What changed in this filing

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Item 1. Financial Statements

2021-12-14 compared with 2021-09-09 · 212 added, 190 removed, 624 unchanged (39% of the section changed)

3 unchanged sentences

CONSOLIDATED FINANCIAL STATEMENTS

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)

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

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2021 and 2020 (unaudited)

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

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

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

Notes to Condensed Consolidated Financial Statements (unaudited)

2 unchanged sentences

Consolidated Balance Sheets

July 31, 2021

October 31, 2021

January 31,2021

1 unchanged sentence

Accounts receivable, net

Other receivable

Prepaid expenses

1 unchanged sentence

Property and equipment, net

Operating lease right of use assets, net

Operating lease right of use assets

Deferred tax asset, net

5 unchanged sentences

Total current liabilities

Operating lease liability – net

Finance leases payable – net

Operating lease liability – net of current portion

Finance leases payable – net of current portion

Total long-term liabilities

4 unchanged sentences

120,000 shares authorized;

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

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

Preferred stock, $ 0.00001 par value;

4 unchanged sentences

250,000,000 shares authorized;

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

35,751,792 and 35,603,731 shares issued and outstanding as of October 31, 2021 and January 31, 2021

Additional paid in capital

2 unchanged sentences

( 12,076,904 )

Treasury stock, 230,000 shares at cost, respectively

Treasury stock, 230,000

shares at cost, respectively as of October 31, 2021 and January 31, 2021

Total Stockholders’ Equity

3 unchanged sentences

Holdings, Inc.

Consolidated Statements of Income

Consolidated Statements of Operations

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

Sales-net of slotting fees and discounts

8 unchanged sentences

Total other income (expenses)

Net income before income tax provision

Income tax provision

Net income per common share

Net income (loss) before income tax provision

Income tax (benefit) provision

Net income (loss)

Net income (loss) per common share

Weighted average common shares outstanding

3 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

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

the Period from August 1, 2021 through October 31, 2021

Preferred Stock

Treasury Stock

Stockholders’

Balance, August 1, 2021

$ ( 149,500 )

$ ( 11,013,455 )

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

Common stock issued for services

Stock options issued for services

Common stock issued for exercise of options

Common stock issued for exercise of warrants

Common stock issued for exercise of warrants, shares

Balance, October 31, 2021

$ ( 149,500 )

$ ( 11,018,910 )

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

the Period from August 1, 2020 through October 31, 2020

Preferred Stock

Treasury Stock

Stockholders’

Balance, August 1, 2020

$ ( 149,500 )

$ ( 14,498,141 )

options issued for services

stock issued for exercise of options

stock issued for exercise of warrants

July 31, 2020

Stock options issued for services

Common stock issued for exercise of warrants

Balance, October 31, 2020

$ ( 149,500 )

4 unchanged sentences

Consolidated Statements of Changes in Stockholders’ Equity

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

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

Preferred Stock

Treasury Stock

Stockholders’

February 1, 2021

Balance, February 1, 2021

$ ( 149,500 )

$ ( 12,076,904 )

options issued for services

options issued exercise of options

July 31, 2021

Common stock issued for services

Stock options issued for services

Common stock issued for exercise of options

Balance, October 31, 2021

$ ( 149,500 )

$ ( 11,018,910 )

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

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

Preferred Stock

Treasury 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

Balance, February 1, 2020

$ ( 149,500 )

$ ( 16,144,110 )

Stock options issued for services

Common stock issued for exercise of options

Common stock issued for exercise of warrants

Balance, October 31, 2020

$ ( 149,500 )

4 unchanged sentences

Consolidated Statements of Cash Flows

July 31, 2021

July 31, 2020

For the Six Months Ended

July 31, 2021

July 31, 2020

For the Nine Months Ended

October 31, 2021

October 31, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

14 unchanged sentences

Cash paid for fixed assets

Cash paid for intangibles

Net Cash Used in Investing Activities

5 unchanged sentences

Borrowings of line of credit, net

( 2,347,348 )

Repayment of finance lease obligations

1 unchanged sentence

Proceeds from exercise of warrants

Net Cash Provided by (Used) in Financing Activities

Net Cash Used in Financing Activities

Net Increase in Cash

6 unchanged sentences

Operating lease asset additions

Software subscription liability in accounts payable and accrued expenses

accompanying notes to the condensed consolidated financial statements

20 unchanged sentences

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 (“ U.S.

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

subsidiaries.

All intercompany balances and transactions have been eliminated in consolidation.

40 unchanged sentences

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

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

held no cash equivalents at October 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 July 31, 2021, the Company had $ 4,009,891 in cash balances that exceed federally

insured limits.

At October 31, 2021, the Company had $ 4,298,390 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 July 31, 2021 and January 31,

As of October 31, 2021 and January

31, 2021, the Company had reserves of $ 2,000 .

