MAMA

Business Context and Reporting Period

Mama's Creations, Inc. (MAMA) is a marketer, manufacturer, and distributor of fresh deli prepared foods, operating through subsidiaries including MamaMancini's, T&L Acquisition Corp., and Crown 1 Foods. This Form 10-Q covers the quarter and nine months ended October 31, 2025. The Company operates as a single reportable segment and is an accelerated filer.

Key Financial Metrics

Note: Debt figures exclude operating and finance lease liabilities. Total liabilities were $34.4 million as of Oct 31, 2025.

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased 50% year-over-year for the quarter and 31% for the nine-month period. This growth was driven by volume gains, new product introductions, and the acquisition of Crown 1 Enterprises, Inc. (Crown 1), which contributed approximately $10.0 million in revenue since the September 2, 2025, acquisition date.
• Profitability: Net income rose 32% for the quarter and 45% for the nine-month period compared to the prior year. Gross margins improved to 24% (quarter) and 25% (nine months) due to operational efficiencies in overhead, labor, and procurement.
• Operating Expenses: Expenses increased significantly ($3.8 million for the quarter; $6.5 million for nine months) primarily due to professional fees related to the Crown 1 acquisition, increased payroll for new executive hires, and higher stock-based compensation.
• Balance Sheet: Total assets nearly doubled from $47.1 million to $84.0 million, driven by the acquisition of Crown 1 assets ($19.6 million) and increased inventory and receivables. Cash balances increased by $10.9 million.

Guidance, Outlook, and Risks

• Capital Structure: The Company raised approximately $18.9 million via a private placement of common stock in September 2025. Proceeds were used to fund the Crown 1 acquisition and repay portions of the T&L Note and a new "Crown Note" ($5.9 million outstanding, maturing 2030). The T&L Note was paid in full in September 2025.
• Liquidity: Management believes current cash resources are sufficient for the next 12 months but may require additional funding for future growth. The Company has a $5.5 million working capital line of credit with M&T Bank, currently with no outstanding balance.
• Risks: Key risks include reliance on a limited number of customers (one customer accounted for 42% of Q3 gross revenue), commodity price volatility, and the ability to realize expected benefits from the Crown 1 integration. A 1% increase in commodity prices could negatively impact annualized costs of sales by approximately $0.95 million.
• Internal Controls: The Company previously identified material weaknesses in internal controls (segregation of duties, IT authorization). Remediation is ongoing, with management targeting full remediation by January 31, 2026.

Investor Verification Checklist

• Acquisition Integration: Verify the realization of synergies and revenue targets from the Crown 1 acquisition, which contributed $10 million in revenue in less than two months.
• Customer Concentration: Monitor the 42% revenue concentration from a single customer in Q3 2025 and the associated credit risk.
• Debt Covenants: Confirm continued compliance with the Senior Funded Debt/EBITDA covenants on the new Crown Note and Credit Agreement.
• Internal Control Remediation: Track progress on fixing material weaknesses in IT and accounting segregation of duties to ensure future financial reporting reliability.
• Commodity Hedging: Assess the impact of the fixed-price chicken purchase commitment (6.08 million pounds) against market price fluctuations.