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Item 1. Financial Statements

2021-12-14 compared with 2021-09-03 · 649 added, 532 removed, 238 unchanged (83% of the section changed)

FINANCIAL STATEMENTS

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.

results of operations for the three and six months ended July 31, 2021 and 2020 are not necessarily indicative of the results for the

entire fiscal year or for any other period.

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 and nine

months ended October 31, 2021 and 2020 are not necessarily indicative of the results for the entire fiscal year or for any other period.

NUTRIBAND INC.

25 unchanged sentences

Common stock, $ .001 par value, 250,000,000 shares authorized;

6,356,270 and 6,256,770 shares issued and outstanding at July 31, 2021 and January 31, 2021, respectively

and 6,256,770 shares issued and outstanding as of October 31, 2021 and January 31, 2021, respectively

Additional paid-in-capital

6 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See notes to unaudited condensed consolidated financial

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

Three Months Ended

Six Months Ended

Nine Months Ended

Costs and expenses:

Cost of revenues

Research and development expenses

Selling, general and administrative expenses

1 unchanged sentence

Loss from operations

( 1,538,441 )

( 2,335,647 )

Other income (expense):

5 unchanged sentences

Loss before provision for income taxes

( 1,571,821 )

( 2,407,701 )

Provision for income taxes

1 unchanged sentence

( 2,407,701 )

Deemed dividend related to warrant round-down

Net loss attributable to common shareholders

$ ( 1,768,410 )

$ ( 2,604,290 )

$ ( 680,632 )

Net loss per share of common stock-basic and diluted

4 unchanged sentences

$ ( 680,632 )

$ ( 638,063 )

Foreign currency translation adjustment

Total Comprehensive Income (Loss)

$ ( 519,923 )

Total Comprehensive Loss

$ ( 1,768,410 )

1 unchanged sentence

$ ( 680,632 )

See notes to unaudited condensed consolidated financial

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended July 31,

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’ EQUITY

Nine Months Ended October 31, 2021

Comprehensive

3 unchanged sentences

Common stock issued for proceeds and payment for license

Proceeds from sale of common stock and warrants in public offering

Proceeds from exercise of warrants

Cashless exercise of warrants

Issuance of common stock for note payable

Common stock issued for services

Net loss for the six months ended July 31, 2021

Balance, July 31, 2021

Common stock issued for settlement of liabilities

Warrants issued for services

Settlement of warrant round down

Deemed dividend from warrants

Net loss for the nine months ended October 31, 2021

( 2,407,701 )

Months Ended July 31, 2020

( 2,407,701 )

Balance, October 31, 2021

$ ( 14,242,806 )

Nine Months Ended October 31, 2020

Comprehensive

2 unchanged sentences

$ ( 8,902,277 )

Common stock issued for services

Common stock issued for cash

Issuance of common stock for services

Sale of commonstock for cash

Conversion of debt for common stock

Issuance of common stock for acquisition

Reclassification of warrants from liability to equity

Net loss for the six months ended July 31, 2020

Balance, July 31, 2020

Net loss for the nine months ended October 31, 2020

Balance, October 31, 2020

$ ( 9,582,909 )

Months Ended July 31, 2021

Three Months Ended October 31, 2021

Comprehensive

Income (Loss)

Balance, April 30, 2021

$ ( 12,151,062 )

Net loss for the three months ended July 31, 2021

Balance, July 31, 2021

$ ( 12,670,985 )

Months Ended July 31, 2020

Proceeds from sale of common stock and warrants in public offering

Proceeds from exercise of warrants

Cashless exercise of warrants

Issuance of common stock for note payable

Common stock issued for services

Common stock issued for settlement of liabilities

Warrants issued for services

Settlement of warrant round down

Deemed dividend from warrants

Net loss for the three months ended October 31, 2021

( 1,571,821 )

Balance, October 31, 2021

$ ( 14,242,806 )

