What changed in this filing

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Item 1. Financial Statements

2021-09-09 compared with 2021-06-14 · 322 added, 462 removed, 492 unchanged (61% of the section changed)

Financial Statements.

MAMAMANCINI’S

HOLDINGS, INC.

CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of April 30, 2021 (unaudited) and January 31, 2021

Condensed Consolidated Statements of Income for the Three Months Ended April 30, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Changes in Stockholders’

Equity (Deficit) for the Period from February 1, 2021 through April 30, 2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2021 and 2020 (unaudited)

Condensed Consolidated Balance Sheets as of July 31, 2021 (unaudited) and January 31, 2021

Condensed Consolidated Statements of Income for the Three and Six Months Ended July 31, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Period from May 1, 2021 through July 31, 2021 and the Period from May 1, 2020 through July 31, 2020 (unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Period from February 1, 2021 through July 31, 2021 and for the Period February 1, 2020 through July 31, 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 31, 2021 and 2020 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

MamaMancini’s

Holdings, Inc.

Consolidated Balance Sheets

April 30, 2021

July 31, 2021

January 31, 2021

1 unchanged sentence

Accounts receivable, net

Other receivable

Prepaid expenses

3 unchanged sentences

Deferred tax asset, net

Liabilities and Stockholders’

Liabilities and Stockholders’ Equity

Current Liabilities:

3 unchanged sentences

Total current liabilities

Operating lease liability –

Finance leases payable –

Operating lease liability – net

Finance leases payable – net

Total long-term liabilities

Total Liabilities

Commitments and contingencies

Stockholders’

Commitments and contingencies (See Note 10)

Stockholders’ Equity:

Series A Preferred stock, $ 0.00001 par value;

120,000 shares authorized;

23,400 issued as of April 30, 2021 and January 31, 2021, 0 and 0 shares outstanding as of April 30, 2021 and January 31, 2021

23,400 issued as of July 31, 2021 and January 31, 2021, 0 and 0 shares outstanding as of July 31, 2021 and January 31, 2021

Preferred stock, value

Preferred stock, $ 0.00001 par value;

1 unchanged sentence

no shares issued and outstanding

Preferred stock, value

Common stock, $ 0.00001 par value;

250,000,000 shares authorized;

35,668,874 and 35,603,731 shares issued and outstanding as of April 30, 2021 and January 31, 2021

35,725,041 and 35,603,731 shares issued and outstanding as of July 31, 2021 and January 31, 2021

Additional paid in capital

3 unchanged sentences

Treasury stock, 230,000 shares at cost, respectively

Total Stockholders’

Total Liabilities and Stockholders’

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes to the condensed consolidated financial statements

MamaMancini’s

Holdings, Inc.

1 unchanged sentence

For the Three Months Ended

April 30, 2021

April 30, 2020

For the Six Months Ended

Sales-net of slotting fees and discounts

13 unchanged sentences

accompanying notes to the condensed consolidated financial statements

MamaMancini’s

Holdings, Inc.

Consolidated Statements of Changes in Stockholders’

Equity (Deficit)

the Period from February 1, 2021 through April 30, 2021

Series A Preferred Stock

Treasury Stock

Stockholders’

Balance, February 1, 2021

Consolidated Statements of Changes in Stockholders’ Equity

the Period from May 1, 2021 through July 31, 2021

Preferred Stock

Stockholders’

$ ( 149,500 )

$ ( 11,445,380 )

Stock options issued for services

Stock options issued exercise of options

Balance, April 30, 2021

options issued for services

stock issued for exercise of warrants

stock issued for exercise of warrants,Shares

stock issued for exercise of options

stock issued for exercise of options, shares

options issued exercise of options

July 31, 2021

$ ( 149,500 )

the Period from February 1, 2020 through April 30, 2020

Series A Preferred Stock

Treasury Stock

Stockholders’

$ ( 11,013,455 )

the Period from May 1, 2020 through July 31, 2020

Preferred Stock

Stockholders’

$ ( 149,500 )

$ ( 15,237,908 )

options issued for services

stock issued for exercise of options

stock issued for exercise of warrants

July 31, 2020

$ ( 149,500 )

$ ( 14,498,141 )

accompanying notes to the condensed consolidated financial statements

MamaMancini’s

Holdings, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

the Period from February 1, 2021 through July 31, 2021

Preferred Stock

Stockholders’

February 1, 2021

$ ( 149,500 )

Stock options issued for services

April 30, 2020

$ ( 12,076,904 )

options issued for services

options issued exercise of options

July 31, 2021

$ ( 149,500 )

$ ( 11,013,455 )

the Period from February 1, 2020 through July 31, 2020

Preferred Stock

Stockholders’

February 1, 2020

$ ( 149,500 )

$ ( 16,144,110 )

$ ( 149,500 )

$ ( 16,144,110 )

options issued for services

stock issued for exercise of options

stock issued for exercise of warrants

July 31, 2020

$ ( 149,500 )

$ ( 14,498,141 )

$ ( 149,500 )

$ ( 14,498,141 )

accompanying notes to the condensed consolidated financial statements

MamaMancini’s

Holdings, Inc.

