Mama's Creations, Inc. 10-Q

Item 1. Financial Statements. MAMAMANCINI’S HOLDINGS, INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS October 31, 2021 Page(s) Condensed Consolidated Balance Sheets as of October 31, 2021 (unaudited) and January 31, 2021 F-2 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2021 and 2020 (unaudited) F-3 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) F-4 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) F-5 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2021 and 2020 (unaudited) F-6 Notes to Condensed Consolidated Financial Statements (unaudited) F-7 F- 1 MamaMancini’s Holdings, Inc. Condensed Consolidated Balance Sheets October 31, 2021 January 31,2021 (unaudited) Assets Current Assets: Cash $ 4,539,920 $ 3,190,560 Accounts receivable, net 3,961,348 3,973,793 Inventories 1,614,738 1,195,211 Prepaid expenses 595,071 519,887 Total current assets 10,711,077 8,879,451 Property and equipment, net 3,177,021 2,963,602 Intangibles 87,639 87,639 Operating lease right of use assets 1,536,927 1,352,483 Deferred tax asset, net 361,660 744,973 Deposits 23,156 20,177 Total Assets $ 15,897,480 $ 14,048,325 Liabilities and Stockholders’ Equity Liabilities: Current Liabilities: Accounts payable and accrued expenses $ 4,269,206 $ 3,707,111 Operating lease liability 188,590 147,684 Finance leases payable 226,111 190,554 Total current liabilities 4,683,907 4,045,349 Operating lease liability – net of current portion 1,383,960 1,218,487 Finance leases payable – net of current portion 422,326 474,743 Total long-term liabilities 1,806,286 1,693,230 Total Liabilities 6,490,193 5,738,579 Commitments and contingencies (See Note 10) - Stockholders’ Equity: Series A Preferred stock, $ 0.00001 par value; 120,000 shares authorized; 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; 19,880,000 shares authorized; no shares issued and outstanding - - Preferred stock, value Common stock, $ 0.00001 par value; 250,000,000 shares authorized; 35,751,792 and 35,603,731 shares issued and outstanding as of October 31, 2021 and January 31, 2021 359 357 Additional paid in capital 20,575,338 20,535,793 Accumulated deficit ( 11,018,910 ) ( 12,076,904 ) Less: Treasury stock, 230,000 shares at cost, respectively as of October 31, 2021 and January 31, 2021 ( 149,500 ) ( 149,500 ) Total Stockholders’ Equity 9,407,287 8,309,746 Total Liabilities and Stockholders’ Equity $ 15,897,480 $ 14,048,325 See accompanying notes to the condensed consolidated financial statements F- 2 MamaMancini’s Holdings, Inc. Condensed Consolidated Statements of Operations (unaudited) 2021 2020 2021 2020 For the Three Months Ended October 31, For the Nine Months Ended October 31, 2021 2020 2021 2020 Sales-net of slotting fees and discounts $ 10,852,682 $ 9,684,195 $ 33,230,666 $ 30,766,700 Costs of sales 8,123,517 6,773,662 23,787,864 21,317,384 Gross profit 2,729,165 2,910,533 9,442,802 9,449,316 Operating expenses: Research and development 33,866 30,765 87,843 86,103 General and administrative 2,694,098 2,092,640 7,916,646 6,793,366 Total operating expenses 2,727,964 2,123,405 8,004,489 6,879,469 Income from operations 1,201 787,128 1,438,313 2,569,847 Other income (expenses) Interest ( 8,731 ) ( 45,822 ) ( 26,710 ) ( 171,872 ) Amortization of debt discount - ( 7,164 ) - ( 17,864 ) Other income - - 37,704 - Total other income (expenses) ( 8,731 ) ( 52,986 ) 10,994 ( 189,736 ) Net income (loss) before income tax provision ( 7,530 ) 734,142 1,449,307 2,380,111 Income tax (benefit) provision ( 2,075 ) - 391,313 - Net income (loss) $ ( 5,455 ) $ 734,142 $ 1,057,994 $ 2,380,111 Net income (loss) per common share – basic $ ( 0.00 ) $ 0.02 $ 0.03 $ 0.07 – diluted $ ( 0.00 ) $ 0.02 $ 0.03 $ 0.07 Weighted average common shares outstanding – basic 35,728,821 34,225,446 35,683,484 32,832,450 – diluted 35,728,821 35,725,984 36,176,949 34,322,988 See accompanying notes to the condensed consolidated financial statements F- 3 MamaMancini’s Holdings, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) For the Period from August 1, 2021 through October 31, 2021 Shares Amount Shares Amount Shares Amount Capital Deficit Equity Series A Preferred Stock Common Stock Treasury Stock Additional Paid In Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance, August 1, 2021 - $ - 35,725,041 $ 359 ( 230,000 ) $ ( 149,500 ) $ 20,555,657 $ ( 11,013,455 ) $ 9,393,061 Common stock issued for services - - - - - - 18,933 - 18,933 Stock options issued for services - - - - - - 748 - 748 Common stock issued for exercise of options - - 26,751 - - - - - - Common stock issued for exercise of warrants Common stock issued for exercise of warrants, shares Net loss - - - - - - - ( 5,455 ) ( 5,455 ) Balance, October 