Three Months Ended October 31, 2020

Comprehensive

Income (Loss)

Balance, April 30, 2020

$ ( 9,314,471 )

Issuance of common stock for services

Net loss for the three months ended July 31, 2020

Balance, July 31, 2020

$ ( 9,540,340 )

See notes to unaudited condensed consolidated financial

Issuance of common stock for acquisition

Net loss for the three months ended October 31, 2020

Balance, October 31, 2020

$ ( 9,582,909 )

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

Nine Months Ended

Cash flows from operating activities:

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Net Cash Used In Operating Activities

( 1,576,789 )

Cash flows from investing activities:

Cash received from acquisition

Purchase of equipment

1 unchanged sentence

Proceeds from sale of common stock

Proceeds from sale of common stock in public offering

Proceeds from exercise of warrants

Proceeds from notes payable

1 unchanged sentence

Payment on note payable

Payment on related party note payable

( 1,500,000 )

Payment on finance leases

13 unchanged sentences

Derivative liability warrant reclassed to equity

Common issued for subscription payable

See notes to unaudited condensed consolidated financial

Common stock issued for subscription payable

Common stock and note issued in acquisition

Settlement of liabilities for common stock

Deemed dividend in connection with warrant round down

Cashless exercise of warrant

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

to Unaudited Consolidated Financial Statements

of and for the Six Months Ended July 31, 2021 and 2020

Notes to Unaudited Consolidated Financial Statements

as of and for the Nine Months Ended October 31,

2021 and 2020

ORGANIZATION AND DESCRIPTION

Nutriband Inc.

(the “Company”) is a Nevada corporation, incorporated on January 4, 2016.

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References to the Company relate to the Company and its subsidiaries unless the context indicates otherwise.

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.

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.

the acquisition of 4P Therapeutics, 4P Therapeutics’ drug development business became the Company’s principal business.

Company’s approach is to use generic drugs that are off patent and incorporate them into the Company’s transdermal drug delivery

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.

August 25, 2020, the Company formed Pocono Pharmaceuticals Inc.

(“Pocono Pharmaceuticals”), a wholly owned subsidiary of

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”).

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.

to the acquisition of 4P Therapeutics, the Company’s business was the development and marketing of a range of transdermal consumer

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.

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”).

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.

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 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.

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

This tape is used as the same as traditional kinesiology tape.

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.

OF SIGNIFICANT ACCOUNTING POLICIES

The tape has transdermal and topical properties.

tape is used as the same as traditional kinesiology tape.

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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The consolidated balance sheet as of

July 31, 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 six months ended July 31, 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.

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.

The consolidated

balance sheet as of October 31, 2021, and the consolidated statements of operations and comprehensive loss, 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 nine months ended October 31, 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.

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.

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 six months July 31, 2021.

As of July 31, 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 from its recent acquisitions.

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

There were no significant changes to these accounting policies during the nine months October 31, 2021.

As of October

31, 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 no longer exist as the Company has positive cash flow during the last quarter and as of October 31, 2021,

has positive working capital.

In October 2021, the Company consummated a public offering and received net proceeds of $ 5,836,230 .

Company also received $ 2,026,500 of proceeds from the exercise of warrants.

Management retired most of its debt and other current obligations.

Management has implemented other plans to alleviate the substantial doubt.

These plans include a substantial increase in projected sales

These factors did not exist in prior years during its start-up operations.

The Company’s recent history of losses has continued

but future positive cash flow projections due to revenue commitments and decreases in overhead as well as expected equity funding will

enable the Company to alleviate the substantial doubt about the Company’s ability to continue as a going concern.

The Company’s recent history of losses has

continued but future positive cash flow projections due to its management’s plans which includes its acquisition in the latter part

of 2020 will enable the Company to alleviate the substantial doubt about the Company’s ability to continue as a going concern.

plans have been currently implemented.

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of Consolidation

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 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:

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Pharmaceuticals Inc.

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.