Consolidated Statements of Cash Flows

For the Three Months Ended

April 30, 2021

April 30, 2020

July 31, 2021

July 31, 2020

For the Six Months Ended

July 31, 2021

July 31, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

6 unchanged sentences

Accounts receivable

Other receivable

Prepaid expenses

Security deposits

Accounts payable and accrued expenses

6 unchanged sentences

Repayments of term loan

Repayments of related party notes payable

Proceeds from promissory note

Repayment of promissory note

Borrowings of line of credit, net

1 unchanged sentence

Proceeds from exercise of options

Net Cash Used in Financing Activities

Proceeds from exercise of warrants

Net Cash Provided by (Used) in Financing Activities

Net Increase in Cash

5 unchanged sentences

Finance lease asset additions

Operating lease asset additions

accompanying notes to the condensed consolidated financial statements

MamaMancini’s

Holdings, Inc.

2 unchanged sentences

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.

3 unchanged sentences

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 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.

2 - Summary of Significant Accounting Policies

1 unchanged sentence

condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted

in the United States of America (“

US GAAP ”) and include the accounts of the Company and its wholly-owned subsidiaries.

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.

2 unchanged sentences

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.

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

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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

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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.

Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.

held no cash equivalents at April 30, 2021 and January 31, 2021.

held no cash equivalents at July 31, 2021 and January 31, 2021.

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 April 30, 2021, the Company had $3,975,358 in cash balances that exceed

federally insured limits.

At July 31, 2021, the Company had $ 4,009,891 in cash balances that exceed federally

insured limits.

Receivable and Allowance for Doubtful Accounts

6 unchanged sentences

on days outstanding, and amounts are written off when determined to be uncollectible by management.

As of April 30, 2021 and January

As of July 31, 2021 and January 31,

2021, the Company had reserves of $ 2,000 .

1 unchanged sentence

Inventory was comprised

of the following at April 30, 2021 and January 31, 2021:

April 30, 2021

of the following at July 31, 2021 and January 31, 2021:

Schedule of Inventories

July 31, 2021

January 31, 2021

7 unchanged sentences

lives for financial statement reporting of depreciation are:

Schedule of Property and Equipment Estimated Useful Lives

Machinery and equipment

1 unchanged sentence

Leasehold improvements

Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

Amortized on a straight-line basis

over the term of the lease or the estimated useful lives, whichever period is shorter.

sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain

2 unchanged sentences

and Other - Internal-Use Software as intangible assets.

The Company capitalized $87,639 of costs incurred in the year ended January

31, 2021 to implement cloud computing arrangements.

Acquired internal-use software licenses are amortized 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.

Company did not record amortization for the software license since the license has yet to be implemented as of April 30, 2021.

The Company capitalized $ 87,639 of costs incurred in the year ended

January 31, 2021 to implement cloud computing arrangements.

Acquired internal-use software licenses are amortized 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

The Company did not record amortization for the software license since the license has yet to be implemented as of July 31,

Additionally,

6 unchanged sentences

arrangement) and hosting costs are generally expensed as incurred.

February 2016, the FASB issued ASU 2016-02 “

Leases”

(Topic 842) which amended guidance for lease arrangements to increase

transparency and comparability by providing additional information to users of financial statements regarding an entity’s leasing

February 2016, the FASB issued ASU 2016-02 “ Leases” (Topic 842) which amended guidance for lease arrangements to increase

transparency and comparability by providing additional information to users of financial statements regarding an entity’s leasing

Subsequent to the issuance of Topic 842, the FASB clarified the guidance through several ASUs;

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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.

1 unchanged sentence

and development is expensed as incurred.

Research and development expenses for the three months ended April 30, 2021 and 2020 were $23,436

Research and development expenses for the three months ended July 31, 2021 and 2020 were $ 30,541

and $ 25,857 , respectively.

