending balance, value at Oct. 31, 2021 | $ 359 | $ (149,500) | 20,575,338 | (11,018,910) | 9,407,287 | |
Ending balance, shares at Oct. 31, 2021 | 35,751,792 | (230,000) | ||||
Beginning balance, value at Jul. 31, 2021 | $ 359 | $ (149,500) | 20,555,657 | (11,013,455) | 9,393,061 | |
Beginning balance, shares at Jul. 31, 2021 | 35,725,041 | (230,000) | ||||
Common stock issued for services | 18,933 | 18,933 | ||||
Stock options issued for services | 748 | 748 | ||||
Common stock issued for exercise of options | ||||||
Common stock issued for exercise of options, shares | 26,751 | |||||
Net income | (5,455) | (5,455) | ||||
Ending balance, value at Oct. 31, 2021 | $ 359 | $ (149,500) | $ 20,575,338 | $ (11,018,910) | $ 9,407,287 | |
Ending balance, shares at Oct. 31, 2021 | 35,751,792 | (230,000) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,057,994 | $ 2,380,111 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 572,238 | 489,109 |
Amortization of debt discount | 17,864 | |
Share-based compensation | 20,467 | 51,435 |
Amortization of right of use assets | 163,141 | 102,943 |
Change in deferred tax asset | 383,313 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 12,445 | 39,975 |
Other receivable | ||
Inventories | (419,527) | (313,870) |
Prepaid expenses | (75,184) | (38,784) |
Security deposits | (2,979) | |
Accounts payable and accrued expenses | 562,095 | (111,024) |
Operating lease liability | (141,206) | (99,747) |
Net Cash Provided by Operating Activities | 2,132,797 | 2,518,012 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for fixed assets | (657,607) | (304,048) |
Cash paid for intangibles | (16,284) | |
Net Cash Used in Investing Activities | (657,607) | (320,332) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of term loan | (441,663) | |
Repayments of related party notes payable | (641,844) | |
Proceeds from promissory note | 330,505 | |
Repayment of promissory note | (330,505) | |
Borrowings of line of credit, net | (2,347,348) | |
Repayment of finance lease obligations | (144,910) | (110,562) |
Proceeds from exercise of options | 19,080 | 7,200 |
Proceeds from exercise of warrants | 2,735,697 | |
Net Cash Used in Financing Activities | (125,830) | (798,520) |
Net Increase in Cash | 1,349,360 | 1,399,160 |
Cash - Beginning of Period | 3,190,560 | 393,683 |
Cash - End of Period | 4,539,920 | 1,792,843 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||
Income taxes | ||
Interest | 28,748 | 174,735 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Finance lease asset additions | 128,050 | 401,387 |
Operating lease asset additions | 347,585 | |
Software subscription liability in accounts payable and accrued expenses | $ 71,355 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 9 Months Ended |
Oct. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | 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. The Company is a manufacturer and distributor of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, chicken parmesan and other similar meats and sauces. In addition, the Company continues to diversify its product line by introducing new products such as ready to serve dinners, single-size Pasta Bowls, bulk deli, packaged refrigerated and frozen products. The Company’s products were submitted to the United States Department of Agriculture (the “USDA”) and approved as all natural. The USDA defines all natural as a product that contains no artificial ingredients, coloring ingredients or chemical preservatives and is minimally processed. The Company’s customers are located throughout the United States, with large concentrations in the Northeast and Southeast. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies 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 (“ U.S. GAAP The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended January 31, 2021 filed on April 21, 2021. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at January 31, 2021 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending January 31, 2022. Principles of Consolidation The condensed consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of 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 a potential general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Cash The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At October 31, 2021, the Company had $ 4,298,390 Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. As of October 31, 2021 and January 31, 2021, the Company had reserves of $ 2,000 Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at October 31, 2021 and January 31, 2021: Schedule of Inventories October 31, 2021 January 31, 2021 Raw Materials $ 845,801 $ 746,013 Work in Process 130,551 88,955 Finished goods 638,386 360,243 Inventories $ 1,614,738 $ 1,195,211 Property and Equipment Property and equipment are recorded at cost net of depreciation. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: Schedule of Property and Equipment Estimated Useful Lives Machinery and equipment 2 7 Furniture and fixtures 3 Leasehold improvements - * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Intangible Assets The Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software 87,639 of costs incurred in the year ended January 31, 2021 to implement cloud computing arrangements. Acquired internal-use software licenses are amortized over the term of the arrangement on a straight-line basis to the line item within the condensed consolidated statements of operations that reflects the nature of the license. The Company did not record amortization for the software license since the license has yet to be implemented as of October 31, 2021. Additionally, the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Research and Development Research and development is expensed as incurred. Research and development expenses for the three months ended October 31, 2021 and 2020 were $ 33,866 30,765 87,843 86,103 Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as general and administrative expenses. Revenue Recognition The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. The Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the condensed consolidated statement of operations. The Company promotes its products with advertising, consumer incentives and trade promotions. These programs include discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of a period. The Company derives these estimates principally on historical utilization and redemption rates. The Company does not receive a distinct service in relation to the advertising, consumer incentives and trade promotions. Payment terms in the Company’s invoices are based on the billing schedule established in contracts and purchase orders with customers. The Company recognizes the related trade receivable when the goods are shipped. Expenses such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows (see Note 11): October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 11,165,524 $ 10,016,932 Less: Slotting, Discounts, Promotions and Allowances 312,842 332,737 Net Sales $ 10,852,682 $ 9,684,195 Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 34,373,119 $ 31,833,423 Less: Slotting, Discounts, Promotions and Allowances 1,142,453 1,066,723 Net Sales $ 33,230,666 $ 30,766,700 The following table disaggregates gross revenue by significant geographic area for the three and nine months ended October 31, 2021 and 2020: October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Northeast $ 3,542,894 $ 3,304,422 Southeast 4,338,967 2,894,971 Midwest 1,155,233 1,204,936 West 952,910 1,475,143 Southwest 1,175,520 1,137,460 Total revenue $ 11,165,524 $ 10,016,932 Schedule of Disaggregates Gross Revenue by Significant Geographic Area October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Northeast $ 10,270,568 $ 10,558,410 Southeast 13,220,822 8,863,856 Midwest 3,515,194 3,819,765 West 3,818,925 4,381,561 Southwest 3,547,610 4,209,831 Total revenue $ 34,373,119 $ 31,833,423 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-in, 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 October 31, 2021 and 2020 were $ 196,495 99,297 441,556 366,499 Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” “ASC 718” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the condensed consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the three months ended October 31, 2021 and 2020, share-based compensation amounted to $ 19,681 1,460 For the nine months ended October 31, 2021 and 2020, share-based