MAMA 10-K & 10-Q changes, risk factors and insider trading
Mama's Creations, Inc. · Nasdaq · Sausages & Other Prepared Meat Products · CIK 1520358 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), USDA, FTC and other governmental entities and such regulations are subject to change from time to time, which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our suppliers' plants and products, which could materially impact our ability to manufacture regulated products.”
New heading “Supply chain disruptions, including supplier instability and single-source dependence, could impair our ability to manufacture and deliver products.”
New heading “If we cannot raise additional capital when needed, we may need to significantly reduce operations or delay growth plans, which would adversely affect our business.”
New heading “Failure to maintain quality control as we expand could result in non-compliant products and harm our reputation.”
New heading “Product liability or legal claims could result in significant costs and damage to our reputation.”
New heading “Damage or disruption at a warehouse could significantly impact our ability to fulfill orders and harm our results.”
New heading “Political instability, government shutdowns, or regulatory changes may disrupt our operations and increase costs.”
New heading “Challenges identifying, completing, or integrating acquisitions could hinder our growth and profitability.”
New heading “Failure to maintain effective internal controls could result in inaccurate reporting, regulatory penalties, and loss of investor confidence.”
New heading “Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material impact on our business and stock price.”
Removed heading “We have a limited history of profitability.”
Removed heading “We may need additional capital, which may be difficult to raise for a variety of reasons.”
Removed heading “Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), U.S. Department of Agriculture (“USDA”), Federal Trade Commission (“FTC”) and other governmental entities and such regulations are subject to change from time to time, which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our suppliers' plants and products, which could materially impact our ability to manufacture regulated products.”
Removed heading “Disruption of our supply chain could adversely affect our business.”
Removed heading “We may be unable to maintain quality control.”
Removed heading “There may be product liability and other legal claims.”
Removed heading “Our finished goods inventory is located in a small number of warehouse facilities. Any damage or disruption at a storage facility would have an adverse effect on our business, results of operations and financial condition.”
Removed heading “Political and social conditions can impact our business”
Removed heading “We have identified material weaknesses in our internal control over financial reporting. If remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely impact investor confidence and, as a result, the value of our common stock.”
Largest changes
“Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), U.S. Department of Agriculture (“USDA”), Federal Trade Commission (“FTC”) and other governmental entities and such regulations are subject to change from time to time, which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our suppliers' plants and products, which could materially impact our ability to manufacture regulated products.”see in full comparison
“Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), USDA, FTC and other governmental entities and such regulations are subject to change from time to time, which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our suppliers' plants and products, which could materially impact our ability to manufacture regulated products.”see in full comparison
“We have identified material weaknesses in our internal control over financial reporting. If remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely impact investor confidence and, as a result, the value of our common stock.”see in full comparison
“Failure to maintain effective internal controls could result in inaccurate reporting, regulatory penalties, and loss of investor confidence.”see in full comparison
“The sale of food products for human consumption involves the risk of injury or illness to consumers. Such injuries or illness may result from inadvertent mislabeling, tampering, or product contamination or spoilage. Under certain circumstances, we may be required to recall or withdraw products, which may have a material adverse effect on our business. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against us. …”see in full comparison
“The sale of food products for human consumption involves the risk of injury or illness to consumers. Such injuries or illness may result from inadvertent mislabeling, tampering or product contamination or spoilage. Under certain circumstances, we may be required to recall or withdraw products, which may have a material adverse effect on our business. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against us. …”see in full comparison
Full comparison: every changed paragraph (49)
There are risks associated with an investment in our securities. The following risk factors should be read carefully in connection with evaluating our business and the forward-looking statements contained in this Annual Report on Form 10- K. Any of these risk factors could lead to material adverse effects on our business, operating results and financial condition. These risk factors reflect the Company's beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. Additional risks and uncertainties not currently known to us or that we currently do not view as material may also become materially adverse to our business in future periods or if circumstances change. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
We could be required, and in some instances have in the past been required, to recall certain products due to labeling, contamination, damage, or tampering, whether caused by us or someone in our supply chain. A widespread recall or market withdrawal could result in significant losses due to the cost of a recall or withdrawal, the destruction of inventory, potential liability claims, and lost sales. The costs associated with recalls could be impacted by issues encountered in tracing products within our facilities or in the supply chain. In addition, a product recall or withdrawal could also result in adverse publicity and a loss of confidence in our products, which could have a material impact on our business.
The sale of food products for human consumption involves the risk of injury or illness to consumers. Such injuries or illness may result from inadvertent mislabeling, tampering, or product contamination or spoilage. Under certain circumstances, we may be required to recall or withdraw products, which may have a material adverse effect on our business. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against us. If the consumption of any of our products causes, or is alleged to have caused, a health-related illness, we may become subject to claims or lawsuits relating to such matters. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that our products caused illness or physical harm could adversely affect our reputation with existing and potential distributors, retailers and consumers and our corporate image and brand equity. Moreover, claims or liabilities of this sort might not be covered by insurance or by any rights of indemnity or contribution that we may have against others. A product liability judgment against us or a product recall or market withdrawal could have a material adverse effect on our business, reputation and operating results.
Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), USDA, FTC and other governmental entities and such regulations are subject to change from time to time, which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our suppliers' plants and products, which could materially impact our ability to manufacture regulated products.
Supply chain disruptions, including supplier instability and single-source dependence, could impair our ability to manufacture and deliver products.
Damage or disruption to our manufacturing or distribution capabilities due to weather, natural disaster, fire, terrorism, pandemic, strikes, the financial and/or operational instability of key suppliers, distributors, warehousing and transportation providers, or brokers, or any other reasons could impair our ability to manufacture or sell our products. To the extent that we are unable to or cannot financially mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single location, our business and results of operations may be materially adversely affected, and additional resources could be required to restore our supply chain.
We have a limited history of profitability.
Since inception on February 22, 2010 and through January 31, 2025, we have raised approximately $23.3 million in capital. During this same period, we have recorded net profit totaling approximately $0.2 million. As of January 31, 2025, we had working capital of approximately $4.9 million. Our net income for the three most recent fiscal years ended January 31, 2025, 2024, and 2023 has been approximately $3.7 million, $6.6 million, and $2.3 million, respectively. Our ability to achieve continued profitability depends upon many factors, including our ability to develop and commercialize products. There can be no assurance that we will be able to achieve growth and profitability consistent with historical performance.
