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Item 1. Financial Statements

2025-06-03 compared with 2024-12-16 · 235 added, 313 removed, 360 unchanged (60% of the section changed)

1 unchanged sentence

Mama’s Creations, Inc.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2024

Condensed Consolidated Balance Sheets as of October 31, 2024 (unaudited) and January 31, 2024

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2024 and 2023 (unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended October 31, 2024 and 2023 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2024 and 2023 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

Mama’s Creations, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Current Assets:

19 unchanged sentences

Total Current Liabilities 18,715 17,025

Line of credit — —

Term loan – net of current 839 1,342

1 unchanged sentence

Finance leases payable – net of current 1,121 1,199

Promissory note – related party, net of current 750 2,250

Total long-term liabilities 7,572 5,141

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250,000,000 shares authorized;

37,815,955 and 37,488,239 shares issued as of October 31 and January 31, 2024, respectively, 37,585,955 and 37,258,239 shares outstanding as of October 31 and January 31, 2024, respectively

37,834,000 and 37,826,000 shares issued as of April 30, and January 31, 2025, respectively, 37,604,000 and 37,596,000 shares outstanding as of April 30, and January 31, 2025, respectively

Additional paid-in capital 25,187 24,882

Accumulated deficit ( 1,436 ) ( 3,547 )

Retained earnings 1,401 164

Treasury stock, 230,000 shares at cost

7 unchanged sentences

For the Three Months Ended

October 31, For the Nine Months Ended

2024 2023 2024 2023

Net sales $ 35,255 $ 29,838

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Amortization of debt discount ( 3 ) ( 6 )

Other income 61 — 61 27

Total other expenses ( 61 ) ( 41 )

Net income before income tax provision and income from equity method investment 538 2,577 2,819 6,452

Income from equity method investment — — — 223

Net income before income tax provision 1,517 732

Income tax expense ( 280 ) ( 179 )

Net income $ 1,237 $ 553

series B preferred dividends — — — ( 49 )

Net income available to common stockholders $ 410 $ 2,009 $ 2,111 $ 5,104

Net income per common share

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(in thousands)

For the Period from August 1, 2024 through October 31, 2024

Preferred Stock Series B Preferred Stock Common Stock Treasury Stock Additional

Paid In Accumulated Stockholders’

Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, August 1, 2024 - $ - - $ - 37,663 $ - ( 230 ) $ ( 150 ) $ 24,293 $ ( 1,846 ) $ 22,297

Stock based compensation - - - - 145 - - - 280 - 280

Stock issued for the exercise of options and warrants - - - - 8 - - - 11 - 11

Net income - - - - - - - - - 410 410

Balance, October 31, 2024 - $ - - $ - 37,816 $ - ( 230 ) $ ( 150 ) $ 24,584 $ ( 1,436 ) $ 22,998

For the Period from August 1, 2023 through October 31, 2023

Preferred Stock Series B

Preferred Stock Common Stock Treasury Stock Additional

Paid In Accumulated Stockholders’

Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, August 1, 2023 - $ - - $ - 37,343 $ — ( 230 ) $ ( 150 ) $ 22,912 $ ( 6,964 ) $ 15,798

Stock based compensation - - - - - - - - 110 - 110

Stock issued for the exercise of options and warrants 25 - - - 37 - 37

Net income - - - - - - - - - 2,009 2,009

Balance, October 31, 2023 - $ - - $ - 37,368 $ — ( 230 ) $ ( 150 ) $ 23,059 $ ( 4,955 ) $ 17,954

For the Period from February 1, 2024 through October 31, 2024

For the Period from February 1, 2025 through April 30, 2025

Preferred Stock Series B Preferred Stock Common Stock Treasury Stock Additional

Paid In Accumulated Stockholders’

Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Paid In Retained Stockholders’

Shares Amount Shares Amount Shares Amount Shares Amount Capital Earnings Equity

Balance, February 1, 2025 - $ - - $ - 37,826 $ - ( 230 ) $ ( 150 ) $ 24,882 $ 164 $ 24,896

Stock based compensation - - - - 8 - - - 305 - 305

Stock issued for the exercise of options - - - - 38 - - - 55 - 55

Issuance of shares for director settlement - - - - 68 - - - 450 - 450

Net income - - - - - - - - - 1,237 1,237

Balance, October 31, 2024 - $ - - $ - 37,816 $ - ( 230 ) $ ( 150 ) 24,584 $ ( 1,436 ) $ 22,998

For the Period from February 1, 2023 through October 31, 2023

Balance, April 30, 2025 - $ - - $ - 37,834 $ - ( 230 ) $ ( 150 ) $ 25,187 $ 1,401 $ 26,438

For the Period from February 1, 2024 through April 30, 2024

Preferred Stock Series B

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Stock based compensation - - - - - - - - 205 - 205

Stock issued for the exercise of options and warrants - - - - 212 - - - 65 - 65

Conversion of series B preferred stock to common stock - - ( 55 ) - 819 - - - - - -

Series B Preferred dividend - - - - - - - - - ( 49 ) ( 49 )

Stock issued for the exercise of options - - - - - - - - 7 - 7

Net income - - - - - - - - - 553 553

Balance, October 31, 2023 - $ - - $ - 37,368 $ - ( 230 ) $ ( 150 ) 23,059 $ ( 4,955 ) $ 17,954

Balance, April 30, 2024 - $ - - $ - 37,488 $ - ( 230 ) $ ( 150 ) $ 23,490 $ ( 2,994 ) $ 20,346

See accompanying notes to the Condensed Consolidated Financial Statements.

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(in thousands)

For the Nine Months Ended October 31,

For the Three Months Ended April 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Stock-based compensation 305 205

Allowance for obsolete inventory - 78

Change in deferred tax asset ( 211 ) 172

Income from equity method investment - ( 223 )

Changes in operating assets and liabilities:

Allowance for credit losses - 140

Accounts receivable 2,326 ( 220 )

1 unchanged sentence

Prepaid expenses and other current assets 382 145

Security deposits - ( 35 )

Accounts payable and accrued expenses 1,473 1,832

3 unchanged sentences

Purchase of fixed assets ( 539 ) ( 1,144 )

Cash paid for investment in Chef Inspirational Foods, LLC, net - ( 646 )

Net Cash (Used in) Investing Activities ( 539 ) ( 1,144 )

1 unchanged sentence

Repayment of term loan ( 503 ) ( 388 )

Repayment of line of credit, net - ( 890 )

Repayment of related party note ( 1,200 ) -

Repayment of finance lease obligations ( 102 ) ( 95 )

Payment of Series B Preferred dividends - ( 49 )

Proceeds from exercise of stock options - 7

Net Cash (Used in) Financing Activities ( 605 ) ( 476 )

Net (Decrease) Increase in Cash ( 1,703 ) 1,247

Net Increase in Cash 4,861 2,021

Cash and cash equivalents at beginning of period 7,150 11,022

5 unchanged sentences

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of series B preferred stock to common stock $ - $ -

Finance lease asset additions $ - $ 169

1 unchanged sentence

Write-off of right of use asset $ 451 $ 897

Related party debt incurred for purchase of Chef Inspirational Foods, LLC $ - $ 2,700

Settlement of liability in common stock $ - $ 50

Issuance of stock for director settlement $ 450 $ -

Receipt of fixed assets for deposits previously paid $ 74 $ -

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements

October 31, 2024

April 30, 2025

Note 1 - Nature of Operations and Basis of Presentation

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Mama's Creations, Inc.

