INNOVATIVE FOOD HOLDINGS INC [IVFH] Filings

10-Q 1 innovfood20220930_10q.htm FORM 10-Q innovfood20220930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D. C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or15(d) of the Securities and Exchange Act of 1934

For the quarterly period ended September 30, 2022

☐ Transition report pursuant to Section 13 or 15(d) of the Exchange Act

For the transition period from to .

Commission File Number: 0-9376

INNOVATIVE FOOD HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Florida

(State or Other Jurisdiction of Incorporation or Organization)

20-1167761

(IRS Employer I.D. No.)

28411 Race Track Rd.

Bonita Springs, Florida 34135

(Address of Principal Executive Offices)

(239) 596-0204

(Registrant’s Telephone Number, Including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check One):

Large Accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Regulation 12b-2 of the Exchange Act): YES ☐ NO ☒

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 47,779,010 shares of common stock outstanding as of November 8, 2022.

INNOVATIVE FOOD HOLDINGS, INC.

TABLE OF CONTENTS TO FORM 10-Q

		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statement of Stockholders’ Equity	5
	Consolidated Statements of Cash Flows	6
	Condensed Notes to the Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (including cautionary statement)	27
Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
	Signatures	39

PART I. FINANCIAL INFORMATION

ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS

Innovative Food Holdings, Inc.

Consolidated Balance Sheets

	September 30,			December 31,
	2022			2021
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	2,752,404		$	6,122,671
Accounts receivable, net		4,670,645			3,256,764
Inventory		2,937,098			3,109,984
Other current assets		336,350			314,107
Total current assets		10,696,497			12,803,526

Property and equipment, net		8,008,057			8,186,227
Investments		286,725			286,725
Right of use assets, operating leases, net		168,344			232,381
Right of use assets, finance leases, net		603,803			669,039
Other amortizable intangible assets, net		41,325			72,218
Tradenames and other unamortizable intangible assets		1,532,822			1,532,822
Total assets	$	21,337,573		$	23,782,938

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	6,070,249		$	5,702,905
Accrued interest, current portion		18,008			29,349
Deferred revenue		1,094,649			1,631,406
Line of Credit		2,014,333			2,000,000
Notes payable - current portion, net of discount		5,667,485			412,961
Lease liability - operating leases, current		63,569			74,088
Lease liability - finance leases, current		188,818			159,823
Contingent liability - current portion		187,000			187,000
Total current liabilities		15,304,111			10,197,532

Lease liability - operating leases, non-current		104,775			158,293
Lease liability - finance leases, non-current		382,286			499,240
Contingent liability - long-term		108,600			108,600
Note payable - long term portion, net		1,899			5,409,172
Total liabilities		15,901,671			16,372,837


					-

Commitments & Contingencies (see note 17)
Stockholders' equity
Common stock: $0.0001 par value; 500,000,000 shares authorized; 50,616,590 and 48,879,331 shares issued, and 47,779,010 and 46,041,751 shares outstanding at September 30, 2022 and December 31, 2021, respectively		5,057			4,885
Additional paid-in capital		42,132,756			41,662,710
Treasury stock: 2,623,171 and 2,623,171 shares outstanding at September 30, 2022 and December 31, 2021, respectively.		(1,141,370	)		(1,141,370	)
Accumulated deficit		(35,560,541	)		(33,116,124	)
Total stockholders' equity		5,435,902			7,410,101

Total liabilities and stockholders' equity	$	21,337,573		$	23,782,938

See condensed notes to these unaudited consolidated financial statements.

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Innovative Food Holdings, Inc.

Consolidated Statements of Operations

(unaudited)

	For the Three			For the Three			For the Nine			For the Nine
	Months Ended			Months Ended			Months Ended			Months Ended
	September 30,			September 30,			September 30,			September 30,
	2022			2021			2022			2021

Revenue	$	20,059,982		$	15,207,353		$	56,226,249		$	41,362,816
Cost of goods sold		15,546,132			11,427,343			43,537,570			30,471,401
Gross margin		4,513,850			3,780,010			12,688,679			10,891,415

Selling, general and administrative expenses		4,320,981			4,998,673			15,015,456			14,512,803
Total operating expenses		4,320,981			4,998,673			15,015,456			14,512,803

Operating (loss) income		192,869			(1,218,663	)		(2,326,777	)		(3,621,388	)

Other income (expense:)
Impairment of investment		-			-			-			(209,850	)
Gain on interest rate swap		-			-			294,000			-
Gain on forgiveness of debt		-			1,665,818			-			1,665,818
Loss on extinguishment of debt		-			-			(40,556	)		-
Other leasing income		785			1,900			8,169			8,940
Interest expense, net		(183,908	)		(82,029	)		(379,253	)		(257,889	)
Total other income (expense)		(183,123	)		1,585,689			(117,640	)		1,207,019

Net (loss) income before taxes		9,746			367,026			(2,444,417	)		(2,414,369	)

Income tax expense		-			-			-			-

Net (loss) income	$	9,746		$	367,026		$	(2,444,417	)	$	(2,414,369	)

Net (loss) income per share - basic	$	0.00		$	0.01		$	(0.05	)	$	(0.06	)

Net (loss) income per share - diluted	$	0.00		$	0.01		$	(0.05	)	$	(0.06	)

Weighted average shares outstanding - basic		47,390,976			40,253,543			46,838,377			37,254,290

Weighted average shares outstanding - diluted		47,390,976			40,253,543			46,838,377			37,254,290

See condensed notes to these unaudited consolidated financial statements.

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Innovative Food Holdings, Inc.

Consolidated Statements of Stockholders' Equity

Three and Nine Months Ended September 30, 2022 and 2021

(unaudited)

					Additional
	Common Stock				Paid-in			Treasury Stock					Accumulated
	Amount		Value		Capital			Amount		Value			Deficit			Total

Balance - June 30, 2021		38,800,629	$	3,877	$	37,730,475			2,623,171	$	(1,141,370	)	$	(35,181,188	)	$	1,411,794
Fair value of vested stock and stock options		335,252		34		160,718			-		-			-			160,752
Common stock sold for cash, net of costs		9,375,000		938		3,579,434			-		-			-			3,580,372
Net income for the three months ended September 30, 2021		-		-		-			-		-			367,026			367,026
Balance - September 30, 2021		48,510,881	$	4,849	$	41,470,627			2,623,171	$	(1,141,370	)	$	(34,814,162	)	$	5,519,944

Balance - June 30, 2022		50,014,147		4,997		41,980,090			2,623,171		(1,141,370	)		(35,570,287	)		5,273,430
Fair value of vested stock and stock options		602,443		60		152,666			-		-			-			152,726
Net income for the three months ended September 30, 2022		-		-		-			-		-			9,746			9,746
Balance - September 30, 2022		50,616,590	$	5,057	$	42,132,756			2,623,171	$	(1,141,370	)	$	(35,560,541	)	$	5,435,902

Balance - December 31, 2020		38,209,060	$	3,817	$	37,415,155			2,623,171	$	(1,141,370	)	$	(32,399,793	)	$	3,877,809
Fair value of vested stock and stock options		926,821		94		476,038			-		-			-			476,132
Common stock sold for cash, net of costs		9,375,000		938		3,579,434			-		-			-			3,580,372
Net loss for the nine months ended September 30, 2021		-		-		-			-		-			(2,414,369	)		(2,414,369	)
Balance - September 30, 2021		48,510,881	$	4,849	$	41,470,627			2,623,171	$	(1,141,370	)	$	(34,814,162	)	$	5,519,944

Balance - December 31, 2021		48,879,331		4,885		41,662,710			2,623,171		(1,141,370	)		(33,116,124	)		7,410,101
Fair value of vested stock and stock options		1,560,957		155		458,023			-		-			-			458,178
Offering expenses for stock previously sold for cash		-		-		(50,000	)		-		-			-			(50,000	)
Common stock issued for services		176,302		17		59,931			-		-			-			59,948
Fair value of options issued to consultant		-		-		2,092			-		-			-			2,092
Net loss for the nine months ended September 30, 2022		-		-		-			-		-			(2,444,417	)		(2,444,417	)
Balance - September 30, 2022		50,616,590	$	5,057	$	42,132,756			2,623,171	$	(1,141,370	)	$	(35,560,541	)	$	5,435,902

See condensed notes to these unaudited consolidated financial statements.

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Innovative Food Holdings, Inc.

