Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 31, 2018 | May 15, 2018 | Jul. 31, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | MamaMancini's Holdings, Inc. | ||
Entity Central Index Key | 1,520,358 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 17,352,015 | ||
Entity Common Stock, Shares Outstanding | 31,793,944 | ||
Trading Symbol | MMMB | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2018 | Jan. 31, 2017 |
Current Assets: | ||
Cash | $ 581,322 | $ 670,807 |
Accounts receivable, net | 3,084,715 | 1,817,820 |
Inventories | 824,276 | 806,623 |
Prepaid expenses | 261,980 | 180,260 |
Total current assets | 4,752,293 | 3,475,510 |
Property and equipment, net | 2,499,875 | 1,563,381 |
Deposits | 20,177 | 20,177 |
Total Assets | 7,272,345 | 5,059,068 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 3,456,918 | 2,124,880 |
Line of credit, net | 2,688,764 | 1,363,145 |
Term loan | 106,938 | 140,004 |
Note payable - net | 1,403,082 | 1,401,906 |
Total current liabilities | 7,655,702 | 5,029,935 |
Term loan - net of current | 651,677 | 513,328 |
Note payable - net of current portion | 250,000 | 1,548,819 |
Notes payable - related party | 649,656 | 649,656 |
Total long-term liabilities | 1,551,333 | 2,711,803 |
Total Liabilities | 9,207,035 | 7,741,728 |
Commitments and contingencies | ||
Stockholders’ Deficit: | ||
Preferred stock value | ||
Common stock, $0.00001 par value; 250,000,000 shares authorized; 31,753,437 and 27,810,717 shares issued and outstanding, respectively | 318 | 278 |
Additional paid in capital | 16,344,794 | 15,825,029 |
Common stock subscribed, $0.00001 par value; 66,667 shares, respectively | 1 | 1 |
Accumulated deficit | (18,130,303) | (18,358,478) |
Less: Treasury stock, 230,000 shares, respectively | (149,500) | (149,500) |
Total Stockholders’ Equity | (1,934,690) | (2,682,670) |
Total Liabilities and Stockholders’ Deficit | 7,272,345 | 5,059,068 |
Series A Preferred Stock [Member] | ||
Stockholders’ Deficit: | ||
Preferred stock value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2018 | Jan. 31, 2017 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 19,880,000 | 19,880,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 31,753,437 | 27,810,717 |
Common stock, shares outstanding | 31,753,437 | 27,810,717 |
Common stock subscribed, par value | $ 0.00001 | $ 0.00001 |
Common stock subscribed, shares | 66,667 | 66,667 |
Treasury stock, shares | 230,000 | 230,000 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 120,000 | 120,000 |
Preferred stock, shares issued | 23,400 | 23,400 |
Preferred stock, shares outstanding | 0 | 23,400 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Income Statement [Abstract] | ||
Sales - net of slotting fees and discounts | $ 27,543,335 | $ 18,048,792 |
Cost of sales | 18,282,660 | 10,830,104 |
Gross profit | 9,260,675 | 7,218,688 |
Operating expenses | ||
Research and development | 138,000 | 153,296 |
General and administrative expenses | 8,059,533 | 6,609,409 |
Total operating expenses | 8,197,533 | 6,762,705 |
Income from operations | 1,063,142 | 455,983 |
Other expenses | ||
Interest expense | (679,974) | (728,537) |
Amortization of debt discount | (63,428) | (28,526) |
Total other expenses | (743,402) | (757,063) |
Net income (loss) | 319,740 | (301,080) |
Less: preferred dividends | (91,565) | (204,921) |
Net income (loss) available to common stockholders | $ 228,175 | $ (506,001) |
Net income (loss) per common share - basic and diluted | $ 0.01 | $ (0.02) |
Weighted average common shares outstanding | ||
- basic | 29,811,521 | 27,100,316 |
- diluted | 32,205,577 | 27,100,316 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Deficit - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid In Capital [Member] | Common Stock Subscribed [Member] | Accumulated Deficit [Member] | Total |
Balance at Jan. 31, 2016 | $ 265 | $ (149,500) | $ 14,954,928 | $ 1 | $ (17,852,477) | $ (3,046,783) | |
Balance, shares at Jan. 31, 2016 | 23,400 | 26,507,516 | (230,000) | ||||
Stock options issued for services | 127,700 | 127,700 | |||||
Stock issued for services | $ 8 | 470,492 | 470,500 | ||||
Stock issued for services, shares | 793,307 | ||||||
Series A Preferred dividend issued in common shares | $ 5 | 271,909 | $ 271,914 | ||||
Series A Preferred dividend issued in common shares, shares | 509,894 | 509,894 | |||||
Series A Preferred dividend | (204,921) | $ (204,921) | |||||
Net income loss | (301,080) | (301,080) | |||||
Balance at Jan. 31, 2017 | $ 278 | $ (149,500) | 15,825,029 | 1 | (18,358,478) | (2,682,670) | |
Balance, shares at Jan. 31, 2017 | 23,400 | 27,810,717 | (230,000) | ||||
Stock options issued for services | 172,740 | 172,740 | |||||
Stock issued for services | 255,500 | ||||||
Series A Preferred dividend issued in common shares | $ 1 | 91,564 | $ 91,565 | ||||
Series A Preferred dividend issued in common shares, shares | 90,717 | 90,717 | |||||
Series A Preferred dividend | (91,565) | $ (91,565) | |||||
Common stock issued for services | $ 2 | 255,498 | 255,500 | ||||
Common stock issued for services, shares | 225,882 | ||||||
Common stock issued for exercise of warrants | $ 2 | (2) | |||||
Common stock issued for exercise of warrants, shares | 159,454 | ||||||
Conversion of Series A Preferred to common | $ 35 | (35) | |||||
Conversion of Series A Preferred to common, shares | (23,400) | 3,466,667 | |||||
Net income loss | 319,740 | 319,740 | |||||
Balance at Jan. 31, 2018 | $ 318 | $ (149,500) | $ 16,344,794 | $ 1 | $ (18,130,303) | $ (1,934,690) | |
Balance, shares at Jan. 31, 2018 | 31,753,437 | (230,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 319,740 | $ (301,080) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 538,322 | 441,585 |
Amortization of debt discount | 63,428 | 28,526 |
Share-based compensation | 428,240 | 598,200 |
(Increase) Decrease in: | ||
Accounts receivable | (1,266,895) | (341,238) |
Inventories | (17,653) | (248,871) |
Prepaid expenses | (81,720) | 29,093 |
Increase (Decrease) in: | ||
Accounts payable and accrued expenses | 1,332,038 | 151,019 |
Net Cash Provided by (Used in) Operating Activities | 1,315,500 | 357,234 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for fixed assets | (1,474,816) | (552,869) |
Net Cash Used in Investing Activities | (1,474,816) | (552,869) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of note payable – related party | (7,344) | |
Repayment of note payable | (1,350,000) | (486,279) |
Debt issuance costs | (24,697) | (50,000) |
Borrowings (repayments) of line of credit, net | 1,339,245 | 403,524 |
Borrowings from term loan | 251,671 | 340,000 |
Repayment of term loan | (146,388) | (126,668) |
Net Cash Provided by Financing Activities | 69,831 | 73,233 |
Net Decrease in Cash | (89,485) | (122,402) |
Cash - Beginning of Period | 670,807 | 793,209 |
Cash - End of Period | 581,322 | 670,807 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||
Income taxes | ||
Interest | 464,958 | 721,821 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Stock issued for Series A Preferred dividends | 91,565 | 271,914 |
Debt issuance costs included in principal balance of note | $ 89,104 | $ 358,523 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Jan. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1 - Nature of Operations and Basis of Presentation Nature of Operations MamaMancini’s Holdings, Inc. (the “Company”), (formerly known as Mascot Properties, Inc.) was organized on July 22, 2009 as a Nevada corporation. The Company has a year-end of January 31. The Company is a manufacturer and distributor of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf and other similar meats and sauces. The Company’s customers are located throughout the United States, with a large concentration in the Northeast and Southeast. Recent Developments On November 1, 2017, the Company, Joseph Epstein Food Enterprises, Inc., a New Jersey corporation (“JEFE”), and MMMB Acquisition, Inc., a Nevada corporation and wholly owned subsidiary of the Company (“Merger Sub”), completed the merger contemplated by the Agreement and Plan of Merger (“Merger Agreement”) by and among the Company, JEFE, and Merger Sub, dated as of November 1, 2017. Pursuant to the terms of the Merger Agreement, JEFE has merged with and into Merger Sub, with Merger Sub continuing as the surviving entity and a wholly owned subsidiary of the Company. Under the terms of the Merger Agreement and in connection with the merger, the Company acquired all assets of JEFE. The consideration for the transaction was (a) the extinguishment of the Inter-Company Loan between the parties, (b) the assumption by the Company of all JEFE accounts payable and accrued expenses, (c) assumption by the Company of certain third-party loans to JEFE and (d) indemnification of Carl Wolf with respect to his collateralization of a bank loan to JEFE in the amount of approximately $250,000. As a result of the transaction, (i) the Company became the sole shareholder of JEFE, which became a wholly-owned subsidiary of the Company (ii) following the Closing, JEFE’s financial statements as of the Closing are consolidated with the Consolidated Financial Statements of the Company (collectively, the “Merger Transaction”). No cash or stock was exchanged in connection with the transaction. In accordance with the guidance under Accounting Standards Business Combinations , the Merger transactions accounted for as reorganization entities under common control. The assets and liabilities of JEFE transferred between entities under common control were recorded by the Company based on JEFE’s historical cost basis. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Principles of Consolidation The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for doubtful accounts, inventory obsolescence and the fair value of share-based payments. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates. Risks and Uncertainties The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the grocery industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. Cash The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at January 31, 2018 and 2017. 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. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of January 31, 2018 and 2017, the Company had reserves of $2,000. Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at January 31, 2018 and 2017: January 31, 2018 January 31, 2017 Raw Materials $ 486,917 $ 374,000 Work in Process 21,387 - Finished goods 315,972 432,623 $ 824,276 $ 806,623 Property and Equipment Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: Machinery and equipment 2-7 years Furniture and fixtures 3 years Leasehold improvements * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Research and Development Research and development is expensed as incurred. Research and development expenses for the years ended January 31, 2018 and 2017 were $138,000 and $153,296, respectively. Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as general and administrative expenses. Revenue Recognition The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products. The Company meets these criteria upon shipment. Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows: Year Ended Ended January 31, 2018 Year Ended Ended January 31, 2017 Gross Sales $ 28,004,078 $ 18,498,142 Less: Slotting, Discounts, Allowances 460,743 449,350 Net Sales $ 27,543,335 $ 18,048,792 Cost of Sales Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight, packaging, and print production costs. Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the years January 31, 2018 and 2017 were $1,773,939 and $1,607,581, respectively. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” Equity Based Payments to Non-Employees The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the years ended January 31, 2018 and 2017, share-based compensation amounted to $428,240 and $598,200, respectively. For the years ended January 31, 2018 and 2017, when computing fair value of share-based payments, the Company has considered the following variables: January 31, 2018 January 31, 2017 Risk-free interest rate 1.60% to 1.99 % 1.25% to 1.90 % Expected life of grants 2.0 – 4.0 years 2.5 years Expected volatility of underlying stock 139% to 177 % 139% to 179 % Dividends 0 % 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. Earnings (Loss) Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. For the Years Ended January 31, 2018 January 31, 2017 Numerator: Net income (loss) attributable to common stockholders $ 228,175 $ (506,001 ) Effect of dilutive securities: — — Diluted net income $ 228,175 $ (506,001 ) Denominator: Weighted average common shares outstanding - basic 29,811,521 27,100,316 Dilutive securities (a): Series A Preferred - - Options 350,694 - Warrants 1,974,648 - Weighted average common shares outstanding and assumed conversion – diluted 32,205,577 27,100,316 Basic net income (loss) per common share $ 0.01 $ (0.02 ) Diluted net income (loss) per common share $ 0.01 $ (0.02 ) (a) - Anti-dilutive securities excluded: 3,041,001 11,659,841 Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “ Income Taxes FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a 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. There were no unrecognized tax benefits as of January 31, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at January 31, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2015. Related Parties The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Recent Accounting Pronouncements In July 2015, the FASB issued the ASU No. 2015-11 “ Inventory (Topic 330) Simplifying the Measurement of Inventory” . In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” In April 2016, the FASB issued ASU No. 2016-09, “ Compensation – Stock Compensation (Topic 718) In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (Topic 606) Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross verses Net) (Topic 606) In May 2016, the FASB issued ASU No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” In May 2017, the FASB issued ASU 2017-09, “ Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” In July 2017, the FASB issued ASU 2017-11, “ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” Distinguishing Liabilities from Equity In September 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 - Property and Equipment: Property and equipment on January 31, 2018 and January 31, 2017 are as follows: January 31, 2018 January 31, 2017 Machinery and Equipment $ 2,431,589 $ 1,707,004 Furniture and Fixtures 71,969 66,306 Leasehold Improvements 2,071,169 1,326,861 4,574,727 3,100,171 Less: Accumulated Depreciation 2,074,852 1,536,790 $ 2,499,875 $ 1,563,381 Depreciation expense charged to income for the years ended January 31, 2018 and 2017 amounted to $538,322 and $441,585, respectively. |
Investment in Meatball Obsessio
Investment in Meatball Obsession, LLC | 12 Months Ended |
Jan. 31, 2018 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investment in Meatball Obsession, LLC | Note 4 - Investment in Meatball Obsession, LLC During 2011, the Company acquired a 34.62% interest in Meatball Obsession, LLC (“MO”) for a total investment of $27,032. This investment is accounted for using the equity method of accounting. Accordingly, investments are recorded at acquisition cost plus the Company’s equity in the undistributed earnings or losses of the entity. At December 31, 2011, the investment was written down to $0 due to losses incurred by MO. The Company’s ownership interest in MO has decreased due to dilution. At January 31, 2018 and 2017, the Company’s ownership interest in MO was 12% and 12%, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5 - Related Party Transactions Meatball Obsession, LLC A current director of the Company is the chairman of the board and shareholder of Meatball Obsession LLC (“MO”). For the years ended January 31, 2018 and 2017, the Company generated approximately $104,081 and $76,342 in revenues from MO, respectively. As of January 31, 2018 and 2017, the Company had a receivable of $32,869 and $8,189 due from MO, respectively. WWS, Inc. A current director of the Company is the president of WWS, Inc. For the years ended January 31, 2018 and 2017, the Company recorded $24,000 in commission expense from WWS, Inc. generated sales. Notes Payable – Related Party During the year ended January 31, 2016, the Company received aggregate proceeds of $125,000 from notes payable with the CEO of the Company. The notes bear interest at a rate of 4% per annum and matured on December 31, 2016. The notes were subsequently extended until February 2019. As of January 31, 2018 and 2017, the outstanding principal balance of the notes was $117,656. The Company received advances from the CEO of the Company which bear interest at 8%. The advances are due on February 1, 2020. At January 31, 2018 and 2017, there was $400,000 of principal outstanding, respectively. The Company received advances from an entity 100% owned by the CEO of the Company, which bear interest at 8%. The advances are due on February 1, 2020. At January 31, 2018 and 2017, there was $132,000 of principal outstanding, respectively. For the years ended January 31, 2018 and 2017, the Company recorded interest expense of $47,266 and $47,266, respectively, related to the above related party notes payable. |
Loan and Security Agreement
Loan and Security Agreement | 12 Months Ended |
Jan. 31, 2018 | |
Debt Disclosure [Abstract] | |
Loan and Security Agreement | Note 6 - Loan and Security Agreement On September 3, 2014, the Company entered into a Loan and Security Agreement (“Loan and Security Agreement”) with Entrepreneur Growth Capital, LLC (“EGC”) which contains a line of credit. As of January 31, 2018 and 2017, the outstanding balance on the line of credit was $2,702,390 and $1,363,145, respectively. In September 2016, the agreement was amended and the total facility increased to an aggregate principal amount of up to $3,200,000. The facility consists of the following: ● Accounts Revolving Line of Credit: $ 2,150,000 ● Inventory Revolving Line of Credit: $ 350,000 ● Term Loan: $ 800,000 EGC may from time to time make loans in an aggregate amount not to exceed the Accounts Revolving Line of Credit up to 85% of the net amount of Eligible Accounts (as defined in the Loan and Security Agreement). In July 2017, EGC made an accommodation whereby the Accounts Receivable Line of Credit could be increased to $2,500,000, provided that the aggregate principal amount of the facility did not exceed $3,200,000. Also, in July 2017, EGC advanced an additional loan to the Company in the principal amount of $300,000, subject to $50,000 monthly repayments commencing October 31, 2017. In relation to the over advance, the Company paid a fee totaling $24,697 which is recorded as a debt discount and will be amortized over the remaining life of the note. EGC may from time to time make loans in an aggregate amount not to exceed the Inventory Revolving Line of Credit against Eligible Inventory (as defined in the Loan and Security Agreement) in an amount up to 50% of finished goods and in an amount up to 20% of raw material, which is capped at $30,000. The revolving interest rates is equal to the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus (a) 2.5% on loans and advances made against eligible accounts and (b) 4.0% on loans made against eligible inventory. The term loan bears interest at a rate of the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus 4.0%. The initial term of the facility is for a period