(together with its subsidiaries, the “Company”, "we", "our", or "us"), (formerly known as Mama Mancini's Holdings, Inc.

(together with its subsidiaries, the “Company”, "we', "us" or "our"), (formerly known as MamaMancini's Holdings, Inc.

and Mascot Properties, Inc.) was organized on July 22, 2009 as a Nevada corporation.

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Our subsidiary, MamaMancini’s Inc.

(“MamaMancini's”) is a marketer, manufacturer and distributor of beef and turkey meatballs with sauce, grilled, roasted and breaded chicken, sausage and peppers, 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 meals, single-serve pasta bowls, bulk deli, and packaged refrigerated protein products.

MamaMancini's products feature many all-natural meals that 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.

(“MamaMancinis”), is a marketer, manufacturer and distributor of beef and turkey meatballs with sauce, grilled, roasted and breaded chicken;

sausage and peppers;

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 meals, single-size pasta and rice bowls, bulk deli, and packaged refrigerated protein products.

MamaMancini's products feature many all-natural meals that 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.

Our Subsidiary T&L Acquisition Corp.

is a premier gourmet food manufacturer based in New York.

T&L Acquisition Corp., under the brands T&L Creative Salads (“T&L”) and Olive Branch offers a full line of foods for retail food chains and club stores, delis, bagel stores, caterers and provision distributors.

T&L uses high-quality meats, seafood and vegetables, prepared to meet the standards set forth by the USDA and the Food and Drug Administration ("FDA").

Olive Branch concentrates on selling olives, olive mixes, and savory products to a limited number of large retail customers, primarily in pre-packaged containers.

In 2022, the Company acquired a 24 % minority interest in Chef Inspirational Foods, LLC (“CIF”), a leading developer, innovator, marketer and sales company selling prepared foods, for an investment of $ 1.2 million.

The investment consisted of $ 500 thousand in cash and $ 700 thousand in the Company’s common stock.

The acquisition of the interest in CIF was accounted for under the equity method of accounting for investments until the Company acquired the remaining interest in CIF.

("T&L") is a premier gourmet food manufacturer based in New York.

T&L doing business as T&L Creative Salads and Olive Branch, offers a full line of foods for retail food chains and club stores, delis, bagel stores, caterers and provision distributors.

Our Creative Salads brand uses high-quality meats, seafood and vegetables, prepared to meet the standards set forth by the USDA and the Food and Drug Administration ("FDA").

Our Olive Branch brand concentrates on selling olives, olive mixes, and savory products to large retail customers, primarily in pre-packaged containers.

On June 28, 2022, the Company acquired a 24 % minority interest in Chef Inspirational Foods, LLC (“CIF”), a leading developer, innovator, marketer and sales company selling prepared foods, for an investment of $ 1.2 million.

The investment consists of $ 500 thousand in cash and $ 700 thousand in the Company’s common stock.

The acquisition of the interest in CIF was accounted for under the equity method of accounting for investments until the Company acquired the remaining interest of CIF.

On June 28, 2023, the Company completed the acquisition of the remaining 76 % of CIF, in accordance with the terms of the Membership Interest Purchase Agreement dated June 28, 2023 by and among the Company, Siegel Suffolk Family, LLC, and R&I Loeb Family, LLC (the “Sellers”) for approximately $ 3.7 million, including approximately $ 1 million in cash at closing and a $ 2.7 million promissory note (the "CIF Acquisition").

The promissory note required a principal payment of $ 1.2 million in cash on the first anniversary of the closing date (which was made during the three months ended July 31, 2024), and requires a payment of $ 1.5 million in common stock of the Company on the second anniversary of the closing date.

The following presents the unaudited results of operations for the period February 1, 2023 through June 28, 2023 of CIF (in thousands):

For the Period

February 1, 2023

June 28, 2023

Revenues $ 13,721

Net income $ 931

On July 31, 2023, the Company filed an amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada to change the Company’s name from “MamaMancini’s Holdings, Inc.” to “Mama’s Creations, Inc.” (the “Name Change”).

The Name Change, which was approved by the Company’s stockholders at its annual meeting on July 31, 2023, did not alter the voting powers or relative rights of the Company.

The promissory note required a principal payment of $ 1.2 million in cash on the first anniversary of the closing date (which was made during the year ended January 31, 2025) and requires a payment of $ 1.5 million in common stock of the Company on the second anniversary of the closing date.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC for interim financial information.

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of October 31, 2024, and the results of its operations and its cash flows for the periods presented.

The unaudited Condensed Consolidated Financial Statements herein should be read together with the historical Consolidated Financial Statements of the Company for the years ended January 31, 2024 and 2023 included in our Annual Report on Form 10-K for the year ended January 31, 2024 (the "2024 Form 10-K"), as filed with the SEC on April 24, 2024.

Operating results for the three and nine months ended October 31, 2024 are not necessarily indicative of the results that may be expected for the year ending January 31, 2025.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

GAAP") for interim financial information.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

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

GAAP requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The results of operations for any interim period are not necessarily indicative of results for the full year.

Certain amounts in the prior years have been reclassified to conform to the current year presentation.

Principles of Consolidation

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany balances have been eliminated in consolidation.

The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X.

Certain information and footnote disclosures normally included in the Company's Consolidated Financial Statements in an annual report on Form 10-K have been condensed or omitted.

The Condensed Consolidated Balance Sheet as of January 31, 2025 has been derived from the audited Consolidated Financial Statements as of that date but does not include all disclosures required for audited annual financial statements.

For further information, please refer to and read these interim unaudited Condensed Consolidated Financial Statements in conjunction with the

Company's audited Consolidated Financial Statements included in the Company's annual report on Form 10-K for the fiscal year ended January 31, 2025.

Use of Estimates

The preparation of unaudited Condensed Consolidated Financial Statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes.

Such estimates and assumptions impact, among other items, allowance for credit losses, the fair value of stock-based compensation, inventory reserves, impairment of goodwill and intangible assets, and estimates for unrealized returns, discounts, and other variable considerations that are netted against revenue.

The preparation of the Condensed Consolidated Financial Statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes.

Such estimates and assumption s impact, among other items, the following:

allowance for credit losses, the fair value of stock-based compensation, inventory reserves, impairment of goodwill and intangible assets, and estimates for unrealized returns, discounts, and other variable considerations that are netted against revenue.

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 unaudited 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.

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 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.

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The Company operates in an industry that is subject to intense competition and changes in consumer demand.

The Company’s operations are subject to significant risks and uncertainties, including financial and operational risks, including the potential risk of business failure.