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

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.

Company’s significant policies are summarized in Note 1 of the Company’s Annual Report on Form 10-K for the year ended January

There were no significant changes to the accounting policies during the six months ended July 31, 2021, and the Company does

not expect that the adoption of other accounting pronouncements will have a material impact on its financial statements.

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.

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

revenues include the contract of research and development related services with the Company’s

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.

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.

revenues are derived from the sale of the Company’s consumer transdermal and coated

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.

with Customers

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.

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 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

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.

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

Disaggregation

Company disaggregates its revenue from contracts with customers by type and by geographical location.

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.

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.

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.

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

Disaggregation of Revenues

disaggregates its revenue from contracts with customers by type and by geographical location.

See the tables:

Three Months Ended

Six Months Ended

Nine Months Ended

Revenue by type

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Three Months Ended

Six Months Ended

Nine Months Ended

Revenue by geographic location:

United States

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 six months ended July 31, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to 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.

months ended October 31, 2021 and 2020, the Company recorded no bad debt expense for doubtful accounts related to account receivable.

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).

As of July 31, 2021, 100 % of the inventory consists of raw materials.

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).

As of October 31, 2021, 100 % of the inventory consists of raw materials.

Plant and Equipment

and equipment represent an important component of the Company’s assets.

equipment represent an important component of the Company’s assets.

The Company depreciates its plant and equipment on a straight-line

9 unchanged sentences

Furniture and fixtures

Machinery and equipment

and equipment

10 - 20 years

1 unchanged sentence

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 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 .

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 July 31, 2021, Goodwill amounted to $ 7,529,875 .

Trademarks, intellectual property

and customer base are being amortized over their estimated useful lives of ten years .

Goodwill represents

the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of

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 October 31, 2021, Goodwill amounted to $ 7,529,875 .

reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying

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be the difference between the fair market value of the long-lived asset and the related book value.

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 July 31, 2021, and 2020, there were

141,830 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect

would be anti-dilutive.

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

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.

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

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 October 31, 2021, and 2020, there were 1,347,928 and141,830

common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect would be

anti-dilutive.

“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

As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and

non-employees.

and Development Expenses

development expenses are expensed as incurred.

Value Measurements

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.

Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial

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.

820 describes three levels of inputs that may be used to measure fair value.

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

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These tiers are defined as follows:

Observable inputs such as quoted

market prices in active markets.

Inputs other than quoted prices in active markets

that are either directly or indirectly observable.

inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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.

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.

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 July 31, 2021, and January 31, 2021, the Company had no derivative liabilities.

-Observable inputs such as quoted market prices in active markets.

-Inputs other than quoted prices in active markets that are either directly or indirectly observable.

-Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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.

Accounting Standards

Company has implemented all new pronouncements, including the adoption of ASU 2018-13 and ASU 2019-12, 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.

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.

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

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.

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.

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.

of the net assets acquired are as follows:

has implemented all new pronouncements, including the adoption of ASU 2018-13, ASU 2019-12 and ASU 2020-06, 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.

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,

(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.

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

Recognized on

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Net assets acquired

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

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.

Six Months Ended

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.

Nine Months Ended

Loss per common share - basic and diluted

AND EQUIPMENT

PROPERTY AND EQUIPMENT

Lab equipment

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Net Property and Equipment

expense amounted to $ 90,913 and 17,558 for the six months ended July 31, 2021 and 2020, respectively.

PAYABLE/CONVERTIBLE DEBT

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.

June 17, 2020, the Company’s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April

The Company recorded a gain on the extinguishment of debt of $34,870 during the six months ended July 31, 2021.

expense amounted to $ 138,017 and $ 55,760 for the nine months ended October 31, 2021 and 2020, respectively .

NOTES PAYABLE/CONVERTIBLE DEBT

Notes Payable

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.

Company recorded a gain on the extinguishment of debt of $34,870 during the nine months ended October 31, 2021.

