mama-20240430

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


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

For the quarter ended: April 30, 2024


o			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 x No o

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 x No o

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	o	Accelerated filer	o

Non-accelerated filer	x	Smaller reporting company	x

		Emerging Growth Company	o

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

As of June 10, 2024, there were 37,263,096 shares outstanding of the registrant’s common stock.


		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 .	6

Item 3.	Defaults Upon Senior Securities.	6

Item 4.	Mine Safety Disclosures.	6

Item 5.	Other Information	6

Item 6.	Exhibits.	7

Signatures		8


			Page(s)

Condensed Consolidated Balance Sheets as of April 30 , 202 4 (unaudited) and January 31, 202 4			F-2

Condensed Consolidated Statements of Operations for the Three Months Ended April 30 , 202 4 and 202 3 (unaudited)			F-3

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended April 3 0 , 202 4 and 202 3 (unaudited)			F-5

Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 3 0 , 202 4 and 202 3 (unaudited)			F-7

Notes to Condensed Consolidated Financial Statements (unaudited)			F-8


	April 30, 2024		January 31, 2024
	(Unaudited)
Assets:

Current Assets:
Cash and cash equivalents	$	13,043	$	11,022
Accounts receivable, net	8,079		7,859
Inventories, net	3,017		3,310
Prepaid expenses and other current assets	1,230		1,375
Total current assets	25,369		23,566

Property, plant, and equipment, net	5,457		4,436
Intangible assets, net	4,599		4,979
Goodwill	8,633		8,633
Operating lease right of use assets, net	2,755		2,889
Deferred tax asset	331		503
Deposits	95		95
Total Assets	$	47,239	$	45,101

Liabilities and Stockholders’ Equity:

Liabilities:
Current Liabilities:
Accounts payable and accrued expenses	$	14,257	$	12,425
Term loan, net of unamortized debt discount of $32 and $38, respectively	1,519		1,514
Operating lease liabilities	418		434
Finance leases payable	378		367
Promissory notes – related parties	1,950		1,950
Total current liabilities	18,522		16,690

Line of credit	—		—
Operating lease liabilities – net of current	2,380		2,515
Finance leases payable – net of current	1,125		1,062
Promissory notes – related parties, net of current	2,250		2,250
Term loan – net of current	2,616		3,003
Total long-term liabilities	8,371		8,830

Total Liabilities	26,893		25,520

Commitments and contingencies (Notes 9 and 10)

Stockholders’ Equity:
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of April 30, 2024 and January 31, 2024, respectively, 0 shares outstanding as of April 30, 2024 and January 31, 2024, respectively	-		-
Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 0 and 0 issued and outstanding as of April 30, 2024 and January 31, 2024 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; 37,493,096 and 37,488,239 shares issued as of April 30, 2024 and January 31, 2024, respectively, 37,263,096 and 37,258,239 shares outstanding as of April 30, 2024 and January 31, 2024, respectively	-		-
Additional paid in capital	23,490		23,278
Accumulated deficit	(2,994)		(3,547)
Less: Treasury stock, 230,000 shares at cost	(150)		(150)
Total Stockholders’ Equity	20,346		19,581
Total Liabilities and Stockholders’ Equity	$	47,239	$	45,101


	For the Three Months Ended April 30,
	2024		2023

Net sales	$	29,838	$	23,121

Costs of sales	22,375		16,750

Gross profit	7,463		6,371

Operating expenses:
Research and development	104		71
Selling, general and administrative expenses	6,586		4,357
Total operating expenses	6,690		4,428

Income from operations	773		1,943

Other income (expenses)
Interest expense	(127)		(177)
Interest income	92		—
Amortization of debt discount	(6)		(6)
Other income	—		20
Total other expenses	(41)		(163)

Net income before income tax provision and income from equity method investment	732		1,780

Income from equity method investment	—		146
Income tax expense	(179)		(525)

Net income	553		1,401

Less: series B preferred dividends	—		(27)

Net Income available to common stockholders	553		1,374

Net income per common share
– basic	$	0.01	$	0.04
– diluted	$	0.01	$	0.04

Weighted average common shares outstanding
– basic	37,259		36,394
– diluted	39,328		37,626


	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, 2024	-	$	-	-	$	-	37,488	$	-	(230)	$	(150)	$	23,278	$	(3,547)	$	19,581

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

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

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

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


	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	-	$	-	55	$	-	36,318	$	—	(230)	$	(150)	$	22,724	$	(10,059)	$	12,515

Stock based compensation	-	-		-	-		-	-		-	-		55		-		55

Stock issued for the exercise of options and warrants	-	-		-	-		167	-		-	-		19		-		19