The Company’s operations are subject to significant risk and uncertainties including financial and operational risks and the potential risk of business failure.

The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings.

1 unchanged sentence

These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.

Segment Reporting

For the three and nine months ending October 31, 2024 and October 31, 2023, the Company was managed as a single operating segment.

The Chief Executive Officer, who is the Company's Chief Operating Decision Maker ("CODM"), reviews financial information on an aggregate basis for purposes of allocating resources and assessing financial performance, as well as for making strategic operational decisions and managing the organization.

As such the Company has one reportable segment.

Additionally, all of the Company's assets are maintained in the United States.

Cash and Cash Equivalents

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

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.

As of October 31, 2024, the Company had approximately $ 8.5 million that exceeded federally insured limits.

The majority of the Company’s cash and cash equivalents are held at one financial institution, which at April 30, 2025, exceeded insured amounts by approximately $ 11.0 million.

The Company believes it mitigates such risk by having this cash and cash equivalents held by a major financial institution.

Accounts Receivable and Allowance for Credit Losses

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Management assesses the collectability of outstanding customer invoices and maintains an allowance resulting from the expected non-collection of customer receivables.

In estimating this reserve, management considers factors such as historical collection experience, customer creditworthiness, specific customer risk, and current and expected general economic conditions.

In estimating this allowance for credit losses, management considers factors such as historical collection experience, customer creditworthiness, specific customer risk, and current and expected general economic conditions.

Customer balances are written off after all collection efforts are exhausted.

The reserve for uncollectible accounts was approximately $ 93 thousand as of October 31, 2024 and January 31, 2024.

During the three and nine months ended October 31, 2024 the Company did no t write off any accounts deemed uncollectible.

During the three and nine months ended October 31, 2023 the Company wrote off approximately $ 0 and $ 140 thousand of uncollectible accounts respectively.

The allowance for credit losses was approximately $ 93 thousand as of April 30, 2025 and January 31, 2025.

During the three months ended April 30, 2025 and April 30, 2024, the Company did not write off any accounts deemed uncollectible.

The Company values its inventory at the lower of cost or net realizable value (“NRV”).

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The Company monitors its inventory to identify excess or obsolete items on hand.

The Company reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on selling prices and indications from customers based upon current price negotiations and purchase orders.

The Company reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on selling prices, indications from customers based upon current price negotiations, and purchase orders.

In addition, and as necessary, specific reserves for future known or anticipated events may be established.

As of October 31, 2024 and January 31, 2024, the reserve for obsolete inventory was approximately $ 95 thousand.

As of April 30, 2025 and January 31, 2025, the reserve for obsolete inventory was approximately $ 95 thousand.

Inventories by major category are as follows (in thousands):

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Raw materials and packaging $ 2,501 $ 1,654

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Property, Plant and Equipment

Property, plant, 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 expense are:

Property, plant, and equipment are recorded at cost net of accumulated depreciation.

Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets.

Asset lives for financial statement reporting of depreciation are:

Machinery and equipment 2 - 7 years

1 unchanged sentence

Leasehold improvements *

(*) Amortized on a straight-line basis over the shorter of the remaining lease term at the time the assets were placed in service or their estimated useful lives.

(*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter.

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 Condensed Consolidated Statements of Operations.

The Company reviews the recoverability of property, plant and equipment when circumstances indicate that the carrying value of an asset or asset class may not be recoverable.

Indicators of impairment could include, among other factors, significant changes in the business environment, the planned closure of a facility, or deterioration in operating cash flows.

Considerable management judgment is necessary to evaluate the impact of operating changes and to estimate future cash flows.

Expenditures for repairs and maintenance that do not substantially improve or extend the useful life of an asset are expensed as incurred.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair values of the underlying net assets of an acquired business.

The Company tests goodwill for impairment on an annual basis during the fourth quarter of its fiscal year, or

immediately if conditions indicate that an impairment could exist.

The Company evaluates qualitative factors to determine if it is more likely than not that the fair value is less than its carrying value and whether it is necessary to perform goodwill impairment testing.

As of October 31, 2024 and January 31, 2024, there were no impairment losses recognized for goodwill.

The Company tests goodwill for impairment on an annual basis during the fourth quarter of its fiscal year, or immediately if conditions indicate that an impairment could exist.

The Company evaluates qualitative factors to determine if it is more likely than not that the fair value is less than the carrying value and whether it is necessary to perform goodwill impairment testing.

As of April 30, 2025 and April 30, 2024, there were no impairment losses recognized for goodwill.

Other Intangible Assets

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Fair Value of Financial Instruments

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.

Fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

The carrying values of the Company’s short-term financial instruments, such as cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value due to the immediate or short-term maturity of these instruments.

The interest rate on the Company’s line of credit and notes payable has a variable component, which is reflective of the market for such instruments at any given date, and as such the carrying value of the debt approximates its fair value.

Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The levels of the fair value hierarchy are:

observable inputs such as quoted prices in active markets;

inputs other than quoted prices in active markets that are either directly or indirectly observable;

unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The Company's financial assets that were accounted for at fair value on a recurring basis as of April 30, 2025 and January 31, 2025 were as follows (in thousands):

April 30, 2025 January 31, 2025

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash equivalents $ 11,382 $ — $ — $ 11,382 $ 6,842 $ — $ — $ 6,842

Total $ 11,382 $ — $ — $ 11,382 $ 6,842 $ — $ — $ 6,842

Research and Development

Research and development is expensed as incurred.

Research and development expenses were $ 155 thousand and $ 352 thousand for the three and nine months ended October 31, 2024, respectively, compared to $ 124 thousand and $ 290 thousand for the three and nine months ended October 31, 2023, respectively.

Research and development expenses were $ 73 thousand and $ 104 thousand for the three months ended April 30, 2025 and April 30, 2024, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with FASB Topic 606, Revenue from Contracts with Customers (Topic 606).

The Company recognizes revenue in accordance with Financial Accounting Standards Board ("FASB") Topic 606, Revenue from Contracts with Customers (Topic 606) .

The Company’s sales are primarily generated from the sale of finished products to customers.

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The Company’s contracts are all short-term in nature;

therefore, there are no unsatisfied performance obligations requiring disclosure as of October 31, 2024 and January 31, 2024.

Expenses such as slotting fees, sales discounts, and variable considerations are accounted for as a direct reduction of revenues as follows (in thousands):

therefore, there are no unsatisfied performance obligations requiring disclosure as of April 30, 2025 and January 31, 2025.

Reductions in the transaction price attributable to items such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows (in thousands):

For the Three Months Ended

October 31, 2024 October 31, 2023

Gross Sales $ 32,333 $ 29,294

Trade Incentives and Promotions 810 646

Net Sales $ 31,523 $ 28,648

For the Nine Months Ended

October 31, 2024 October 31, 2023

April 30, 2025 April 30, 2024

Gross Sales $ 37,504 $ 30,398

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Disaggregation of Revenue from Contracts with Customers.