of two years and will automatically renew for an additional one-year period. The Company is required to pay an annual facility fee equal to 0.75% of the total $3,200,000 facility and pays an annualized maintenance fee equal to 2.16% of the total facility. In the event of default, the Company shall pay 10% above the stated rates of interest per the Agreement. The drawdowns are secured by all of the assets of the Company. Due to the terms of the agreement regarding a subjective acceleration clause and a lockbox arrangement, the line of credit is shown as a current liability on the consolidated balance sheets. On September 3, 2014, the Company also entered into a 5-year $600,000 Secured Promissory Note (“EGC Note”) with EGC. In September 2016, the ECG Note was increased to $700,000 with an extended maturity date of September 30, 2021. The amended EGC Note is payable in 60 monthly installments of $11,667. The EGC Note was further amended in October 2017 to increase the note to $800,000 with principal payments of $13,795. The EGC Note bears interest at the prime rate plus 4.0% and is payable monthly, in arrears. In the event of default, the Company shall pay 10% above the stated rates of interest per the Loan and Security Agreement. The EGC Note is secured by all of the assets of the Company. The outstanding balance on the term loan was $758,615 and $653,332 as of January 31, 2018 and 2017, respectively. Additionally, in connection with the Loan and Security Agreement, Carl Wolf, the Company’s Chief Executive Officer, entered into a Guarantee Agreement with EGC, personally guaranteeing all the amounts borrowed on behalf of the Company under the Loan and Security Agreement. |
Note Payable
Note Payable | 12 Months Ended |
Jan. 31, 2018 | |
Debt Disclosure [Abstract] | |
Note Payable | Note 7 – Notes Payable On December 19, 2014, the Company entered into a securities purchase agreement (the “Manatuck Purchase Agreement”) with Manatuck Hill Partners, LLC (“Manatuck”) whereby the Company issued a convertible redeemable debenture (the “Manatuck Debenture”) in favor of Manatuck. The Manatuck Debenture is for $2,000,000 bearing interest at a rate of 14% and matures in February 2016. Upon issuance of the Manatuck Debenture, the Company granted Manatuck 200,000 shares of the Company’s restricted common stock. In April 2015, the maturity date was extended to May 2016 and 30,000 shares of restricted common stock were issued to Manatuck. Based on management’s review, the accounting for debt modification applied. The Company valued the 30,000 shares at the grant date share price of $1.32 and recorded $39,600 to debt discount on the consolidated balance sheet. Upon issuance of the debenture and subsequent extension, a debt discount of $498,350 was recorded for the fees incurred by the buyer as well as the value of the common shares granted to Manatuck. The debt discount will be amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the effective interest method. The amortization of debt discount is included as a component of other expense in the consolidated statements of operations. On October 29, 2015, the note was further amended to extend the maturity date to December 19, 2016. Per the terms of the execution of the extension, the Company was required to purchase the above 230,000 shares issued to Manatuck for a share price of $0.65, a value of $149,500 and incurred an amendment fee of $170,500, both of which were added to the outstanding principal of the debt. In addition, the extension reduced accrued interest by $220,000 and increased the outstanding principal of the debt by $220,000. Based on management’s review, the accounting for debt extinguishment applied. In accordance with the accounting for debt extinguishment, the Company wrote-off the existing debt of $2,000,000, wrote-off the unamortized debt discount of $190,483 and wrote-off the remaining debt issuance costs relating to this note of $19,106. The loss on debt extinguishment of $380,089 on the statement of operations is comprised of the write-off of the remaining debt discount of $190,483, the write-off of the debt issuance costs of $19,106, and the amendment fee of $170,500. In August 2016, the note was further amended to extend the maturity date to September 30, 2017 and also removed the convertible feature of the note. The principal amount of the note was increased to $2,898,523, which is inclusive of accrued interest payable through October 31, 2016. In addition, the Company paid an origination fee of $50,000 on October 31, 2016 which is recorded as a debt discount and will be amortized over the remaining life of the note using the effective interest method. On March 10, 2017, the Company further extended the maturity date to May 1, 2018. The Company paid to Manatuck a cash fee equal to two percent (2%) of the mutually-agreed pro-forma balance payable on account of the note as of March 31, 2017. On January 22, 2018, the Company further extended the maturity date to November 1, 2018. Per the terms of the amended agreement: 1) The Company will pay to Manatuck a cash fee equal to two percent (2%) of the mutually-agreed pro-forma balance payable on account of the note as of January 31, 2018, which shall include all interest which would be accrued on the note through January 31, 2018; 2) The Company shall make monthly principal payments to Manatuck of $100,000. Based on management’s review of the amended agreement and extension, the accounting for debt modification applied. The Company accrued the 2% fee totaling $52,236 which is recorded as a debt discount and will be amortized over the remaining life of the note using the effective interest method. There was unamortized debt discount of $84,841 and $48,094 as of January 31, 2018 and 2017, respectively. The outstanding principal net of debt discount at January 31, 2018 and 2017 was $1,403,082 and $2,700,725, respectively. On April 29, 2015, the Company entered into a note payable with a bank for $250,000, which was used to pay down and replace a prior note payable. The note bears interest at 3.75%, with interest being due monthly. The note is due in full on the maturity date of April 1, 2019. The note is fully guaranteed by the Company’s Chief Executive Officer. Future maturities of all debt (including debt discussed above in Notes 5, 6 and 7) are as follows: For the Years Ending January 31, 2019 $ 4,198,784 2020 483,758 2021 658,051 2022 136,852 2023 148,579 Thereafter 124,093 $ 5,750,117 |
Concentrations
Concentrations | 12 Months Ended |
Jan. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 8 - Concentrations Revenues During the year ended January 31, 2018, the Company earned revenues from two customers representing approximately 40% and 10% of gross sales. During the year ended January 31, 2017, the Company earned revenues from two customers representing approximately 28% and 13% of gross sales. As of January 31, 2018, these two customers represented approximately 43% and 15% of total gross outstanding receivables, respectively. As of January 31, 2017, these two customers represented approximately 44% and 12% of total gross outstanding receivables, respectively. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Jan. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 9 - Stockholders’ Deficit Common Stock On July 27, 2017, (the effective date), 23,400 shares of the Company’s Series A Preferred Stock were automatically converted into approximately 3,466,667 shares of the Company’s Common Stock. Pursuant to the terms of the Certificate of Designation, the automatic conversion occurred on June 27, 2017 following the volume weighted average price of the Common Stock during any ten consecutive trading days remaining at least $1.0125. The conversion became effective on July 27, 2017. During the years ended January 31, 2018, the Company issued 90,717 shares of its common stock to the holders of the Series A Preferred stockholders for the dividends in arrears totaling $91,565. During the years ended January 31, 2017, the Company issued 509,894 shares of its common stock to the holders of the Series A Preferred stockholders for the dividends in arrears totaling $271,914. During the year ended January 31, 2018, the Company issued 225,882 shares of its common stock to employees and consultants for services rendered of $255,500. During the year ended January 31, 2017, the Company issued 793,307 shares of its common stock to employees and consultants for services rendered of $470,500. Treasury Stock As discussed in Note 7, upon amendment of the Manatuck Debenture on October 29, 2015, the Company repurchased the 230,000 shares for an aggregate purchase price of $149,500 which is presented as Treasury Stock on the consolidated balance sheets. (C) Options The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – January 31, 2016 496,404 $ 1.04 Exercisable – January 31, 2016 496,404 $ 1.04 Granted 385,000 $ 0.46 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – January 31, 2017 881,404 $ 0.78 Exercisable – January 31, 2017 799,404 $ 0.78 Granted 239,000 $ 1.21 Exercised - $ - Forfeited/Cancelled (254,404 ) $ 1.05 Outstanding – January 31, 2018 866,000 $ 0.87 Exercisable – January 31, 2018 699,000 $ 0.78 Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.39 – 2.97 866,000 2.42 years $ 0.87 699,000 $ 0.78 At January 31, 2018 the total intrinsic value of options outstanding and exercisable was $562,290 and $498,827, respectively. For the years ended January 31, 2018 and 2017, the Company recognized share-based compensation related to options of an aggregate of $172,740 and $127,700, respectively. At January 31, 2018, unrecognized share-based compensation was $135,614. (D) Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – January 31, 2016 4,915,865 $ 1.05 Exercisable – January 31, 2017 2,510,000 $ 1.50 Granted 2,510,000 1.50 Exercised - - Forfeited/Cancelled - - Outstanding – January 31, 2017 7,425,865 $ 1.06 Exercisable – January 31, 2017 7,425,865 $ 1.06 Granted - $ - Exercised (364,466 ) $ - Forfeited/Cancelled - $ - Outstanding – January 31, 2018 7,061,399 $ 1.06 Exercisable – January 31, 2018 7,061,399 $ 1.06 Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.68 – 2.50 7,061,399 2.54 years $ 1.06 7,061,399 $ 1.06 At January 31, 2018, the total intrinsic value of warrants outstanding and exercisable was $3,020,483 and $3,020,483, respectively. During the year ended January 31, 2018, 364,466 warrants were exercised by the warrant holders on a cashless basis. The Company issued 159,454 shares of common stock as a result of this exercise. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies Litigations, Claims and Assessments From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. Licensing and Royalty Agreements On March 1, 2010, the Company was assigned a Development and License agreement (the “Agreement”). Under the terms of the Agreement the Licensor shall develop for the Company a line of beef meatballs with sauce, turkey meatballs with sauce and other similar meats and sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and collectively the “Licensor Products”). Licensor shall work with Licensee to develop Licensor Products that are acceptable to Licensee. Upon acceptance of a Licensor Product by Licensee, Licensor’s trade secret recipes, formulas methods and ingredients for the preparation and production of such Licensor Products (the “Recipes”) shall be subject to this Development and License Agreement. The term of the Agreement (the “Term”) shall consist of the Exclusive Term and the Non-Exclusive Term. The 12-month period beginning on each January 1 and ending on each December 31 is referred to herein as an “Agreement Year”. The Exclusive Term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date, unless terminated or extended as provided herein. Licensor, at its option, may terminate the Exclusive Term by notice in writing to Licensee, delivered between the 60th and the 90th day following the end of any Agreement Year if, on or before the 60th day following the end of such Agreement Year, Licensee has not paid Licensor Royalties with respect to such Agreement Year at least equal to the minimum royalty (the “Minimum Royalty”) for such Agreement Year. Subject to the foregoing sentence, and provided Licensee has not breached this Agreement and failed to cure such breach in accordance herewith, Licensee may extend the Exclusive Term for an additional twenty-five (25) years, by notice in writing to Licensor, delivered on or before the 50th anniversary of the Effective Date. The Non-Exclusive Term begins upon expiration of the Exclusive Term and continues indefinitely thereafter, until terminated by Licensor due to a material breach hereof by Licensee that remains uncured after notice and opportunity to cure in accordance herewith, or until terminated by Licensee. Either party may terminate this Agreement in the event that the other party materially breaches its obligations and fails to cure such material breach within ninety (60) days following written notice from the non-breaching party specifying the nature of the breach. The following termination rights are in addition to the termination rights provided elsewhere in the agreement. ● Termination by Licensee - Licensee shall have the right to terminate this Agreement at any time on ninety (60) days written notice to Licensor. In such event, all moneys paid to Licensor shall be deemed non-refundable. Under the terms of the Agreement the Company is required to pay quarterly royalty fees as follows: During the Exclusive Term and the Non-Exclusive Term the Company will pay a royalty equal to the royalty rate (the “Royalty Rate”), multiplied by Company’s “Net Sales”. As used herein, “Net Sales” means gross invoiced sales of Products, directly or indirectly to unrelated third parties, less (a) discounts (including cash discounts), and retroactive price reductions or allowances actually allowed or granted from the billed amount (collectively “Discounts”); (b) credits, rebates, and allowances actually granted upon claims, rejections or returns, including recalls (voluntary or otherwise) (collectively, “Credits”); (c) freight, postage, shipping and insurance charges; (d) taxes, duties or other governmental charges levied on or measured by the billing amount, when included in billing, as adjusted for rebates and refunds; and (e) provisions for uncollectible accounts determined in accordance with reasonable accounting methods, consistently applied. The Royalty Rate shall be: 6% of net sales up to $500,000 of net sales for each Agreement year; 4% of Net Sales from $500,000 up to $2,500,000 of Net Sales for each Agreement year; 2% of Net Sales from $2,500,000 up to $20,000,000 of Net Sales for each Agreement year; and 1% of Net Sales in excess of $20,000,000 of Net Sales for each Agreement year. In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: Agreement Year Minimum Royalty to be Paid with Respect to Such Agreement Year 1 st nd $ - 3 rd th $ 50,000 5 th th $ 75,000 8 th th $ 100,000 10 th $ 125,000 The Company incurred $429,934 and $304,157 of royalty expenses for the years ended January 31, 2018 and 2017. Royalty expenses are included in general and administrative expenses on the consolidated statement of operations. Agreements with Placement Agents and Finders (A) April 1, 2015 The Company entered into a fourth Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective April 1, 2015 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, the Company shall pay to Spartan a non-refundable monthly fee of $10,000 through October 1, 2015. The monthly fee shall survive any termination of the Agreement. Additionally, (i) if at least $4,000,000 is raised in the Financing, the Company shall pay to Spartan a non-refundable fee of $5,000 per month from November 1, 2015 through October 2017; and (ii) if at least $5,000,000 is raised in the Financing, the Company shall pay to Spartan a non-refundable fee of $5,000 per month from November 1, 2017 through October 2019. If $10,000,000 or more is raised in the Financing, the Company shall issue to Spartan shares of its common stock having an aggregate value of $5,000 (as determined by reference to the average volume weighted average trading price for the last five trading days of the immediately preceding month) on the first day of each month during the period from November 1, 2015 through October 1, 2019. The Company upon closing of the Financing shall pay consideration to Spartan, in cash, a fee in an amount equal to 10% of the aggregate gross proceeds raised in the Financing and 3% of the aggregate gross proceeds raised in the Financing for expenses incurred by Spartan. The Company shall grant and deliver to Spartan at the closing of the Financing, for nominal consideration, five-year warrants to purchase a number of shares of the Company’s common stock equal to 10% of the number of shares of common stock (and/or shares of common stock issuable upon exercise of securities or upon conversion or exchange of convertible or exchangeable securities) sold at such closing. The warrants shall be exercisable at any time during the five-year period commencing on the closing to which they relate at an exercise price equal to the purchase price per share of common stock paid by investors in the Financing or, in the case of exercisable, convertible, or exchangeable securities, the exercise, conversion or exchange price thereof. If the Financing is consummated by means of more than one closing, Spartan shall be entitled to the fees provided herein with respect to each such closing. During the year ended January 31, 2017, the Company paid to Spartan a one-time engagement fee of $10,000. In connection with the Initial Closing, the Company agreed to pay an aggregate cash fee and non-accountable allowance of $157,300. The Company also granted warrants to purchase 364,466 shares of common stock at $0.675 per share. The warrants have a grant date fair value of $241,769 which is treated as a direct cost of the Financing and has been recorded as a reduction in additional paid in capital. In connection with the Initial Closing, the Company granted warrants to purchase 80,000 shares of common stock at $1.00 per share. Spartan exercised 364,466 warrants during the year ended January 31, 2018. During the years ended January 31, 2018 and 2017, no payments were made to Spartan. Operating Lease The Company has a lease for office, manufacturing, and warehouse space in East Rutherford, NJ. The lease expires on March 31, 2024, with a 5-year renewal option. The Company leases additional office space in East Rutherford, NJ. This lease is for a 51-month term expiring on March 31, 2019 with annual payments of $18,847. Rent expense for the years ended January 31, 2018 and 2017 was $297,339 and $256,681, respectively. Total future minimum payments required under the lease as of January 31, 2018 are as follows: Years Ending January 31, 2019 $ 210,809 2020 201,599 2021 199,757 2022 209,846 2023 211,864 Thereafter 247,174 Total $ 1,281,049 |
Income Tax Provision (Benefit)
Income Tax Provision (Benefit) | 12 Months Ended |
Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision (Benefit) | Note 11 - Income Tax Provision (Benefit) The income tax provision (benefit) consists of the following: January 31, 2018 January 31, 2017 Federal Current $ - $ - Deferred (2,188,418 ) (105,137 ) State and Local Current Deferred - (106,002 ) Change in valuation allowance 2,188,418 211,139 Income tax provision (benefit) $ - $ - On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Bill”) was signed into law. Prior to the enactment of the Tax Reform Bill, the Company measured its deferred tax assets at the federal rate of 34%. The Tax Reform Bill reduced the federal tax rate to 21% resulting in the re-measurement of the deferred tax asset as of January 31, 2018. Beginning January 1, 2018, the lower tax rate of 21% will be used to calculate the amount of any federal income tax due on taxable income earned during 2019. The Company has U.S. federal net operating loss carryovers (NOLs) of approximately $11.1 million and $11.1 million at January 31, 2018 and 2017, respectively, available to offset taxable income through 2034. If not used, these NOLs may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50% ownership change as determined under the regulations. The Company plans on undertaking a detailed analysis of any historical and/or current Section 382 ownership changes that may limit the utilization of the net operating loss carryovers. The Company also has New Jersey State Net Operating Loss carry overs of $10.9 million and $10.9 million at January 31, 2018 and 2017, respectively, available to offset future taxable income through 2035. 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. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended January 31, 2018 and 2017, the change in the valuation allowance was $2,188,418 and $211,139, respectively. 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. 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 carry forward 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. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other expenses – Interest” in the statement of operations. Penalties would be recognized as a component of “General and administrative.” No interest or penalties on unpaid tax were recorded during the years ended January 31, 2018 and 2017, respectively. As of January 31, 2018 and 2017, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next year. The Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: Deferred Tax Assets Year Ended January 31, 2018 Year Ended January 31, 2017 Net operating loss carryovers $ 3,252,384 $ 5,456,947 Total deferred tax assets 3,252,384 5,456,947 Valuation allowance (3,183,275 ) (5,371,693 ) Deferred tax asset, net of valuation allowance 69,109 85,254 Deferred Tax Liabilities Other deferred tax liabilities (69,109 ) (85,254 ) Total deferred tax liabilities $ (69,109 ) $ (85,254 ) Net deferred tax asset (liability) $ - $ - The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: Year Ended January 31, 2018 Year Ended January 31, 2017 US Federal statutory rate (21.00 )% (34.00 )% State income tax, net of federal benefit (5.94 ) (5.94 ) Deferred tax true-up Change in valuation allowance 27.03 40.03 Other permanent differences (0.09 ) (0.09 ) Income tax provision (benefit) - % - % |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 – Subsequent Events The Company has evaluated subsequent events through the date the financial statements were available to be issued. Based on this evaluation, the Company has identified the following reportable subsequent events other than those disclosed elsewhere in these financials. In May 2018, the Company entered into a sales leaseback agreement for equipment with a third-party lender. The agreement has a 4-year lease period and a 15% residual buy back option at the end of the term. The total equipment cost under the agreement was $213,250. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for doubtful accounts, inventory obsolescence and the fair value of share-based payments. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company operates in an industry that is subject to intense competition and change in consumer demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure. The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the grocery industry, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices pertaining to food and beverages in connection with the Company’s distribution of the product. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis. |
Cash | Cash The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company held no cash equivalents at January 31, 2018 and 2017. 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. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts. As of January 31, 2018 and 2017, the Company had reserves of $2,000. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at January 31, 2018 and 2017: January 31, 2018 January 31, 2017 Raw Materials $ 486,917 $ 374,000 Work in Process 21,387 - Finished goods 315,972 432,623 $ 824,276 $ 806,623 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: Machinery and equipment 2-7 years Furniture and fixtures 3 years Leasehold improvements * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. |
Research and Development | Research and Development Research and development is expensed as incurred. Research and development expenses for the years ended January 31, 2018 and 2017 were $138,000 and $153,296, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as general and administrative expenses. |
Revenue Recognition | Revenue Recognition The Company records revenue for products when all of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product is delivered, (3) the sales price to the customer is fixed or determinable, and (4) collectability of the related customer receivable is reasonably assured. There is no stated right of return for products. The Company meets these criteria upon shipment. Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows: Year Ended Ended January 31, 2018 Year Ended Ended January 31, 2017 Gross Sales $ 28,004,078 $ 18,498,142 Less: Slotting, Discounts, Allowances 460,743 449,350 Net Sales $ 27,543,335 $ 18,048,792 |
Cost of Sales | Cost of Sales Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight, packaging, and print production costs. |
Advertising | Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the years January 31, 2018 and 2017 were $1,773,939 and $1,607,581, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” Equity Based Payments to Non-Employees The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the years ended January 31, 2018 and 2017, share-based compensation amounted to $428,240 and $598,200, respectively. For the years ended January 31, 2018 and 2017, when computing fair value of share-based payments, the Company has considered the following variables: January 31, 2018 January 31, 2017 Risk-free interest rate 1.60% to 1.99 % 1.25% to 1.90 % Expected life of grants 2.0 – 4.0 years 2.5 years Expected volatility of underlying stock 139% to 177 % 139% to 179 % Dividends 0 % 0 % The expected option term is computed using the “simplified” method as permitted under the provisions of ASC 718-10-S99. The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The expected stock price volatility for the Company’s stock options was estimated using the historical volatilities of the Company’s common stock. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. For the Years Ended January 31, 2018 January 31, 2017 Numerator: Net income (loss) attributable to common stockholders $ 228,175 $ (506,001 ) Effect of dilutive securities: — — Diluted net income $ 228,175 $ (506,001 ) Denominator: Weighted average common shares outstanding - basic 29,811,521 27,100,316 Dilutive securities (a): Series A Preferred - - Options 350,694 - Warrants 1,974,648 - Weighted average common shares outstanding and assumed conversion – diluted 32,205,577 27,100,316 Basic net income (loss) per common share $ 0.01 $ (0.02 ) Diluted net income (loss) per common share $ 0.01 $ (0.02 ) (a) - Anti-dilutive securities excluded: 3,041,001 11,659,841 |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “ Income Taxes FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a 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. There were no unrecognized tax benefits as of January 31, 2018. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at January 31, 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is no longer subject to tax examinations by tax authorities for years prior to 2015. |
Related Parties | Related Parties The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2015, the FASB issued the ASU No. 2015-11 “ Inventory (Topic 330) Simplifying the Measurement of Inventory” . In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” In April 2016, the FASB issued ASU No. 2016-09, “ Compensation – Stock Compensation (Topic 718) In April 2016, the FASB issued ASU No. 2016-10, “ Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (Topic 606) Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross verses Net) (Topic 606) In May 2016, the FASB issued ASU No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230)” In May 2017, the FASB issued ASU 2017-09, “ Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” In July 2017, the FASB issued ASU 2017-11, “ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” Distinguishing Liabilities from Equity In September 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying consolidated financial statements. |
Subsequent Events | Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Inventories | Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) valuation method. Inventory was comprised of the following at January 31, 2018 and 2017: January 31, 2018 January 31, 2017 Raw Materials $ 486,917 $ 374,000 Work in Process 21,387 - Finished goods 315,972 432,623 $ 824,276 $ 806,623 |
Schedule of Property and Equipment Estimated Useful Lives | Asset lives for financial statement reporting of depreciation are: Machinery and equipment 2-7 years Furniture and fixtures 3 years Leasehold improvements * (*) Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. |
Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues | Expenses such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows: Year Ended Ended January 31, 2018 Year Ended Ended January 31, 2017 Gross Sales $ 28,004,078 $ 18,498,142 Less: Slotting, Discounts, Allowances 460,743 449,350 Net Sales $ 27,543,335 $ 18,048,792 |
Schedule of Fair Value of Share-Based Payments | For the years ended January 31, 2018 and 2017, when computing fair value of share-based payments, the Company has considered the following variables: January 31, 2018 January 31, 2017 Risk-free interest rate 1.60% to 1.99 % 1.25% to 1.90 % Expected life of grants 2.0 – 4.0 years 2.5 years Expected volatility of underlying stock 139% to 177 % 139% to 179 % Dividends 0 % 0 % |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) attributable to common stockholders per common share. For the Years Ended January 31, 2018 January 31, 2017 Numerator: Net income (loss) attributable to common stockholders $ 228,175 $ (506,001 ) Effect of dilutive securities: — — Diluted net income $ 228,175 $ (506,001 ) Denominator: Weighted average common shares outstanding - basic 29,811,521 27,100,316 Dilutive securities (a): Series A Preferred - - Options 350,694 - Warrants 1,974,648 - Weighted average common shares outstanding and assumed conversion – diluted 32,205,577 27,100,316 Basic net income (loss) per common share $ 0.01 $ (0.02 ) Diluted net income (loss) per common share $ 0.01 $ (0.02 ) (a) - Anti-dilutive securities excluded: 3,041,001 11,659,841 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment on January 31, 2018 and January 31, 2017 are as follows: January 31, 2018 January 31, 2017 Machinery and Equipment $ 2,431,589 $ 1,707,004 Furniture and Fixtures 71,969 66,306 Leasehold Improvements 2,071,169 1,326,861 4,574,727 3,100,171 Less: Accumulated Depreciation 2,074,852 1,536,790 $ 2,499,875 $ 1,563,381 |
Loan and Security Agreement (Ta
Loan and Security Agreement (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit | The facility consists of the following: ● Accounts Revolving Line of Credit: $ 2,150,000 ● Inventory Revolving Line of Credit: $ 350,000 ● Term Loan: $ 800,000 |
Note Payable (Tables)
Note Payable (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Future Maturities of Long Term Debt | Future maturities of all debt (including debt discussed above in Notes 5, 6 and 7) are as follows: For the Years Ending January 31, 2019 $ 4,198,784 2020 483,758 2021 658,051 2022 136,852 2023 148,579 Thereafter 124,093 $ 5,750,117 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Equity [Abstract] | |
Summary of Option Activity | The following is a summary of the Company’s option activity: Options Weighted Average Exercise Price Outstanding – January 31, 2016 496,404 $ 1.04 Exercisable – January 31, 2016 496,404 $ 1.04 Granted 385,000 $ 0.46 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – January 31, 2017 881,404 $ 0.78 Exercisable – January 31, 2017 799,404 $ 0.78 Granted 239,000 $ 1.21 Exercised - $ - Forfeited/Cancelled (254,404 ) $ 1.05 Outstanding – January 31, 2018 866,000 $ 0.87 Exercisable – January 31, 2018 699,000 $ 0.78 |
Summary of Option Outstanding and Exercisable | Options Outstanding Options Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.39 – 2.97 866,000 2.42 years $ 0.87 699,000 $ 0.78 |
Schedule of Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – January 31, 2016 4,915,865 $ 1.05 Exercisable – January 31, 2017 2,510,000 $ 1.50 Granted 2,510,000 1.50 Exercised - - Forfeited/Cancelled - - Outstanding – January 31, 2017 7,425,865 $ 1.06 Exercisable – January 31, 2017 7,425,865 $ 1.06 Granted - $ - Exercised (364,466 ) $ - Forfeited/Cancelled - $ - Outstanding – January 31, 2018 7,061,399 $ 1.06 Exercisable – January 31, 2018 7,061,399 $ 1.06 |
Schedule of Warrants Outstanding and Exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.68 – 2.50 7,061,399 2.54 years $ 1.06 7,061,399 $ 1.06 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Royalty Minimum Payment by Preceding Agreement Year | In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: Agreement Year Minimum Royalty to be Paid with Respect to Such Agreement Year 1 st nd $ - 3 rd th $ 50,000 5 th th $ 75,000 8 th th $ 100,000 10 th $ 125,000 |
Schedule of Future Minimum Payments Under Operating Leases | Total future minimum payments required under the lease as of January 31, 2018 are as follows: Years Ending January 31, 2019 $ 210,809 2020 201,599 2021 199,757 2022 209,846 2023 211,864 Thereafter 247,174 Total $ 1,281,049 |
Income Tax Provision (Benefit)
Income Tax Provision (Benefit) (Tables) | 12 Months Ended |
Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision (benefit) consists of the following: January 31, 2018 January 31, 2017 Federal Current $ - $ - Deferred (2,188,418 ) (105,137 ) State and Local Current Deferred - (106,002 ) Change in valuation allowance 2,188,418 211,139 Income tax provision (benefit) $ - $ - |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following: Deferred Tax Assets Year Ended January 31, 2018 Year Ended January 31, 2017 Net operating loss carryovers $ 3,252,384 $ 5,456,947 Total deferred tax assets 3,252,384 5,456,947 Valuation allowance (3,183,275 ) (5,371,693 ) Deferred tax asset, net of valuation allowance 69,109 85,254 Deferred Tax Liabilities Other deferred tax liabilities (69,109 ) (85,254 ) Total deferred tax liabilities $ (69,109 ) $ (85,254 ) Net deferred tax asset (liability) $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: Year Ended January 31, 2018 Year Ended January 31, 2017 US Federal statutory rate (21.00 )% (34.00 )% State income tax, net of federal benefit (5.94 ) (5.94 ) Deferred tax true-up Change in valuation allowance 27.03 40.03 Other permanent differences (0.09 ) (0.09 ) Income tax provision (benefit) - % - % |
Nature of Operations and Basi27
Nature of Operations and Basis of Presentation (Details Narrative) | Jan. 31, 2018USD ($) |
Joseph Epstein Food Enterprises, Inc., [Member] | |
Due to related party | $ 250,000 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Accounting Policies [Abstract] | ||
Cash equivalents | ||
Accounts receivable reserves | 2,000 | 2,000 |
Research and development expense | 138,000 | 153,296 |
Advertising expenses | 1,773,939 | 1,607,581 |
Share-based compensation | $ 428,240 | $ 598,200 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Schedule of Inventories (Details) - USD ($) | Jan. 31, 2018 | Jan. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 486,917 | $ 374,000 |
Work in Process | 21,387 | |
Finished goods | 315,972 | 432,623 |
Inventory | $ 824,276 | $ 806,623 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended | |
Jan. 31, 2018 | ||
Furniture and Fixtures [Member] | ||
Property and equipment estimated useful lives | 3 years | |
Leasehold Improvements [Member] | ||
Property and equipment estimated useful lives | 0 years | [1] |
Minimum [Member] | Machinery and Equipment [Member] | ||
Property and equipment estimated useful lives | 2 years | |
Maximum [Member] | Machinery and Equipment [Member] | ||
Property and equipment estimated useful lives | 7 years | |
[1] | Amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever period is shorter. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Schedule of Expenses of Slotting Fees, Sales Discounts and Allowances are Accounted as Direct Reduction of Revenues (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Accounting Policies [Abstract] | ||
Gross Sales | $ 28,004,078 | $ 18,498,142 |
Less: Slotting, Discounts, Allowances | 460,743 | 449,350 |
Net Sales | $ 27,543,335 | $ 18,048,792 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Fair Value of Share-Based Payments (Details) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Risk-free interest rate, minimum | 1.60% | 1.25% |
Risk-free interest rate, maximum | 1.99% | 1.90% |
Expected life of grants | 2 years 6 months | |
Expected volatility of underlying stock, minimum | 139.00% | 139.00% |
Expected volatility of underlying stock, maximum | 177.00% | 179.00% |
Dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Expected life of grants | 2 years | |
Maximum [Member] | ||
Expected life of grants | 4 years |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Accounting Policies [Abstract] | ||
Net income (loss) attributable to common stockholders | $ 228,175 | $ (506,001) |
Effect of dilutive securities: | ||
Diluted net income | $ 228,175 | $ (506,001) |
Weighted average common shares outstanding - basic | 29,811,521 | 27,100,316 |
Series A Preferred | ||
Options | 350,694 | |
Warrants | 1,974,648 | |
Weighted average common shares outstanding and assumed conversion - diluted | 32,205,577 | 27,100,316 |
Basic net income (loss) per common share | $ 0.01 | $ (0.02) |
Diluted net income (loss) per common share | $ 0.01 | $ (0.02) |
(a) - Anti-dilutive securities excluded: | 3,041,001 | 11,659,841 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 538,322 | $ 441,585 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jan. 31, 2018 | Jan. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Machinery and Equipment | $ 2,431,589 | $ 1,707,004 |
Furniture and Fixtures | 71,969 | 66,306 |
Leasehold Improvements | 2,071,169 | 1,326,861 |
Property plant and equipment, gross | 4,574,727 | 3,100,171 |
Less: Accumulated Depreciation | 2,074,852 | 1,536,790 |
Property, plant and equipment, net | $ 2,499,875 | $ 1,563,381 |
Investment in Meatball Obsess36
Investment in Meatball Obsession, LLC (Details Narrative) - Meatball Obsession, LLC [Member] - USD ($) | Dec. 31, 2011 | Jan. 31, 2018 | Jan. 31, 2017 |
Percentage of equity interest acquired in business combination | 34.62% | ||
Investment in business combination | $ 27,032 | ||
Reduction in investment due to losses in affiliates | $ 0 | ||