We may need additional capital, which may be difficult to raise for a variety of reasons.
While we believe that we have adequate financing to execute our current growth plan, in the case that we exceed our expected growth, we will need to raise additional capital and/or significantly cut expenses and overhead in order to operate the business through such date. Currently, we have no plan to raise additional capital, and our access to funding is always uncertain. There is no assurance that additional equity or debt financing will be available to us when needed, on acceptable terms or even at all. In the event that we are not able to secure financing, we may have to scale back our development plans or operations.
Because we depend on a limited number of customers for a significant portion of our sales, a loss of a small number of these customers could materially adversely affect our business and financial condition. During the year ended January 31, 2026, the Company earned revenues from two customers representing approximately 38% and 17% of gross sales, respectively. As of January 31, 2026, two customers represented approximately 35% and 12% of total gross outstanding receivables, respectively. During the year ended January 31, 2025, the Company earned revenues from one customer representing approximately 44% of gross sales. As of January 31, 2025, two customers represented approximately 38% and 16% of total gross outstanding receivables. During the year ended January 31, 2024 three customers represented approximately 26%, 11%, and 10% of gross sales, respectively. If these principal customers cease ordering products from us, our business could be materially adversely affected. The consolidation of the retail industry, growth of large-format retailers and e-commerce platforms, shrinking retail footprints, and increased store closures have intensified our reliance on a limited number of retailers for the distribution of our packaged food products. Many of these retailers, including major grocery chains, discounters, and online marketplaces, possess significant bargaining power and leverage in negotiations. As a result, these retailers may demand lower prices, increased promotional allowances, or other terms that are less favorable to us. Additionally, changes in their store formats, inventory practices, or shelf space allocation could negatively impact the visibility and sales of our products. If we are unable to maintain strong relationships with these key retailers or if their bargaining power continues to increase, our sales, margins, and overall financial results could be materially and adversely affected
Because we depend on a limited number of customers for a significant portion of our sales, a loss of a small number of these customers could materially adversely affect our business and financial condition. During the year ended January 31, 2025, the Company earned revenues from one customer representing approximately 44% of gross sales. As of January 31, 2025, two customers represented approximately 38% and 16% of total gross outstanding receivables, respectively. During the year ended January 31, 2024, the Company earned revenues from three customers representing approximately 26%, 11%, and 10% of gross sales, respectively. As of January 31, 2024, four customers represented approximately 20%, 15%, 13% and 10% of total gross outstanding receivables. During the year ended January 31, 2023 two customers represented approximately 25% and 13% of gross sales, respectively. If these principal customers cease ordering products from us, our business could be materially adversely affected.
Our operations are subject to regulation by the U.S. Food and Drug Administration (“FDA”), U.S. Department of Agriculture (“USDA”), Federal Trade Commission (“FTC”) and other governmental entities and such regulations are subject to change from time to time, which could impact how we manage our production and sale of products. Federal budget cuts could result in furloughs for government employees, including inspectors and reviewers for our suppliers' plants and products, which could materially impact our ability to manufacture regulated products.
We could be required, and in some instances have in the past been required to, recall certain products due to labeling, contamination, damage, or tampering, whether caused by us or someone in our supply chain. A widespread recall or market withdrawal could result in significant losses due to the cost of a recall or withdrawal, the destruction of inventory, potential liability claims, and lost sales. The costs associated with recalls could be impacted by issues encountered in tracing products within our facilities or in the supply chain. In addition, a product recall or withdrawal could also result in adverse publicity and a loss of confidence in our products, which could have a material impact on our business.
The sale of food products for human consumption involves the risk of injury or illness to consumers. Such injuries or illness may result from inadvertent mislabeling, tampering or product contamination or spoilage. Under certain circumstances, we may be required to recall or withdraw products, which may have a material adverse effect on our business. Even if a situation does not necessitate a recall or market withdrawal, product liability claims may be asserted against us. If the consumption of any of our products causes, or is alleged to have caused, a health-related illness, we may become subject to claims or lawsuits relating to such matters. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that our products caused illness or physical harm could adversely affect our reputation with existing and potential distributors, retailers and consumers and our corporate image and brand equity. Moreover, claims or liabilities of this sort might not be covered by insurance or by any rights of indemnity or contribution that we may have against others. A product liability judgment against us or a product recall or market withdrawal could have a material adverse effect on our business, reputation and operating results.
Disruption of our supply chain could adversely affect our business.
Damage or disruption to our manufacturing or distribution capabilities due to weather, natural disaster, fire, terrorism, pandemic, strikes, the financial and/or operational instability of key suppliers, distributors, warehousing and transportation providers, or brokers, or any other reasons could impair our ability to manufacture or sell our products. To the extent that we are unable to, or cannot financially mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single location, our business and results of operations may be materially adversely affected, and additional resources could be required to restore our supply chain.
If we cannot raise additional capital when needed, we may need to significantly reduce operations or delay growth plans, which would adversely affect our business.
While we believe that we have adequate financing to execute our current growth plan, in the case that we exceed our expected growth, we will need to raise additional capital and/or significantly cut expenses and overhead in order to operate the business through such date. There is no assurance that additional equity or debt financing will be available to us when needed, on acceptable terms or even at all. In the event that we are not able to secure financing, we may have to scale back our development plans or operations.
We offer a variety of sales and promotion incentives to our customers and to consumers, such as price discounts, consumer coupons, volume rebates, cooperative marketing programs, slotting fees, and in-store displays. Our net sales may periodically be influenced by the introduction and discontinuancediscontinuation of sales and promotion incentives. Reductions in overall sales and promotion incentives could impact our net sales and affect our results of operations in any particular fiscal quarter.
Failure to maintain quality control as we expand could result in non-compliant products and harm our reputation.
We may be unable to maintain quality control.
Product liability or legal claims could result in significant costs and damage to our reputation.
There may be product liability and other legal claims.
Damage or disruption at a warehouse could significantly impact our ability to fulfill orders and harm our results.
Our finished goods inventory is located in a small number of warehouse facilities. Any damage or disruption at a storage facility would have an adverse effect on our business, results of operations and financial condition.
Damage to our reputation can adversely impact our businessbusiness.
Political instability, government shutdowns, or regulatory changes may disrupt our operations and increase costs.
Political and social conditions can impact our business
Increases in income tax rates, changes in income tax laws or disagreements with tax authorities may impact our financial performanceperformance.