The following table disaggregates gross revenue by significant geographic area for the three months ended October 31, 2024 and 2023 (in thousands):

The following table disaggregates gross revenue by significant geographic area for the three months ended April 30, 2025 and 2024 (in thousands):

For the Three Months Ended

October 31, 2024 October 31, 2023

Northeast $ 8,277 $ 9,317

Southeast 8,763 8,225

Midwest 7,049 6,116

West 8,244 5,636

Total gross sales $ 32,333 $ 29,294

For the Nine Months Ended

October 31, 2024 October 31, 2023

April 30, 2025 April 30, 2024

Northeast $ 9,917 $ 9,567

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Costs of sales represents costs directly related to the production and manufacturing of the Company’s products.

Costs incurred for advertising for the Company are charged to selling, general and administrative expenses as incurred.

Advertising expenses wer e $ 663 thousand and $ 1,480 thousand fo r the three and nine months ended October 31, 2024, respectively, compared to $ 380 thousand and $ 779 thousand for the three and nine months ended October 31, 2023, respectively.

Stock-Based Compensation

The Company provides compensation benefits in the form of performance stock awards, restricted stock units, stock options, and warrants.

The cost of the stock-based compensation is recorded at fair value on the date of grant and expensed in the Condensed Consolidated Statement of Operations over the requisite service period.

The Company has granted performance stock awards ("PSUs") to certain executive officers.

Each performance stock award entitles the participant to earn shares of common stock upon the attainment of certain market conditions and/or certain performance goals over the applicable performance period.

The recognition of the compensation expense for the performance stock awards is based upon the probable outcome of the market condition and performance conditions based on the fair value of the award on the date of grant.

Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred and are included in selling, general and administrative expenses.

Advertising expenses for the three months ended April 30, 2025 and April 30, 2024 were $ 814 thousand and $ 476 thousand, respectively.

St ock-Based Compensation

The Company provides compensation benefits in the form of performance stock units, restricted stock units, stock options, and warrants.

The cost of the stock-based compensation is recorded at fair value on the date of grant and expensed in our Condensed Consolidated Statement of Operations over the requisite service period.

The Company has granted performance awards in the form of Performance Stock Units ("PSUs") to certain executive officers.

Each performance stock unit award entitles the participant to earn shares of common stock upon the attainment of certain market conditions and/or certain performance goals over the applicable performance period.

The recognition of the compensation expense for the performance stock awards is based upon the probable outcome of the market condition and performance conditions and is based on the fair value of the award on the date of grant.

To determine the value of PSUs with market conditions for stock-based compensation purposes, the Company used a Monte Carlo simulation valuation model.

For each path, the PSUs' payoff is calculated based on the contractual terms, whereas the fair value of the PSUs is calculated as the average present value of all modeled payoffs.

The determination of the grant date fair value of PSUs issued is affected by a number of variables and subjective assumptions, including (i) the fair value of the Company’s common stock at the grant date of $ 1.17 and $ 1.40 ,

(ii) the expected common stock price volatility over the expected life of the award of 85.7 % and 87.0 %, (iii) the term of the awards of 5 years and 5 years, (iv) the risk-free interest rate of 3.7 % and 3.4 %, and (v) the expected dividend yield of 0 % and 0 %.

Forfeitures are recognized when they occur.

There were no performance stock units that vested in the three and nine months ending October 31, 2024.

T he Company's performance against the defined goals is re-evaluated on a quarterly basis throughout the performance period and the recognition of the compensation expense is adjusted for subsequent changes in the estimated or actual outcome.

The Company's performance against the defined goals is re-evaluated on a quarterly basis throughout the performance period and the recognition of the compensation expense is adjusted for subsequent changes in the estimated or actual outcome.

The Company values stock options and warrants using the Black-Scholes option pricing model.

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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.

The Company values Restricted Stock Units ("RSUs") at the closing stock price on the date of the grant.

The Company has granted restricted stock units ("RSUs") that entitle the participant to earn shares of common stock so long as they continuously provide service to the Company through a given date.

The Company values RSUs by multiplying the underlying shares of common stock by the closing stock price on the date of the grant, and the related expense is recognized ratably over the vesting period of the awards.

Earnings Per Share

Basic net income or loss per share attributable to common stockholders excludes dilution and is computed by dividing net income attributable to common stockholders during the period by the weighted average number of common shares outstanding during the period.

Basic net income or loss per share attributable to common stockholders excludes dilution and is computed by dividing net income during the period by the weighted average number of common shares outstanding during the period.

Diluted net income or loss per share reflects potential dilution and is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period, which is increased by the number of additional common shares that would have been outstanding if the potential common shares had been issued.

However, if the effect of any additional securities are anti-dilutive (i.e., resulting in a higher net income per share or lower net loss per share), they are excluded from the dilutive earnings per share computation.

The dilutive effect of stock options, warrants, and restricted stock is calculated using the treasury stock method, and the dilutive effect of the Series B Preferred stock and PSUs is calculated using the if-converted method.

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 (in thousands, except per share data):

However, if the effect of any additional securities is anti-dilutive (i.e., resulting in a higher net income per share or lower net loss per share), they are excluded from the dilutive net income computation.

The dilutive effect of stock options, warrants, and restricted stock is calculated using the treasury stock method.

The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income per common share (in thousands, except per share data):

For the Three Months Ended

October 31, 2024 October 31, 2023

Net income attributable to common stockholders $ 410 2,009

Effect of dilutive securities:

Diluted net income $ 410 $ 2,009

Weighted average common shares outstanding – basic 37,522 37,121

Dilutive securities (a):

Restricted stock 266 447

Performance stock awards 1,600 —

Options 54 78

Weighted average common shares outstanding and assumed conversion – diluted 39,442 37,646

Basic net income per common share $ 0.01 $ 0.05

Diluted net income per common share $ 0.01 $ 0.05

(a) – Anti-dilutive securities excluded — —

For the Nine Months Ended

October 31, 2024 October 31, 2023

Net income attributable to common stockholders $ 2,111 $ 5,104

April 30, 2025 April 30, 2024

Net income $ 1,237 $ 553

Effect of dilutive securities:

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Restricted stock 281 351

Performance stock units 1,450 1,650

Options 50 68

Performance stock awards 1,600 —

Weighted average common shares outstanding and assumed conversion – diluted 39,378 39,328

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Deferred tax assets are adjusted for the effects of changes in tax laws and rates on the date of enactment.

As of October 31, 2024 and January 31, 2024, the Company recognized a deferred tax asset of $ 413 thousand and $ 503 thousand, 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 April 30, 2025 and January 31, 2025, the Company recognized a deferred tax asset of $ 469 thousand and $ 258 thousand, 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 assets.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No.

2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies an issuer’s accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features.

ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures for convertible instruments and earnings per share (EPS) guidance.

This update was effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The adoption of this standard did not have a significant impact on the Company’s condensed consolidated financial statements.

In March 2023, the FASB issued ASU No.

