Related Party Transactions

3 Months Ended

Apr. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 5 - Related Party Transactions

Promissory Note – Related Party

Upon consummation of the acquisition of T&L and Olive Branch on December 29, 2021, the Company executed a $3,000,000 promissory note with the sellers. The promissory note requires annual principal payments of $750,000 payable on each anniversary of the closing, together with accrued interest at a rate of three and one-half (3.5%) per annum. As of April 30, 2023 and January 31, 2023, the outstanding balance under the note was $2,250,000 and $2,250,000, respectively. For the three months ended April 30, 2023 and 2022 interest expense for this note was $19,314 and $26,119 respectively. As of April 30, 2023 and 2022, accrued interest was $26,002 and $36,036, respectively.

Lease – Related Party

The Company leases a fully contained facility in Farmingdale, NY from 148 Allen Blvd LLC for production and distribution of T&L Creative Salads and Olive Branch products. 148 Allen Blvd LLC is owned by Anthony Morello, Jr., President of T&L and various individuals related to Mr. Morello. This lease term is through November 30, 2031 with the option to extend the lease for two additional ten-year terms with base rent of $20,200 per month through December 31, 2026, increasing after that date to $23,567 through the end of the initial lease term. The exercise of optional renewal is uncertain and therefore excluded from the calculation of the right of use asset. Rent expense pursuant to the lease for the three months ended April 30, 2023 and 2022 was $65,608 and $59,857, respectively.

Chef Inspirational Foods, LLC – Related Party

As noted above in Note 1, on owns a 24% minority interest in CIF. For the three months ended April 30, 2023, the Company recorded sales of $6,540,074 with CIF, of which $2,943,751 was outstanding and included in accounts receivable on the accompanying consolidated balance sheet at April 30, 2023. As of January 31, 2023, the Company had an account receivable balance with CIF of $1,449,009. During the three months ended April 30, 2023, the Company recorded commission expenses and consulting services expenses of $145,842 based on its transactions with CIF, of which $93,545 was due to CIF and is included in accounts payable and accrued expenses on the accompanying consolidated balance sheets at April 30, 2023.