Mama's Creations, Inc.: Form 10-Q for the period ended Jul 31, 2026

The following management's discussion and analysis should be read in conjunction with our annual report on Form 10-K for the fiscal year ended January 31, 2026, the Condensed Consolidated Financial Statements and notes thereto contained in this report, as well as our subsequent reports on Form 10-Q and Form 8-K and any amendments to such reports.

Overview

Mama’s Creations, Inc. is a leading marketer, manufacturer, and distributor of fresh deli prepared foods, found in over 12,000 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 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 increased 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.

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 adequacy of our liquidity to pursue our business objectives;
• reliance on a limited number of customers;
• pricing pressures in the market and lack of control over the pricing of raw materials and freight;
• adverse economic conditions or intense competition;
• 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;
• supply chain disruptions due to global economic uncertainty, weather, natural disaster, fire, terrorism, pandemic, strikes, or otherwise;
• loss or retirement of key executives, including prior to identifying a successor;
• ability to secure placement of our products in key retail locations;
• maintenance of quality control;
• ability to timely realize the expected benefits of recent acquisitions and unanticipated or higher than anticipated integration expenses;
• wage and price inflation; 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 our most recent Annual Report on Form 10-K, and to subsequent reports 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.

Results of Operations for the Three Months Ended July 31, 2026 and 2025

The following table sets forth the summary of the Condensed Consolidated Statements of Operations for the three months ended July 31, 2026 and 2025 (in thousands):

For the three months ended July 31, 2026 and 2025, the Company reported net income of approximately $2.6 million and $1.3 million, respectively. The change in net income between the three 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 55%, to $54.6 million, during the three months ended July 31, 2026, from $35.2 million during the three months ended July 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 the acquisition of the Crown 1 business in September 2025.

Costs of sales: Costs of sales increased by approximately 57%, to $41.5 million, or 76% of Net Sales, during the three months ended July 31, 2026, from $26.4 million, or 75% of Net Sales, during the three months ended July 31, 2025. The increase in costs 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 25% of Net Sales for the three months ended July 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, as well as increased promotional activity to support new customers and new product introductions.

Operating Expenses: Operating expenses increased approximately $3.0 million during the three months ended July 31, 2026, as compared to the three months ended July 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.
• Freight-related expenses increased by approximately $0.6 million mainly due to increased sales;
• Other operating expenses increased by approximately $0.3 million due to additional software and EDI-related expenses, travel, and office expenses;
• Insurance-related expenses increased by approximately $0.2 million, primarily due to the growth of the Company; and
• Professional fees decreased by approximately $0.1 million, primarily due to lower corporate activity.

Other Income, net: Other income, net increased by approximately $367 thousand, to $312 thousand, for the three months ended July 31, 2026, as compared to an expense of $55 thousand for the three months ended July 31, 2025. The increase 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.

Liquidity and Capital Resources

We finance our operations with internally generated funds, supplemented by credit arrangements with third parties and, potentially, capital market financing.

Working Capital

The following table summarizes total current assets, liabilities and working capital at July 31, 2026 compared to January 31, 2026 (in thousands):

As of July 31, 2026, we had working capital of approximately $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 $118.7 million, which was primarily driven by the July 2026 capital raise and cash flows generated from operations.

Cash Flows

The following table summarizes the key components of our cash flows for the six months ended July 31, 2026 and 2025 (in thousands);

Operating activities

Net cash provided by operating activities for the six months ended July 31, 2026 was approximately $11.9 million, which consisted of net income of approximately $4.6 million, non-cash expenses of approximately $5.3 million, and a net positive change in operating assets and liabilities of approximately $1.9 million.

Net cash provided by operating activities for the six months ended July 31, 2025 was approximately $4.3 million, which consisted of net income of approximately $2.5 million, non-cash expenses of approximately $2.9 million, and a net negative change in operating assets and liabilities of approximately $1.0 million.

Investing activities

Net cash used in investing activities for the six months ended July 31, 2026 was approximately $1.1 million and consisted of purchases of fixed assets.

Net cash used in investing activities for the six months ended July 31, 2025 was approximately $1.1 million and consisted of purchases of fixed assets.

Financing activities

Net cash provided by financing activities for the six months ended July 31, 2026 was approximately $107.9 million and primarily consisted of proceeds from the sale of common stock of approximately $108.6 million, net of offering expenses.

Net cash used in financing activities for the six months ended July 31, 2025 was approximately $1.0 million and consisted of approximately $0.9 million of payments of debt and approximately $0.2 million of payments on finance leases.

Credit Facility & Indebtedness

As of July 31, 2026, we had no borrowings outstanding under the revolving line of credit available under our Credit Agreement and approximately $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 11.

Liquidity and Capital Requirements Outlook

Although the expected revenue growth and control of expenses lead 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.

Critical Accounting Estimates

There have been no material changes to the critical accounting estimates previously described in our Form 10-K for the fiscal year ended January 31, 2026.

There have been no material changes to our quantitative or qualitative disclosures previously disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, who serve as our principal executive officer and our principal financial officer, respectively, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

As of July 31, 2026, we evaluated, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15, that occurred during our last quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other 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.