compensation amounted to $ 20,467 51,435 For the nine months ended October 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: Schedule of Fair Value of Share-Based Payments October 31, 2021 October 31, 2020 Risk-free interest rate N/A 0.37 % Expected life of grants N/A 3.5 Expected volatility of underlying stock N/A 125 % Dividends N/A 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. Earnings Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. Schedule of Earnings Per Share, Basic and Diluted October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Numerator: Net (loss) income attributable to common stockholders $ (5,455 ) 734,142 Effect of dilutive securities: — — Diluted net (loss) income $ (5,455 ) $ 734,142 Denominator: Weighted average common shares outstanding – basic 35,728,821 34,225,446 Dilutive securities (a): Series A Preferred - - Options - 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 35,728,821 35,725,984 Basic net (loss) income per common share $ (0.00 ) $ 0.02 Diluted net (loss) income per common share $ (0.00 ) $ 0.02 (a) - Anti-dilutive securities excluded: 666,500 - October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Numerator: Net income attributable to common stockholders $ 1,057,994 2,380,111 Effect of dilutive securities: — — Diluted net income $ 1,057,994 $ 2,380,111 Denominator: Weighted average common shares outstanding – basic 35,683,484 32,832,450 Dilutive securities (a): Series A Preferred - - Options 493,465 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 36,176,949 34,322,988 Basic net income per common share $ 0.03 $ 0.07 Diluted net income per common share $ 0.03 $ 0.07 (a) - Anti-dilutive securities excluded: - - Income Taxes Income taxes are provided in accordance with ASC 740, “ Accounting for Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of October 31, 2021 and January 31, 2021, the Company recognized a deferred tax asset of $ 361,660 and $ 744,973 , respectively, which is included in other long-term assets on the condensed consolidated balance sheets. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. As of October 31, 2021 and January 31, 2021, the valuation allowance was $ 0 0 The Company is no longer subject to tax examinations by tax authorities for years prior to 2019. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act (“NOLs”) In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to the income tax provision. Related Parties The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Recent Accounting Pronouncements In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Oct. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 - Property and Equipment Property and equipment on October 31, 2021 and January 31, 2021 are as follows: Schedule of Property and Equipment October 31, 2021 January 31, 2021 Machinery and Equipment $ 4,410,850 $ 3,787,321 Furniture and Fixtures 165,728 113,112 Leasehold Improvements 3,229,786 3,120,273 Property and Equipment, Gross 7,806,364 7,020,706 Less: Accumulated Depreciation 4,629,343 4,057,104 Property and Equipment, Net $ 3,177,021 $ 2,963,602 Depreciation expense charged to income for the three months ended October 31, 2021 and 2020 amounted to $ 145,506 170,031 572,238 489,109 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4 - Related Party Transactions WWS, Inc. Alfred D’Agostino and Tom Toto, two directors of the Company, are affiliates of WWS, Inc. For the three months ended October 31, 2021 and 2020, the Company recorded $ 12,000 36,000 30,000 Other Related Party Transactions During the three months ended October 31, 2021 and 2020, the Company reimbursed an entity 100 0 0 4,517 14,570 During the nine months ended October 31, 2020, members of the board of directors and the CEO exercised 940,807 1 940,807 |
Loan and Security Agreement
Loan and Security Agreement | 9 Months Ended |
Oct. 31, 2021 | |
Loan And Security Agreement | |
Loan and Security Agreement | Note 5 - Loan and Security Agreement M&T Bank Effective, January 4, 2019, the Company entered into a $ 2.5 five 89,321 0 0 Effective, January 4, 2019, the Company has arranged a $ 3.5 two 4.0 June 30, 2022 4.5 June 30, 2023 6.0 August 4, 2026 Advances under the line of credit are limited to eighty percent (80%) of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration provisions) and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation). 0 During the nine months ended October 31, 2021 and 2020, the Company paid total interest of $ 0 58,904 On August 3, 2021, M&T Bank approved an acquisition line of credit for $ 6.0 3.5 |
Promissory Note
Promissory Note | 9 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
Promissory Note | Note 6 – Promissory Note On April 21, 2020, the Company entered into a term note with its principal bank, M&T, with a principal amount of $ 330,505 PPP Term Note CARES Act 1.00 330,505 |
Leases
Leases | 9 Months Ended |
Oct. 31, 2021 | |
Leases | |
Leases | Note 7 - Leases The Company determines if an arrangement contains a lease at inception. Right of use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company’s leases consist of leaseholds on office space, manufacturing space and machinery and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates. On March 1, 2021, the Company amended its existing lease with the landlord for a new premise with a greater square footage. Upon cancellation of the existing lease, the Company wrote-off the net right of use asset and corresponding lease liability of $ 22,870 347,585 The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three to five years that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. The components of lease expense were as follows: Schedule of Components of Lease Expense For the For the October 31, 2021 October 31, 2020 Finance lease Depreciation of assets $ 110,901 $ 102,116 Interest on lease liabilities 26,710 26,960 Operating leases 259,958 231,716 Short-term lease - - Total net lease cost $ 397,569 $ 360,792 Supplemental balance sheet information related to leases was as follows: Schedule of Supplemental Balance Sheet Information Related to Leases October 31, 2021 January 31, 2021 Operating leases: Operating lease ROU assets $ 1,536,927 $ 1,352,483 Current operating lease liabilities, included in current liabilities $ 188,590 $ 147,684 Noncurrent operating lease liabilities, included in long-term liabilities 1,383,960 1,218,487 Total operating lease liabilities $ 1,572,550 $ 1,366,171 Finance leases Property and equipment, at cost $ 1,079,706 $ 951,656 Accumulated depreciation (371,271 ) (260,370 ) Property and equipment, net $ 708,435 $ 691,286 Current obligations of finance lease liabilities, included in current liabilities $ 226,111 $ 190,554 Finance leases, net of current obligations, included in long-term liabilities 422,326 474,743 Total finance lease liabilities $ 648,437 $ 665,297 Supplemental cash flow and other information related to leases was as follows: Schedule of Supplemental Cash Flow and Other Information Related to Leases For the Nine Months Ended October 31, 2021 For the Nine Months Ended October 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 141,206 $ 231,716 Financing cash flows from finance leases 144,910 110,562 ROU assets obtained in exchange for lease liabilities: Operating leases $ 347,585 $ - Finance leases 128,050 401,387 Weighted average remaining lease term (in years): Operating leases 6.8 7.1 Finance leases 3.3 4.0 Weighted average discount rate: Operating leases 5.58 % 6.54 % Finance leases 4.57 % 4.60 % Total future minimum payments required under the lease obligations as of October 31, 2021 are as follows: Schedule of Future Minimum Payments Required Under Lease Obligations For the Twelve Months Ending January 31, 2022 (Remaining) $ 120,014 2023 450,051 2024 438,907 2025 414,986 2026 330,646 Thereafter 670,901 Total lease payments $ 2,574,901 Less: amounts representing interest (372,236 ) Total lease obligations $ 2,202,665 |
Concentrations
Concentrations | 9 Months Ended |
