Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 31, 2021 | Apr. 19, 2021 | Jul. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | MamaMancini's Holdings, Inc. | ||
Entity Central Index Key | 0001520358 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 31, 2021 | ||
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 Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 14,922,636 | ||
Entity Common Stock, Shares Outstanding | 35,608,474 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Current Assets: | ||
Cash | $ 3,190,560 | $ 393,683 |
Accounts receivable, net | 3,973,793 | 3,727,887 |
Inventories | 1,195,211 | 1,246,417 |
Prepaid expenses | 519,887 | 252,268 |
Total current assets | 8,879,451 | 5,620,255 |
Property and equipment, net | 2,963,602 | 2,805,843 |
Intangibles | 87,639 | |
Operating lease right of use assets, net | 1,352,483 | 1,490,794 |
Deferred tax asset, net | 744,973 | |
Deposits | 20,177 | 20,177 |
Total Assets | 14,048,325 | 9,937,069 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 3,707,111 | 3,552,790 |
Term loan | 423,799 | |
Operating lease liability | 147,684 | 126,516 |
Finance leases payable | 190,554 | 105,126 |
Total current liabilities | 4,045,349 | 4,208,231 |
Line of credit - net | 2,997,348 | |
Operating lease liability - net | 1,218,487 | 1,372,349 |
Finance leases payable - net | 474,743 | 315,234 |
Notes payable - related party | 641,844 | |
Total long-term liabilities | 1,693,230 | 5,326,775 |
Total Liabilities | 5,738,579 | 9,535,006 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, value | ||
Common stock, $0.00001 par value; 250,000,000 shares authorized; 35,603,731 and 31,991,241 shares issued and outstanding as of January 31, 2021 and 2020 | 357 | 321 |
Additional paid in capital | 20,535,793 | 16,695,352 |
Accumulated deficit | (12,076,904) | (16,144,110) |
Less: Treasury stock, 230,000 shares at cost, respectively | (149,500) | (149,500) |
Total Stockholders' Equity | 8,309,746 | 402,063 |
Total Liabilities and Stockholders' Equity | 14,048,325 | 9,937,069 |
Series A Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Preferred stock, value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2021 | Jan. 31, 2020 |
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 | 35,603,731 | 31,991,241 |
Common stock, shares outstanding | 35,603,731 | 31,991,241 |
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 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Statement [Abstract] | ||
Sales-net of slotting fees and discounts | $ 40,758,605 | $ 33,750,465 |
Costs of sales | 28,019,296 | 23,766,137 |
Gross profit | 12,739,309 | 9,984,328 |
Operating expenses: | ||
Research and development | 110,713 | 114,626 |
General and administrative | 9,150,748 | 7,786,278 |
Total operating expenses | 9,261,461 | 7,900,904 |
Income from operations | 3,477,848 | 2,083,424 |
Other expenses | ||
Interest | (137,751) | (482,995) |
Amortization of debt discount | (17,864) | (67,735) |
Total other expenses | (155,615) | (550,730) |
Net income before income tax provision | 3,322,233 | 1,532,694 |
Income tax benefit | 744,973 | |
Net income | $ 4,067,206 | $ 1,532,694 |
Net income per common share - basic | $ 0.12 | $ 0.05 |
Net income per common share - diluted | $ 0.12 | $ 0.04 |
Weighted average common shares outstanding - basic | 33,503,208 | 31,949,803 |
Weighted average common shares outstanding - diluted | 34,016,581 | 34,339,256 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jan. 31, 2019 | $ 320 | $ (149,500) | $ 16,547,287 | $ (17,676,804) | $ (1,278,697) | |
Balance, shares at Jan. 31, 2019 | 31,866,241 | (230,000) | ||||
Stock options issued for services | 76,191 | 76,191 | ||||
Common stock issued for services | $ 1 | 71,874 | 71,875 | |||
Common stock issued for services, shares | 125,000 | |||||
Net income | 1,532,694 | 1,532,694 | ||||
Balance at Jan. 31, 2020 | $ 321 | $ (149,500) | 16,695,352 | (16,144,110) | 402,063 | |
Balance, shares at Jan. 31, 2020 | 31,991,241 | (230,000) | ||||
Stock options issued for services | 52,895 | 52,895 | ||||
Common stock issued for exercise of options | 14,400 | 14,400 | ||||
Common stock issued for exercise of options, shares | 24,000 | |||||
Common stock issued for exercise of warrants | $ 36 | 3,773,146 | 3,773,182 | |||
Common stock issued for exercise of warrants, shares | 3,588,490 | |||||
Net income | 4,067,206 | 4,067,206 | ||||
Balance at Jan. 31, 2021 | $ 357 | $ (149,500) | $ 20,535,793 | $ (12,076,904) | $ 8,309,746 | |
Balance, shares at Jan. 31, 2021 | 35,603,731 | (230,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 4,067,206 | $ 1,532,694 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 663,001 | 640,246 |
Amortization of debt discount | 17,864 | 67,735 |
Share-based compensation | 52,895 | 93,862 |
Amortization of right of use assets | 138,311 | 109,036 |
Change in deferred tax asset | (744,973) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (245,906) | (1,077,063) |
Inventories | 51,206 | 101,172 |
Prepaid expenses | (267,619) | (42,886) |
Accounts payable and accrued expenses | 99,249 | 490,858 |
Operating lease liability | (132,694) | (100,965) |
Net Cash Provided by Operating Activities | 3,698,540 | 1,814,689 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for fixed assets | (419,373) | (268,106) |
Cash paid for intangible assets | (32,567) | |
Net Cash Used in Investing Activities | (451,940) | (268,106) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of related party notes payable | (641,844) | |
Repayments of term loan | (441,663) | (2,058,337) |
Proceeds from promissory note | 330,505 | |
Repayment of promissory note | (330,505) | |
Borrowings (repayments) of line of credit, net | (2,997,348) | 385,314 |
Repayment of capital lease obligations | (156,450) | (89,376) |
Proceeds from exercise of options | 14,400 | |
Proceeds from exercise of warrants | 3,773,182 | |
Net Cash Used in Financing Activities | (449,723) | (1,762,399) |
Net Increase (Decrease) in Cash | 2,796,877 | (215,726) |
Cash - Beginning of Period | 393,683 | 609,409 |
Cash - End of Period | 3,190,560 | 393,683 |
SUPPLEMENTARY CASH FLOW INFORMATION: | ||
Income taxes | ||
Interest | 174,735 | 548,894 |
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Operating lease liability | 1,599,830 | |
Finance lease asset additions | 401,387 | 293,479 |
Common stock issued for services to be rendered | 71,875 | |
Acquisition of software via contract liability | $ 55,072 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Jan. 31, 2021 | |
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, chicken parmesan and other similar meats and sauces. In addition, the Company continues to diversify its product line by introducing new products such as ready to serve dinners, single-size Pasta Bowls, bulk deli, packaged refrigerated and frozen products. The Company’s products were submitted to the United States Department of Agriculture (the “USDA”) and approved as all natural. The USDA defines all natural as a product that contains no artificial ingredients, coloring ingredients or chemical preservatives and is minimally processed. The Company’s customers are located throughout the United States, with large concentrations in the Northeast and Southeast. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2021 | |
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 condensed consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions impact, among others, the following: allowance for doubtful accounts, inventory obsolescence and the fair value of share-based payments. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates. 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, 2021 and 2020. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At January 31, 2021, the Company had $3,128,246 in cash balances that exceed federally insured limits. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management. As of January 31, 2021 and January 31, 2020, 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, 2021 and January 31, 2020: January 31, 2021 January 31, 2020 Raw Materials $ 746,013 $ 893,204 Work in Process 88,955 37,764 Finished goods 360,243 315,449 $ 1,195,211 $ 1,246,417 Property and Equipment Property and equipment are recorded at cost net of depreciation. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: 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. Intangible Assets The Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software Additionally, the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred. Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On February 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheet in the amount of $1,599,830 related to the operating lease for office and warehouse space. As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Fair Value of Financial Instruments For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments. Research and Development Research and development is expensed as incurred. Research and development expenses for the years ended January 31, 2021 and 2020 were $110,713 and $114,626, 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 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients The Company adopted this guidance and related amendments as of the first quarter of fiscal 2019, applying the full retrospective transition method. As the underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with the Company’s current business model and practices, the adoption of ASU 2014-09 did not have a material impact on the consolidated financial statements. In addition, the adoption of ASC 606 did not impact the previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings. The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. Under the new revenue guidance, the Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the consolidated statement of operations. The Company promotes its products with advertising, consumer incentives and trade promotions. These programs include discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of a period. The Company derives these estimates principally on historical utilization and redemption rates. The Company does not receive a distinct service in relation to the advertising, consumer incentives and trade promotions. Payment terms in the Company’s invoices are based on the billing schedule established in contracts and purchase orders with customers. The Company recognizes the related trade receivable when the goods are shipped. Expenses such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows: For the Year Ended January 31, 2021 January 31, 2020 (as revised) Gross Sales $ 42,238,702 $ 35,455,541 Less: Slotting, Discounts, Promotions and Allowances 1,480,097 1,705,076 Net Sales $ 40,758,605 $ 33,750,465 Disaggregation of Revenue from Contracts with Customers. For the Year Ended January 31, 2021 January 31, 2020 Northeast $ 13,994,534 $ 11,857,813 Southeast 12,780,368 8,523,577 Midwest 4,870,644 5,024,197 West 5,515,759 5,823,215 Southwest 5,077,397 4,226,739 Total revenue $ 42,238,702 $ 35,455,541 Cost of Sales Cost of sales represents costs directly related to the production and manufacturing of the Company’s products. Costs include product development, freight-in, packaging, and print production costs. Advertising Costs incurred for producing and communicating advertising for the Company are charged to operations as incurred. Producing and communicating advertising expenses for the years ended January 31, 2021 and 2020 were $633,102 and $611,199 respectively. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” “ASC 718” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the condensed consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the years ended January 31, 2021 and 2020, share-based compensation amounted to $52,895 and $93,862, respectively. For the years ended January 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: January 31, 2021 January 31, 2020 Risk-free interest rate 0.00 - 0.49 % 1.52 - 2.29 % Expected life of grants 0.1 - 5.2 years 3 - 3.5 years Expected volatility of underlying stock 43 - 127 % 127 - 150 % 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 attributable to common stockholders per common share. For the Years Ended January 31, 2021 January 31, 2020 Numerator: Net income attributable to common stockholders $ 4,067,206 1,532,694 Effect of dilutive securities: — - Diluted net income $ 4,067,206 $ 1,532,694 Denominator: Weighted average common shares outstanding - basic 33,503,208 31,949,803 Dilutive securities (a): Series A Preferred - - Options 513,373 397,664 Warrants - 1,991,789 Weighted average common shares outstanding and assumed conversion – diluted 34,016,581 34,339,256 Basic net income per common share $ 0.12 $ 0.05 Diluted net income per common share $ 0.12 $ 0.04 (a) - Anti-dilutive securities excluded: - - Income Taxes Income taxes are provided in accordance with ASC No. 740, “ Accounting for Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of January 31, 2021 and 2020, the Company recognized a deferred tax asset of $744,973 and $0, respectively, which is included in other long-term assets on the consolidated balance sheets. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. The Company is no longer subject to tax examinations by tax authorities for years prior to 2018. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act “NOLs In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to the income tax provision. Related Parties The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Recent Accounting Pronouncements In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. In August 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 - Property and Equipment: Property and equipment on January 31, 2021 and January 31, 2020 are as follows: January 31, 2021 January 31, 2020 Machinery and Equipment $ 3,787,321 $ 3,176,638 Furniture and Fixtures 113,112 89,443 Leasehold Improvements 3,120,273 2,933,865 7,020,706 6,199,946 Less: Accumulated Depreciation 4,057,104 3,394,103 $ 2,963,602 $ 2,805,843 Depreciation expense charged to income for the years ended January 31, 2021 and 2020 amounted to $663,001 and $640,246, respectively. |
Investment in Meatball Obsessio
Investment in Meatball Obsession, LLC | 12 Months Ended |
Jan. 31, 2021 | |
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, 2021 and January 31, 2020, the Company’s ownership interest in MO was 0% and 12%, respectively. As of December 31, 2019, MO had wound down and ceased operations. Major accounts were transitioned to the Company as a part of the wind down. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 31, 2021 | |
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, 2021 and 2020, the Company generated approximately $0 and $53,984 in revenues from MO, respectively. As of January 31, 2021 and 2020, the Company had a receivable of $0 and $1,604 due from MO, respectively. WWS, Inc. Alfred D’Agostino and Tom Toto, two directors of the Company, are affiliates of WWS, Inc. For the years ended January 31, 2021 and 2020, the Company recorded $48,000 and $48,000 in commission expense from WWS, Inc. generated sales, respectively. 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 January 2024. As of January 31, 2021 and 2020, the outstanding principal balance of the notes was $0 and $109,844, respectively. The Company received advances from the CEO of the Company which bear interest at 8%. The advances were due on January 2024. At January 31, 2021 and 2020, there was $0 and $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 were due on January 2024. At January 31, 2021 and 2020, there was $0 and $132,000 of principal outstanding, respectively. For the years ended January 31, 2021 and 2020, the Company recorded interest expense of $23,550 and $44,131, respectively, related to the above related party notes payable. At January 31, 2021 and 2020, there was $0 and $2,863, respectively, of accrued interest on the above related party notes. Other Related Party Transactions During the years ended January 31, 2021 and 2020, the Company reimbursed an entity 100% owned by the CEO of the Company for certain investor relation conference expenses totaling $29,503 and $15,722, respectively. During the year ended January 31, 2021, members of the board of directors and officers exercised 940,807 warrants with exercise price of $1 in exchange for 940,807 shares of common stock. |
Loan and Security Agreement
Loan and Security Agreement | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Loan and Security Agreement | Note 6 - Loan and Security Agreement M&T Bank Effective, January 4, 2019, the Company entered into a $2.5 million five-year note with M&T Bank at LIBOR plus four points with repayments in equal payments over 60 months. The new facility is supported by a first priority security interest in all of the Company’s business assets and is further subject to various affirmative and negative financial covenants and a limited Guaranty by the Company’s Chief Executive Officer, Carl Wolf. The Company recorded $89,321 as a debt discount and will be amortized over the remaining life of the note using the effective interest method. There was unamortized debt discount of $0 and $17,864 as of January 31, 2021 and January 31, 2020, respectively. The outstanding balance on the term loan was $0 and $441,663 as of January 31, 2021 and 2020, respectively. Effective, January 4, 2019, the Company has arranged a new $3.5 million working capital line of credit with M&T Bank at LIBOR plus four points with a two-year expiration. On January 29, 2020, the facility was amended to increase the total available balance to $4.0 million as well as extend the maturity date to June 30, 2022. The facility is supported by a first priority security interest in all of the Company’s business assets and is further subject to various affirmative and negative financial covenants and a limited Guaranty by the Company’s Chief Executive Officer, Carl Wolf. Advances under the line of credit are limited to eighty percent (80%) of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration provisions) and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation). All advances under the line of credit are due upon maturity. The outstanding balance on the line of credit was $0 and $2,997,348 as of January 31, 2021 and 2020, respectively. During the year ended January 31, 2021, the Company paid total interest of $78,032 to M&T Bank for the above agreements. |