2023-02, "Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investment Tax Credit Structures Using the Proportional Amortization Method." The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

This guidance was effective for fiscal years beginning after December 15, 2023, including interim periods within those

fiscal years.

The adoption of this standard did not have a significant impact on the Company’s condensed consolidated financial statements.

In October 2023, the Financial Accounting Standards Board ("FASB") issued ASU No.

2023-06, "Disclosure Improvements:

Amendments - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative." The FASB issued the standard to introduce changes to U.S.

GAAP that originate in either SEC Regulation S-X or S-K, which are rules about the form and content of financial reports.

The provisions of the standard are contingent when the SEC removes the related disclosure provisions from Regulation S-X and S-K.

The Company does not expect the provisions of the standard to have a material impact on the Company's financial statements and related disclosures.

In November 2023, the FASB issued ASU No.

2023-07, " Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures." The new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

Improvements to Reportable Segment Disclosures.

" The new guidance is intended to improve reportable segment disclosure requirements primarily

through enhanced disclosures about significant segment expenses.

The amendment is effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is in the process of evaluating the impact that the adoption ASU No.

2023-07 will have to the financial statements and related disclosures.

Adoption of this standard led to enhanced segment reporting disclosures but did not impact the Company's results of operations, cash flows, or financial condition.

The Company adopted ASU 2023-07 during the fiscal year ended January 31, 2025.

See Note 13, Segment Information in the accompanying notes to the Condensed Consolidated Financial Statements for further detail.

In December 2023, the FASB issued ASU No.

2023-09, " Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures.

Improvements to Income Tax Disclosures.

" The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in the ASU address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

The amendment is effective retrospectively for fiscal years beginning after December 15, 2024, on a prospective basis, with early adoption permitted.

The amendment is effective retrospectively for fiscal years beginning after December 15, 2024.

This ASU is effective on a prospective basis for the Company in the fiscal year ending January 31, 2026 and will result in additional disclosures being included in the Consolidated Financial Statements for the Company's Form 10-K for the year ended January 31, 2026.

In November 2024, the FASB issued ASU No.

2024-03, " Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures " (Subtopic 220-40):

Disaggregation of Income Statement Expenses." Additionally, in January 2025, the FASB issued ASU No.

2025-01 to clarify the effective date of ASU No.

The new guidance aims to enhance disclosures about a public business entity's expenses by providing more specific information about certain costs and expenses at each interim and annual reporting period, enabling investors to better understand the entity’s overall performance, including its cost structure, and assess potential future cash flows.

This guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted.

The Company is in the process of evaluating the impact that this guidance will have on the Consolidated Financial Statements and related disclosures.

In November 2024, the FASB issued ASU No.

2024-04, " Debt - Debt with Conversion and Other Options " (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments." The new guidance clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt.

The new standard is effective for fiscal years beginning after December 31, 2025 and interim periods within those annual periods.

Early adoption is permitted.

The Company is in the process of evaluating the impact that the adoption of ASU No.

2023-09 will have to the financial statements and related disclosures.

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.

Fair Value Measurements

Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The levels of the fair value hierarchy are:

observable inputs such as quoted prices in active markets;

inputs other than quoted prices in active markets that are either directly or indirectly observable;

unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The Company's financial assets that were accounted for at fair value on a recurring basis as of October 31, 2024 and January 31, 2024 were as follows (in thousands):

October 31, 2024 January 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash equivalents $ 9,168 $ — $ — $ 9,168 $ 10,912 $ — $ — $ 10,912

Total $ 9,168 $ — $ — $ 9,168 $ 10,912 $ — $ — $ 10,912

2024-04 will have on the Consolidated Financial Statements and related disclosures.

Note 3 – Property Plant and Equipment, Net:

Property plant and equipment, net on October 31, 2024 and January 31, 2024 were as follows (in thousands):

October 31, 2024 January 31, 2024

Property plant and equipment, net, on April 30, 2025 and January 31, 2025 were as follows (in thousands):

April 30, 2025 January 31, 2025

Machinery and Equipment $ 8,568 $ 7,982

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Leasehold Improvements 5,884 5,875

14,694 14,099

Accumulated Depreciation 5,248 4,712

Total $ 9,446 $ 9,387

Depreciation expense was approximately $ 451 thousand and $ 1.1 million for the three and nine months ended October 31, 2024, respectively, compared to approximately $ 255 thousand and $ 767 thousand for the three and nine months ended October 31, 2023, respectively.

Depreciation expense was approximately $ 554 thousand and $ 292 thousand for the three months ended April 30, 2025 and April 30, 2024, respectively .

Note 4 – Intangible Assets, Net

Intangible assets, net, consisted of the following at October 31, 2024 (dollars in thousands):

Intangible assets, net, consisted of the following at April 30, 2025 (dollars in thousands):

Amount Accumulated

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Total intangible assets $ 6,497 $ ( 3,061 ) $ 3,436

Amortization expense was approximately $ 388 thousand and $ 1.2 million for the three and nine months ended October 31, 2024, respectively, compared to approximately $ 388 thousand and $ 692 thousand for the three and nine months ended October 31, 2023, respectively.

We expect the estimated aggregate amortization expense for each of the four succeeding fiscal years to be as follows (in thousands):

Amortization expense was approximately $ 370 thousand and $ 380 thousand for the three months ended April 30, 2025 and April 30, 2024, respectively.

We expect the estimated aggregate amortization expense for each of the succeeding fiscal years to be as follows (in thousands):

2026 (Remaining) $ 1,144

Total $ 3,067

Note 5 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses are composed of the following (in thousands):

April 30, 2025 January 31, 2025

Trade accounts payable $ 9,178 $ 9,051

Accrued promotions 593 485

Accrued employee compensation 2,127 1,391

Accrued commissions and royalties 1,127 686

Other accrued expenses 252 439

Accrued income taxes 249 —

Total accounts payable and accrued expenses $ 13,526 $ 12,052

Note 6 – Related Party Transactions

Promissory Notes – Related Parties

Upon consummation of the acquisition of T&L in December 2021, the Company executed a $ 3 million promissory note with the sellers.

Promissory Notes

Upon consummation of the acquisition of the T&L Creative Salads business in December 2021, the Company executed a $ 3 million promissory note with the sellers, which consist of Anthony Morello, Jr., President of Creative Salads and Olive Branch, as well as individuals related to Mr.

The promissory note requires annual principal payments of $ 750 thousand, payable on each anniversary of the closing, together with accrued interest at a rate of three and one-half percent ( 3.5 %) per annum.

As of both October 31, and January 31, 2024, the outstanding balance under the note was $ 1.5 million, of which $ 750 thousand was recorded as Promissory notes – related parties and $ 750 thousand is recorded as Promissory notes – related parties, net of current, in the Company’s Condensed Consolidated Balance Sheets.

Interest expense related to this note was approximately $ 14 thousand and $ 40 thousand for the three and nine months ended October 31, 2024, respectively, compared to approximately $ 20 thousand and $ 39 thousand for the three and nine months ended October 31, 2023, respectively.