Oct. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 8 - Concentrations Revenues During the nine months ended October 31, 2021, the Company earned revenues from three customers representing approximately 32 %, 20 11 of gross sales. As of October 31, 2021, these three customers represented approximately 26 17 14 45 11 30 11 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Oct. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 9 - Stockholders’ Equity Options The following is a summary of the Company’s option activity: Summary of Option Activity Options Weighted Average Outstanding – January 31, 2021 869,000 $ 0.70 Exercisable – January 31, 2021 859,000 $ 0.70 Granted - $ - Exercised (200,000 ) $ 0.81 Forfeited/Cancelled - $ - Outstanding – October 31, 2021 669,000 $ 0.66 Exercisable – October 31, 2021 666,500 $ 0.66 Summary of Option Outstanding and Exercisable Options Outstanding Options Exercisable Exercise Price Number Weighted Weighted Number Weighted $ 0.39 1.38 669,000 2.28 $ 0.66 666,500 $ 0.66 At October 31, 2021, the total intrinsic value of options outstanding and exercisable was $ 1,343,821 1,340,046 During the nine months ended October 31, 2021, seven employees exercised a total of 200,000 0.81 19,080 12,000 0.60 7,200 For the nine months ended October 31, 2021 and 2020, the Company recognized share-based compensation related to options of an aggregate of $ 1,534 51,435 399. Restricted Stock Units During the nine months ended September 30, 2021, the Company awarded an employee a grant of 21,000 21,000 For the three and nine months ended October 31, 2021, the Company recognized share-based compensation related to options of an aggregate of $ 18,933 40,497 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies Insurance Claim The Company maintains insurance for both property damage and business interruption relating to catastrophic events, such as fires. Insurance recoveries received for property damage and business interruption in excess of the net book value of damaged assets, clean-up and demolition costs, and post-event costs are recognized as income in the period received or committed when all contingencies associated with the recoveries are resolved. Gains on insurance recoveries related to business interruption are recorded within “Cost of sales” and any gains or losses related to property damage are recorded within “Other income (expense)” on the condensed consolidated statements of income. On December 7, 2020, the Company experienced a fire at its plant in a spiral oven. The spiral oven was rebuilt and was fully put back into service in late February 2021. The estimated loss is approximately $ 656,700 152,850 91,312 12,475 47,669 Litigation, Claims and Assessments From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. Licensing and Royalty Agreements On March 1, 2010, the Company was assigned a Development and License agreement (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 Exclusive Term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date. The Royalty Rate shall be: 6 500,000 4 500,000 2,500,000 2 2,500,000 20,000,000 1 20,000,000 In order to continue the Exclusive Term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: Schedule of Royalty Minimum Payment by Preceding Agreement Year Agreement Year Minimum Royalty to be Paid with Respect to Such Agreement Year 1 st nd $ - 3 rd th $ 50,000 5 th th th $ 75,000 8 th th $ 100,000 10 th $ 125,000 The Company incurred $ 99,457 111,568 391,433 399,013 Agreements with Placement Agents and Finders The Company entered into a fourth Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective April 1, 2015 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, if the Company enters into a change of control transaction during the term of the agreement through October 1, 2022, the Company shall pay to Spartan a fee equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction Advisory Agreements The Company entered into an Advisory Agreement with Spartan effective June 1, 2019 (the “Advisory Agreement”). Pursuant to the agreement, the Company shall pay to Spartan a non-refundable monthly fee of $ 5,000 125,000 The Company entered into an Advisory Agreement with B. Riley Securities, Inc. effective September 25, 2020 (the “B. Riley Advisory Agreement”). Pursuant to the agreement, the Company shall pay to B. Riley a non-refundable fee of $175,000 upon delivery of a fairness opinion in the event a transaction has value over $50 million ($125,000 if a transaction has a value less than $50 million). |
Impact on Previously Issued Fin
Impact on Previously Issued Financial Statements | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact on Previously Issued Financial Statements | Note 11 – Impact on Previously Issued Financial Statements During the audit for the year ended January 31, 2021, the Company identified and recorded a prior period adjustment related to promotion expenses that should have been recorded in the year ended January 31, 2021 as an offset to revenue as discussed in the Company’s revenue recognition policy instead of general and administrative expenses as originally recorded. In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows: Schedule of Revision of Prior Year Financials For the three months ended October 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 9,898,991 $ (214,796 ) $ 9,684,195 Gross profit $ 3,125,329 $ (214,796 ) $ 2,910,533 General and administrative expenses $ 2,307,436 $ (214,796 ) $ 2,092,640 Operating expenses $ 2,338,201 $ (214,796 ) $ 2,123,405 Income from operations $ 787,128 $ - $ 787,128 Net income $ 734,142 $ - $ 734,142 Basic and diluted income per share $ 0.02 $ - $ 0.02 For the nine months ended October 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 31,384,394 $ (617,694 ) $ 30,766,700 Gross profit $ 10,067,010 $ (617,694 ) $ 9,449,316 General and administrative expenses $ 7,411,060 $ (617,694 ) $ 6,793,366 Operating expenses $ 7,497,163 $ (617,694 ) $ 6,879,469 Income from operations $ 2,569,847 $ - $ 2,569,847 Net income $ 2,380,111 $ - $ 2,380,111 Basic and diluted income per share $ 0.07 $ - $ 0.07 THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD- LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” DETAILED IN PRIOR COMPANY FILINGS AND THOSE INCLUDED ELSEWHERE IN THIS REPORT. Results of Operations for the Three Months ended October 31, 2021 and 2020 The following table sets forth the summary statements of operations for the three months ended October 31, 2021 and 2020: Three Months Ended October 31, 2021 October 31, 2020 (as revised) Sales - Net of Slotting Fees and Discounts $ 10,852,682 $ 9,684,195 Gross Profit $ 2,729,165 $ 2,910,533 Operating Expenses $ (2,727,964 ) $ (2,123,405 ) Other Expenses $ (8,731 ) $ (52,986 ) Income Tax Benefit $ 2,075 $ - Net (Loss) Income $ (5,455 ) $ 734,142 For the three months ended October 31, 2021 and 2020, the Company reported net loss of $5,455 and net income of $734,142, respectively. The change between the three months ended October 31, 2021 and 2020 was mainly the result of a decrease in gross profit percentage (as discussed below) and an increase in operating expenses (principally freight). Sales: Gross Profit: Operating Expenses: ● Postage and Freight of $311,482 mainly due to transportation rate increases; ● Advertising and promotion of $103,275; ● Payroll and related expenses of $60,402 due to salary adjustments and additional accounting payroll, and senior operational management hire; ● Director fees of $42,500 due to the increase in the number of directors, an increase in compensation to each director and an additional shareholder meeting of $11,437. These expense increases were offset by minimal decreases in other expense categories. Other Expenses: Results of Operations for the Nine Months ended October 31, 2021 and 2020 The following table sets forth the summary statements of operations for the nine months ended October 31, 2021 and 2020: Nine Months Ended October 31, 2021 October 31, 2020 (as revised) Sales - Net of Slotting Fees and Discounts $ 33,230,666 $ 30,766,700 Gross Profit $ 9,442,802 $ 9,449,316 Operating Expenses $ (8,004,489 ) $ (6,879,469 ) Other Income (Expenses) $ 10,994 $ (189,736 ) Income Tax Provision $ (391,313 ) $ - Net Income $ 1,057,994 $ 2,380,111 For the nine months ended October 31, 2021 and 2020, the Company reported net income of $1,057,994 and $2,380,111, respectively. The change in net income between the nine months ended October 31, 2021 and 2020 was mainly the result of a decrease in gross profit percentage (as discussed below) and the income tax provision of $391,313 recorded during the nine months ended October 31, 2021 compared to $0 during the nine months ended October 31, 2020. Sales: Gross Profit: Operating Expenses: ● Postage and Freight of $582,556 due to increased transportation rate increases; ● Payroll and related expenses of $177,427 due, bonuses paid to executives; addition of senior personnel in operations and accounting personnel; ● Director