Consolidated Statements of Cash Flows

(unaudited)

	For the Nine			For the Nine
	Months Ended			Months Ended
	September 30,			September 30,
	2022			2021
	(unaudited)			(unaudited)
Cash flows from operating activities:
Net loss	$	(2,444,417	)	$	(2,414,369	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on forgiveness of debt		-			(1,665,818	)
Impairment of investment		-			209,850
Depreciation and amortization		423,844			407,704
Amortization of right-of-use asset		50,821			76,005
Amortization of prepaid loan fees		70,618			9,368
Stock based compensation		520,218			476,132
Loss on extinguishment of debt		40,556			-
Provision for doubtful accounts		11,493			32,443

Changes in assets and liabilities:
Accounts receivable, net		(1,425,374	)		(1,254,764	)
Inventory and other current assets, net		150,643			869,165
Accounts payable and accrued liabilities		386,414			(747,187	)
Deferred revenue		(536,757	)		(1,861,665	)
Contingent liabilities		-			(8,000	)
Operating lease liability		(50,821	)		(76,005	)
Net cash (used in) operating activities		(2,802,762	)		(5,947,141	)

Cash flows from investing activities:
Acquisition of property and equipment		(107,045	)		(14,812	)
Net cash used in investing activities		(107,045	)		(14,812	)

Cash flows from financing activities:
Payment of offering costs for stock previously issued		(50,000	)		-
Proceeds from sale of common stock, net of costs					3,580,372
Proceeds from Payroll Protection Plan Loan		-			1,748,414
Principal payments on debt		(169,696	)		(299,924	)
Principal payments financing leases		(130,459	)		(108,528	)
Cost of debt financing		(110,305	)		-
Net cash provided by (used in) financing activities		(460,460	)		4,920,334

Decrease in cash and cash equivalents		(3,370,267	)		(1,041,619	)

Cash and cash equivalents at beginning of period		6,122,671			5,060,015

Cash and cash equivalents at end of period	$	2,752,404		$	4,018,396

Supplemental disclosure of cash flow information:

Cash paid during the period for:
Interest	$	187,090		$	250,967

Taxes	$	-		$	-

Non-cash investing and financing activities:
Increase in right of use assets & liabilities – new leases	$	-		$	88,359
Decrease in right of use assets & liabilities – cancellation of lease	$	13,216		$	-
Finance lease for fixed assets	$	42,500		$	21,885
Debt to Fifth Third Bank paid directly by Maple Mark Bank	$	7,695,866		$	-
Reclassification of accounts receivable to other assets	$	-		$	22,380

See condensed notes to these unaudited consolidated financial statements.

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INNOVATIVE FOOD HOLDINGS, INC.

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

(Unaudited)

1. BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of Innovative Food Holdings, Inc., and its wholly owned subsidiaries, some of which are non-operating, Artisan Specialty Foods, Inc. (“Artisan”), Food Innovations, Inc. (“FII”), Food New Media Group, Inc. (“FNM”), Organic Food Brokers, LLC (“OFB”), Gourmet Foodservice Group, Inc. (“GFG”), Gourmet Foodservice Group Warehouse, Inc. (“GFW”), Gourmeting, Inc. (“Gourmeting”), Haley Food Group, Inc. (“Haley”), Oasis Sales Corp. (“Oasis”), 4 The Gourmet, Inc. (d/b/a For The Gourmet, Inc.), (“Gourmet”), Innovative Food Properties, LLC (“IFP”), Plant Innovations, Inc. (“Plant Innovations”), Innovative Gourmet, LLC (“Innovative Gourmet” or “igourmet”), Food Funding, LLC (“Food Funding”), Logistics Innovations, LLC (L Innovations”), M Innovations, LLC (“M Innovations”), MI Foods, LLC (“MIF”), M Foods Innovations, LLC (“M Foods”), P Innovations, LLC (“P Innovations”), PlantBelly, LLC (“PlantBelly”), Innovative Foods, Inc. (“IFI”) and Innovative Gourmet Partnerships, LLC (“IGP”), and collectively with IVFH and its other subsidiaries, the “Company” or “IVFH”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. All material intercompany transactions have been eliminated upon consolidation of these entities.

The accompanying unaudited interim consolidated financial statements have been prepared by the Company, in accordance with generally accepted accounting principles pursuant to Regulation S-X of the Securities and Exchange Commission and with the instructions to Form 10-Q. Certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Accordingly, these interim financial statements should be read in conjunction with the Company’s audited financial statements and related notes as contained in Form 10-K for the year ended December 31, 2021. In the opinion of management, the interim unaudited consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary for fair presentation of the interim periods presented. The results of the operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results of operations to be expected for the full year.

2. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Business Activity

Our business is currently conducted by our wholly owned subsidiaries, some of which are non-operating, Artisan Specialty Foods, Inc. (“Artisan”), Food Innovations, Inc. (“FII”), Food New Media Group, Inc. (“FNM”), Organic Food Brokers, LLC (“OFB”), Gourmet Foodservice Group, Inc. (“GFG”), Gourmet Foodservice Group Warehouse, Inc. (“GFW”), Gourmeting, Inc. (“Gourmeting”), Haley Food Group, Inc. (“Haley”), Oasis Sales Corp. (“Oasis”), 4 The Gourmet, Inc. (d/b/a For The Gourmet, Inc.), (“Gourmet”), Innovative Food Properties, LLC (“IFP”), Plant Innovations, Inc. (“Plant Innovations”), Innovative Gourmet, LLC (“Innovative Gourmet” or “igourmet”), Food Funding, LLC (“Food Funding”), Logistics Innovations, LLC (L Innovations”), M Innovations, LLC (“M Innovations” or “Mouth”), MI Foods, LLC (“MIF”), M Foods Innovations, LLC (“M Foods”), P Innovations, LLC (“P Innovations”), PlantBelly, LLC (“PlantBelly”), Innovative Foods, Inc. (“IFI”) and Innovative Gourmet Partnerships, LLC (“IGP”), and collectively with IVFH and its other subsidiaries, the “Company” or “IVFH”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. All material intercompany transactions have been eliminated upon consolidation of these entities.

Overall, our business activities are focused around the creation and growth of a platform which provides distribution or the enabling of distribution of high quality, unique specialty food and food related products ranging from specialty foodservice products to Consumer-Packaged Goods (“CPG”) products through a variety of sales channels ranging from national partnership based and regionally based foodservice related sales channels to e-commerce sales channels offering products both direct to consumers (“D2C”) and direct to business (“B2B”). In our business model, we receive orders from our customers and then work closely with our suppliers and our warehouse facilities to have the orders fulfilled. In order to maintain freshness and quality, we carefully select our suppliers based upon, among other factors, their quality, uniqueness, reliability and access to overnight courier services.

FII, through its relationship with the producers, growers, and makers of thousands of unique specialty foodservice products and through its relationship with US Foods, Inc. (“U.S. Foods” or “USF”), has been in the business of providing premium restaurants, within 24 – 72 hours, with the freshest origin-specific perishable, and healthcare products shipped directly from our network of vendors and from our warehouses. Our customers include restaurants, hotels, country clubs, national chain accounts, casinos, hospitals and catering houses.

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Gourmet has been in the business of providing specialty food via e-commerce through its own website at www.forthegourmet.com and through other ecommerce channels, with unique specialty gourmet food products shipped directly from our network of vendors and from our warehouses within 24 – 72 hours.

Artisan is a supplier of over 1,500 unique specialty foodservice products to over 500 customers such as chefs, restaurants, etc. in the Greater Chicago area and serves as a national fulfillment center for certain of the Company’s other subsidiaries.

GFG is focused on expanding the Company’s program offerings to additional specialty foodservice customers.

Haley is a dedicated foodservice consulting and advisory firm that works closely with companies to access private label and manufacturers’ private label food service opportunities with the intent of helping them launch and commercialize new products in the broadline foodservice industry and assists in the enabling of the distribution of products via national broadline food distributors.

IFP was formed to hold the Company’s real estate holdings including the recently acquired facility in Mountaintop, Pennsylvania.

OFB and Oasis function as outsourced national sales and brand management teams for emerging organic and specialty food CPG companies of a variety of sizes and business stages, and provides emerging and unique CPG specialty food brands with distribution and shelf placement access in all of the major metro markets in the food retail industry.

igourmet has been in the business of providing D2C specialty food via e-commerce through its own website at www.igourmet.com and through other channels such as www.amazon.com, www.ebay.com, and www.walmart.com. In addition, igourmet.com offers a line of B2B specialty foodservice items. Products are primarily shipped directly from igourmet.com’s approximately 100,000 square feet warehouse in Pennsylvania via igourmet.com owned trucks and via third party carrier directly to thousands of customers nationwide.