Research and development expenses for the six months ended July 31, 2021 and 2020 were $ 53,977 and $ 55,338 ,

respectively.

and Handling Costs

Company classifies freight billed to customers as sales revenue and the related freight costs as general and administrative expenses.

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.

4 unchanged sentences

The Company reports all amounts billed to a customer in a sale transaction as revenue.

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 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.

Company promotes its products with advertising, consumer incentives and trade promotions.

6 unchanged sentences

a distinct service in relation to the advertising, consumer incentives and trade promotions.

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.

such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows (see

For the Three Months Ended

April 30, 2021

April 30, 2020

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

July 31, 2021

July 31, 2020

For the Six Months Ended

July 31, 2021

July 31, 2020

Slotting, Discounts, Promotions and Allowances

2 unchanged sentences

The following table disaggregates gross revenue by significant geographic area for the

three months ended April 30, 2021 and 2020:

For the Three Months Ended

April 30, 2021

April 30, 2020

six months ended July 31, 2021 and 2020:

Schedule of Disaggregates Gross Revenue by Significant Geographic Area

July 31, 2021

July 31, 2020

For the Six Months Ended

July 31, 2021

July 31, 2020

Total revenue

of sales represents costs directly related to the production and manufacturing of the Company’s products.

Costs include product

2 unchanged sentences

Producing and communicating

advertising expenses for the three months ended April 30, 2021 and 2020 were $126,180 and $115,970 respectively.

Company accounts for stock-based compensation in accordance with ASC Topic 718, “

Compensation –

Stock Compensation”

( “ASC 718”

), which establishes financial accounting and reporting standards for stock-based employee compensation.

advertising expenses for the three months ended July 31, 2021 and 2020 were $ 118,881 and $ 151,232 respectively.

Producing and communicating

advertising expenses for the six months ended July 31, 2021 and 2020 were $ 245,061 and $ 267,202 respectively.

Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation”

( “ASC 718” ), which establishes financial accounting and reporting standards for stock-based employee compensation.

It defines a fair value-based method of accounting for an employee stock option or similar equity instrument.

11 unchanged sentences

to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital.

the three months ended April 30, 2021 and 2020, share-based compensation amounted to $501 and $27,105, respectively.

the three months ended April 30, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following

April 30, 2021

April 30, 2020

the three months ended July 31, 2021 and 2020, share-based compensation amounted to $ 285 and $ 22,870 , respectively.

the six months ended July 31, 2021 and 2020, share-based compensation amounted to $ 786 and $ 49,975 , respectively.

the six months ended July 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following

Schedule of Fair Value of Share-Based Payments

July 31, 2021

July 31, 2020

Risk-free interest rate

1 unchanged sentence

Expected volatility of underlying stock

expected option term is computed using the “simplified”

method as permitted under the provisions of ASC 718-10-S99.

expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99.

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.

expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s

common stock.

1 unchanged sentence

Treasury rates for the applicable periods.

per share (“EPS”) is the amount of earnings attributable to each share of common stock.

Pursuant to ASC Paragraphs 260-10-45-10

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.

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.

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

July 31, 2021

July 31, 2020

For the Three Months Ended

April 30, 2021

April 30, 2020

July 31, 2021

July 31, 2020

Net income attributable to common stockholders

4 unchanged sentences

Series A Preferred

Weighted average common shares outstanding and assumed conversion –

Weighted average common shares outstanding and assumed conversion – diluted

Basic net income per common share

1 unchanged sentence

(a) - Anti-dilutive securities excluded:

July 31, 2021

July 31, 2020

For the Six Months Ended

July 31, 2021

July 31, 2020

Net income attributable to common stockholders

Effect of dilutive securities:

Diluted net income

Weighted average common shares outstanding - basic

Dilutive securities (a):

Series A Preferred

Weighted average common shares outstanding and assumed conversion – diluted

Basic net income per common share

Diluted net income per common share

(a) - Anti-dilutive securities excluded:

taxes are provided in accordance with ASC No.

Accounting for Income Taxes ”.

740, “ Accounting for Income Taxes ”.

A deferred tax asset or liability

6 unchanged sentences

and rates on the date of enactment.

As of April 30, 2021 and January 31, 2021, the Company recognized a deferred tax asset of $497,024

As of July 31, 2021 and January 31, 2021, the Company recognized a deferred tax asset of $353,794

and $744,973, respectively, which is included in other long-term assets on the condensed consolidated balance sheets.

regularly evaluates the need for a valuation allowance related to the deferred tax asset.