fees of $108,972 due to the increase in the number of directors, an increase in compensation to each director and an additional shareholder meeting of $11,437; and ● NASDAQ up-listing costs of $80,000. These expense increases were offset by decreases in the following as well as minimal decreases in other expense categories: ● Professional fees decreased by $65,488 due to a decrease in contractual investment banking fees. Other Income (Expenses): Liquidity and Capital Resources The following table summarizes total current assets, liabilities and working capital at October 31, 2021 compared to January 31, 2021: October 31, 2021 January 31, 2021 Change Current Assets $ 10,711,077 $ 8,879,451 $ 1,831,626 Current Liabilities $ 4,683,907 $ 4,045,349 $ 638,558 Working Capital $ 6,027,170 $ 4,834,102 $ 1,193,068 As of October 31, 2021, we had working capital of $6,027,170 as compared to a working capital of $4,834,102 as of January 31, 2021, an increase of $1,193,068. The increase in working capital is primarily attributable to an increase in cash of $1,349,360 and an increase in inventory of $419,527. These amounts were offset by an increase in accounts payable and accrued expenses of $562,095 and an increase in current portion of lease obligations of $76,463. Net cash provided by operating activities for the nine months ended October 31, 2021 and 2020 was $2,132,797 and $2,518,012, respectively. The net income for the nine months ended October 31, 2021 and 2020 was $1,057,994 and $2,380,111, respectively. Net cash used in all investing activities for the nine months ended October 31, 2021 was $657,607 as compared to $320,332 for the nine months ended October 31, 2020, respectively, to acquire new machinery and equipment and leasehold improvements. Our capital expenditures are attributed to a Plant Expansion Project in progress since mid-2017 to expand plant capacity and efficiency to meet growing demand. Net cash used in all financing activities for the nine months ended October 31, 2021 was $125,830 as compared to $798,520 used by financing activities for the nine months ended October 31, 2020. During the nine months ended October 31, 2021, the Company received proceeds of $19,080 from the exercise of options. These cash in-flows were offset by payments of $144,910 paid for finance lease payments. During the nine months ended October 31, 2020, the Company received proceeds of $330,505 from the Paycheck Protection Program promissory note and proceeds of $2,735,697 from the exercise of options and warrants. These cash in-flows were offset by payments on its line of credit of $2,347,348, payments on its term loan of $441,663, payments of $641,844 on the related party loans and $110,562 paid for capital lease payments. The Company returned the $330,505 received from the Paycheck Protection Program in May 2020. Although the expected revenue growth and control of expenses lead management to believe that it is probable that the Company’s cash resources will be sufficient to meet its cash requirements through December 14, 2022 based on current and projected levels of operations, the Company may require additional funding to finance growth and achieve its strategic objectives. If such financing is required, there can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. In the event funding is not available on reasonable terms, the Company might be required to change its growth strategy and/or seek funding on an alternative basis, but there is no guarantee it will be able to do so. Because of the rapidly changing environment in response to COVID-19, the current expectations of the Company may be altered as conditions change. Recent Accounting Pronouncements In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. Critical Accounting Policies Our condensed consolidated financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements. Our significant accounting policies are summarized in Note 2 of our condensed consolidated financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report. We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements: Use of Estimates The preparation of 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. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On February 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheet in the amount of $1,599,830 related to the operating lease for office and warehouse space. Results for the year ended January 31, 2021 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the legacy accounting guidance under ASC Topic 840, Leases As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients The Company adopted this guidance and related amendments as of the first quarter of fiscal 2019, applying the full retrospective transition method. As the underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with the Company’s current business model and practices, the adoption of ASU 2014-09 did not have a material impact on the consolidated financial statements. In addition, the adoption of ASC 606 did not impact the previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings. The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. Under the new revenue guidance, the Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the consolidated statement of operations. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” 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. When computing fair value of share-based payments, the Company has considered the following variables: ● The risk-free interest rate assumption is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. ● The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. ● The expected option term is computed using the “simplified” method as permitted under the provisions of Staff Accounting Bulletin (“SAB”) 110. ● The term is the life of the grant. ● The expected volatility was estimated using the historical volatilities of the Company’s common stock. ● The forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%. Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Off Balance Sheet Arrangements: We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs). We do not hold any derivative instruments and do not engage in any hedging activities. (a) Evaluation of Disclosure Controls and Procedures Based on evaluation as of the end of the period covered by this Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in report that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. (b) Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. Smaller reporting companies are not required to provide the information required by this item. During the period between February 1, 2021 and October 31, 2021, the Company had no sales of unregistered securities. There has been no default in payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company. Not applicable. There is no other information required to be disclosed under this item which was not previously disclosed. Exhibit No. Description 31.1 Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002* 31.2 Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002* 32.1 Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 32.2 Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 101.INS Inline XBRL Instance Document** 101.SCH Inline XBRL Taxonomy Extension Schema Document** 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document** 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document** 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document** 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document** 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished herewith. In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MAMAMANCINI’S HOLDINGS, INC. Date: December 14, 2021 By: /s/ Carl Wolf Name: Carl Wolf Title: Chief Executive Officer (Principal Executive Officer) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 (“ U.S. GAAP The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended January 31, 2021 filed on April 21, 2021. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at January 31, 2021 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending January 31, 2022. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of 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 a potential general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. |
Cash | 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 The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At October 31, 2021, the Company had $ 4,298,390 |