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

The loan was outstanding as July 31, 2021, and January 31, 2021.

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 loan is interest- free and

due upon demand.

In October 2021, the loan was converted into 17,182 common shares of the Company.

The shares were issued at fair

market value and no gain or loss was recorded for the transaction.

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 .

requires monthly payments of principal and interest of $ 1,697 .

During the six months ended July 31, 2021, principal and interest payments

of $ 8,344 were forgiven under the Cares Act.

The loan requires

monthly payments of principal and interest of $ 1,697 .

During the nine months ended October 31, 2021, principal and interest payments of

$ 8,344 were forgiven under the Cares Act.

The amount, $ 8,344 , has been recorded as a gain on the forgiveness of debt.

As of July 31,

As of October 31,

2021, the amount due was $ 118,720 , of which $ 14,119 is current.

has two finance leases secured by equipment.

two finance leases secured by equipment.

The leases mature in 2025 and 2026.

The incremental borrowing rate is 5.0 %.

As of July 31,

2021, the minimum lease payments are as follow:

January 31, 2022

January 31, 2023

January 31, 2024

January 31, 2025

January 31, 2026

As of October 31,

2021, the amount due on the leases was $ 106,031 , all of which was paid in November 2021.

Party Payable

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

Pocono Coated Products LLC, a related party, is a shareholder of the Company.

During the six months ended July 31, 2021,

the Company recorded amortization of debt discount of $ 71,308 .

As of July 31, 2021, the amount due was $ 1,475,631 .

The due date for the

note has been extended to September 30, 2021.

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.

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

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.

Coated Products LLC, a related party, is a shareholder of the Company.

During the nine months ended October 31, 2021, the Company recorded

amortization of debt discount of $ 97,477 .

In October 2021, the note in the amount of $ 1,500,000 was paid in full.

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.

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.

debt discount will be amortized over the life of the note.

Amortization of the debt discount for the six months ended July 31, 2020,

was $ 202,500 .

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.

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 nine months ended October 31, 2020, was $ 202,500 .

2020, the Company prepaid the convertible notes in the principal amount of $ 270,000 from the proceeds of a private placement.

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 six months ended July 31, 2021was $ 81,888 including the amortization of the debt discount of $ 73,108 and interest expense of $ 8,780 .

Interest expense for the six months ended July 31, 2020, was $ 205,218 including the amortization of debt discount of $ 202,500 and interest

expense of $ 2,718 .

of July 31, 2021, and January 31, 2021, intangible assets consisted of intellectual property, customer base and trademarks, net of amortization,

for the nine months ended October 31, 2021was $ 115,268 including the amortization of the debt discount of $ 97,477 and interest expense

of $ 17,791 .

Interest expense for the nine months ended October 31, 2020, was $ 206,836 including the amortization of debt discount of $ 202,500

and interest expense of $ 4,336 .

INTANGIBLE ASSETS

As of October 31, 2021, and January

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

Customer base

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Net Intangible Assets

February 2021, the Company acquired an IP license for $ 50,000 , see Note 10- “Rambam Agreement” for further discussion 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 six months ended July 31, 2021, and 2020 was $ 64,909 and $ 18,534 , respectively.

2021, the Company acquired an IP license for $ 50,000 , see Note 10- “Rambam Agreement” for further discussion 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

nine months ended October 31, 2021, and 2020 was $ 97,363 and $ 27,802 , respectively.

Estimated Amortization:

2 unchanged sentences

2026 and thereafter

PARTY TRANSACTIONS

Company had related party notes with its former Chief Financial Officer and Chief Operating

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 six months ended July 31, 2021, the Company was advanced $ 7,862 in finance payments.

As of July 31, 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.

STOCKHOLDERS’

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.

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.

June 25, 2019, the Company effected a one-for four reverse stock splits, 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.

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.

during the Six Months Ended July 31, 2020

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.