31, 2021 - $ - 35,751,792 $ 359 ( 230,000 ) $ ( 149,500 ) $ 20,575,338 $ ( 11,018,910 ) $ 9,407,287 For the Period from August 1, 2020 through October 31, 2020 Series A Preferred Stock Common Stock Treasury Stock Additional Paid In Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance, August 1, 2020 - $ - 33,517,101 $ 336 ( 230,000 ) $ ( 149,500 ) $ 18,229,615 $ ( 14,498,141 ) $ 3,582,310 Stock options issued for services - - - - - - 1,460 - 1,460 Common stock issued for exercise of warrants - - 1,250,740 12 - - 1,258,852 - 1,258,594 Net income - - - - - - - 734,142 734,142 Balance, October 31, 2020 - $ - 34,767,841 $ 348 ( 230,000 ) $ ( 149,500 ) $ 19,489,657 $ ( 13,763,999 ) $ 5,576,506 See accompanying notes to the condensed consolidated financial statements F- 4 MamaMancini’s Holdings, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) For the Period from February 1, 2021 through October 31, 2021 Series A Preferred Stock Common Stock Treasury Stock Additional Paid In Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance, February 1, 2021 - $ - 35,603,731 $ 357 ( 230,000 ) $ ( 149,500 ) $ 20,535,793 $ ( 12,076,904 ) $ 8,309,746 Common stock issued for services - - - - - - 18,933 - 18,933 Stock options issued for services - - - - - - 1,534 - 1,534 Common stock issued for exercise of options - - 148,061 2 - - 19,078 - 19,080 Net income - - - - - - - 1,057,994 1,057,994 Balance, October 31, 2021 - $ - 35,751,792 $ 359 ( 230,000 ) $ ( 149,500 ) $ 20,575,338 $ ( 11,018,910 ) $ 9,407,287 For the Period from February 1, 2020 through October 31, 2020 Series A Preferred Stock Common Stock Treasury Stock Additional Paid In Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance, February 1, 2020 - $ - 31,991,241 $ 321 ( 230,000 ) $ ( 149,500 ) $ 16,695,352 $ ( 16,144,110 ) $ 402,063 Stock options issued for services - - - - - - 51,435 - 51,435 Common stock issued for exercise of options - - 12,000 - - - 7,200 - 7,200 Common stock issued for exercise of warrants - - 2,764,600 27 - - 2,735,670 - 2,735,697 Net income - - - - - - - 2,380,111 2,380,111 Balance, October 31, 2020 - $ - 34,767,841 $ 348 ( 230,000 ) $ ( 149,500 ) $ 19,489,657 $ ( 13,763,999 ) $ 5,576,506 See accompanying notes to the condensed consolidated financial statements F- 5 MamaMancini’s Holdings, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) For the Nine Months Ended October 31, 2021 October 31, 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,057,994 $ 2,380,111 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 572,238 489,109 Amortization of debt discount - 17,864 Share-based compensation 20,467 51,435 Amortization of right of use assets 163,141 102,943 Change in deferred tax asset 383,313 - Changes in operating assets and liabilities: Accounts receivable 12,445 39,975 Other receivable - - Inventories ( 419,527 ) ( 313,870 ) Prepaid expenses ( 75,184 ) ( 38,784 ) Security deposits ( 2,979 ) - Accounts payable and accrued expenses 562,095 ( 111,024 ) Operating lease liability ( 141,206 ) ( 99,747 ) Net Cash Provided by Operating Activities 2,132,797 2,518,012 CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for fixed assets ( 657,607 ) ( 304,048 ) Cash paid for intangibles - ( 16,284 ) Net Cash Used in Investing Activities ( 657,607 ) ( 320,332 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of term loan - ( 441,663 ) Repayments of related party notes payable - ( 641,844 ) Proceeds from promissory note - 330,505 Repayment of promissory note - ( 330,505 ) Borrowings of line of credit, net - ( 2,347,348 ) Repayment of finance lease obligations ( 144,910 ) ( 110,562 ) Proceeds from exercise of options 19,080 7,200 Proceeds from exercise of warrants - 2,735,697 Net Cash Used in Financing Activities ( 125,830 ) ( 798,520 ) Net Increase in Cash 1,349,360 1,399,160 Cash - Beginning of Period 3,190,560 393,683 Cash - End of Period $ 4,539,920 $ 1,792,843 SUPPLEMENTARY CASH FLOW INFORMATION: Cash Paid During the Period for: Income taxes $ - $ - Interest $ 28,748 $ 174,735 SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Finance lease asset additions $ 128,050 $ 401,387 Operating lease asset additions $ 347,585 $ - Software subscription liability in accounts payable and accrued expenses $ - $ 71,355 See accompanying notes to the condensed consolidated financial statements F- 6 MamaMancini’s Holdings, Inc. Notes to Condensed Consolidated Financial Statements October 31, 2021 Note 1 - Nature of Operations and Basis of Presentation Nature of Operations MamaMancini’s Holdings, Inc. (the “Company”), (formerly known as Mascot Properties, Inc.) was organized on July 22, 2009 as a Nevada corporation. The Company has a year-end of January 31. The Company is a manufacturer and