Challenges identifying, completing, or integrating acquisitions could hinder our growth and profitability.
We periodically pursue acquisitions of businesses assets as part of our strategy to expand our operations and enhance profitability. This strategy focuses on identifying companies with manufacturing capabilities or product portfolios that complement our existing operations. Although we routinely evaluate potential acquisition opportunities, there is no assurance that we will identify suitable targets, reach agreements on acceptable terms, or successfully integrate any acquisitions we complete.
Our acquisition strategy involves significant risks and uncertainties. Competitive dynamics may increase purchase prices or limit our ability to complete transactions. We may lack the financial resources required for future acquisitions, or we may inaccurately assess a target’s value or fail to identify certain risks and liabilities. Acquisitions can also divert management’s attention from ongoing operations, place additional demands on our personnel, increase our leverage or dilute existing stockholders.
Even when acquisitions are completed, integration efforts may present substantial challenges. These may include the inability to achieve anticipated financial or operational objectives, increased pressure on our personnel and systems, the need to modify or expand internal processes and workforce, and the impact of amortizing acquired intangible assets, which will reduce future reported earnings. Integration activities may also temporarily affect cash flows or operating results, and create risks related to retaining key employees of the acquired business. Failure to effectively manage these risks could adversely affect our business.
Failure to maintain effective internal controls could result in inaccurate reporting, regulatory penalties, and loss of investor confidence.
During the course of testing our disclosure controls and procedures and internal control over financial reporting, we may identify and disclose material weaknesses in internal control over financial reporting that will have to be remediated. Implementing any appropriate changes to our internal control may require specific compliance training of our directors, officers and employees, entail substantial costs to modify our existing accounting systems, and take a significant period of time to complete. Such changes may not, however, be effective in maintaining the adequacy of our internal control over financial reporting, and any failure to maintain that adequacy or inability to produce accurate financial statements on a timely basis could result in our financial statements being unreliable, increase our operating costs and materially impair our ability to operate our business.
Failure to achieve and maintain effective internal control over financial reporting could result in a loss of investor confidence in our financial reports and could have a material adverse effect on our stock price. Additionally, failure to maintain effective internal control over our financial reporting could result in government investigation or sanctions by regulatory authorities.
Our shares of common stock have traded on the OTCQB from 2013 to July 2021 and on the Nasdaq Capital Market from July 2021 to the present date. While we have upgraded our listing, historicallyHistorically there has been limited daily volume of trading in our common stock, which has limited the overall and perceived liquidity of our common stock on that market.
A more active trading market for our shares may never develop ornot be sustained. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders. The absence of an active trading market increases price volatility and reduces the liquidity of our common stock. As long as this condition continues, the sale of a significant number of shares of common stock at any particular time could be difficult to achieve at the market prices prevailing immediately before such shares are offered and, if an active market for our common stock does not develop, it may be difficult to sell shares without depressing the market price for the shares, or at all. In addition, in the event that an active trading market does not develop, the price of our common stock may not be a reliable indicator of the fair value of our common stock.
In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 270 million shares of capital stock, consisting of 20 million shares of preferred stock, par value $0.00001 per sharestock and 250 million shares of common stock, par value $0.00001 per share.stock.
We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raisingcapital-raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raisingcapital-raising purposes or for other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock are trading.
The declaration, payment, and amount of any future dividends will be made at the discretion of the Board of Directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the Board of Directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend. If the Company does not pay dividends, the Company’s common stock may be less valuable because a return on an investor’s investment will only occur if the Company’s stock price appreciates.
Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material impact on our business and stock price.
We may identify material weaknesses or significant deficiencies in internal control over financial reporting that will have to be remediated. Implementing any changes to our internal control may require specific compliance training of our employees and officers, involve significant costs, and/or take significant time to complete. Such changes may not, however, be effective in maintaining the adequacy of our internal control over financial reporting, and any failure to maintain that adequacy or inability to produce accurate financial statements on a timely basis could result in our financial statements being unreliable and increase our operating costs.
We have identified material weaknesses in our internal control over financial reporting. If remediation of these material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely impact investor confidence and, as a result, the value of our common stock.
In connection with the preparation of our financial statements for the fiscal year ended January 31, 2025, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified generally relate to (1) inadequate segregation of duties between the IT and accounting functions, (2) not maintaining adequate support for authorization and approval of certain transactions recorded in the Company’s IT systems, including those obtained through electronic data interface, and (3) inadequate documentation of review procedures, including those associated with level of precision, investigating and resolving outliers, and evaluating the completeness and accuracy of information produced by the entity, including those obtained from certain service organizations which require that complementary user entity controls are suitably designed and operating effectively.
We may not be able to fully remediate the identified material weaknesses. If the steps we take do not correct the material weaknesses in a timely manner, we will be unable to conclude that the Company maintains effective internal control over financial reporting. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. We also may incur significant costs to execute various aspects of our remediation plan but cannot provide a reasonable estimate of such costs at this time.
In the future, it is possible that additional material weaknesses or significant deficiencies may be identified that we may be unable to remedy before the requisite deadline for these reports. Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across the Company. Any weaknesses or deficiencies or any failure to implement new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm our operating results and cause us to fail to meet our financial reporting obligations, or result in material misstatements in our consolidated financial statements, which could adversely impact our business and reduce our stock price.
If we are unable to conclude that we have effective internal control over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common shares. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “Acquisition Accounting”
Removed heading “Recent Accounting Pronouncements”
Largest changes
“When performing its quantitative annual goodwill impairment test, the Company is comparing the fair value with its carrying amount. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the fair value; however, the loss recognized would not exceed the total amount of goodwill. Additionally, the Company considers income tax effects from any tax-deductible goodwill on the carrying amount when measuring the goodwill impairment loss, if applicable. …”see in full comparison
“We continue to monitor commodity costs so that we can purchase ingredients, packaging and other materials required for production. A variety of other factors may impact the cost and availability of raw materials. Although, almost all our inputs are sourced domestically and our manufacturing facilities are all in the United States, we continue to expect that recent tariff volatility will have a limited and manageable impact on the Company. We address commodity costs primarily through competitive sourcing procedures and manufacturing and overhead cost control. …”see in full comparison
“The Company applies the provisions of Accounting Standard Codification ("ASC") 805, "Business Combinations," in the accounting for acquisitions of businesses. ASC 805 requires the Company to recognizing identifiable assets and liabilities, including intangible assets of acquired businesses, at their fair value at the date of acquisition. The excess of the purchase price consideration over the fair value of identifiable net assets acquired is goodwill. …”see in full comparison
Full comparison: every changed paragraph (43)
We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this report because that disclosure was already included in our Annual Report on Form 10-K for our fiscal year ended January 31, 2025, filed with the SEC on April 15, 2025. You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and results of operations of the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024.