Promissory Note
Promissory Note | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Promissory Note | Note 7 – Promissory Note On April 21, 2020, the Company entered into a term note with its principal bank, M&T, with a principal amount of $330,505 pursuant to the Paycheck Protection Program (“ PPP Term Note CARES Act |
Leases
Leases | 12 Months Ended |
Jan. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 8 - Leases The Company determines if an arrangement contains a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company’s leases consist of leaseholds on office space, manufacturing space and machinery and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three to five years that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities. Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred. The components of lease expense were as follows: For the Year Ended For the Year Ended January 31, 2021 January 31, 2020 Finance lease Depreciation of assets $ 129,104 $ 100,703 Interest on lease liabilities 36,169 23,130 Operating leases 309,357 257,763 Short-term lease - 7,653 Total net lease cost $ 474,630 $ 389,249 Supplemental balance sheet information related to leases was as follows: January 31, 2021 January 31, 2020 Operating leases: Operating lease ROU assets $ 1,352,483 $ 1,490,794 Current operating lease liabilities, included in current liabilities $ 147,684 $ 126,516 Noncurrent operating lease liabilities, included in long-term liabilities 1,218,487 1,372,349 Total operating lease liabilities $ 1,366,171 $ 1,498,865 Finance leases Property and equipment, at cost $ 951,656 $ 550,269 Accumulated depreciation (260,370 ) (131,266 ) Property and equipment, net $ 691,286 $ 419,003 Current obligations of finance lease liabilities, included in current liabilities $ 190,554 $ 105,126 Finance leases, net of current obligations, included in long-term liabilities 474,743 315,234 Total finance lease liabilities $ 665,297 $ 420,360 Supplemental cash flow and other information related to leases was as follows: For the Year Ended January 31, 2021 For the Year Ended January 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 132,694 $ 100,965 Financing cash flows from finance leases 156,450 92,928 ROU assets obtained in exchange for lease liabilities: Operating leases $ - $ 1,599,830 Finance leases 401,387 293,479 Weighted average remaining lease term (in years): Operating leases 6.8 7.8 Finance leases 3.9 3.6 Weighted average discount rate: Operating leases 6.54 % 6.54 % Finance leases 4.57 % 5.67 % For the Twelve Months Ending January 31, 2022 $ 453,199 2023 422,164 2024 356,370 2025 331,193 2026 243,633 Thereafter 670,902 Total lease payments $ 2,477,461 Less: amounts representing interest (445,992 ) Total lease obligations $ 2,031,469 |
Concentrations
Concentrations | 12 Months Ended |
Jan. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 9 - Concentrations Revenues During the year ended January 31, 2021, the Company earned revenues from two customers representing approximately 41% and 13% of gross sales. As of January 31, 2021, these two customers represented approximately 23% and 14% of total gross outstanding receivables, respectively. During the year ended January 31, 2020, the Company earned revenues from three customers representing approximately 46%, 11% and 10% of gross sales. As of January 31, 2020, these three customers represented approximately 34%, 16% and 8% of total gross outstanding receivables, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Note 10 - Stockholders’ Equity (A) Options The following is a summary of the Company’s option activity: Options Weighted Average Outstanding – January 31, 2019 626,500 $ 0.77 Exercisable – January 31, 2019 521,500 $ 0.71 Granted 265,000 $ 0.53 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – January 31, 2020 891,500 $ 0.77 Exercisable – January 31, 2020 756,500 $ 0.71 Granted 7,500 $ 0.53 Exercised (24,000 ) $ 0.60 Forfeited/Cancelled (6,000 ) $ 0.60 Outstanding – January 31, 2021 869,000 $ 0.70 Exercisable – January 31, 2021 859,000 $ 0.70 Options Outstanding Options Exercisable Exercise Price Number Weighted Weighted Number Weighted $ 0.39 – 1.38 869,000 3.54 $ 0.70 859,000 $ 0.70 At January 31, 2021, the total intrinsic value of options outstanding and exercisable was $1,021,141 and $1,011,853, respectively. During the year ended January 31, 2021, three employees exercised a total of 24,000 options at an exercise price of $0.60 per share for aggregate proceeds of $14,400. During the year ended January 31, 2021, the Company issued to 7,500 options to an employee. The options have an exercise price of $1.16 per share, a term of 5 years, and 2-year vesting. The options have an aggregated fair value of approximately $6,682 that was calculated using the Black-Scholes option-pricing model based on the assumptions discussed above in Note 2. For the years ended January 31, 2021 and 2020, the Company recognized share-based compensation related to options of an aggregate of $52,895 and $76,191, respectively. At January 31, 2021, unrecognized share-based compensation was $1,933. In January 2021, the Company extended all employee options for 5 years and director options that were set to expire in April 2021 for a period of two years to April 2023 using the assumptions in Note 2. (B) Warrants The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – January 31, 2019 6,245,331 $ 1.04 Exercisable – January 31, 2019 6,245,331 $ 1.04 Granted - $ - Exercised - $ - Forfeited/Cancelled (188,667 ) $ 1.57 Outstanding – January 31, 2020 6,056,664 $ 1.00 Exercisable – January 31, 2020 6,056,664 $ 1.00 Granted - $ - Exercised (3,631,733 ) $ 1.09 Forfeited/Cancelled (2,424,931 ) $ 1.39 Outstanding – January 31, 2021 - $ - Exercisable – January 31, 2021 - $ - During the year ended January 31, 2021, warrant holders exercised a total of 3,631,733 warrants and the Company issued 3,588,490 shares of common stock as a result of these exercises and received net proceeds of $3,773,182 which included $87,000 paid to the placement agent. Of the 3,631,733 exercised warrants, 80,000 warrants were exercised on a cashless basis by Spartan Capital and the Company issued 36,757 shares of common stock. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 - Commitments and Contingencies Insurance Claim The Company maintains insurance for both property damage and business interruption relating to catastrophic events, such as fires. Insurance recoveries received for property damage and business interruption in excess of the net book value of damaged assets, clean-up and demolition costs, and post-event costs are recognized as income in the period received or committed when all contingencies associated with the recoveries are resolved. Gains on insurance recoveries related to business interruption are recorded within “Cost of sales” and any gains or losses related to property damage are recorded within Other income (expense) on the consolidated statements of income. On December 7, 2020, the Company experienced a fire at its plant in a spiral oven. The spiral oven was rebuilt and was fully put back into service in late February 2021. The estimated loss is approximately $656,700 which includes loss of business, the rebuild of the spiral oven, additional expenses to clean plant and lost material and packaging. To date, the Company has recorded approximately $110,000 as an offset against labor expenses and $6,817 in raw material and packaging loss. The Company recorded the above $116,817 in prepaid expenses on the consolidated balance sheets. The Company has been reimbursed partially against the property damages for $93,870. The Company is awaiting the approval of the remaining balance of its property losses and business income claim from the insurance carrier. As of the date of these financials, the Company does not have final approved numbers for the loss. Litigation, Claims and Assessments From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. Licensing and