As of October 31, 2024 and January 31, 2024, accrued interest was approximately $ 44 thousand and $ 5 thousand, respectively.

Lease – Related Party

The Company leases a fully contained facility in Farmingdale, NY from 148 Allen Blvd LLC for production and distribution of T&L Creative Salads and Olive Branch products.

148 Allen Blvd LLC is owned by Anthony Morello, Jr., President of T&L, and various individuals related to Mr.

As of both April 30, and January 31, 2025, the outstanding balance under the note was $ 750 thousand, which was recorded as Promissory notes – related parties in the Company’s Condensed Consolidated

Balance Sheets.

Interest expense related to this note was approximately $ 7 thousand and $ 13 thousand for the three months ended April 30, 2025 and April 30, 2024, respectively.

As of April 30, 2025 and January 31, 2025, accrued interest was approximately $ 9 thousand and $ 2 thousand, respectively.

The Company leases 20,188 square feet in a fully contained facility in Farmingdale, NY from 148 Allen Blvd LLC for production and distribution of Creative Salads and Olive Branch products.

148 Allen Blvd LLC is owned by Mr.

Morello and various individuals related to Mr.

This lease term is through November 30, 2031 with the option to extend the lease for two additional ten-year terms with base rent of approximately $ 20 thousand per month through December 31, 2026, increasing after that date to approximately $ 24 thousand per month through the end of the initial lease term.

The exercise of optional renewal is uncertain and, therefore, excluded from the calculation of the right of use asset.

Rent expense and other ancillary charges pursuant to the lease for the three and nine months ended October 31, 2024 were approximately $ 81 thousand and $ 240 thousand, respectively, compared to $ 96 thousand and $ 267 thousand for the three and nine months ending October 31, 2023.

Chef Inspirational Foods, LLC – Related Party

The Company owned a 24 % minority interest in CIF until June 28, 2023, when the Company acquired the remaining interest (refer to Note 1).

For the period from February 1, 2023 to June 28, 2023, the Company recorded sales of approximatel y $ 10.9 million with CIF .

For the period from February 1, 2023 to June 28, 2023, the Company recorded commission expense with CIF of approximately $ 175 thousand, respectively.

Rent expense and other ancillary charges pursuant to the lease for the three months ended April 30, 2025 and April 30, 2024 were approximately $ 84 thousand and $ 77 thousand, respectively.

Note 7 – Loan and Security Agreements

The Company has a working capital line of credit with M&T Bank for a maximum principal amount of $ 5.5 million (the "Credit Agreement") .

On July 31, 2024 , the Company extended the maturity date of the working capital line from October 31, 2025 to November 30, 2027 .

The principal outstanding bears interest at a variable rate per annum based on the Company’s Senior Funded Debt/EBITDA Ratio (as defined in the Credit Agreement), established with respect to the Borrower as of the date of any advance under the Credit Agreement as follows:

The Company has a working capital line of credit with M&T Bank for a maximum principal amount of $ 5.5 million (the "Credit Agreement") , which is scheduled to mature on November 30, 2027 .

The principal outstanding bears interest at a variable rate per annum based on the Company’s Senior Funded Debt/EBITDA Ratio (as defined in the Credit Agreement), established with respect to the Company as of the date of any advance under the Credit Agreement as follows:

if the Senior Funded Debt/EBITDA ratio is:

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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.

The Company was in compliance with the covenants as of October 31, 2024 and January 31, 2024.

The Company was in compliance with the covenants as of April 30, and January 31, 2025.

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.

There was no outstanding balance on the line of credit as of October 31, or January 31, 2024.

During the three and nine months ended October 31, 2024 the Company incurred no interest, compared to approximately $ 1 thousand and $ 47 thousand for the three and nine months ended October 31, 2023, respectively.

There were no outstanding balances on the line of credit as of April 30, or January 31, 2025.

During the three months ended April 30, 2025 and April 30, 2024, the Company incurred no interest on the working capital line.

On December 29, 2021, the Com pany entered into a loan with M&T Bank for the original principal amount of $ 7.5 million, payable in equal monthly principal installments over a 60 -month amortization period (the “Acquisition Note”).

The Maturity Date of the Acquisition Note is January 17, 2027.

The Acquisition Note was amended effective December 4, 2023, to change the rate at which interest accrues and amended on July 31, 2024 to amend certain covenants.

Effective December 4, 2023 the interest rate was amended to be based on the Senior Funded Debt/EBITDA Ratio (as defined in the Acquisition Note).

All of the proceeds of the loan were used to fund a portion of the consideration for the acquisition of the Creative Salads and Olive Branch businesses.

The Acquisition Note is scheduled to mature on January 17, 2027.

The outstanding balance under the Acquisition Note accrues interest based on the Senior Funded Debt/EBITDA Ratio (as defined in the Acquisition Note).

If the Senior Funded Debt/EBITDA ratio is:

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provided that in all events the rate shall not be less than the recited percentage point margin over 0 %.

As of October 31, 2024 , the outstanding balance and unamortized discount of the Acquisition Note were approximately $ 3.3 million and $ 25 thousand, respectively.

As of April 30, 2025 , the outstanding balance and unamortized discount of the Acquisition Note were approximately $ 2.4 million and $ 19 thousand, respectively.

As of January 31, 2025 , the outstanding balance and unamortized discount of the Acquisition Note were approximately $ 2.9 million and $ 22 thousand, respectively.

During the three and nine months ended October 31, 2024, the Company incurred interest of approximately $ 72 thousand and $ 238 thousand, respectively, compared to approximately $ 112 thousand and $ 350 thousand for the three and nine months ended October 31, 2023, respectively.

During the three months ended April 30, 2025 and 2024 , the Company incurred interest of approximately $ 47 thousand, and $ 86 thousand, respectively.

Note 8 – Concentrations

For the three months ended October 31, 2024, the Company’s revenue was concentrated in two customers that accounted for approximately 43 % and 10 % of gross revenue, respectively.

For the nine months ended October 31, 2024, the Company’s revenue was concentrated in one customer that accounted for approximately 41 % of gross revenue.

For the three months ended October 31, 2023, the Company’s revenue was concentrated in two customers that accounted for approximately 39 % and 12 % of gross revenue, respectively.

For the nine months ended October 31, 2023, the Company’s revenue was concentrated in three customers that accounted for approximately 22 %, 14 %, and 11 % of gross revenue, respectively.

As of October 31, 2024, two customers represented approximately 35 % and 17 % of the total gross outstanding receivables, respectively.

As of January 31, 2024, four customers represented approximately 20 %, 15 %, 13 %, and 10 % of total gross outstanding receivables, respectively.

For the three months ended April 30, 2025, two customers accounted for approximately 36 % and 27 % of gross revenue, respectively.

For the three months ended April 30, 2024, one customer accounted for approximately 43 % of gross revenue.

As of April 30, 2025, two customers represented approximately 16 % and 13 % of the total gross outstanding receivables, respectively.

As of January 31, 2025, two customers represented approximately 38 % and 16 % of total gross outstanding receivables, respectively.