THE FOLLOWING DISCUSSION OF OUR PLANFINANCIAL OF OPERATIONCONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES TO THE FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REPORT. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT RELATE TO FUTURE EVENTS OR OUR FUTURE FINANCIAL PERFORMANCE. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE OUR ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THOSE LISTED UNDER “FORWARD-LOOKING STATEMENTS” AND “RISK FACTORS” AND THOSE INCLUDED ELSEWHERE IN THIS REPORT.
Mama’s Creations, Inc. (“Mama’s,” “Mama’s Creations” or the “Company”) is a leading marketer and manufacturer of fresh deli prepareddeli-prepared foods, found in over 10,00012,000 grocery, mass, club and convenience stores nationally. The Company’s broad product portfolio, born from MamaMancini’s rich history in Italian foods, now consists of a variety of high-quality, fresh, clean and easy to prepare foods to address the needs of both our consumers and retailers. Our vision is to become a one-stop-shop deli solutions platform, leveraging vertical integration and a diverse family of brands to offer a wide array of prepared foods to meet the changing demands of the modern consumer.
Recent Developments
On September 2, 2025, Crown 1 Foods, Inc., a wholly owned subsidiary of the Company, acquired substantially all of the assets of Crown I Enterprises, Inc. ("Crown 1"), a full-service manufacturer of value-added proteins and ready-to-heat meals, for a $17.3 million cash payment.
On September 2, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the purchasers named therein (the “Purchasers”) for the private placement (the “Private Placement”) of approximately 2.7 million shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share (the “Common Stock”), at a purchase price of $7.50 per share. The Private Placement resulted in net proceeds of approximately $18.9 million to the Company. The proceeds from the Private Placement were used to pay for expenses related to the acquisition of the Crown 1 Business and repayments of debt.
Recent Trends
We continue to monitor commodity costs so that we can purchase ingredients, packaging and other materials required for production. A variety of other factors may impact the cost and availability of raw materials. Although, almost all our inputs are sourced domestically and our manufacturing facilities are all in the United States, we continue to expect that recent tariff volatility will have a limited and manageable impact on the Company. We address commodity costs primarily through competitive sourcing procedures and manufacturing and overhead cost control. While certain ingredient costs have recently declined, we continue to face higher fuel and freight expenses as well as rising labor costs, all of which have negatively impacted profitability. The Company looks to offset rising costs through increasing efficiencies and price increases to our customers. Market dynamics, promotional incentives, or other factors may cause our pricing actions to lag changes in supply and commodity costs.
Results of Operations for the Fiscal Years Ended January 31, 20252026, and 20242025
The following table sets forth the summary of the consolidated statements of operations for the fiscal years ended January 31, 20252026 and 20242025 (in thousands):
For the fiscal years ended January 31, 20252026 and 2024,2025, the Company reported net income of approximately $3.7$5.3 million and $6.6$3.7 million, respectively. The change in net income between the fiscal years ended January 31, 20252026 and 20242025 reflects strong revenue growth and the acquisition of the Crown 1 Business in September 2025, as well as enhanced operational and procurement efficiencies, partially offset by manufacturing inefficiencies related to the capital improvement project at the Company's Farmingdale, New York facility and increased costs of commodities, primarily the cost of chicken, and other materials.proteins.
Net Sales: Net Sales increased by approximately 19%39% to $171.7 million for the year ended January 31, 2026, from $123.3 million for the year ended January 31, 2025,2025. fromApproximately $103.3$21.4 million forof the year ended January 31, 2024. Thethis increase is due to higher volume of salessales. ofSales existingvolume productsincreased due to higher production capacity, introductions at new customers, introductionand successful promotional activities. Approximately $3.8 million of newthis productsincrease atis existingdue customers and successfulto pricing actions taken due to recoverincreasing costs. In addition, the increased costacquisition of commodities.the Crown 1 Business contributed approximately $23.2 million of net sales in fiscal year 2026.
Gross Profit: The gross profit margin remained relatively flat at 25% for the fiscal years ended January 31, 2026 and 2025, respectively.
Gross Profit: The gross profit margin was 25% and 29% for the years ended January 31, 2025 and 2024, respectively. The decrease in gross profit margin is due to inefficiencies related to the capital improvement project at the Company's Farmingdale, New York facility and increased costs of commodities, primarily chicken, and other materials.
•Advertising expenses increased by approximately $1.1 million due to new digital strategies and an enhanced focus on marketing to help drive increased velocities of our existing products;
•One-time legal settlement expense of approximately $900 thousand, due to the Settlement Agreement with directors;
•Commission and royalty expenses rose by approximately $568$1.8 thousandmillion due to increased salessales. As a percentage of revenue, commission and royalty expenses remained consistent at 3%;
•Professional fees increased by approximately $474 thousand due to increased corporate activity due to the growth of the Company and fees associated with Sarbanes-Oxley 404(b) implementation;
•Amortization of intangible assets increased by approximately $463 thousand due to the CIF Acquisition in the prior fiscal year;
•Office and computer-related expenses increased by approximately $300 thousand due to growth of the company, increased office space, and investment in new software to drive efficiencies;
•Travel-relatedAdvertising expenses increased by approximately $170$1.3 thousand,million due to anew largerdigital sales teamstrategies and increasedan travelenhanced focus on marketing to nationalhelp retailersdrive increased velocities of our existing products;
•Freight-related expenses increased by approximately $71$1.6 thousandmillion due to increased salessales, partially offset by the benefit of load-sharing between the Company's two manufacturing facilitiesfacilities. As a percentage of revenue, freight-related expenses remained consistent at 3%; and
•Professional fees increased by approximately $1.7 million due to increased corporate activity, which included approximately $1.3 million of transaction-related expenses associated with the acquisition of the Crown 1 Business;
•InsurancePayroll-related expenses decreasedincreased by approximately $204$3.7 thousandmillion due to consolidationnew ofexecutive policies.hires and performance related compensation increases;
•Insurance expenses increased by approximately $362 thousand due to increased sales and corporate size; and
•Office and computer-related expenses increased by approximately $932 thousand due to growth of the company and investment in new software to drive efficiencies;
•These increases were partially offset by a decrease in director-related expenses of approximately $1.0 million, mainly due to a one-time legal settlement expense of approximately $900 thousand, in the prior fiscal year.