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. As of October 31, 2021 and January 31, 2021, the Company had reserves of $ 2,000 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at October 31, 2021 and January 31, 2021: Schedule of Inventories October 31, 2021 January 31, 2021 Raw Materials $ 845,801 $ 746,013 Work in Process 130,551 88,955 Finished goods 638,386 360,243 Inventories $ 1,614,738 $ 1,195,211 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost net of depreciation. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: Schedule of Property and Equipment Estimated Useful Lives Machinery and equipment 2 7 Furniture and fixtures 3 Leasehold improvements - * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. |
Intangible Assets | Intangible Assets The Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software 87,639 of costs incurred in the year ended January 31, 2021 to implement cloud computing arrangements. Acquired internal-use software licenses are amortized over the term of the arrangement on a straight-line basis to the line item within the condensed consolidated statements of operations that reflects the nature of the license. The Company did not record amortization for the software license since the license has yet to be implemented as of October 31, 2021. Additionally, the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. |
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. |
Research and Development | Research and Development Research and development is expensed as incurred. Research and development expenses for the three months ended October 31, 2021 and 2020 were $ 33,866 30,765 87,843 86,103 |
Shipping and Handling Costs | Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as general and administrative expenses. |
Revenue Recognition | Revenue Recognition The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. The Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the condensed consolidated statement of operations. The Company promotes its products with advertising, consumer incentives and trade promotions. These programs include discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of a period. The Company derives these estimates principally on historical utilization and redemption rates. The Company does not receive a distinct service in relation to the advertising, consumer incentives and trade promotions. Payment terms in the Company’s invoices are based on the billing schedule established in contracts and purchase orders with customers. The Company recognizes the related trade receivable when the goods are shipped. Expenses such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows (see Note 11): October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 11,165,524 $ 10,016,932 Less: Slotting, Discounts, Promotions and Allowances 312,842 332,737 Net Sales $ 10,852,682 $ 9,684,195 Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 34,373,119 $ 31,833,423 Less: Slotting, Discounts, Promotions and Allowances 1,142,453 1,066,723 Net Sales $ 33,230,666 $ 30,766,700 The following table disaggregates gross revenue by significant geographic area for the three and nine months ended October 31, 2021 and 2020: October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Northeast $ 3,542,894 $ 3,304,422 Southeast 4,338,967 2,894,971 Midwest 1,155,233 1,204,936 West 952,910 1,475,143 Southwest 1,175,520 1,137,460 Total revenue $ 11,165,524 $ 10,016,932 Schedule of Disaggregates Gross Revenue by Significant Geographic Area October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Northeast $ 10,270,568 $ 10,558,410 Southeast 13,220,822 8,863,856 Midwest 3,515,194 3,819,765 West 3,818,925 4,381,561 Southwest 3,547,610 4,209,831 Total revenue $ 34,373,119 $ 31,833,423 |
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-in, 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 October 31, 2021 and 2020 were $ 196,495 99,297 441,556 366,499 |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” “ASC 718” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the condensed consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the three months ended October 31, 2021 and 2020, share-based compensation amounted to $ 19,681 1,460 For the nine months ended October 31, 2021 and 2020, share-based compensation amounted to $ 20,467 51,435 For the nine months ended October 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: Schedule of Fair Value of Share-Based Payments October 31, 2021 October 31, 2020 Risk-free interest rate N/A 0.37 % Expected life of grants N/A 3.5 Expected volatility of underlying stock N/A 125 % Dividends N/A 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. |
Earnings Per Share | Earnings Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. Schedule of Earnings Per Share, Basic and Diluted October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Numerator: Net (loss) income attributable to common stockholders $ (5,455 ) 734,142 Effect of dilutive securities: — — Diluted net (loss) income $ (5,455 ) $ 734,142 Denominator: Weighted average common shares outstanding – basic 35,728,821 34,225,446 Dilutive securities (a): Series A Preferred - - Options - 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 35,728,821 35,725,984 Basic net (loss) income per common share $ (0.00 ) $ 0.02 Diluted net (loss) income per common share $ (0.00 ) $ 0.02 (a) - Anti-dilutive securities excluded: 666,500 - October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Numerator: Net income attributable to common stockholders $ 1,057,994 2,380,111 Effect of dilutive securities: — — Diluted net income $ 1,057,994 $ 2,380,111 Denominator: Weighted average common shares outstanding – basic 35,683,484 32,832,450 Dilutive securities (a): Series A Preferred - - Options 493,465 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 36,176,949 34,322,988 Basic net income per common share $ 0.03 $ 0.07 Diluted net income per common share $ 0.03 $ 0.07 (a) - Anti-dilutive securities excluded: - - |
Income Taxes | Income Taxes Income taxes are provided in accordance with ASC 740, “ Accounting for Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of October 31, 2021 and January 31, 2021, the Company recognized a deferred tax asset of $ 361,660 and $ 744,973 , respectively, which is included in other long-term assets on the condensed consolidated balance sheets. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. As of October 31, 2021 and January 31, 2021, the valuation allowance was $ 0 0 The Company is no longer subject to tax examinations by tax authorities for years prior to 2019. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act (“NOLs”) In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to the income tax provision. |
Related Parties | Related Parties The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. |
Subsequent Events | Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at October 31, 2021 and January 31, 2021: Schedule of Inventories October 31, 2021 January 31, 2021 Raw Materials $ 845,801 $ 746,013 Work in Process 130,551 88,955 Finished goods 638,386 360,243 Inventories $ 1,614,738 $ 1,195,211 |
Schedule of Property and Equipment Estimated Useful Lives | Asset lives for financial statement reporting of depreciation are: Schedule of Property and Equipment Estimated Useful Lives Machinery and equipment 2 7 Furniture and fixtures 3 Leasehold improvements - * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. |
Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues | Expenses such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows (see Note 11): October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 11,165,524 $ 10,016,932 Less: Slotting, Discounts, Promotions and Allowances 312,842 332,737 Net Sales $ 10,852,682 $ 9,684,195 Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 34,373,119 $ 31,833,423 Less: Slotting, Discounts, Promotions and Allowances 1,142,453 1,066,723 Net Sales $ 33,230,666 $ 30,766,700 |
Schedule of Disaggregates Gross Revenue by Significant Geographic Area | The following table disaggregates gross revenue by significant geographic area for the three and nine months ended October 31, 2021 and 2020: October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Northeast $ 3,542,894 $ 3,304,422 Southeast 4,338,967 2,894,971 Midwest 1,155,233 1,204,936 West 952,910 1,475,143 Southwest 1,175,520 1,137,460 Total revenue $ 11,165,524 $ 10,016,932 Schedule of Disaggregates Gross Revenue by Significant Geographic Area October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Northeast $ 10,270,568 $ 10,558,410 Southeast 13,220,822 8,863,856 Midwest 3,515,194 3,819,765 West 3,818,925 4,381,561 Southwest 3,547,610 4,209,831 Total revenue $ 34,373,119 $ 31,833,423 |
