UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: July 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to ____________

Commission File Number: 001-40597

Mama’s Creations, Inc.

(Exact name of Registrant as specified in its charter)

Nevada		27-0607116
(State or other jurisdiction of incorporation)		(IRS Employer ID No.)

25 Branca Road

East Rutherford, NJ 07073

(Address of principal executive offices and zip Code)

(201) 531-1212

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(g) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on which registered
Common Stock, par value $0.00001		MAMA		NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging Growth Company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 11, 2023, there were 37,443,387 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

		Page
	Cautionary Statement Regarding Forward-Looking Statements	1

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	5

Item 4.	Controls and Procedures.	5

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	6

Item 1A.	Risk Factors.	6

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	13

Item 3.	Defaults Upon Senior Securities.	13

Item 4.	Mine Safety Disclosures.	13

Item 6.	Exhibits.	14

Signatures		15

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act. The forward-looking statements involve substantial risks and uncertainties. All statements, other than statements related to present facts or current conditions or of historical facts, contained in this report, including statements regarding our strategy, future operations, future financial position, future revenues, and projected costs, prospects, plans and objectives of management, are forward-looking statements. Accordingly, these statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in them. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are not guarantees of future performance and our actual results could differ materially from the results discussed in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

	●	the impacts of the COVID-19 pandemic on our business, financial condition and results of operations, and our inability to mitigate such impacts;
	●	the adequacy of our liquidity to pursue our business objectives;
	●	reliance on a limited number of customers;
	●	loss or retirement of key executives, including prior to identifying a successor;
	●	adverse economic conditions or intense competition;
	●	pricing pressures in the market and lack of control over the pricing of raw materials and freight;
	●	entry of new competitors and products;
	●	adverse federal, state and local government regulation (including, but not limited to, the Food and Drug Administration);
	●	liability related to the consumption of our products
	●	ability to secure placement of our products in key retail locations;
	●	our ability to integrate acquisitions and related businesses including Chef Inspirational Foods, LLC;
	●	wage and price inflation;
	●	maintenance of quality control; and
	●	issues related to the enforcement of our intellectual property rights.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to “Item 1A. Risk Factors” in this report and “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K, and to subsequent reports and registration statements filed from time to time with the SEC. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this report. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Mama’s Creations, Inc.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2023

	Page(s)

Condensed Consolidated Balance Sheets as of July 31, 2023 (unaudited) and January 31, 2023	F-2

Condensed Consolidated Statements of Operations for the Three and Six Months Ended July 31, 2023 and 2022 (unaudited)	F-3

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended July 31, 2023 and 2022 (unaudited)	F-4

Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 31, 2023 and 2022 (unaudited)	F-6

Notes to Condensed Consolidated Financial Statements (unaudited)	F-7

F-1

Mama’s Creations, Inc.

Condensed Consolidated Balance Sheets

	July 31, 2023			January 31, 2023
	(Unaudited)
Assets:

Current Assets:
Cash	$	5,560,176		$	4,378,383
Accounts receivable, net		8,843,756			6,832,046
Inventories, net		3,308,513			3,635,881
Prepaid expenses and other current assets		474,301			828,391
Total current assets		18,186,746			15,674,701

Property, plant, and equipment, net		4,067,648			3,423,096
Intangible assets, net		5,754,182			1,502,510
Goodwill		8,633,334			8,633,334
Operating lease right of use assets, net		3,124,449			3,236,690
Deferred tax asset		67,908			717,559
Equity method investment		-			1,343,486
Deposits		65,410			53,819
Total Assets	$	39,899,677		$	34,585,195

Liabilities and Stockholders’ Equity:

Liabilities:
Current Liabilities:
Accounts payable and accrued expenses	$	8,872,582		$	9,063,256
Term loan, net of debt discount of $49,022 and $60,082, respectively		1,502,702			1,491,642
Operating lease liabilities		414,937			391,802
Finance leases payable		335,119			182,391
Promissory notes – related parties		1,950,000			750,000
Total current liabilities		13,075,340			11,879,091

Line of credit		500,000			890,000
Operating lease liabilities – net of current		2,739,208			2,897,205
Finance leases payable – net of current		906,476			248,640
Promissory notes – related parties, net of current		3,000,000			1,500,000
Term loan – net of current		3,879,318			4,655,181
Total long-term liabilities		11,025,002			10,191,026

Total Liabilities		24,100,342			22,070,117

Commitments and contingencies (Notes 10 and 11)		-			-

Stockholders’ Equity:
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of July 31, 2023 and January 31, 2023, respectively, 0 shares outstanding as of July 31, 2023 and January 31, 2023, respectively		-			-
Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 0 and 54,600 issued and outstanding as of July 31, 2023 and January 31, 2023 respectively		-			-
Preferred stock, $0.00001 par value; 19,680,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.00001 par value; 250,000,000 shares authorized; 37,343,387 and 36,317,857 shares issued and outstanding as of July 31, 2023 and January 31, 2023		374			364
Additional paid in capital		22,912,383			22,724,440
Accumulated deficit		(6,963,922	)		(10,060,226	)
Less: Treasury stock, 230,000 shares at cost		(149,500	)		(149,500	)
Total Stockholders’ Equity		15,799,335			12,515,078
Total Liabilities and Stockholders’ Equity	$	39,899,677		$	34,585,195

See accompanying notes to the condensed consolidated financial statements.

