What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-12-14 compared with 2021-09-09 · 77 added, 83 removed, 189 unchanged (46% of the section changed)

10 unchanged sentences

PRIOR COMPANY FILINGS AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

of Operations for the Three Months ended July 31, 2021 and 2020

following table sets forth the summary statements of operations for the three months ended July 31, 2021 and 2020:

of Operations for the Three Months ended October 31, 2021 and 2020

following table sets forth the summary statements of operations for the three months ended October 31, 2021 and 2020:

Three Months Ended

July 31, 2021

July 31, 2020

October 31, 2021

October 31, 2020

Sales - Net of Slotting Fees and Discounts

3 unchanged sentences

Other Expenses

Income Tax Provision

the three months ended July 31, 2021 and 2020, the Company reported net income of $431,925 and $739,767, respectively.

The change in

net income between the three months ended July 31, 2021 and 2020 was mainly the result of a decrease in gross profit percentage (as discussed

below) and the income tax provision of $145,439 recorded during the three months ended July 31, 2021 compared to $0 during the three

months ended July 31, 2020.

Sales, net of slotting fees and discounts increased by approximately 18% to $12,064,584 during the three months ended July 31, 2021,

from $10,247,564 during the three months ended July 31, 2020.

The increase was mainly to new product introductions and major customer

volume increases.

The gross profit margin was 28% for the three months ended July 31, 2021 compared to 30% for the three months ended July

Income Tax Benefit

Net (Loss) Income

the three months ended October 31, 2021 and 2020, the Company reported net loss of $5,455 and net income of $734,142, respectively.

The change between the three months ended October 31, 2021 and 2020 was mainly the result of a decrease in gross profit percentage (as

discussed below) and an increase in operating expenses (principally freight).

Sales, net of slotting fees and discounts increased by approximately 12% to $10,852,682 during the three months ended October 31,

2021, from $9,684,195 during the three months ended October 31, 2020.

The increase was mainly to major customer volume increases.

The gross profit margin was 25% for the three months ended October 31, 2021 compared to 30% for the three months ended October

The change in gross profit margin is due to increases in raw material costs, packaging costs and in-bound freight costs.

Operating expenses increased by 23% during the three months ended July 31, 2021, as compared to the three months ended

July 31, 2020.

Operating expenses increased by 29% during the three months ended October 31, 2021, as compared to the three months

ended October 31, 2020.

Operating expenses as a percentage of sales was 25% in 2021 and 22% in 2020.

The $513,975 increase in total operating

expenses is primarily attributable to the following:

and Freight of $288,548 due to increased sales volume and transportation rate increases;

expense of $59,078 directly related to increased sales;

and related expenses of $49,888 due to salary adjustments and bonuses paid to executives;

The $601,458 increase in

total operating expenses is primarily attributable to the following:

and Freight of $311,482 mainly due to transportation rate increases;

and promotion of $103,275;

and related expenses of $60,402 due to salary adjustments and additional accounting payroll, and senior operational management hire;

fees of $42,500 due to the increase in the number of directors, an increase in compensation to each director and an additional shareholder

meeting of $11,437.

up-listing costs of $80,000.

expense increases were offset by minimal decreases in other expense categories.

Other expenses decreased by $59,449 to $7,549 for the three months ended July 31, 2021 as compared to $66,998 during the

three months ended July 31, 2020.

For the three months ended July 31, 2021, other expenses consisted of $7,549 in interest expense incurred

on the Company’s financing arrangements.

For three months ended July 31, 2020, other expenses consisted of $61,648 in interest

expense incurred on the Company’s financing arrangements and the Company recorded $5,350 of amortization expense related to the

debt discount.

of Operations for the Six Months ended July 31, 2021 and 2020

following table sets forth the summary statements of operations for the six months ended July 31, 2021 and 2020:

Six Months Ended

July 31, 2021

July 31, 2020

Other expenses decreased by $44,255 to $8,731 for the three months ended October 31, 2021 as compared to $52,986 during

the three months ended October 31, 2020.

