What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-09-14 compared with 2022-06-14 · 175 added, 107 removed, 154 unchanged (65% of the section changed)

10 unchanged sentences

PRIOR COMPANY FILINGS AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

of Operations for the Quarter ended April 30, 2022 and 2021

following table sets forth the summary of the condensed consolidated statements of operations for the quarter ended April 30, 2022 and

of Operations for the Quarter ended July 31, 2022 and 2021

following table sets forth the summary of the condensed consolidated statements of operations for the quarter ended July 31, 2022 and

For the Three Months Ended

April 30, 2022

April 30, 2021

July 31, 2022

July 31, 2021

Sales - Net of Slotting Fees and Discounts

Operating Expenses

$ (3,557,907 )

$ (2,784,371 )

Other Expenses

Income Tax Benefit (Provision)

Income from equity method investment in Chef Inspirational

Net (Loss) Income

the quarters ended July 31, 2022 and 2021, the Company reported net (loss) income of $(743,246) and $431,925, respectively.

in net loss (income) between the quarter ended July 31, 2022 and 2021 reflects continued waning downward pressure on gross margin percentage

from continued commodity, packaging and freight inflation along with increased interest

& transactional costs associated with one time acquisitions.

Sales, net of slotting fees and discounts increased by approximately 89% to $22,846,474 during the quarter ended July 31, 2022, from

$12,064,584 during the quarter ended July 31, 2021.

Sales included the second full quarter from the acquisition of T&L Creative Salads,

and Olive Branch LLC in December 2021.

During the quarter ended July 31, 2022, MamaMancini’s Inc.

and T&L Salads sharply

accelerated product portfolio synergies by adding new T&L products to existing MamaMancini’s customers in both club stores

and retail chains.

The gross profit margin was 12% for the quarter ended July 31, 2022 compared to 28% for the quarter ended July 31, 2021.

The T&L Creative Salads and Olive Branch LLC acquisition created a different financial model with lower gross margin percentage

yet comparable Operating Income margins.

In addition, continued inflation of raw materials and freight costs have temporarily

out-paced price increases in the quarter.

In particular, poultry price increases outpaced all macro projections causing a steep

reduction in projected margins for the period.

Management is now seeing the balance between inflationary costs and price increases

to improve and projects gross profits will return to targeted levels the quarter ending October 31, 2022.

The Company has

instituted a new pricing process that more accurately and rapidly tracks inputs costs, including commodity costs, to ensure that

with every single sale the Company meeting its required margin profile.

Operating expenses increased by 28% during the quarter ended July 31, 2022, as compared to the quarter ended July 31, 2021.

Operating expenses decreased as a percentage of sales to 15% in 2022 compared to 23% in 2021.

The $814,254 increase in total operating

expenses is primarily attributable to the following:

charges rose $203,343 due to increased Finished Goods transportation rate increases and fuel surcharges;

and Related Expenses rose by $174,613 related to the acquisition of T&L Creative Salads management and office salaries, additional

accounting staff at MamaMancini’s and severance pay expenses;

Fees rose $278,760 due to one-time legal fees associated with investment in Chef Inspirational Foods, higher Auditing Fees related

to the additional complexity of the acquisitions and added third-party accounting and technical expertise to augment staffing shortfalls;

Expenses rose $213,521 due to increased sales.

Income (Expenses):

Other expenses increased by $131,934 to $139,483 for the quarter ended July 31, 2022 as compared to $7,549 during

the quarter ended July 31, 2021.

For the quarter ended July 31, 2022, other income (expenses) consisted of $139,064 in interest expense

on the Company’s financing arrangements, $3,015 in amortization of debt discount and other income of $2,596.

For the three months

ended July 31, 2021, other expenses consisted of $7,549 in interest expense incurred on the Company’s financing arrangements.

of Operations for the Six Months ended July 31, 2022 and 2021

following table sets forth the summary of the condensed consolidated statements of operations for the six months ended July 31, 2022

For the Six Months Ended

July 31, 2022

July 31, 2021

Sales - Net of Slotting Fees and Discounts

Operating Expenses

$ (7,157,197 )

$ (5,276,525 )

Other Income (Expenses)

Income Tax Provision

the quarters ended April 30, 2022 and 2021, the Company reported net income of $103,697 and $631,524, respectively.

change in net income between the quarter ended April 30, 2022 and 2021 reflects continued downward pressure on gross margin percentage

from inflated materials and freight expenses, increased interest costs associated with acquisitions.