Mouth.com (www.mouth.com) is an online retailer of specialty foods, monthly subscription boxes and curated gift boxes to thousands of consumers and corporate customers across the United States. Mouth sources high quality specialty foods crafted in the US by independent and small batch makers, and expertly curates them into standout food gifts for both consumers and corporate customers. Mouth also has launched a private label brand, including several award-winning products.

P Innovations focus is to leverage acquired assets to expand the Company’s subscription-based e-commerce business activities and to launch new businesses leveraging the Company’s e-commerce platform.

Plant Innovations is focused on plant-based D2C brands and online retail within the e-commerce space.

L Innovations provides 3rd party warehouse and fulfillment services out of its location at the Company’s PA facility.

Use of Estimates

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to revenue recognition and concentration of credit risk. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Accounts subject to estimate and judgements are accounts receivable reserves, income taxes, intangible assets, contingent liabilities, operating and finance right of use assets and liabilities, and equity-based instruments. Actual results may differ from these estimates under different assumptions or conditions. We believe our estimates have not been materially inaccurate in past years, and our assumptions are not likely to change in the foreseeable future.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Innovative Food Holdings, Inc., and its wholly owned operating subsidiaries, Artisan, FII, FNM, OFB, GFG, GFW, Gourmeting, Haley, Oasis, Innovative Gourmet, Food Funding, IFP, L Innovations, M Innovations, P Innovations, MIF, M Foods, PlantBelly, Plant Innovations, IFI, IGP, and Gourmet. All material intercompany transactions have been eliminated upon consolidation of these entities.

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Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and temporary cash in investments with credit quality institutions. At times, such investments may be in excess of applicable government mandated insurance limit. At September 30, 2022 and December 31, 2021, trade receivables from the Company’s largest customer amounted to 27% and 28%, respectively, of total trade receivables. During the nine months ended September 30, 2022 and 2021, sales from the Company’s largest customer amounted to 51% and 48% of total sales, respectively.

The Company maintains cash balances in excess of Federal Deposit Insurance Corporation limits. At September 30, 2022 and December 31, 2021, the total cash in excess of these limits was $403,255 and $4,555,032, respectively.

Leases

The Company accounts for leases in accordance with Financial Accounting Standards Board (“FASB”) ASC 842, “Leases”. The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within current and long-term liabilities.

ROU assets represent the right of use to an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term.

Revenue Recognition

The Company recognizes revenue upon product delivery. All of our products are shipped either same day or overnight or through longer shipping terms to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers and sales taxes collectible from customers, if any, are included in revenues.

For revenue from product sales, the Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers”. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Warehouse and logistic services revenue is primarily comprised of inventory management, order fulfilment and warehousing services. Warehouse & logistics services revenues are recognized at the point in time when the services are rendered to the customer.

Deferred Revenue

Certain customer arrangements in the Company's business such as gift cards and e-commerce subscription purchases result in deferred revenues when cash payments are received in advance of performance. Gift cards issued by the Company generally have an expiration of five years from date of purchase. The Company records a liability for unredeemed gift cards and advance payments for monthly club memberships, as cash is received, and the liability is reduced when the card is redeemed or product delivered.

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The following table represents the changes in deferred revenue as reported on the Company’s consolidated balance sheets:

Balance as of December 31, 2020	$	2,917,676
Cash payments received		591,886
Net sales recognized		(2,376,151	)
Balance as of March 31, 2021 (unaudited)	$	1,133,411

Cash payments received		375,115
Net sales recognized		(527,991	)
Balance as of June 30, 2021 (unaudited)	$	980,535

Cash payments received		401,097
Net sales recognized		(325,621	)
Balance as of September 30, 2021 (unaudited)	$	1,056,011

Balance as of December 31, 2021	$	1,631,406
Cash payments received		700,582
Net sales recognized		(1,081,044	)
Balance as of March 31, 2022 (unaudited)	$	1,250,944

Cash payments received		99,989
Net sales recognized		(128,686	)
Balance as of June 30, 2022 (unaudited)	$	1,222,247

Cash payments received		385,633
Net sales recognized		(513,231	)
Balance as of September 30, 2022 (unaudited)	$	1,094,649

Disaggregation of Revenue

The following table represents a disaggregation of revenue for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended
	September 30,
	2022		2021
	(unaudited)		(unaudited)
Specialty Foodservice	$	17,630,515	$	12,060,223
E-Commerce		1,839,541		2,652,307
National Brand Management		336,766		260,934
Logistics		253,160		233,889
Total	$	20,059,982	$	15,207,353

	Nine Months Ended
	September 30,
	2022		2021
	(unaudited)		(unaudited)
Specialty Foodservice	$	46,072,258	$	29,049,060
E-Commerce		8,637,210		10,917,318
National Brand Management		872,732		751,865
Logistics		644,049		644,573
Total	$	56,226,249	$	41,362,816

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Cost of goods sold

We have included in cost of goods sold all costs which are directly related to the generation of revenue. These costs include primarily the cost of food and raw materials, packing and handling, shipping, and delivery costs.

We have also included all payroll costs as cost of goods sold in our leasing and logistics services business.

Basic and Diluted Earnings Per Share

Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully-diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options and warrants to purchase common stock, and convertible debt. Basic and diluted net loss per share is computed based on the weighted average number of shares of common stock outstanding during the period.

The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options and warrants for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculation. For the three and nine months ended September 30, 2022, 2,300,000 stock options were excluded from the calculation of fully diluted earnings per share because the effect would have been anti-dilutive. For the three and nine months ended September 30, 2021, 2,225,000 stock options were excluded from the calculation of fully diluted earnings per share because the effect would have been anti-dilutive.

Dilutive shares at September 30, 2022:

Stock Options

The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company at September 30, 2022:

				Weighted
				Average
				Remaining
Exercise		Number		Contractual
Price		of Options		Life (years)
$	0.41		125,000		1.57
$	0.50		125,000		1.57
$	0.60		50,000		3.25
$	0.62		360,000		1.25
$	0.85		540,000		1.25
$	1.00		50,000		3.25
$	1.20		1,050,000		1.15
			2,300,000		1.33

Restricted Stock Awards

At September 30, 2022, there are 300,000 unvested restricted stock awards remaining from grants in a prior year. Those 300,000 restricted stock awards will vest as follows: 125,000 restricted stock awards will vest contingent upon the attainment of a stock price of $2.00 per share for 20 straight trading days, and an additional 175,000 restricted stock awards will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days. The fair value of these RSUs at the date of the grants will be charged to operations upon vesting.

Stock Grants

At September 30, 2022, there were an aggregate 86,236 unvested stock grants outstanding due to the Company’s two independent directors. These grants will vest as follows: 25,816 per quarter through December 31, 2022, and 15,106 per quarter through September 30, 2023, and 15,102 during the quarter ended December 31, 2023. The fair value of these stock grants at the date of the grant were charged to operations upon vesting.

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Dilutive shares at September 30, 2021:

Stock Options

The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company at September 30, 2021:

				Weighted
				Average
				Remaining
Exercise		Number		Contractual
Price		of Options		Life (years)
$	0.60		50,000		4.25
$	0.62		360,000		2.25
$	0.85		540,000		2.25
$	1.00		50,000		4.25
$	1.20		1,100,000		2.04
$	1.50		125,000		0.25
			2,225,000		2.13

During the three months ended September 30, 2021, the Company issued 50,000 two-year options with a fair value $2,270 to a director. The Company charged the amount of $35,878 and $107,836 to operations in connection with stock options during the three and nine months ended September 30, 2021, respectively.

Restricted Stock Awards

At September 30, 2021, there are 300,000 unvested restricted stock awards remaining from grants in a prior year. Those 300,000 restricted stock awards will vest as follows: 125,000 restricted stock awards will vest contingent upon the attainment of a stock price of $2.00 per share for 20 straight trading days, and an additional 175,000 restricted stock awards will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days.

Stock Grants

The Company charged the amount of $124,874 and $368,296 to operations in connection with stock grants during the three and nine months ended September 30, 2021, respectively.