The Company regularly

evaluates the need for a valuation allowance related to the deferred tax asset.

Company is no longer subject to tax examinations by tax authorities for years prior to 2019.

response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“

CARES Act ”) was signed

response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act ”) was signed

into law in March 2020.

The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“

Tax Act ”).

Corporate taxpayers may carryback net operating losses ( “NOLs ”) originating between 2018 and

2020 for up to five years, which was not previously allowed under the 2017 Tax Act.

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.

The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for

the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the

2017 Tax Act.

The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 2017

Corporate taxpayers may carryback net operating losses (“NOLs”) originating between 2018 and 2020 for up to five years,

which was not previously allowed under the (“2017 Tax Act”).

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.

The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead

of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.

addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property

4 unchanged sentences

to Section 850-10-20, the related parties include:

(a) affiliates of the Company (“Affiliate”

means, with respect to any

(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

14 unchanged sentences

Accounting Pronouncements

December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “

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 ”).

This guidance eliminates certain exceptions to the general

3 unchanged sentences

The adoption of the new

standard did not have a significant impact on the Company’s condensed consolidated financial statements.

does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect

4 unchanged sentences

3 - Property and Equipment :

and equipment on April 30, 2021 and January 31, 2021 are as follows:

April 30, 2021

and equipment on July 31, 2021 and January 31, 2021 are as follows:

Schedule of Property and Equipment

July 31, 2021

January 31, 2021

2 unchanged sentences

Leasehold Improvements

Property and Equipment, Gross

Accumulated Depreciation

expense charged to income for the three months ended April 30, 2021 and 2020 amounted to $183,761 and $159,793, respectively.

Property and Equipment,

expense charged to income for the three months ended July 31, 2021 and 2020 amounted to $ 197,971 and $ 159,285 , respectively.

expense charged to income for the six months ended July 31, 2021 and 2020 amounted to $ 381,732 and $ 319,078 , respectively.

4 - Related Party Transactions

D’Agostino and Tom Toto, two directors of the Company, are affiliates of WWS, Inc.

the three months ended April 30, 2021 and 2020, the Company recorded $12,000 in commission expense from WWS, Inc.

D’Agostino and Tom Toto, two directors of the Company, are affiliates of WWS, Inc.

the three months ended July 31, 2021 and 2020, the Company recorded $ 12,000 in commission expense from WWS, Inc.

generated sales.

the six months ended July 31, 2021 and 2020, the Company recorded $ 24,000 in commission expense from WWS, Inc.

generated sales.

the three and six months ended July 31, 2020, members of the board of directors and the CEO exercised 940,807 warrants with exercise

price of $ 1 in exchange for 940,807 shares of common stock.

Related Party Transactions

the three months ended April 30, 2021 and 2020, the Company reimbursed an entity 100% owned by the CEO of the Company for certain investor

the three months ended July 31, 2021 and 2020, the Company reimbursed an entity 100 % owned by the CEO of the Company for certain investor

relation conference expenses totaling $ 0 and $ 0 , respectively.

During the six months ended July 31, 2021 and 2020, the Company reimbursed

an entity 100% owned by the CEO of the Company for certain investor relation conference expenses totaling $ 4,517 and $ 14,570 , respectively.

5 - Loan and Security Agreement

1 unchanged sentence

equal payments over 60 months.

The facility is supported by a first priority security interest in all of the Company’s business

assets and is further subject to various affirmative and negative financial covenants and a limited Guaranty by the Company’s Chief

The facility is supported by a first priority security interest in all of the Company’s business

assets and is further subject to various affirmative and negative financial covenants and a limited Guaranty by the Company’s Chief

Executive Officer, Carl Wolf.

The Company recorded $89,321 as a debt discount and will be amortized over the remaining life of the note

The Company recorded $ 89,321 as a debt discount, which was amortized over the remaining life of the note

using the effective interest method.

There was unamortized debt discount of $0 as of April 30, 2021 and January 31, 2021.

There was unamortized debt discount of $ 0 as of July 31, 2021 and January 31, 2021.

The outstanding

balance on the term loan was $0 as of April 30, 2021 and January 31, 2021.

balance on the term loan was $ 0 as of July 31, 2021 and January 31, 2021.

January 4, 2019, the Company has arranged a $ 3.5 million working capital line of credit with M&T Bank at LIBOR plus four points with

4 unchanged sentences

million as well as extend the maturity date to June 30, 2023 .