Sales, net of slotting fees and discounts increased by approximately 112% to $21,830,580 during the quarter ended April 30,

2022, from $10,313,400 during the quarter ended April 30, 2021.

Sales included the first full quarter from the acquisition of T&L

Income Tax Benefit (Provision)

Income from equity method investment in Chef Inspirational

Net (Loss) Income

the six months ended July 31, 2022 and 2021, the Company reported net (loss) income of $(639,549) and $1,063,449, respectively.

in net income between the six months ended July 31, 2022 and 2021 reflects continued commodity, packaging and freight inflation along with increased interest

& transactional costs associated with one time acquisitions.

Sales, net of slotting fees and discounts increased by approximately 100% to $44,677,054 during the six months ended July 31, 2022,

from $22,377,984 during the six months ended July 31, 2021.

Sales included the first full six months from the acquisition of T&L

Creative Salads, Inc.

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Sales for MamaMancini’s, Inc.

also rose modestly during the three

months ended April 30, 2022 versus the prior year comparative period.

During the quarter, MamaMancini’s Inc.

and T&L Salads

were quickly able to gain product portfolio synergies by adding new products to existing customers, particularly in club stores.

Gross Profit:

The gross profit margin was

18% for the quarter ended April 30, 2022 compared to 32% for the quarter ended April 30, 2021.

The T&L Creative Salads and

Olive Branch LLC acquisition created a different financial model with lower gross margin percentage.

In addition, continued inflation

of raw materials, packaging and freight costs have out-paced price increases in the quarter.

Management believes the balance between

inflationary costs and price increases will begin to balance in the quarter ended July 31, 2022 and gross profits will

begin to return to targeted levels.

Operating expenses increased by 44% during the quarter ended April 30, 2022, as compared to the quarter ended April

also rose modestly during the six months

ended July 31, 2022 versus the prior year comparative period.

During the six months ended July 31, 2022, MamaMancini’s Inc.

T&L Salads quickly gained product portfolio synergies by adding new products to existing customers in both club stores and retail

The gross profit margin was 15% for the six months ended July 31, 2022 compared to 30% for the quarter ended July 31,

The T&L Creative Salads and Olive Branch LLC acquisition created a different financial model with lower gross margin

percentage yet comparable Operating Income margins.

In addition, continued inflation of raw materials, packaging and freight costs

have temporarily out-paced price increases in the quarter.

In particular, poultry price increases outpaced all macro projections

causing a steep reduction in projected margins for the period.

Management is now seeing the balance between inflationary costs and

price increases to improve and projects gross profits will return to targeted levels the quarter ending October 31, 2022.

Company has instituted a new pricing process that more accurately and rapidly tracks inputs costs, including commodity costs, to

ensure that with every single sale the Company meeting its required margin profile.

Operating expenses increased by 36% during the six months ended July 31, 2022, as compared to the six months ended July

Operating expenses decreased as a percentage of sales to 16% in 2022 compared to 24% in 2021.

The $1,107,136

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

The $1,880,672 increase in total

operating expenses is primarily attributable to the following:

charges rose $501,580 due to increased Finished Goods transportation rate increases and fuel surcharges;

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accounting staff at MamaMancini’s and severance pay expenses;

Fees rose $134,288 due to higher Auditing Fees related to the additional complexity of the acquisitions and added third-party accounting

and technical expertise to augment staffing shortfalls;

Fees rose $413,048 due to one-time legal fees associated with investment in Chef Inspirational Foods, higher Auditing Fees related

to the additional complexity of the acquisitions and added third-party accounting and technical expertise to augment staffing shortfalls;

Expenses rose $227,842 due to increased sales;

Expenses rose $193,681 to account for the acquisition of T&L Creative Salads and Olive Branch LLC.

Income (Expenses):

Other expenses increased by $155,165 to $127,891 for the quarter ended April 30, 2022 as compared to income

of $27,274 during the quarter ended April 30, 2021.

For the quarter ended April 30, 2022, other income (expenses) consisted of $124,251

in interest expense on the Company’s financing arrangements and $3,640 in amortization of debt discount.

For the three

months ended April 30, 2021, other income (expenses) consisted of $(10,430) in interest expense incurred on the Company’s financing

arrangements which was offset by the net insurance proceeds relating to the property damage claim of $37,704.

Other expenses changed by $287,099 to $(267,374) for the six months ended July 31, 2022 as compared to income

of $19,725 during the six months ended July 31, 2021.

For the six months ended July 31, 2022, other income (expenses) consisted of $263,315

in interest expense on the Company’s financing arrangements, $6,655 in amortization of debt discount and $2,596 of other income.

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.

and Capital Resources

following table summarizes total current assets, liabilities and working capital at April 30, 2022 compared to January 31, 2022:

April 30, 2022

following table summarizes total current assets, liabilities and working capital at July 31, 2022 compared to January 31, 2022:

July 31, 2022

January 31, 2022

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Working Capital

As of April 30, 2022, we had working capital of $4,192,469

as compared to working capital of $2,653,190 as of January 31, 2022, an increase of $1,539,279.

The increase in working capital

is primarily attributable to an increase in cash of $70,662, an increase in accounts receivable of $1,370,867 and increase of inventories

of $1,277,898 based on robust sales increases, an increase in prepaid expenses of $229,239 and increases in the short term portion

of lease payables of $52,312 offset by an increase in accounts payable and accrued liabilities of $1,069,320 and increases

in the term loan of $261,635.

Net cash used in operating activities for the quarter

ended April 30, 2022 was $1,343,013 compared to net cash provided by operating activities for the quarter ended April 30.2021

of $1,434,768.

The net income for the quarter ended April 30, 2022 and 2021 was $103,697 and $631,524, respectively.

the three months ended April 30, 2022, net income was affected by adjustments to net income of $445,950 and offset by changes in operating

activities which used cash of $1,898,393.

During the three months ended April 30, 2021, net income was affected by adjustments to net

income of $475,832 and changes in operating activities which provided cash of $327,412.

Net cash used in investing activities for the quarter

ended April 30, 2022 was $174,007 as compared to $354,394 for the quarter ended April 30, 2021, respectively.

For the quarters

ended April 30, 2022 and 2021, the cash used in investing activities was to purchase new machinery and equipment.

Net cash provided by all financing activities for

the quarter ended April 30, 2022 was $1,587,682 as compared to $27,578 used by financing activities for the quarter ended April 30, 2021.

During the three months ended April 30, 2022, the Company received net proceeds of $1,775,000 from borrowings pursuant to the line of

credit which were offset by payments of the acquisition related term loan and finance lease payments of $129,310 and $58,008,

respectively.

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

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

of July 31, 2022, we had working capital of $2,462,711 as compared to working capital of $2,653,189 as of January 31, 2022, a

decrease of $190,478.

The decrease in working capital is primarily attributable to an increase in cash of $1,045,814, an increase of

inventories of $1,302,933 based on robust sales increases, an increase in prepaid expenses of $247,488 and a decreases in the short

term portion of finance lease payable of $42,826 offset by better cash management and a decrease in accounts receivable of $749,959,

an increase in accounts payable and accrued liabilities of $1,170,280, an increase in the term loan of $264,650, an increase in the

short term portion of the operating lease payable of $76,294, an increase in the related party promissory note of $53,356 and the

receipt of proceeds from the Series B Preferred Stock to be issued of $515,000.

cash provided by operating activities for the six months ended July 31, 2022 was $232,978 compared to net cash provided by operating activities

for the six months ended July 31, 2021 of $1,618,610.

The net (loss) income for the six months ended July 31, 2022 and 2021 was $(639,549)

and $1,063,449, respectively.

During the six months ended July 31, 2022, net income was affected by adjustments to net loss of $679,868

and offset by changes in operating activities which used cash of $192,659.

During the six months ended July 31, 2021, net income was

affected by adjustments to net income of $865,357 and changes in operating activities which provided cash of $310,196.

cash used in investing activities for the six months ended July 31, 2022 was $805,547 as compared to $481,295 for the six months ended

July 31, 2021, respectively.