Royalty Agreements On March 1, 2010, the Company was assigned a Development and License agreement (the “Agreement”). Under the terms of the Agreement the Licensor shall develop for the Company a line of beef meatballs with sauce, turkey meatballs with sauce and other similar meats and sauces for commercial manufacture, distribution and sale (each a “Licensor Product” and collectively the “Licensor Products”). Licensor shall work with Licensee to develop Licensor Products that are acceptable to Licensee. Upon acceptance of a Licensor Product by Licensee, Licensor’s trade secret recipes, formulas methods and ingredients for the preparation and production of such Licensor Products (the “Recipes”) shall be subject to this Development and License Agreement. The Exclusive Term began on January 1, 2009 (the “Effective Date”) and ends on the 50th anniversary of the Effective Date. The Royalty Rate shall be: 6% of net sales up to $500,000 of net sales for each Agreement year; 4% of Net Sales from $500,000 up to $2,500,000 of Net Sales for each Agreement year; 2% of Net Sales from $2,500,000 up to $20,000,000 of Net Sales for each Agreement year; and 1% of Net Sales in excess of $20,000,000 of Net Sales for each Agreement year. In order to continue the Exclusive term, the Company shall pay a minimum royalty with respect to the preceding Agreement year as follows: Agreement Year Minimum Royalty to be Paid with Respect to Such Agreement Year 1 st nd $ - 3 rd th $ 50,000 5 th th th $ 75,000 8 th th $ 100,000 10 th $ 125,000 The Company incurred $539,801 and $463,540 of royalty expenses for the years ended January 31, 2021 and 2020, respectively. Royalty expenses are included in general and administrative expenses on the condensed consolidated statement of operations. Agreements with Placement Agents and Finders The Company entered into a fourth Financial Advisory and Investment Banking Agreement with Spartan Capital Securities, LLC (“Spartan”) effective April 1, 2015 (the “Spartan Advisory Agreement”). Pursuant to the Spartan Advisory Agreement, 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. If the Company enters into a change of control transaction during the term of the agreement through October 1, 2022, the Company shall pay to Spartan a fee equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction. Advisory Agreements The Company entered into an Advisory Agreement with Spartan effective June 1, 2019 (the “Advisory Agreement”). Pursuant to the agreement, the Company shall pay to Spartan a non-refundable monthly fee of $5,000 over a 21-month period. Additionally, the Company granted Spartan 125,000 shares of common stock which are considered fully-paid and non-assessable upon execution of the agreement. During the term or this Agreement, the Consultant will provide non-exclusive consulting services related to general corporate matters, including, but not limited to (i) advice and input with respect to raising capital and potential M&A transactions, (ii) identifying suitable personal for management and Board positions (iii) developing corporate structure and finance strategies, (iv) assisting the Company with strategic introductions, (v) assisting management with enhancing corporate and shareholder value, and (vi) introducing the Company to potential investors (collectively, the “Advisory Services”). The advisory agreement was terminated according to its terms on March 31, 2020. The Company entered into an Advisory Agreement with B. Riley Securities, Inc. effective September 25, 2020 (the “B. Riley Advisory Agreement”). Pursuant to the agreement, the Company shall pay to B. Riley a non-refundable fee of $175,000 upon delivery of a fairness opinion in the event a transaction has value over $50 million ($125,000 if a transaction has a value less than $50 million). In addition, additional fees may be paid to B. Riley based on the terms of the agreement and transactions consummated. During the term or this Agreement, the Consultant will provide non-exclusive consulting services related to general corporate matters, including, but not limited to (i) advice and input with respect to raising capital and potential M&A transactions, (ii) identifying potential purchasers or targets, (iii) soliciting proposals from purchasers or targets, (iv) assisting the Company with strategic introductions and negotiations, (v) evaluating proposals, and (vi) other financial advisory and investment banking services (collectively, the “B. Riley Advisory Services”). |
Income Tax Provision
Income Tax Provision | 12 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision | Note 12 - Income Tax Provision The income tax provision consists of the following: January 31, 2021 January 31, 2020 Federal Current $ - $ - Deferred (184,085 ) - State and Local Current Deferred (560,888 ) - Income tax benefit $ (744,973 ) $ - 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 $3.8 million and $9.5 million at January 31, 2021 and 2020, 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 $5.2 million and $8.8 million at January 31, 2021 and 2020, 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. For the years ended January 31, 2021 and 2020, the change in the valuation allowance was $(2,177,802) and $675,896, 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, 2021 and 2020, respectively. As of January 31, 2021 and 2020, 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, 2021 Year Ended January 31, 2020 Net operating loss carryovers $ 1,212,466 $ 2,071,751 Share-based compensation - 48,684 Fixed assets - 86,293 Capitalized start-up and organization costs 44,133 566 Right of use liability 571,046 - Other 6,309 41,506 Total deferred tax assets 1,833,954 2,199,550 Valuation allowance - (2,177,802 ) Deferred tax asset, net of valuation allowance 1,833,954 21,748 Deferred Tax Liabilities Fixed assets 708,798 - Right of use asset 380,183 - Other deferred tax liabilities - 21,748 Total deferred tax liabilities $ 1,088,981 $ 21,748 Net deferred tax asset (liability) $ 744,973 $ - The expected tax expense (benefit) based on the statutory rate is reconciled with actual tax expense benefit as follows: Year Ended January 31, 2021 Year Ended January 31, 2020 US Federal statutory rate 21.00 % (21.00 )% State income tax, net of federal benefit 7.11 (8.98 ) True Up 5.78 (0.57 ) Change in valuation allowance (65.55 ) 33.72 Other permanent differences 9.24 (6.10 ) Income tax provision (benefit) (22.42) % - % |
Revision of Prior Year Financia
Revision of Prior Year Financial Statements | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision of Prior Year Financial Statements | Note 13 – Revision of Prior Year Financial Statements The Company identified and recorded a prior period adjustment related to promotion expenses that should have been recorded in the year ended January 31, 2020 as an offset to revenue as discussed in the Company’s revenue recognition policy instead of general and administrative expenses as originally recorded. The adjustment was reflected as a $1,086,982 decrease in Sales net of slotting fees and corresponding decrease in General and administrative expenses. In accordance with the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows: For the year ended January 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 34,837,447 $ (1,086,982 ) $ 33,750,465 Gross profit 11,071,310 (1,086,982 ) 9,984,328 General and administrative expenses 8,873,260 (1,086,982 ) 7,786,278 Operating expenses 8,987,886 (1,086,982 ) 7,900,904 Income from operations 2,083,424 - 2,083,424 Net income $ 1,532,694 $ - $ 1,532,694 Basic and diluted income per share $ 0.05 $ - 0.05 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2021 | |
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 condensed consolidated financial statements include all accounts of the entities as of the reporting period ending date(s) and for the reporting period(s). All inter-company balances and transactions have been eliminated. |
Use of Estimates | 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, 2021 and 2020. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits. At January 31, 2021, the Company had $3,128,246 in cash balances that 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. As of January 31, 2021 and January 31, 2020, 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, 2021 and January 31, 2020: January 31, 2021 January 31, 2020 Raw Materials $ 746,013 $ 893,204 Work in Process 88,955 37,764 Finished goods 360,243 315,449 $ 1,195,211 $ 1,246,417 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost net of depreciation. Depreciation expense is computed using straight-line methods over the estimated useful lives. Asset lives for financial statement reporting of depreciation are: 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. |