F-2

Mama’s Creations, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	2023			2022			2023			2022
	For the Three Months Ended July 31,						For the Six Months Ended July 31,
	2023			2022			2023			2022

Net sales	$	24,790,085		$	22,846,474		$	47,910,901		$	44,677,054

Costs of sales		17,283,847			20,119,862			34,033,663			38,090,179

Gross profit		7,506,238			2,726,612			13,877,238			6,586,875

Operating expenses:
Research and development		94,871			41,792			166,056			68,327
Selling, general and administrative		5,135,537			3,516,115			9,492,568			7,088,870
Total operating expenses		5,230,408			3,557,907			9,658,624			7,157,197

Income (loss) from operations		2,275,830			(831,295	)		4,218,614			(570,322	)

Other income (expenses)
Interest, net		(181,658	)		(139,064	)		(359,052	)		(263,315	)
Amortization of debt discount		(5,530	)		(3,015	)		(11,060	)		(6,655	)
Other income		7,449			2,596			27,449			2,596
Total other expenses		(179,739	)		(139,483	)		(342,663	)		(267,374	)

Net income (loss) before income tax provision and income from equity method investment		2,096,091			(970,778	)		3,875,951			(837,696	)

Income from equity method investment		77,584			18,540			223,342			18,540
Income tax (provision) benefit		(429,764	)		208,992			(954,456	)		179,607

Net income (loss)		1,743,911			(743,246	)		3,144,837			(639,549	)

Less: series B preferred dividends		(21,233	)		-			(48,533	)		-

Net Income available to common stockholders		1,722,678			(743,246	)		3,096,304			(639,549	)

Net income (loss) per common share
– basic	$	0.05		$	(0.02	)	$	0.09		$	(0.02	)
– diluted	$	0.05		$	(0.02	)	$	0.08		$	(0.02	)

Weighted average common shares outstanding
– basic		36,855,181			35,811,087			36,628,429			35,785,719
– diluted		37,490,567			35,811,087			37,195,314			35,785,719

See accompanying notes to the condensed consolidated financial statements.

F-3

Mama’s Creations, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

For the Period from May 1, 2023 through July 31, 2023

	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
	Series A Preferred Stock				Series B Preferred Stock					Common Stock				Treasury Stock						Additional Paid In			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance, May 1, 2023		-	$	-		54,600		$	-		36,484,777	$	366		(230,000	)	$	(149,500	)	$	22,799,322		$	(8,686,600	)	$	13,963,588

Stock based compensation		-		-		-			-		19,960		-		-			-			104,789			-			104,789

Stock issued for the exercise of options and warrants		-		-		-			-		19,650		-		-			-			8,280			-			8,280

Conversion of series B preferred stock to common stock		-		-		(54,600	)		-		819,000		8		-			-			(8	)		-			-

Series B Preferred dividend		-		-		-			-		-		-		-			-			-			(21,233	)		(21,233	)

Net income		-		-		-			-		-		-		-			-			-			1,743,911			1,743,911

Balance, July 31, 2023		-	$	-		-		$	-		37,343,387	$	374		(230,000	)	$	(149,500	)	$	22,912,383		$	(6,963,922	)	$	15,799,335

For the Period from May 1, 2022 through July 31, 2022

	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
	Series A Preferred Stock				Common Stock				Treasury Stock						Additional Paid In		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
Balance, May 1, 2022		-	$	-		35,774,468	$	359		(230,000	)	$	(149,500	)	$	20,587,789	$	(12,225,133	)	$	8,213,515

Stock issued for the exercise of options		-		-		41,417		-		-			-			26,250		-			26,250

Stock options issued for services		-		-		-		-		-			-			12,333		-			12,333

Stock issued for the acquisition of equity investment in Chef Inspirational		-		-		501,972		5		-			-			699,995		-			700,000

Net loss		-		-		-		-		-			-			-		(743,246	)		(743,246	)

Balance, July 31, 2022		-	$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	21,326,367	$	(12,968,379	)	$	8,208,852

F-4

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

	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
	Series A Preferred Stock				Series B Preferred Stock					Common Stock				Treasury Stock						Additional Paid In			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance, February 1, 2023		-	$	-		54,600		$	-		36,317,857	$	364		(230,000	)	$	(149,500	)	$	22,724,440		$	(10,060,226	)	$	12,515,078

Stock based compensation		-		-		-			-		19,960		-		-			-			160,173			-			160,173

Stock issued for the exercise of options and warrants		-		-		-			-		186,570		2		-			-			27,778			-			27,780

Conversion of series B preferred stock to common stock		-		-		(54,600	)		-		819,000		8		-			-			(8	)		-			-

Series B Preferred dividend		-		-		-			-		-		-		-			-			-			(48,533	)		(48,533	)

Net income		-		-		-			-		-		-		-			-			-			3,144,837			3,144,837

Balance, July 31, 2023		-	$	-		-		$	-		37,343,387	$	374		(230,000	)	$	(149,500	)	$	22,912,383		$	(6,963,922	)	$	15,799,335

For the Period from February 1, 2022 through July 31, 2022

	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
	Series A Preferred Stock				Common Stock				Treasury Stock						Additional Paid In		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Equity
Balance, February 1, 2022		-	$	-		35,758,792	$	359		(230,000	)	$	(149,500	)	$	20,587,789	$	(12,328,830	)	$	8,109,818
Beginning balance, value		-	$	-		35,758,792	$	359		(230,000	)	$	(149,500	)	$	20,587,789	$	(12,328,830	)	$	8,109,818

Stock issued for the exercise of options		-		-		57,093		-		-			-			26,250		-			26,250

Stock options issued for services		-		-		-		-		-			-			12,333		-			12,333

SEC Form 10-Q filed by MamaMancini's Holdings Inc.