distributor of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, chicken parmesan and other similar meats and sauces. In addition, the Company continues to diversify its product line by introducing new products such as ready to serve dinners, single-size Pasta Bowls, bulk deli, packaged refrigerated and frozen products. The Company’s products were submitted to the United States Department of Agriculture (the “USDA”) and approved as all natural. The USDA defines all natural as a product that contains no artificial ingredients, coloring ingredients or chemical preservatives and is minimally processed. The Company’s customers are located throughout the United States, with large concentrations in the Northeast and Southeast. Note 2 - Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“ U.S. GAAP ”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended January 31, 2021 filed on April 21, 2021. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet at January 31, 2021 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the interim periods presented are not necessarily indicative of results for the year ending January 31, 2022. Principles of Consolidation The condensed consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for doubtful accounts, inventory obsolescence and the fair value of share-based payments. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates. F- 7 Risks and Uncertainties The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the grocery industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Cash The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at October 31, 2021 and January 31, 2021. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At October 31, 2021, the Company had $ 4,298,390 in cash balances that exceed federally insured limits. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. As of October 31, 2021 and January 31, 2021, the Company had reserves of $ 2,000 . Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at October 31, 2021 and January 31, 2021: Schedule of Inventories October 31, 2021 January 31, 2021 Raw Materials $ 845,801 $ 746,013 Work in Process 130,551 88,955 Finished goods 638,386 360,243 Inventories $ 1,614,738 $ 1,195,211 Property and Equipment Property and equipment are recorded at cost net of depreciation. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: Schedule of Property and Equipment Estimated Useful Lives Machinery and equipment 2 - 7 years Furniture and fixtures 3 years Leasehold improvements - * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. F- 8 Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Intangible Assets The Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software 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 condensed consolidated statements of operations that reflects the nature of the license. The Company did not record amortization for the software license since the license has yet to be implemented as of October 31, 2021. Additionally, the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” (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 activities. 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. As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Research and Development Research and development is expensed as incurred. Research and development expenses for the three months ended October 31, 2021 and 2020 were $ 33,866 and $ 30,765 , respectively. Research and development expenses for the nine months ended October 31, 2021 and 2020 were $ 87,843 and $ 86,103 , respectively. F- 9 Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as general and administrative expenses. Revenue Recognition The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. The Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the condensed consolidated statement of operations. The Company promotes its products with advertising, consumer incentives and trade promotions. These programs include discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of a period. The Company derives these estimates principally on historical utilization and redemption rates. The Company does not receive a distinct service in relation to the advertising, consumer incentives and trade promotions. Payment terms in the Company’s invoices are based on the billing schedule established in contracts and purchase orders with customers. The Company recognizes the related trade receivable when the goods are shipped. Expenses such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows (see Note 11): October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 11,165,524 $ 10,016,932 Less: Slotting, Discounts, Promotions and Allowances 312,842 332,737 Net Sales $ 10,852,682 $ 9,684,195 Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Gross Sales $ 34,373,119 $ 31,833,423 Less: Slotting, Discounts, Promotions and Allowances 1,142,453 1,066,723 Net Sales $ 33,230,666 $ 30,766,700 The following table disaggregates gross revenue by significant geographic area for the three and nine months ended October 31, 2021 and 2020: October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Northeast $ 3,542,894 $ 3,304,422 Southeast 4,338,967 2,894,971 Midwest 1,155,233 1,204,936 West 952,910 1,475,143 Southwest 1,175,520 1,137,460 Total revenue $ 11,165,524 $ 10,016,932 Schedule of Disaggregates Gross Revenue by Significant Geographic Area October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Northeast $ 10,270,568 $ 10,558,410 Southeast 13,220,822 8,863,856 Midwest 3,515,194 3,819,765 West 3,818,925 4,381,561 Southwest 3,547,610 4,209,831 Total revenue $ 34,373,119 $ 31,833,423 Cost of Sales Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight-in, packaging, and print production costs. Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the three months ended October 31, 2021 and 2020 were $ 196,495 and $ 99,297 respectively. Producing and communicating advertising expenses for the nine months ended October 31, 2021 and 2020 were $ 441,556 and $ 366,499 respectively. F- 10 Stock-Based Compensation The 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. The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the condensed consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the three months ended October 31, 2021 and 2020, share-based compensation amounted to $ 19,681 and $ 1,460 , respectively. For the nine months ended October 31, 2021 and 2020, share-based compensation amounted to $ 20,467 and $ 51,435 , respectively. For the nine months ended October 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: Schedule of Fair Value of Share-Based Payments October 31, 2021 October 31, 2020 Risk-free interest rate N/A 0.37 % Expected life of grants N/A 3.5 years Expected volatility of underlying stock N/A 125 % Dividends N/A 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. Earnings Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. F- 11 The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share. Schedule of Earnings Per Share, Basic and Diluted October 31, 2021 October 31, 2020 For the Three Months Ended October 31, 2021 October 31, 2020 Numerator: Net (loss) income attributable to common stockholders $ ( 5,455 ) 734,142 Effect of dilutive securities: — — Diluted net (loss) income $ ( 5,455 ) $ 734,142 Denominator: Weighted average common shares outstanding – basic 35,728,821 34,225,446 Dilutive securities (a): Series A Preferred - - Options - 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 35,728,821 35,725,984 Basic net (loss) income per common share $ ( 0.00 ) $ 0.02 Diluted net (loss) income per common share $ ( 0.00 ) $ 0.02 (a) - Anti-dilutive securities excluded: 666,500 - October 31, 2021 October 31, 2020 For the Nine Months Ended October 31, 2021 October 31, 2020 Numerator: Net income attributable to common stockholders $ 1,057,994 2,380,111 Effect of dilutive securities: — — Diluted net income $ 1,057,994 $ 2,380,111 Denominator: Weighted average common shares outstanding – basic 35,683,484 32,832,450 Dilutive securities (a): Series A Preferred - - Options 493,465 575,139 Warrants - 925,399 Weighted average common shares outstanding and assumed conversion – diluted 36,176,949 34,322,988 Basic net income per common share $ 0.03 $ 0.07 Diluted net income per common share $ 0.03 $ 0.07 (a) - Anti-dilutive securities excluded: - - F- 12 Income Taxes Income taxes are provided in accordance with ASC 740, “ Accounting for Income Taxes ”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the period of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of October 31, 2021 and January 31, 2021, the Company recognized a deferred tax asset of $ 361,660 and $ 744,973 , respectively, which is included in other long-term assets on the condensed consolidated balance sheets. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. As of October 31, 2021 and January 31, 2021, the valuation allowance was $ 0 and $ 0 , respectively. The Company is no longer subject to tax examinations by tax authorities for years prior to 2019. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act ”) 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 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. In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to the income tax provision. Related Parties The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. F- 13 Recent Accounting Pronouncements In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ”). 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. Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. Note 3 - Property and Equipment : Property and equipment on October 31, 2021 and January 31, 2021 are as follows: Schedule of Property and Equipment October 31, 2021 January 31, 2021 Machinery and Equipment $ 4,410,850 $ 3,787,321 Furniture and Fixtures 165,728 113,112 Leasehold Improvements 3,229,786 3,120,273 Property and Equipment, Gross 7,806,364 7,020,706 Less: Accumulated Depreciation 4,629,343 4,057,104 Property and Equipment, Net $ 3,177,021 $ 2,963,602 Depreciation expense charged to income for the three months ended October 31, 2021 and 2020 amounted to $ 145,506 and $ 170,031 , respectively. Depreciation expense charged to income for the nine months ended October 31, 2021 and 2020 amounted to $ 572,238 and $ 489,109 , respectively. Note 4 - Related Party Transactions WWS, Inc. Alfred D’Agostino and Tom Toto, two directors of the Company, are affiliates of WWS, Inc. For the three months ended October 31, 2021 and 2020, the Company recorded $ 12,000 in commission expense from WWS, Inc. generated sales. For the nine months ended October 31, 2021 and 2020, the Company recorded $ 36,000 and $ 30,000 in commission expense from WWS, Inc. generated sales. F- 14 Other Related Party Transactions During 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 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. During 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. Note 5 - Loan and Security Agreement M&T Bank Effective, January 4, 2019, the Company entered into a $ 2.5 million five -year note with M&T Bank at LIBOR plus four points with repayments in equal payments over 60 months. 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, which was amortized over the remaining life of the note using the effective interest method. 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 October 31, 2021 and January 31, 2021. Effective, 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 a two -year expiration. On January 29, 2020, the facility was amended to increase the total available balance to $ 4.0 million as well as extend the maturity date to June 30, 2022 . On June 11, 2021, the facility was amended to increase the total available balance to $ 4.5 million as well as extend the maturity date to June 30, 2023 . 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 October 31, 2021 and January 31, 2021. During 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. On 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. If 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. Note 6 – Promissory Note On April 21, 2020, the Company entered into a term note with its principal bank, M&T, with a principal amount of $ 330,505 pursuant to 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. The PPP Term Note bears interest at a fixed annual rate of 1.00 %, with the first six months of interest deferred. The Company returned the $ 330,505 received from the Paycheck Protection Program on May 6, 2020, inclusive of interest. Note 7 - Leases The Company determines if an arrangement contains a lease at inception. Right of use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. F- 15 The Company’s leases consist of leaseholds on office space, manufacturing space and machinery and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates. On March 1, 2021, the Company amended its existing lease with the landlord for a new premise with a greater square footage. Upon cancellation of the existing lease, the Company wrote-off the net right of use asset and corresponding lease liability of $ 22,870 . The Company recorded a right of use asset and related liability of $ 347,585 for the new space which will be occupied over a 60-month period. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three to five years that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. The components of lease expense were as follows: Schedule of Components of Lease Expense For the Nine Months Ended For the Nine Months Ended October 31, 2021 October 31, 2020 Finance lease Depreciation of assets $ 110,901 $ 102,116 Interest on lease liabilities 26,710 26,960 Operating leases 259,958 231,716 Short-term lease - - Total net lease cost $ 397,569 $ 360,792 Supplemental balance sheet information related to leases was as follows: Schedule of Supplemental Balance Sheet Information Related to Leases October 31, 2021 January 31, 2021 Operating leases:  Operating lease ROU assets $ 1,536,927 $ 1,352,483 Current operating lease liabilities, included in current liabilities $ 188,590 $ 147,684 Noncurrent operating lease liabilities, included in long-term liabilities 1,383,960 1,218,487 Total operating