| Summary of Significant Accounting Policies | Note
3 - Summary of Significant Accounting Policies Basis
of Presentation The
consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in
the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany
balances and transactions have been eliminated in consolidation. Principles
of Consolidation The
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 January 31, 2022, the Company had approximately $ 186,100
in cash balances that exceed federally insured
limits. Accounts
Receivable and Allowance for Doubtful Accounts Accounts
receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral
to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts
receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based
on days outstanding, and amounts are written off when determined to be uncollectible by management. As of January 31, 2022 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 January 31, 2022 and January 31, 2021: Schedule
of Inventories
January 31, 2022 January 31, 2021
Raw Materials $ 1,854,156 $ 746,013
Work in Process 244,974 88,955
Finished goods 791,663 360,243
Inventories $ 2,890,793 $ 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 Software The
Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40, Intangibles - Goodwill
and Other - Internal-Use Software 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 consolidated statements of operations that reflects the nature of the license. In
November 2021, the Company finalized the implementation process and began to use the software license and recorded amortization of $ 7,303 . Additionally,
the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software.
If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software
licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid
for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting
arrangement) and hosting costs are generally expensed as incurred. Goodwill
The
Company does not amortize goodwill or indefinite-lived intangible assets. The Company tests goodwill for impairment annually as of January
31 or if an event occurs or circumstances change that indicate that the fair value of the entity, or the reporting unit, may be below
its carrying amount (a “triggering event”). Whenever events or circumstances change, entities have the option to first make
a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would
perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative
factors, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the reporting
unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying
amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions,
industry and market considerations, overall financial performance, Company specific events and share price trends, an assessment of whether
each relevant factor will impact the impairment test positively or negatively, and the magnitude of an such impact. If
a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s
fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected
future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair
value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount
exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that
reporting unit. Management
evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events
and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined
to have a finite useful life, it is amortized prospectively over its estimated remaining useful life. As
of January 31, 2022, there were no impairment losses recognized for goodwill. Other
Intangibles Other
intangibles consist of trademarks, trade names and customer relationships. Intangible asset lives for financial statement reporting
of amortization are: Schedule of Other Intangible Assets Impairment Losses Recognized for Goodwill
Tradenames and trademarks 3
years
Customer relationships 4 5 years During the year ended January
31, 2022, the Company recognized amortization of $ 36,357
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 years ended January 31, 2022 and 2021 were $ 120,692 110,713 Revenue
Recognition The
Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The
Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation
and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods
are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive
in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. 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. 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, and allowances are accounted for as a direct reduction of revenues as follows: Schedule
of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues
For the Year Ended
January 31, 2022 January 31, 2021
Gross Sales $ 48,798,656 $ 42,238,702
Less: Slotting, Discounts, Allowances 1,714,916 1,480,097
Net Sales $ 47,083,740 $ 40,758,605 Disaggregation
of Revenue from Contracts with Customers. Schedule
of Disaggregates Gross Revenue by Significant Geographic Area
For the Year Ended
January 31, 2022 January 31, 2021
Northeast $ 16,119,490 $ 13,994,534
Southeast 17,546,606 12,780,368
Midwest 4,917,263 4,870,644
West 5,358,105 5,515,759
Southwest 4,857,192 5,077,397
Total revenue $ 48,798,656 $ 42,238,702 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 years ended January 31, 2022 and 2021 were $ 734,924 633,102 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 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 years ended January 31, 2022 and 2021, share-based compensation amounted to $ 32,918 52,895 For
the years ended January 31, 2022 and 2021, when computing fair value of share-based payments, the Company has considered the following
variables: Schedule
of Fair Value of Share-Based Payments
January
31, 2022 January
31, 2021
Risk-free
interest rate N/A 0.00 0.49 %
Expected
life of grants N/A 0.1 5.2
Expected
volatility of underlying stock N/A 43 127 %
Dividends N/A 0 % The
expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company
uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term. The
expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s
common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. Earnings
(Loss) Per Share Earnings
per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used
to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification.
Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing 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
For
the Years Ended
January
31, 2022 January
31, 2021
Numerator:
Net
(loss) income attributable to common stockholders $ (251,926 ) 4,067,206
Effect
of dilutive securities: — —
Diluted
net (loss) income $ (251,926 ) $ 4,067,206
Denominator:
Weighted
average common shares outstanding - basic 35,702,197 33,503,208
Dilutive
securities (a):
Series
A Preferred - -
Options - 513,373
Warrants - -
Weighted
average common shares outstanding and assumed conversion – diluted 35,702,197 34,016,581
Basic
net (loss) income per common share $ (0.01 ) $ 0.12
Diluted
net (loss) income per common share $ (0.01 ) $ 0.12
(a)
- Anti-dilutive securities excluded: 669,000 - Income
Taxes Income
taxes are provided in accordance with ASC No. 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 January 31, 2022 and 2021, the Company recognized a deferred tax asset of $ 448,501 744,973 The
Company is no longer subject to tax examinations by tax authorities for years prior to the year ended January 31, 2019. In
response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017
Tax Act “NOLs The CARES Act also eliminates the 80% of taxable
income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2019, 2020 or 2021.
Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under
the 2017 Tax Act) for 2019 and 2020 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 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 In
May 2021, the FASB issued accounting standards update ASU 2021-04—Earnings Per Share (Topic 260), Debt— Modifications and
Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in
Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified
Written Call Options, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding
equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments
in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with
fiscal years beginning after December 15, 2021. Early adoption is permitted, including adoption in an interim period. The Company is
currently evaluating the effects of the adoption of ASU No. 2021-04 on its consolidated financial statements. In
August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
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. 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. |