Schedule of Fair Value of Share-Based Payments | For the nine months ended October 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: Schedule of Fair Value of Share-Based Payments October 31, 2021 October 31, 2020 Risk-free interest rate N/A 0.37 % Expected life of grants N/A 3.5 Expected volatility of underlying stock N/A 125 % Dividends N/A 0 % |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. Schedule of Earnings Per Share, Basic and Diluted October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Numerator: Net (loss) income attributable to common stockholders $ (5,455 ) 734,142 Effect of dilutive securities: — — Diluted net (loss) income $ (5,455 ) $ 734,142 Denominator: Weighted average common shares outstanding – basic 35,728,821 34,225,446 Dilutive securities (a): Series A Preferred - - Options - 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 35,728,821 35,725,984 Basic net (loss) income per common share $ (0.00 ) $ 0.02 Diluted net (loss) income per common share $ (0.00 ) $ 0.02 (a) - Anti-dilutive securities excluded: 666,500 - October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Numerator: Net income attributable to common stockholders $ 1,057,994 2,380,111 Effect of dilutive securities: — — Diluted net income $ 1,057,994 $ 2,380,111 Denominator: Weighted average common shares outstanding – basic 35,683,484 32,832,450 Dilutive securities (a): Series A Preferred - - Options 493,465 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 36,176,949 34,322,988 Basic net income per common share $ 0.03 $ 0.07 Diluted net income per common share $ 0.03 $ 0.07 (a) - Anti-dilutive securities excluded: - - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment on October 31, 2021 and January 31, 2021 are as follows: Schedule of Property and Equipment October 31, 2021 January 31, 2021 Machinery and Equipment $ 4,410,850 $ 3,787,321 Furniture and Fixtures 165,728 113,112 Leasehold Improvements 3,229,786 3,120,273 Property and Equipment, Gross 7,806,364 7,020,706 Less: Accumulated Depreciation 4,629,343 4,057,104 Property and Equipment, Net $ 3,177,021 $ 2,963,602 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Leases | |
Schedule of Components of Lease Expense | The components of lease expense were as follows: Schedule of Components of Lease Expense For the For the October 31, 2021 October 31, 2020 Finance lease Depreciation of assets $ 110,901 $ 102,116 Interest on lease liabilities 26,710 26,960 Operating leases 259,958 231,716 Short-term lease - - Total net lease cost $ 397,569 $ 360,792 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: Schedule of Supplemental Balance Sheet Information Related to Leases October 31, 2021 January 31, 2021 Operating leases: Operating lease ROU assets $ 1,536,927 $ 1,352,483 Current operating lease liabilities, included in current liabilities $ 188,590 $ 147,684 Noncurrent operating lease liabilities, included in long-term liabilities 1,383,960 1,218,487 Total operating lease liabilities $ 1,572,550 $ 1,366,171 Finance leases Property and equipment, at cost $ 1,079,706 $ 951,656 Accumulated depreciation (371,271 ) (260,370 ) Property and equipment, net $ 708,435 $ 691,286 Current obligations of finance lease liabilities, included in current liabilities $ 226,111 $ 190,554 Finance leases, net of current obligations, included in long-term liabilities 422,326 474,743 Total finance lease liabilities $ 648,437 $ 665,297 |
Schedule of Supplemental Cash Flow and Other Information Related to Leases | Supplemental cash flow and other information related to leases was as follows: Schedule of Supplemental Cash Flow and Other Information Related to Leases For the Nine Months Ended October 31, 2021 For the Nine Months Ended October 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 141,206 $ 231,716 Financing cash flows from finance leases 144,910 110,562 ROU assets obtained in exchange for lease liabilities: Operating leases $ 347,585 $ - Finance leases 128,050 401,387 Weighted average remaining lease term (in years): Operating leases 6.8 7.1 Finance leases 3.3 4.0 Weighted average discount rate: Operating leases 5.58 % 6.54 % Finance leases 4.57 % 4.60 % |
Schedule of Future Minimum Payments Required Under Lease Obligations | Total future minimum payments required under the lease obligations as of October 31, 2021 are as follows: Schedule of Future Minimum Payments Required Under Lease Obligations For the Twelve Months Ending January 31, 2022 (Remaining) $ 120,014 2023 450,051 2024 438,907 2025 414,986 2026 330,646 Thereafter 670,901 Total lease payments $ 2,574,901 Less: amounts representing interest (372,236 ) Total lease obligations $ 2,202,665 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Equity [Abstract] | |
Summary of Option Activity | The following is a summary of the Company’s option activity: Summary of Option Activity Options Weighted Average Outstanding – January 31, 2021 869,000 $ 0.70 Exercisable – January 31, 2021 859,000 $ 0.70 Granted - $ - Exercised (200,000 ) $ 0.81 Forfeited/Cancelled - $ - Outstanding – October 31, 2021 669,000 $ 0.66 Exercisable – October 31, 2021 666,500 $ 0.66 |
Summary of Option Outstanding and Exercisable | Summary of Option Outstanding and Exercisable Options Outstanding Options Exercisable Exercise Price Number Weighted Weighted Number Weighted $ 0.39 1.38 669,000 2.28 $ 0.66 666,500 $ 0.66 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
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: Schedule of Royalty Minimum Payment by Preceding Agreement Year Agreement Year Minimum Royalty to be Paid with Respect to Such Agreement Year 1 st nd $ - 3 rd th $ 50,000 5 th th th $ 75,000 8 th th $ 100,000 10 th $ 125,000 |
Impact on Previously Issued F_2
Impact on Previously Issued Financial Statements (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Revision of Prior Year Financials | As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows: Schedule of Revision of Prior Year Financials For the three months ended October 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 9,898,991 $ (214,796 ) $ 9,684,195 Gross profit $ 3,125,329 $ (214,796 ) $ 2,910,533 General and administrative expenses $ 2,307,436 $ (214,796 ) $ 2,092,640 Operating expenses $ 2,338,201 $ (214,796 ) $ 2,123,405 Income from operations $ 787,128 $ - $ 787,128 Net income $ 734,142 $ - $ 734,142 Basic and diluted income per share $ 0.02 $ - $ 0.02 For the nine months ended October 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 31,384,394 $ (617,694 ) $ 30,766,700 Gross profit $ 10,067,010 $ (617,694 ) $ 9,449,316 General and administrative expenses $ 7,411,060 $ (617,694 ) $ 6,793,366 Operating expenses $ 7,497,163 $ (617,694 ) $ 6,879,469 Income from operations $ 2,569,847 $ - $ 2,569,847 Net income $ 2,380,111 $ - $ 2,380,111 Basic and diluted income per share $ 0.07 $ - $ 0.07 |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 845,801 | $ 746,013 |
Work in Process | 130,551 | 88,955 |
Finished goods | 638,386 | 360,243 |
Inventories | $ 1,614,738 | $ 1,195,211 |
Schedule of Property and Equipm
Schedule of Property and Equipment Estimated Useful Lives (Details) | 9 Months Ended | |
Oct. 31, 2021 | ||
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 3 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | [1] | |
Minimum [Member] | Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 2 years | |
Maximum [Member] | Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment estimated useful lives | 7 years | |
[1] | Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. |
Schedule of Expenses of Slottin
Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Accounting Policies [Abstract] | ||||
Gross Sales | $ 11,165,524 | $ 10,016,932 | $ 34,373,119 | $ 31,833,423 |
Less: Slotting, Discounts, Promotions and Allowances | 312,842 | 332,737 | 1,142,453 | 1,066,723 |
Net Sales | $ 10,852,682 | $ 9,684,195 | $ 33,230,666 | $ 30,766,700 |
Schedule of Disaggregates Gross
Schedule of Disaggregates Gross Revenue by Significant Geographic Area (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Total revenue | $ 11,165,524 | $ 10,016,932 | $ 34,373,119 | $ 31,833,423 |
Northeast [Member] | ||||