Other Income (Expenses): Other expenses decreasedincreased by approximately $373$90 thousand to approximately $261 thousand for the year ended January 31, 2026, as compared to approximately $171 thousand for the year ended January 31, 2025, as compared to approximately $544 thousand for the year ended January 31, 2024.2025. The decreaseincrease is mainly due to aother decreaseincome in netthe interestprior expenseyear of approximately$104 $290 thousand, which was a result of lower debt balances outstanding as well as higher interest earned on Company cash balances.thousand.
As of January 31, 2025,2026, we had working capital of approximately $4.9$24.3 million as compared to working capital of approximately $6.9$4.9 million as of January 31, 2024,2025, aan decreaseincrease of approximately $2.0$19.5 million. The decreaseincrease in working capital is primarily attributable to aan decreaseincrease in cash of approximately $3.9$12.8 million, whichan wasincrease usedin toaccounts purchasereceivable of approximately $5.1$4.9 million, and an increase in inventory of approximately $4.8 million. These increases were partially offset by an increase in accounts payable and accrued expenses of approximately $5.7 million of property plant and equipment, an increase in operating lease liabilities of approximately $414$0.8 thousand, and an increase in Promissory notes – related parties of approximately $300 thousand, offset by an increase in inventory of approximately $1.5 million due to increased sales, and a decrease in accounts payable and accrued expenses of approximately $373 thousand due to lower accrued taxes.million.
As of January 31, 2025,2026, we havehad $0no balance outstanding under our Line of Credit Agreement, withwhich has a maximum capacity of $5.5 million, and approximately $2.9$5.4 million outstanding under our Term Loan Agreement with M&T Bank (the "Term Loan Agreement"). The Term Loan Agreement has a maturity date of JanuaryOctober 17,1, 2027.2030, In addition, we have payments of $750 thousand (plus accrued interest) due on December 29, 2025 pursuantrefer to promissoryNote notes8, issuedLoan toand Security Agreement for certain financial information regarding the sellersCompany's of T&L Creative Salads ("T&L") and Olive Branch LLC ("Olive Branch"), as discussed in Item 8, Note 6. In addition, we have a promissory note with a balance of $1.5 million with the sellers of CIF as discussed in Item 8, Note 6. This note is payable in common stock on June 28, 2025.debt. We also have operating leases for offices and other facilities used for our operations, and finance leases comprised primarily of machinery and equipment, as discussed in Item 8, Note 11.
The following table summarizes the key components of our cash flows for the fiscal years ended January 31, 20252026 and January 31, 20242025 (in thousands).
Net cash used in investing activities for the years ended January 31, 20252026 was approximately $5.1$19.0 million as compared to approximately $1.4$5.1 million for the year ended January 31, 2024.2025. For the year ended January 31, 2025,2026, the Company used cash of approximately $5.1$17.3 million for the purchase of the Crown 1 Business and approximately $1.7 million to purchase new machinery and equipment. For the year ended January 31, 2024,2025, the cash used in investing activities consisted of approximately $786$5.1 thousandmillion to purchase new machinery and equipment and $646 thousand for the acquisition of the remaining interest in CIF..
Net cash provided by financing activities for the year ended January 31, 2026 was approximately $20.3 million as compared to $4.0 million used in financing activities for the year ended January 31, 2025. During the year ended January 31, 2026, the Company had net proceeds from the issuance of common stock of approximately $18.9 million and net proceeds from the issuance of notes payable of approximately $18.8 million, offset by payments on the term loan, related party loans, and finance lease liabilities of approximately $16.3 million, $0.8 million, and $345 thousand, respectively. During the year ended January 31, 2025, the Company had payments on the term loan, related party loans, and finance lease liabilities of approximately $1.7 million, $2.0 million, and $397 thousand, respectively.
Net cash used in financing activities for the year ended January 31, 2025 was approximately $4.0 million as compared to $3.5 million for the year ended January 31, 2024. During the year ended January 31, 2025, the Company had payments on the term loan, related party loans, and finance lease liabilities of approximately $1.7 million, $2.0 million, and $397 thousand, respectively. During the year ended January 31, 2024, the Company had payments on the term loan, line of credit, related party loans, and finance lease liabilities of approximately $1.7 million, $890 thousand, $750 thousand, and $272 thousand, respectively.
Recent Accounting Pronouncements
See Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding recently issued accounting pronouncements.
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States (“US GAAP”) requires us to make estimates and judgments that affect the amounts reported in the consolidated financial statements and related notes. Critical accounting estimates are those estimates that, in accordance with GAAP, involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements. Management has determined that our most critical accounting estimates are those relating to the fair value of stock-based compensation, impairment of goodwill and intangible assets, andthe estimates for unrealized returns, discounts, and other allowances that are netted against revenue.revenue, and the allocation of the purchase price of the acquisition of substantially all of the assets of Crown 1 Enterprises, Inc. Although we believe that the estimates we use are reasonable, actual results reported in future periods could differ materially from those estimates. The following is a summary of certain accounting estimates we consider critical. For further discussion about our accounting policies, see Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements appearing elsewhere in this Annual Report.
Goodwill is the excess of the consideration paid for a business over the fair value of the identifiable net assets acquired. Goodwill and other indefinite lived intangible assets are not amortized. Instead, these assets are reviewed at least annually for impairment. The Company has the option to perform a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. However, the Company may elect to perform the quantitative goodwill impairment test even if no indications of a potential impairment exist. We perform this annual assessment during our fourth quarter or more frequently if circumstances indicate that the carrying value may not be recoverable. When the qualitative assessment is used, we first determine if it is more likely than not impairment exists. Factors include general economic conditions, industry factors, legal and regulatory factors and historical financial performance.
When performing its quantitative annual goodwill impairment test, the Company is comparing the fair value with its carrying amount. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the fair value; however, the loss recognized would not exceed the total amount of goodwill. Additionally, the Company considers income tax effects from any tax-deductible goodwill on the carrying amount when measuring the goodwill impairment loss, if applicable. The fair value is estimated using discounted cash flow methodologies, as well as considering third party market value indicators. The Company’s use of a discounted cash flow methodology includes estimates of future revenue based upon budgets and projections. The Company also develops estimates for future levels of gross and operating profits and projected capital expenditures. The Company’s methodology also includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. Calculating the fair value requires significant estimates and assumptions by management. Should the estimates and assumptions regarding the fair value of the reporting units prove to be incorrect, the Company may be required to record impairments to its goodwill in future periods and such impairments could be material.