Intangible Assets | Intangible Assets The Company accounts for acquired internal-use software licenses and certain costs within the scope of ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software Additionally, the Company evaluates its accounting for fees paid in an agreement to determine whether it includes a license to internal-use software. If the agreement includes a software license, the Company accounts for the software license as an intangible asset. Acquired software licenses are recognized and measured at cost, which includes the present value of the license obligation if the license is to be paid for over time. If the agreement does not include a software license, the Company accounts for the arrangement as a service contract (hosting arrangement) and hosting costs are generally expensed as incurred. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “ Leases” On February 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recognized a right of use (“ROU”) asset and liability in the consolidated balance sheet in the amount of $1,599,830 related to the operating lease for office and warehouse space. As part of the adoption the Company elected the practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1. Not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. 2. Not to apply the recognition requirements in ASC 842 to short-term leases. 3. Not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. |
Fair Value of Financial Instruments | 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, 2021 and 2020 were $110,713 and $114,626, 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 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606)—Narrow-Scope Improvements and Practical Expedients The Company adopted this guidance and related amendments as of the first quarter of fiscal 2019, applying the full retrospective transition method. As the underlying principles of the new standard, relating to the measurement of revenue and the timing of recognition, are closely aligned with the Company’s current business model and practices, the adoption of ASU 2014-09 did not have a material impact on the consolidated financial statements. In addition, the adoption of ASC 606 did not impact the previously reported financial statements in any prior period nor did it result in a cumulative effect adjustment to retained earnings. The Company’s sales predominantly are generated from the sale of finished products to customers, contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are shipped to the customer. Revenues are recognized in an amount that reflects the net consideration the Company expects to receive in exchange for the goods. The Company reports all amounts billed to a customer in a sale transaction as revenue. Under the new revenue guidance, the Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in general and administrative expenses on the consolidated statement of operations. The Company promotes its products with advertising, consumer incentives and trade promotions. These programs include discounts, slotting fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of a period. The Company derives these estimates principally on historical utilization and redemption rates. The Company does not receive a distinct service in relation to the advertising, consumer incentives and trade promotions. Payment terms in the Company’s invoices are based on the billing schedule established in contracts and purchase orders with customers. The Company recognizes the related trade receivable when the goods are shipped. Expenses such as slotting fees, sales discounts, promotions and allowances are accounted for as a direct reduction of revenues as follows: For the Year Ended January 31, 2021 January 31, 2020 (as revised) Gross Sales $ 42,238,702 $ 35,455,541 Less: Slotting, Discounts, Promotions and Allowances 1,480,097 1,705,076 Net Sales $ 40,758,605 $ 33,750,465 Disaggregation of Revenue from Contracts with Customers. For the Year Ended January 31, 2021 January 31, 2020 Northeast $ 13,994,534 $ 11,857,813 Southeast 12,780,368 8,523,577 Midwest 4,870,644 5,024,197 West 5,515,759 5,823,215 Southwest 5,077,397 4,226,739 Total revenue $ 42,238,702 $ 35,455,541 |
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-in, 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 ended January 31, 2021 and 2020 were $633,102 and $611,199 respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718, “ Compensation – Stock Compensation” “ASC 718” The Company recognizes all forms of share-based payments, including stock option grants, warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Stock-based compensation expenses are included in cost of goods sold or selling, general and administrative expenses, depending on the nature of the services provided, in the condensed consolidated statement of operations. Share-based payments issued to placement agents are classified as a direct cost of a stock offering and are recorded as a reduction in additional paid in capital. For the years ended January 31, 2021 and 2020, share-based compensation amounted to $52,895 and $93,862, respectively. For the years ended January 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: January 31, 2021 January 31, 2020 Risk-free interest rate 0.00 - 0.49 % 1.52 - 2.29 % Expected life of grants 0.1 - 5.2 years 3 - 3.5 years Expected volatility of underlying stock 43 - 127 % 127 - 150 % 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 attributable to common stockholders per common share. For the Years Ended January 31, 2021 January 31, 2020 Numerator: Net income attributable to common stockholders $ 4,067,206 1,532,694 Effect of dilutive securities: — - Diluted net income $ 4,067,206 $ 1,532,694 Denominator: Weighted average common shares outstanding - basic 33,503,208 31,949,803 Dilutive securities (a): Series A Preferred - - Options 513,373 397,664 Warrants - 1,991,789 Weighted average common shares outstanding and assumed conversion – diluted 34,016,581 34,339,256 Basic net income per common share $ 0.12 $ 0.05 Diluted net income per common share $ 0.12 $ 0.04 (a) - Anti-dilutive securities excluded: - - |
Income Taxes | Income Taxes Income taxes are provided in accordance with ASC No. 740, “ Accounting for Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of January 31, 2021 and 2020, the Company recognized a deferred tax asset of $744,973 and $0, respectively, which is included in other long-term assets on the consolidated balance sheets. The Company regularly evaluates the need for a valuation allowance related to the deferred tax asset. The Company is no longer subject to tax examinations by tax authorities for years prior to 2018. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“ CARES Act 2017 Tax Act “NOLs In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to the income tax provision. |
Related Parties | 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 October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. In August 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. |
Subsequent Events | 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 Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
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, 2021 and January 31, 2020: January 31, 2021 January 31, 2020 Raw Materials $ 746,013 $ 893,204 Work in Process 88,955 37,764 Finished goods 360,243 315,449 $ 1,195,211 $ 1,246,417 |
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, promotions and allowances are accounted for as a direct reduction of revenues as follows: For the Year Ended January 31, 2021 January 31, 2020 (as revised) Gross Sales $ 42,238,702 $ 35,455,541 Less: Slotting, Discounts, Promotions and Allowances 1,480,097 1,705,076 Net Sales $ 40,758,605 $ 33,750,465 |
Schedule of Disaggregates Gross Revenue by Significant Geographic Area | The following table disaggregates gross revenue by significant geographic area for the years ended January 31, 2021 and 2020: For the Year Ended January 31, 2021 January 31, 2020 Northeast $ 13,994,534 $ 11,857,813 Southeast 12,780,368 8,523,577 Midwest 4,870,644 5,024,197 West 5,515,759 5,823,215 Southwest 5,077,397 4,226,739 Total revenue $ 42,238,702 $ 35,455,541 |