The facility is supported by a first priority security interest

in all of the Company’s business assets and is further subject to various affirmative and negative financial covenants and a limited

Guaranty by the Company’s Chief Executive Officer, Carl Wolf.

Advances under the line of credit are limited to eighty percent (80%)

of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration provisions)

and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation).

All advances under the line of credit

are due upon maturity.

The outstanding balance on the line of credit was $0 as of April 30, 2021 and January 31, 2021.

the three months ended April 30, 2021 and 2020, the Company paid total interest of $0 and $43,080 to M&T Bank for the above agreements,

On August 4, 2021, the facility was amended to increase the total available

balance to $ 6.0 million as well as extend the maturity date to August 4, 2026 .

The facility is supported by a first priority security

interest in all of the Company’s business assets and is further subject to various affirmative and negative financial covenants

and a limited Guaranty by the Company’s Chief Executive Officer, Carl Wolf.

Advances under the line of credit are limited to eighty

percent (80%) of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration

provisions) and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation).

All advances under the line

of credit are due upon maturity.

The outstanding balance on the line of credit was $ 0 as of July 31, 2021 and January 31, 2021.

the six months ended July 31, 2021 and 2020, the Company paid total interest of $ 0 and $ 43,080 to M&T Bank for the above agreements,

respectively.

1 unchanged sentence

April 21, 2020, the Company entered into a term note with its principal bank, M&T, with a principal amount of $ 330,505 pursuant to

the Paycheck Protection Program (“

PPP Term Note ”) under the Coronavirus Aid, Relief, and Economic Security Act (the

CARES Act ”).

the Paycheck Protection Program (“ PPP Term Note ”) under the Coronavirus Aid, Relief, and Economic Security Act (the

“ CARES Act ”).

The PPP Loan is evidenced by a promissory note.

8 unchanged sentences

recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

Company’s leases consist of leaseholds on office space, manufacturing space and machinery and equipment.

The Company utilized a

1 unchanged sentence

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.

25 unchanged sentences

components of lease expense were as follows:

For the Three Months

April 30, 2021

April 30, 2020

Schedule of Components of Lease Expense

For the Six Months Ended

July 31, 2021

June 31, 2020

Finance lease

5 unchanged sentences

balance sheet information related to leases was as follows:

April 30, 2021

Schedule of Supplemental Balance Sheet Information Related to Leases

July 31, 2021

January 31, 2021

12 unchanged sentences

cash flow and other information related to leases was as follows:

For the Three Months Ended April 30, 2021

For the Three Months Ended April 30, 2020

Schedule of Supplemental Cash Flow and Other Information Related to Leases

For the Six Months Ended July 31, 2021

For the Six Months Ended July 31, 2020

Cash paid for amounts included in the measurement of lease liabilities:

10 unchanged sentences

Finance leases

Total future minimum payments required under the lease obligations

as of April 30, 2021 are as follows:

For the Twelve Months Ending January 31,

2022 (Remaining)

Total lease payments

future minimum payments required under the lease obligations as of July 31, 2021 are as follows:

Schedule of Future Minimum Payments Required Under Lease Obligations

the Twelve Months Ending January 31,

lease payments

amounts representing interest

Total lease obligations

lease obligations

8 - Concentrations

the three months ended April 30, 2021, the Company earned revenues from three customers representing approximately 31%, 19% and 11% of

the six months ended July 31, 2021, the Company earned revenues from three customers representing approximately 33 %, 21 % and 10 % of gross

As of April 30, 2021, these three customers represented approximately 40 %, 24 % and 9 % of total gross outstanding receivables,

respectively.

During the three months ended April 30, 2020, the Company earned revenues from three customers representing approximately

During the six months ended July 31, 2020, the Company earned revenues from two customers representing approximately 48 %

and 11 % of gross sales.

As of April 30, 2020, these three customers represented approximately 40%, 16% and 9% of total gross

outstanding receivables, respectively.

9 - Stockholders’

following is a summary of the Company’s option activity:

As of July 31, 2020, these two customers represented approximately 41 % and 6 % of total gross outstanding receivables,

respectively.