RELATED PARTY TRANSACTIONS

a) In connection with the acquisition of Pocono, the Company

recorded various transactions and operations through Pocono Coated Products LLC, a related entity.

During the nine months ended October

31, 2021, the Company was advanced $ 7,862 in finance payments.

As of October 31, 2021, the Company owed Pocono $4,203.

The Company also

issued a note in the amount of $1,500,000 to Pocono Coated Products LLC.

In October 2021, the related party note payable was repaid.

See Note 5 for further discussion.

b) For services to the Company resulting in a listing on a National

Exchange and material capital raise of no less than $ 4 million, the Company will pay the Company’s President and Chief Executive

Officer a Milestone bonus of up to $ 50,000 each.

Should any transaction include a warrant clause, the President and Chief Executive Officer

shall receive a further $ 50,000 bonus for every $ 2 million exercised.

For the nine months ended October 31, 2021, the President and Chief

Executive Officer each received $ 100,000 .

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.

On June 25, 2019, the Company effected a one-for four reverse

stock 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 Nine Months Ended October 31, 2020

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.

received proceeds of $ 515,108 .

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

June 30,2020, the Company issued 5,000 shares to a consultant for services rendered to the Company.

The fair value of the common stock

at the date of issuance was $ 50,000 , of which $ 38,000 is included in selling and general administrative expenses and $ 12,000 is included

in prepaid expenses.

during the Six Months Ended July 31, 2021

(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.

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.

On June 30,2020, the Company issued 5,000 shares to a consultant

for services rendered to the Company.

The fair value of the common stock at the date of issuance was $ 50,000 , of which $ 38,000 is included

in selling and general administrative expenses and $ 12,000 is included in prepaid expenses.

On August 31, 2020, the Company acquired the membership interests

in Pocono Coated Products LLC and issued 608,519 shares of its common stock, valued at $ 6,000,000 , and issued a promissory note in the

amount of $ 1,500,000 .

See Note 3 for further information.

Activity during the Nine Months

Ended October 31, 2021

(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.

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.

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 discussed in Note 10.

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.

(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.

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 discussed in Note

(3) On October 5, 2021, the Company consummated a public offering (the “IPO”) of 1,056,000 units (the “Units”), each Unit consisting of one share of common stock and one warrant (each a “Warrant”) at a price of $ 6.25 per Unit, and an additional 158,400 warrants pursuant to exercise of the underwriters’ over-allotment option.

The underwriters also received an additional 105,600 warrants.

At closing, the Company received net proceeds of $ 5,836,230 from the sale of our securities in the IPO, which included direct offering costs of $ 790,000 .

Concurrently, with the October 1, 2021 effective date of the IPO, the shares of our common stock and the Warrants sold to the public in the IPO were listed for trading on the Nasdaq Capital Market.

Each Warrant is immediately exercisable, will entitle the holder to purchase one share of common stock at an exercise price of $ 7.50 and will expire five years from the date of issuance.

The shares of common stock and Warrants are separately transferred immediately upon issuance.

(4) On October 19, 2021, the Company issued 275,000 shares of

its common stock and received proceeds of $ 2,062,500 from the exercise of 275,000 public warrants.

(5) On October 25, 2021, the Company issued 17,182 shares of its

common stock in exchange for the extinguishment of debt in the amount of $ 100,000 .

See Note 5 for further discussion.

(6) On October 25,2021, the Company issued 26,642 shares, valued

at $ 144,000 , for consulting services issued in connection with research and development expenses.

The shares were issued in settlement

of liabilities.

(7) On October 5, 2021, in connection with the Company’s

IPO, two former debtholders were issued an additional 72,200 warrants at an exercise price of $ 6.25 per share in accordance with the

anti-dilution provision of their agreement.

The fair value of the warrants issued amounted to $ 196,589 and the Company recorded the transaction

as a deemed dividend related to the warrant round down.

In October 2021, one of the debtholders exercised the 36,100 warrants as a cashless

warrant and was issued 14,898 shares of common stock.