Total revenue | 3,542,894 | 3,304,422 | 10,270,568 | 10,558,410 |
Southeast [Member] | ||||
Total revenue | 4,338,967 | 2,894,971 | 13,220,822 | 8,863,856 |
Midwest [Member] | ||||
Total revenue | 1,155,233 | 1,204,936 | 3,515,194 | 3,819,765 |
West [Member] | ||||
Total revenue | 952,910 | 1,475,143 | 3,818,925 | 4,381,561 |
Southwest [Member] | ||||
Total revenue | $ 1,175,520 | $ 1,137,460 | $ 3,547,610 | $ 4,209,831 |
Schedule of Fair Value of Share
Schedule of Fair Value of Share-Based Payments (Details) | 9 Months Ended |
Oct. 31, 2020 | |
Accounting Policies [Abstract] | |
Risk-free interest rate | 0.37% |
Expected life of grants | 3 years 6 months |
Expected volatility of underlying stock | 125.00% |
Dividends | 0.00% |
Schedule of Earnings Per Share,
Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Accounting Policies [Abstract] | ||||
Net income attributable to common stockholders | $ (5,455) | $ 734,142 | $ 1,057,994 | $ 2,380,111 |
Effect of dilutive securities: | ||||
Diluted net income | $ (5,455) | $ 734,142 | $ 1,057,994 | $ 2,380,111 |
Weighted average common shares outstanding – basic | 35,728,821 | 34,225,446 | 35,683,484 | 32,832,450 |
Series A Preferred | ||||
Options | 575,139 | 493,465 | 575,139 | |
Warrants | 925,399 | 925,399 | ||
Weighted average common shares outstanding and assumed conversion – diluted | 35,728,821 | 35,725,984 | 36,176,949 | 34,322,988 |
Basic net income per common share | $ 0 | $ 0.02 | $ 0.03 | $ 0.07 |
Diluted net income per common share | $ 0 | $ 0.02 | $ 0.03 | $ 0.07 |
(a) - Anti-dilutive securities excluded: | 666,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Jan. 31, 2021 | |
Accounting Policies [Abstract] | |||||
Cash equivalents | $ 0 | $ 0 | $ 0 | ||
Federal insured limits | 4,298,390 | 4,298,390 | |||
Accounts receivable reserves | 2,000 | 2,000 | 2,000 | ||
Capitalized Computer Software, Impairments | 87,639 | ||||
Research and development expense | 33,866 | $ 30,765 | 87,843 | $ 86,103 | |
Advertising expenses | 196,495 | 99,297 | 441,556 | 366,499 | |
Share based compensation | 19,681 | $ 1,460 | 20,467 | $ 51,435 | |
Deferred Tax Assets, Net of Valuation Allowance | 361,660 | 361,660 | 744,973 | ||
Valuation allowance | $ 0 | $ 0 | $ 0 | ||
Charitable deduction limit description | the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to the income tax provision. |
Schedule of Property and Equi_2
Schedule of Property and Equipment (Details) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Machinery and Equipment | $ 4,410,850 | $ 3,787,321 |
Furniture and Fixtures | 165,728 | 113,112 |
Leasehold Improvements | 3,229,786 | 3,120,273 |
Property and Equipment, Gross | 7,806,364 | 7,020,706 |
Less: Accumulated Depreciation | 4,629,343 | 4,057,104 |
Property and Equipment, Net | $ 3,177,021 | $ 2,963,602 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 145,506 | $ 170,031 | $ 572,238 | $ 489,109 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
CEO [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investor relation conference expenses | $ 0 | $ 0 | $ 4,517 | $ 14,570 |
Warrants exercised, shares | 940,807 | |||
Warrants exercise price, per share | $ 1 | $ 1 | ||
WWS Inc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Commission expense | $ 12,000 | $ 12,000 | $ 36,000 | $ 30,000 |
CEO [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Loan and Security Agreement (De
Loan and Security Agreement (Details Narrative) - USD ($) | Aug. 04, 2021 | Aug. 03, 2021 | Jun. 11, 2021 | Jan. 29, 2020 | Jan. 04, 2019 | Oct. 31, 2021 | Jan. 31, 2021 | Oct. 31, 2020 |
Short-term Debt [Line Items] | ||||||||
Debt discount | $ 0 | $ 0 | ||||||
Term loan outstanding | 0 | 0 | ||||||
Acquisition line of credit | $ 6,000,000 | |||||||
London Interbank Offered Rate (LIBOR) Swap Rate [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Debt instrument percentage | 3.50% | |||||||
M and T Bank [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Line of credit interest rate description | Advances under the line of credit are limited to eighty percent (80%) of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration provisions) and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation). | |||||||
Debt instrument term | 2 years | |||||||
Line of credit | 0 | $ 0 | ||||||
Increase total available outstanding amount | $ 6,000,000 | $ 4,500,000 | $ 4,000,000 | |||||
Extend maturity date | Aug. 4, 2026 | Jun. 30, 2023 | Jun. 30, 2022 | |||||
Interest payable, debt | $ 0 | $ 58,904 | ||||||
M and T Bank [Member] | LIBOR [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Line of credit | $ 3,500,000 | |||||||
Secured Promissory Note [Member] | M and T Bank [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Line of credit interest rate description | the Company entered into a $2.5 million five-year note with M&T Bank at LIBOR plus four points with repayments in equal payments over 60 months. | |||||||
Note payable | $ 2,500,000 | |||||||
Debt instrument term | 5 years | |||||||
Debt discount | $ 89,321 |
Promissory Note (Details Narrat
Promissory Note (Details Narrative) - M and T Bank [Member] - PPP Term Note [Member] - USD ($) | May 06, 2020 | Apr. 21, 2020 |
Short-term Debt [Line Items] | ||
Repayment of loan | $ 330,505 | |
CARES Act [Member] | ||
Short-term Debt [Line Items] | ||
Principal amount | $ 330,505 | |
Interest rate percentage | 1.00% |
Schedule of Components of Lease
Schedule of Components of Lease Expense (Details) - USD ($) | 9 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Leases | ||
Depreciation of assets | $ 110,901 | $ 102,116 |
Interest on lease liabilities | 26,710 | 26,960 |
Operating leases | 259,958 | 231,716 |
Short-term lease | ||
Total net lease cost | $ 397,569 | $ 360,792 |
Schedule of Supplemental Balanc
Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Oct. 31, 2021 | Mar. 01, 2021 | Jan. 31, 2021 |
Leases | |||
Operating lease ROU assets | $ 1,536,927 | $ 1,352,483 | |
Current operating lease liabilities, included in current liabilities | 188,590 | 147,684 | |
Noncurrent operating lease liabilities, included in long-term liabilities | 1,383,960 | 1,218,487 | |
Total operating lease liabilities | 1,572,550 | $ 347,585 | 1,366,171 |
Property and equipment, at cost | 1,079,706 | 951,656 | |
Accumulated depreciation | (371,271) | (260,370) | |
Property and equipment, net | 708,435 | 691,286 | |
Current obligations of finance lease liabilities, included in current liabilities | 226,111 | 190,554 | |
Finance leases, net of current obligations, included in long-term liabilities | 422,326 | 474,743 | |
Total finance lease liabilities | $ 648,437 | $ 665,297 |
Schedule of Supplemental Cash F
Schedule of Supplemental Cash Flow and Other Information Related to Leases (Details) - USD ($) | 9 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Leases | ||
Operating cash flows from operating leases | $ 141,206 | $ 231,716 |
Financing cash flows from finance leases | 144,910 | 110,562 |
Operating leases | 347,585 | |
Finance leases | $ 128,050 | $ 401,387 |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 9 months 18 days | 7 years 1 month 6 days |
Finance Lease, Weighted Average Remaining Lease Term | 3 years 3 months 18 days | 4 years |
Operating Lease, Weighted Average Discount Rate, Percent | 5.58% | 6.54% |
Finance Lease, Weighted Average Discount Rate, Percent | 4.57% | 4.60% |
Schedule of Future Minimum Paym
Schedule of Future Minimum Payments Required Under Lease Obligations (Details) - USD ($) | Oct. 31, 2021 | Mar. 01, 2021 | Jan. 31, 2021 |
Lessee, Lease, Description [Line Items] | |||
Total lease obligations | $ 1,572,550 | $ 347,585 | $ 1,366,171 |
Operating Lease [Member] | |||
Lessee, Lease, Description [Line Items] | |||
2022 (Remaining) | 120,014 | ||
2023 | 450,051 | ||
2024 | 438,907 | ||
2025 | 414,986 | ||
2026 | 330,646 | ||
Thereafter | 670,901 | ||
Total lease payments | 2,574,901 | ||
Less: amounts representing interest | (372,236) | ||
Total lease obligations | $ 2,202,665 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Mar. 01, 2021 | Oct. 31, 2021 | Jan. 31, 2021 |
Leases | |||
Wrote-off net right of use asset and corresponding lease liability | $ 22,870 | ||
Operating Lease, Liability | $ 347,585 | $ 1,572,550 | $ 1,366,171 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - Customer Concentration Risk [Member] | 9 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Customer One [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 32.00% | 45.00% |