Note 9 – Stockholders’ Equity

Preferred Stock and Series A Preferred Stock

The Company is authorized to issue 20 million shares of Preferred Stock, $ 0.00001 par value per share.

The Company has designated 120 thousand shares of Preferred Stock as Series A Convertible Preferred stock.

As of October 31, 2024 and January 31, 2024, no shares of Series A Convertible Preferred Stock were outstanding.

Series B Preferred Stock

The Company has designated 200 thousand shares of preferred stock, Series B Preferred Stock.

As of October 31, 2024 and January 31, 2024, no shares of Series B Preferred Stock remain outstanding.

The holders of the Series B Preferred Stock were entitled to receive, upon liquidation, dissolution or winding up of the Company, the original issue price, plus any dividends declared but unpaid or the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares of Series B Preferred Stock if such shares had been converted to common stock immediately prior to such liquidation.

Holders of the Series B Preferred Stock were entitled to receive cumulative cash dividends at an annual rate of eight percent ( 8 %).

Holders of the Series B Preferred Stock had no voting rights.

Each share of Series B Preferred Stock was convertible, at the option of the holder, into shares of common stock at a rate of 1 share of Series B Preferred Stock into 15 shares of common stock.

The Company was able to force conversion at $ 2.00 per share of Common Stock at any time after 6 months after issue if the Common Stock had a closing price of $ 2.00 or higher in any 20 consecutive trading days.

After 18 months, the Company could force holders to convert at a 20 % discount to the most recent 20 -day average closing price per share.

The Company also had the right to cause a conversion following a Fundamental Change.

On June 22, 2023, all the holders of the Series B Preferred Stock converted the shares of Series B Preferred Stock into 819,000 shares of Common Stock of the Company.

The Company paid dividends of approximately $ 0 thousand and $ 49 thousand for the three and nine months ended October 31, 2023, respectively.

Such dividends related to the Company's then outstanding Series B Preferred Stock.

Because no shares of Series B Preferred Stock were outstanding, no such dividends were paid during the three and nine months ended October 31, 2024.

Restricted Stock Units

The fair value of RSUs is determined based on the closing price of the Company's Common Stock on the grant date.

RSUs generally vest on a graded basis over three years to four years of service.

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

The following is a summary of the Company’s restricted stock units activity:

The following is a summary of the Company’s RSU activity:

Stock Units Weighted Average Grant Date Fair Value

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Forfeited ( 4,167 ) $ 6.00

Outstanding – October 31, 2024 370,328 $ 2.87

During the three and nine months ended October 31, 2024, the Company recognized stock-based compensation expense related to restricted stock units of an aggregate of approximately $ 136 thousand and $ 447 thousand, respectively, compared to $ 167 thousand and $ 98 thousand for the three and nine months ended October 31, 2023, respectively.

The restricted stock expense was recorded to selling, general and administrative expenses or cost of goods sold depending on the nature of the employee's expense on the Condensed Consolidated Statement of Operations.

As of October 31, 2024, there was unrecognized stock-based compensation of approximately $ 996 thousand related to future vesting of restricted stock units.

Outstanding – April 30, 2025 449,580 $ 3.48

During the three months ended April 30, 2025, the Company recognized stock-based compensation expense related to restricted stock units of an aggregate of approximately $ 152 thousand, compared to approximately $ 114 thousand for the three months ended April 30, 2024.

The restricted stock expense was recorded to selling, general and administrative expenses or cost of goods sold depending on the nature of the related employee's expense on the Condensed Consolidated Statement of Operations.

As of April 30, 2025, there was unrecognized stock-based compensation of approximately $ 1.3 million related to future vesting of restricted stock units.

The following is a summary of the Company’s option activity:

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Expired/forfeited - $ -

Outstanding – October 31, 2024 103,806 $ 3.76 8.47 $ 388

Exercisable – October 31, 2024 0 $ — 0.00 $ —

During the nine months ended October 31, 2024, there were 37,500 options exercised at a weighted average exercise price of $ 1.48 per share resulting in the issuance of approximately 38 thousand shares of common stock.

The Company received approximately $ 55 thousand for the exercise of these options.

During the nine months ended October 31, 2024 the Company granted options to purchase 38,806 shares.

Outstanding – April 30, 2025 103,806 $ 3.76 7.97 $ 333

Exercisable – April 30, 2025 - $ - 0.00 $ -

The Company values stock options using the Black-Scholes option pricing model.

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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.

For the nine months ended October 31, 2024, when computing the fair value of the stock options issued, the Company used the following variables:

(i) risk-free interest rate of 3.5 % , (ii) expected term of the award of 6 years, (iii) expected volatility of the underlying stock of 76 %, and (iv) no expected dividend yield.

For the three and nine months ended October 31, 2024, the Company recognized stock-based compensation expense related to options of an aggregate of approximately $ 16 thousand and $ 23 thousand, respectively, compared to $ 12 thousand and $ 53 thousand for the three and nine months ended October 31, 2023.

For the three months ended April 30, 2025, the Company recognized stock-based compensation expense related to options of approximately $ 22 thousand compared to $( 1 ) thousand for the three months ended April 30, 2024.

The stock-based compensation expense related to the options is included in selling, general and administrative expenses on the accompanying Condensed Consolidated Statements of Operations.

During the nine months ended October 31, 2024, certain employees and

contractors resigned from the Company, which resulted in the reversal of approximately $ 11 thousand of previously recognized stock-based compensation expense.

At October 31, 2024, there was unrecognized stock-based compensation expense related to the issuance of options of approximately $ 213 thousand.

During the three months ended April 30, 2024, certain employees and contractors resigned from the Company, which resulted in the reversal of approximately $ 11 thousand of previously recognized stock-based compensation expense.

At April 30, 2025, there was unrecognized stock-based compensation expense related to the issuance of options of approximately $ 169 thousand.

Performance Stock Units

During the year ended January 31, 2023, the Company issued certain PSUs to the Chief Executive Officer and Chief Financial Officer based on certain market and performance conditions of the Company compared to the respective targets.

During the three and nine ended October 31, 2024, the Company issued PSUs to the Chief Operating Officer depending on the Company's Earnings per Share compared to respective targets.

During the three and nine months ended October 31, 2024, the Company recognized stock-based compensation expense related to PSUs of approximately $ 91 thousand and $ 311 thousand, respectively.

During the three months ended April 30, 2025, the Company granted to its Chief Executive Officer PSUs with a target payout of 94,200 shares of common stock.

The PSU award is eligible to vest and settle into between 50 % and 110 % of the

target shares based on the Company's actual performance against threshold, target, and maximum adjusted EBITDA.

The PSUs were valued at approximately $ 600 thousand during the three months ending April 30, 2025.

No outstanding PSUs vested in the three months ended April 30, 2025.

During each of the three months ended April 30, 2025 and April 30, 2024, the Company recognized stock-based compensation expense related to PSUs of approximately $ 130 thousand.

The stock-based compensation expense related to the PSUs is included in selling, general and administrative expenses on the accompanying Condensed Consolidated Statements of Operations.