For the six months ended July 31, 2022, the Company used cash of $305,547 to purchase new machinery and

In addition, the Company paid cash of $500,000 for the acquisition of

a 24% minority interest in Chef Inspirational Foods, Inc.

For the six months ended July 31, 2021, the cash used in investing

activities was to purchase new machinery and equipment.

cash provided by all financing activities for the six months ended July 31, 2022 was $1,618,383 as compared to $74,994 used in financing

activities for the six ended July 31, 2021.

During the six months ended July 31, 2022, the Company received net proceeds of $1,725,000

from borrowings pursuant to the line of credit which were offset by payments of the acquisition related term loan and finance lease payments

of $517,241 and $130,626, respectively.

In addition, during the six months ended July 31, 2022, the Company received proceeds of $26,250

for the exercise of options and $515,000 from the initial tranche of the sale of Series B Convertible Preferred Stock.

During the six

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

These cash in-flows were offset by

payments of $94,074 paid for finance lease payments.

the expected revenue growth and control of expenses lead management to believe that it is probable that the Company’s cash resources

will be sufficient to meet its cash requirements through June 16, 2024, based on current and projected levels of operations, the Company

will be sufficient to meet its cash requirements through September 14, 2023, based on current and projected levels of operations, the Company

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

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Early adoption is permitted, including adoption in an interim period.

Company adopted the new standard on February 1, 2022 and the adoption of the new standard did not have a significant impact on the Company’s

condensed consolidated financial statements.

The Company adopted

the new standard on February 1, 2022 and the adoption of the new standard did not have a significant impact on the Company’s condensed

consolidated financial statements.

August 2020, the FASB issued ASU No.

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

on the accompanying consolidated financial statements.

on the accompanying condensed consolidated financial statements.

Accounting Policies

consolidated financial statements and related public financial information are based on the application of accounting principles generally

accepted in the United States (“GAAP”).

condensed consolidated financial statements and related public financial information are based on the application of accounting principles

generally accepted in the United States (“GAAP”).

GAAP requires the use of estimates;

assumptions, judgments and subjective interpretations

of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported.

These estimates can also

affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial

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

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

assumptions, judgments and subjective

interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported.

estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies,

risk and financial condition.

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

and conservatively applied.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable

under the circumstances.

Actual results may differ materially from these estimates under different assumptions or conditions.

We continue to monitor significant

estimates made during the preparation of our financial statements.

significant accounting policies are summarized in Note 3 of our consolidated financial statements.

While all these significant accounting

policies impact our financial condition and results of operations, we view certain of these policies as critical.

Policies determined

to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater

degree of judgment and estimates.

to monitor significant estimates made during the preparation of our financial statements.

significant accounting policies are summarized in Note 3 of our condensed consolidated financial statements.

While all these significant

accounting policies impact our financial condition and results of operations, we view certain of these policies as critical.

determined to be critical are those policies that have the most significant impact on our financial statements and require management

to use a greater degree of judgment and estimates.

Actual results may differ from those estimates.

Our management believes that given current facts and

circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated

results of operations, financial position or liquidity for the periods presented in this report.

Our management believes that given

current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect

on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates

used in the preparation of our consolidated financial statements:

preparation of consolidated financial statements in conformity with U.S.

generally accepted accounting principles requires management

to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

estimates and assumptions impact, among others, the following:

allowance for doubtful accounts, inventory obsolescence and the fair value

of share-based payments.

used in the preparation of our condensed consolidated financial statements:

preparation of condensed 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 condensed 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.

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.

a condition, situation or set of circumstances that existed at the date of the condensed 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.

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 quarter ended April

30, 2022 to implement cloud computing arrangements.

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

July 31, 2022 to implement cloud computing arrangements.

Acquired internal-use software licenses are amortized over the term of the arrangement

on a straight-line basis to the line item within the consolidated statements of operations that reflects the nature of the license.

on a straight-line basis to the line item within the condensed consolidated statements of operations that reflects the nature of the

Additionally,

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guidance, the Company elected to treat shipping and handling activities as fulfilment activities, and the related costs are recorded

as selling expenses in general and administrative expenses on the consolidated statement of operations.

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

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

12 unchanged sentences

Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses,

depending on the nature of the services provided, in the consolidated statement of operations.

Share-based payments issued to placement

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

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.

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

13 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