Ownership interest percentage | 12.00% | 12.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Oct. 29, 2015 | Apr. 29, 2015 | Aug. 31, 2016 | Jan. 31, 2018 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2016 |
Debt maturity date | Dec. 19, 2016 | Sep. 30, 2017 | |||||
Interest expense related party | $ 47,266 | $ 47,266 | |||||
Notes Payable [Member] | |||||||
Note bears interest rate per annum | 3.75% | ||||||
Debt maturity date | Apr. 1, 2019 | ||||||
Notes Payable [Member] | CEO [Member] | |||||||
Note principal balance amount | $ 117,656 | $ 117,656 | 117,656 | ||||
Notes Payable One [Member] | CEO [Member] | |||||||
Note bears interest rate per annum | 8.00% | 8.00% | |||||
Debt maturity date | Feb. 1, 2020 | ||||||
Note principal balance amount | $ 400,000 | $ 400,000 | 400,000 | ||||
Notes Payable Two [Member] | CEO [Member] | |||||||
Note bears interest rate per annum | 8.00% | 8.00% | |||||
Debt maturity date | Feb. 1, 2020 | ||||||
Note principal balance amount | $ 132,000 | $ 132,000 | 132,000 | ||||
Ownership percentage | 100.00% | 100.00% | |||||
Meatball Obsession, LLC [Member] | |||||||
Revenue from related parties | $ 104,081 | 76,342 | |||||
Due from related party | $ 32,869 | 32,869 | 8,189 | ||||
WWS, Inc [Member] | |||||||
Commission expense | $ 24,000 | $ 24,000 | |||||
CEO [Member] | |||||||
Proceeds from notes payable with related party | $ 125,000 | ||||||
Note bears interest rate per annum | 4.00% | ||||||
Debt maturity date | Dec. 31, 2016 | ||||||
CEO [Member] | Extended Maturity [Member] | |||||||
Debt maturity date | Feb. 28, 2019 |
Loan and Security Agreement (De
Loan and Security Agreement (Details Narrative) - USD ($) | Oct. 29, 2015 | Sep. 03, 2014 | Oct. 31, 2017 | Jul. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2016 | Oct. 31, 2017 | Jan. 31, 2018 | Jan. 31, 2018 | Jan. 31, 2017 |
Line of credit | $ 2,702,390 | $ 2,702,390 | $ 1,363,145 | |||||||
Debt instrument face amount | $ 2,898,523 | |||||||||
Repayments of debt | 146,388 | 126,668 | ||||||||
Debt instrument, increase | $ 220,000 | |||||||||
Extended maturity date | Dec. 19, 2016 | Sep. 30, 2017 | ||||||||
Repayment of secured debt, monthly installment basis | 1,403,082 | 2,700,725 | ||||||||
Amortization of debt discount | $ 63,428 | 28,526 | ||||||||
Loan and Security Agreement [Member] | Entrepreneur Growth Capital LLC [Member] | ||||||||||
Line of credit interest rate description | The revolving interest rates is equal to the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus (a) 2.5% on loans and advances made against eligible accounts and (b) 4.0% on loans made against eligible inventory. The term loan bears interest at a rate of the highest prime rate in effect during each month as generally reported by Citibank, N.A. plus 4.0%. The initial term of the facility is for a period of two years and will automatically renew for an additional one -year period. The Company is required to pay an annual facility fee equal to 0.75% of the total $3,200,000 facility and pays an annualized maintenance fee equal to 2.16% of the total facility. In the event of default, the Company shall pay 10% above the stated rates of interest per the Agreement. The drawdowns are secured by all of the assets of the Company. | |||||||||
Line of credit facility annualized maintenance fee | $ 3,200,000 | |||||||||
Line of credit annual facility percentage | 0.75% | 0.75% | ||||||||
Line of credit fee percentage | 2.16% | |||||||||
Line of credit default stated rates of interest | 10.00% | |||||||||
Entrepreneur Growth Capital, LLC [Member] | ||||||||||
Line of credit aggregate value | $ 3,200,000 | |||||||||
Debt instrument face amount | $ 300,000 | |||||||||
Repayments of debt | $ 50,000 | |||||||||
Percentage of accounts revolving line of credit maximum | 85.00% | |||||||||
Percentage of finished goods amount | 50.00% | |||||||||
Percentage of raw material amount | 20.00% | |||||||||
Raw material capped | $ 30,000 | |||||||||
Amortization of debt discount | 24,697 | |||||||||
Entrepreneur Growth Capital LLC [Member] | Secured Promissory Note [Member] | ||||||||||
Line of credit aggregate value | $ 600,000 | |||||||||
Line of credit interest rate description | The EGC Note bears interest at the prime rate plus 4.0% and is payable monthly, in arrears. In the event of default, the Company shall pay 10% above the stated rates of interest per the Loan and Security Agreement. | |||||||||
Line of credit default stated rates of interest | 10.00% | |||||||||
Term of loan | 5 years | |||||||||
Debt instrument, increase | $ 800,000 | $ 700,000 | ||||||||
Extended maturity date | Sep. 30, 2021 | |||||||||
Repayment of secured debt, monthly installment basis | $ 11,667 | $ 13,795 | ||||||||
Term loan outstanding | $ 758,615 | $ 758,615 | $ 653,332 | |||||||
Maximum [Member] | Entrepreneur Growth Capital, LLC [Member] | ||||||||||
Line of credit | $ 2,500,000 |
Loan and Security Agreement - S
Loan and Security Agreement - Schedule of Line of Credit (Details) | Sep. 03, 2014USD ($) |
Accounts Revolving Line of Credit [Member] | |
Line of credit facility | $ 2,150,000 |
Inventory Revolving Line of Credit [Member] | |
Line of credit facility | 350,000 |
Term Loan [Member] | |
Line of credit facility | $ 800,000 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | Jan. 22, 2018 | Mar. 31, 2017 | Mar. 10, 2017 | Jan. 31, 2017 | Oct. 29, 2015 | Apr. 29, 2015 | Dec. 19, 2014 | Aug. 31, 2016 | Apr. 30, 2015 | Jan. 31, 2018 | Jan. 31, 2017 |
Debt discount | $ 63,428 | $ 28,526 | |||||||||
Debt maturity date | Dec. 19, 2016 | Sep. 30, 2017 | |||||||||
Sale of stock during period | 230,000 | ||||||||||
Sale of stock price per share | $ 0.65 | ||||||||||
Sale of stock during period, value | $ 149,500 | ||||||||||
Amendment fee | 170,500 | 170,500 | |||||||||
Accrued interest | 220,000 | ||||||||||
Increased in outstanding principal of debt | 220,000 | ||||||||||
Debt extinguishment | 2,000,000 | ||||||||||
Unamortized debt discount | 190,483 | ||||||||||
Debt issuance cost | $ 19,106 | 19,106 | |||||||||
Loss on debt extinguishment | 380,089 | ||||||||||
Remaining debt discount | 190,483 | ||||||||||
Outstanding principal debt | $ 2,898,523 | ||||||||||
Origination fees | $ 50,000 | ||||||||||
Accrued fee percentage | 2.00% | ||||||||||
Debt instrument, periodic payment | 1,403,082 | 2,700,725 | |||||||||
Debt fee | 52,236 | ||||||||||
Unamortized debt discount, net | $ 48,094 | 84,841 | 48,094 | ||||||||
Repayable of note payable | $ 1,350,000 | $ 486,279 | |||||||||
Notes Payable [Member] | |||||||||||
Convertible debt, interest rate percentage | 3.75% | ||||||||||
Debt maturity date | Apr. 1, 2019 | ||||||||||
Repayable of note payable | $ 250,000 | ||||||||||
Manatuck Purchase Agreement [Member] | |||||||||||
Debt maturity month year | November 1, 2018 | May 1, 2018 | |||||||||
Debt instrument, description | The Company will pay to Manatuck a cash fee equal to two percent (2%) of the mutually-agreed pro-forma balance payable on account of the note as of January 31, 2018, which shall include all interest which would be accrued on the note through January 31, 2018 | The Company paid to Manatuck a cash fee equal to two percent (2%) of the mutually-agreed pro-forma balance payable on account of the note as of March 31, 2017 | |||||||||
Debt instrument, periodic payment | $ 100,000 | ||||||||||
Manatuck Purchase Agreement [Member] | Manatuck Hill Partners, LLC [Member] | |||||||||||
Convertible debenture | $ 2,000,000 | ||||||||||
Convertible debt, interest rate percentage | 14.00% | ||||||||||
Debt maturity month year | February 2,016 | ||||||||||
Number of restricted common stock granted, shares | 200,000 | 30,000 | 30,000 | ||||||||
Debt maturity extended month year | May 2,016 | ||||||||||
Common stock price per shares | $ 1.32 | ||||||||||
Debt discount | $ 498,350 | $ 39,600 |
Note Payable - Schedule of Futu
Note Payable - Schedule of Future Maturities of Long Term Debt (Details) | Jan. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 4,198,784 |
2,020 | 483,758 |
2,021 | 658,051 |
2,022 | 136,852 |
2,023 | 148,579 |
Thereafter | 124,093 |
Future maturities of long term debt total | $ 5,750,117 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Sales Revenue [Member] | Customer A [Member] | ||
Concentrations of risk percentage | 40.00% | 28.00% |
Sales Revenue [Member] | Customer B [Member] | ||
Concentrations of risk percentage | 10.00% | 13.00% |
Accounts Receivable [Member] | Customer A [Member] | ||
Concentrations of risk percentage | 43.00% | 44.00% |
Accounts Receivable [Member] | Customer B [Member] | ||
Concentrations of risk percentage | 15.00% | 12.00% |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jul. 27, 2017 | Oct. 29, 2015 | Jan. 31, 2018 | Jan. 31, 2017 |
Number of preferred stock converted into common stock | 3,466,667 | |||
Series A Preferred dividend issued in common shares, shares | 90,717 | 509,894 | ||
Series A Preferred dividend issued in common shares | $ 91,565 | $ 271,914 | ||
Number of stock issued for employees services | 255,500 | 470,500 | ||
Repurchase of treasury stock, shares | 230,000 | |||
Repurchase of treasury stock | $ 149,500 | |||
Total intrinsic value of options outstanding | 562,290 | |||
Total intrinsic value of options exercisable | 498,827 | |||
Recognized stock options | 172,740 | 127,700 | ||
Unrecognized stock based compensation | 135,614 | |||
Stock Option [Member] | ||||
Recognized stock options | $ 122,320 | |||
Warrant [Member] | ||||
Total intrinsic value of warrants outstanding | 3,020,483 | |||
Total intrinsic value of warrants exercisable | $ 3,020,483 | |||
Number of warrants exercised | 364,466 | |||
Number of shares issued for warrants exercises | 159,454 | |||
Employees and Consultants [Member] | Common Stock One [Member] | ||||