1 unchanged sentence

Inventory was comprised

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

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

Schedule of Inventories

July 31, 2021

October 31, 2021

January 31, 2021

11 unchanged sentences

Leasehold improvements

Amortized on a straight-line basis

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

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

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

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 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

Additionally,

26 unchanged sentences

and development is expensed as incurred.

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

Research and development expenses for the three months ended October 31, 2021 and 2020 were

$ 33,866 and $ 30,765 , respectively.

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

respectively.

Research and development expenses for the nine months ended October 31, 2021 and 2020 were $ 87,843

and $ 86,103 , respectively.

and Handling Costs

21 unchanged sentences

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

the Three Months Ended

Slotting, Discounts, Promotions and Allowances

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

October 31, 2021

October 31, 2020

For the Nine Months Ended

October 31, 2021

October 31, 2020

Slotting, Discounts, Promotions and Allowances

Disaggregation

of Revenue from Contracts with Customers.

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

six months ended July 31, 2021 and 2020:

following table disaggregates gross revenue by significant geographic area for the three and nine months ended October 31, 2021

October 31, 2021

October 31, 2020

For the Three Months Ended

October 31, 2021

October 31, 2020

Total revenue

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

October 31, 2021

October 31, 2020

For the Nine Months Ended

October 31, 2021

October 31, 2020

Total revenue

4 unchanged sentences

Producing and communicating

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

advertising expenses for the three months ended October 31, 2021 and 2020 were $ 196,495 and $ 99,297 respectively.

Producing and communicating

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

advertising expenses for the nine months ended October 31, 2021 and 2020 were $ 441,556 and $ 366,499 respectively.

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

13 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 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

the three months ended October 31, 2021 and 2020, share-based compensation amounted to $ 19,681 and $ 1,460 , respectively.

the nine months ended October 31, 2021 and 2020, share-based compensation amounted to $ 20,467 and $ 51,435 , respectively.

the nine months ended October 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

October 31, 2021

October 31, 2020

Risk-free interest rate

23 unchanged sentences

Schedule of Earnings Per Share, Basic and Diluted

July 31, 2021

July 31, 2020

October 31, 2021

October 31, 2020

For the Three Months Ended

July 31, 2021

July 31, 2020

Net income attributable to common stockholders

October 31, 2021

October 31, 2020

Net (loss) income attributable to common stockholders

Effect of dilutive securities:

Diluted net income

Diluted net (loss) income

Weighted average common shares outstanding – basic

2 unchanged sentences

Weighted average common shares outstanding and assumed conversion – diluted

Basic net income per common share

Diluted net income per common share

Basic net (loss) income per common share

Diluted net (loss) income per common share

(a) - Anti-dilutive securities excluded:

July 31, 2021

July 31, 2020

For the Six Months Ended

July 31, 2021

July 31, 2020

October 31, 2021

October 31, 2020

For the Nine Months Ended

October 31, 2021

October 31, 2020

Net income attributable to common stockholders

8 unchanged sentences

(a) - Anti-dilutive securities excluded:

taxes are provided in accordance with ASC No.

740, “ Accounting for Income Taxes ”.

taxes are provided in accordance with ASC 740, “ Accounting for Income Taxes ”.

A deferred tax asset or liability

6 unchanged sentences

and rates on the date of enactment.

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.

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 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 and $ 0 , respectively.

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

2 unchanged sentences

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.

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

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

36 unchanged sentences

3 - Property and Equipment :

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

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

Schedule of Property and Equipment

July 31, 2021

October 31, 2021

January 31, 2021

4 unchanged sentences

Accumulated Depreciation

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.

Property and Equipment, Net

expense charged to income for the three months ended October 31, 2021 and 2020 amounted to $ 145,506 and $ 170,031 , respectively.

expense charged to income for the nine months ended October 31, 2021 and 2020 amounted to $ 572,238 and $ 489,109 , respectively.

4 - Related Party Transactions

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.

the three months ended October 31, 2021 and 2020, the Company recorded $ 12,000 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.

For the nine months ended October 31, 2021 and 2020, the Company recorded $ 36,000 and $ 30,000 in commission expense from WWS, Inc.

Related Party Transactions

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

the three months ended October 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

During the nine months ended October 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.

the nine months ended October 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.

5 - Loan and Security Agreement

6 unchanged sentences

using the effective interest method.

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

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

The outstanding

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

balance on the term loan was $ 0 as of October 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

14 unchanged sentences

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,

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

the nine months ended October 31, 2021 and 2020, the Company paid total interest of $ 0 and $ 58,904 to M&T Bank for the above agreements,

respectively.

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.

6 – Promissory Note

8 unchanged sentences

Company determines if an arrangement contains a lease at inception.

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.

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

ROU assets and liabilities are 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.