Schedule of Fair Value of Share-Based Payments | For the years ended January 31, 2021 and 2020, when computing fair value of share-based payments, the Company has considered the following variables: January 31, 2021 January 31, 2020 Risk-free interest rate 0.00 - 0.49 % 1.52 - 2.29 % Expected life of grants 0.1 - 5.2 years 3 - 3.5 years Expected volatility of underlying stock 43 - 127 % 127 - 150 % 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 attributable to common stockholders per common share. For the Years Ended January 31, 2021 January 31, 2020 Numerator: Net income attributable to common stockholders $ 4,067,206 1,532,694 Effect of dilutive securities: — - Diluted net income $ 4,067,206 $ 1,532,694 Denominator: Weighted average common shares outstanding - basic 33,503,208 31,949,803 Dilutive securities (a): Series A Preferred - - Options 513,373 397,664 Warrants - 1,991,789 Weighted average common shares outstanding and assumed conversion – diluted 34,016,581 34,339,256 Basic net income per common share $ 0.12 $ 0.05 Diluted net income per common share $ 0.12 $ 0.04 (a) - Anti-dilutive securities excluded: - - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment on January 31, 2021 and January 31, 2020 are as follows: January 31, 2021 January 31, 2020 Machinery and Equipment $ 3,787,321 $ 3,176,638 Furniture and Fixtures 113,112 89,443 Leasehold Improvements 3,120,273 2,933,865 7,020,706 6,199,946 Less: Accumulated Depreciation 4,057,104 3,394,103 $ 2,963,602 $ 2,805,843 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows: For the Year Ended For the Year Ended January 31, 2021 January 31, 2020 Finance lease Depreciation of assets $ 129,104 $ 100,703 Interest on lease liabilities 36,169 23,130 Operating leases 309,357 257,763 Short-term lease - 7,653 Total net lease cost $ 474,630 $ 389,249 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: January 31, 2021 January 31, 2020 Operating leases: Operating lease ROU assets $ 1,352,483 $ 1,490,794 Current operating lease liabilities, included in current liabilities $ 147,684 $ 126,516 Noncurrent operating lease liabilities, included in long-term liabilities 1,218,487 1,372,349 Total operating lease liabilities $ 1,366,171 $ 1,498,865 Finance leases Property and equipment, at cost $ 951,656 $ 550,269 Accumulated depreciation (260,370 ) (131,266 ) Property and equipment, net $ 691,286 $ 419,003 Current obligations of finance lease liabilities, included in current liabilities $ 190,554 $ 105,126 Finance leases, net of current obligations, included in long-term liabilities 474,743 315,234 Total finance lease liabilities $ 665,297 $ 420,360 |
Schedule of Supplemental Cash Flow and Other Information Related to Leases | Supplemental cash flow and other information related to leases was as follows: For the Year Ended January 31, 2021 For the Year Ended January 31, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 132,694 $ 100,965 Financing cash flows from finance leases 156,450 92,928 ROU assets obtained in exchange for lease liabilities: Operating leases $ - $ 1,599,830 Finance leases 401,387 293,479 Weighted average remaining lease term (in years): Operating leases 6.8 7.8 Finance leases 3.9 3.6 Weighted average discount rate: Operating leases 6.54 % 6.54 % Finance leases 4.57 % 5.67 % |
Schedule of Future Minimum Payments Required Under Lease Obligations | For the Twelve Months Ending January 31, 2022 $ 453,199 2023 422,164 2024 356,370 2025 331,193 2026 243,633 Thereafter 670,902 Total lease payments $ 2,477,461 Less: amounts representing interest (445,992 ) Total lease obligations $ 2,031,469 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Equity [Abstract] | |
Summary of Option Activity | The following is a summary of the Company’s option activity: Options Weighted Average Outstanding – January 31, 2019 626,500 $ 0.77 Exercisable – January 31, 2019 521,500 $ 0.71 Granted 265,000 $ 0.53 Exercised - $ - Forfeited/Cancelled - $ - Outstanding – January 31, 2020 891,500 $ 0.77 Exercisable – January 31, 2020 756,500 $ 0.71 Granted 7,500 $ 0.53 Exercised (24,000 ) $ 0.60 Forfeited/Cancelled (6,000 ) $ 0.60 Outstanding – January 31, 2021 869,000 $ 0.70 Exercisable – January 31, 2021 859,000 $ 0.70 |
Summary of Option Outstanding and Exercisable | Options Outstanding Options Exercisable Exercise Price Number Weighted Weighted Number Weighted $ 0.39 – 1.38 869,000 3.54 $ 0.70 859,000 $ 0.70 |
Schedule of Warrants Activity | The following is a summary of the Company’s warrant activity: Warrants Weighted Average Exercise Price Outstanding – January 31, 2019 6,245,331 $ 1.04 Exercisable – January 31, 2019 6,245,331 $ 1.04 Granted - $ - Exercised - $ - Forfeited/Cancelled (188,667 ) $ 1.57 Outstanding – January 31, 2020 6,056,664 $ 1.00 Exercisable – January 31, 2020 6,056,664 $ 1.00 Granted - $ - Exercised (3,631,733 ) $ 1.09 Forfeited/Cancelled (2,424,931 ) $ 1.39 Outstanding – January 31, 2021 - $ - Exercisable – January 31, 2021 - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
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 th $ 75,000 8 th th $ 100,000 10 th $ 125,000 |
Income Tax Provision (Tables)
Income Tax Provision (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The income tax provision consists of the following: January 31, 2021 January 31, 2020 Federal Current $ - $ - Deferred (184,085 ) - State and Local Current Deferred (560,888 ) - Income tax benefit $ (744,973 ) $ - |
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, 2021 Year Ended January 31, 2020 Net operating loss carryovers $ 1,212,466 $ 2,071,751 Share-based compensation - 48,684 Fixed assets - 86,293 Capitalized start-up and organization costs 44,133 566 Right of use liability 571,046 - Other 6,309 41,506 Total deferred tax assets 1,833,954 2,199,550 Valuation allowance - (2,177,802 ) Deferred tax asset, net of valuation allowance 1,833,954 21,748 Deferred Tax Liabilities Fixed assets 708,798 - Right of use asset 380,183 - Other deferred tax liabilities - 21,748 Total deferred tax liabilities $ 1,088,981 $ 21,748 Net deferred tax asset (liability) $ 744,973 $ - |
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, 2021 Year Ended January 31, 2020 US Federal statutory rate 21.00 % (21.00 )% State income tax, net of federal benefit 7.11 (8.98 ) True Up 5.78 (0.57 ) Change in valuation allowance (65.55 ) 33.72 Other permanent differences 9.24 (6.10 ) Income tax provision (benefit) (22.42) % - % |
Revision of Prior Year Financ_2
Revision of Prior Year Financial Statements (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Revision of Prior Year Financials | As a result of the aforementioned correction of accounting errors, the relevant financial statements have been revised as follows: For the year ended January 31, 2020 As Previously Reported Adjustments As Revised Statement of Income Sales – net of slotting fees and discounts $ 34,837,447 $ (1,086,982 ) $ 33,750,465 Gross profit 11,071,310 (1,086,982 ) 9,984,328 General and administrative expenses 8,873,260 (1,086,982 ) 7,786,278 Operating expenses 8,987,886 (1,086,982 ) 7,900,904 Income from operations 2,083,424 - 2,083,424 Net income $ 1,532,694 $ - $ 1,532,694 Basic and diluted income per share $ 0.05 $ - 0.05 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 31, 2021 | Jan. 31, 2020 | Feb. 02, 2019 | |
Cash equivalents | |||
Federal insured limits | 3,128,246 | ||
Accounts receivable reserves | 2,000 | 2,000 | |
Capitalized costs | 87,639 | ||
Right of use asset | 1,352,483 | 1,490,794 | |
Right of use liability | 2,031,469 | 1,498,865 | |
Research and development expense | 110,713 | 114,626 | |
Advertising expenses | 633,102 | 611,199 | |
Share-based compensation | $ 52,895 | 93,862 | |
Taxable income limitations description | The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. | ||
Charitable deduction limit description | CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. | ||
Deferred tax asset, net | $ 744,973 | ||
Adoption (Topic 842) [Member] | |||
Right of use asset | $ 1,599,830 | ||
Right of use liability | $ 1,599,830 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Inventories (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 746,013 | $ 893,204 |
Work in Process | 88,955 | 37,764 |
Finished goods | 360,243 | 315,449 |
Inventories | $ 1,195,211 | $ 1,246,417 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended | |
Jan. 31, 2021 | ||
Machinery and Equipment [Member] | Minimum [Member] | ||
Property and equipment estimated useful lives | 2 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property and equipment estimated useful lives | 7 years | |
Furniture and Fixtures [Member] | ||
Property and equipment estimated useful lives | 3 years | |
Leasehold Improvements [Member] | ||
Property and equipment estimated useful lives | 0 years | [1] |
[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 Accoun_7
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, 2021 | Jan. 31, 2020 | |
Accounting Policies [Abstract] | ||
Gross Sales | $ 42,238,702 | $ 35,455,541 |
Less: Slotting, Discounts, Promotions and Allowances | 1,480,097 | 1,705,076 |
Net Sales | $ 40,758,605 | $ 33,750,465 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Disaggregates Gross Revenue by Significant Geographic Area (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Total revenue | $ 40,758,605 | $ 33,750,465 |
Northeast [Member] | ||
Total revenue | 13,994,534 | 11,857,813 |
Southeast [Member] | ||