Number of stock issued for employees services , shares | 225,882 | |||
Number of stock issued for employees services | $ 255,500 | |||
Employees and Consultants [Member] | Common Stock Two [Member] | ||||
Number of stock issued for employees services , shares | 793,307 | |||
Number of stock issued for employees services | $ 470,500 | |||
Series A Preferred Stock [Member] | ||||
Number of preferred stock converted into common stock | 23,400 | |||
Common stock price trigger volume weighted average price per share | $ 1.0125 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Option Activity (Details) - $ / shares | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Equity [Abstract] | ||
Options Outstanding, Beginning balance | 881,404 | 496,404 |
Options Exercisable, Beginning balance | 799,404 | 496,404 |
Options, Granted | 239,000 | 385,000 |
Options, Exercised | ||
Options, Forfeited/Cancelled | (254,404) | |
Options Outstanding, Ending balance | 866,000 | 881,404 |
Options Exercisable, Ending balance | 699,000 | 799,404 |
Options Outstanding, Weighted Average Exercise Price, Beginning balance | $ 0.78 | $ 1.04 |
Options Exercisable, Weighted Average Exercise Price, Beginning balance | 0.78 | 1.04 |
Weighted Average Exercise Price, Granted | 1.21 | 0.46 |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited/Cancelled | 1.05 | |
Options Outstanding, Weighted Average Exercise Price, Ending balance | 0.87 | 0.78 |
Options Exercisable, Weighted Average Exercise Price, Ending balance | $ 0.78 | $ 0.78 |
Stockholders' Equity - Summar45
Stockholders' Equity - Summary of Option Outstanding and Exercisable (Details) | 12 Months Ended |
Jan. 31, 2018$ / sharesshares | |
Equity [Abstract] | |
Range of exercise price lower range limit | $ 0.39 |
Range of exercise price upper range limit | $ 2.97 |
Number of Options Outstanding | shares | 866,000 |
Weighted Average Remaining Contractual Life (in years), Options Outstanding | 2 years 5 months 1 day |
Weighted Average Exercise Price, Options Outstanding | $ 0.87 |
Number of Options Exercisable | shares | 699,000 |
Weighted Average Exercise Price, Options Exercisable | $ 0.78 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) - Warrant [Member] | 12 Months Ended |
Jan. 31, 2018$ / sharesshares | |
Warrants Outstanding, Beginning balance | shares | 4,915,865 |
Warrants Exercisable, Beginning balance | shares | 2,510,000 |
Warrants, Granted | shares | 2,510,000 |
Warrants, Exercised | shares | |
Warrants, Forfeited/Cancelled | shares | |
Warrants Outstanding, Ending balance | shares | 7,425,865 |
Warrants Exercisable, Ending balance | shares | 7,061,399 |
Warrants Outstanding, Weighted Average Exercise Price, Beginning balance | $ / shares | $ 1.05 |
Warrants Exercisable, Weighted Average Exercise Price, Beginning balance | $ / shares | 1.50 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | |
Warrants Outstanding, Weighted Average Exercise Price, Ending balance | $ / shares | 1.06 |
Warrants Exercisable, Weighted Average Exercise Price, Ending balance | $ / shares | $ 1.06 |
Stockholders' Equity - Schedu47
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Range of Exercise Price, lower limit | $ 0.68 | |
Range of Exercise Price, upper limit | $ 2.50 | |
Number of Warrants Outstanding | 7,425,865 | 4,915,865 |
Weighted Average Remaining Contractual Life (in Years) | 2 years 6 months 14 days | |
Weighted Average Exercise Price, Warrants Outstanding | $ 1.06 | |
Number of Warrants Exercisable | 7,061,399 | 2,510,000 |
Weighted Average Exercise Price, Warrants Exercisable | $ 1.06 | $ 1.50 |
Commitments and Contingencies48
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Royalty expenses | $ 429,934 | $ 304,157 |
Warrants to purchase shares of common stock | 80,000 | |
Warrants exercise price per share | $ 1 | |
Year 1 [Member] | ||
Percentage of royalty on net sales | 6.00% | |
Royalty revenue | $ 500,000 | |
Year 2 [Member] | ||
Percentage of royalty on net sales | 4.00% | |
Year 2 [Member] | Minimum [Member] | ||
Royalty revenue | $ 500,000 | |
Year 2 [Member] | Maximum [Member] | ||
Royalty revenue | $ 2,500,000 | |
Year 3 [Member] | ||
Percentage of royalty on net sales | 2.00% | |
Year 3 [Member] | Minimum [Member] | ||
Royalty revenue | $ 2,500,000 | |
Year 3 [Member] | Maximum [Member] | ||
Royalty revenue | $ 20,000,000 | |
Year 4 [Member] | ||
Percentage of royalty on net sales | 1.00% | |
Royalty revenue | $ 20,000,000 | |
Spartan Capital Securities, LLC [Member] | ||
Percentage of fee equal to aggregate gross proceeds | 10.00% | |
Percentage of fees equal to aggregate gross proceeds for expenses | 3.00% | |
Percentage of common stock issuable | 10.00% | |
One-time engagement fee | 10,000 | |
Cash fee and non-accountable allowance | $ 157,300 | |
Warrants to purchase shares of common stock | 364,466 | |
Warrants exercise price per share | $ 0.675 | |
Warrants grant date fair value | $ 241,769 | |
Number of warrants exercised during the period | 364,466 | |
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | ||
Nonrefundable monthly fee amount | $ 10,000 | |
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | At least $4,000,000 Raised Financing [Member] | ||
Nonrefundable monthly fee amount | $ 5,000 | |
Nonrefundable monthly fee term | November 1, 2015 through October 2017 | |
Aggregate gross proceeds fee | $ 4,000,000 | |
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | At least $5,000,000 Raised Financing [Member] | ||
Nonrefundable monthly fee amount | $ 5,000 | |
Nonrefundable monthly fee term | November 1, 2017 through October 2019 | |
Aggregate gross proceeds fee | $ 5,000,000 | |
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | $10,000,000 or More Raised Financing [Member] | ||
Nonrefundable monthly fee amount | $ 5,000 | |
Nonrefundable monthly fee term | November 1, 2015 through October 1, 2019 | |
Aggregate gross proceeds fee | $ 10,000,000 | |
Operating Lease [Member] | ||
Operating lease expiration term | 5 years | |
Lease agreement expire date | Mar. 31, 2024 | |
Office Space [Member] | ||
Operating lease expiration term | 51 months | |
Lease agreement expire date | Mar. 31, 2019 | |
Operating lease annual payments | $ 18,847 | |
Rent expense | $ 297,339 | $ 256,681 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Royalty Minimum Payment by Preceding Agreement Year (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Minimum Royalty to be Paid | $ 429,934 | $ 304,157 |
Agreement Year 1st and 2nd [Member] | ||
Minimum Royalty to be Paid | ||
Agreement Year 3rd and 4th [Member] | ||
Minimum Royalty to be Paid | 50,000 | |
Agreement Year 5th, 6th and 7th [Member] | ||
Minimum Royalty to be Paid | 75,000 | |
Agreement Year 8th and 9th [Member] | ||
Minimum Royalty to be Paid | 100,000 | |
Agreement Year 10th and thereafter [Member] | ||
Minimum Royalty to be Paid | $ 125,000 |
Commitments and Contingencies50
Commitments and Contingencies - Schedule of Future Minimum Payments Under Operating Leases (Details) | Jan. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 210,809 |
2,020 | 201,599 |
2,021 | 199,757 |
2,022 | 209,846 |
2,023 | 211,864 |
Thereafter | 247,174 |
Total | $ 1,281,049 |
Income Tax Provision (Benefit51
Income Tax Provision (Benefit) (Details Narrative) - USD ($) | Dec. 22, 2017 | Jan. 31, 2018 | Jan. 31, 2017 |
Deferred tax asste rate | 34.00% | (2100.00%) | (3400.00%) |
Income tax reconciliation description | On December 22, 2017, the Tax Cuts and Jobs Act (the Tax Reform Bill) was signed into law. Prior to the enactment of the Tax Reform Bill, the Company measured its deferred tax assets at the federal rate of 34%. The Tax Reform Bill reduced the federal tax rate to 21% resulting in the re-measurement of the deferred tax asset as of January 31, 2018. Beginning January 1, 2018, the lower tax rate of 21% will be used to calculate the amount of any federal income tax due on taxable income earned during 2019. | ||
Change in valuation allowance | $ 2,188,418 | $ 211,139 | |
Through 2034 [Member] | |||
Net operating loss | 11,100,000 | 11,100,000 | |
Through 2035 [Member] | |||
Net operating loss | $ 10,900,000 | $ 10,900,000 | |
Tax Reform Bill [Member] | |||
Deferred tax asste rate | 21.00% |
Income Tax Provision (Benefit52
Income Tax Provision (Benefit) - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal Current | ||
Federal Deferred | (2,188,418) | (105,137) |
State and Local Deferred | (106,002) | |
Change in valuation allowance | 2,188,418 | 211,139 |
Income tax provision (benefit) |
Income Tax Provision (Benefit53
Income Tax Provision (Benefit) - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jan. 31, 2018 | Jan. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryovers | $ 3,252,384 | $ 5,456,947 |
Total deferred tax assets | 3,252,384 | 5,456,947 |
Valuation allowance | (3,183,275) | 211,139 |
Deferred tax asset, net of valuation allowance | 69,109 | 85,254 |
Other deferred tax liabilities | (69,109) | (85,254) |
Total deferred tax liabilities | (69,109) | (85,254) |
Net deferred tax asset (liability) |
Income Tax Provision (Benefit54
Income Tax Provision (Benefit) - Schedule of Effective Income Tax Rate Reconciliation (Details) | Dec. 22, 2017 | Jan. 31, 2018 | Jan. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
US Federal statutory rate | 34.00% | (2100.00%) | (3400.00%) |
State income tax, net of federal benefit | (594.00%) | (594.00%) | |
Change in valuation allowance | 2703.00% | 4003.00% | |
Other permanent differences | (9.00%) | (9.00%) | |
Income tax provision (benefit) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - Sales Leaseback Agreement [Member] | 1 Months Ended |
May 31, 2018USD ($) | |
Operating lease expiration term | 4 years |
Residual buy back option | 15.00% |
Equipment cost | $ 213,250 |