Significant Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to, accounts receivable. ASU 2016-13 will become effective for the Company on January 1, 2023 and early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on our consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible Preferred Stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on January 1, 2023; adoption of this standard is not expected to have a material effect on our consolidated financial statements and related disclosures.

Management does not believe that any other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements.

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3. LIQUIDITY

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company had an accumulated deficit of $35,560,541 at September 30, 2022 and negative cash flow from operations in the amount of $2,802,762 for the nine months ended September 30, 2022. The Company’s current liabilities exceeded its current assets by $4,607,614 as of September 30, 2022. The Company has reported a net loss of $2,444,417 for the nine months ended September 30, 2022.

The Company is working to manage its current liabilities while it continues to make changes in operations to further improve its cash flow and liquidity position. Management believes the Company will generate sufficient capital from operations and, if additional financing is required, from debt and equity financing in order to satisfy current liabilities in the succeeding twelve months. Management’s belief is based, if necessary, on the Company’s operating plans, which in turn is based on assumptions that may prove to be incorrect.

On June 6, 2022, the Company entered into the following loan agreements with MapleMark: the MapleMark Revolver, with a balance at September 30, 2022 of $2,014,333; the MapleMark Term Loan 1, with a balance at September 30, 2022 of $5,324,733; and the MapleMark Term Loan 2, with a balance at September 30, 2022 $356,800 (the “MapleMark Loans”). See notes 13 and 14. The total debt due to MapleMark at September 30, 2022 was $7,695,866. The purpose of the MapleMark Loans was to recapitalize the Company’s debt by the loans payable to Fifth Third Bank in the aggregate amount of $5,665,456.

The MapleMark Revolver has an initial maturity date of November 28, 2022; the MapleMark Term Loans 1 and 2 have initial maturity dates of November 28, 2022. The Company has applied for, and expects to receive, loan guarantees from the United States Department of Agriculture pursuant to its Business and Industry Guarantee Loan Program, though there can be no assurance that these guarantees will be received. Upon receipt of these loan guarantees, the maturity date of the Revolver will be extended to November 28, 2023, and the maturity date of the Term Loans will be extended to June 6, 2052. See note 19.

If the Company’s cash flow from operations is insufficient, the Company may require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or be in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, the Company may be unable to implement its current plans for expansion, repay its debt obligations as they become due or respond to competitive pressures, any of which circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations. The Company has not made any adjustments to the financial statements which would be necessary should the Company not be able to continue as a going concern.

4. ACCOUNTS RECEIVABLE

At September 30, 2022 and December 31, 2021, accounts receivable consists of:

	September 30, 2022			December 31, 2021
	(unaudited)
Accounts receivable from customers	$	5,036,296		$	3,632,695
Allowance for doubtful accounts		(365,651	)		(375,931	)
Accounts receivable, net	$	4,670,645		$	3,256,764

During the three and nine months ended September 30, 2022 the Company charged the amount of $3,437 and $11,473 to provision for doubtful accounts, respectively; during the previous period the Company charged the amount of $4,456 and $32,443 to provision for doubtful accounts, respectively.

5. INVENTORY

Inventory consists primarily of specialty food products. At September 30, 2022 and December 31, 2021, inventory consisted of the following:

September 30,

2022

December 31,

2021

(unaudited)

Finished Goods Inventory

2,937,098

3,109,984

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6. PROPERTY AND EQUIPMENT

Acquisition of Building

The Company owns a building and property located at 28411 Race Track Road, Bonita Springs, Florida 34135. The property consists of approximately 1.1 acres of land and approximately 10,000 square feet of combined office and warehouse space, and was purchased as part of a bank short sale. The Company moved its operations to these premises on July 15, 2013. The purchase price of the property was $792,758.

On May 14, 2015, the Company purchased a building and property located at 2528 S. 27th Avenue, Broadview, Illinois 60155. The property consists of approximately 1.33 acres of land and approximately 28,711 square feet of combined office and warehouse space. The purchase price of $914,350 was initially financed primarily by a draw-down of $900,000 on the Company’s credit facility with Fifth Third Bank, National Association (“Fifth Third Bank”). On May 29, 2015, a permanent financing facility was provided by Fifth Third Bank in the form of a loan in the amount of $980,000. $900,000 of this amount was used to pay the balance of the credit facility; the additional $80,000 was used for refrigeration and other improvements at the property. The interest on the loan is at the LIBOR rate plus 3.0%. The building is used for office and warehouse space primarily for the Company’s Artisan subsidiary. We have also recently completed an additional property improvement and upgrade buildout at the Artisan building which include a fully functional commercial test kitchen and training center and conference room. The test kitchen and training room is used by Artisan and other subsidiaries of the Company for the purposes of new product testing and development and approval, Quality Assurance and Quality Control as well as sales presentations and customer demonstrations. In addition, we added a packaging room to the Artisan building, which is built to FDA, FSMA and SQF food safety standards and purchased new, technologically advanced semi-automated fillers for the packaging room. The packaging room addition will allow for expansion of private label product lines as well as packing of organic, non-GMO, diet specific and other specialty foods. The test kitchen, packaging room and additional improvements were financed by a loan from Fifth Third Bank.

Depreciation on the building and the related improvements, furniture, fixtures, and equipment began when the Company occupied the facility in October, 2015.

On November 8, 2019 the Company, through a newly formed wholly-owned subsidiary, purchased a logistics and warehouse facility (the “Facility”) for $4.5 million. The Facility is approximately 200,000 square feet and is situated on approximately 15 acres in Mountain Top, Pennsylvania. The Facility’s appraised value by a third party appraisal firm in 2022 was $16,400,000. Related to the Facility purchase, the Company entered into a commercial loan agreement for both the purchase price and planned improvements to the Facility. The amount of the loan was $5,500,000, of which $3,600,000 had been utilized at December 31, 2021 in connection with the purchase of the Facility; the lender is Fifth Third Bank and the loan is secured by a mortgage on the property and other Company assets. The interest on the loan is LIBOR plus 2.75%, with interest only payments due through September 30, 2020, thereafter with principal amortized over 20 years with the balance due at maturity on September 2, 2025. Related to Facility purchase, the Company also acquired certain leases from certain tenants of the Facility, all of which were in good standing at the time of purchase. Depreciation on the building began when the Company commenced recognizing revenue from leasing and logistics services associated with the Facility. On October 5, 2020, the Company completed work to upgrade the Facility at a cost of $2,231,458 in order to better support the Company’s focus on e-commerce and logistics. Of the build out costs, $1,900,000 was funded by the loan described below. On June 9, 2022, the principal and interest due on this note in the amount of $5,168,000 and $14,967, respectively, were paid directly to Fifth Third Bank by MapleMark in connection with MapleMark Term Loan 1. (See note 14.)

The following table summarizes property and equipment at September 30, 2022 and December 31, 2021:

	September 30, 2022			December 31, 2021
	(unaudited)
Land	$	1,256,895		$	1,256,895
Building		7,191,451			7,191,451
Computer and Office Equipment		607,384			593,566
Warehouse Equipment		376,667			376,667
Furniture and Fixtures		1,017,483			944,233
Vehicles		109,441			109,441
Total before accumulated depreciation		10,559,321			10,472,253
Less: accumulated depreciation		(2,551,264	)		(2,286,026	)
Total	$	8,008,057		$	8,186,227

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Depreciation and amortization expense for property and equipment amounted to $96,650 and $97,797 for the three months ended September 30, 2022 and 2021, respectively. Depreciation and amortization expense for property and equipment amounted to $285,215 and $298,362 for the nine months ended September 30, 2022 and 2021, respectively.

7. RIGHT OF USE (“ROU”) ASSETS AND LEASE LIABILITIES – OPERATING LEASES

The Company has operating leases for offices, warehouses, vehicles, and office equipment. The Company’s leases have remaining lease terms of 1 year to 3 years, some of which include options to extend.

The Company’s lease expense for the three months ended September 30, 2022 and 2021 was entirely comprised of operating leases and amounted to $18,213 and $30,861, respectively. The Company’s lease expense for the nine months ended September 30, 2022 and 2021 was entirely comprised of operating leases and amounted to $60,186 and $89,443, respectively.

The Company’s ROU asset amortization for the three months ended September 30, 2022 and 2021 was $15,659 and $26,305, respectively. The Company’s ROU asset amortization for the nine months ended September 30, 2022 and 2021 was $50,821 and $76,005, respectively.