For the three months ended October 31, 2021, other expenses consisted of $8,731 in interest

expense incurred on the Company’s financing arrangements.

For three months ended October 31, 2020, other expenses consisted of

$45,822 in interest expense incurred on the Company’s financing arrangements and the Company recorded $7,164 of amortization expense

related to the debt discount.

of Operations for the Nine Months ended October 31, 2021 and 2020

following table sets forth the summary statements of operations for the nine months ended October 31, 2021 and 2020:

Nine Months Ended

October 31, 2021

October 31, 2020

Sales - Net of Slotting Fees and Discounts

4 unchanged sentences

Income Tax Provision

the six months ended July 31, 2021 and 2020, the Company reported net income of $1,063,449 and $1,645,969, respectively.

The change in

net income between the six months ended July 31, 2021 and 2020 was mainly the result of a decrease in gross profit percentage (as discussed

below) and the income tax provision of $393,388 recorded during the six months ended July 31, 2021 compared to $0 during the six months

ended July 31, 2020.

Sales, net of slotting fees and discounts increased by approximately 6% to $22,377,984 during the six months ended July 31, 2021,

from $21,082,505 during the six months ended July 31, 2020.

The increase in sales can be attributed to new product introduction and major

customer volume increases.

The gross profit margin was 30% for the six months ended July 31, 2021 compared to 31% for the six months ended July 31,

the nine months ended October 31, 2021 and 2020, the Company reported net income of $1,057,994 and $2,380,111, respectively.

change in net income between the nine months ended October 31, 2021 and 2020 was mainly the result of a decrease in gross profit percentage

(as discussed below) and the income tax provision of $391,313 recorded during the nine months ended October 31, 2021 compared

to $0 during the nine months ended October 31, 2020.

Sales, net of slotting fees and discounts increased by approximately 8% to $33,230,666 during the nine months ended October 31, 2021,

from $30,766,700 during the nine months ended October 31, 2020.

The increase in sales can be attributed to major customer volume increases.

The gross profit margin was 28% for the nine months ended October 31, 2021 compared to 31% for the nine months ended October

The change in gross profit margin is due to increases in raw material costs, packaging costs and in-bound freight costs.

Operating expenses increased by 11% during the six months ended July 31, 2021, as compared to the six months ended July

Operating expenses increased by 16% during the nine months ended October 31, 2021, as compared to the nine months ended

October 31, 2020.

Operating expenses increased as a percentage of sales to 24% in 2021 compared to 22% in 2020.

The $383,541 increase in total

operating expenses is primarily attributable to the following:

and Freight of $271,074 due to increased sales volume and transportation rate increases;

and related expenses of $117,025 due to salary adjustments and bonuses paid to executives;

The $1,125,020 increase

in total operating expenses is primarily attributable to the following:

and Freight of $582,556 due to increased transportation rate increases;

and related expenses of $177,427 due, bonuses paid to executives;

addition of senior personnel in operations and accounting personnel;

fees of $108,972 due to the increase in the number of directors, an increase in compensation to each director and an additional shareholder

3 unchanged sentences

fees decreased by $65,488 due to a decrease in contractual investment banking fees.

compensation decreased by $49,189 due to a decrease in awards and vesting during the current period.

Income (Expenses):

Other income (expenses) increased by $156,475 to income of $19,725 for the six months ended July 31, 2021 as compared

to expenses of $(136,750) during the six months ended July 31, 2020.

For the six months ended July 31, 2021, other income (expenses)

consisted of $(17,979) 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 six months ended July 31, 2020, other expenses consisted of $(126,050)

in interest expense incurred on the Company’s financing arrangements and the Company recorded $(10,700) of amortization expense

related to the debt discount.

Other income (expenses) increased by $200,730 to income of $10,994 for the nine months ended October 31, 2021

as compared to expenses of $(189,736) during the nine months ended October 31, 2020.