9 - Stockholders’ Equity

following is a summary of the Company’s option activity:

Summary of Option Activity

Exercise Price

Outstanding –

January 31, 2021

Exercisable –

January 31, 2021

Outstanding – January 31, 2021

Exercisable – January 31, 2021

Forfeited/Cancelled

Outstanding –

April 30, 2021

Exercisable –

April 30, 2021

Outstanding – July 31, 2021

Exercisable – July 31, 2021

Summary of Option Outstanding and Exercisable

Options Outstanding

Options Exercisable

Exercise Price

Life (in years)

1 unchanged sentence

Exercise Price

April 30, 2021, the total intrinsic value of options outstanding and exercisable was $1,588,091 and $1,584,241, respectively.

the three months ended April 30, 2021, six employees exercised a total of 84,000 options at an average exercise price of $0.86 per share

July 31, 2021, the total intrinsic value of options outstanding and exercisable was $ 1,498,651 and $ 1,494,601 , respectively.

the six months ended July 31, 2021, six employees exercised a total of 152,000 options at an average exercise price of $ 0.72 per share

for aggregate proceeds of $ 19,080 .

No options were exercised

during the three months ended April 30, 2020.

the three months ended April 30, 2021 and 2020, the Company recognized share-based compensation related to options of an aggregate of

In June 2020, two employees exercised a total of 12,000 options at an exercise price of $ 0.60 per

share for aggregate proceeds of $ 7,200 .

the six months ended July 31, 2021 and 2020, the Company recognized share-based compensation related to options of an aggregate of $ 786

and $ 49,795 , respectively.

At April 30, 2021, unrecognized share-based compensation was $1,432.

At July 31, 2021, unrecognized share-based compensation was $ 1,147 .

10 - Commitments and Contingencies

3 unchanged sentences

are resolved.

Gains on insurance recoveries related to business interruption are recorded within “Cost of sales”

gains or losses related to property damage are recorded within “Other income (expense)”

on the condensed consolidated statements

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

December 7, 2020, the Company experienced a fire at its plant in a spiral oven.

3 unchanged sentences

oven, additional expenses to clean plant and lost material and packaging.

During the three months ended April 30, 2021, the Company received

During the six months ended July 31, 2021, the Company received

$ 67,426 relating to business interruption insurance which was recorded as a component of costs of sales on the condensed consolidated

3 unchanged sentences

and roof totaling $ 47,669 .

On July 31, 2021, the Company recorded a receivable of $ 107,896 for proceeds to be received pursuant to an

updated claim.

This amount is for business interruption losses and is recorded within cost of sales on the condensed consolidated statements

The insurance claim remains open in order for the Company to review for additional business income losses.

6 unchanged sentences

and Royalty Agreements

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”).

sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and collectively the “Licensor

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.

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

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.

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

Royalty Rate shall be:

5 unchanged sentences

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

7 unchanged sentences

10 th and thereafter

Company incurred $148,436 and $161,627 of royalty expenses for the three months ended April 30, 2021 and 2020, respectively.

expenses are included in general and administrative expenses on the condensed consolidated statement of operations.

Company incurred $ 143,540 and $ 125,618 of royalty expenses for the three months ended July 31, 2021 and 2020, respectively.

incurred $ 291,976 and $ 287,445 of royalty expenses for the six months ended July 31, 2021 and 2020, respectively.

Royalty expenses are

included in general and administrative expenses on the condensed consolidated statement of operations.

with Placement Agents and Finders

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”).

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

1 unchanged sentence

equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction.

Company entered into an Advisory Agreement with Spartan effective June 1, 2019 (the “Advisory Agreement”).

Pursuant to the

2 unchanged sentences

granted Spartan 125,000 shares of common stock which are considered fully-paid and non-assessable upon execution of the agreement.

the term or this Agreement, the Consultant will provide non-exclusive consulting services related to general corporate matters, including,

the term of this Agreement, the Consultant will provide non-exclusive consulting services related to general corporate matters, including,

but not limited to (i) advice and input with respect to raising capital and potential M&A transactions, (ii) identifying suitable

1 unchanged sentence

strategic introductions, (v) assisting management with enhancing corporate and shareholder value, and (vi) introducing the Company to

potential investors (collectively, the “Advisory Services”).

The advisory agreement was terminated according to its terms

2 unchanged sentences

Riley Securities, Inc.

effective September 25, 2020 (the “B.

Riley Advisory

Agreement”).

Pursuant to the agreement, the Company shall pay to B.

7 unchanged sentences

(iii) soliciting proposals from purchasers or targets, (iv) assisting the Company with strategic introductions and negotiations, (v)

evaluating proposals, and (vi) other financial advisory and investment banking services (collectively, the “B.

Riley Advisory Services”).

evaluating proposals, and (vi) other financial advisory and investment banking services (collectively, the “B.

Riley Advisory Services”).

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 and Staff Accounting Bulletin No.