Amortizable intangible assets, including tradenamestrade names and trademarks, are amortized on a straight-line basis over 3three years. Customer relationships are amortized on a straight-line basis over 4periods ranging from four to 5five years.
The Company’s sales are primarily generated from the sale of finished products to customers. Revenue is recognized when the performance obligation is satisfied, and the promised goods have been transferred. Control transfers when the product is shipped or delivered based upon applicable shipping terms. For each contract, the Company considers the transfer of product to be the performance obligation. Although some payment terms may be extended, generally the Company’s payment terms are approximately 15- 3010-30 days. Accordingly, there is no significant financing components to consider when determining the transaction price. The Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses in selling, general and administrative expenses on the Consolidated Statements of Operations.
Acquisition Accounting
The Company applies the provisions of Accounting Standard Codification ("ASC") 805, "Business Combinations," in the accounting for acquisitions of businesses. ASC 805 requires the Company to recognizing identifiable assets and liabilities, including intangible assets of acquired businesses, at their fair value at the date of acquisition. The excess of the purchase price consideration over the fair value of identifiable net assets acquired is goodwill. Acquisition-related expenses are expensed as incurred, and the expenses are recorded in operating expenses in the consolidated statements of operations. See Note 3, "Acquisition," for additional information.
What changed in the latest 10-Q
Risk Factors
New heading “We may be unable to successfully integrate the Crown I Carve Out Business into our business or achieve the anticipated benefits or synergies of the Crown I Acquisition.”
New heading “Challenges identifying, completing, or integrating acquisitions could hinder our growth and profitability.”
Largest changes
“We may be unable to successfully integrate the Crown I Carve Out Business into our business or achieve the anticipated benefits or synergies of the Crown I Acquisition.”see in full comparison
“Challenges identifying, completing, or integrating acquisitions could hinder our growth and profitability.”see in full comparison
“In addition, any potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with the Crown I Acquisition, including cash costs of integration, may exceed what we currently anticipate. Any one of these factors could result in increased costs, decreased benefits, and diversion of management’s attention, which could materially impact our business, financial condition, and results of operations. …”see in full comparison
“Even when acquisitions are completed, integration efforts may present substantial challenges. These may include the inability to achieve anticipated financial or operational objectives, increased pressure on our personnel and systems, the need to modify or expand internal processes and workforce, and the impact of amortizing acquired intangible assets, which will reduce future reported earnings. Integration activities may also temporarily affect cash flows or operating results, and create risks related to retaining key employees of the acquired business. …”see in full comparison
“On September 2, 2025, Crown 1 Foods, Inc., a Nevada corporation and wholly owned subsidiary of the Company, acquired substantially all of the assets of Crown I Enterprises, Inc. (the “Crown I Carve Out Business,” and such acquisition, the “Crown I Acquisition”). Our ability to achieve the anticipated benefits or synergies of the Crown I Acquisition will depend in part upon whether we can integrate the Crown I Carve Out Business into our existing business in an efficient and effective manner. We may not be able to accomplish this integration process successfully.”see in full comparison
“Our acquisition strategy involves significant risks and uncertainties. Competitive dynamics may increase purchase prices or limit our ability to complete transactions. We may lack the financial resources required for future acquisitions, or we may inaccurately assess a target’s value or fail to identify certain risks and liabilities. Acquisitions can also divert management’s attention from ongoing operations, place additional demands on our personnel, increase our leverage, or dilute existing stockholders.”see in full comparison
Full comparison: every changed paragraph (8)
ThereOther than as set forth below, there have been no material changes to the risk factors previously described in Part I, Item 1A of our Form 10-K for the fiscal year ended January 31, 2026.
We may be unable to successfully integrate the Crown I Carve Out Business into our business or achieve the anticipated benefits or synergies of the Crown I Acquisition.
On September 2, 2025, Crown 1 Foods, Inc., a Nevada corporation and wholly owned subsidiary of the Company, acquired substantially all of the assets of Crown I Enterprises, Inc. (the “Crown I Carve Out Business,” and such acquisition, the “Crown I Acquisition”). Our ability to achieve the anticipated benefits or synergies of the Crown I Acquisition will depend in part upon whether we can integrate the Crown I Carve Out Business into our existing business in an efficient and effective manner. We may not be able to accomplish this integration process successfully.
In addition, any potential unknown liabilities, liabilities that are significantly larger than we currently anticipate, and unforeseen increased expenses or delays associated with the Crown I Acquisition, including cash costs of integration, may exceed what we currently anticipate. Any one of these factors could result in increased costs, decreased benefits, and diversion of management’s attention, which could materially impact our business, financial condition, and results of operations. In addition, even following successful integration, the anticipated benefits or synergies of the Crown I Acquisition may not be realized fully, or at all, or may take longer to realize than expected.
Challenges identifying, completing, or integrating acquisitions could hinder our growth and profitability.
We periodically pursue acquisitions of businesses’ assets as part of our strategy to expand our operations and enhance profitability. This strategy focuses on identifying companies with manufacturing capabilities or product portfolios that complement our existing operations. Although we routinely evaluate potential acquisition opportunities, there is no assurance that we will identify suitable targets, reach agreements on acceptable terms, or successfully integrate any acquisitions we complete.
Our acquisition strategy involves significant risks and uncertainties. Competitive dynamics may increase purchase prices or limit our ability to complete transactions. We may lack the financial resources required for future acquisitions, or we may inaccurately assess a target’s value or fail to identify certain risks and liabilities. Acquisitions can also divert management’s attention from ongoing operations, place additional demands on our personnel, increase our leverage, or dilute existing stockholders.
Even when acquisitions are completed, integration efforts may present substantial challenges. These may include the inability to achieve anticipated financial or operational objectives, increased pressure on our personnel and systems, the need to modify or expand internal processes and workforce, and the impact of amortizing acquired intangible assets, which will reduce future reported earnings. Integration activities may also temporarily affect cash flows or operating results, and create risks related to retaining key employees of the acquired business. Failure to effectively manage these risks could adversely affect our business.
Management's Discussion & Analysis (MD&A)
New heading “Results of Operations for the Six Months Ended July 31, 2026 and 2025”
Removed heading “Recent Accounting Pronouncements”
Largest changes
“Results of Operations for the Six Months Ended July 31, 2026 and 2025”see in full comparison
“Costs of sales: Costs of sales increased by approximately 56%, to $81.8 million, or 76% of Net Sales, during the six months ended July 31, 2026, from $52.5 million, or 75% of Net Sales, during the six months ended July 31, 2025. The increase in costs of sales is due to higher sales volume, partially offset by increased operational efficiencies driven by increased overhead, labor, and procurement efficiencies.”see in full comparison
“Gross Profit Margin: The gross profit margin was 24% and 25% for the six months ended July 31, 2026 and 2025, respectively. The year-over-year margin rate change was driven by increased promotional activity to support new customers and new product introductions as well as increased commodity costs, partially offset by overhead, labor and procurement efficiencies.”see in full comparison
“Net sales: Net Sales increased by approximately 52%, to $107.3 million, during the six months ended July 31, 2026, from $70.5 million during the six months ended July 31, 2025. The increase in sales is primarily due to volume gains, which were driven by new products sold into existing customers, successful trade and marketing promotions, which drove velocity acceleration of existing products, and initial entry into new customers, as well as the acquisition of the Crown 1 business in September 2025.”see in full comparison
“Other Income, net: Other income, net increased by approximately $398 thousand, to $282 thousand, for the six months ended July 31, 2026, as compared to an expense of $116 thousand for the six months ended July 31, 2025. The increase is primarily due to higher interest income, which is due to a higher cash and cash equivalents balance.”see in full comparison
Full comparison: every changed paragraph (42)
Results of Operations for the Three Months Ended AprilJuly 30,31, 2026 and 2025
The following table sets forth the summary of the Condensed Consolidated Statements of Operations for the three months ended AprilJuly 30,31, 2026 and 2025 (in thousands):
For the three months ended AprilJuly 30,31, 2026 and 2025, the Company reported net income of approximately $2.1$2.6 million and $1.2$1.3 million, respectively. The change in net income between the three months ended AprilJuly 30,31, 2026 and 2025 is due to the changes in net sales, costs of sales and operating expenses described below.
Net sales: Net Sales increased by approximately 50%,55%, to $52.8$54.6 million, during the three months ended AprilJuly 30,31, 2026, from $35.3$35.2 million during the three months ended AprilJuly 30,31, 2025. The increase in sales is primarily due to increased velocities of existing items driven by new marketing and trade programs, the introduction of new products into existing customers, new customers, and new products associated with product innovation initiatives and the acquisistionacquisition of the Crown 1 business in the September 2025.
Costs of sales: Costs of sales increased by approximately 55%,57%, to $40.3$41.5 million, or 76% of Net Sales, during the three months ended AprilJuly 30,31, 2026, from $26.1$26.4 million, or 74%75% of Net Sales, during the three months ended AprilJuly 30,31, 2025. The increase in costcosts of sales is due to higher sales, partially offset by increased operational efficiencies resulting from increased overhead, labor and procurement efficiencies.
Gross Profit Margin: The gross profit margin was 24% and 26%25% of Net Sales for the three months ended AprilJuly 30,31, 2026 and 2025, respectively. The year-over-year margin rate change was primarily driven by increased labor and overhead associated with new product launches.launches, as well as increased promotional activity to support new customers and new product introductions.
Operating Expenses: Operating expenses increased approximately $2.2$3.0 million during the three months ended AprilJuly 30,31, 2026, as compared to the three months ended AprilJuly 30,31, 2025. The change in total operating expenses are primarily attributable to the following:
•Payroll and Related Expenses, inclusive of stock-based compensation, increased by approximately $1.3 million, primarily related to new hires and variable compensation arrangements;
•Commission and royalty expenses increased by approximately $0.7 million due to increased sales.
•Payroll and Related Expenses, inclusive of stock-based compensation, increased by approximately $0.6 million mainly due to additional employees associated with the acquisition of the Crown 1 business and variable compensation arrangements;
•Other operating expenses increased by approximately $0.3 million due to additional software and EDI relatedEDI-related expenses, travel, and office expenses;
•Insurance relatedInsurance-related expenses increased by approximately $0.2 million, primarily due to the growth of the Company; and
•Professional fees increaseddecreased by approximately $0.2$0.1 million, primarily due to thelower growthcorporate of the Company; andactivity.
•Commission and royalty expenses increased by approximately $0.2 million due to increased sales.
Other Expenses,Income, net: Other expenses,income, net decreasedincreased by approximately $31$367 thousand, to $30$312 thousand, for the three months ended AprilJuly 30,31, 2026, as compared to $61an expense of $55 thousand for the three months ended AprilJuly 30,31, 2025. The decreaseincrease is primarily due to higher interest income, which is due to a higher average cash balance in the current year period.
Results of Operations for the Six Months Ended July 31, 2026 and 2025
The following table sets forth the summary of the Condensed Consolidated Statements of Operations for the six months ended July 31, 2026 and 2025 (in thousands):
For the six months ended July 31, 2026 and 2025, the Company reported net income of approximately $4.6 million and $2.5 million, respectively. The change in net income between the six months ended July 31, 2026 and 2025 is due to the changes in net sales, costs of sales and operating expenses described below.
Net sales: Net Sales increased by approximately 52%, to $107.3 million, during the six months ended July 31, 2026, from $70.5 million during the six months ended July 31, 2025. The increase in sales is primarily due to volume gains, which were driven by new products sold into existing customers, successful trade and marketing promotions, which drove velocity acceleration of existing products, and initial entry into new customers, as well as the acquisition of the Crown 1 business in September 2025.
Costs of sales: Costs of sales increased by approximately 56%, to $81.8 million, or 76% of Net Sales, during the six months ended July 31, 2026, from $52.5 million, or 75% of Net Sales, during the six months ended July 31, 2025. The increase in costs of sales is due to higher sales volume, partially offset by increased operational efficiencies driven by increased overhead, labor, and procurement efficiencies.
Gross Profit Margin: The gross profit margin was 24% and 25% for the six months ended July 31, 2026 and 2025, respectively. The year-over-year margin rate change was driven by increased promotional activity to support new customers and new product introductions as well as increased commodity costs, partially offset by overhead, labor and procurement efficiencies.