31 unchanged sentences

Schedule of Components of Lease Expense

For the Six Months Ended

July 31, 2021

June 31, 2020

Nine Months Ended

October 31, 2021

October 31, 2020

Finance lease

6 unchanged sentences

Schedule of Supplemental Balance Sheet Information Related to Leases

July 31, 2021

October 31, 2021

January 31, 2021

13 unchanged sentences

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

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:

10 unchanged sentences

Finance leases

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

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

the Twelve Months Ending January 31,

lease payments

For the Twelve Months Ending January 31,

2022 (Remaining)

Total lease payments

amounts representing interest

lease obligations

Total lease obligations

8 - Concentrations

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

the nine months ended October 31, 2021, the Company earned revenues from three customers representing approximately 32 %,

20 % and 11 % of gross sales.

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

respectively.

As of October 31, 2021, these three customers

represented approximately 26 %, 17 % and 14 % of total gross outstanding receivables, respectively.

During the nine months ended

October 31, 2020, the Company earned revenues from two customers representing approximately 45 % and 11 % of gross sales.

As of October

31, 2020, these two customers represented approximately 30 % and 11 % of total gross outstanding receivables, respectively.

9 - Stockholders’ Equity

5 unchanged sentences

Forfeited/Cancelled

Outstanding – July 31, 2021

Exercisable – July 31, 2021

Outstanding – October 31, 2021

Exercisable – October 31, 2021

Summary of Option Outstanding and Exercisable

3 unchanged sentences

Life (in years)

Exercise Price

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 .

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

October 31, 2021, the total intrinsic value of options outstanding and exercisable was $ 1,343,821 and $ 1,340,046 , respectively.

the nine months ended October 31, 2021, seven employees exercised a total of 200,000 options at an average exercise price of $ 0.81 per

share for aggregate proceeds of $ 19,080 .

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

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 nine months ended October 31, 2021 and 2020, the Company recognized share-based compensation related to options of an aggregate of

$ 1,534 and $ 51,435 , respectively.

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

At October 31, 2021, unrecognized share-based compensation was $ 399.

nine months ended September 30, 2021, the Company awarded an employee a grant of 21,000 restricted stock units (“RSUs”).

The RSUs will be expensed over the requisite service period.

The terms of the RSUs include vesting provisions based solely on continued

If the service criteria are satisfied, the RSUs will vest during November 2021, September 2022 and September 2023.

October 31, 2021, there were 21,000 unvested shares.

the three and nine months ended October 31, 2021, the Company recognized share-based compensation related to options of an aggregate

of $ 18,933 .

At October 31, 2021, unrecognized share-based compensation was $ 40,497 .

10 - Commitments and Contingencies

10 unchanged sentences

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

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

statement of income.

The Company received the remaining amount of proceeds for the property damage claim, resulting in other income of

During the nine months ended October 31, 2021, the Company

received $ 152,850 relating to business interruption insurance which was recorded as a component of costs of sales on the condensed consolidated

statements of income.

The Company received the remaining amount of proceeds for the property damage claim, resulting in other income

of $ 91,312 .

This amount was offset by repairs and maintenance expense of $ 12,475 as well as the costs of additions and parts of the oven

and roof totaling $ 47,669 .

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.

Claims and Assessments

16 unchanged sentences

6 % of Net sales up to $ 500,000 of Net sales for each Agreement year;

4 % of Net Sales from $ 500,000 up to $ 2,500,000

of Net Sales for each Agreement year;

2 % of Net Sales from $ 2,500,000 up to $ 20,000,000 of Net Sales for each Agreement year;

of Net Sales in excess of $ 20,000,000 of Net Sales for each Agreement year.

order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows:

4 % of Net Sales from $ 500,000

up to $ 2,500,000 of Net Sales for each Agreement year;

2 % of Net Sales from $ 2,500,000 up to $ 20,000,000 of Net Sales for each Agreement

and 1 % of Net Sales in excess of $ 20,000,000 of Net Sales for each Agreement year.

order to continue the Exclusive Term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as

Schedule of Royalty Minimum Payment by Preceding Agreement Year

8 unchanged sentences

10 th and thereafter

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.

Company incurred $ 99,457 and $ 111,568 of royalty expenses for the three months ended October 31, 2021 and 2020, respectively.

incurred $ 391,433 and $ 399,013 of royalty expenses for the nine months ended October 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

37 unchanged sentences

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

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

to reflect the correction of these errors.

1 unchanged sentence

Schedule of Revision of Prior Year Financials

For the three months ended July 31, 2020

For the three months ended October 31, 2020

As Previously Reported

2 unchanged sentences

$ ( 214,796 )

General and administrative expenses

$ ( 214,796 )

Operating expenses

$ ( 214,796 )

Income from operations

Basic and diluted income per share

For the six months ended July 31, 2020

For the nine months ended October 31, 2020

As Previously Reported

2 unchanged sentences

$ ( 617,694 )

General and administrative expenses

$ ( 617,694 )

Operating expenses

$ ( 617,694 )

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