What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-12-12 compared with 2022-09-14 · 122 added, 134 removed, 195 unchanged (57% of the section changed)

10 unchanged sentences

PRIOR COMPANY FILINGS AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.

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

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

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

For the Three Months Ended

July 31, 2022

July 31, 2021

October 31, 2022

October 31, 2021

Sales - Net of Slotting Fees and Discounts

5 unchanged sentences

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,

Net Income (Loss)

the quarters ended October 31, 2022 and 2021, the Company reported net income (loss) of $1,097,940 and $(5,455), respectively.

in net income (loss) between the quarter ended October 31, 2022 and 2021 reflects strong sales and same-customer product additions, normalization

of costs for commodities, other materials, freight as well as improvements in manufacturing efficiencies.

Sales, net of slotting fees and discounts increased by approximately 137% to $25,693,913 during the quarter ended October 31, 2022,

from $10,852,682 during the quarter ended October 31, 2021.

Sales included the third full quarter from the acquisition of T&L Creative

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.

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

and T&L Salads

continued to successfully accelerate product portfolio synergies by adding new T&L products to existing MamaMancini’s customers

in both club stores and retail chains in addition to increasing the average SKU’s carried per location.

The gross profit margin was 26% and 24% for the quarters ended October 31, 2022 and 2021, respectively.

The quarter ended

October 31, 2022 marks the return to normalcy of target margins based on improved pricing and strong sales growth.

The Company continues

to identify procurement efficiencies and cost savings through stronger buying power created through the acquisitions of T&L Creative

Salads and Olive Branch.

Operating expenses increased by 92% during the quarter ended October 31, 2022, as compared to the quarter ended October

Operating expenses decreased as a percentage of sales to 20% in 2022 compared to 24% 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;

The $2,421,103 increase in total

operating expenses is primarily attributable to the following:

and Related Expenses rose by $659,941 related to the executive hires, incremental costs associated with the acquisition of T&L

Creative Salads management and office salaries;

Expenses rose $253,144 due to increased sales;

for Doubtful Accounts rose by $245,354 due to our anticipation of increasing macroeconomic risk;

Fees rose $158,448 due to higher third-party accounting and technical expertise and auditing fees related to the additional complexity

of the acquisitions;

charges rose $110,153 due to increased Finished Goods transportation rate increases and fuel surcharges.

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

Other expenses increased by $178,128 to $186,859 for the quarter ended October 31, 2022 as compared to $8,731

during the quarter ended October 31, 2021.

For the quarter ended October 31, 2022, other income (expenses) consisted of $183,844 in interest

expense on the Company’s financing arrangements and $3,015 in amortization of debt discount.

For the three months ended October

31, 2021, other expenses consisted of $8,731 in interest expense incurred on the Company’s financing arrangements.

of Operations for the Nine Months ended October 31, 2022 and 2021

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

For the Nine Months Ended

October 31, 2022

October 31, 2021

Sales - Net of Slotting Fees and Discounts

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Other Income (Expenses)

Income Tax Benefit (Provision)

Income Tax 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.

the nine months ended October 31, 2022 and 2021, the Company reported net income of $458,391 and $1,057,994, respectively.

in net income between the nine months ended October 31, 2022 and 2021 reflects the challenges of cost inflation of commodities, packaging

and freight outpacing price increases from February through July 2022 offset by cost normalization and improved pricing models from August

through October 2022.

Sales, net of slotting fees and discounts increased by approximately 112% to $70,370,967 during the nine months ended October 31,

2022, from $33,230,666 during the nine months ended October 31, 2021.

Sales included the first full nine months from the acquisition

of T&L Creative Salads, Inc.

and Olive Branch LLC in December 2021.

Sales for MamaMancini’s, Inc.

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

grew moderately across all

channels during the nine months ended October 31, 2022 versus the prior year comparative period.

During the nine months ended October

31, 2022, MamaMancini’s Inc.

and T&L Salads continued to gain product portfolio synergies by adding new products to existing

customers in both club stores and retail chains.

The gross profit margin was 18% for the nine months ended October 31, 2022 compared to 28% for the quarter ended October

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, for the first six months inflation of raw materials, packaging and freight costs

temporarily out-paced price increases which dissipated in the final 3 months of the quarter.

Operating expenses increased by 55% during the nine months ended October 31, 2022, as compared to the nine months ended

October 31, 2021.

Operating expenses decreased as a percentage of sales to 17% in 2022 compared to 23% in 2021.