108, Considering the Effects of

Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements the Company determined that previously

issued financial statements for the three months ended April 30, 2020 should be revised to reflect the correction of these errors.

impact on the the three months ended April 30,2020, was reflected as an adjustment of $265,978 which resulted in a decrease in Sales

net of slotting fees and corresponding decrease in General and administrative expenses.

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.

accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality and Staff Accounting Bulletin

108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements

the Company determined that previously issued financial statements for the three and six months ended July 31, 2020 should be revised

to reflect the correction of these errors..

a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows:

For the three months ended April 30, 2020

Schedule of Revision of Prior Year Financials

For the three months ended July 31, 2020

As Previously Reported

Statement of Income

Sales –

net of slotting fees and discounts

Sales – net of slotting fees and discounts

$ ( 136,920 )

General and administrative expenses

2 unchanged sentences

Basic and diluted income per share

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

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 STATEMENS”

AND “RISK FACTORS”

PRIOR COMPANY FILINGS AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

of Operations for the Three Months ended April 30, 2021 and 2020

following table sets forth the summary statements of operations for the three months ended April 30, 2021 and 2020:

Three Months Ended

April 30, 2021

April 30, 2020

For the six months ended July 31, 2020

As Previously Reported

Statement of Income

Sales – net of slotting fees and discounts

Operating Expenses

$ ( 402,898 )

$ (2,485,668 )

Other Income (Expenses)

Income Tax Provision

the three months ended April 30, 2021 and 2020, the Company reported a net income of $631,524 and $906,202, respectively.

in net income between the three months ended April 30, 2021 and 2020 was mainly the result of a decrease in gross profit of $117,269

(discussed below) and the income tax provision of $247,949 recorded during the three months ended April 30, 2021 compared to $0 during

the three months ended April 30, 2020.

net of slotting fees and discounts decreased by approximately 5% to $10,313,400 during the three months ended April 30, 2021, from

$10,834,941 during the three months ended April 30, 2020.

The decrease was mainly attributable to the prior year’s increase in

sales due to inventory stocking of major national accounts during the early stages of the COVID-19 pandemic.

The gross profit margin was 32% for the three months ended April 30, 2021 compared to 32% for the three months ended

April 30, 2020.

Operating expenses increased by less than 1% during the three months ended April 30, 2021, as compared to the three

months ended April 30, 2020.

Operating expenses increased as a percentage of sales to 24% in 2021 compared to 23% in 2020.

increase in total operating expenses is primarily attributable to the following increases in operating expenses:

and related expenses of $66,568 due to bonuses paid to executives;

fees of $23,972 due to the increase in the number of directors and increase in compensation to each director;

expense of $23,580 due to an increase in costs of coverage of the director and officer policies and an increase in umbrella policy.

expense increases were offset by decreases in the following as well as minimal decreases in other expense categories:

fees of $77,089 due to reduced consulting and investment banker expenses;

compensation decreased by $26,604 due to a decrease in awards and vesting during the current period.

Income (Expenses):

Other income (expenses) increased by $97,026 to income of $27,274 for the three months ended April 30, 2021

as compared to expenses of $(69,752) during the three months ended April 30, 2020.

For the three months ended April 30, 2021, other income

(expenses) consisted of $(10,430) in interest expense incurred on the Company’s financing arrangements which was offset by the

net insurance proceeds relating to the property damage claim of $37,704.

For three months ended April 30, 2020, other expenses consisted

of $(64,402) in interest expense incurred on the Company’s financing arrangements.

In addition, the Company recorded $(5,350) of

amortization expense related to the debt discount.

and Capital Resources

following table summarizes total current assets, liabilities and working capital at April 30, 2021 compared to January 31, 2021:

April 30, 2021

January 31, 2021

Current Assets

Current Liabilities

Working Capital

of April 30, 2021, we had working capital of $5,500,142 as compared to a working capital of $4,834,102 as of January 31, 2021, an increase

The increase in working capital is primarily attributable to an increase in cash of $1,052,796 and an increase in inventory

These amounts were offset by a decrease in accounts receivable of $254,048 and an increase in accounts payable and accrued

expenses of $338,962 and current portion of lease obligations of $21,551.

cash provided by operating activities for the three months ended April 30, 2021 and 2020 was $1,434,768 and $1,195,665, respectively.

The net income for the three months ended April 30, 2021 and 2020 was $631,524 and $906,202, respectively.

cash used in all investing activities for the three months ended April 30, 2021 was $354,394 as compared to $105,616 for the three months

ended April 30, 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.

cash used in all financing activities for the three months ended April 30, 2021 was $27,578 as compared to $330,296 provided for the

three months ended April 30, 2020.