Customer One [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 26.00% | 30.00% |
Customer Two [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 20.00% | 11.00% |
Customer Two [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.00% | 11.00% |
Customer Three [Member] | Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 11.00% | |
Customer Three [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 14.00% |
Summary of Option Activity (Det
Summary of Option Activity (Details) - Stock Options [Member] | 9 Months Ended |
Oct. 31, 2021$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | shares | 869,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.70 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares | 859,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.70 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | shares | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | shares | (200,000) |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares | $ 0.81 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | shares | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | shares | 669,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.66 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares | 666,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.66 |
Summary of Option Outstanding a
Summary of Option Outstanding and Exercisable (Details) | 9 Months Ended |
Oct. 31, 2021$ / sharesshares | |
Equity [Abstract] | |
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 0.39 |
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit | $ 1.38 |
Share-based Payment Arrangement, Option, Exercise Price Range, Shares Outstanding | shares | 669,000 |
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Remaining Contractual Term | 2 years 3 months 10 days |
Share-based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Exercise Price | $ 0.66 |
Share-based Payment Arrangement, Option, Exercise Price Range, Shares Exercisable | shares | 666,500 |
Share-based Payment Arrangement, Option, Exercise Price Range, Exercisable, Weighted Average Exercise Price | $ 0.66 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Sep. 30, 2021 | Oct. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Total intrinsic value of options outstanding | $ 1,343,821 | $ 1,343,821 | ||||
Total intrinsic value of options exercisable | 1,340,046 | 1,340,046 | ||||
Proceeds from Stock Options Exercised | 19,080 | $ 7,200 | ||||
Share-based Payment Arrangement, Noncash Expense | 19,681 | $ 1,460 | 20,467 | 51,435 | ||
Restricted Stock Units (RSUs) [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Share-based Payment Arrangement, Noncash Expense | 18,933 | 18,933 | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 40,497 | $ 40,497 | ||||
Number of shares granted to employee | 21,000 | |||||
Number of shares unvested | 21,000 | 21,000 | ||||
Stock Options [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Stock option exercised | 200,000 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | ||||||
Share-based Payment Arrangement, Noncash Expense | $ 1,534 | $ 51,435 | ||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 399 | $ 399 | ||||
Seven Employees [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Stock option exercised | 200,000 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.81 | |||||
Proceeds from Stock Options Exercised | $ 19,080 | |||||
Two Employees [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Stock option exercised | 12,000 | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.60 | |||||
Proceeds from Stock Options Exercised | $ 7,200 |
Schedule of Royalty Minimum Pay
Schedule of Royalty Minimum Payment by Preceding Agreement Year (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty Expense | $ 99,457 | $ 111,568 | $ 391,433 | $ 399,013 |
Agreement Year First And Second [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty Expense | ||||
Agreement Year Third And Fourth [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty Expense | 50,000 | |||
Agreement Year Fifth, Sixth And Seventh [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty Expense | 75,000 | |||
Agreement Year Eight and Nine [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty Expense | 100,000 | |||
Agreement Year Tenth And Thereafter [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty Expense | $ 125,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Jun. 01, 2019 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 |
Loss Contingencies [Line Items] | |||||
Loss Contingency, Loss in Period | $ 656,700 | ||||
Cost of Goods and Services Sold | $ 8,123,517 | $ 6,773,662 | 23,787,864 | $ 21,317,384 | |
Proceeds for the property damage claim | 91,312 | ||||
Offset by repairs and maintenance expense | 12,475 | ||||
Cost of oven and roof | 47,669 | ||||
Royalty Expense | $ 99,457 | $ 111,568 | $ 391,433 | $ 399,013 | |
Spartan Capital Securities LLC [Member] | |||||
Loss Contingencies [Line Items] | |||||
Agreement term description | the Company enters into a change of control transaction during the term of the agreement through October 1, 2022, the Company shall pay to Spartan a fee equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction | ||||
Spartan Capital Securities LLC [Member] | Advisory Agreement [Member] | |||||
Loss Contingencies [Line Items] | |||||
Nonrefundable monthly fee amount | $ 5,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 125,000 | ||||
B. Riley Securities, Inc [Member] | Advisory Agreement [Member] | |||||
Loss Contingencies [Line Items] | |||||
Non refundable monthly fee term | the Company shall pay to B. Riley a non-refundable fee of $175,000 upon delivery of a fairness opinion in the event a transaction has value over $50 million ($125,000 if a transaction has a value less than $50 million). | ||||
Year One [Member] | |||||
Loss Contingencies [Line Items] | |||||
Percentage of royalty on net sales | 6.00% | ||||
Royalty Income, Nonoperating | $ 500,000 | ||||
Year Two [Member] | |||||
Loss Contingencies [Line Items] | |||||
Percentage of royalty on net sales | 4.00% | ||||
Year Two [Member] | Minimum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Royalty Income, Nonoperating | $ 500,000 | ||||
Year Two [Member] | Maximum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Royalty Income, Nonoperating | $ 2,500,000 | ||||
Year Three [Member] | |||||
Loss Contingencies [Line Items] | |||||
Percentage of royalty on net sales | 2.00% | ||||
Year Three [Member] | Minimum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Royalty Income, Nonoperating | $ 2,500,000 | ||||
Year Three [Member] | Maximum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Royalty Income, Nonoperating | $ 20,000,000 | ||||
Year Four [Member] | |||||
Loss Contingencies [Line Items] | |||||
Percentage of royalty on net sales | 1.00% | ||||
Royalty Income, Nonoperating | $ 20,000,000 | ||||
Insurance Claims [Member] | |||||
Loss Contingencies [Line Items] | |||||
Cost of Goods and Services Sold | $ 152,850 |
Schedule of Revision of Prior Y
Schedule of Revision of Prior Year Financials (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales-net of slotting fees and discounts | $ 10,852,682 | $ 9,684,195 | $ 33,230,666 | $ 30,766,700 |
Gross profit | 2,729,165 | 2,910,533 | 9,442,802 | 9,449,316 |
General and administrative expenses | 2,694,098 | 2,092,640 | 7,916,646 | 6,793,366 |
Operating expenses | 2,727,964 | 2,123,405 | 8,004,489 | 6,879,469 |
Income from operations | 1,201 | 787,128 | 1,438,313 | 2,569,847 |
Net income | $ (5,455) | $ 734,142 | $ 1,057,994 | $ 2,380,111 |
Basic and diluted income per share | $ 0.02 | $ 0.07 | ||
Previously Reported [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales-net of slotting fees and discounts | $ 9,898,991 | $ 31,384,394 | ||
Gross profit | 3,125,329 | 10,067,010 | ||
General and administrative expenses | 2,307,436 | 7,411,060 | ||
Operating expenses | 2,338,201 | 7,497,163 | ||
Income from operations | 787,128 | 2,569,847 | ||
Net income | $ 734,142 | $ 2,380,111 | ||
Basic and diluted income per share | $ 0.02 | $ 0.07 | ||
Revision of Prior Period, Adjustment [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Sales-net of slotting fees and discounts | $ (214,796) | $ (617,694) | ||
Gross profit | (214,796) | (617,694) | ||
General and administrative expenses | (214,796) | (617,694) | ||
Operating expenses | (214,796) | (617,694) | ||
Income from operations | ||||
Net income | ||||
Basic and diluted income per share |