Total revenue | 12,780,368 | 8,523,577 |
Midwest [Member] | ||
Total revenue | 4,870,644 | 5,024,197 |
West [Member] | ||
Total revenue | 5,515,759 | 5,823,215 |
Southwest [Member] | ||
Total revenue | $ 5,077,397 | $ 4,226,739 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Fair Value of Share-Based Payments (Details) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rate | 0.00% | 1.52% |
Expected life of grants | 1 month 6 days | 3 years |
Expected volatility of underlying stock | 0.43% | 127.00% |
Maximum [Member] | ||
Risk-free interest rate | 0.49% | 2.29% |
Expected life of grants | 5 years 2 months 12 days | 3 years 6 months |
Expected volatility of underlying stock | 127.00% | 150.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Accounting Policies [Abstract] | ||
Net income attributable to common stockholders | $ 4,067,206 | $ 1,532,694 |
Effect of dilutive securities: | ||
Diluted net income | $ 4,067,206 | $ 1,532,694 |
Weighted average common shares outstanding - basic | 33,503,208 | 31,949,803 |
Series A Preferred | ||
Options | 513,373 | 397,664 |
Warrants | 1,991,789 | |
Weighted average common shares outstanding and assumed conversion - diluted | 34,016,581 | 34,339,256 |
Basic net income per common share | $ 0.12 | $ 0.05 |
Diluted net income per common share | $ 0.12 | $ 0.04 |
(a) - Anti-dilutive securities excluded: |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 663,001 | $ 640,246 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Machinery and Equipment | $ 3,787,321 | $ 3,176,638 |
Furniture and Fixtures | 113,112 | 89,443 |
Leasehold Improvements | 3,120,273 | 2,933,865 |
Property and Equipment, Gross | 7,020,706 | 6,199,946 |
Less: Accumulated Depreciation | 4,057,104 | 3,394,103 |
Property and Equipment, Net | $ 2,963,602 | $ 2,805,843 |
Investment in Meatball Obsess_2
Investment in Meatball Obsession, LLC (Details Narrative) - Meatball Obsession, LLC [Member] - USD ($) | Dec. 31, 2011 | Jan. 31, 2021 | Jan. 31, 2020 |
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 | 0.00% | 12.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2016 | |
Proceeds from notes payable with related party | $ 330,505 | ||
Interest expense related party | 23,550 | 44,131 | |
Accrued interest | 0 | 2,863 | |
CEO [Member] | |||
Investor relation conference expenses | $ 29,503 | 15,722 | |
Board of Directors and CEO [Member] | |||
Warrants exercise shares | 940,807 | ||
Warrants exercise price | $ 1 | ||
Number of shares of common stock | 940,807 | ||
Meatball Obsession, LLC [Member] | |||
Revenue from related parties | $ 0 | 53,984 | |
Due from related party | 0 | 1,604 | |
WWS, Inc. [Member] | |||
Commission expense | 48,000 | 48,000 | |
CEO [Member] | |||
Proceeds from notes payable with related party | $ 125,000 | ||
Notes, interest rate per annum | 4.00% | ||
Debt maturity date | Dec. 31, 2016 | ||
CEO [Member] | Notes Payable [Member] | |||
Note principal balance amount | $ 0 | 109,844 | |
CEO [Member] | Notes Payable One [Member] | |||
Notes, interest rate per annum | 8.00% | ||
Debt maturity date, description | The advances were due on January 2024. | ||
Note principal balance amount | $ 0 | 400,000 | |
CEO [Member] | Notes Payable Two [Member] | |||
Notes, interest rate per annum | 8.00% | ||
Debt maturity date, description | The advances were due on January 2024. | ||
Note principal balance amount | $ 0 | $ 132,000 | |
Ownership percentage | 100.00% | ||
CEO [Member] | Extended Maturity [Member] | |||
Debt maturity date, description | Extended until January 2024. |
Loan and Security Agreement (De
Loan and Security Agreement (Details Narrative) - USD ($) | Jan. 29, 2020 | Jan. 04, 2019 | Jan. 31, 2021 | Jan. 31, 2020 |
Debt discount | $ 0 | $ 17,864 | ||
Term loan outstanding | 0 | 441,663 | ||
Interest payable, debt | 0 | 2,863 | ||
M&T Bank [Member] | ||||
Debt instrument term | 2 years | |||
Line of credit interest rate description | Advances under the line of credit are limited to eighty percent (80%) of eligible accounts receivable (which is subject to an agreed limitation and is further subject to certain asset concentration provisions) and fifty percent (50%) of eligible inventory (which is subject to an agreed dollar limitation). | |||
Line of credit | 0 | $ 2,997,348 | ||
Increase total available outstanding amount | $ 4,000,000 | |||
Extend maturity date | Jun. 30, 2022 | |||
Interest payable, debt | $ 78,032 | |||
M&T Bank [Member] | LIBOR [Member] | ||||
Line of credit | $ 3,500,000 | |||
M&T Bank [Member] | Secured Promissory Note [Member] | ||||
Note payable | $ 2,500,000 | |||
Debt instrument term | 5 years | |||
Line of credit interest rate description | The Company entered into a $2.5 million five-year note with M&T Bank at LIBOR plus four points with repayments in equal payments over 60 months. | |||
Debt discount | $ 89,321 |
Promissory Note (Details Narrat
Promissory Note (Details Narrative) - M&T Bank [Member] - PPP Term Note [Member] - USD ($) | May 06, 2020 | Apr. 21, 2020 |
Repayment of loan | $ 330,505 | |
CARES Act [Member] | ||
Principal amount | $ 330,505 | |
Interest rate percentage | 1.00% |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Leases [Abstract] | ||
Depreciation of assets | $ 129,104 | $ 100,703 |
Interest on lease liabilities | 36,169 | 23,130 |
Operating leases | 309,357 | 257,763 |
Short-term lease | 7,653 | |
Total net lease cost | $ 474,630 | $ 389,249 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Leases [Abstract] | ||
Operating lease ROU assets | $ 1,352,483 | $ 1,490,794 |
Current operating lease liabilities, included in current liabilities | 147,684 | 126,516 |
Noncurrent operating lease liabilities, included in long-term liabilities | 1,218,487 | 1,372,349 |
Total operating lease liabilities | 2,031,469 | 1,498,865 |
Property and equipment, at cost | 951,656 | 550,269 |
Accumulated depreciation | (260,370) | (131,266) |
Property and equipment, net | 691,286 | 419,003 |
Current obligations of finance lease liabilities, included in current liabilities | 190,554 | 105,126 |
Finance leases, net of current obligations, included in long-term liabilities | 474,743 | 315,234 |
Total finance lease liabilities | $ 665,297 | $ 420,360 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow and Other Information Related to Leases (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 132,694 | $ 100,965 |
Financing cash flows from finance leases | 156,450 | 92,928 |
ROU assets obtained in exchange for lease liabilities: Operating leases | 1,599,830 | |
ROU assets obtained in exchange for lease liabilities: Finance leases | $ 401,387 | $ 293,479 |
Weighted average remaining lease term (in years): Operating leases | 6 years 9 months 18 days | 7 years 9 months 18 days |
Weighted average remaining lease term (in years): Finance leases | 3 years 10 months 25 days | 3 years 7 months 6 days |
Weighted average discount rate: Operating leases | 6.54% | 6.54% |
Weighted average discount rate: Finance leases | 4.57% | 5.67% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payments Required Under Lease Obligations (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 453,199 | |
2023 | 422,164 | |
2024 | 356,370 | |
2025 | 331,193 | |
2026 | 243,633 | |
Thereafter | 670,902 | |
Total lease payments | 2,477,461 | |
Less: amounts representing interest | (445,992) | |
Total lease obligations | $ 2,031,469 | $ 1,498,865 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Sales Revenue [Member] | Customer One [Member] | ||
Concentrations of risk percentage | 41.00% | 46.00% |
Sales Revenue [Member] | Customer Two [Member] | ||
Concentrations of risk percentage | 13.00% | 11.00% |
Sales Revenue [Member] | Customer Three [Member] | ||
Concentrations of risk percentage | 10.00% | |
Accounts Receivable [Member] | Customer One [Member] | ||
Concentrations of risk percentage | 23.00% | 34.00% |
Accounts Receivable [Member] | Customer Two [Member] | ||
Concentrations of risk percentage | 14.00% | 16.00% |
Accounts Receivable [Member] | Customer Three [Member] | ||
Concentrations of risk percentage | 8.00% |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Total intrinsic value of options outstanding | $ 1,021,141 | |
Total intrinsic value of options exercisable | 1,011,853 | |
Proceeds from options exercised | 14,400 | |
Share-based compensation | 52,895 | 93,862 |
Proceeds from exercise of warrants | $ 3,773,182 | |
Stock Options [Member] | ||
Stock option exercised | 24,000 | |
Stock options exercise price per share | $ 0.53 | $ 0.53 |
Share-based compensation | $ 52,895 | $ 76,191 |
Unrecognized stock based compensation | $ 1,933 | |
Extended expiration period, description | In January 2021, the Company extended all employee options for 5 years and director options that were set to expire in April 2021 for a period of two years to April 2023 | |