The $1,880,672 increase in total

operating expenses is primarily attributable to the following:

The $4,272,342 increase

in total operating expenses is primarily attributable to the following:

and Related Expenses rose by $1,198,146 related to the acquisition of T&L Creative Salads management and office salaries, newly

hired executives, additional accounting staff at MamaMancini’s and severance pay;

charges rose $611,733 due to increased Finished Goods transportation rate increases and fuel surcharges;

and Promotion expenses rose $55,858 based on key promotions primarily at club stores;

and Related Expenses rose by $538,205 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 $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;

Fees rose $571,496 due to one-time legal fees associated with investment in Chef Inspirational Foods, higher Auditing Fees and third-party

accounting/technical expertise related to the additional complexity of the acquisitions;

Expenses rose $480,986 due to increased sales;

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Income (Expenses):

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.

Other expenses changed by $465,227 to $(454,233) for the nine months ended October 31, 2022 as compared to income

of $10,994 during the nine months ended October 31, 2021.

For the nine months ended October 31, 2022, other income (expenses) consisted

of $447,259 in interest expense on the Company’s financing arrangements, $9,670 in amortization of debt discount and $2,596 of

other income.

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

and Capital Resources

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

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

Current Assets

1 unchanged sentence

Working Capital

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

of October 31, 2022, we had working capital of $3,164,855 as compared to working capital of $2,653,189 as of January 31, 2022, an increase

The increase in working capital is primarily attributable to an increase in cash of $2,628,689, an increase of inventories

of $673,166 based on robust sales increases, an increase in prepaid expenses of $110,926 and a decreases in the short term portion of

finance lease payable of $37,954 offset by better cash management and a decrease in accounts receivable of $735,018, an increase in accounts

payable and accrued liabilities of $1,586,609, an increase in the term loan of $267,665, an increase in the short term portion of the

operating lease payable of $85,524, an increase in the related party promissory note of $79,253 and the receipt of proceeds from the

Series B Preferred Stock to be issued of $185,000.

cash provided by operating activities for the nine months ended October 31, 2022 was $3,184,020 compared to net cash provided by operating

activities for the nine months ended October 31, 2021 of $2,132,797.

The net income for the nine months ended October 31, 2022 and 2021

was $458,391 and $1,057,994, respectively.

During the nine months ended October 31, 2022, net income was affected by adjustments to net

income of $1,371,694 and by changes in operating activities which provided cash of $1,353,935.

During the nine months ended October 31,

2021, net income was affected by adjustments to net income of $1,139,159 offset by changes in operating activities which used cash of

cash used in investing activities for the nine months ended October 31, 2022 was $1,007,547 as compared to $657,607 for the nine months

ended October 31, 2021, respectively.

For the nine months ended October 31, 2022, the Company used cash of $507,547 to purchase new machinery

and equipment.

In addition, the Company paid cash of $500,000 for the acquisition of a 24% minority interest in Chef Inspirational Foods,

For the nine months ended October 31, 2021, the cash used in investing activities was to purchase new machinery and equipment.

cash provided by all financing activities for the nine months ended October 31, 2022 was $452,216 as compared to $125,830 used in financing

activities for the nine ended October 31, 2021.

During the nine months ended October 31, 2022, the Company received net proceeds of $225,000

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.

of $905,172 and $190,349, respectively, and payment of offering costs of $57,200.

In addition, during the nine months ended October 31,

2022, the Company received proceeds of $26,250 for the exercise of options and $1,365,000 from the first and second tranches of the sale

of Series B Convertible Preferred Stock, of which $185,000 was received in advance of share issuance.

During the nine months ended October

31, 2022, the Company paid dividends on the Series B Preferred stock of $11,313.

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

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 14, 2023, based on current and projected levels of operations, the Company

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

If such financing is required, there can be no

assurance that financing will be available in amounts or terms acceptable to the Company, if at all.

In the event funding is not available

on reasonable terms, the Company might be required to change its growth strategy and/or seek funding on an alternative basis, but there

is no guarantee it will be able to do so.

Because of the rapidly changing environment in response to COVID-19, the current expectations

of the Company may be altered as conditions change.

will be sufficient to meet its cash requirements through December 12, 2023, based on current and projected levels of operations, the

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

If such financing is required, there can

be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all.

In the event funding is not

available on reasonable terms, the Company might be required to change its growth strategy and/or seek funding on an alternative basis,

but there is no guarantee it will be able to do so.

Accounting Pronouncements

70 unchanged sentences

and Other - Internal-Use Software as intangible assets.

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 condensed consolidated statements of operations that reflects the nature of the

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

October 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 condensed consolidated statements of operations that reflects the nature

of the license.

Additionally,

80 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