lease liabilities $ 1,572,550 $ 1,366,171 F- 16 Finance leases Property and equipment, at cost $ 1,079,706 $ 951,656 Accumulated depreciation ( 371,271 ) ( 260,370 ) Property and equipment, net $ 708,435 $ 691,286 Current obligations of finance lease liabilities, included in current liabilities $ 226,111 $ 190,554 Finance leases, net of current obligations, included in long-term liabilities 422,326 474,743 Total finance lease liabilities $ 648,437 $ 665,297 Supplemental cash flow and other information related to leases was as follows: Schedule of Supplemental Cash Flow and Other Information Related to Leases For the Nine Months Ended October 31, 2021 For the Nine Months Ended October 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 141,206 $ 231,716 Financing cash flows from finance leases 144,910 110,562 ROU assets obtained in exchange for lease liabilities: Operating leases $ 347,585 $ - Finance leases 128,050 401,387 Weighted average remaining lease term (in years): Operating leases 6.8 7.1 Finance leases 3.3 4.0 Weighted average discount rate: Operating leases 5.58 % 6.54 % Finance leases 4.57 % 4.60 % Total future minimum payments required under the lease obligations as of October 31, 2021 are as follows: Schedule of Future Minimum Payments Required Under Lease Obligations For the Twelve Months Ending January 31, 2022 (Remaining) $ 120,014 2023 450,051 2024 438,907 2025 414,986 2026 330,646 Thereafter 670,901 Total lease payments $ 2,574,901 Less: amounts representing interest ( 372,236 ) Total lease obligations $ 2,202,665 Note 8 - Concentrations Revenues During 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 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. F- 17 Note 9 - Stockholders’ Equity Options The following is a summary of the Company’s option activity: Summary of Option Activity Options Weighted Average Exercise Price Outstanding – January 31, 2021 869,000 $ 0.70 Exercisable – January 31, 2021 859,000 $ 0.70 Granted - $ - Exercised ( 200,000 ) $ 0.81 Forfeited/Cancelled - $ - Outstanding – October 31, 2021 669,000 $ 0.66 Exercisable – October 31, 2021 666,500 $ 0.66 Summary of Option Outstanding and Exercisable Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.39 – 1.38 669,000 2.28 $ 0.66 666,500 $ 0.66 At October 31, 2021, the total intrinsic value of options outstanding and exercisable was $ 1,343,821 and $ 1,340,046 , respectively. During 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 . 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 . For the nine months ended October 31, 2021 and 2020, the Company recognized share-based compensation related to options of an aggregate of $ 1,534 and $ 51,435 , respectively. At October 31, 2021, unrecognized share-based compensation was $ 399. Restricted Stock Units During the 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 service. If the service criteria are satisfied, the RSUs will vest during November 2021, September 2022 and September 2023. As of October 31, 2021, there were 21,000 unvested shares. For the three and nine months ended October 31, 2021, the Company recognized share-based compensation related to options of an aggregate of $ 18,933 . At October 31, 2021, unrecognized share-based compensation was $ 40,497 . F- 18 Note 10 - Commitments and Contingencies Insurance Claim The Company maintains insurance for both property damage and business interruption relating to catastrophic events, such as fires. Insurance recoveries received for property damage and business interruption in excess of the net book value of damaged assets, clean-up and demolition costs, and post-event costs are recognized as income in the period received or committed when all contingencies associated with the recoveries are resolved. Gains on insurance recoveries related to business interruption are recorded within “Cost of sales” and any gains or losses related to property damage are recorded within “Other income (expense)” on the condensed consolidated statements of income. On December 7, 2020, the Company experienced a fire at its plant in a spiral oven. The spiral oven was rebuilt and was fully put back into service in late February 2021. The estimated loss is approximately $ 656,700 which includes loss of business, the rebuild of the spiral oven, additional expenses to clean plant and lost material and packaging. 