Warrant [Member] | ||
Warrants exercised | 3,631,733 | |
Number of shares of common stock | 3,588,490 | |
Proceeds from exercise of warrants | $ 3,773,182 | |
Warrant [Member] | Spartan Capital Securities, LLC [Member] | ||
Warrants exercised | 3,631,733 | |
Number of shares of common stock | 36,757 | |
Warrants exercised on cashless basis | 80,000 | |
Two Employees [Member] | ||
Stock option exercised | 24,000 | |
Stock options exercise price per share | $ 0.60 | |
Proceeds from options exercised | $ 14,400 | |
Employee [Member] | ||
Stock options exercise price per share | $ 1.16 | |
Number of stock option shares issued | 7,500 | |
Stock option term | 5 years | |
Stock options vesting period | 2 years | |
Fair value of option | $ 6,682 | |
Placement Agent [member] | Warrant [Member] | ||
Placement agent fees | $ 87,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Option Activity (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Options, Outstanding, Beginning balance | 891,500 | 626,500 |
Options, Exercisable, Beginning balance | 756,500 | 521,500 |
Options, Granted | 7,500 | 265,000 |
Options, Exercised | (24,000) | |
Options, Forfeited/Cancelled | (6,000) | |
Options, Outstanding, Ending balance | 859,000 | 891,500 |
Options, Exercisable, Ending balance | 859,000 | 756,500 |
Weighted Average Exercise Price, Beginning balance | $ 0.77 | $ 0.77 |
Weighted Average Exercise Price, Beginning balance | 0.71 | 0.71 |
Weighted Average Exercise Price, Granted | 0.53 | 0.53 |
Weighted Average Exercise Price, Exercised | 0.60 | |
Weighted Average Exercise Price, Forfeited/Cancelled | 0.60 | |
Weighted Average Exercise Price, Ending balance | 0.70 | 0.77 |
Weighted Average Exercise Price, Ending balance | $ 0.70 | $ 0.71 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Option Outstanding and Exercisable (Details) | 12 Months Ended |
Jan. 31, 2021$ / sharesshares | |
Equity [Abstract] | |
Range of exercise price lower range limit | $ 0.39 |
Range of exercise price upper range limit | $ 1.38 |
Number of Options Outstanding | shares | 869,000 |
Weighted Average Remaining Contractual Life (in years), Options Outstanding | 3 years 6 months 14 days |
Weighted Average Exercise Price, Options Outstanding | $ 0.70 |
Number of Options Exercisable | shares | 869,000 |
Weighted Average Exercise Price, Options Exercisable | $ 0.70 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) - Warrant [Member] - $ / shares | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Warrants Outstanding, Beginning balance | 6,056,664 | 6,245,331 |
Warrants Exercisable, Beginning balance | 6,056,664 | 6,245,331 |
Warrants, Granted | ||
Warrants, Exercised | (3,631,733) | |
Warrants, Forfeited/Cancelled | (2,424,931) | (188,667) |
Warrants Outstanding, Outstanding, Ending balance | 6,056,664 | |
Warrants Exercisable, Exercisable, Ending balance | 6,056,664 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 1 | $ 1.04 |
Weighted Average Exercise Price, Exercisable, Beginning balance | 1 | 1.04 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | 1.09 | |
Weighted Average Exercise Price, Forfeited/Cancelled | 1.39 | 1.57 |
Weighted Average Exercise Price, Outstanding, Ending balance | 1 | |
Weighted Average Exercise Price, Exercisable, Ending balance | $ 1 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | Sep. 25, 2020 | Jun. 01, 2019 | Jan. 31, 2021 | Jan. 31, 2020 |
Estimated loss | $ 656,700 | |||
Offset against labor expenses | 110,000 | |||
Loss contingency receivable | 116,817 | |||
Loss on raw material and packaging | 6,817 | |||
Reimbursed amount on property damages | 93,870 | |||
Royalty expenses | $ 539,801 | $ 463,540 | ||
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% | |||
Percentage of fee equal to consideration paid | 3.00% | |||
Agreement term description | If the Company enters into a change of control transaction during the term of the agreement through October 1, 2022, the Company shall pay to Spartan a fee equal to 3% of the consideration paid or received by the Company and/or its stockholders in such transaction. | |||
Spartan Capital Securities, LLC [Member] | Financial Advisory and Investment Banking Agreement [Member] | ||||
Nonrefundable monthly fee amount | $ 10,000 | |||
Nonrefundable monthly fee term | Through October 1, 2015 | |||
Spartan Capital Securities, LLC [Member] | Financial Advisory and Investment Banking 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] | Financial Advisory and Investment Banking 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] | Financial Advisory and Investment Banking 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 | |||
Spartan Capital Securities, LLC [Member] | Advisory Agreement [Member] | ||||
Nonrefundable monthly fee amount | $ 5,000 | |||
Number of common stock shares granted | 125,000 | |||
B. Riley Securities, Inc [Member] | Advisory Agreement [Member] | ||||
Nonrefundable monthly fee amount | $ 175,000 | |||
Nonrefundable monthly fee term | Company shall pay to B. Riley a non-refundable fee of $175,000 upon delivery of a fairness opinion in the event a transaction has value over $50 million ($125,000 if a transaction has a value less than $50 million). | |||
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 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Royalty Minimum Payment by Preceding Agreement Year (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Minimum royalty to be paid | $ 539,801 | $ 463,540 |
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 |
Income Tax Provision (Details N
Income Tax Provision (Details Narrative) - USD ($) | Dec. 22, 2017 | Jan. 31, 2021 | Jan. 31, 2020 |
Income tax description | 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. | ||
Federal income tax percentage | 21.00% | ||
Change in valuation allowance | $ (2,177,802) | $ 675,896 | |
Penalties on unpaid tax | |||
Federal [Member] | |||
Net operating loss carryovers | $ 3,800,000 | $ 9,500,000 | |
Net operating loss carryovers expiration, description | offset taxable income through 2034 | offset taxable income through 2034 | |
State [Member] | |||
Net operating loss carryovers | $ 5,200,000 | $ 8,800,000 | |
Net operating loss carryovers expiration, description | offset future taxable income through 2035 | offset future taxable income through 2035 |
Income Tax Provision (Benefit)
Income Tax Provision (Benefit) - Schedule of Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal Current | ||
Federal Deferred | (184,085) | |
State and Local Current | ||
State and Local Deferred | (560,888) | |
Income tax provision (benefit) | $ (744,973) |
Income Tax Provision - Schedule
Income Tax Provision - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryovers | $ 1,212,466 | $ 2,071,751 |
Share-based compensation | 48,684 | |
Fixed assets | 86,293 | |
Capitalized start-up and organization costs | 44,133 | 566 |
Right of use liability | 571,046 | |
Other | 6,309 | 41,506 |
Total deferred tax assets | 1,833,954 | 2,199,550 |
Valuation allowance | (2,177,802) | |
Deferred tax asset, net of valuation allowance | 1,833,954 | 21,748 |
Fixed assets | 708,798 | |
Right of use asset | 380,183 | |
Other deferred tax liabilities | 21,748 | |
Total deferred tax liabilities | 1,088,981 | 21,748 |
Net deferred tax asset (liability) | $ 744,973 |
Income Tax Provision - Schedu_2
Income Tax Provision - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
US Federal statutory rate | 21.00% | (21.00%) |
State income tax, net of federal benefit | 7.11% | (8.98%) |
Deferred tax adjustment | 5.78% | (0.57%) |
Change in valuation allowance | (65.55%) | 33.72% |
Other permanent differences | 9.24% | (6.10%) |
Income tax provision (benefit) | (22.42%) |
Revision of Prior Year Financ_3
Revision of Prior Year Financial Statements - Schedule of Revision of Prior Year Financials (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Sales-net of slotting fees and discounts | $ 40,758,605 | $ 33,750,465 |
Gross profit | 12,739,309 | 9,984,328 |
General and administrative expenses | 9,150,748 | 7,786,278 |
Operating expenses | 9,261,461 | 7,900,904 |
Income from operations | 3,477,848 | 2,083,424 |
Net income | $ 4,067,206 | $ 1,532,694 |
Basic and diluted income per share | $ 0.05 | |
Previously Reported [Member] | ||
Sales-net of slotting fees and discounts | $ 34,837,447 | |
Gross profit | 11,071,310 | |
General and administrative expenses | 8,873,260 | |
Operating expenses | 8,987,886 | |
Income from operations | 2,083,424 | |
Net income | $ 1,532,694 | |
Basic and diluted income per share | $ 0.05 | |
Adjustment [Member] | ||
Sales-net of slotting fees and discounts | $ (1,086,982) | |
Gross profit | (1,086,982) | |
General and administrative expenses | (1,086,982) | |
Operating expenses | (1,086,982) | |
Income from operations | ||
Net income | ||
Basic and diluted income per share |