Series B Preferred dividend	-	-		-	-		-	-		-	-		-		(27)		(27)

Net income	-	-		-	-		-	-		-	-		-		1,401		1,401

Balance, April 30, 2023	-	$	-	55	$	-	36,485	$	—	(230)	$	(150)	$	22,798	$	(8,685)	$	13,963


	For the Three Months Ended April 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	553	$	1,401
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	292		248
Amortization of debt discount	6		6
Amortization of right of use assets	134		6
Amortization of intangibles	380		102
Stock-based compensation	205		55
Change in deferred tax asset	172		345
Income from equity method investment	-		(146)
Changes in operating assets and liabilities:
Accounts receivable	(220)		(1,557)
Inventories	293		1,100
Prepaid expenses and other current assets	145		(607)
Security deposits	-		(3)
Accounts payable and accrued expenses	1,832		697
Operating lease liability	(151)		(35)
Net Cash Provided by Operating Activities	3,641		1,612

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for fixed assets	(1,144)		(145)
Net Cash (Used in) Investing Activities	(1,144)		(145)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of term loan	(388)		(388)
Repayment of line of credit, net	-		(140)
Repayment of finance lease obligations	(95)		(50)
Payment of Series B Preferred dividends	-		(27)
Proceeds from exercise of stock options	7		19
Net Cash (Used in) Financing Activities	(476)		(586)

Net Increase in Cash	2,021		881

Cash and cash equivalents at beginning of period	11,022		4,378

Cash and cash equivalents at end of period	$	13,043	$	5,259

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income taxes	$	-	$	9
Interest	$	114	$	152

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash deposits on prepaid additions	$	-	$	308
Finance lease asset additions	$	169	$	-
Right of use asset recognized	$	873	$	—
Write-off of right of use asset	$	897	$	-


	For the Period February 1, 2023 through April 30, 2023
Revenues	$	8,289
Net income	$	607


	April 30, 2024		January 31, 2024
Raw materials and packaging	$	1,293	$	1,159
Work in process	217		237
Finished goods	1,507		1,914
Total	$	3,017	$	3,310


Machinery and equipment			2-7 years
Furniture and fixtures			3-5 years
Leasehold improvements			*


Tradenames and trademarks			3 years
Customer relationships			4 – 5 years


	For the Three Months Ended
	April 30, 2024		April 30, 2023
Northeast	$	9,567	$	8,566
Southeast	7,697		6,695
Midwest	6,384		4,267
West	6,750		4,072
Total gross sales	$	30,398	$	23,600


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life (years)
Customer relationships	$	6,418	$	(1,836)	$	4,582	3.05
Tradename and trademarks	79		(62)		17		0.66
	$	6,497	$	(1,898)	$	4,599


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life (years)
Customer relationships	$	6,418	$	(1,463)	$	4,955	3.29
Tradename and trademarks	79		(55)		24		0.91
	$	6,497	$	(1,518)	$	4,979


	Restricted Stock Units	Weighted Average Grant Date Fair Value
Non-vested restricted stock units - February 1, 2024	493,078	$	1.91
Granted	-	$	-
Vested	-	$	-
Forfeited	-	$	-
Outstanding – April 30, 2024	493,078	$	1.91


	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding – February 1, 2024	117,500	$	1.48	8.36	$	333
Granted	-	$	-
Exercised	(5,000)	$	1.48
Expired/forfeited	(15,000)	$	1.48
Outstanding – April 30, 2024	97,500	$	1.48	8.12	$	435
Exercisable – April 30, 2024	0	$	—	0.00	$	—


	April 30, 2024		April 30, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	151	$	35
Financing cash flows from finance leases	95		50


	April 30, 2024		January 31, 2024
Weighted average remaining lease term (in years)
Operating leases	7.03		6.57
Finance leases	4.58		4.49

Weighted average discount rate:
Operating leases	5.50	%	4.85	%
Finance Leases	7.08	%	6.74	%


For the fiscal years ended	Finance Leases		Operating Leases		Total Maturities of Lease Liabilities
2025 remaining	$	361	$	421	$	782
2026	384		566		950
2027	336		467		803
2028	328		500		828
2029	232		507		739
Thereafter	150		839		989
Total undiscounted future lease payments	1,791		3,300		5,091
Less: imputed interest	(288)		(502)		(790)
Total present value of future lease liabilities	$	1,503	$	2,798	$	4,301


	April 30, 2024		January 31, 2024		Change
Current Assets	$	25,369	$	23,566	$	1,803
Current Liabilities	18,522		16,690		1,832
Working Capital	$	6,847	$	6,876	$	(29)

SEC Form 10-Q filed by Mama's Creations Inc.