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 . Litigation, Claims and Assessments From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. Licensing and Royalty Agreements On March 1, 2010, the Company was assigned a Development and License agreement (the “Agreement”). Under the terms of the Agreement the Licensor shall develop for the Company a line of beef meatballs with sauce, turkey meatballs with sauce and other similar meats and sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and collectively the “Licensor Products”). Licensor shall work with Licensee to develop Licensor Products that are acceptable to Licensee. Upon acceptance of a Licensor Product by Licensee, Licensor’s trade secret recipes, formulas methods and ingredients for the preparation and production of such Licensor Products (the “Recipes”) shall be subject to this Development and License Agreement. The Exclusive Term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date. The Royalty Rate shall be: 6 % 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; and 1 % of Net Sales in excess of $ 20,000,000 of Net Sales for each Agreement year. In order to continue the Exclusive Term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: Schedule of Royalty Minimum Payment by Preceding Agreement Year Agreement Year Minimum Royalty to be Paid with Respect to Such Agreement Year 1 st and 2 nd $ - 3 rd and 4 th $ 50,000 5 th , 6 th and 7 th $ 75,000 8 th and 9 th $ 100,000 10 th and thereafter $ 125,000 F- 19 The Company incurred $ 99,457 and $ 111,568 of royalty expenses for the three months ended October 31, 2021 and 2020, respectively. The Company 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. Agreements with Placement Agents and Finders The Company entered into a fourth Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective April 1, 2015 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, if the Company enters into a change of control transaction during the term of the agreement through October 1, 2022, the Company shall pay to Spartan a fee equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction . Advisory Agreements The Company entered into an Advisory Agreement with Spartan effective June 1, 2019 (the “Advisory Agreement”). Pursuant to the agreement, the Company shall pay to Spartan a non-refundable monthly fee of $ 5,000 over a 21-month period. Additionally, the Company granted Spartan 125,000 shares of common stock which are considered fully-paid and non-assessable upon execution of the agreement. During 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 personal for management and Board positions (iii) developing corporate structure and finance strategies, (iv) assisting the Company with 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 on March 31, 2020. The Company entered into an Advisory Agreement with B. Riley Securities, Inc. effective September 25, 2020 (the “B. Riley Advisory Agreement”). Pursuant to the agreement, the Company shall pay to B. Riley a non-refundable fee of $175,000 upon delivery of a fairness opinion in the event a transaction has value over $50 million ($125,000 if a transaction has a value less than $50 million). In addition, additional fees may be paid to B. Riley based on the terms of the agreement and transactions consummated. During the term or 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 potential purchasers or targets, (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”). Note 11 – Impact on Previously Issued Financial Statements During the audit for the year ended January 31, 2021, the Company identified and recorded a prior period adjustment related to promotion expenses that should have been recorded in the year ended January 31, 2021 as an offset to revenue as discussed in the Company’s revenue recognition policy instead of general and administrative expenses as originally recorded. In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality 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 and nine months ended October 31, 2020 should be revised to reflect the correction of these errors. As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows: Schedule of Revision of Prior Year Financials For the three months ended October 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 9,898,991 $ ( 214,796 ) $ 9,684,195 Gross profit $ 3,125,329 $ ( 214,796 ) $ 2,910,533 General and administrative expenses $ 2,307,436 $ ( 214,796 ) $ 2,092,640 Operating expenses $ 2,338,201 $ ( 214,796 ) $ 2,123,405 Income from operations $ 787,128 $ - $ 787,128 Net income $ 734,142 $ - $ 734,142 Basic and diluted income per share $ 0.02 $ - $ 0.02 For the nine months ended October 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 31,384,394 $ ( 617,694 ) $ 30,766,700 Gross profit $ 10,067,010 $ ( 617,694 ) $ 9,449,316 General and administrative expenses $ 7,411,060 $ ( 617,694 ) $ 6,793,366 Operating expenses $ 7,497,163 $ ( 617,694 ) $ 6,879,469 Income from operations $ 2,569,847 $ - $ 2,569,847 Net income $ 2,380,111 $ - $ 2,380,111 Basic and diluted income per share $ 0.07 $ - $ 0.07 F- 20