For the nine months ended October 31, 2021, other

income (expenses) consisted of $(26,710) 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 nine months ended October 31, 2020, other expenses

consisted of $(171,872) in interest expense incurred on the Company’s financing arrangements and the Company recorded $(17,864)

of amortization expense related to the debt discount.

and Capital Resources

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

July 31, 2021

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

October 31, 2021

January 31, 2021

2 unchanged sentences

Working Capital

of July 31, 2021, we had working capital of $6,065,546 as compared to a working capital of $4,834,102 as of January 31, 2021, an increase

of October 31, 2021, we had working capital of $6,027,170 as compared to a working capital of $4,834,102 as of January 31, 2021, an increase

of $1,193,068.

The increase in working capital is primarily attributable to an increase in cash of $1,062,321, an increase in accounts

receivable of $728,920 and an increase in inventory of $212,403.

These amounts were offset by an increase in accounts payable and accrued

expenses of $749,822 and an increase in current portion of lease obligations of $58,281.

cash provided by operating activities for the six months ended July 31, 2021 and 2020 was $1,618,610 and $1,465,898, respectively.

net income for the six months ended July 31, 2021 and 2020 was $1,063,449 and $1,645,969, respectively.

cash used in all investing activities for the six months ended July 31, 2021 was $481,295 as compared to $189,287 for the six months

ended July 31, 2020, respectively, to acquire new machinery and equipment and leasehold improvements.

Our capital expenditures are attributed

to a Plant Expansion Project in progress since mid-2017 to expand plant capacity and efficiency to meet growing demand.

cash used in all financing activities for the six months ended July 31, 2021 was $74,994 as compared to $28,292 provided by for the six

months ended July 31, 2020.

During the six months ended July 31, 2021, the Company received proceeds of $19,080 from the exercise of

The increase in working capital is primarily attributable to an increase in cash of $1,349,360 and an increase in inventory

These amounts were offset by an increase in accounts payable and accrued expenses of $562,095 and an increase in current

portion of lease obligations of $76,463.

cash provided by operating activities for the nine months ended October 31, 2021 and 2020 was $2,132,797 and $2,518,012, respectively.

The net income for the nine months ended October 31, 2021 and 2020 was $1,057,994 and $2,380,111, respectively.

cash used in all investing activities for the nine months ended October 31, 2021 was $657,607 as compared to $320,332 for the nine months

ended October 31, 2020, respectively, to acquire new machinery and equipment and leasehold improvements.

Our capital expenditures are

attributed to a Plant Expansion Project in progress since mid-2017 to expand plant capacity and efficiency to meet growing demand.

cash used in all financing activities for the nine months ended October 31, 2021 was $125,830 as compared to $798,520 used by financing

activities for the nine months ended October 31, 2020.

During the nine months ended October 31, 2021, the Company received proceeds of

$19,080 from the exercise of options.

These cash in-flows were offset by payments of $144,910 paid for finance lease payments.

During the six months ended July 31,

2020, the Company received proceeds of $330,505 from the Paycheck Protection Program promissory note and proceeds of $1,484,303 from

the exercise of options and warrants.

These cash in-flows were offset by payments on its line of credit of $500,000, payments on its

term loan of $250,002, payments of $641,844 on the related party loans and $64,165 paid for capital lease payments.

The Company returned

the $330,505 received from the Paycheck Protection Program in May 2020.

the nine months ended October 31, 2020, the Company received proceeds of $330,505 from the Paycheck Protection Program promissory note

and proceeds of $2,735,697 from the exercise of options and warrants.

These cash in-flows were offset by payments on its line of credit

of $2,347,348, payments on its term loan of $441,663, payments of $641,844 on the related party loans and $110,562 paid for capital lease

The Company returned the $330,505 received from the Paycheck Protection Program in May 2020.

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 September 9, 2022 based on current and projected levels of operations, the Company

will be sufficient to meet its cash requirements through December 14, 2022 based on current and projected levels of operations, the Company

may require additional funding to finance growth and achieve its strategic objectives.

144 unchanged sentences

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 2. Management’s Discussion and Analysis