During the three months ended April 30, 2021, the Company received proceeds of $19,080 from the exercise

These cash in-flows were offset by payments of $46,658 paid for finance lease payments.

During the three months ended April

30, 2020, the Company received proceeds of $330,505 from the Paycheck Protection Program promissory note and the Company’s net

borrowings on its line of credit increased by $150,000 over the prior year comparable period.

The Company returned the $330,505 received

from the Paycheck Protection Program in May 2020.

These cash in-flows were offset by payments on its term loan of $125,001 and $25,208

paid for capital lease payments.

reflected in the accompanying consolidated financial statements, the Company has net income and net cash provided by operations of $631,524

and $1,434,768, respectively, for the three months ended April 30, 2021.

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 June 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.

Accounting Pronouncements

December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “

Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ”).

This guidance eliminates certain exceptions to the general

approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes.

This guidance

is effective for annual periods after December 15, 2020, including interim periods within those annual periods.

The adoption of the new

standard did not have a significant impact on the Company’s condensed consolidated financial statements.

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.

Accounting Policies

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

We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively

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.

significant accounting policies are summarized in Note 2 of our 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.

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:

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.

estimates and assumptions impact, among others, the following:

allowance for doubtful accounts, inventory obsolescence and the fair value

of share-based payments.

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.

February 2016, the FASB issued ASU 2016-02 “

Leases”

(Topic 842) which amended guidance for lease arrangements to increase

transparency and comparability by providing additional information to users of financial statements regarding an entity’s leasing

Subsequent to the issuance of Topic 842, the FASB clarified the guidance through several ASUs;

hereinafter the collection

of lease guidance is referred to as ASC 842.

The revised guidance seeks to achieve this objective by requiring reporting entities to

recognize lease assets and lease liabilities on the balance sheet for substantially all lease arrangements.

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

Results for the year ended January 31, 2020 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 .

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:

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.

to apply the recognition requirements in ASC 842 to short-term leases.

record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial.

May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) .

ASU 2014-09 supersedes the revenue recognition

requirements under Topic 605, Revenue Recognition , and most industry-specific guidance throughout the Industry Topics of the ASC.

The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.

Under the new guidance, an entity is required to perform the following five steps:

(1) identify the contract(s) with a customer;

identify the performance obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction price to the

performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

guidance will significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions and capital

Additionally, the guidance requires improved disclosures as to the nature, amount, timing and uncertainty of revenue that is

In May 2016, the FASB issued ASU No.

2016-12, Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements

and Practical Expedients .

This update clarifies the objectives of collectability, sales and other taxes, noncash consideration, contract

modifications at transition, completed contracts at transition and technical correction.

The amendments in this update affect the guidance

in ASU 2014-09.

In September 2017, the FASB issued additional amendments providing clarification and implementation guidance.

Company adopted this guidance and related amendments as of the first quarter of fiscal 2019, applying the full retrospective transition

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.

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.

Company accounts for stock-based compensation in accordance with ASC Topic 718, “

Compensation –

Stock Compensation”

(“ASC 718”) which establishes financial accounting and reporting standards for stock-based employee compensation.

defines a fair value-based method of accounting for an employee stock option or similar equity instrument.

The Company accounts for compensation

cost for stock option plans in accordance with ASC 718.

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.

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

The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period.

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.

computing fair value of share-based payments, the Company has considered the following variables:

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.

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.

expected option term is computed using the “simplified”

method as permitted under the provisions of Staff Accounting

Bulletin (“SAB”) 110.

term is the life of the grant.

expected volatility was estimated using the historical volatilities of the Company’s common stock.

forfeiture rate is based on the historical forfeiture rate for the Company’s unvested stock options, which was 0%.

incurred for producing and communicating advertising for the Company are charged to operations as incurred.

Balance Sheet Arrangements:

do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also

known as “special purpose entities”

Quantitative and Qualitative Disclosures About Market Risk

do not hold any derivative instruments and do not engage in any hedging activities.

General and administrative expenses

Operating expenses

Income from operations

Basic and diluted income per share

12 – Subsequent Events

August 3, 2021, M&T Bank approved an acquisition line of credit for $ 6.0 million.

The Company has two years to draw the line.

the Company draws on the line, it must pay down the line in 60 months.

The current pricing is 3.5% above the one-day Libor rate.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements