Related Party Transactions

6 Months Ended

Jul. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Promissory Notes – Related Parties

Upon consummation of the acquisition of T&L in December 2021, the Company executed a $3 million promissory note with the sellers. The promissory note requires annual principal payments of $750 thousand, payable on each anniversary of the closing, together with accrued interest at a rate of three and one-half percent (3.5%) per annum. As of July 31, 2024 and January 31, 2024, the outstanding balance under the note was $1.5 million, respectively, of which $750 thousand is recorded as Promissory notes – related parties and $750 thousand is recorded as Promissory notes – related parties, net of current in the Company’s Condensed Consolidated Balance Sheets. Interest expense related to this note was approximately $13 thousand and $26 thousand for the three and six months ended July 31, 2024, respectively, compared to approximately $20 thousand and $39 thousand for the three and six months ended July 31, 2023, respectively. As of July 31, 2024 and January 31, 2024, accrued interest was approximately $31 thousand and $5 thousand, 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 approximately $20 thousand per month through December 31, 2026, increasing after that date to approximately $24 thousand per month 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 and other ancillary charges pursuant to the lease for the three and six months ended July 31, 2024 were approximately $81 thousand and $159 thousand, respectively, compared to $106 thousand and $171 thousand for the three and six months ending July 31, 2023 , respectively.

Chef Inspirational Foods, LLC – Related Party

The Company owned a 24% minority interest in CIF until June 28, 2023, when the Company acquired the remaining interest (refer to Note 1). For the period May 1, 2023 to July 31, 2023 and the period from February 1, 2023 to June 28, 2023, the Company recorded sales of approximately $4.3 million and $10.9 million with CIF, respectively. For the period May 1, 2023 to July 31, 2023 and the period from February 1, 2023 to June 28, 2023, the Company recorded commission expense with CIF of approximately $29 thousand and $175 thousand, respectively.