Right of use assets – operating leases are summarized below:

	September 30, 2022		December 31, 2021
	(unaudited)
Office	$	117,412	$	148,529
Warehouse equipment		40,558		55,047
Office equipment		10,374		12,677
Vehicles		-		16,128
Right of use assets - operating leases, net	$	168,344	$	232,381

Operating lease liabilities are summarized below:

	September 30, 2022			December 31, 2021
	(unaudited)
Office	$	117,412		$	148,529
Warehouse equipment		40,558			55,047
Office equipment		10,374			12,677
Vehicles		-			16,128
Lease liability	$	168,344		$	232,381
Less: current portion		(63,569	)		(74,088	)
Lease liability, non-current	$	104,775		$	158,293

Maturity analysis under these lease agreements are as follows:

For the period ended September 30, 2023	$	72,948
For the period ended September 30, 2024		71,901
For the period ended September 30, 2025		37,938
For the period ended September 30, 2026		890
For the period ended September 30, 2027		-
Total	$	183,677
Less: Present value discount		(15,333	)
Lease liability	$	168,344

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8. RIGHT OF USE ASSETS – FINANCING LEASES

The Company has financing leases for vehicles and warehouse equipment. (See note 15.) Right of use asset – financing leases are summarized below:

	September 30, 2022			December 31, 2021
	(unaudited)
Vehicles	$	404,858		$	362,358
Warehouse Equipment		555,416			555,416
Total before accumulated depreciation		960,274			917,774
Less: accumulated depreciation		(356,471	)		(248,735	)
Total right of use assets - financing leases, net	$	603,803		$	669,039

Depreciation expense for right of use assets for the three months ended September 30, 2022 and 2021 was $37,128 and $35,036, respectively. Depreciation expense for right of use assets for the nine months ended September 30, 2022 and 2021 was $107,736 and $100,732, respectively.

9. INVESTMENTS

The Company has made investments in certain early stage food related companies which it expects can benefit from synergies with the Company’s various operating businesses. At September 30, 2022 and 2021 the Company has investments in seven food related companies in the aggregate amount of $286,725. The Company does not have significant influence over the operations of these companies.

The Company’s investments may take the form of debt, equity, or equity in the future including convertible notes and other instruments which provide for future equity under various scenarios including subsequent financings or initial public offerings. The Company has evaluated the guidance in ASC No. 325-20, “Investments – Other”, in determining to account for the investment using the cost method since the equity securities are not marketable and do not give the Company significant influence.

During the nine months ended September 30, 2021, the founder of one of the food related companies passed away in an untimely tragic accident, and as a result the food related company ceased operations and the Company recognized an impairment in the amount of $209,850 in connection with that investment.

10. INTANGIBLE ASSETS

The Company acquired certain intangible assets pursuant to the acquisitions through Artisan, Oasis, Innovative Gourmet, OFB, Haley, and M Innovations. These assets include non-compete agreements, customer relationships, trade names, internally developed technology, and goodwill. The Company has also capitalized the development of its website.

As detailed in ASC 350 “Intangibles - Goodwill and Other”, the Company tests for goodwill impairment in the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. As detailed in ASC 350-20-35-3A, in performing its testing for goodwill impairment, management has completed a qualitative analysis to determine whether it was more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, including goodwill. To complete this review, management followed the steps in ASC 350-20-35-3C to evaluate the fair value of goodwill and considered all known events and circumstances that might trigger an impairment of goodwill.

COVID-19 has had a material negative impact on some of the Company’s foodservice customers. In an effort to limit the spread of the virus, federal, state and local governments have implemented measures that have resulted in the closure of non-essential businesses in many of the markets the Company serves, which has forced its customers in those markets to either transition their establishments to take-out service, delivery service or temporarily cease operations. These actions have led to a significant decrease in demand for certain of the Company’s foodservice products. The adverse impact to the Company’s foodservice customer base was a triggering event and accordingly, as required by ASC 350, the Company performed interim goodwill and long-lived asset quantitative impairment tests during the first quarter of 2020. While the triggering event was a result of the negative impact related to foodservice customers, the applicable accounting rules then required an impairment test targeted specifically to any available carrying value of goodwill or intangible assets. During the first quarter of 2020, the Company performed the impairment tests on certain intangible assets and goodwill pursuant to the acquisitions through Artisan, Oasis, Innovative Gourmet and M Innovations; the intangible assets acquired pursuant to the acquisitions of OFB and Haley were fully amortized at the time of the impairment test.

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Long-lived Impairment Test

Long-lived assets, including other intangible assets, were tested for recoverability at the asset group level. The Company estimated the net undiscounted cash flows expected to be generated from the asset group over the expected useful life of the asset group’s primary asset. Key assumptions include future revenues, growth rates, estimates of future levels of gross profit and operating profit and projected capital expenditures necessary to maintain the operating capacity of each asset group. As a result of the impairment test, it was calculated that the net carrying values of other intangible assets exceeded the undiscounted cash flows for each of the Company’s asset groups by a total of $1,048,692, and the Company was required by the applicable accounting rules to record an impairment charge to operations during the year ended December 31, 2020. At September 30, 2022 and December 31, 2021, the net carrying value of other intangible assets on the Company’s balance sheet was $1,574,147 and $1,605,040, respectively.

The Company acquired certain intangible assets pursuant to the acquisitions through Artisan, Oasis, Innovative Gourmet, OFB, Haley, and M Innovations. The following is the net book value of these assets:

	September 30, 2022 (unaudited)
			Accumulated
	Gross		Amortization			Net
Non-Compete Agreement - amortizable	$	505,900	$	(505,900	)	$	-
Customer Relationships - amortizable		3,068,034		(3,068,034	)		-
Trade Names and other		1,532,822		-			1,532,822
Internally Developed Technology - amortizable		875,643		(875,643	)		-
Website - amortizable		84,000		(42,675	)		41,325
Total	$	6,066,399	$	(4,492,252	)	$	1,574,147

	December 31, 2021
			Accumulated
	Cost		Amortization			Net
Non-Compete Agreement - amortizable	$	505,900	$	(505,900	)	$	-
Customer Relationships - amortizable		3,068,034		(3,068,034	)		-
Trade Names and other		1,532,822		-			1,532,822
Internally Developed Technology		875,643		(875,643	)		-
Website		84,000		(11,782	)		72,218
Total	$	6,066,399	$	(4,461,359	)	$	1,605,040

Total amortization expense for the three months ended September 30, 2022 and 2021 was $10,331 and $2,870, respectively. Total amortization expense for the nine months ended September 30, 2022 and 2021 was $30,993 and $8,610, respectively.

11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at September 30, 2022 and December 31, 2021 are as follows:

	September 30, 2022		December 31, 2021
	(unaudited)
Trade payables and accrued liabilities	$	5,835,854	$	5,414,731
Accrued payroll and commissions		234,395		288,174
Total	$	6,070,249	$	5,702,905

12. ACCRUED INTEREST

At September 30, 2022, accrued interest on notes outstanding was $18,008. During the three months ended September 30, 2022 and 2021, the Company paid cash for interest in the aggregate amount of $58,292 and $88,331, respectively. During the nine months ended September 30, 2022 and 2021, the Company paid cash for interest in the aggregate amount of $187,090 and $250,967, respectively.

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13. REVOLVING CREDIT FACILITIES

	September 30, 2022		December 31, 2021
	(unaudited)
On June 6, 2022, the Company entered into a revolving credit facility with MapleMark Bank ("MapleMark”, the “MapleMark Revolver”) in the initial amount of $2,014,333. This amount was paid by MapleMark directly to Fifth Third Bank in satisfaction of the Fifth Third Bank Line of Credit. Any amounts borrowed under the MapleMark Revolver will bear interest at the greater of (a) the Base Rate (the rate of interest per annum quoted in the “Money Rates” section of The Wall Street Journal from time to time and designated as the “Prime Rate”) plus 0.25% per annum and (b) 3.50% per annum. The MapleMark Revolver matures on November 28, 2022 and in the event United States Department of Agriculture issues a guarantee of repayment of the MapleMark Revolver in favor of the Company pursuant to its Business and Industry Loan Guarantee Program (the “USDA Guarantee”), at the Company’s option, the amount of the MapleMark Revolver can be expanded to $3,000,000 and its term extended to November 28, 2023. The Company has applied for a USDA Guarantee; at September 30, 2022, this guarantee had not yet been received. The MapleMark Revolver contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge their assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. The Company is also subject to a fixed charge coverage ratio covenant for the Revolver Loan as described in more detail in the MapleMark Revolver. The Company recorded a discount to this loan in the amount of $29,832 in connection with financing costs; $13,532 and $17,623 of this amount was amortized to interest expense during the three and nine months ended September 30, 2022, respectively. During the three and nine months ended September 30, 2022, the Company paid interest in the amount of $34,355 on the MapleMark Revolver.	$	2,014,333	$	-

Line of credit facility with Fifth Third Bank in the original amount of $2,000,000 with an interest rate of LIBOR plus 3.00% (the “Fifth Third Bank Line of Credit”). Effective August 1, 2019, this credit facility was extended to August 1, 2021. Effective as of July 31, 2021 this credit facility was extended to November 1, 2021: effective as of October 29, 2021, this credit facility was extended to March 1, 2022; and effective March 1, 2022, this credit facility was extended to June 30, 2022. The debt covenants of this credit facility were waived until June 30, 2022. On March 20, 2020, the Company drew down the amount of $2,000,000. During the three and nine months ended September 30, 2022, the Company paid interest in the amount of $22,459 and $44,681 respectively, on the Fifth Third Bank Line of Credit. On June 9, 2022, the total outstanding principal in the amount of $2,000,000 and accrued interest in the amount of $14,333 were paid directly to Fifth Third Bank by MapleMark in connection with the MapleMark Revolver. The Fifth Third Bank Line of Credit is paid in full.	$	-	$	2,000,000

Total	$	2,014,333	$	2,000,000

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14. NOTES PAYABLE

	September 30, 2022		December 31, 2021
	(unaudited)

On June 6, 2022, the Company entered into a term loan agreement with MapleMark (the “MapleMark Term Loan 1”) for the original amount of $5,324,733. This amount was paid by MapleMark directly to Fifth Third Bank in satisfaction the outstanding principal and interest due under existing loans with Fifth Third Bank. The MapleMark Term Loan 1 matures on November 28, 2022. Upon receipt of the USDA Guarantee, the Company will have the option of extending the term of the Term Loan 1 to June 6, 2052. Amounts outstanding under the Term Loans will bear interest at the rate equal to the lesser of (a) the Maximum Lawful Rate, or (b) the greater of (i) WSJP (the “Prime Rate” as published by The Wall Street Journal) plus 1.25% per annum or (ii) 4.50% per annum. The Term Loan Agreements contain negative covenants that, subject to certain exceptions, limits the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge their assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. The Term Loan Agreements also provides that the Company and its subsidiaries on a consolidated basis, meet a Fixed Charge Coverage Ratio as described in detail in the Loan Agreements. The Term Loan Agreements contain events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, nonpayment of interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, and certain judgment defaults as specified in the Term Loan Agreements. If an event of default occurs, the maturity of the amounts owed under the Term Loan Agreements may be accelerated. The obligations under the Term Loan Agreements are guaranteed by the Company and IFP and are secured by mortgages on their real estate located in Florida, Illinois, and Pennsylvania and substantially all of their assets, in each case, subject to certain exceptions and permitted liens. The Company recorded a discount to this loan in the amount of $57,106 in connection with financing costs; $25,904 and $33,736 of this amount was amortized to interest expense during the three and nine months ended September 30, 2022, respectively. During the three and nine months ended September 30, 2022, the Company accrued interest in the amount of $88,856 and $108,380 on this loan, respectively.	$	5,324,733	$	-

On June 6, 2022, the Company entered into a term loan agreement with MapleMark (the “MapleMark Term Loan 2”) for the original amount of $356,800. This amount was paid by MapleMark directly to Fifth Third Bank in satisfaction the outstanding principal and interest due under existing loans with Fifth Third Bank. The MapleMark Term Loan 1 matures on November 28, 2022. Upon receipt of the USDA Guarantee, the Company will have the option of extending the term of the Term Loan 1 to June 6, 2052. Amounts outstanding under the Term Loans will bear interest at the rate equal to the lesser of (a) the Maximum Lawful Rate, or (b) the greater of (i) WSJP (the “Prime Rate” as published by The Wall Street Journal) plus 1.25% per annum or (ii) 4.50% per annum. The Term Loan Agreements contain negative covenants that, subject to certain exceptions, limits the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge their assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. The Term Loan Agreements also provides that the Company and its subsidiaries on a consolidated basis, meet a Fixed Charge Coverage Ratio as described in detail in the Loan Agreements. The Term Loan Agreements contain events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, nonpayment of interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, and certain judgment defaults as specified in the Term Loan Agreements. If an event of default occurs, the maturity of the amounts owed under the Term Loan Agreements may be accelerated. The obligations under the Term Loan Agreements are guaranteed by the Company and IFP and are secured by mortgages on their real estate located in Florida, Illinois, and Pennsylvania and substantially all of their assets, in each case, subject to certain exceptions and permitted liens. The Company recorded a discount to this loan in the amount of $23,367 in connection with financing costs; $10,599 and $13,804 of this amount was amortized to interest expense during the three and nine months ended September 30, 2022, respectively. During the three and nine months ended September 30, 2022, the Company accrued interest in the amount of $5,954 and $7,262 on this loan, respectively.	$	356,800	$	-

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Secured mortgage note payable for the acquisition of land and building in Bonita Springs, Florida in the amount of $546,000. Principal payments of $4,550 plus interest at the rate of Libor plus 3% are due monthly. The balance of the principal amount was originally due February 28, 2018. On March 23, 2018 and effective February 26, 2018, this note was amended and renewed in the amount of $273,000, with monthly payments of principal and interest of $4,550 payable through the maturity date of February 28, 2023. During the three months ended September 30, 2022, the Company made payments of principal and interest on this note in the amounts of $9,100 and $151, respectively; and during the nine months ended September 30, 2022, the Company made payments of principal and interest on this note in the amounts of $22,750 and $655, respectively. On June 9, 2022, the principal and interest due on this note in the amount of $45,500 and $66, respectively, were paid directly to Fifth Third Bank by MapleMark in connection with MapleMark Term Loan 2.	$	-	$	68,250

Secured mortgage note payable for the acquisition of land and building in Broadview, Illinois in the amount of $980,000. Principal payments of $8,167 plus interest at the rate of LIBOR plus 2.75% are due monthly through April 2020, the remaining principal balance in the amount of $490,000 was originally due May 29, 2020. Effective May 29, 2020, the note was amended and renewed such that principal payments of $8,303 plus accrued interest were due beginning June 29, 2020 and continuing for sixty months; the entire principal balance and all accrued interest will be due on May 29, 2025. During the three months ended September 30, 2022, the Company made payments of principal and interest on this note in the amounts of $16,333 and $1,305, respectively; during the nine months ended September 30, 2022, the Company made payments of principal and interest on this note in the amounts of $40,833 and $3,781, respectively. On June 9, 2022, the principal and interest due on this note in the amount of $310,333 and $901, respectively, were paid directly to Fifth Third Bank by Maple Mark in connection with MapleMark Term Loan 2.	$	-	$	351,165

Promissory note dated March 22, 2019 in the original amount of $391,558 (the “Artisan Equipment Loan”) payable to Fifth Third Bank. This loan is secured by the Company’s tangible and intangible personal property and bears interest at the rate of 5.20%. The entire principal balance and all accrued interest is due on the maturity date of March 21, 2024. Monthly payments in the amount of $7,425 including principal and interest commenced in April, 2019. During the year ended December 31, 2019, equipment financed under the Artisan Equipment Loan in the amount of $33,075 was returned for credit. During the three months ended September 30, 2022, the Company made payments of principal and interest on this loan in the amounts of $12,288 and $1,308, respectively; during the nine months ended September 30, 2022, the Company made payments of principal and interest on this loan in the amounts of $30,523 and $3,467, respectively. On June 9, 2022, the principal and interest due on this note in the amount of $141,623 and $143, respectively, were paid directly to Fifth Third Bank by MapleMark in connection with MapleMark Term Loan 1.	$	-	$	172,146

A note payable in the amount of $20,000. The Note was due in January 2006 and the Company is currently accruing interest on this note at 1.9%. During the three and nine months ended September 30, 2022, the Company accrued interest in the amount of $96 and $285, respectively, on this note. At September 30, 2022, accrued interest on this note was $18,008.	$	20,000	$	20,000

Vehicle acquisition loan dated December 6, 2018 in the original amount of $51,088, payable in sixty monthly installments of $955 including interest at the rate of 4.61% maturing November 5, 2023. During the three months ended September 30, 2022, the Company made principal and interest payments in the amount of $2,694 and $168, respectively, on this loan; during the nine months ended September 30, 2022, the Company made principal and interest payments in the amount of $7,991 and $601, respectively.	$	12,992	$	20,984

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	September 30, 2022			December 31, 2021
	(unaudited)

Secured mortgage facility in the amount of $5,500,000 with Fifth Third Bank for the acquisition of land and building in Mountaintop, Pennsylvania dated November 8, 2019 (the “Fifth Third Mortgage Facility”). The Fifth Third Mortgage Facility is secured by the assets acquired. During the year ended December 31, 2019, the Company drew down $3,600,000 of this facility. During the year ended December 31, 2020, the Company drew down an additional $1,900,000 of this facility. The interest rate is LIBOR plus 2.75% with interest only due through September 30, 2020, thereafter with principal amortized at a 20 years amortization rate and the balance due on the maturity date of September 2, 2025. The Company prepaid loan fees in connection with this loan in the amount of $72,916 which are considered a discount to the loan and are being amortized over the term of the note; during the three and nine months ended September 30, 2022, $0 and $5,456, respectively, of this discount was amortized to interest expense. During the three months ended September 30, 2022, the Company made principal and interest payments in the amount of $0 and $13,351, respectively, on this loan; during the nine months ended September 30, 2022, the Company made principal and interest payments in the amount of $0 and $51,151, respectively, on this loan. On June 9, 2022, the principal and interest due on this note in the amount of $5,168,000 and $14,967, respectively, were paid directly to Fifth Third Bank by MapleMark in connection with MapleMark Term Loan 1. The Company recorded a loss in the amount of $40,556 on this transaction in connection with the write-off of the unamortized portion of the discount. The Company also had in place an interest rate swap agreement (the “Fifth Third Interest Rate Swap”) with Fifth Third bank in connection with the Fifth Third Mortgage Facility. Pursuant to the Fifth Third Interest Rate Swap, the Company paid an additional base rate of 0.59% reduced by the difference between an initial LIBOR rate of 0.1513% and the month-end LIBOR rate resulting in additional interest expense of $0 and $5,632, respectively, during the three and nine months ended September 30, 2022. On March 28, 2022 the Interest Rate Swap was terminated. Upon termination the Company received a cash payment of $294,000, which is reflected as a gain on the interest rate swap on the statement of operations for the nine months ended September 30, 2022.	$	-		$	5,235,600

Total	$	5,714,526		$	5,868,145
Discount		(45,142	)		(46,012	)
Net of discount	$	5,669,384		$	5,822,133

Current portion	$	5,712,627		$	458,973
Long-term maturities		1,899			5,409,172
Total	$	5,714,526		$	5,868,145

Aggregate maturities of long-term notes payable as of September 30, 2022 are as follows:

For the period ended September 30,

2023	$	5,712,627
2024		1,899
2025		-
2026		-
2027		-
Total	$	5,714,526

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15. LEASE LIABILITIES - FINANCING LEASES

	September 30, 2022		December 31, 2021
	(unaudited)
Financing lease obligation under a lease agreement for a forklift dated July 12, 2021 in the original amount of $16,070 payable in thirty-six monthly installments of $489 including interest at the rate of 6.01%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $1,307 and $159, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $3,865 and $536, respectively.	$	9,723	$	13,588

Financing lease obligation under a lease agreement for a pallet truck dated July 15, 2021 in the original amount of $5,816 payable in thirty-six monthly installments of $177 including interest at the rate of 6.01%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $473 and $58, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $1,398 and $194, respectively.	$	3,520	$	4,918

Financing lease obligation under a lease agreement for warehouse furniture and equipment truck dated October 14, 2020 in the original amount of $514,173 payable in sixty monthly installments of $9,942 including interest at the rate of 6.01%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amount of $24,672 and $5,153, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amount of $72,920 and $16,556, respectively.	$	326,768	$	399,688

Financing lease obligation under a lease agreement for a truck dated March 31, 2020 in the original amount of $152,548 payable in eighty-four monthly installments of $2,188 including interest at the rate of 5.44%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $5,118 and $1,447, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $15,147 and $4,546, respectively.	$	102,873	$	118,020

Financing lease obligation under a lease agreement for a truck dated November 5, 2018 in the original amount of $128,587 payable in seventy monthly installments of $2,326 including interest at the rate of 8.33%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $5,869 and $1,109, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $17,247 and $3,684, respectively.	$	49,279	$	66,526

Financing lease obligation under a lease agreement for a truck dated August 23, 2019 in the original amount of $80,413 payable in eighty-four monthly installments of $1,148 including interest at the rate of 5.0%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $2,821 and $623, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $8,358 and $1,974, respectively.	$	47,965	$	56,323

Financing lease obligation under a lease agreement for a truck dated February 4, 2022 in the original amount of $42,500 payable in twenty-four monthly installments of $1,963 including interest at the rate of 10.1%. During the three months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $5,022 and $868, respectively. During the nine months ended September 30, 2022, the Company made principal and interest payments on this lease obligation in the amounts of $11,524 and $2,219, respectively.	$	30,976	$	-

Total	$	571,104	$	659,063

Current portion	$	188,818	$	159,823
Long-term maturities		382,286		499,240
Total	$	571,104	$	659,063

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Aggregate maturities of lease liabilities – financing leases as of September 30, 2022 are as follows:

For the period ended September 30,

2023	$	188,818
2024		183,361
2025		151,984
2026		36,148
2027		10,793
Thereafter		-
Total	$	571,104

16. RELATED PARTY TRANSACTIONS

For the nine months ended September 30, 2022:

Vesting of shares to officers

During the nine months ended September 30, 2022 in connection with stock based compensation based upon the terms of employment agreements with its employees and compensation agreements with the Company’s independent board members, the Company charged to operations the amount of $30,000 for the vesting of a total of 77,440 shares of common stock issuable to two of its independent board members, and $421,200 for the vesting of a total of 1,483,517 shares of common stock issuable to its Chief Executive Officer pursuant to his employment agreement. The Company also recognized non-cash compensation in the amount of $6,978 during the nine months ended September 30, 2022 in connection with stock options issuable to management and board members.

For the nine months ended September 30, 2021:

Vesting of shares to officers

During the nine months ended September 30, 2021 in connection with stock based compensation based upon the terms of employment agreements with its employees and compensation agreements with the Company’s independent board members, the Company charged to operations the amount of $67,500 for the vesting of a total of 150,210 shares of common stock issuable to two of its independent board members, and $300,796 for the vesting of a total of 776,611 shares of common stock issuable to its Chief Executive Officer and its Director of Strategic Acquisitions pursuant to their employment agreements. The Company also recognized non-cash compensation in the amount of $107,836 during the nine months ended September 30, 2021 in connection with stock options issuable to management and board members.

During the nine months ended September 30, 2021, the Company issued 50,000 two-year stock options with a fair value of $2,270 and an exercise price of $1.20 to a director.

On August 26, 2021, the Company sold a total of 3,125,000 shares of common stock at a price of $0.40 per share to an entity controlled by Hank Cohn, a director of the Company; the Company sold 3,125,000 shares of common stock at a price of $0.40 per share to an entity controlled by Jefferson Gramm, a director of the Company; and the Company sold 3,125,000 shares of common stock at a price of $0.40 per share to an entity controlled by James C. Pappas, a director of the Company.

17. COMMITMENTS AND CONTINGENCIES

Contingent Liability

Pursuant to the igourmet Asset Purchase Agreement, the Company recorded contingent liabilities in the original amount of $787,800. This amount relates to certain performance-based payments over the twenty-four months following the acquisition date as well as to certain additional liabilities that the Company has evaluated and has recorded on a contingent basis. During the year ended December 31, 2018, the Company reduced this amount by $392,900 as the performance goals for the first year were not met. During the year ended December 31, 2019, the Company reduced this amount by $132,300 as the performance goals for the second year were not met. During the year ended December 31, 2019, the Company paid the amount of $39,000 in connection with the additional liabilities. During the three and nine months ended September 30, 2022, the Company paid the amount of $0 and $8,000, respectively, in connection with the additional liabilities. At September 30, 2022 and December 31, 2021, the amount of $67,000 remains on the Company’s consolidated balance sheet as a current contingent liability, and $108,600 as a long term contingent liability.

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Pursuant to the Mouth Foods LLC Asset Acquisition, the Company recorded contingent liabilities in the amount of $240,576. These amounts relate to the estimate of certain performance-based payments following the acquisition date as well as to certain additional liabilities that the Company has evaluated and has recorded on a contingent basis. During the year ended December 31, 2019, the Company paid the amount of $120,576 in connection with these liabilities. At September 30, 2022 and December 31, 2021, $120,000 is classified as a current contingent liability and is included in accounts payable and accrued liabilities.

License Agreements

In May 2019, the Company entered into a royalty-based license agreement, through December 31, 2022 with a lifestyle brand, which provides the exclusive right, with certain carve-outs and limitations, to sell and promote branded gift baskets for certain channels including: retail, warehouse club stores, certain of the Company’s current e-commerce channels, and other e-commerce channels such as amazon.com (the “May 2019 License Agreement”). Pursuant to the May 2019 License Agreement, the Company paid an initial royalty deposit in the amount of $50,000 towards the minimum royalty, which is classified as other current assets on the Company’s balance sheet at December 31, 2019. Future royalty amounts owed for minimum payments in connection with the May 2019 License Agreement will be deducted from this deposit. The royalty rate is 5% of net sales, and the Company is required, with certain exceptions and exclusions, to make minimum royalty payments of $100,000 through the end of 2020, $110,000 in 2021, and $125,000 in 2022.

Litigation

On September 16, 2019, an action (the “PA Action”) was filed in the Court of Common Pleas of Philadelphia County, Trial Division, against, among others, the Company and its wholly-owned subsidiaries, Innovative Gourmet LLC and Food Innovations, Inc. Since that time, other parties involved in the incident have joined as plaintiffs in the PA Action. The complaint in the PA Action alleges, inter alia, wrongful death and negligence by a driver employed by Innovative Gourmet and indicates a demand and offer to settle for fifty million dollars. We expect that should a settlement occur the amount to resolve the Action would be substantially lower. The Company and its subsidiaries had auto and umbrella insurance policies, among others, that were in effect for the relevant period The Company and its subsidiaries’ insurers have agreed to defend the Company and its subsidiaries in the PA Action (and the related action), subject to a reservation of rights. The Company believes that the likely outcome would result in the liabilities being covered by its insurance carriers. However, if the Company was found responsible for damages in excess of its available insurance coverage, such damages in excess of the coverage could have a material adverse effect on the Company’s operations. The case has been set for trial for April 1, 2024. Because the statute of limitations on the incident has now run, it is not anticipated that any new plaintiffs involved in the incident will come forward against the Company and its subsidiaries.

From time to time, the Company has become and may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business, or as the result of current or previous investments, or current or previous subsidiaries, or current or previous employees, or current or previous directors, or as a result of acquisitions and dispositions or other corporate activities. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position or our business and the outcome of these matters cannot be ultimately predicted.

18. EQUITY

Common Stock

At September 30, 2022 and December 31, 2021, a total of 2,837,580 shares are deemed issued but not outstanding by the Company. These include 2,623,171 shares of treasury stock.

Nine months ended September 30, 2022:

On April 8, 2022, the Company issued 33,445 shares with a value of $11,405 to an employee as compensation.

On April 25, 2022, the Company issued 142,857 shares with a value of $48,543 to a service provider.

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Nine months ended September 30, 2021:

On August 26, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with each of JCP Investment Partnership LP, Bandera Master Fund LP and SV Asset Management LLC (collectively, the “Investors”). Pursuant to the SPA, each Investor purchased 3,125,000 shares of the Company’s common stock for an aggregate of 9,375,000 shares from the Company at a price of $0.40 per share. The Company received $3,580,372 proceeds from the sale of the shares, net of costs in the amount of $169,628. JCP Investment Partnership, LP is controlled by James C. Pappas, a director of the Company; Bandera Master Fund LP is controlled by Jefferson Gramm, a director of the Company; and SV Asset Management LLC is controlled by Hank Cohn, a director of the Company.

Options

The following table summarizes the options outstanding at September 30, 2022 and the related prices for the options to purchase shares of the Company’s common stock issued by the Company:

						Weighted				Weighted
				Weighted		average				average
				average		exercise				exercise
Range of		Number of		Remaining		price of		Number of		price of
exercise		options		contractual		outstanding		options		exercisable
Prices		Outstanding		life (years)		Options		Exercisable		Options
$	0.41		125,000		1.57	$	0.41		125,000	$	0.41
$	0.50		125,000		1.57	$	0.50		125,000	$	0.50
$	0.60		50,000		3.25	$	0.60		43,750	$	0.60
$	0.62		360,000		1.25	$	0.62		360,000	$	0.62
$	0.85		540,000		1.25	$	0.85		540,000	$	0.85
$	1.00		50,000		3.25	$	1.00		43,750	$	1.00
$	1.20		1,050,000		1.15	$	1.20		1,050,000	$	1.20
			2,300,000		1.33	$	0.93		2,287,500	$	0.93

Transactions involving stock options are summarized as follows:

	Number of Shares			Weighted Average Exercise Price
Options outstanding at December 31, 2021		2,100,000		$	0.99

Granted		250,000		$	0.46
Exercised		-		$	-
Cancelled / Expired		(50,000	)	$	1.20

Options outstanding at September 30, 2022 (unaudited)		2,300,000		$	0.93
Options exercisable at September 30, 2022 (unaudited)		2,287,500		$	0.93

Aggregate intrinsic value of options outstanding and exercisable at September 30, 2022 and 2021 was $0. Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $0.19 and $0.49 as of September 30, 2022 and 2021, respectively, and the exercise price multiplied by the number of options outstanding.

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During the three months ended September 30, 2022 and 2021, the Company charged $2,326 and $35,878, respectively, to operations to recognized stock-based compensation expense for employee and board member stock options.

During the nine months ended September 30, 2022 and 2021, the Company charged $6,978 and $107,836, respectively, to operations to recognized stock-based compensation expense for employee and board member stock options; the Company also charged $2,092 and $0, respectively, to operations to recognize the fair value of options issued to a service provider.

19. SUBSEQUENT EVENTS

As previously disclosed, in June 2022 we entered into three secured loan facilities with MapleMark Bank consisting of a $7,775,680 USDA B&I loan, a $2,680,000 USDA Food and Supply note, and a $3,000,000 Revolving Line of Credit, with total approved proceeds of $13,450,680, of which only $7,695,867 has been funded to date as the remaining funds are contingent of final USDA approval (the “MMB Facilities”). The MMB Facilities were originally approved as a 6-month bridge facility until full USDA approval was obtained. Due to the nationwide backup on USDA approvals, such approval has not been opened. Accordingly, by memo dated October 15, 2022, the Company was advised that, effective November 28, 2022, the current maturity date of the MMB Facilities, the MMB Facilities would be extended for

INNOVATIVE FOOD HOLDINGS INC [IVFH] Filings
10-Q	[2022-11-14]
10-Q	[2022-08-22]
10-Q	[2022-05-16]
10-K	[2022-03-31]
10-Q	[2021-11-22]
10-Q	[2021-08-23]
10-Q	[2021-05-24]
10-K	[2021-04-15]
10-Q	[2020-11-16]
10-Q	[2020-08-18]
10-Q	[2020-07-06]
10-K	[2020-05-14]
10-Q	[2019-11-14]
10-Q	[2019-08-14]
10-Q	[2019-05-20]
10-K	[2019-04-16]
10-Q	[2018-11-14]
10-Q	[2018-08-14]
10-Q	[2018-05-15]
10-K	[2018-03-29]
10-Q	[2017-11-14]
10-Q	[2017-08-14]
10-Q	[2017-05-15]
10-K	[2017-03-30]
10-Q	[2016-11-14]
10-Q	[2016-08-15]
10-Q	[2016-05-16]
10-K	[2016-03-30]
10-Q	[2015-11-16]
10-Q	[2015-08-12]
S-1	[2015-06-12]
10-Q	[2015-05-11]
10-K	[2015-03-31]
10-Q	[2014-11-19]
10-Q	[2014-08-14]
10-Q	[2014-05-15]
10-K	[2014-03-31]
10-Q	[2013-11-14]
10-Q	[2013-08-14]
10-Q	[2013-05-10]
10-K	[2013-03-28]
10-Q	[2012-11-21]
10-Q	[2012-08-20]
10-Q	[2012-05-15]
10-K	[2012-03-30]