Operating Expenses: Operating expenses increased approximately $5.2 million during the six months ended July 31, 2026, as compared to the six months ended July 31, 2025. The change in total operating expenses is primarily attributable to the following:
•Payroll and Related Expenses, inclusive of stock-based compensation, increased by approximately $2.0 million, primarily related to new hires and variable compensation arrangements;
•Freight-related expenses increased by approximately $1.3 million primarily due to increased sales;
•Commission and royalty expenses increased by approximately $0.9 million due to increased sales;
•Other operating expenses increased by approximately $641 thousand due to additional travel, IT, and office expenses;
•Insurance-related expenses increased by approximately $399 thousand, primarily due to the growth of the Company; and
•Advertising expenses decreased by approximately $172 thousand due to new marketing strategies and increased investment in trade promotions.
Other Income, net: Other income, net increased by approximately $398 thousand, to $282 thousand, for the six months ended July 31, 2026, as compared to an expense of $116 thousand for the six months ended July 31, 2025. The increase is primarily due to higher interest income, which is due to a higher cash and cash equivalents balance.
The following table summarizes total current assets, liabilities and working capital at AprilJuly 30,31, 2026 compared to January 31, 2026 (in thousands):
As of AprilJuly 30,31, 2026, we had working capital of approximately $27.8$140.2 million as compared to working capital of approximately $24.3 million as of January 31, 2026. The increase in working capital is primarily attributable to an increase of cash and cash equivalents of approximately $4.5$118.7 million, partiallywhich offsetwas primarily driven by athe decreaseJuly in2026 inventorycapital of approximately $0.6 millionraise and acash decreaseflows ingenerated prepaidfrom expenses of approximately $0.3 million.operations.
The following table summarizes the key components of our cash flows for the threesix months ended AprilJuly 30,31, 2026 and 2025 (in thousands);
Net cash provided by operating activities for the threesix months ended AprilJuly 30,31, 2026 was approximately $5.0$11.9 million, which consisted of net income of approximately $2.1$4.6 million, non-cash expenses of approximately $2.3$5.3 million, and a net positive change in operating assets and liabilities of approximately $0.6$1.9 million.
Net cash provided by operating activities for the threesix months ended AprilJuly 30,31, 2025 was approximately $6.0$4.3 million, which consisted of net income of approximately $1.2$2.5 million, non-cash expenses of approximately $1.3$2.9 million, and a net positivenegative change in operating assets and liabilities of approximately $3.5$1.0 million.
Net cash used in investing activities for the threesix months ended AprilJuly 30,31, 2026 was approximately $0.2$1.1 million and consisted of purchases of fixed assets.
Net cash used in investing activities for the threesix months ended AprilJuly 30,31, 2025 was approximately $0.5$1.1 million,million and consisted of purchases of fixed assets.
Net cash usedprovided inby financing activities for the threesix months ended AprilJuly 30,31, 2026 was approximately $0.4$107.9 million and primarily consisted of $0.3proceeds millionfrom the sale of paymentscommon onstock the Crown Note andof approximately $0.1$108.6 millionmillion, paymentsnet onof financeoffering leases.expenses.
Net cash used in financing activities for the threesix months ended AprilJuly 30,31, 2025 was approximately $0.6$1.0 million and consisted of approximately $0.5$0.9 million of payments of debt and approximately $0.1$0.2 million of payments on finance leases.
As of AprilJuly 30,31, 2026, we had no borrowings outstanding under the revolving line of credit available under our Credit Agreement and approximately $5.3$5.0 million outstanding under our Crown Note with M&T. The Crown Note has a maturity date of October 1, 2030. We also have operating leases for offices and other facilities used for our operations and finance leases comprised primarily of machinery and equipment leases, as discussed in Item 1. Note 7.11.
Although the expected revenue growth and control of expenses leadslead management to believe that it is probable that the Company’s cash resources will be sufficient to meet its cash requirements through at least the next twelve months, based on current and projected levels of operations, the Company may require additional funding to finance growth or achieve its strategic objectives. If such financing is required, there can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all. In the event funding is not available on reasonable terms, the Company might be required to change its growth strategy and/or seek funding on an alternative basis, but there is no guarantee it will be able to do so.
Recent Accounting Pronouncements
See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s condensed consolidated financial position, earnings, cash flows or disclosures.
MAMA insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (2 insiders, 3 trade dates, 86,378 shares, about $1.2M; 2 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -86,378 (purchases minus sales); net value about -$1.2M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-23 | Michaels Adam Laurance |
Open-market sale |
69,683 | $13.31 | $927.5K |
| 2026-09-22 | Michaels Adam Laurance |
Grant/award |
14,814 | — | — |
| 2026-07-08 | Tappan Moore Iii |
Open-market sale | 472 | $18.65 | $8.8K |
| 2026-07-06 | Janeway Dean |
Grant/award | 2,200 | — | — |
| 2026-07-06 | Halvin Fred |
Grant/award | 2,200 | — | — |
| 2026-07-06 | Blake Lynn Larson |
Grant/award | 2,200 | — | — |
| 2026-07-06 | Henson Meghan |
Grant/award | 2,200 | — | — |
| 2026-04-17 | Gruber Anthony |
Grant/award | 3,500 | — | — |
| 2026-04-17 | Tappan Moore Iii |
Grant/award | 3,500 | — | — |
| 2026-04-17 | Michaels Adam Laurance |
Grant/award |
82,300 | — | — |
| 2026-04-16 | Michaels Adam Laurance |
Open-market sale |
844 | $15.84 | $13.4K |
| 2026-04-16 | Michaels Adam Laurance |
Open-market sale |
15,379 | $15.27 | $234.8K |
Well-known investors holding MAMA (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| First Eagle Investment Management | 2026-06-30 | 1,379,289 | $24.6M | 0.04% | Added 13% |
| Renaissance Technologies | 2026-06-30 | 316,400 | $5.6M | 0.01% | Reduced 12% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 201,375 | $3.6M | 0.0% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 143,591 | $2.6M | 0.0% | New position |
| Two Sigma Investments | 2026-06-30 | 102,913 | $1.8M | 0.0% | New position |
| Polen Capital Management | 2026-06-30 | 100,497 | $1.8M | 0.02% | Added 54% |
| D. E. Shaw & Co. | 2026-06-30 | 31,396 | $560.4K | 0.0% | Added 2% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 10,783 | $165.4K | — | Sold out |