Equity issuances

On May 15, 2024, the Company entered into a Settlement Agreement with directors Alfred D’Agostino, Steven Burns, Dean Janeway and Thomas Toto (each, a “Director”), relating to certain options purported to have been granted by the Company in 2018 and 2019 (the "Purported Options") under prior management that exceeded the availability under the Company’s equity plan at the time of the purported grants.

In exchange for a release of any and all claims or rights related to the Purported Options, the Company agreed to issue each Director a payment of approximately $ 113 thousand and approximately 17 thousand shares of common stock.

On May 15, 2024, the Company entered into a Settlement Agreement with directors Steven Burns, Alfred D’Agostino, Dean Janeway and Thomas Toto, relating to certain options purported to have been granted by the Company in 2018 and 2019 (the "Purported Options") under prior management that exceeded the availability under the Company’s equity plan at the time of the purported grants.

In exchange for a release of any and all claims or rights related to the Purported Options, the Company agreed to issue each of the directors a payment of approximately $ 113 thousand and approximately 17 thousand shares of common stock.

In connection with the Settlement Agreement and the issuance of the shares, the Company incurred a one-time charge of approximately $ 900 thousand within selling, general and administrative expense in the three months ended April 30, 2024.

During the three and nine months ended October 31, 2024, t he Company is sued 3,007 shares valued at approximately $ 20 thousand to certain employees as compensation.

Note 10 - Commitments and Contingencies

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.

From time to time, the Company may become involved in various lawsuits and legal proceedings that 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.

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In order to continue exclusivity, the Company must pay a minimum royalty of $ 125,000 each year.

The Company incurred approximately $ 143 thousand and $ 448 thousand of royalty expenses for the three and nine months ended October 31, 2024, respectively, compared to $ 119 thousand and $ 437 thousand for the three and nine months ended October 31, 2023, respectively.

The Company incurred approximately $ 357 thousand of royalty expenses for the three months ended April 30, 2025, compared to $ 182 thousand for the three months ended April 30, 2024.

Royalty expenses are included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

Purchase Commitments

On December 20, 2024, the Company entered into a one year purchase commitment to buy six million eighty thousand pounds of chicken, to be delivered in equal weekly installments at a fixed price.

Effective March 1, 2025, the Company entered into a six month purchase commitment to buy two million sixteen thousand pounds of beef, to be delivered in equal weekly installments at a fixed price.

The Company recognizes liabilities for contingencies and commitments when a loss is deemed to be probable and estimable.

No such liability was recognized for these arrangements during the period.

Note 11 – Leases

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This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration.

In April 2024, the Company's lease of additional warehouse and office space in Farmingdale, New York became effective.

The lease agreement has a five-year term with monthly rent of approximately $ 16.7 thousand for the first year, increasing

to approximately $ 17.2 thousand for the second year, increasing to approximately $ 17.7 thousand for the third year, increasing to approximately $ 18.2 thousand for the fourth year and increasing to approximately $ 18.8 thousand for the fifth year.

As a result of this lease the Company recognized a ROU)asset and a lease liability of approximately $ 873 thousand.

During the nine months ended October 31, 2024, the Company amended and subsequently extended its lease for 25 Branca Road, East Rutherford, NJ.

The amended lease had a termination date of August 31, 2024.

With the initial amendment of the lease the Company wrote off approximately $ 897 thousand of the ROU asset and ROU liability in the nine months ended October 31, 2024.

On August 21, 2024, the Company amended its lease at 25 Branca Road.

The amended lease has monthly rent of approximately $ 36 thousand until February 28, 2026, with a renewal option to extend the lease until August 31, 2029.

The monthly rent during the renewal option ranges from approximately $ 38 thousand to approximately $ 42 thousand.

As a result of this lease the Company recognized a ROU asset and a lease liability of approximately $ 615 thousand.

Effective February 1, 2025, the Company amended and extended its lease for 25 Branca Road, East Rutherford, NJ.

The amended lease expands the space available to the Company, has a monthly rent starting at approximately $ 73 thousand increasing over time to approximately $ 84 thousand from February 1, 2025 to January 31, 2030, and required an initial direct payment of approximately $ 200 thousand.

On the effective date of the lease amendment, the Company recognized a right of use asset and corresponding lease liability of approximately $ 4.2 million.

We have operating leases for offices and other facilities used for our operations.

We also have finance leases consisting primarily of machinery and equipment.

We also have finance leases relating primarily to machinery and equipment.

Our leases have remaining lease terms of approximately 0.25 years to 6.6 years.

Supplemental cash flow and other information related to leases was as follows (in thousands):

October 31, 2024 October 31, 2023

April 30, 2025 April 30, 2024

Cash paid for amounts included in the measurement of lease liabilities

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The following table shows the weighted average lease term and weighted average discount rate for our ROU lease assets:

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Weighted average remaining lease term (in years)

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Note 12 - Income Tax Provision

The Company’s effective tax rate for the three and nine months ending October 31, 2024 and October 31, 2023 is 23.8 % and 25.1 %, respectively.

The Company’s effective tax rate for the three months ended April 30, 2025 and April 30, 2024 was 18.5 % and 24.5 %, respectively.

Differences from the statutory rate primarily relate to state taxes.

As of October 31, 2024, the net deferred tax asset was approximately $ 413 thousand.

As of April 30, 2025, and January 31, 2025, the net deferred tax asset was approximately $ 469 thousand and $ 258 thousand, respectively.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

There was no valuation allowance on the Company's deferred tax assets as of October 31, 2024 or January 31, 2024.

There was no valuation allowance on the Company's deferred tax assets as of April 30, 2025 or January 31, 2025.

The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.

ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

For those benefits

to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carryforward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

Note 13 - Segment Information

For the three months ended April 30, 2025 and April 30, 2024 the Company was managed as a single operating segment.

The Chief Executive Officer, who is also the Company’s Chief Operating Decision Maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and assessing financial performance, as well as for making strategic operational decisions and managing the organization.

As such, the Company has one reportable segment.

Additionally, all of the Company’s assets are maintained in the United States.

Segment reporting for the three months ended April 30, (in thousands):

For the Three Ended

April 30, 2025 April 30, 2024

Net sales $ 35,255 $ 29,838

Costs of sales 26,071 22,375

Gross profit 9,184 7,463

Research and development 73 104

Direct Variable Costs (B)

Other selling, general, and administrative expenses 5,100 4,733

Total operating expenses 7,606 6,690

Income from operations 1,578 773

Interest expense ( 88 ) ( 127 )

Interest income 30 92

Amortization of debt discount ( 3 ) ( 6 )

Income tax expense ( 280 ) ( 179 )

Segment net income 1,237 553

Reconciliation of profit

Adjustments and reconciling items — —

Consolidated net income $ 1,237 $ 553

(A) The significant expense categories and amounts align with the information that is regularly provided to the Chief Operating Decision Maker.

(B) This category contains commission expenses, royalty expenses, and freight-related expenses.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements