0001213900-21-032333.txt : 20210614 0001213900-21-032333.hdr.sgml : 20210614 20210614170546 ACCESSION NUMBER: 0001213900-21-032333 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 59 CONFORMED PERIOD OF REPORT: 20210430 FILED AS OF DATE: 20210614 DATE AS OF CHANGE: 20210614 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NutriBand Inc. CENTRAL INDEX KEY: 0001676047 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 811118176 STATE OF INCORPORATION: NV FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55644 FILM NUMBER: 211015375 BUSINESS ADDRESS: STREET 1: 121 S. ORANGE AVE. STREET 2: SUITE 1500 CITY: ORLANDO STATE: FL ZIP: 32801 BUSINESS PHONE: 407 377-6695 MAIL ADDRESS: STREET 1: 121 S. ORANGE AVE. STREET 2: SUITE 1500 CITY: ORLANDO STATE: FL ZIP: 32801 FORMER COMPANY: FORMER CONFORMED NAME: Nutriband Inc. DATE OF NAME CHANGE: 20160601 10-Q 1 f10q0421_nutribandinc.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended April 30, 2021

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ____________

 

Commission File Number 000-55654

 

NUTRIBAND INC.

(Exact name of registrant as specified in its charter)

 

NEVADA   81-1118176
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

121 South Orange Ave., Suite 1500, Orlando, FL   32801
(Address of Principal Executive Offices)   (Zip Code)

 

(407) 377-6695

(Registrant’s Telephone Number, Including Area Code)

 

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

 

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, 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.

 

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 Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

 

The number of shares outstanding of the issuer’s common stock, par value $0.001 per share, was 6,356,270 shares as of June 11, 2021.

 

 

 

 

   

NUTRIBAND INC.

INDEX

 

    Page No.
Part I: Financial Information  
     
Item 1 Financial Statements 1
  Condensed Consolidated Balance Sheets as of April 30, 2021 (unaudited) and January 31, 2021 2
  Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended April 30, 2021 and 2020 (unaudited) 3
  Consolidated Statements of Stockholders’ Equity for the three months ended April 30, 2021 and 2020 (unaudited) 4
  Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2021 and 2020 (unaudited) 5
  Notes to Unaudited Consolidated Financial Statements 6
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
Item 3 Quantitative and Qualitative Disclosures about Market Risk 23
Item 4 Controls and Procedures 23
     
Part II: Other Information  
   
Item 1A Risk Factors 25
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 28
Item 6 Exhibits 28

 

i

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the Securities and Exchange Commission.

 

The results of operations for the three months ended April 30, 2021 and 2020 are not necessarily indicative of the results for the entire fiscal year or for any other period.

 

1

 

 

NUTRIBAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   April 30,   January 31, 
   2021   2021 
   (Unaudited)     
ASSETS        
         
CURRENT ASSETS:        
Cash and cash equivalents  $410,754   $151,993 
Accounts receivable   150,810    109,347 
Inventory   90,266    52,848 
Prepaid expenses   282,542    - 
Total Current Assets   934,372    314,188 
           
PROPERTY & EQUIPMENT-net   1,071,597    1,076,626 
           
OTHER ASSETS:          
Goodwill   7,529,875    7,529,875 
Intangible assets-net   1,024,276    1,006,730 
           
TOTAL ASSETS  $10,560,120   $9,927,419 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Accounts payable and accrued expenses  $873,988   $940,612 
Deferred revenue   69,894    86,846 
Notes payable-related party   1,439,077    1,402,523 
Finance lease liabilities-current portion   25,119    24,740 
Notes payable-current portion   114,060    113,885 
Total Current Liabilities   2,522,138    2,568,606 
           
LONG-TERM LIABILITIES:          
Notes payable-net of current portion   111,613    150,063 
Finance lease liabilities-net of current portion   90,380    96,804 
Total Liabilities   2,724,131    2,815,473 
           
Commitments and Contingencies   -    - 
           
STOCKHOLDERS’ EQUITY:          
Preferred stock, $.001 par value, 10,000,000 shares authorized, -0- outstanding   -    - 
Common stock, $.001 par value, 250,000,000 shares authorized; 6,356,270 and 6,256,772 shares issued and outstanding at April 30, 2021 and January 31, 2021, respectively   6,356    6,257 
Additional paid-in-capital   19,980,999    18,871,098 
Subscription payable   -    70,000 
Accumulated other comprehensive loss   (304)   (304)
Accumulated deficit   (12,151,062)   (11,835,105)
Total Stockholders’ Equity   7,835,989    7,111,946 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $10,560,120   $9,927,419 

 

See notes to unaudited consolidated financial statements

 

2

 

 

NUTRIBAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 (UNAUDITED)

 

   For the Three Months Ended 
   April 30, 
   2021   2020 
         
Revenue  $433,488   $119,364 
           
Costs and expenses:          
Cost of revenues   168,844    74,939 
Selling, general and administrative expenses   579,608    191,917 
Total Costs and Expenses   748,452    266,856 
           
Loss from operations   (314,964)   (147,492)
           
Other income (expense)          
Gain (loss) on extinguishment of debt   39,876    (12,500)
Early prepayment fee on convertible debenture   -    (69,131)
Gain on change in fair value of derivative   -    22,096 
Interest expense   (40,869)   (205,167)
Total other income (expense)   (993)   (264,702)
           
Loss from operations before provision for income taxes   (315,957)   (412,194)
           
Provision for income taxes   -    - 
           
Net loss  $(315,957)  $(412,194)
           
Net loss per share of common stock-basic and diluted  $(0.05)  $(0.08)
           
Weighted average shares of common stock outstanding - basic and diluted   6,329,438    5,469,033 
           
Other Comprehensive Loss:          
           
Net loss  $(315,957)  $(412,194)
           
Foreign currency translation adjustment   -    - 
           
Total Comprehensive Loss  $(315,957)  $(412,194)

 

See notes to unaudited consolidated financial statements

 

3

 

 

NUTRIBAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

                   Accumulated         
       Common Stock   Additional   Other         
       Number of       Paid In   Comprehensive   Accumulated   Subscription 
   Total   shares   Amount   Capital   Income(Loss)   Deficit   Payable 
Balance, February 1, 2021  $7,111,946    6,256,772   $6,257   $18,871,098   $(304)  $(11,835,105)  $70,000 
                                    
Common stock issued for proceeds and in payment for license   640,000    81,396    81    699,919    -    -    (60,000)
                                    
Common stock issued for services   400,000    18,102    18    409,982    -    -    (10,000)
                                    
Net loss for the three months ended April 31, 2021   (315,957)   -    -    -    -    (315,957)   - 
                                    
Balance, April 30, 2021   7,835,989    6,356,270    6,356    19,980,999    (304)   (12,151,062)   0 

 

                   Accumulated         
       Common Stock   Additional   Other         
       Number of       Paid In   Comprehensive   Accumulated   Subscription 
   Total   shares   Amount   Capital   Income(Loss)   Deficit   Payable 
Balance, February 1, 2020  $175,433    5,441,100   $5,441   $9,072,573   $(304)  $(8,902,277)  $         - 
                                    
Proceeds from common stock and warrants   515,108    46,828    47    515,061    -    -    - 
                                    
Issuance of common stock for notes payable   287,500    25,000    25    287,475    -    -    - 
                                    
Reclassification of warrants from liabilitiy to equity   906,678    -    -    906,678    -    -    - 
                                    
Net loss for the three months ended April 30, 2020   (412,194)   -    -    -    -    (412,194)     
                                    
Balance, April 30, 2020   1,472,525    5,512,928    5,513    10,781,787    (304)   (9,314,471)   - 

 

See notes to unaudited consolidated financial statements

 

4

 

 

NUTRIBAND INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   Three Months Ended 
   April 30, 
   2021   2020 
Cash flows from operating activities:        
Net loss  $(315,957)  $(412,194)
Adjustments to reconcile net loss to net cash used in operating activities:          
Expenses paid on behalf of the Company by related party   -    3,628 
Depreciation and amortization   76,262    18,046 
Early prepayment fee on convertible debentures   -    69,131 
(Gain) loss on extinguishment of debt   (39,875)   12,500 
Gain on change in fair value of derivative   -    (22,096)
Amortization of debt discount   36,554    202,500 
Amortization of right of use asset   -    4,805 
Stock-based compensation   127,500    - 
Changes in operating assets and liabilities:          
Account receivable   (41,463)   (26,811)
Prepaid expenses   (10,042)   13,750 
Inventories   (37,418)   - 
Customer deposits   (16,952)   - 
Operating lease liability   -    (4,968)
Accounts payable and accrued expenses   (58,024)   (59,805)
Net Cash Used In Operating Activities   (279,415)   (201,514)
           
Cash flows from investing activities:          
Purchase of equipment   (38,779)   - 
Net Cash Used in Investing Activities   (38,779)   - 
           
Cash flows from financing activities:          
Proceeds from sale of common stock   583,000    515,108 
Proceeds from notes payable   -    60,000 
Payment of convertible debt   -    (339,131)
Payment of finance leases   (6,045)   - 
Payment of related party payables   -    (24,000)
Net Cash Provided by Financing Activities   576,955    211,977 
           
Effect of exchange rate on cash   -    - 
           
Net change in cash   258,761    10,463 
           
Cash and cash equivalents - Beginning of period   151,993    10,181 
           
Cash and cash equivalents - End of period  $410,754   $20,644 
           
Supplementary information:          
           
Cash paid for:          
Interest  $2,715   $6,525 
           
Income taxes  $-   $- 
           
Supplemental disclosure of non-cash investing and financing activities          
           
Derivative liability warrant reclassed to equity  $-   $906,678 
           
Common stock issued for prepaid consulting  $400,000   $- 
           
Common stock issued for settlement of debt  $-   $287,500 
           
Non-cash payment for license agreement  $57,000   $- 
           
Common stock issued for subscription payable   $70,000   $- 

 

See notes to unaudited consolidated financial statements.

 

5

 

 

NUTRIBAND INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

as of and for the Three Months Ended April 30, 2021 and 2020

 

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Organization

 

Nutriband Inc. (the “Company”) is a Nevada corporation, incorporated on January 4, 2016. In January 2016, the Company acquired Nutriband Ltd, an Irish company which was formed by the Company’s chief executive officer in 2012 to enter the health and wellness market by marketing transdermal patches. References to the Company relate to the Company and its subsidiaries unless the context indicates otherwise.

 

On August 1, 2018, the Company acquired 4P Therapeutics LLC (“4P Therapeutics”) for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics.

 

4P Therapeutics is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development. Prior to the acquisition of 4P Therapeutics, the Company’s business was the development and marketing of a range of transdermal consumer patches. Most of these products are considered drugs in the United States and cannot be marketed in the United States without approval by the Food and Drug Administration (the “FDA”). The Company is not presently taking any steps to seek FDA approval of its consumer transdermal products and its consumer products are not being marketed in the United States.

 

With the acquisition of 4P Therapeutics, 4P Therapeutics’ drug development business became the Company’s principal business. The Company’s approach is to use generic drugs that are off patent and incorporate them into the Company’s transdermal drug delivery system. Although these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal product development program which will include the preclinical and clinical trials that are necessary to receive FDA approval before we can market any of our pharmaceutical products.

 

On August 25, 2020, the Company formed Pocono Pharmaceuticals Inc. (“Pocono Pharmaceuticals”), a wholly owned subsidiary of the Company. On August 31, 2020, the Company acquired certain assets and liabilities associated with the Transdermal, Topical, Cosmetic, and Nutraceutical business of Pocono Coated Products LLC (“PCP”). The net assets were contributed to Pocono Pharmaceuticals. Included in the transaction the Company also acquired 100% of the membership interests of Active Intelligence LLC (“Active Intelligence”). See Note 2 for further details of the acquisition.

 

Pocono Pharmaceuticals is a coated products manufacturing entity organized to take advantage of unique process capabilities and experience. Pocono helps their customer with product design and development along with manufacturing to bring new products to market with minimal capital investment. Pocono Pharmaceutical’s competitive edge is a low-cost manufacturing base: a result of its unique processes and state of the art material technology. Active Intelligence manufactures activated kinesiology tape. The tape has transdermal and topical properties. This tape is used as the same as traditional kinesiology tape.

 

In December 2019, COVID-19 emerged and has subsequently spread world-wide. The World Health Organization has declared COVID-19 a pandemic resulting in federal, state and local governments and private entities mediating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining people who may have been exposed to the virus. The effect of these orders, government imposed quarantines and measures the Company would take, such as work-at-home policies, may negatively impact productivity, disrupt our business and could delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and disruptions in our operations could negatively impact our business, operating results and financial condition. Further, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns, or other restrictions on the conduct of business could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which could disrupt our supply chain.

 

6

 

 

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Unaudited Interim Financial Statements

 

The consolidated balance sheet as of April 30, 2021, and the consolidated statements of operations, stockholders’ equity, and cash flows for the periods presented have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' equity and cash flows for all periods presented have been made. The results for the three months ended April 30, 2021, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Nutriband’s Annual Report on Form 10-K for the year ended January 31, 2021.

 

Certain information and footnote disclosures required under generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements of the U.S. Securities and Exchange Commission (“SEC”). The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosures of contingent amounts in our consolidated financial statements and accompanying footnotes. Actual results could differ from estimates.

 

The Company’s significant accounting policies are summarized in Note 1 in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to these accounting policies during the three months April 30, 2021.

 

Going Concern

 

As of April 30, 2021, the Company believes the substantial doubt about its status as a going concern has been resolved. The going concern conditions that caused substantial doubt consisted of current quarter net loss, negative working capital, negative cash flow, and accumulated deficit. Management has implemented plans to alleviate the substantial doubt. These plans include a substantial increase in sales commitments, a decrease in planned overhead expenses, equity funding that has been received and additional funding expected to be received, and the net revenue and positive cash flow from its recent acquisitions. These factors did not exist in prior years during its start-up operations. The Company’s recent history of losses has changed from prior periods due to its management’s plans including its acquisition in the latter part of 2020 to alleviate the substantial doubt about the Company’s ability to continue as a going concern. Management’s plans have been currently implemented. The plans enable the Company to meet its obligations for at least one year from the date when the financial statements are issued.

 

Principles of Consolidation

 

The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company’s financial statements from the date of acquisition of August 1, 2018, and the operations of Pocono and Active Intelligence are included in the Company’s financial statements from the date of acquisition of September 1, 2020. The wholly owned subsidiaries are as follows:

 

Nutriband Ltd.

4P Therapeutics LLC

Pocono Pharmaceuticals Inc.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on other various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

 

The Company’s significant policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to the accounting policies during the three months ended April 30, 2021, and the Company does not expect that the adoption of other accounting pronouncements will have a material impact on its financial statements.

 

7

 

 

Revenue Recognition

 

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

 

Revenue Types

 

The following is a description of the Company’s revenue types, which include professional services and sale of goods:

 

Service revenues include the contract of research and development related services with the Company’s clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged.

 

Product revenues are derived from the sale of the Company’s consumer transdermal and coated products. Upon the reception of a purchase order, we have the order filled and shipped.

 

Contracts with Customers

 

A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

 

Deferred Revenue

 

Deferred revenue is a liability related to a revenue producing activity for which revenue has not been recognized. The Company records deferred revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

 

Performance Obligations

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types, the performance obligation is satisfied at different times. The Company’s performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs over time on a monthly basis for the work performed during that month.

 

All revenue recognized in the income statement is considered to be revenue from contracts with customers.

 

8

 

 

Disaggregation of Revenues

 

The Company disaggregates its revenue from contracts with customers by type and by geographical location. See the tables:

 

   Three Months Ended 
   April 30, 
   2021   2020 
Revenue by type        
Sale of goods  $327,512   $61,320 
Services   105,976    58,044 
Total  $433,488   $119,364 

 

   Years Ended 
   January 31, 
   2021   2020 
Revenue by geographic location:        
United States  $346,888   $58,044 
Foreign   86,600    61,320 
   $433,488   $119,364 

 

Account receivable

 

Trade accounts receivables are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the three months ended April 30, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to account receivable.

 

Inventories

 

Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net reasonable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity).

 

Property, Plant and Equipment

 

Property and equipment represent an important component of the Company’s assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 20 years as follows:

 

Lab Equipment   5-10 years 
Furniture and fixtures   3 years 
Machinery and equipment   10-20 years 

 

Intangible Assets

 

Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company’s acquisitions have also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.

 

9

 

 

Goodwill

 

Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350. On August 31, 2020, in connection with the Company’s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640. As of April 30, 2021, Goodwill amounted to $7,529,875.

 

Long-lived Assets

 

Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value.

 

Earnings per Share

 

Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants. As of April 30, 2021, and 2020, there were 141,830 and 161,828 common stock equivalents outstanding, respectively, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.

 

Stock-Based Compensation

 

ASC 718, “Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees.

 

Fair Value Measurements

 

FASB ASC 820, “Fair Value Measurements and Disclosure” (“ASC 820”), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value.

 

The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:

 

    Level 1 - Observable inputs such as quoted market prices in active markets.
       
    Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable.
       
    Level 3 - Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments.

 

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Derivative Liabilities

 

Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

The Company accounts for derivative instruments in accordance with ASC Topic 815, “Derivatives and Hedging” and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of April 30, 2021, and January 31, 2021, the Company had no derivative liabilities.

 

Recent Accounting Standards

 

The Company has implemented all new pronouncements, including the adoption of ASU 2018-13, that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements or results of operations.

 

3.ACQUISITION OF BUSINESS

 

On August 31, 2020, the Company entered into a Purchase Agreement (“Agreement”), with Pocono Coated Products (“PCP”), pursuant to which PCP agreed to sell the Company certain of the assets and liabilities associated with its Transdermal, Topical, Cosmetic, and Nutraceutical business, including: (1) all the equipment, intellectual property and trade secrets, cash balances, receivables, bank accounts and inventory, free and clear of all liens, except for certain lease obligations, and (2), a 100% membership interest in Active Intelligence, LLC (collectively the “Assets”). The net assets acquired were contributed to Pocono Pharmaceuticals Inc, a newly formed wholly owned subsidiary of the Company. The purchase price for the Assets was (i) $6,085,180 paid with the issuance of 608,519 shares in the Company’s common stock of Nutriband at a value of the average price of the previous 90 days at the date of Closing (the “Shares”), and (ii) a promissory note of the Company, net of debt discount, in the principal amount, of $1,332,893 (the Note”) which is due upon the earlier of (a) twelve (12) months from issuance, or (b) immediately following a capital raise of not less than $4,000,000 and/or a public offering of no less than $4,000,000. Michael Myer, the CEO of PCP, has been elected to the Board of Directors of the Company for period of one year at the annual meeting of shareholders of the Company held in October 2020.

 

The Agreement provides that it is effective August 31, 2020, on which date the parties also entered into an escrow agreement (the “Escrow Agreement”), with legal counsel serving as the escrow agent, providing for holding of the Note, certificate for the shares, and title to the Assets (held in a special purpose subsidiary) as collateral security for completion of all closing conditions under the Agreement. On that date, the parties also entered into a security agreement granting PCP a security interest in all proceeds of the Assets held as collateral under the Escrow Agreement.

 

The purpose of the Company entering into the transaction is to enhance the transdermal products operations of the Company. The fair value of consideration given was allocated to the net tangible assets acquired. Under U.S. GAAP, both the PCP segment and Active Intelligence were considered to be businesses and, as such, the transaction was accounted for under the acquisition method of accounting.

 

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Details of the net assets acquired are as follows:

 

   Fair value 
   Recognized on 
   Acquisition 
Common stock issued  $6,085,180 
Note payable issued   1,332,893 
   $7,418,073 
      
Cash  $66,994 
Account receivable   1,761 
Inventory   42,613 
Equipment and fixtures   1,056,935 
Customer base   177,600 
Intellectual property and trademarks   583,200 
Goodwill   5,810,640 
Accounts payable and accrued expenses   (26,104)
Deferred revenue   (26,851)
Debt   (268,715)
Net assets acquired  $7,418,073 

 

The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and the two businesses acquired from PCP, Pocono and Active Intelligence, as if the acquisition occurred as part of the beginning of cash period presented. The unaudited pro forma condensed financial information is not intended to represent or be indicative of the consolidated results of operations of the Company that would have been reported had the acquisition occurred at the beginning of the period presented and should not be taken as being representation of the future consolidated results of operations of the Company.

 

   Three Months Ended 
   April 30, 
   2020 
   As Reported   Proforma 
Net revenue  $119,364   $303,189 
           
Net loss   (412,194)   (444,650)
           
Loss per common share - basic and diluted   (0.08)   (0.08)

 

4.PROPERTY AND EQUIPMENT

 

   April 30,   January 31, 
   2021   2021 
Lab equipment  $144,585   $144,585 
Machinery and equipment   1,086,915    1,056,935 
Furniture and fixtures   28,442    19,643 
    1,259,942    1,221,163 
          
Less: Accumulated depreciation   (188,345)   (144,537)
Net Property and Equipment  $1,071,597   $1,076,626 

 

Depreciation expense amounted to $43,808 and 8,779 for the three months ended April 30, 2021 and 2020, respectively.

 

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5.NOTES PAYABLE/CONVERTIBLE DEBT

 

Notes Payable

 

On March 21, 2020, the Coronavirus Aid Relief and Economic Security Act (“CARES ACT” was enacted. The CARES ACT established the Paycheck Protection Program (“PPP”) which funds small businesses through federally guaranteed loans. Under the PPP, companies are eligible for forgiveness of principal and interest if the proceeds are used for eligible payroll costs, rent and utility costs. On June 17, 2020, the Company’s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April 30, 2021. The Company recorded a gain on the extinguishment of debt of $34,870 during the three months ended April 30, 2021.

 

In July 2020, a minority shareholder made an additional loan to the Company in the amount of $100,000. The loan is interest- free and due upon demand. The loan was outstanding as April 30, 2021, and January 31, 2021.

 

Active Intelligence, the Company’s newly acquired subsidiary, entered into an agreement with the Carolina Small Business Development Fund for a line of credit of $160,000 due October 16, 2029, with interest of 5% per year. The amount assumed in Note 3 was $139,184. The loan requires monthly payments of principal and interest of $1,697. During the three months ended April 30, 2021, principal and interest payments of $5,006 were forgiven under the Cares Act. The amount has been recorded as a gain on the forgiveness of debt. As of April 30, 2021, the amount due was $125,673, of which $14,060 is current.

 

Finance Leases

 

Pocono has two finance leases secured by equipment. The leases mature in 2025 and 2026. The incremental borrowing rate is 5.0%. As of April 30, 2021, the minimum lease payments are as follow:

 

 

Years Ending January 31, 2022  $18,694 
January 31, 2023   26,295 
January 31, 2024   27,948 
January 31, 2025   26,361 
January 31, 2026   16,202 
Total  $115,499 

 

Related Party Payable

 

On August 31, 2020, in connection with the Company’s acquisition of Pocono Products LLC, the Company issued to Pocono Coated Products LLC a promissory note, net of debt discount, in the amount of $1,332,893 with interest accruing at an annual rate of 0.17%, due on August 28, 2021, or immediately following the earlier of a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000. Pocono Coated Products LLC, a related party, is a shareholder of the Company. During the three months ended April 30, 2021, the Company recorded amortization of debt discount of $36,554. As of April 30, 2021, the amount due was $1,439,077.

 

Convertible Debt

 

On October 30, 2019, the Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross proceeds from this financing of $250,000.

 

The notes are convertible at a conversion price equal to the lesser of (i) the per share price of our common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180-day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company’s securities or (b) the next private placement of the Company’s equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender.

 

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The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15 Derivative and Hedging. The initial fair of the conversion feature was $128,870 and the fair value of the warrants in connection with the notes

were valued at $888,789 and were recorded based on their relative fair values. A debt discount to the note payables of $270,000 and an initial derivative expense of $767,650 was recorded.

 

The debt discount will be amortized over the life of the note. Amortization of the debt discount for the three months ended April 30, 2020 was $202,500.

 

On March 25, 2020, the Company prepaid the convertible notes in the principal amount of $270,000 from the proceeds of a private placement. The total payments, including a prepayment fee of $69,131 and accrued interest, was $345,565. As a result of the payment of the notes, the derivative liability, which was $928,774 as of January 31, 2020, was reduced to zero. The warrants are no longer a derivative liability based on the notes being paid in full.

 

Interest expense for the three months ended April 30, 2021was $40,869 including the amortization of the debt discount of $36,554 and interest expense of $4,315. Interest expense for the three months ended April 30, 2020 was $205,167 including the amortization of debt discount of $202,500 and interest expense of $2,667.

 

6.INTANGIBLE ASSETS

 

As of April 30, 2021, and January 31, 2021, intangible assets consisted of intellectual property, customer base and trademarks, net of amortization, as follows:

 

   April 30,   January 31, 
   2021   2021 
Customer base  $314,100   $314,100 
License agreement   50,000    0 
Intellectual property   817,400    817,400 
           
Total   1,181,500    1,131,500 
           
Less: Accumulated amortization   (157,224)   (124,770)
           
Net Intangible Assets  $1,024,276   $1,006,730 

 

In February 2021, the Company acquired an IP license for $50,000, see Note 10- “Rambam Agreement” for further information regarding the license agreement. The value of the intangible assets, consisting of intellectual property, license agreement and customer base has been recorded at their fair value by the Company and are being amortized over a period of three to ten years. Amortization expense for the three months ended April 30, 2021, and 2020 was $32,454 and $9,267, respectively.

 

Estimated Amortization:    
   Total 
Year Ended January 31,    
Remainder of 2022  $97,325 
2023   129,776 
2924   129,776 
2026   113,109 
2026 and thereafter   554,290 
   $1,024,276 

 

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7.RELATED PARTY TRANSACTIONS

 

a)The Company had related party notes with its former Chief Financial Officer and Chief Operating Officer. See footnote 5 for further discussion.

 

b)In connection with the acquisition of Pocono, the Company recorded various transactions and operations through Pocono Coated Products LLC, a related entity. During the three months ended April 30, 2021, the Company was advanced $7,862 in finance payments. As of April 30, 2021, the Company owed Pocono $2,634. The Company also issued a note in the amount of $1,500,000 to Pocono Coated Products LLC. See footnote 5 for further discussion.

 

8.STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

On January 15, 2016, the board of directors of the Company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize 10,000,000 shares of Preferred Stock, par value $0.001 per share.

 

On May 24, 2019, the board of directors created a series of preferred stock consisting of 2,500,000 shares designated as the Series A Convertible Preferred Stock (“Series A Preferred Stock”). On June 20, 2019, the Series A preferred Stock was terminated, and the 2,500,000 shares were restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series, until such stock is once more designated as part of a particular series by the board of directors.

 

Common Stock

 

On June 25, 2019, the Company effected a one-for four reverse split, pursuant to which each share of common stock became converted into 0.25 shares of common stock, and the Company decreased its authorized common stock from 100,000,000 to 25,000,000 shares.

 

On January 27, 2020, the Company amended its articles of incorporation to increase its authorized common shares from 25,000,000 shares to 250,000,000 shares.

 

Activity during the Three Months Ended April 30, 2021

 

On March 22, 2020, the Company issued in a private placement 46,828 units at a price of $11 per unit. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $14 per share. The warrants expire April 30, 2023. The Company issued a total of 46,828 shares of common stock and warrants to purchase 46,828 shares of common stock. The Company received proceeds of $515,108.

 

In March 2020, a minority shareholder who had previously made loans of $215,000, made an additional loan to the Company in the amount of $60,000, increasing the loans to shareholder to $275,000. On March 27, 2020, the Company issued 25,000 shares of common stock upon reaching a settlement with the noteholder to convert the notes in the principal amount of $275,000. The transaction resulted in a loss on extinguishment of $12,500.

 

Activity during the Three Months Ended April 30, 2020

 

(1)On February 25, 2021, in connection with the Company’s License Agreement with Rambam, pursuant to a Stock Purchase Agreement with BPM Inno Ltd (“BPM”), the Company issued 81,396 shares of common stock to BPM and received proceeds of $700,000 to be applied to product development expenses under the License Agreement. The Company entered into the Stock Purchase Agreement with BPM in December 2020 and received a payment of $60,000 which is included in Stockholders’ Equity as Subscription Payable in the Company’s consolidated balance sheet as of January 31, 2021. In February 2021, BPM advanced a payment for the Company to Rambam in the amount of $57,000 for the license fee. The balance of the funds of $583,000 was received in February 2021. See footnote 10 for further discussion.

 

(2)On February 25, 2021, the Company issued 5,602 shares of common stock, valued at $60,000, for consulting services pursuant to a consultant agreement commencing December 1, 2020. The Company has reflected $10,000 representing 934 shares as Subscription Payable in the Stockholders’ Equity in the Company’s consolidated balance sheet as of January 31, 2021. As of April 30, 2021, $10,000 is included in prepaid expenses.

 

On February 15, 2021, the Company issued 12,500 shares of common stock, valued at $350,000, for consulting fees in connection with the Rambam License Agreement.

 

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9.WARRANTS

 

The following table summarizes the changes in warrants outstanding and the related price of the shares of the Company’s common stock issued to non-employees of the Company.

 

       Exercise   Remaining   Intrinsic 
   Shares   Price   Life   Value 
Outstanding, January 31, 2021   141,828   $11.99     2.16 years    $285,000 
                     
Granted   -    -    -    - 
                     
Expired/Cancelled   -    -    -    - 
                     
Exercised   -    -    -    - 
                     
Outstanding-period ending April 30, 2021   141,828   $11.99     1.67 years    $852,320 
                     
Exercisable - period ending April 30, 2021   141,828   $11.99     1.67 years    $852,320 

 

The following table summarizes additional information relating to the warrants outstanding as of April 30, 2021: 

 

Range of Exercise   Number   Remaining Contractual   Exercise Price for   Number   Exercise Price for   Intrinsic 
Prices   Outstanding   Life(Years)   Shares Outstanding   Exercisable   Shares Exercisable   Value 
                          
$11.00    95,000    1.50   $11.00    95,000   $11.00   $665,000 
$14.00    46,828    1.50   $14.00    46,828   $14.00   $187,320 

 

10.COMMITMENTS AND CONTIGENCIES

 

Legal Proceedings

 

On July 27, 2018, the Company commenced an action in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, against Advanced Health Brands, Inc., Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Laura Fillman and John Baker, together with a Motion for Temporary Injunction Without Notice and a Motion for Prejudgment Writ of Replevin arising from the Company’s decision to seek to rescind for misrepresentation the agreement by which the Company acquired advanced Health Brands, Inc. for 1,250,000 shares of common stock valued at $2,500,000 and seek return of the shares. On August 2, 2018, the court entered a Temporary Injunction Without Notice and an Order to Show Cause against the defendants. Defendants Kalmar, Murphy, Polly-Murphy, and Baker filed a Motion to Dismiss the Company’s Verified Complaint, Motion to Dissolve Temporary Injunction Without Notice and Response to Order to Show Cause, and Motion to Compel Arbitration. On January 4, 2019, the court dismissed the Company’s complaint with prejudice, and directed the defendants to assign the Company within 30 days, the six patents never duly transferred to the Company. On February 1, 2019, the Company appealed the court’s order. Pursuant to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the shares were cancelled as of January 31, 2019. On June 7, 2019, the individual defendants (other than the defendant whom the Company has a settlement agreement), filed a motion for sanctions and civil contempt against us, which generally claimed that we failed to comply with the Court’s January 4, 2019 order by refusing to issue the Ruling 144 letters that would allow the defendants to transfer their shares of common stock. On October 29, 2019, the Court denied the Defendants motion. On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state court action that dismissed our complaint, with prejudice, and gave us leave to file an amended complaint. On July 7, 2020, Defendants filed Notice for Trial, requesting the court to set a trial date. The Company and defendants have served their first set of interrogatories on each other and have filed answers and responses to each other’s first set of interrogatories.

 

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On August 22, 2018, four of the defendants in the Florida action described in the previous paragraph filed a complaint against the Company in the Franklin County, Ohio Court of Common Pleas seeking a declaratory judgment permitting them to sell the shares of common stock they received pursuant to the acquisition agreement. The parties have agreed to a stay pending the outcome of the Florida litigation.

 

On April 29, 2019, the Company filed a securities fraud action in the U.S. District Court for the Eastern District of New York against Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Advanced Health Brands and TD Therapeutic, Inc. In the complaint the Company alleges that in 2017, the defendants fraudulently and deceitfully obtained 1,250,000 shares of common stock by orchestrating a months-long scheme to defraud the Company. The Company is seeking the return of the shares of common stock and monetary damages resulting from the defendants’ fraudulent conduct. The defendants filed a motion to dismiss the complaint on August 23, 2019, and on September 13, 2019, the Company filed its response. On July 20, 2020, the Court denied the defendant’s motion to dismiss the complaint, and the parties have recently commenced the discovery phase of the litigation. No trial date has been scheduled by the Court.

 

Employment Agreements

 

The Company entered into a three-year employment agreement with Gareth Sheridan, our CEO, effective April 25, 2019. The agreement also provides that the executive will continue as a director. The agreement provides for an initial term, commencing on the effective date of the agreement and ending on January 31, 2024, and continuing on a year-to-year basis thereafter unless terminated by either party on not less than 30 days’ notice given prior to the expiration of the initial term or any one year extension. For his services to the Company during the term of the agreement, Mr. Sheridan receives an annual salary $42,000 per annum, commencing on the effective date of the agreement and increasing to $170,000 per annum in the month in which the Company shall have received not less than $2,500,000 from one or more public or private financings of the Company’s equity securities subsequent to the date of the agreement. During the year ended January 31, 2021, the salary was increased to $60,000 per annum.

 

Rambam Agreement

 

On December 9, 2020, the Company entered into a License Agreement (the “License Agreement”) with Rambam Med-Tech Ltd. (“Rambam”), Haifa, Israel, to develop the RAMBAM Closed System Transfer Device (“CTSD”) and such other products as the parties agree to develop/commercialize. The Company will license from Rambam the full technology, IP, and title to CTSD in the field, with an Initial license fee of $50,000 and running royalties on net sales. The $50,000 license fee was paid by a third party at the direction of the Company in February 2021, at which time the agreement became effective.

 

The Company had entered into a prior agreement, dated November 13, 2020, with BPM Inno Ltd., Kiryat, Israel (“BPM”), that, in consideration of BPM’s introduction of Rambam to the Company, provided for BPM to have the rights as the exclusive of agent of the Company with Rambam and any other parties similarly introduced by BPM, and for a commission payable to BPM by the Company of 4.5% of revenues received by the Company resulting from the introduction of Rambam (and any other companies as to which the exclusive agency of BPM was in effect), and for BPM’s payment of a royalty to Rambam. If the Company fails to commercialize the medical products subject to the License Agreement with Rambam within 36 months, under the November 13, 2020 agreement, BPM and the Company would share 50/50 in the revenues generated from sales of the licensed products from Rambam. This agreement further provides that it will be effective for a period of 10 years, with either party having the right to terminate on notice given 30 days prior to the desired termination, and also provided for certain territorial distribution rights of BPM as are set forth in the March 10, 2021 Distribution Agreement between the Company and BPM.

 

BPM Distribution and Stock Purchase Agreements

 

(a)On March 10, 2021, the Company finalized the Distribution Agreement with BPM, providing for distribution of the medical products developed and produced under the License Agreement. Under the Distribution Agreement, BPM has the right to distribute the medical products in Israel and has a right of first refusal in relation to all other countries/states, other than United States, Korea, China, Vietnam, Canada and Ecuador, which are termed excluded countries.

 

(b)The Company and BPM entered into a Stock Purchase Agreement (“SPA”), dated December 7, 2020, providing for the purchase by BPM of 81,396 shares of common stock at a price of $8.60 per share, or $700,000.  In December 2020, the Company received an initial payment of $60,000 under the SPA, which is included in Stockholders’ Equity in the Company’s consolidated balance sheet as of January 31, 2021. On February 25, 2021, in connection with the Company’s License Agreement with Rambam, pursuant to the SPA, the Company issued 81,395 shares of common stock to BPM and received the balance of the proceeds of $700,000 to be applied to product development expenses under the License Agreement.

 

11.SUBSEQUENT EVENTS

 

There were no reportable subsequent events as of the date of this filing.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

FORWARD LOOKING STATEMENTS

 

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

 

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended January 31, 2021, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

 

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

 

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

References to “we,” “us,” “our” and words of like import refer to Nutriband Inc. and its subsidiaries unless the context indicates otherwise. Unless the context indicates otherwise, references to 4P Therapeutics relate to the operations of 4P Therapeutics LLC prior to our acquisition of 4P Therapeutics on August 1, 2018, and references to Pocono and Active Intelligence to operations of those companies prior to our acquisition of the PCP segment on August 31, 2020.

 

Overview

 

Our primary business is the development of a portfolio of transdermal pharmaceutical products. Our lead product is our abuse deterrent fentanyl transdermal system which we are developing to provide clinicians and patients with an extended-release transdermal fentanyl product for use in managing chronic pain requiring around the clock opioid therapy combined with properties designed to help combat the opioid crisis by deterring the abuse and misuse of fentanyl patches. We believe that our abuse deterrent technology can be broadly applied to various transdermal products and our strategy is to follow the development of our abuse deterrent fentanyl transdermal system with the development of additional transdermal prescription products for pharmaceuticals that have risks or a history of abuse. In addition, we are developing a portfolio of transdermal pharmaceutical products to deliver commercially available drugs or biologics that are typically delivered by injection but with the potential to improve compliance and therapeutic outcomes.

 

Because of our financial position, we have put our development efforts with respect to these products on hold, and our only business is the performance of contract services for a small number of customers. Because of both our financial position and the effects of the COVID-19 pandemic, our contract service business has also been scaled back. The description of our business in this annual report is based on our ability to raise significant financing or enter into a joint venture agreement with a third party that has the financial ability to fund the joint venture’s operations. We cannot assure you that we will be able to obtain necessary financing or enter into a joint venture agreement on reasonable, if any, terms. If we are not able to continue obtain financing or enter into a joint venture agreement, we may not be able to continue in business.

 

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Through July 31, 2018, our business was the development of a line of consumer and health products that are delivered through a transdermal patch which we plan to sell internationally. Consumer products are products that are sold over the counter and do not require a prescription. Most of our consumer products require FDA approval for sale in the United States, and we have not sought to obtain, and we do not plan to seek to obtain, FDA approval to market these products in the United States at this time. Following our acquisition of Pocono, our focus is primarily now on providing contract manufacturing services and consulting services to 3rd party brands with no intention at this time to launch our own consumer products.

 

With our acquisition of 4P Therapeutics on August 1, 2018, our focus changed, and we are seeking to develop and seek FDA approval on a number of transdermal pharmaceutical products under development by 4P Therapeutics. As a result of the acquisition of 4P Therapeutics, we have pipeline of potential products.

 

4P Therapeutics has not generated any revenue from any of its products under development. Rather, prior to our acquisition, 4P Therapeutics generated revenue to provide cash for its operations through contract research and development and related services for a small number of clients in the life sciences field on an as-needed basis. We are, for the near term, continuing this activity, although we do not anticipate that it will generate significant revenues and, since our acquisition, it has generated a negative gross margin. We have no long-term contractual obligations, and either party can terminate at any time.

 

With the change in our focus, our capital requirements have increased substantially. The process of developing pharmaceutical products and submitting them for FDA approval is both time consuming and expensive, with no assurance of obtaining approval from the FDA to market our product in the United States. We have budgeted $5.0 million for research and development of our abuse deterrent fentanyl transdermal system, including clinical manufacturing and clinical trials that need to be completed in order to obtain FDA approval. However, the total cost could be substantially in excess of that amount.

 

On March 25, 2020, we completed a private placement of 46,828 units at a price of $11 per unit. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $14 per share. The warrants expire April 30, 2023. We issued a total of 46,828 shares of common stock and warrants to purchase 46,828 shares of common stock. We received proceeds of $515,113.

 

On March 25, 2020, we paid off the convertible notes in the principal amount of $270,000 from the proceeds of the private placement. The total payments, including the prepayment penalty and accrued interest, was $345,656. The payment was made from the proceeds of the private placement. As a result of the payment of the notes, the derivative liability, which was $928,774 at April 30, 20200, was reduced to zero. As a result of a completed private placement, the warrants to purchase 50,000 shares at the lesser of (i) $20.90 or, (ii) if the Company completes its public offering of its common stock, 110% of the initial public offering price of the Common Stock in the public offering, became a warrant to purchase 95,000 warrants at $11 per share, subject to adjustment pursuant to the antidilution provisions of the warrant. The Company recorded a derivative liability for the warrants in the amount of $906,678 and reclassed the derivative liability to additional paid-in capital as of January 31, 2021.

 

In March 2020, a minority stockholder who had previously made loans to us in the total amount of $215,00, made an additional loan to us in the amount of $60,000, increasing the total loans from the stockholder to $275,000. On March 27, 2020, we issued 25,000 shares of common stock upon conversion of the notes.

 

Pursuant to a Stock Purchase Agreement (“SPA”), dated December 7, 2020, with the Company, BPM Inno Ltd., Kiryat, Israel, purchased 81,396 shares of common stock at a price of $8.60 per share, or $700,000, which provided payment for the RamBam license. The transaction was completed at a closing on February 26, 2021.

 

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Results of Operations

 

Three Months Ended April 30, 2021 and 2020

 

For the three months ended April 30, 2021, we generated revenue of $433,488 and our costs of revenue were $168,644, resulting in a gross margin of $264,844. For the three months ended April 30, 2020, we generated revenue of $119,364 and our costs of revenue were $74,939, resulting in negative gross margin of $44,425. Our revenue for April 30, 2021 was derived from three sources – (1) a continuation of research and development contracts of the type 4P Therapeutics performed prior to our acquisition, which accounted for $105,976, (2) sales of our consumer transdermal product to or South Korean distributor, which accounted for $86,600 which our distributor purchased for its preliminary marketing efforts since the product has not obtained regulatory approval for retail sales in South Korea and (3) sales from our recent acquisition of transdermal patches, which accounted for $240,912. Since we do not have the funds for development of our lead product, the 4P Therapeutics fixed costs are allocated to the contract services that we perform for clients. Our cost of revenue for our contract research and development services represents basically our labor cost plus a modest amount of material costs which we passed on to the client. The Company moved from the 4P facilities, and many of the prior costs relating to the facility were not incurred.

 

For the three months ended April 30, 2021, our selling, general and administrative expenses were $579,608 primarily legal, accounting and non-cash expenses compared to $191,917 for the three months ended April 30, 2020.The increase from 2020 is primarily attributable to non-cash consulting expenses of $127,500 and the inclusion of expenses of $164,637 of Active Intelligence in 2021.

 

During the three months ended April 30, 2020, we incurred gain on change in fair value of derivatives of $22,096 in connection with our October 2019 financing in which we raised gross proceeds of $250,000 and net proceeds of approximately $230,000 from the sale of convertible notes and warrants.

 

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We incurred interest expense of $40,869, primarily from the amortization of debt discounts for the three months ended April 30, 2021, as compared to $205,167 for the three months ended April 30, 2020.

 

As a result of the foregoing, we sustained a net loss of $315,957 or $(0.05) per share (basic and diluted) for the three months ended April 30, 2021, compared with a loss of $412,194, or $(0.08) per share (basic and diluted) for the three months ended April 30, 20200.

 

Liquidity and Capital Resources

 

As of April 30, 2021, we had $410,754 in cash and cash equivalents and a working capital deficiency of $1,587,766, as compared with cash and cash equivalents of $151,993 and working capital deficiency of $2,254,418 as of January 31, 2021. The Company received proceeds of $583,000 from the sale of common stock during the three months ended April 30, 2021.

 

For the three months ended April 30, 2021, we used cash of $279,415 in our operations. The principal adjustments to our net loss of $315,957 were amortization of debt discount of $36,554, depreciation and amortization of $76,262, and stock-based compensation of $127,500, offset by a gain on extinguishment of debt $39,875.

 

For the three months ended April 30, 2021, we had cash flows of $576,955 from financing activities, primarily $583,000 from gross proceeds from the sale of common stock.

 

Off Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

Critical Accounting Policies

 

Going Concern

 

As of April 30, 2021, the Company believes the substantial doubt about its status as a going concern has been resolved. The going concern conditions that caused substantial doubt consisted of current quarter net loss, negative working capital, negative cash flow, and accumulated deficit. Management has implemented plans to alleviate the substantial doubt. These plans include a substantial increase in sales commitments, a decrease in planned overhead expenses, equity funding that has been received and additional funding expected to be received, and the net revenue and positive cash flow from its recent acquisitions. These factors did not exist in prior years during its start-up operations. The Company’s recent history of losses has changed from prior periods due to its management’s plans including its acquisition in the latter part of 2020 to alleviate the substantial doubt about the Company’s ability to continue as a going concern. Management’s plans have been currently implemented. The plans enable the Company to meet its obligations for at least one year from the date when the financial statements are issued.

 

Revenue Recognition

 

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. We adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018. Topic 606 requires us to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

 

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Revenue Service Types

 

The following is a description of our revenue service types, which include professional services and sales of goods:

 

  Professional services include the contract of research and development related services with our clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged.

 

  Sales revenues are generated from the sale of our products. Upon the receipt of a purchase order, we have the order filled and shipped.

 

Contracts with Customers

 

A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

 

Deferred Revenue

 

Deferred revenue is a liability related to a revenue producing activity for which revenue has not been recognized. The Company records deferred revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized in accordance with GAAP. As of April 30, 2021 and January 31, 2021, the balance of deferred revenue was $69,894 and $86,846, respectively.

 

Performance Obligations

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types, the performance obligation is satisfied at different times. Our performance obligations include providing products and professional services in the area of research. We recognize product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs on a monthly basis for work performed during that month.

 

All revenue recognized in the statement of operations is considered to be revenue from contracts with customers.

 

Stock-Based Compensation

 

ASC 718, “Compensation — Stock Compensation,” prescribes accounting and reporting standards for all stock-based payment transactions in which employee services, and, since February 1, 2019, non-employee services, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Stock-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

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Intangible Assets

 

Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company’s acquisition has also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.

 

Goodwill

 

Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350. On August 31, 2020, in connection with the Company’s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640. As of April 30, 2021 and January 31, 2021, Goodwill amounted to $7,529,875.

 

Long-lived Assets

 

Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between fair market value of the long-lived asset and the related net book value.

 

New Financial Accounting Standards

 

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

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure controls and procedures.

 

As of the end of period covered by this report, we carried out an evaluation, with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, we concluded that our disclosure controls and procedures are not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

 

Management has determined that our internal controls contain material weaknesses due to the absence of segregation of duties, as well as lack of qualified accounting personnel, and excessive reliance on third-party consultants for accounting, financial reporting and related activities. During the past fiscal year we have added qualified accounting personnel, so the Company does not have to rely on third-party consultants. The Company has established additional monitoring controls over the financial statements. We have also improved our internal controls to provide for a detailed accounting review of all revenue items and accounts receivable and accounts payable transactions in connection with the entry and categorization of each transaction in the preparation of the Company’s financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

 

Changes in internal controls over financial reporting.

 

No changes were made to our internal controls in the quarterly period covered by this report that have materially affected, or are reasonably likely materially to affect, our internal control over financial reporting.

 

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PART II—OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

On August 10, 2018, we, our chief executive officer and our chief financial officer received a Wells notice from the enforcement division staff of the Miami Regional Office of the SEC in connection with an investigation into the accuracy of certain statements in our Form 10 registration statement filed June 2, 2016, as amended, and our Form 10-K annual report filed May 8, 2017. The staff’s inquiry was focused on our disclosure language in those filings relating to the FDA requirements for our consumer transdermal patch products in that our filings did not accurately reflect the FDA’s jurisdiction over our consumer products and did not disclose that we could not legally market these products in the United States. On September 7, 2018, we and the officers filed a Wells submission in response. After engaging in settlement discussions with the staff about the matters under investigation, we and the officers submitted an offer of settlement to resolve the investigation without admitting or denying any violations of the federal securities laws.

 

On December 26, 2018, the SEC announced that it has accepted the settlement offer and instituted settled administrative cease-and-desist proceedings against us and the named officers. The SEC’s administrative order, dated December 26, 2018, finds that we and the officers consented – without admitting or denying any findings by the SEC– to cease-and-desist orders against them for violations by us of Sections 12(g) and 13(a) of the Exchange Act 1934 and Rules 12b-20 and 13a-1 thereunder, which require issuers to file accurate registration statements and annual reports with the SEC; violations by the officers for causing our violations of the above issuer reporting provisions; and violations by the officers of Rule 13a-14 of the Exchange Act, which requires each principal executive and principal financial officer of issuers to attest that annual reports filed with the SEC do not contain any untrue statements of material fact. In addition to consenting to the cease-and-desist orders, the officers have each agreed to pay a $25,000 civil penalty to resolve the investigation. The administrative order does not impose a civil penalty or any other monetary relief against us.

 

On July 27, 2018, we commenced an action in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, against Advanced Health Brands, Inc., Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Laura Fillman and John Baker, together with a Motion for Temporary Injunction Without Notice and a Motion for Prejudgment Writ of Replevin arising from our decision to seek to rescind for misrepresentation the agreement by which we acquired advanced Health Brands, Inc. for 1,250,000 shares of common stock valued at $2,500,000 and seek return of the shares. On August 2, 2018, the court entered a Temporary Injunction Without Notice and an Order to Show Cause against the defendants. Defendants Kalmar, Murphy, Polly-Murphy, and Baker filed a Motion to Dismiss our Verified Complaint, Motion to Dissolve Temporary Injunction Without Notice and Response to Order to Show Cause, and Motion to Compel Arbitration. On January 4, 2019, the court dismissed our complaint with prejudice, and directed the defendants to assign to us within 30 days, the six patents never duly transferred to us. On February 1, 2019, we appealed the court’s order. Pursuant to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the shares were cancelled as of January 31, 2019. On June 7, 2019, the individual defendants (other than the defendant whom we have a settlement agreement), filed a motion for sanctions and civil contempt against us, which generally claimed that we failed to comply with the Court’s January 4, 2019 order by refusing to issue the Ruling 144 letters that would allow the defendants to transfer their shares of common stock. On October 29, 2019, the Court denied the defendants’ motion. On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state court action that dismissed our complaint with prejudice, and gave us leave to file an amended complaint/

 

On August 22, 2018, four of the defendants in the Florida action described in the previous paragraph filed a complaint against us in the Franklin County, Ohio Court of Common Pleas seeking a declaratory judgment permitting them to sell the shares of common stock they received pursuant to the acquisition agreement. The parties have agreed to a stay pending the outcome of the Florida litigation.

 

On April 29, 2019, we filed a securities fraud action in the U.S. District Court for the Eastern District of New York against Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Advanced Health Brands and TD Therapeutic, Inc. In the complaint we allege that in 2017, the defendants fraudulently and deceitfully obtained 1,250,000 shares of common stock by orchestrating a months-long scheme to defraud us. We are seeking the return of the 1,200,000 shares of common stock and monetary damages resulting from the defendants’ fraudulent conduct. The defendants filed a motion to dismiss on August 23, 2019, and we filed our response on September 13, 2019. On July 20, 2020, the Court denied the defendant’s motion to dismiss the complaint, and the parties have recently commenced the discovery phase of the litigation. No trial date has been scheduled by the Court.

 

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ITEM 1A. RISK FACTORS

 

You should carefully consider the risks described below together with all of the other information included in this prospectus before making an investment decision with regard to our securities. The risks set forth below are not the only risks facing us. Additional risks and uncertainties may exist that could also adversely affect our business, prospects or operations. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or a significant part of your investment.

 

Because of a lack of funds, we have suspended our pharmaceutical product development operations.

 

Our business is the development of transdermal systems for the delivery of pharmaceuticals. The development of pharmaceutical products is highly cash intensive, and many early-stage drug development companies are unable to raise sufficient cash to complete the development and testing of their products and obtain regulatory approval, with the result that they either obtain funding on very unfavorable terms, cease to conduct business or sell or license their intellectual property on unfavorable terms. Because of our lack of cash and the absence of any significant financing, we have suspended our development activities relating to our transdermal pharmaceutical products. Because of the anticipated lack of revenues until we have an approved product that we can market and the time required to obtain FDA approval, which can take many years, we must rely on our ability to raise money in the private or public equity market or enter into a joint venture relationship with a company that has the funds, the willingness and the ability to fund or obtain funds for the project that is the subject of the joint venture. In March 2020, we withdrew a registration statement relating to a proposed public offering. If we are able to raise funds or enter into a joint venture, it is likely that the term will not be favorable to us. We cannot assure you that we will be able to raise funds in a public or private financing or a joint venture, and, if we are unable to do so, we may cease operations.

 

Because we are an early-stage company with minimal revenue and a history of losses and we expect to continue to incur substantial losses for the foreseeable future, we cannot assure you that we can or will be able to operate profitably.

 

We did not generate any revenue prior to the quarter ended October 31, 2018 and since then, we have incurred losses as, 4P Therapeutics generated only modest revenue from contract research and development services which are not related to our pharmaceutical transdermal patch business. Although we anticipate that, for the near term, we will continue to perform research and development services for third parties, we do not expect to generate significant revenue from performing contract research and development services for our clients and we have generated losses from operations from this business. During the year ended January 31, 2021, we experienced a significant decline in revenue from 4P Therapeutics’ largest customer. We generated negative cash flow from operations for the years ended January 31, 2021 and 2020. We are subject to the risks common to start-up, pre-revenue enterprises, including, among other factors, undercapitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. Drug development companies typically incur substantial losses during the product development and FDA testing phase of the business and do not generate revenues until after the drug has received FDA approval, which cannot be assured, and until the company has started to sell the product. We can give no assurance that we can or will ever be successful in achieving profitability and the likelihood of our success must be considered in light of our early stage of operations. We cannot assure you that we will be able to operate profitably or generate positive cash flow. If we cannot achieve profitability, we may be forced to cease operations and you may suffer a total loss of your investment.

 

Because we do not have a product we can market in the United States, we cannot predict when or whether we will operate profitably.

 

We have not completed the development of our lead product, which is our abuse deterrent fentanyl transdermal system, and we do not have any product that we can market in the United States. Because of the numerous risks and uncertainties associated with product development, we cannot assure you that we will be able to develop and market any products or achieve or attain profitability. If we are able to obtain financing for our operations, we expect that we will incur substantial expenses as we continue with our product development and clinical trials. Further, if we are required by applicable regulatory authorities, including the FDA as well as the comparable regulatory agencies in other countries in which we may seek to market product, to perform studies in addition to those we currently anticipate, our expenses will increase beyond expectations and the timing of any potential product approval may be delayed. As a result, we expect to continue to incur substantial losses and negative cash flow for the foreseeable future.

 

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A number of factors, including, but not limited to the following, may affect our ability to develop our business and operate profitably:

 

  our ability to obtain necessary funding to develop our proposed products;

 

  the success of clinical trials for our products;

 

  our ability to obtain FDA approval for us to market any proposed product in our pipeline in the United States;

 

  any delays in regulatory review and approval of product in development;

 

  if we obtain FDA approval to market our product, our ability to establish manufacturing and distribution operations or entering into manufacturing and distribution agreements with qualified third parties;

 

  market acceptance of our products;

 

  our ability to establish an effective sales and marketing infrastructure;

 

  our ability to protect our intellectual property;

 

  competition from existing products or new products that may emerge;

 

  the ability to commercialize our products;

 

  potential product liability claims and adverse events;

 

  our ability to adequately support future growth; and

 

  our ability to attract and retain key personnel to manage our business effectively.

 

We are dependent on obtaining additional financing to enable us to pay off debt and to resume our product development operations.

 

Our continued operations are substantially dependent on our ability to obtain additional financing to pay off substantial debt incurred in our August 31, 2020 acquisition of Pocono Coated Products, LLC and to provide us with the ability to resume product development operations and continue to finance our current operations and generate growth in our revenues.

 

Our business is impacted by the following additional key risks:

 

  Our business could be adversely affected by the effects of health pandemics or epidemics, including the recent outbreak of COVID-19, which was declared by the World Health Organization as a global pandemic, and is resulting in travel and other restrictions to reduce the spread of the disease, including state and local orders across the country, which, among other things, direct individuals to shelter at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel. The effects of these orders, government-imposed quarantines and measures we would take, such as work-from-home policies, may negatively impact productivity, disrupt our business and could delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.  Further, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which could disrupt our supply chain.

 

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  The FDA regulatory process may take longer and be more expensive than we anticipate without any assurance that we will obtain FDA approval.

 

  If we are not able to obtain FDA approval for our lead product, we may not have the resources to develop any other product, and we may not be able to continue in business.

 

  We may not be able to launch any products for which we receive FDA marketing approval.

 

  We may not be able to establish a distribution network for the marketing and sale of any products for which we receive FDA approval.

 

  We may not be able to establish manufacturing facilities in compliance with FDA good manufacturing practices or to enter into manufacturing agreements for the manufacture of our products in an FDA approved manufacturing facility.

 

  It may be necessary to us to enter into a joint venture or other strategic relationship in order to develop, perform clinical testing for, manufacture or market any of our proposed products. We may not be able to enter into such a relationship, and any relationship may not be successful, and the other party may have business interests and priorities that are different from ours.

 

  We are party to a settlement agreement with the SEC resulting from statements in our SEC filings that did not accurately reflect the FDA’s jurisdiction over our consumer products and did not disclose that we could not legally market these products in the United States. The settlement included a cease-and-desist order against violating the provisions of the Securities Exchange Act which require us to file accurate registration statements and annual reports with the SEC. Our failure to comply with our obligations under the settlement agreement could result in enforcement proceedings against us or our officers.

 

  We may not be able to protect our rights in our intellectual property, and we may be subject to intellectual property litigation which would be expensive and disruptive of our operations even if we eventually prevail on the merits.

  

  Unanticipated side effects or other adverse events resulting from the use of our product could require a recall of our products and, even if no recall is required, our reputation could be impaired by side effects.

 

  We may not be able to evaluate potential acquisition candidates, with the result that we may not be able to benefit from the acquisition or integrate the acquired business with our business. We have recently incurred an impairment charge as a result of an acquisition when the intellectual property assets of the acquired company were not as represented. We cannot assure you that we will not incur similar or other problems with any future acquisitions.

 

  We may fail to comply with all applicable laws and regulations relating to our product. We may have to change or adapt our operations in the event of changes in national, regional and local government regulations, taxation, controls and political and economic developments that affect our products and the market for our products;

 

  We may be unable to accurately estimate anticipated expenses, capital requirements and needs for additional financing;

 

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

The following table sets forth the sales of unregistered securities since the Company’s last report filed under this item.

 

Date  Title and Amount (1)  Purchaser  Principal
Underwriter
  Total Offering Price/
Underwriting Discounts
February 15, 2021  12,500 shares of common stock  Consultant.  NA  $350,000/NA
February 25, 2021  5,603 shares of common stock  Financial Consultant  NA  $60,000/NA

  

  (1) The issuances to private investors, directors and management and consultants are viewed by the Company as exempt from registration under the Securities Act of 1933, as amended (“Securities Act”), alternatively, as transactions either not involving any public offering, or as exempt under the provisions of Regulation D, Regulation S or Rule 701 promulgated by the SEC under the Securities Act.

 

ITEM 6. EXHIBITS.

 

Exhibit
Number
  Description of Exhibits
31.1   Section 302 Certificate of Chief Executive Officer.
31.2   Section 302 Certification of Chief Financial Officer
32.1   Section 906 Certificate of Chief Executive Officer and Principal Financial Officer.
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Schema Document
101.CAL   XBRL Taxonomy Calculation Linkbase Document
101.DEF   XBRL Taxonomy Definition Linkbase Document
101.LAB   XBRL Taxonomy Label Linkbase Document
101.PRE   XBRL Taxonomy Presentation Linkbase Document

 

28

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  NUTRIBAND INC.
   
June 14, 2021 By: /s/ Gareth Sheridan
   

Gareth Sheridan,
Chief Executive Officer

(Principal Executive Officer)

   
June 14, 2021 By: /s/ Gerald Goodman
   

Gerald Goodman,
Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

 

29

 

 

EX-31.1 2 f10q0421ex31-1_nutriband.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

I, Gareth Sheridan, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Nutriband Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

DATE: June 14,  2021 /s/ Gareth Sheridan
  Gareth Sheridan,
Chief Executive Officer
  (Principal Executive Officer)

 

EX-31.2 3 f10q0421ex31-2_nutriband.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

I, Gerald Goodman, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Nutriband Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

DATE: June 14, 2021 /s/ Gerald Goodman
  Gerald Goodman,
Chief Financial Officer
  (Principal Financial Officer)

 

EX-32.1 4 f10q0421ex32-1_nutriband.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 In connection with the quarterly report of Nutriband Inc. (the “Company”) on Form 10-Q for the quarter ended April 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gareth Sheridan, chief executive officer, and I, Gerald Goodman, chief financial officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

June 14, 2021 /s/ Gareth Sheridan
  Gareth Sheridan,
  Chief Executive Officer
  (Principal Executive Officer)
   
June 14, 2021 /s/ Gerald Goodman
  Gerald Goodman,
  Chief Financial Officer
  (Principal Financial Officer)

 

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Times, Serif; font-size: 10pt">ORGANIZATION AND DESCRIPTION OF BUSINESS</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; "><i><font style="text-decoration:underline">Organization</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Nutriband Inc. (the &#x201c;Company&#x201d;) is a Nevada corporation, incorporated on January 4, 2016. In January 2016, the Company acquired Nutriband Ltd, an Irish company which was formed by the Company&#x2019;s chief executive officer in 2012 to enter the health and wellness market by marketing transdermal patches. References to the Company relate to the Company and its subsidiaries unless the context indicates otherwise.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On August 1, 2018, the Company acquired 4P Therapeutics LLC (&#x201c;4P Therapeutics&#x201d;) for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">4P Therapeutics is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development. Prior to the acquisition of 4P Therapeutics, the Company&#x2019;s business was the development and marketing of a range of transdermal consumer patches. Most of these products are considered drugs in the United States and cannot be marketed in the United States without approval by the Food and Drug Administration (the &#x201c;FDA&#x201d;). The Company is not presently taking any steps to seek FDA approval of its consumer transdermal products and its consumer products are not being marketed in the United States.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">With the acquisition of 4P Therapeutics, 4P Therapeutics&#x2019; drug development business became the Company&#x2019;s principal business. The Company&#x2019;s approach is to use generic drugs that are off patent and incorporate them into the Company&#x2019;s transdermal drug delivery system. Although these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal product development program which will include the preclinical and clinical trials that are necessary to receive FDA approval before we can market any of our pharmaceutical products.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On August 25, 2020, the Company formed Pocono Pharmaceuticals Inc. (&#x201c;Pocono Pharmaceuticals&#x201d;), a wholly owned subsidiary of the Company. On August 31, 2020, the Company acquired certain assets and liabilities associated with the Transdermal, Topical, Cosmetic, and Nutraceutical business of Pocono Coated Products LLC (&#x201c;PCP&#x201d;). The net assets were contributed to Pocono Pharmaceuticals. Included in the transaction the Company also acquired 100% of the membership interests of Active Intelligence LLC (&#x201c;Active Intelligence&#x201d;). See Note 2 for further details of the acquisition.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Pocono Pharmaceuticals is a coated products manufacturing entity organized to take advantage of unique process capabilities and experience. Pocono helps their customer with product design and development along with manufacturing to bring new products to market with minimal capital investment. Pocono Pharmaceutical&#x2019;s competitive edge is a low-cost manufacturing base: a result of its unique processes and state of the art material technology. Active Intelligence manufactures activated kinesiology tape. The tape has transdermal and topical properties. This tape is used as the same as traditional kinesiology tape.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">In December 2019, COVID-19 emerged and has subsequently spread world-wide. The World Health Organization has declared COVID-19 a pandemic resulting in federal, state and local governments and private entities mediating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining people who may have been exposed to the virus. The effect of these orders, government imposed quarantines and measures the Company would take, such as work-at-home policies, may negatively impact productivity, disrupt our business and could delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and disruptions in our operations could negatively impact our business, operating results and financial condition. Further, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns, or other restrictions on the conduct of business could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which could disrupt our supply chain.</p><br/> the Company acquired 4P Therapeutics LLC (&#x201c;4P Therapeutics&#x201d;) for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics. 1.00 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0%"></td><td style="width: 0.5in; text-align: left">2.</td><td style="text-align: justify">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Unaudited Interim Financial Statements</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The consolidated balance sheet as of April 30, 2021, and the consolidated statements of operations, stockholders&#x2019; equity, and cash flows for the periods presented have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' equity and cash flows for all periods presented have been made. The results for the three months ended April 30, 2021, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Nutriband&#x2019;s Annual Report on Form 10-K for the year ended January 31, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Certain information and footnote disclosures required under generally accepted accounting principles in the United States of America (&#x201c;U.S. GAAP&#x201d;) have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements of the U.S. Securities and Exchange Commission (&#x201c;SEC&#x201d;). The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosures of contingent amounts in our consolidated financial statements and accompanying footnotes. Actual results could differ from estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The Company&#x2019;s significant accounting policies are summarized in Note 1 in the Company&#x2019;s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to these accounting policies during the three months April 30, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Going Concern </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">As of April 30, 2021, the Company believes the substantial doubt about its status as a going concern has been resolved. The going concern conditions that caused substantial doubt consisted of current quarter net loss, negative working capital, negative cash flow, and accumulated deficit. Management has implemented plans to alleviate the substantial doubt. These plans include a substantial increase in sales commitments, a decrease in planned overhead expenses, equity funding that has been received and additional funding expected to be received, and the net revenue and positive cash flow from its recent acquisitions. These factors did not exist in prior years during its start-up operations. The Company&#x2019;s recent history of losses has changed from prior periods due to its management&#x2019;s plans including its acquisition in the latter part of 2020 to alleviate the substantial doubt about the Company&#x2019;s ability to continue as a going concern. Management&#x2019;s plans have been currently implemented. The plans enable the Company to meet its obligations for at least one year from the date when the financial statements are issued.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Principles of Consolidation</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company&#x2019;s financial statements from the date of acquisition of August 1, 2018, and the operations of Pocono and Active Intelligence are included in the Company&#x2019;s financial statements from the date of acquisition of September 1, 2020. The wholly owned subsidiaries are as follows:</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">Nutriband Ltd.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">4P Therapeutics LLC</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">Pocono Pharmaceuticals Inc.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Use of Estimates </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on other various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The Company&#x2019;s significant policies are summarized in Note 1 of the Company&#x2019;s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to the accounting policies during the three months ended April 30, 2021, and the Company does not expect that the adoption of other accounting pronouncements will have a material impact on its financial statements.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Revenue Recognition </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">In May 2014, the FASB issued ASU No. 2014-09, &#x201c;Revenue from Contracts with Customers (Topic 606) (&#x201c;ASU 2014-09&#x201d;), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i><font style="text-decoration:underline">Revenue Types</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The following is a description of the Company&#x2019;s revenue types, which include professional services and sale of goods:</p><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">&#x25cf;</td><td style="text-align: justify">Service revenues include the contract of research and development related services with the Company&#x2019;s clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged.</td></tr></table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">&#x25cf;</td><td style="text-align: justify">Product revenues are derived from the sale of the Company&#x2019;s consumer transdermal and coated products. Upon the reception of a purchase order, we have the order filled and shipped.</td></tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i><font style="text-decoration:underline">Contracts with Customers</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party&#x2019;s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer&#x2019;s intent and ability to pay the promised consideration.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 2.25pt"><i><font style="text-decoration:underline">Deferred Revenue</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Deferred revenue is a liability related to a revenue producing activity for which revenue has not been recognized. The Company records deferred revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i><font style="text-decoration:underline">Performance Obligations</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company&#x2019;s different revenue service types, the performance obligation is satisfied at different times. The Company&#x2019;s performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs over time on a monthly basis for the work performed during that month.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">All revenue recognized in the income statement is considered to be revenue from contracts with customers.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i><font style="text-decoration:underline">Disaggregation of Revenues</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The Company disaggregates its revenue from contracts with customers by type and by geographical location. See the tables:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Three Months Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">April 30,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>Revenue by type</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Sale of goods</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">327,512</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,320</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">105,976</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">58,044</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">433,488</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">119,364</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Years Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">January 31,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Revenue by geographic location:</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">United States</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">346,888</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">58,044</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Foreign</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">86,600</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">61,320</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">433,488</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">119,364</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; "><i><font style="text-decoration:underline">Account receivable </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Trade accounts receivables are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the three months ended April 30, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to account receivable.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Inventories</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net reasonable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Property, Plant and Equipment</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Property and equipment represent an important component of the Company&#x2019;s assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 20 years as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">Lab Equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: center"><font style="font-size: 10pt">5-10 years</font></td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Furniture and fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: center">3 years</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Machinery and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: center">10-20 years</td><td style="text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Intangible Assets</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, &#x201c;Intangibles-Goodwill and Other.&#x201d; The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company&#x2019;s acquisitions have also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Goodwill</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350. On August 31, 2020, in connection with the Company&#x2019;s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640. As of April 30, 2021, Goodwill amounted to $7,529,875.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Long-lived Assets</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Earnings per Share</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period.&#xa0;&#xa0;Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period.&#xa0;Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants. As of April 30, 2021, and 2020, there were 141,830 and 161,828 common stock equivalents outstanding, respectively, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Stock-Based Compensation</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">ASC 718, &#x201c;Compensation - Stock Compensation,&#x201d; prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in; background-color: #FDFDFD"><font style="background-color: #FDFDFD"><i><font style="text-decoration:underline">Fair Value Measurements</font></i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">FASB ASC 820, &#x201c;Fair Value Measurements and Disclosure&#x201d; (&#x201c;ASC 820&#x201d;), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%">&#xa0;</td> <td style="width: 6%">&#xa0;</td> <td style="width: 6%"><font style="font-size: 10pt">Level 1</font></td> <td style="width: 85%"><font style="font-size: 10pt">- Observable inputs such as quoted market prices in active markets.</font></td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td><font style="font-size: 10pt">Level 2</font></td> <td><font style="font-size: 10pt">- Inputs other than quoted prices in active markets that are either directly or indirectly observable.</font></td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td><font style="font-size: 10pt">Level 3</font></td> <td><font style="font-size: 10pt">- Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The carrying value of the Company&#x2019;s financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD"><i><font style="text-decoration:underline">Derivative Liabilities</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The Company accounts for derivative instruments in accordance with ASC Topic 815, &#x201c;Derivatives and Hedging&#x201d; and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company&#x2019;s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of April 30, 2021, and January 31, 2021, the Company had no derivative liabilities.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD"><i><font style="text-decoration:underline">Recent Accounting Standards</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The Company has implemented all new pronouncements, including the adoption of ASU 2018-13, that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements or results of operations.</p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Unaudited Interim Financial Statements</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The consolidated balance sheet as of April 30, 2021, and the consolidated statements of operations, stockholders&#x2019; equity, and cash flows for the periods presented have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' equity and cash flows for all periods presented have been made. The results for the three months ended April 30, 2021, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Nutriband&#x2019;s Annual Report on Form 10-K for the year ended January 31, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Certain information and footnote disclosures required under generally accepted accounting principles in the United States of America (&#x201c;U.S. GAAP&#x201d;) have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements of the U.S. Securities and Exchange Commission (&#x201c;SEC&#x201d;). The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosures of contingent amounts in our consolidated financial statements and accompanying footnotes. Actual results could differ from estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The Company&#x2019;s significant accounting policies are summarized in Note 1 in the Company&#x2019;s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to these accounting policies during the three months April 30, 2021.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Going Concern </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">As of April 30, 2021, the Company believes the substantial doubt about its status as a going concern has been resolved. The going concern conditions that caused substantial doubt consisted of current quarter net loss, negative working capital, negative cash flow, and accumulated deficit. Management has implemented plans to alleviate the substantial doubt. These plans include a substantial increase in sales commitments, a decrease in planned overhead expenses, equity funding that has been received and additional funding expected to be received, and the net revenue and positive cash flow from its recent acquisitions. These factors did not exist in prior years during its start-up operations. The Company&#x2019;s recent history of losses has changed from prior periods due to its management&#x2019;s plans including its acquisition in the latter part of 2020 to alleviate the substantial doubt about the Company&#x2019;s ability to continue as a going concern. Management&#x2019;s plans have been currently implemented. The plans enable the Company to meet its obligations for at least one year from the date when the financial statements are issued.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Principles of Consolidation</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company&#x2019;s financial statements from the date of acquisition of August 1, 2018, and the operations of Pocono and Active Intelligence are included in the Company&#x2019;s financial statements from the date of acquisition of September 1, 2020. The wholly owned subsidiaries are as follows:</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">Nutriband Ltd.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">4P Therapeutics LLC</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">Pocono Pharmaceuticals Inc.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Use of Estimates </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on other various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The Company&#x2019;s significant policies are summarized in Note 1 of the Company&#x2019;s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to the accounting policies during the three months ended April 30, 2021, and the Company does not expect that the adoption of other accounting pronouncements will have a material impact on its financial statements.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Revenue Recognition </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">In May 2014, the FASB issued ASU No. 2014-09, &#x201c;Revenue from Contracts with Customers (Topic 606) (&#x201c;ASU 2014-09&#x201d;), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i><font style="text-decoration:underline">Revenue Types</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The following is a description of the Company&#x2019;s revenue types, which include professional services and sale of goods:</p><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">&#x25cf;</td><td style="text-align: justify">Service revenues include the contract of research and development related services with the Company&#x2019;s clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged.</td></tr></table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">&#x25cf;</td><td style="text-align: justify">Product revenues are derived from the sale of the Company&#x2019;s consumer transdermal and coated products. Upon the reception of a purchase order, we have the order filled and shipped.</td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i><font style="text-decoration:underline">Contracts with Customers</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party&#x2019;s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer&#x2019;s intent and ability to pay the promised consideration.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 2.25pt"><i><font style="text-decoration:underline">Deferred Revenue</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Deferred revenue is a liability related to a revenue producing activity for which revenue has not been recognized. The Company records deferred revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i><font style="text-decoration:underline">Performance Obligations</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company&#x2019;s different revenue service types, the performance obligation is satisfied at different times. The Company&#x2019;s performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs over time on a monthly basis for the work performed during that month.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">All revenue recognized in the income statement is considered to be revenue from contracts with customers.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i><font style="text-decoration:underline">Disaggregation of Revenues</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The Company disaggregates its revenue from contracts with customers by type and by geographical location. See the tables:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Three Months Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">April 30,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>Revenue by type</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Sale of goods</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">327,512</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,320</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">105,976</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">58,044</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">433,488</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">119,364</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Years Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">January 31,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Revenue by geographic location:</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">United States</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">346,888</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">58,044</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Foreign</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">86,600</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">61,320</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">433,488</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">119,364</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; "><i><font style="text-decoration:underline">Account receivable </font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Trade accounts receivables are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the three months ended April 30, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to account receivable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Inventories</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net reasonable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Property, Plant and Equipment</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Property and equipment represent an important component of the Company&#x2019;s assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 20 years as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">Lab Equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: center"><font style="font-size: 10pt">5-10 years</font></td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Furniture and fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: center">3 years</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Machinery and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: center">10-20 years</td><td style="text-align: left">&#xa0;</td></tr> </table> P3Y P20Y <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Intangible Assets</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, &#x201c;Intangibles-Goodwill and Other.&#x201d; The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company&#x2019;s acquisitions have also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Goodwill</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350. On August 31, 2020, in connection with the Company&#x2019;s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640. As of April 30, 2021, Goodwill amounted to $7,529,875</p> 5810640 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Long-lived Assets</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Earnings per Share</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period.&#xa0;&#xa0;Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period.&#xa0;Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants. As of April 30, 2021, and 2020, there were 141,830 and 161,828 common stock equivalents outstanding, respectively, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.</p> 141830 161828 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><i><font style="text-decoration:underline">Stock-Based Compensation</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">ASC 718, &#x201c;Compensation - Stock Compensation,&#x201d; prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in; background-color: #FDFDFD"><font style="background-color: #FDFDFD"><i><font style="text-decoration:underline">Fair Value Measurements</font></i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">FASB ASC 820, &#x201c;Fair Value Measurements and Disclosure&#x201d; (&#x201c;ASC 820&#x201d;), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%">&#xa0;</td> <td style="width: 6%">&#xa0;</td> <td style="width: 6%"><font style="font-size: 10pt">Level 1</font></td> <td style="width: 85%"><font style="font-size: 10pt">- Observable inputs such as quoted market prices in active markets.</font></td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td><font style="font-size: 10pt">Level 2</font></td> <td><font style="font-size: 10pt">- Inputs other than quoted prices in active markets that are either directly or indirectly observable.</font></td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td> <td>&#xa0;</td></tr> <tr style="vertical-align: top"> <td>&#xa0;</td> <td>&#xa0;</td> <td><font style="font-size: 10pt">Level 3</font></td> <td><font style="font-size: 10pt">- Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The carrying value of the Company&#x2019;s financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD"><i><font style="text-decoration:underline">Derivative Liabilities</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The Company accounts for derivative instruments in accordance with ASC Topic 815, &#x201c;Derivatives and Hedging&#x201d; and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company&#x2019;s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of April 30, 2021, and January 31, 2021, the Company had no derivative liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD"><i><font style="text-decoration:underline">Recent Accounting Standards</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; background-color: #FDFDFD">The Company has implemented all new pronouncements, including the adoption of ASU 2018-13, that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements or results of operations.</p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Three Months Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">April 30,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>Revenue by type</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Sale of goods</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">327,512</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,320</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">105,976</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">58,044</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">433,488</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">119,364</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 327512 61320 105976 58044 433488 119364 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Years Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">January 31,</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Revenue by geographic location:</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">United States</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">346,888</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">58,044</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Foreign</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">86,600</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">61,320</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">433,488</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">119,364</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 346888 58044 86600 61320 433488 119364 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">Lab Equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: center"><font style="font-size: 10pt">5-10 years</font></td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Furniture and fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: center">3 years</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Machinery and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: center">10-20 years</td><td style="text-align: left">&#xa0;</td></tr> </table> P5Y P10Y P3Y P10Y P20Y <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0%"></td><td style="width: 0.5in">3.</td><td style="text-align: justify">ACQUISITION OF BUSINESS</td></tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On August 31, 2020, the Company entered into a Purchase Agreement (&#x201c;Agreement&#x201d;), with Pocono Coated Products (&#x201c;PCP&#x201d;), pursuant to which PCP agreed to sell the Company certain of the assets and liabilities associated with its Transdermal, Topical, Cosmetic, and Nutraceutical business, including: (1) all the equipment, intellectual property and trade secrets, cash balances, receivables, bank accounts and inventory, free and clear of all liens, except for certain lease obligations, and (2), a 100% membership interest in Active Intelligence, LLC (collectively the &#x201c;Assets&#x201d;). The net assets acquired were contributed to Pocono Pharmaceuticals Inc, a newly formed wholly owned subsidiary of the Company. The purchase price for the Assets was (i) $6,085,180 paid with the issuance of 608,519 shares in the Company&#x2019;s common stock of Nutriband at a value of the average price of the previous 90 days at the date of Closing (the &#x201c;Shares&#x201d;), and (ii) a promissory note of the Company, net of debt discount, in the principal amount, of $1,332,893 (the Note&#x201d;) which is due upon the earlier of (a) twelve (12) months from issuance, or (b) immediately following a capital raise of not less than $4,000,000 and/or a public offering of no less than $4,000,000. Michael Myer, the CEO of PCP, has been elected to the Board of Directors of the Company for period of one year at the annual meeting of shareholders of the Company held in October 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Agreement provides that it is effective August 31, 2020, on which date the parties also entered into an escrow agreement (the &#x201c;Escrow Agreement&#x201d;), with legal counsel serving as the escrow agent, providing for holding of the Note, certificate for the shares, and title to the Assets (held in a special purpose subsidiary) as collateral security for completion of all closing conditions under the Agreement. On that date, the parties also entered into a security agreement granting PCP a security interest in all proceeds of the Assets held as collateral under the Escrow Agreement.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The purpose of the Company entering into the transaction is to enhance the transdermal products operations of the Company. The fair value of consideration given was allocated to the net tangible assets acquired. Under U.S. GAAP, both the PCP segment and Active Intelligence were considered to be businesses and, as such, the transaction was accounted for under the acquisition method of accounting.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Details of the net assets acquired are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">Fair value</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">Recognized on</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Acquisition</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">Common stock issued</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">6,085,180</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Note payable issued</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,332,893</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,418,073</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cash</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">66,994</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Account receivable</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,761</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Inventory</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">42,613</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Equipment and fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,056,935</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Customer base</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">177,600</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Intellectual property and trademarks</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">583,200</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Goodwill</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5,810,640</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Accounts payable and accrued expenses</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(26,104</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred revenue</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(26,851</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Debt</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(268,715</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net assets acquired</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,418,073</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and the two businesses acquired from PCP, Pocono and Active Intelligence, as if the acquisition occurred as part of the beginning of cash period presented. The unaudited pro forma condensed financial information is not intended to represent or be indicative of the consolidated results of operations of the Company that would have been reported had the acquisition occurred at the beginning of the period presented and should not be taken as being representation of the future consolidated results of operations of the Company.</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Three Months Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">April 30,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">As Reported</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Proforma</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Net revenue</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">119,364</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">303,189</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net loss</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(412,194</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(444,650</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss per common share - basic and diluted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(0.08</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(0.08</td><td style="text-align: left">)</td></tr> </table><br/> 1.00 6085180 608519 1332893 4000000 4000000 P1Y <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">Fair value</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">Recognized on</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Acquisition</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">Common stock issued</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">6,085,180</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Note payable issued</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,332,893</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,418,073</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cash</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">66,994</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Account receivable</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,761</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Inventory</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">42,613</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Equipment and fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,056,935</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Customer base</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">177,600</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Intellectual property and trademarks</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">583,200</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Goodwill</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5,810,640</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Accounts payable and accrued expenses</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(26,104</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Deferred revenue</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(26,851</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Debt</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(268,715</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net assets acquired</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,418,073</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 6085180 1332893 7418073 66994 1761 42613 1056935 177600 583200 5810640 26104 26851 268715 7418073 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">Three Months Ended</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="6" style="text-align: center">April 30,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">2020</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">As Reported</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Proforma</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Net revenue</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">119,364</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">303,189</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Net loss</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(412,194</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(444,650</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss per common share - basic and diluted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(0.08</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(0.08</td><td style="text-align: left">)</td></tr> </table> 119364 303189 -412194 -444650 -0.08 -0.08 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0%"></td><td style="width: 0.5in; text-align: left">4.</td><td style="text-align: justify">PROPERTY AND EQUIPMENT</td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">April 30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">January 31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Lab equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">144,585</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">144,585</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Machinery and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,086,915</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,056,935</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Furniture and fixtures</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">28,442</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">19,643</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,259,942</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,221,163</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"></td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: -0.125in; padding-bottom: 1.5pt">Less: Accumulated depreciation</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(188,345</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(144,537</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net Property and Equipment</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,071,597</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,076,626</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; "><font style="font-size: 10pt">Depreciation expense amounted to $43,808 and 8,779 for the three months ended April 30, 2021 and 2020, respectively</font>.</p><br/> 43808 8779 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">April 30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">January 31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Lab equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">144,585</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">144,585</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Machinery and equipment</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,086,915</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,056,935</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Furniture and fixtures</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">28,442</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">19,643</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,259,942</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,221,163</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"></td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: -0.125in; padding-bottom: 1.5pt">Less: Accumulated depreciation</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(188,345</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(144,537</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net Property and Equipment</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,071,597</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,076,626</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 144585 144585 1086915 1056935 28442 19643 1259942 1221163 188345 144537 <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0%"></td><td style="width: 0.5in">5.</td><td>NOTES PAYABLE/CONVERTIBLE DEBT</td></tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.5in; text-indent: 1in"><font style="text-decoration:underline">Notes Payable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On March 21, 2020, the Coronavirus Aid Relief and Economic Security Act (&#x201c;CARES ACT&#x201d; was enacted. The CARES ACT established the Paycheck Protection Program (&#x201c;PPP&#x201d;) which funds small businesses through federally guaranteed loans. Under the PPP, companies are eligible for forgiveness of principal and interest if the proceeds are used for eligible payroll costs, rent and utility costs. On June 17, 2020, the Company&#x2019;s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April 30, 2021. The Company recorded a gain on the extinguishment of debt of $34,870 during the three months ended April 30, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">In July 2020, a minority shareholder made an additional loan to the Company in the amount of $100,000. The loan is interest- free and due upon demand. The loan was outstanding as April 30, 2021, and January 31, 2021.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Active Intelligence, the Company&#x2019;s newly acquired subsidiary, entered into an agreement with the Carolina Small Business Development Fund for a line of credit of $160,000 due October 16, 2029, with interest of 5% per year. The amount assumed in Note 3 was $139,184. The loan requires monthly payments of principal and interest of $1,697. During the three months ended April 30, 2021, principal and interest payments of $5,006 were forgiven under the Cares Act. The amount has been recorded as a gain on the forgiveness of debt. As of April 30, 2021, the amount due was $125,673, of which $14,060 is current.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; "><font style="text-decoration:underline">Finance Leases</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Pocono has two finance leases secured by equipment. The leases mature in 2025 and 2026. The incremental borrowing rate is 5.0%. As of April 30, 2021, the minimum lease payments are as follow:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">Years Ending January 31, 2022</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">18,694</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">January 31, 2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">26,295</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">January 31, 2024</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">27,948</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">January 31, 2025</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">26,361</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">January 31, 2026</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,202</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">115,499</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in"><font style="text-decoration:underline">Related Party Payable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On August 31, 2020, in connection with the Company&#x2019;s acquisition of Pocono Products LLC, the Company issued to Pocono Coated Products LLC a promissory note, net of debt discount, in the amount of $1,332,893 with interest accruing at an annual rate of 0.17%, due on August 28, 2021, or immediately following the earlier of a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000. Pocono Coated Products LLC, a related party, is a shareholder of the Company. During the three months ended April 30, 2021, the Company recorded amortization of debt discount of $36,554. As of April 30, 2021, the amount due was $1,439,077.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in"><font style="text-decoration:underline">Convertible Debt</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On October 30, 2019, the Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross proceeds from this financing of $250,000.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The notes are convertible at a conversion price equal to the lesser of (i) the per share price of our common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180-day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company&#x2019;s securities or (b) the next private placement of the Company&#x2019;s equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15 Derivative and Hedging. The initial fair of the conversion feature was $128,870 and the fair value of the warrants in connection with the notes</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">were valued at $888,789 and were recorded based on their relative fair values. A debt discount to the note payables of $270,000 and an initial derivative expense of $767,650 was recorded.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The debt discount will be amortized over the life of the note. Amortization of the debt discount for the three months ended April 30, 2020 was $202,500.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">On March 25, 2020, the Company prepaid the convertible notes in the principal amount of $270,000 from the proceeds of a private placement. The total payments, including a prepayment fee of $69,131 and accrued interest, was $345,565. As a result of the payment of the notes, the derivative liability, which was $928,774 as of January 31, 2020, was reduced to zero. The warrants are no longer a derivative liability based on the notes being paid in full.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">Interest expense for the three months ended April 30, 2021was $40,869 including the amortization of the debt discount of $36,554 and interest expense of $4,315. Interest expense for the three months ended April 30, 2020 was $205,167 including the amortization of debt discount of $202,500 and interest expense of $2,667.</p><br/> the Coronavirus Aid Relief and Economic Security Act (&#x201c;CARES ACT&#x201d; was enacted. The CARES ACT established the Paycheck Protection Program (&#x201c;PPP&#x201d;) which funds small businesses through federally guaranteed loans. Under the PPP, companies are eligible for forgiveness of principal and interest if the proceeds are used for eligible payroll costs, rent and utility costs. On June 17, 2020, the Company&#x2019;s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April 30, 2021. The Company recorded a gain on the extinguishment of debt of $34,870 during the three months ended April 30, 2021. 100000 Active Intelligence, the Company&#x2019;s newly acquired subsidiary, entered into an agreement with the Carolina Small Business Development Fund for a line of credit of $160,000 due October 16, 2029, with interest of 5% per year. 160000 0.05 139184 1697 5006 125673 14060 The leases mature in 2025 and 2026. 0.050 the Company issued to Pocono Coated Products LLC a promissory note, net of debt discount, in the amount of $1,332,893 with interest accruing at an annual rate of 0.17%, due on August 28, 2021, or immediately following the earlier of a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000. Pocono Coated Products LLC, a related party, is a shareholder of the Company. 36554 1439077 the Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross proceeds from this financing of $250,000. the lesser of (i) the per share price of our common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180-day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company&#x2019;s securities or (b) the next private placement of the Company&#x2019;s equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender. 128870 888789 270000 767650 270000 69131 345565 928774 4315 202500 2667 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">Years Ending January 31, 2022</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">18,694</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">January 31, 2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">26,295</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">January 31, 2024</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">27,948</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">January 31, 2025</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">26,361</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">January 31, 2026</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,202</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">115,499</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 18694 26295 27948 26361 16202 115499 <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0%"></td><td style="width: 0.5in">6.</td><td>INTANGIBLE ASSETS</td></tr></table><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; ">As of April 30, 2021, and January 31, 2021, intangible assets consisted of intellectual property, customer base and trademarks, net of amortization, as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">April 30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">January 31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Customer base</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">314,100</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">314,100</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">License agreement</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">50,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">0</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Intellectual property</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">817,400</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">817,400</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Total</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,181,500</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,131,500</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Less: Accumulated amortization</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(157,224</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(124,770</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net Intangible Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,024,276</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,006,730</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">In February 2021, the Company acquired an IP license for $50,000, see Note 10- &#x201c;Rambam Agreement&#x201d; for further information regarding the license agreement. The value of the intangible assets, consisting of intellectual property, license agreement and customer base has been recorded at their fair value by the Company and are being amortized over a period of three to ten years. Amortization expense for the three months ended April 30, 2021, and 2020 was $32,454 and $9,267, respectively.</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-left: 0in">Estimated Amortization:</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Year Ended January 31,</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">Remainder of 2022</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">97,325</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">129,776</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2924</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">129,776</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2026</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">113,109</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2026 and thereafter</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">554,290</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,024,276</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> 50000 P3Y P10Y 32454 9267 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">April 30,</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">January 31,</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Customer base</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">314,100</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">314,100</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">License agreement</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">50,000</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">0</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; 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background-color: rgb(204,238,255)"> <td>Total</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,181,500</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,131,500</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Less: Accumulated amortization</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(157,224</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(124,770</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Net Intangible Assets</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,024,276</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,006,730</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 314100 314100 50000 0 817400 817400 1181500 1131500 157224 124770 1024276 1006730 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-left: 0in">Estimated Amortization:</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Year Ended January 31,</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">Remainder of 2022</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">97,325</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">129,776</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2924</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">129,776</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2026</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">113,109</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">2026 and thereafter</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">554,290</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,024,276</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 97325 129776 129776 113109 554290 1024276 <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0%"></td><td style="width: 0.5in">7.</td><td style="text-align: justify">RELATED PARTY TRANSACTIONS</td></tr></table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">a)</td><td style="text-align: justify">The Company had related party notes with its former Chief Financial Officer and Chief Operating Officer. See footnote 5 for further discussion.</td></tr></table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">b)</td><td style="text-align: justify">In connection with the acquisition of Pocono, the Company recorded various transactions and operations through Pocono Coated Products LLC, a related entity. During the three months ended April 30, 2021, the Company was advanced $7,862 in finance payments. As of April 30, 2021, the Company owed Pocono $2,634. The Company also issued a note in the amount of $1,500,000 to Pocono Coated Products LLC. See footnote 5 for further discussion.</td></tr></table><br/> 7862 As of April 30, 2021, the Company owed Pocono $2,634. The Company also issued a note in the amount of $1,500,000 to Pocono Coated Products LLC. See footnote 5 for further discussion. <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; "><tr style="vertical-align: top"> <td style="width: 0%"></td><td style="width: 0.5in">8.</td><td style="text-align: justify">STOCKHOLDERS&#x2019; EQUITY</td></tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="text-decoration:underline">Preferred Stock</font></p><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">On January 15, 2016, the board of directors of the Company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize 10,000,000 shares of Preferred Stock, par value $0.001 per share.</p><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">On May 24, 2019, the board of directors created a series of preferred stock consisting of 2,500,000 shares designated as the Series A Convertible Preferred Stock (&#x201c;Series A Preferred Stock&#x201d;). On June 20, 2019, the Series A preferred Stock was terminated, and the 2,500,000 shares were restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series, until such stock is once more designated as part of a particular series by the board of directors.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="text-decoration:underline">Common Stock</font></p><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">On June 25, 2019, the Company effected a one-for four reverse split, pursuant to which each share of common stock became converted into 0.25 shares of common stock, and the Company decreased its authorized common stock from 100,000,000 to 25,000,000 shares.</p><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">On January 27, 2020, the Company amended its articles of incorporation to increase its authorized common shares from 25,000,000 shares to 250,000,000 shares.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.5in"><font style="text-decoration:underline">Activity during the Three Months Ended April 30, 2021</font></p><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">On March 22, 2020, the Company issued in a private placement 46,828 units at a price of $11 per unit. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $14 per share. The warrants expire April 30, 2023. The Company issued a total of 46,828 shares of common stock and warrants to purchase 46,828 shares of common stock. The Company received proceeds of $515,108.</p><br/><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">In March 2020, a minority shareholder who had previously made loans of $215,000, made an additional loan to the Company in the amount of $60,000, increasing the loans to shareholder to $275,000. On March 27, 2020, the Company issued 25,000 shares of common stock upon reaching a settlement with the noteholder to convert the notes in the principal amount of $275,000. The transaction resulted in a loss on extinguishment of $12,500.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><font style="text-decoration:underline">Activity during the Three Months Ended April 30, 2020</font></p><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 37.8pt"></td><td style="width: 18pt">(1)</td><td style="text-align: justify">On February 25, 2021, in connection with the Company&#x2019;s License Agreement with Rambam, pursuant to a Stock Purchase Agreement with BPM Inno Ltd (&#x201c;BPM&#x201d;), the Company issued 81,396 shares of common stock to BPM and received proceeds of $700,000 to be applied to product development expenses under the License Agreement. The Company entered into the Stock Purchase Agreement with BPM in December 2020 and received a payment of $60,000 which is included in Stockholders&#x2019; Equity as Subscription Payable in the Company&#x2019;s consolidated balance sheet as of January 31, 2021. In February 2021, BPM advanced a payment for the Company to Rambam in the amount of $57,000 for the license fee. The balance of the funds of $583,000 was received in February 2021. See footnote 10 for further discussion.</td></tr></table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 37.8pt"></td><td style="width: 18pt">(2)</td><td style="text-align: justify">On February 25, 2021, the Company issued 5,602 shares of common stock, valued at $60,000, for consulting services pursuant to a consultant agreement commencing December 1, 2020. 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On March 27, 2020, the Company issued 25,000 shares of common stock upon reaching a settlement with the noteholder to convert the notes in the principal amount of $275,000. 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text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Outstanding-period ending April 30, 2021</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">141,828</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">11.99</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;1.67 years </font></td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">852,320</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Exercisable - period ending April 30, 2021</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">141,828</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">11.99</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;1.67 years </font></td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">852,320</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; ">The following table summarizes additional information relating to the warrants outstanding as of April 30, 2021:&#xa0;</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: center">Range of Exercise</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Number</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Remaining Contractual</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Exercise Price for</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Number</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Exercise Price for</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Intrinsic</td><td style="text-align: center">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Prices</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; border-bottom: Black 1.5pt solid">&#xa0;</td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Outstanding</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; border-bottom: Black 1.5pt solid">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Life(Years)</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; border-bottom: Black 1.5pt solid">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Shares Outstanding</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; border-bottom: Black 1.5pt solid">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Exercisable</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; border-bottom: Black 1.5pt solid">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Shares Exercisable</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; border-bottom: Black 1.5pt solid">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Value</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">11.00</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 12%; text-align: right">95,000</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 12%; text-align: right">1.50</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">11.00</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 11%; text-align: right">95,000</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">11.00</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">665,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">$</td><td style="text-align: right">14.00</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">46,828</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1.50</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">14.00</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">46,828</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">14.00</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">187,320</td><td style="text-align: left">&#xa0;</td></tr> </table><br/> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Exercise</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Remaining</td><td style="text-align: center">&#xa0;</td><td style="text-align: center">&#xa0;</td> <td colspan="2" style="text-align: center">Intrinsic</td><td style="text-align: center">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Shares</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Price</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Life</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Value</td><td style="text-align: center; padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Outstanding, January 31, 2021</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">141,828</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">11.99</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;2.16 years </font></td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">285,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Expired/Cancelled</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt">Exercised</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Outstanding-period ending April 30, 2021</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; 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background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Exercisable - period ending April 30, 2021</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">141,828</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">11.99</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#xa0;1.67 years </font></td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; 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font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0%"></td><td style="width: 0.5in">10.</td><td>COMMITMENTS AND CONTIGENCIES</td></tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><i>Legal Proceedings</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On July 27, 2018, the Company commenced an action in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, against Advanced Health Brands, Inc., Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Laura Fillman and John Baker, together with a Motion for Temporary Injunction Without Notice and a Motion for Prejudgment Writ of Replevin arising from the Company&#x2019;s decision to seek to rescind for misrepresentation the agreement by which the Company acquired advanced Health Brands, Inc. for 1,250,000 shares of common stock valued at $2,500,000 and seek return of the shares. On August 2, 2018, the court entered a Temporary Injunction Without Notice and an Order to Show Cause against the defendants. Defendants Kalmar, Murphy, Polly-Murphy, and Baker filed a Motion to Dismiss the Company&#x2019;s Verified Complaint, Motion to Dissolve Temporary Injunction Without Notice and Response to Order to Show Cause, and Motion to Compel Arbitration. On January 4, 2019, the court dismissed the Company&#x2019;s complaint with prejudice, and directed the defendants to assign the Company within 30 days, the six patents never duly transferred to the Company. On February 1, 2019, the Company appealed the court&#x2019;s order. Pursuant to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the shares were cancelled as of January 31, 2019. On June 7, 2019, the individual defendants (other than the defendant whom the Company has a settlement agreement), filed a motion for sanctions and civil contempt against us, which generally claimed that we failed to comply with the Court&#x2019;s January 4, 2019 order by refusing to issue the Ruling 144 letters that would allow the defendants to transfer their shares of common stock. On October 29, 2019, the Court denied the Defendants motion. On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state court action that dismissed our complaint, with prejudice, and gave us leave to file an amended complaint. On July 7, 2020, Defendants filed Notice for Trial, requesting the court to set a trial date. The Company and defendants have served their first set of interrogatories on each other and have filed answers and responses to each other&#x2019;s first set of interrogatories.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On August 22, 2018, four of the defendants in the Florida action described in the previous paragraph filed a complaint against the Company in the Franklin County, Ohio Court of Common Pleas seeking a declaratory judgment permitting them to sell the shares of common stock they received pursuant to the acquisition agreement. The parties have agreed to a stay pending the outcome of the Florida litigation.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On April 29, 2019, the Company filed a securities fraud action in the U.S. District Court for the Eastern District of New York against Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Advanced Health Brands and TD Therapeutic, Inc. In the complaint the Company alleges that in 2017, the defendants fraudulently and deceitfully obtained 1,250,000 shares of common stock by orchestrating a months-long scheme to defraud the Company. The Company is seeking the return of the shares of common stock and monetary damages resulting from the defendants&#x2019; fraudulent conduct. The defendants filed a motion to dismiss the complaint on August 23, 2019, and on September 13, 2019, the Company filed its response. On July 20, 2020, the Court denied the defendant&#x2019;s motion to dismiss the complaint, and the parties have recently commenced the discovery phase of the litigation. No trial date has been scheduled by the Court.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in"><i>Employment Agreements</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company entered into a three-year employment agreement with Gareth Sheridan, our CEO, effective April 25, 2019. The agreement also provides that the executive will continue as a director. The agreement provides for an initial term, commencing on the effective date of the agreement and ending on January 31, 2024, and continuing on a year-to-year basis thereafter unless terminated by either party on not less than 30 days&#x2019; notice given prior to the expiration of the initial term or any one year extension. For his services to the Company during the term of the agreement, Mr. Sheridan receives an annual salary $42,000 per annum, commencing on the effective date of the agreement and increasing to $170,000 per annum in the month in which the Company shall have received not less than $2,500,000 from one or more public or private financings of the Company&#x2019;s equity securities subsequent to the date of the agreement. During the year ended January 31, 2021, the salary was increased to $60,000 per annum.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><i>Rambam Agreement</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On December 9, 2020, the Company entered into a License Agreement (the &#x201c;License Agreement&#x201d;) with Rambam Med-Tech Ltd. (&#x201c;Rambam&#x201d;), Haifa, Israel, to develop the RAMBAM Closed System Transfer Device (&#x201c;CTSD&#x201d;) and such other products as the parties agree to develop/commercialize. The Company will license from Rambam the full technology, IP, and title to CTSD in the field, with an Initial license fee of $50,000 and running royalties on net sales. The $50,000 license fee was paid by a third party at the direction of the Company in February 2021, at which time the agreement became effective.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company had entered into a prior agreement, dated November 13, 2020, with BPM Inno Ltd., Kiryat, Israel (&#x201c;BPM&#x201d;), that, in consideration of BPM&#x2019;s introduction of Rambam to the Company, provided for BPM to have the rights as the exclusive of agent of the Company with Rambam and any other parties similarly introduced by BPM, and for a commission payable to BPM by the Company of 4.5% of revenues received by the Company resulting from the introduction of Rambam (and any other companies as to which the exclusive agency of BPM was in effect), and for BPM&#x2019;s payment of a royalty to Rambam. If the Company fails to commercialize the medical products subject to the License Agreement with Rambam within 36 months, under the November 13, 2020 agreement, BPM and the Company would share 50/50 in the revenues generated from sales of the licensed products from Rambam. This agreement further provides that it will be effective for a period of 10 years, with either party having the right to terminate on notice given 30 days prior to the desired termination, and also provided for certain territorial distribution rights of BPM as are set forth in the March 10, 2021 Distribution Agreement between the Company and BPM.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><i>BPM Distribution and Stock Purchase Agreements</i></p><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">(a)</td><td style="text-align: justify">On March 10, 2021, the Company finalized the Distribution Agreement with BPM, providing for distribution of the medical products developed and produced under the License Agreement. Under the Distribution Agreement, BPM&#xa0;has the right to distribute the medical products in Israel and has a right of first refusal in relation to all other countries/states, other than United States, Korea, China, Vietnam, Canada and Ecuador, which are termed excluded countries.</td></tr></table><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">(b)</td><td style="text-align: justify">The Company and BPM entered into a Stock Purchase Agreement (&#x201c;SPA&#x201d;), dated December 7, 2020, providing for the purchase by BPM of 81,396 shares of common stock at a price of $8.60 per share, or $700,000.&#xa0; In December 2020, the Company received an initial payment of $60,000 under the SPA, which is included in Stockholders&#x2019; Equity in the Company&#x2019;s consolidated balance sheet as of January 31, 2021. On February 25, 2021, in connection with the Company&#x2019;s License Agreement with Rambam, pursuant to the SPA, the Company issued 81,395 shares of common stock to BPM and received the balance of the proceeds of $700,000 to be applied to product development expenses under the License Agreement.</td></tr></table><br/> 1250000 2500000 50000 1250000 42000 170000 2500000 60000 50000 50000 The Company had entered into a prior agreement, dated November 13, 2020, with BPM Inno Ltd., Kiryat, Israel (&#x201c;BPM&#x201d;), that, in consideration of BPM&#x2019;s introduction of Rambam to the Company, provided for BPM to have the rights as the exclusive of agent of the Company with Rambam and any other parties similarly introduced by BPM, and for a commission payable to BPM by the Company of 4.5% of revenues received by the Company resulting from the introduction of Rambam (and any other companies as to which the exclusive agency of BPM was in effect), and for BPM&#x2019;s payment of a royalty to Rambam. If the Company fails to commercialize the medical products subject to the License Agreement with Rambam within 36 months, under the November 13, 2020 agreement, BPM and the Company would share 50/50 in the revenues generated from sales of the licensed products from Rambam. This agreement further provides that it will be effective for a period of 10 years, with either party having the right to terminate on notice given 30 days prior to the desired termination, and also provided for certain territorial distribution rights of BPM as are set forth in the March 10, 2021 Distribution Agreement between the Company and BPM. The Company and BPM entered into a Stock Purchase Agreement (&#x201c;SPA&#x201d;), dated December 7, 2020, providing for the purchase by BPM of 81,396 shares of common stock at a price of $8.60 per share, or $700,000. In December 2020, the Company received an initial payment of $60,000 under the SPA, which is included in Stockholders&#x2019; Equity in the Company&#x2019;s consolidated balance sheet as of January 31, 2021. 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Document And Entity Information - shares
3 Months Ended
Apr. 30, 2021
Jun. 11, 2021
Document Information Line Items    
Entity Registrant Name NutriBand Inc.  
Document Type 10-Q  
Current Fiscal Year End Date --01-31  
Entity Common Stock, Shares Outstanding   6,356,270
Amendment Flag false  
Entity Central Index Key 0001676047  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Apr. 30, 2021  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company false  
Entity Ex Transition Period false  
Entity File Number 000-55654  
Entity Incorporation, State or Country Code NV  
Entity Interactive Data Current No  
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Condensed Consolidated Balance Sheets - USD ($)
Apr. 30, 2021
Jan. 31, 2021
CURRENT ASSETS:    
Cash and cash equivalents $ 410,754 $ 151,993
Accounts receivable 150,810 109,347
Inventory 90,266 52,848
Prepaid expenses 282,542  
Total Current Assets 934,372 314,188
PROPERTY & EQUIPMENT-net 1,071,597 1,076,626
OTHER ASSETS:    
Goodwill 7,529,875 7,529,875
Intangible assets-net 1,024,276 1,006,730
TOTAL ASSETS 10,560,120 9,927,419
CURRENT LIABILITIES:    
Accounts payable and accrued expenses 873,988 940,612
Deferred revenue 69,894 86,846
Notes payable-related party 1,439,077 1,402,523
Finance lease liabilities-current portion 25,119 24,740
Notes payable-current portion 114,060 113,885
Total Current Liabilities 2,522,138 2,568,606
LONG-TERM LIABILITIES:    
Notes payable-net of current portion 111,613 150,063
Finance lease liabilities-net of current portion 90,380 96,804
Total Liabilities 2,724,131 2,815,473
Commitments and Contingencies
STOCKHOLDERS’ EQUITY:    
Preferred stock, $.001 par value, 10,000,000 shares authorized, -0- outstanding
Common stock, $.001 par value, 250,000,000 shares authorized; 6,356,270 and 6,256,772 shares issued and outstanding at April 30, 2021 and January 31, 2021, respectively 6,356 6,257
Additional paid-in-capital 19,980,999 18,871,098
Subscription payable   70,000
Accumulated other comprehensive loss (304) (304)
Accumulated deficit (12,151,062) (11,835,105)
Total Stockholders’ Equity 7,835,989 7,111,946
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 10,560,120 $ 9,927,419
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.21.1
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Apr. 30, 2021
Jan. 31, 2021
Statement of Financial Position [Abstract]    
Preferred stock par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares outstanding 0 0
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 250,000,000 250,000,000
Common stock, shares issued 6,356,270 6,256,772
Common stock, shares outstanding 6,356,270 6,256,772
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.21.1
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Income Statement [Abstract]    
Revenue $ 433,488 $ 119,364
Costs and expenses:    
Cost of revenues 168,844 74,939
Selling, general and administrative expenses 579,608 191,917
Total Costs and Expenses 748,452 266,856
Loss from operations (314,964) (147,492)
Other income (expense)    
Gain (loss) on extinguishment of debt 39,876 (12,500)
Early prepayment fee on convertible debenture   (69,131)
Gain on change in fair value of derivative   22,096
Interest expense (40,869) (205,167)
Total other income (expense) (993) (264,702)
Loss from operations before provision for income taxes (315,957) (412,194)
Provision for income taxes
Net loss $ (315,957) $ (412,194)
Net loss per share of common stock-basic and diluted (in Dollars per share) $ (0.05) $ (0.08)
Weighted average shares of common stock outstanding - basic and diluted (in Shares) 6,329,438 5,469,033
Other Comprehensive Loss:    
Net loss $ (315,957) $ (412,194)
Foreign currency translation adjustment
Total Comprehensive Loss $ (315,957) $ (412,194)
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.21.1
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($)
Common Stock
Additional Paid In Capital
Accumulated Other Comprehensive Income(Loss)
Accumulated Deficit
Subscription Payable
Total
Balance at Jan. 31, 2020 $ 5,441 $ 9,072,573 $ (304) $ (8,902,277)   $ 175,433
Balance (in Shares) at Jan. 31, 2020 5,441,100          
Proceeds from common stock and warrants $ 47 515,061       515,108
Proceeds from common stock and warrants (in Shares) 46,828          
Issuance of common stock for notes payable $ 25 287,475       287,500
Issuance of common stock for notes payable (in Shares) 25,000          
Reclassification of warrants from liabilitiy to equity 906,678       906,678
Net loss (412,194)   (412,194)
Balance at Apr. 30, 2020 $ 5,513 10,781,787 (304) (9,314,471)   1,472,525
Balance (in Shares) at Apr. 30, 2020 5,512,928          
Balance at Jan. 31, 2021 $ 6,257 18,871,098 (304) (11,835,105) $ 70,000 7,111,946
Balance (in Shares) at Jan. 31, 2021 6,256,772          
Common stock issued for proceeds and in payment for license $ 81 699,919     (60,000) 640,000
Common stock issued for proceeds and in payment for license (in Shares) 81,396          
Common stock issued for services $ 18 409,982     (10,000) 400,000
Common stock issued for services (in Shares) 18,102          
Net loss (315,957)   (315,957)
Balance at Apr. 30, 2021 $ 6,356 $ 19,980,999 $ (304) $ (12,151,062) $ 0 $ 7,835,989
Balance (in Shares) at Apr. 30, 2021 6,356,270          
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.21.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Cash flows from operating activities:    
Net loss $ (315,957) $ (412,194)
Adjustments to reconcile net loss to net cash used in operating activities:    
Expenses paid on behalf of the Company by related party   3,628
Depreciation and amortization 76,262 18,046
Early prepayment fee on convertible debentures   69,131
(Gain) loss on extinguishment of debt (39,875) 12,500
Gain on change in fair value of derivative   (22,096)
Amortization of debt discount 36,554 202,500
Amortization of right of use asset   4,805
Stock-based compensation 127,500  
Changes in operating assets and liabilities:    
Account receivable (41,463) (26,811)
Prepaid expenses (10,042) 13,750
Inventories (37,418)  
Customer deposits (16,952)  
Operating lease liability   (4,968)
Accounts payable and accrued expenses (58,024) (59,805)
Net Cash Used In Operating Activities (279,415) (201,514)
Cash flows from investing activities:    
Purchase of equipment (38,779)  
Net Cash Used in Investing Activities (38,779)  
Cash flows from financing activities:    
Proceeds from sale of common stock 583,000 515,108
Proceeds from notes payable   60,000
Payment of convertible debt   (339,131)
Payment of finance leases (6,045)  
Payment of related party payables   (24,000)
Net Cash Provided by Financing Activities 576,955 211,977
Effect of exchange rate on cash
Net change in cash 258,761 10,463
Cash and cash equivalents - Beginning of period 151,993 10,181
Cash and cash equivalents - End of period 410,754 20,644
Cash paid for:    
Interest 2,715 6,525
Income taxes
Supplemental disclosure of non-cash investing and financing activities    
Derivative liability warrant reclassed to equity   906,678
Common stock issued for prepaid consulting 400,000  
Common stock issued for settlement of debt   $ 287,500
Non-cash payment for license agreement 57,000  
Common stock issued for subscription payable $ 70,000  
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.21.1
Organization and Description of Business
3 Months Ended
Apr. 30, 2021
Accounting Policies [Abstract]  
ORGANIZATION AND DESCRIPTION OF BUSINESS
1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization


Nutriband Inc. (the “Company”) is a Nevada corporation, incorporated on January 4, 2016. In January 2016, the Company acquired Nutriband Ltd, an Irish company which was formed by the Company’s chief executive officer in 2012 to enter the health and wellness market by marketing transdermal patches. References to the Company relate to the Company and its subsidiaries unless the context indicates otherwise.


On August 1, 2018, the Company acquired 4P Therapeutics LLC (“4P Therapeutics”) for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics.


4P Therapeutics is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development. Prior to the acquisition of 4P Therapeutics, the Company’s business was the development and marketing of a range of transdermal consumer patches. Most of these products are considered drugs in the United States and cannot be marketed in the United States without approval by the Food and Drug Administration (the “FDA”). The Company is not presently taking any steps to seek FDA approval of its consumer transdermal products and its consumer products are not being marketed in the United States.


With the acquisition of 4P Therapeutics, 4P Therapeutics’ drug development business became the Company’s principal business. The Company’s approach is to use generic drugs that are off patent and incorporate them into the Company’s transdermal drug delivery system. Although these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal product development program which will include the preclinical and clinical trials that are necessary to receive FDA approval before we can market any of our pharmaceutical products.


On August 25, 2020, the Company formed Pocono Pharmaceuticals Inc. (“Pocono Pharmaceuticals”), a wholly owned subsidiary of the Company. On August 31, 2020, the Company acquired certain assets and liabilities associated with the Transdermal, Topical, Cosmetic, and Nutraceutical business of Pocono Coated Products LLC (“PCP”). The net assets were contributed to Pocono Pharmaceuticals. Included in the transaction the Company also acquired 100% of the membership interests of Active Intelligence LLC (“Active Intelligence”). See Note 2 for further details of the acquisition.


Pocono Pharmaceuticals is a coated products manufacturing entity organized to take advantage of unique process capabilities and experience. Pocono helps their customer with product design and development along with manufacturing to bring new products to market with minimal capital investment. Pocono Pharmaceutical’s competitive edge is a low-cost manufacturing base: a result of its unique processes and state of the art material technology. Active Intelligence manufactures activated kinesiology tape. The tape has transdermal and topical properties. This tape is used as the same as traditional kinesiology tape.


In December 2019, COVID-19 emerged and has subsequently spread world-wide. The World Health Organization has declared COVID-19 a pandemic resulting in federal, state and local governments and private entities mediating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining people who may have been exposed to the virus. The effect of these orders, government imposed quarantines and measures the Company would take, such as work-at-home policies, may negatively impact productivity, disrupt our business and could delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and disruptions in our operations could negatively impact our business, operating results and financial condition. Further, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns, or other restrictions on the conduct of business could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which could disrupt our supply chain.


XML 18 R8.htm IDEA: XBRL DOCUMENT v3.21.1
Summary of Significant Accounting Policies
3 Months Ended
Apr. 30, 2021
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Statements


The consolidated balance sheet as of April 30, 2021, and the consolidated statements of operations, stockholders’ equity, and cash flows for the periods presented have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' equity and cash flows for all periods presented have been made. The results for the three months ended April 30, 2021, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Nutriband’s Annual Report on Form 10-K for the year ended January 31, 2021.


Certain information and footnote disclosures required under generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements of the U.S. Securities and Exchange Commission (“SEC”). The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosures of contingent amounts in our consolidated financial statements and accompanying footnotes. Actual results could differ from estimates.


The Company’s significant accounting policies are summarized in Note 1 in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to these accounting policies during the three months April 30, 2021.


Going Concern


As of April 30, 2021, the Company believes the substantial doubt about its status as a going concern has been resolved. The going concern conditions that caused substantial doubt consisted of current quarter net loss, negative working capital, negative cash flow, and accumulated deficit. Management has implemented plans to alleviate the substantial doubt. These plans include a substantial increase in sales commitments, a decrease in planned overhead expenses, equity funding that has been received and additional funding expected to be received, and the net revenue and positive cash flow from its recent acquisitions. These factors did not exist in prior years during its start-up operations. The Company’s recent history of losses has changed from prior periods due to its management’s plans including its acquisition in the latter part of 2020 to alleviate the substantial doubt about the Company’s ability to continue as a going concern. Management’s plans have been currently implemented. The plans enable the Company to meet its obligations for at least one year from the date when the financial statements are issued.


Principles of Consolidation


The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company’s financial statements from the date of acquisition of August 1, 2018, and the operations of Pocono and Active Intelligence are included in the Company’s financial statements from the date of acquisition of September 1, 2020. The wholly owned subsidiaries are as follows:


Nutriband Ltd.


4P Therapeutics LLC


Pocono Pharmaceuticals Inc.


Use of Estimates


The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on other various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.


The Company’s significant policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to the accounting policies during the three months ended April 30, 2021, and the Company does not expect that the adoption of other accounting pronouncements will have a material impact on its financial statements.


Revenue Recognition


In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.


Revenue Types


The following is a description of the Company’s revenue types, which include professional services and sale of goods:


Service revenues include the contract of research and development related services with the Company’s clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged.

Product revenues are derived from the sale of the Company’s consumer transdermal and coated products. Upon the reception of a purchase order, we have the order filled and shipped.

Contracts with Customers


A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.


Deferred Revenue


Deferred revenue is a liability related to a revenue producing activity for which revenue has not been recognized. The Company records deferred revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.


Performance Obligations


A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types, the performance obligation is satisfied at different times. The Company’s performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs over time on a monthly basis for the work performed during that month.


All revenue recognized in the income statement is considered to be revenue from contracts with customers.


Disaggregation of Revenues


The Company disaggregates its revenue from contracts with customers by type and by geographical location. See the tables:


   Three Months Ended 
   April 30, 
   2021   2020 
Revenue by type        
Sale of goods  $327,512   $61,320 
Services   105,976    58,044 
Total  $433,488   $119,364 

   Years Ended 
   January 31, 
   2021   2020 
Revenue by geographic location:        
United States  $346,888   $58,044 
Foreign   86,600    61,320 
   $433,488   $119,364 

Account receivable


Trade accounts receivables are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the three months ended April 30, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to account receivable.


Inventories


Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net reasonable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity).


Property, Plant and Equipment


Property and equipment represent an important component of the Company’s assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 20 years as follows:


Lab Equipment   5-10 years 
Furniture and fixtures   3 years 
Machinery and equipment   10-20 years 

Intangible Assets


Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company’s acquisitions have also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.


Goodwill


Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350. On August 31, 2020, in connection with the Company’s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640. As of April 30, 2021, Goodwill amounted to $7,529,875.


Long-lived Assets


Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value.


Earnings per Share


Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants. As of April 30, 2021, and 2020, there were 141,830 and 161,828 common stock equivalents outstanding, respectively, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.


Stock-Based Compensation


ASC 718, “Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees.


Fair Value Measurements


FASB ASC 820, “Fair Value Measurements and Disclosure” (“ASC 820”), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value.


The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:


    Level 1 - Observable inputs such as quoted market prices in active markets.
       
    Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable.
       
    Level 3 - Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments.


Derivative Liabilities


Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.


The Company accounts for derivative instruments in accordance with ASC Topic 815, “Derivatives and Hedging” and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of April 30, 2021, and January 31, 2021, the Company had no derivative liabilities.


Recent Accounting Standards


The Company has implemented all new pronouncements, including the adoption of ASU 2018-13, that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements or results of operations.


XML 19 R9.htm IDEA: XBRL DOCUMENT v3.21.1
Acquisition of Business
3 Months Ended
Apr. 30, 2021
Business Combinations [Abstract]  
ACQUISITION OF BUSINESS
3.ACQUISITION OF BUSINESS

On August 31, 2020, the Company entered into a Purchase Agreement (“Agreement”), with Pocono Coated Products (“PCP”), pursuant to which PCP agreed to sell the Company certain of the assets and liabilities associated with its Transdermal, Topical, Cosmetic, and Nutraceutical business, including: (1) all the equipment, intellectual property and trade secrets, cash balances, receivables, bank accounts and inventory, free and clear of all liens, except for certain lease obligations, and (2), a 100% membership interest in Active Intelligence, LLC (collectively the “Assets”). The net assets acquired were contributed to Pocono Pharmaceuticals Inc, a newly formed wholly owned subsidiary of the Company. The purchase price for the Assets was (i) $6,085,180 paid with the issuance of 608,519 shares in the Company’s common stock of Nutriband at a value of the average price of the previous 90 days at the date of Closing (the “Shares”), and (ii) a promissory note of the Company, net of debt discount, in the principal amount, of $1,332,893 (the Note”) which is due upon the earlier of (a) twelve (12) months from issuance, or (b) immediately following a capital raise of not less than $4,000,000 and/or a public offering of no less than $4,000,000. Michael Myer, the CEO of PCP, has been elected to the Board of Directors of the Company for period of one year at the annual meeting of shareholders of the Company held in October 2020.


The Agreement provides that it is effective August 31, 2020, on which date the parties also entered into an escrow agreement (the “Escrow Agreement”), with legal counsel serving as the escrow agent, providing for holding of the Note, certificate for the shares, and title to the Assets (held in a special purpose subsidiary) as collateral security for completion of all closing conditions under the Agreement. On that date, the parties also entered into a security agreement granting PCP a security interest in all proceeds of the Assets held as collateral under the Escrow Agreement.


The purpose of the Company entering into the transaction is to enhance the transdermal products operations of the Company. The fair value of consideration given was allocated to the net tangible assets acquired. Under U.S. GAAP, both the PCP segment and Active Intelligence were considered to be businesses and, as such, the transaction was accounted for under the acquisition method of accounting.


Details of the net assets acquired are as follows:


   Fair value 
   Recognized on 
   Acquisition 
Common stock issued  $6,085,180 
Note payable issued   1,332,893 
   $7,418,073 
      
Cash  $66,994 
Account receivable   1,761 
Inventory   42,613 
Equipment and fixtures   1,056,935 
Customer base   177,600 
Intellectual property and trademarks   583,200 
Goodwill   5,810,640 
Accounts payable and accrued expenses   (26,104)
Deferred revenue   (26,851)
Debt   (268,715)
Net assets acquired  $7,418,073 

The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and the two businesses acquired from PCP, Pocono and Active Intelligence, as if the acquisition occurred as part of the beginning of cash period presented. The unaudited pro forma condensed financial information is not intended to represent or be indicative of the consolidated results of operations of the Company that would have been reported had the acquisition occurred at the beginning of the period presented and should not be taken as being representation of the future consolidated results of operations of the Company.


   Three Months Ended 
   April 30, 
   2020 
   As Reported   Proforma 
Net revenue  $119,364   $303,189 
           
Net loss   (412,194)   (444,650)
           
Loss per common share - basic and diluted   (0.08)   (0.08)

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.21.1
Property and Equipment
3 Months Ended
Apr. 30, 2021
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT
4.PROPERTY AND EQUIPMENT

   April 30,   January 31, 
   2021   2021 
Lab equipment  $144,585   $144,585 
Machinery and equipment   1,086,915    1,056,935 
Furniture and fixtures   28,442    19,643 
    1,259,942    1,221,163 
          
Less: Accumulated depreciation   (188,345)   (144,537)
Net Property and Equipment  $1,071,597   $1,076,626 

Depreciation expense amounted to $43,808 and 8,779 for the three months ended April 30, 2021 and 2020, respectively.


XML 21 R11.htm IDEA: XBRL DOCUMENT v3.21.1
Notes Payable/Convertible Debt
3 Months Ended
Apr. 30, 2021
Debt Disclosure [Abstract]  
NOTES PAYABLE/CONVERTIBLE DEBT
5.NOTES PAYABLE/CONVERTIBLE DEBT

Notes Payable


On March 21, 2020, the Coronavirus Aid Relief and Economic Security Act (“CARES ACT” was enacted. The CARES ACT established the Paycheck Protection Program (“PPP”) which funds small businesses through federally guaranteed loans. Under the PPP, companies are eligible for forgiveness of principal and interest if the proceeds are used for eligible payroll costs, rent and utility costs. On June 17, 2020, the Company’s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April 30, 2021. The Company recorded a gain on the extinguishment of debt of $34,870 during the three months ended April 30, 2021.


In July 2020, a minority shareholder made an additional loan to the Company in the amount of $100,000. The loan is interest- free and due upon demand. The loan was outstanding as April 30, 2021, and January 31, 2021.


Active Intelligence, the Company’s newly acquired subsidiary, entered into an agreement with the Carolina Small Business Development Fund for a line of credit of $160,000 due October 16, 2029, with interest of 5% per year. The amount assumed in Note 3 was $139,184. The loan requires monthly payments of principal and interest of $1,697. During the three months ended April 30, 2021, principal and interest payments of $5,006 were forgiven under the Cares Act. The amount has been recorded as a gain on the forgiveness of debt. As of April 30, 2021, the amount due was $125,673, of which $14,060 is current.


Finance Leases


Pocono has two finance leases secured by equipment. The leases mature in 2025 and 2026. The incremental borrowing rate is 5.0%. As of April 30, 2021, the minimum lease payments are as follow:


Years Ending January 31, 2022  $18,694 
January 31, 2023   26,295 
January 31, 2024   27,948 
January 31, 2025   26,361 
January 31, 2026   16,202 
Total  $115,499 

Related Party Payable


On August 31, 2020, in connection with the Company’s acquisition of Pocono Products LLC, the Company issued to Pocono Coated Products LLC a promissory note, net of debt discount, in the amount of $1,332,893 with interest accruing at an annual rate of 0.17%, due on August 28, 2021, or immediately following the earlier of a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000. Pocono Coated Products LLC, a related party, is a shareholder of the Company. During the three months ended April 30, 2021, the Company recorded amortization of debt discount of $36,554. As of April 30, 2021, the amount due was $1,439,077.


Convertible Debt


On October 30, 2019, the Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross proceeds from this financing of $250,000.


The notes are convertible at a conversion price equal to the lesser of (i) the per share price of our common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180-day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company’s securities or (b) the next private placement of the Company’s equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender.


The embedded conversion option qualified for derivative accounting and bifurcation under ASC 815-15 Derivative and Hedging. The initial fair of the conversion feature was $128,870 and the fair value of the warrants in connection with the notes


were valued at $888,789 and were recorded based on their relative fair values. A debt discount to the note payables of $270,000 and an initial derivative expense of $767,650 was recorded.


The debt discount will be amortized over the life of the note. Amortization of the debt discount for the three months ended April 30, 2020 was $202,500.


On March 25, 2020, the Company prepaid the convertible notes in the principal amount of $270,000 from the proceeds of a private placement. The total payments, including a prepayment fee of $69,131 and accrued interest, was $345,565. As a result of the payment of the notes, the derivative liability, which was $928,774 as of January 31, 2020, was reduced to zero. The warrants are no longer a derivative liability based on the notes being paid in full.


Interest expense for the three months ended April 30, 2021was $40,869 including the amortization of the debt discount of $36,554 and interest expense of $4,315. Interest expense for the three months ended April 30, 2020 was $205,167 including the amortization of debt discount of $202,500 and interest expense of $2,667.


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Intangible Assets
3 Months Ended
Apr. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS
6.INTANGIBLE ASSETS

As of April 30, 2021, and January 31, 2021, intangible assets consisted of intellectual property, customer base and trademarks, net of amortization, as follows:


   April 30,   January 31, 
   2021   2021 
Customer base  $314,100   $314,100 
License agreement   50,000    0 
Intellectual property   817,400    817,400 
           
Total   1,181,500    1,131,500 
           
Less: Accumulated amortization   (157,224)   (124,770)
           
Net Intangible Assets  $1,024,276   $1,006,730 

In February 2021, the Company acquired an IP license for $50,000, see Note 10- “Rambam Agreement” for further information regarding the license agreement. The value of the intangible assets, consisting of intellectual property, license agreement and customer base has been recorded at their fair value by the Company and are being amortized over a period of three to ten years. Amortization expense for the three months ended April 30, 2021, and 2020 was $32,454 and $9,267, respectively.


Estimated Amortization:    
   Total 
Year Ended January 31,    
Remainder of 2022  $97,325 
2023   129,776 
2924   129,776 
2026   113,109 
2026 and thereafter   554,290 
   $1,024,276 

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Related Party Transactions
3 Months Ended
Apr. 30, 2021
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
7.RELATED PARTY TRANSACTIONS

a)The Company had related party notes with its former Chief Financial Officer and Chief Operating Officer. See footnote 5 for further discussion.

b)In connection with the acquisition of Pocono, the Company recorded various transactions and operations through Pocono Coated Products LLC, a related entity. During the three months ended April 30, 2021, the Company was advanced $7,862 in finance payments. As of April 30, 2021, the Company owed Pocono $2,634. The Company also issued a note in the amount of $1,500,000 to Pocono Coated Products LLC. See footnote 5 for further discussion.

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Stockholders' Equity
3 Months Ended
Apr. 30, 2021
Stockholders' Equity Note [Abstract]  
STOCKHOLDER’S EQUITY
8.STOCKHOLDERS’ EQUITY

Preferred Stock


On January 15, 2016, the board of directors of the Company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize 10,000,000 shares of Preferred Stock, par value $0.001 per share.


On May 24, 2019, the board of directors created a series of preferred stock consisting of 2,500,000 shares designated as the Series A Convertible Preferred Stock (“Series A Preferred Stock”). On June 20, 2019, the Series A preferred Stock was terminated, and the 2,500,000 shares were restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series, until such stock is once more designated as part of a particular series by the board of directors.


Common Stock


On June 25, 2019, the Company effected a one-for four reverse split, pursuant to which each share of common stock became converted into 0.25 shares of common stock, and the Company decreased its authorized common stock from 100,000,000 to 25,000,000 shares.


On January 27, 2020, the Company amended its articles of incorporation to increase its authorized common shares from 25,000,000 shares to 250,000,000 shares.


Activity during the Three Months Ended April 30, 2021


On March 22, 2020, the Company issued in a private placement 46,828 units at a price of $11 per unit. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $14 per share. The warrants expire April 30, 2023. The Company issued a total of 46,828 shares of common stock and warrants to purchase 46,828 shares of common stock. The Company received proceeds of $515,108.


In March 2020, a minority shareholder who had previously made loans of $215,000, made an additional loan to the Company in the amount of $60,000, increasing the loans to shareholder to $275,000. On March 27, 2020, the Company issued 25,000 shares of common stock upon reaching a settlement with the noteholder to convert the notes in the principal amount of $275,000. The transaction resulted in a loss on extinguishment of $12,500.


Activity during the Three Months Ended April 30, 2020


(1)On February 25, 2021, in connection with the Company’s License Agreement with Rambam, pursuant to a Stock Purchase Agreement with BPM Inno Ltd (“BPM”), the Company issued 81,396 shares of common stock to BPM and received proceeds of $700,000 to be applied to product development expenses under the License Agreement. The Company entered into the Stock Purchase Agreement with BPM in December 2020 and received a payment of $60,000 which is included in Stockholders’ Equity as Subscription Payable in the Company’s consolidated balance sheet as of January 31, 2021. In February 2021, BPM advanced a payment for the Company to Rambam in the amount of $57,000 for the license fee. The balance of the funds of $583,000 was received in February 2021. See footnote 10 for further discussion.

(2)On February 25, 2021, the Company issued 5,602 shares of common stock, valued at $60,000, for consulting services pursuant to a consultant agreement commencing December 1, 2020. The Company has reflected $10,000 representing 934 shares as Subscription Payable in the Stockholders’ Equity in the Company’s consolidated balance sheet as of January 31, 2021. As of April 30, 2021, $10,000 is included in prepaid expenses.

On February 15, 2021, the Company issued 12,500 shares of common stock, valued at $350,000, for consulting fees in connection with the Rambam License Agreement.


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Warrants
3 Months Ended
Apr. 30, 2021
Warrants [Abstract]  
WARRANTS
9.WARRANTS

The following table summarizes the changes in warrants outstanding and the related price of the shares of the Company’s common stock issued to non-employees of the Company.


       Exercise   Remaining   Intrinsic 
   Shares   Price   Life   Value 
Outstanding, January 31, 2021   141,828   $11.99     2.16 years    $285,000 
                     
Granted   -    -    -    - 
                     
Expired/Cancelled   -    -    -    - 
                     
Exercised   -    -    -    - 
                     
Outstanding-period ending April 30, 2021   141,828   $11.99     1.67 years    $852,320 
                     
Exercisable - period ending April 30, 2021   141,828   $11.99     1.67 years    $852,320 

The following table summarizes additional information relating to the warrants outstanding as of April 30, 2021: 


Range of Exercise   Number   Remaining Contractual   Exercise Price for   Number   Exercise Price for   Intrinsic 
Prices   Outstanding   Life(Years)   Shares Outstanding   Exercisable   Shares Exercisable   Value 
                          
$11.00    95,000    1.50   $11.00    95,000   $11.00   $665,000 
$14.00    46,828    1.50   $14.00    46,828   $14.00   $187,320 

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Commitments and Contigencies
3 Months Ended
Apr. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTIGENCIES
10.COMMITMENTS AND CONTIGENCIES

Legal Proceedings


On July 27, 2018, the Company commenced an action in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, against Advanced Health Brands, Inc., Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Laura Fillman and John Baker, together with a Motion for Temporary Injunction Without Notice and a Motion for Prejudgment Writ of Replevin arising from the Company’s decision to seek to rescind for misrepresentation the agreement by which the Company acquired advanced Health Brands, Inc. for 1,250,000 shares of common stock valued at $2,500,000 and seek return of the shares. On August 2, 2018, the court entered a Temporary Injunction Without Notice and an Order to Show Cause against the defendants. Defendants Kalmar, Murphy, Polly-Murphy, and Baker filed a Motion to Dismiss the Company’s Verified Complaint, Motion to Dissolve Temporary Injunction Without Notice and Response to Order to Show Cause, and Motion to Compel Arbitration. On January 4, 2019, the court dismissed the Company’s complaint with prejudice, and directed the defendants to assign the Company within 30 days, the six patents never duly transferred to the Company. On February 1, 2019, the Company appealed the court’s order. Pursuant to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the shares were cancelled as of January 31, 2019. On June 7, 2019, the individual defendants (other than the defendant whom the Company has a settlement agreement), filed a motion for sanctions and civil contempt against us, which generally claimed that we failed to comply with the Court’s January 4, 2019 order by refusing to issue the Ruling 144 letters that would allow the defendants to transfer their shares of common stock. On October 29, 2019, the Court denied the Defendants motion. On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state court action that dismissed our complaint, with prejudice, and gave us leave to file an amended complaint. On July 7, 2020, Defendants filed Notice for Trial, requesting the court to set a trial date. The Company and defendants have served their first set of interrogatories on each other and have filed answers and responses to each other’s first set of interrogatories.


On August 22, 2018, four of the defendants in the Florida action described in the previous paragraph filed a complaint against the Company in the Franklin County, Ohio Court of Common Pleas seeking a declaratory judgment permitting them to sell the shares of common stock they received pursuant to the acquisition agreement. The parties have agreed to a stay pending the outcome of the Florida litigation.


On April 29, 2019, the Company filed a securities fraud action in the U.S. District Court for the Eastern District of New York against Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Advanced Health Brands and TD Therapeutic, Inc. In the complaint the Company alleges that in 2017, the defendants fraudulently and deceitfully obtained 1,250,000 shares of common stock by orchestrating a months-long scheme to defraud the Company. The Company is seeking the return of the shares of common stock and monetary damages resulting from the defendants’ fraudulent conduct. The defendants filed a motion to dismiss the complaint on August 23, 2019, and on September 13, 2019, the Company filed its response. On July 20, 2020, the Court denied the defendant’s motion to dismiss the complaint, and the parties have recently commenced the discovery phase of the litigation. No trial date has been scheduled by the Court.


Employment Agreements


The Company entered into a three-year employment agreement with Gareth Sheridan, our CEO, effective April 25, 2019. The agreement also provides that the executive will continue as a director. The agreement provides for an initial term, commencing on the effective date of the agreement and ending on January 31, 2024, and continuing on a year-to-year basis thereafter unless terminated by either party on not less than 30 days’ notice given prior to the expiration of the initial term or any one year extension. For his services to the Company during the term of the agreement, Mr. Sheridan receives an annual salary $42,000 per annum, commencing on the effective date of the agreement and increasing to $170,000 per annum in the month in which the Company shall have received not less than $2,500,000 from one or more public or private financings of the Company’s equity securities subsequent to the date of the agreement. During the year ended January 31, 2021, the salary was increased to $60,000 per annum.


Rambam Agreement


On December 9, 2020, the Company entered into a License Agreement (the “License Agreement”) with Rambam Med-Tech Ltd. (“Rambam”), Haifa, Israel, to develop the RAMBAM Closed System Transfer Device (“CTSD”) and such other products as the parties agree to develop/commercialize. The Company will license from Rambam the full technology, IP, and title to CTSD in the field, with an Initial license fee of $50,000 and running royalties on net sales. The $50,000 license fee was paid by a third party at the direction of the Company in February 2021, at which time the agreement became effective.


The Company had entered into a prior agreement, dated November 13, 2020, with BPM Inno Ltd., Kiryat, Israel (“BPM”), that, in consideration of BPM’s introduction of Rambam to the Company, provided for BPM to have the rights as the exclusive of agent of the Company with Rambam and any other parties similarly introduced by BPM, and for a commission payable to BPM by the Company of 4.5% of revenues received by the Company resulting from the introduction of Rambam (and any other companies as to which the exclusive agency of BPM was in effect), and for BPM’s payment of a royalty to Rambam. If the Company fails to commercialize the medical products subject to the License Agreement with Rambam within 36 months, under the November 13, 2020 agreement, BPM and the Company would share 50/50 in the revenues generated from sales of the licensed products from Rambam. This agreement further provides that it will be effective for a period of 10 years, with either party having the right to terminate on notice given 30 days prior to the desired termination, and also provided for certain territorial distribution rights of BPM as are set forth in the March 10, 2021 Distribution Agreement between the Company and BPM.


BPM Distribution and Stock Purchase Agreements


(a)On March 10, 2021, the Company finalized the Distribution Agreement with BPM, providing for distribution of the medical products developed and produced under the License Agreement. Under the Distribution Agreement, BPM has the right to distribute the medical products in Israel and has a right of first refusal in relation to all other countries/states, other than United States, Korea, China, Vietnam, Canada and Ecuador, which are termed excluded countries.

(b)The Company and BPM entered into a Stock Purchase Agreement (“SPA”), dated December 7, 2020, providing for the purchase by BPM of 81,396 shares of common stock at a price of $8.60 per share, or $700,000.  In December 2020, the Company received an initial payment of $60,000 under the SPA, which is included in Stockholders’ Equity in the Company’s consolidated balance sheet as of January 31, 2021. On February 25, 2021, in connection with the Company’s License Agreement with Rambam, pursuant to the SPA, the Company issued 81,395 shares of common stock to BPM and received the balance of the proceeds of $700,000 to be applied to product development expenses under the License Agreement.

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Subsequent Events
3 Months Ended
Apr. 30, 2021
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
11.SUBSEQUENT EVENTS

There were no reportable subsequent events as of the date of this filing.


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Accounting Policies, by Policy (Policies)
3 Months Ended
Apr. 30, 2021
Accounting Policies [Abstract]  
Unaudited Interim Financial Statements

Unaudited Interim Financial Statements


The consolidated balance sheet as of April 30, 2021, and the consolidated statements of operations, stockholders’ equity, and cash flows for the periods presented have been prepared by the Company and are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders' equity and cash flows for all periods presented have been made. The results for the three months ended April 30, 2021, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Nutriband’s Annual Report on Form 10-K for the year ended January 31, 2021.


Certain information and footnote disclosures required under generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements of the U.S. Securities and Exchange Commission (“SEC”). The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosures of contingent amounts in our consolidated financial statements and accompanying footnotes. Actual results could differ from estimates.


The Company’s significant accounting policies are summarized in Note 1 in the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to these accounting policies during the three months April 30, 2021.

Going Concern

Going Concern


As of April 30, 2021, the Company believes the substantial doubt about its status as a going concern has been resolved. The going concern conditions that caused substantial doubt consisted of current quarter net loss, negative working capital, negative cash flow, and accumulated deficit. Management has implemented plans to alleviate the substantial doubt. These plans include a substantial increase in sales commitments, a decrease in planned overhead expenses, equity funding that has been received and additional funding expected to be received, and the net revenue and positive cash flow from its recent acquisitions. These factors did not exist in prior years during its start-up operations. The Company’s recent history of losses has changed from prior periods due to its management’s plans including its acquisition in the latter part of 2020 to alleviate the substantial doubt about the Company’s ability to continue as a going concern. Management’s plans have been currently implemented. The plans enable the Company to meet its obligations for at least one year from the date when the financial statements are issued.

Principles of Consolidation

Principles of Consolidation


The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company’s financial statements from the date of acquisition of August 1, 2018, and the operations of Pocono and Active Intelligence are included in the Company’s financial statements from the date of acquisition of September 1, 2020. The wholly owned subsidiaries are as follows:


Nutriband Ltd.


4P Therapeutics LLC


Pocono Pharmaceuticals Inc.

Use of Estimates

Use of Estimates


The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on other various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.


The Company’s significant policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021. There were no significant changes to the accounting policies during the three months ended April 30, 2021, and the Company does not expect that the adoption of other accounting pronouncements will have a material impact on its financial statements.

Revenue Recognition

Revenue Recognition


In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Revenue Types

Revenue Types


The following is a description of the Company’s revenue types, which include professional services and sale of goods:


Service revenues include the contract of research and development related services with the Company’s clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged.

Product revenues are derived from the sale of the Company’s consumer transdermal and coated products. Upon the reception of a purchase order, we have the order filled and shipped.
Contracts with Customers

Contracts with Customers


A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

Deferred Revenue

Deferred Revenue


Deferred revenue is a liability related to a revenue producing activity for which revenue has not been recognized. The Company records deferred revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

Performance Obligations

Performance Obligations


A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company’s different revenue service types, the performance obligation is satisfied at different times. The Company’s performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs over time on a monthly basis for the work performed during that month.


All revenue recognized in the income statement is considered to be revenue from contracts with customers.

Disaggregation of Revenues

Disaggregation of Revenues


The Company disaggregates its revenue from contracts with customers by type and by geographical location. See the tables:


   Three Months Ended 
   April 30, 
   2021   2020 
Revenue by type        
Sale of goods  $327,512   $61,320 
Services   105,976    58,044 
Total  $433,488   $119,364 

   Years Ended 
   January 31, 
   2021   2020 
Revenue by geographic location:        
United States  $346,888   $58,044 
Foreign   86,600    61,320 
   $433,488   $119,364 
Account receivable

Account receivable


Trade accounts receivables are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the three months ended April 30, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to account receivable.

Inventories

Inventories


Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net reasonable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity).

Property, Plant and Equipment

Property, Plant and Equipment


Property and equipment represent an important component of the Company’s assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 20 years as follows:


Lab Equipment   5-10 years 
Furniture and fixtures   3 years 
Machinery and equipment   10-20 years 
Intangible Assets

Intangible Assets


Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company’s acquisitions have also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.

Goodwill

Goodwill


Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350. On August 31, 2020, in connection with the Company’s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640. As of April 30, 2021, Goodwill amounted to $7,529,875

Long-lived Assets

Long-lived Assets


Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value.

Earnings per Share

Earnings per Share


Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants. As of April 30, 2021, and 2020, there were 141,830 and 161,828 common stock equivalents outstanding, respectively, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.

Stock-Based Compensation

Stock-Based Compensation


ASC 718, “Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees.

Fair Value Measurements

Fair Value Measurements


FASB ASC 820, “Fair Value Measurements and Disclosure” (“ASC 820”), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value.


The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows:


    Level 1 - Observable inputs such as quoted market prices in active markets.
       
    Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable.
       
    Level 3 - Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments

Derivative Liabilities

Derivative Liabilities


Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.


The Company accounts for derivative instruments in accordance with ASC Topic 815, “Derivatives and Hedging” and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of April 30, 2021, and January 31, 2021, the Company had no derivative liabilities.

Recent Accounting Standards

Recent Accounting Standards


The Company has implemented all new pronouncements, including the adoption of ASU 2018-13, that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements or results of operations.

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.21.1
Summary of Significant Accounting Policies (Tables)
3 Months Ended
Apr. 30, 2021
Accounting Policies [Abstract]  
Schedule of disaggregation of revenues
   Three Months Ended 
   April 30, 
   2021   2020 
Revenue by type        
Sale of goods  $327,512   $61,320 
Services   105,976    58,044 
Total  $433,488   $119,364 
Schedule of Revenue by geographical location
   Years Ended 
   January 31, 
   2021   2020 
Revenue by geographic location:        
United States  $346,888   $58,044 
Foreign   86,600    61,320 
   $433,488   $119,364 
Schedule of property plant and equipment
Lab Equipment   5-10 years 
Furniture and fixtures   3 years 
Machinery and equipment   10-20 years 
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.21.1
Acquisition of Business (Tables)
3 Months Ended
Apr. 30, 2021
Business Combinations [Abstract]  
Schedule of net assets acquired
   Fair value 
   Recognized on 
   Acquisition 
Common stock issued  $6,085,180 
Note payable issued   1,332,893 
   $7,418,073 
      
Cash  $66,994 
Account receivable   1,761 
Inventory   42,613 
Equipment and fixtures   1,056,935 
Customer base   177,600 
Intellectual property and trademarks   583,200 
Goodwill   5,810,640 
Accounts payable and accrued expenses   (26,104)
Deferred revenue   (26,851)
Debt   (268,715)
Net assets acquired  $7,418,073 
Schedule of unaudited pro forma condensed financial information
   Three Months Ended 
   April 30, 
   2020 
   As Reported   Proforma 
Net revenue  $119,364   $303,189 
           
Net loss   (412,194)   (444,650)
           
Loss per common share - basic and diluted   (0.08)   (0.08)
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.21.1
Property and Equipment (Tables)
3 Months Ended
Apr. 30, 2021
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment
   April 30,   January 31, 
   2021   2021 
Lab equipment  $144,585   $144,585 
Machinery and equipment   1,086,915    1,056,935 
Furniture and fixtures   28,442    19,643 
    1,259,942    1,221,163 
          
Less: Accumulated depreciation   (188,345)   (144,537)
Net Property and Equipment  $1,071,597   $1,076,626 
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.21.1
Notes Payable/Convertible Debt (Tables)
3 Months Ended
Apr. 30, 2021
Debt Disclosure [Abstract]  
Schedule of Minimum lease payments
Years Ending January 31, 2022  $18,694 
January 31, 2023   26,295 
January 31, 2024   27,948 
January 31, 2025   26,361 
January 31, 2026   16,202 
Total  $115,499 
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.21.1
Intangible Assets (Tables)
3 Months Ended
Apr. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization
   April 30,   January 31, 
   2021   2021 
Customer base  $314,100   $314,100 
License agreement   50,000    0 
Intellectual property   817,400    817,400 
           
Total   1,181,500    1,131,500 
           
Less: Accumulated amortization   (157,224)   (124,770)
           
Net Intangible Assets  $1,024,276   $1,006,730 
Schedule of estimated amortization
Estimated Amortization:    
   Total 
Year Ended January 31,    
Remainder of 2022  $97,325 
2023   129,776 
2924   129,776 
2026   113,109 
2026 and thereafter   554,290 
   $1,024,276 
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.21.1
Warrants (Tables)
3 Months Ended
Apr. 30, 2021
Warrants (Tables) [Line Items]  
Schedule of additional information relating to warrants outstanding
Range of Exercise   Number   Remaining Contractual   Exercise Price for   Number   Exercise Price for   Intrinsic 
Prices   Outstanding   Life(Years)   Shares Outstanding   Exercisable   Shares Exercisable   Value 
                          
$11.00    95,000    1.50   $11.00    95,000   $11.00   $665,000 
$14.00    46,828    1.50   $14.00    46,828   $14.00   $187,320 
Warrants [Member]  
Warrants (Tables) [Line Items]  
Schedule of warrants outstanding
       Exercise   Remaining   Intrinsic 
   Shares   Price   Life   Value 
Outstanding, January 31, 2021   141,828   $11.99     2.16 years    $285,000 
                     
Granted   -    -    -    - 
                     
Expired/Cancelled   -    -    -    - 
                     
Exercised   -    -    -    - 
                     
Outstanding-period ending April 30, 2021   141,828   $11.99     1.67 years    $852,320 
                     
Exercisable - period ending April 30, 2021   141,828   $11.99     1.67 years    $852,320 
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.21.1
Organization and Description of Business (Details)
Aug. 01, 2018
Aug. 31, 2020
Accounting Policies [Abstract]    
Description of acquired the Company acquired 4P Therapeutics LLC (“4P Therapeutics”) for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics.  
Acquired percentage   100.00%
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.21.1
Summary of Significant Accounting Policies (Details) - USD ($)
3 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Jan. 31, 2021
Aug. 31, 2020
Summary of Significant Accounting Policies (Details) [Line Items]        
Goodwill $ 7,529,875   $ 7,529,875 $ 5,810,640
Potential shares of common stock 141,830 161,828    
Minimum [Member]        
Summary of Significant Accounting Policies (Details) [Line Items]        
Property plant and equipment useful life 3 years      
Maximum [Member]        
Summary of Significant Accounting Policies (Details) [Line Items]        
Property plant and equipment useful life 20 years      
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.21.1
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of revenues - USD ($)
3 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Schedule of disaggregation of revenues [Abstract]    
Sale of goods $ 327,512 $ 61,320
Services 105,976 58,044
Total $ 433,488 $ 119,364
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.21.1
Summary of Significant Accounting Policies (Details) - Schedule of Revenue by geographical location - USD ($)
3 Months Ended 12 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Jan. 31, 2021
Jan. 31, 2020
Summary of Significant Accounting Policies (Details) - Schedule of Revenue by geographical location [Line Items]        
Total $ 433,488 $ 119,364 $ 433,488 $ 119,364
United States [Member]        
Summary of Significant Accounting Policies (Details) - Schedule of Revenue by geographical location [Line Items]        
Total     346,888 58,044
Foreign [Member]        
Summary of Significant Accounting Policies (Details) - Schedule of Revenue by geographical location [Line Items]        
Total     $ 86,600 $ 61,320
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.21.1
Summary of Significant Accounting Policies (Details) - Schedule of property plant and equipment
3 Months Ended
Apr. 30, 2021
Lab Equipment [Member] | Minimum [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of property plant and equipment [Line Items]  
Property plant and equipment, Usefull life 5 years
Lab Equipment [Member] | Maximum [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of property plant and equipment [Line Items]  
Property plant and equipment, Usefull life 10 years
Furniture and fixtures [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of property plant and equipment [Line Items]  
Property plant and equipment, Usefull life 3 years
Machinery and equipment [Member] | Minimum [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of property plant and equipment [Line Items]  
Property plant and equipment, Usefull life 10 years
Machinery and equipment [Member] | Maximum [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of property plant and equipment [Line Items]  
Property plant and equipment, Usefull life 20 years
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.21.1
Acquisition of Business (Details) - USD ($)
1 Months Ended
Oct. 31, 2020
Aug. 31, 2020
Business Combinations [Abstract]    
Acquired of membership interests   100.00%
Acquired common stock value   $ 6,085,180
Acquired common stock, shares (in Shares)   608,519
Principal amount   $ 1,332,893
Capital raise of no less   4,000,000
Public offering less   $ 4,000,000
Annual meeting of shareholders, term 1 year  
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.21.1
Acquisition of Business (Details) - Schedule of net assets acquired
3 Months Ended
Apr. 30, 2021
USD ($)
Schedule of net assets acquired [Abstract]  
Common stock issued $ 6,085,180
Note payable issued 1,332,893
Total 7,418,073
Cash 66,994
Account receivable 1,761
Inventory 42,613
Equipment and fixtures 1,056,935
Customer base 177,600
Intellectual property and trademarks 583,200
Goodwill 5,810,640
Accounts payable and accrued expenses (26,104)
Deferred revenue (26,851)
Debt (268,715)
Net assets acquired $ 7,418,073
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.21.1
Acquisition of Business (Details) - Schedule of unaudited pro forma condensed financial information
3 Months Ended
Apr. 30, 2021
USD ($)
$ / shares
Schedule of unaudited pro forma condensed financial information [Abstract]  
Net revenue, Reported $ 119,364
Net revenue, Proforma 303,189
Net loss, Reported (412,194)
Net loss, Proforma $ (444,650)
Loss per common share - basic and diluted, Reported (in Dollars per share) | $ / shares $ (0.08)
Loss per common share - basic and diluted, Proforma (in Dollars per share) | $ / shares $ (0.08)
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.21.1
Property and Equipment (Details) - USD ($)
3 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 43,808 $ 8,779
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.21.1
Property and Equipment (Details) - Schedule of property and equipment - USD ($)
Apr. 30, 2021
Jan. 31, 2021
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 1,259,942 $ 1,221,163
Less: Accumulated depreciation (188,345) (144,537)
Net Property and Equipment 1,071,597 1,076,626
Lab equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 144,585 144,585
Machinery and equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 1,086,915 1,056,935
Furniture and fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 28,442 $ 19,643
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.21.1
Notes Payable/Convertible Debt (Details) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Aug. 31, 2020
Jul. 31, 2020
Mar. 25, 2020
Mar. 21, 2020
Oct. 30, 2019
Apr. 30, 2021
Apr. 30, 2020
Jan. 31, 2020
Notes Payable/Convertible Debt (Details) [Line Items]                
Notes payable, description       the Coronavirus Aid Relief and Economic Security Act (“CARES ACT” was enacted. The CARES ACT established the Paycheck Protection Program (“PPP”) which funds small businesses through federally guaranteed loans. Under the PPP, companies are eligible for forgiveness of principal and interest if the proceeds are used for eligible payroll costs, rent and utility costs. On June 17, 2020, the Company’s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April 30, 2021. The Company recorded a gain on the extinguishment of debt of $34,870 during the three months ended April 30, 2021.        
Additional loan   $ 100,000            
Line of credit, term           Active Intelligence, the Company’s newly acquired subsidiary, entered into an agreement with the Carolina Small Business Development Fund for a line of credit of $160,000 due October 16, 2029, with interest of 5% per year.    
Line of credit amount           $ 160,000    
Interest rate, percentage           5.00%    
Assumed amount           $ 139,184    
Payments of principal interest           1,697    
Principal and interest payments           5,006    
Balance due           125,673    
Convertible notes payable current           $ 14,060    
Lease of description           The leases mature in 2025 and 2026.    
Borrowing rate, percentage           5.00%    
Amortization of debt discount           $ 36,554 $ 202,500  
Convertible notes payable, description         the Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross proceeds from this financing of $250,000.      
Description of convertible notes         the lesser of (i) the per share price of our common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180-day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company’s securities or (b) the next private placement of the Company’s equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender.      
Fair value of conversion price           128,870    
Fair value of the warrants           888,789    
Debt discount           270,000    
Initial derivative expense           767,650    
Principal amount     $ 270,000          
Prepayment fee     69,131          
Accrued interest     $ 345,565          
Derivative liability               $ 928,774
Interest expense, debt           40,869 205,167  
interest expense           4,315 2,667  
Debt discount             $ 202,500  
Related Party Payable [Member]                
Notes Payable/Convertible Debt (Details) [Line Items]                
Balance due           1,439,077    
Related party payable, description the Company issued to Pocono Coated Products LLC a promissory note, net of debt discount, in the amount of $1,332,893 with interest accruing at an annual rate of 0.17%, due on August 28, 2021, or immediately following the earlier of a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000. Pocono Coated Products LLC, a related party, is a shareholder of the Company.              
Amortization of debt discount           $ 36,554    
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.21.1
Notes Payable/Convertible Debt (Details) - Schedule of minimum lease payments
Apr. 30, 2021
USD ($)
Schedule of minimum lease payments [Abstract]  
Years Ending January 31, 2022 $ 18,694
January 31, 2023 26,295
January 31, 2024 27,948
January 31, 2025 26,361
January 31, 2026 16,202
Total $ 115,499
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.21.1
Intangible Assets (Details) - USD ($)
3 Months Ended
Apr. 30, 2021
Apr. 30, 2020
Intangible Assets (Details) [Line Items]    
License fee $ 50,000  
Amortization expense $ 32,454 $ 9,267
Minimum [Member]    
Intangible Assets (Details) [Line Items]    
Amortized over period 3 years  
Maximum [Member]    
Intangible Assets (Details) [Line Items]    
Amortized over period 10 years  
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.21.1
Intangible Assets (Details) - Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization - USD ($)
Apr. 30, 2021
Jan. 31, 2021
Intangible Assets (Details) - Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization [Line Items]    
Total $ 1,181,500 $ 1,131,500
Less: Accumulated amortization (157,224) (124,770)
Net Intangible Assets 1,024,276 1,006,730
Customer base [Member]    
Intangible Assets (Details) - Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization [Line Items]    
Total 314,100 314,100
License agreement [Member]    
Intangible Assets (Details) - Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization [Line Items]    
Total 50,000 0
Intellectual property [Member]    
Intangible Assets (Details) - Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization [Line Items]    
Total $ 817,400 $ 817,400
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.21.1
Intangible Assets (Details) - Schedule of estimated amortization
Jan. 31, 2021
USD ($)
Schedule of estimated amortization [Abstract]  
Remainder of 2022 $ 97,325
2023 129,776
2024 129,776
2026 113,109
2026 and thereafter 554,290
Total $ 1,024,276
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.21.1
Related Party Transactions (Details) - Pocono Coated Products LLC [Member]
3 Months Ended
Apr. 30, 2021
USD ($)
Related Party Transactions (Details) [Line Items]  
Purchase of materials $ 7,862
Related party transaction, description As of April 30, 2021, the Company owed Pocono $2,634. The Company also issued a note in the amount of $1,500,000 to Pocono Coated Products LLC. See footnote 5 for further discussion.
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.21.1
Stockholders' Equity (Details) - USD ($)
1 Months Ended 3 Months Ended
Mar. 31, 2020
Mar. 22, 2020
Jun. 20, 2019
Feb. 25, 2021
Feb. 15, 2021
Jun. 25, 2019
May 24, 2019
Apr. 30, 2021
Apr. 30, 2020
Jan. 31, 2021
Jan. 27, 2020
Jan. 15, 2016
Stockholders' Equity (Details) [Line Items]                        
Preferred stock, shares authorized               10,000,000   10,000,000   10,000,000
Preferred stock, par value (in Dollars per share)               $ 0.001   $ 0.001   $ 0.001
Preferred stock, shares designated     2,500,000                  
Common stock of, description In March 2020, a minority shareholder who had previously made loans of $215,000, made an additional loan to the Company in the amount of $60,000, increasing the loans to shareholder to $275,000. On March 27, 2020, the Company issued 25,000 shares of common stock upon reaching a settlement with the noteholder to convert the notes in the principal amount of $275,000. The transaction resulted in a loss on extinguishment of $12,500.         On June 25, 2019, the Company effected a one-for four reverse split, pursuant to which each share of common stock became converted into 0.25 shares of common stock, and the Company decreased its authorized common stock from 100,000,000 to 25,000,000 shares.            
Issuance of shares   46,828                    
Warrant to purchase of common stock per unit (in Dollars per share)   $ 11                    
Exercise price of warrants (in Dollars per share)   $ 14                    
Warrant to purchase of common stock   46,828                    
Received proceeds (in Dollars)   $ 515,108           $ 583,000 $ 515,108      
License fee (in Dollars)       $ 57,000                
Funds received (in Dollars)       583,000                
Common stock issued, value (in Dollars)                 $ 287,500      
Subscription payable, value (in Dollars)                   $ 10,000    
Prepaid expenses (in Dollars)               $ 10,000        
Extinguish accounts payable (in Dollars)         $ 350,000              
BPM [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Received proceeds (in Dollars)       $ 700,000                
Common stock issued, shares       81,396                
Payment received (in Dollars)       $ 60,000                
Consulting Services [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Common stock issued, shares       5,602                
Common stock issued, value (in Dollars)       $ 60,000                
Private Placement [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Issuance of shares   46,828                    
Common Stock [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Common stock issued, shares         12,500       25,000      
Common stock issued, value (in Dollars)                 $ 25      
Common Stock [Member] | Minimum [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Increase decreased in authorized common stock                     25,000,000  
Common Stock [Member] | Maximum [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Increase decreased in authorized common stock                     250,000,000  
Series A Preferred Stock [Member]                        
Stockholders' Equity (Details) [Line Items]                        
Preferred stock, shares designated             2,500,000          
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.21.1
Warrants (Details) - Schedule of warrants outstanding - Warrants [Member]
3 Months Ended
Apr. 30, 2021
USD ($)
$ / shares
shares
Class of Warrant or Right [Line Items]  
Shares, Outstanding, Beginning Balance (in Shares) | shares 141,828
Exercise Price, Outstanding, Beginning Balance (in Dollars per share) | $ / shares $ 11.99
Remaining Life, Outstanding, Beginning Balance 2 years 58 days
Intrinsic Value, Outstanding, Beginning Balance $ 285,000
Intrinsic Value, Granted
Intrinsic Value, Expired/Cancelled
Shares, Exercised (in Shares) | shares
Exercise Price, Exercised (in Dollars per share) | $ / shares
Intrinsic Value, Exercised
Shares, Outstanding, Ending Balance (in Shares) | shares 141,828
Exercise Price, Outstanding, Ending Balance (in Dollars per share) | $ / shares $ 11.99
Remaining Life, Outstanding, Ending Balance 1 year 244 days
Intrinsic Value, Outstanding, Ending Balance $ 852,320
Shares, Exercisable (in Shares) | shares 141,828
Exercise Price, Exercisable (in Dollars per share) | $ / shares $ 11.99
Remaining Life, Exercisable 1 year 244 days
Intrinsic Value, Exercisable $ 852,320
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.21.1
Warrants (Details) - Schedule of additional information relating to warrants outstanding
3 Months Ended
Apr. 30, 2021
USD ($)
$ / shares
shares
Warrants (Details) - Schedule of additional information relating to warrants outstanding [Line Items]  
Range of Exercise Prices 14.00
Number Outstanding 46,828
Remaining Contractual Life(Years) 1 year 6 months
Exercise Price for Shares Outstanding (in Dollars per share) | $ / shares $ 14.00
Number Exercisable 46,828
Exercise Price for Shares Exercisable (in Dollars per share) | $ / shares $ 14.00
Intrinsic Value (in Dollars) | $ $ 187,320
Warrants [Member]  
Warrants (Details) - Schedule of additional information relating to warrants outstanding [Line Items]  
Range of Exercise Prices 11.00
Number Outstanding 95,000
Remaining Contractual Life(Years) 1 year 6 months
Exercise Price for Shares Outstanding (in Dollars per share) | $ / shares $ 11.00
Number Exercisable 95,000
Exercise Price for Shares Exercisable (in Dollars per share) | $ / shares $ 11.00
Intrinsic Value (in Dollars) | $ $ 665,000
XML 54 R44.htm IDEA: XBRL DOCUMENT v3.21.1
Commitments and Contigencies (Details) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Dec. 09, 2020
Feb. 28, 2021
Apr. 29, 2019
Apr. 25, 2019
Jan. 31, 2019
Jul. 27, 2018
Apr. 30, 2021
Jan. 31, 2021
Commitments and Contigencies (Details) [Line Items]                
Acquired advanced shares of common stock (in Shares)           1,250,000    
Acquired advanced shares of common stock value           $ 2,500,000    
Compensation annual rate       $ 170,000        
Public or private financing       2,500,000        
Initial license fee payment $ 50,000 $ 50,000            
Other commitments term, description             The Company had entered into a prior agreement, dated November 13, 2020, with BPM Inno Ltd., Kiryat, Israel (“BPM”), that, in consideration of BPM’s introduction of Rambam to the Company, provided for BPM to have the rights as the exclusive of agent of the Company with Rambam and any other parties similarly introduced by BPM, and for a commission payable to BPM by the Company of 4.5% of revenues received by the Company resulting from the introduction of Rambam (and any other companies as to which the exclusive agency of BPM was in effect), and for BPM’s payment of a royalty to Rambam. If the Company fails to commercialize the medical products subject to the License Agreement with Rambam within 36 months, under the November 13, 2020 agreement, BPM and the Company would share 50/50 in the revenues generated from sales of the licensed products from Rambam. This agreement further provides that it will be effective for a period of 10 years, with either party having the right to terminate on notice given 30 days prior to the desired termination, and also provided for certain territorial distribution rights of BPM as are set forth in the March 10, 2021 Distribution Agreement between the Company and BPM.  
Stock Purchase Agreement [Member]                
Commitments and Contigencies (Details) [Line Items]                
Purchase commitment, description             The Company and BPM entered into a Stock Purchase Agreement (“SPA”), dated December 7, 2020, providing for the purchase by BPM of 81,396 shares of common stock at a price of $8.60 per share, or $700,000. In December 2020, the Company received an initial payment of $60,000 under the SPA, which is included in Stockholders’ Equity in the Company’s consolidated balance sheet as of January 31, 2021. On February 25, 2021, in connection with the Company’s License Agreement with Rambam, pursuant to the SPA, the Company issued 81,395 shares of common stock to BPM and received the balance of the proceeds of $700,000 to be applied to product development expenses under the License Agreement.  
Health Brands, Inc. [Member]                
Commitments and Contigencies (Details) [Line Items]                
Acquired advanced shares of common stock (in Shares)     1,250,000          
Defendants [Member]                
Commitments and Contigencies (Details) [Line Items]                
Shares cancelled (in Shares)         50,000      
Chief Executive Officer [Member]                
Commitments and Contigencies (Details) [Line Items]                
Annual salary       $ 42,000        
President [Member]                
Commitments and Contigencies (Details) [Line Items]                
Annual salary               $ 60,000
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