(8) On October 22, 2021, the Company issued 125,000 warrants for

services to the Company’s CFO and a service provider in connection with the Company’s IPO.

The warrants are exercisable at

$ 4.90 per share and expire in three years .

The fair value of the warrants issued was $ 365,000 .

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

During the nine months ended October 31, 221, the Company issued 1,056,000 public warrants in connection with its

public offering, 105,600 to the underwriters in connection with its public offering, 158,400 warrants issued to the underwriters for

the related over-allotment, 125,000 (of which 75,000 were issued to the Chief Financial Officer) warrants for services and 72,200

warrants to previous convertible noteholders as additional compensation due to the warrant round down provisions of their agreement.

See Note 5 for further discussion.

The warrant exercise price to the previous convertible noteholders was

adjusted to $ 6.25 for the round down provision and the resulting $ 196,589 of deemed dividend was recorded during the nine months ended

October 31, 2021.

The fair value of the 125,000 warrants issued for services amounted to $ 365,000 and was recorded during the same period.

The Company used the Black-Scholes model to determine the fair value of both the $ 196,589 in deemed dividends and the $ 365,000 in compensation.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatilities ranging from 136 % to 145 %;

and risk-free rate

Outstanding, January 31, 2021

Expired/Cancelled

Outstanding-period ending July 31, 2021

Exercisable - period ending July 31, 2021

following table summarizes additional information relating to the warrants outstanding as of July 31, 2021:

Range of Exercise Prices

Number Outstanding

Remaining Contractual Life

Exercise Price for Shares

Number Exercisable

Exercise Price for Shares

Intrinsic Value

AND CONTIGENCIES

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.

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.

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.

Outstanding - period ending October 31, 2021

Exercisable - period ending October 31, 2021

The following

table summarizes additional information relating to the warrants outstanding as of October 31, 2021:

Range of Exercise

Remaining Contractual

Exercise Price

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.

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

The parties have agreed to a stay pending the outcome of the Florida litigation.

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.

The Court has scheduled a trial date in November 2021.

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.

December 9, 2020, the Company entered into a License Agreement (the “License Agreement”) with Rambam Med-Tech Ltd.

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.

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.

Distribution and Stock Purchase Agreements

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.

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.

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 all of the assets associated with its Transdermal, Topical, Cosmetic and Nutraceutical

business (the “Assets”).

PCP is the manufacturer of our transdermal products, and we bought that business from them.

purchase price for the Assets was (i) $6,000,000 paid in shares of the Company’s common stock at a value of the average price of

the previous 90 days at the date of Closing (the “Shares”);

(ii) a promissory note of the Company in the principal amount

of $1,500,000, which is due upon the earlier of (a) twelve (12) months from issuance, or (b) immediately following a capital raise of

no less than $4,000,000 and/or a public offering of no less than $4,000,000.

August 31, 2021 we entered into an amendment to the Agreement with the parties to the Agreement that provides for an extension of the

August 31, 2021 due date of the $ 1,500,000 note issued in the transaction to September 30, 2021, and extends the time limit set forth

in Section 5.3(a) of the Agreement for completion of the Listing and for payment of the Note in full until September 30, 2021.

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.

The Court has scheduled a trial date in early 2022.

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,

Sheridan receives an annual salary $ 42,000 per annum, commencing on the effective date of the agreement and increasing to $ 250,000

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.

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

(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.

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.

SUBSEQUENT EVENTS

On November 1, 2021, The Board of Directors adopted the 2021 Employee

Stock Option Plan (the “Plan”).

The Company has reserved 350,000 shares under the Plan to issue and sell upon the exercise

of stock options.

On November 20,2021, 163,500 options to purchase shares of the Company’s common stock were issued to executive

officers and directors of the Company at a price of $ 5.96 per share.

Under the Plan, options may be granted which are intended to qualify

as Incentive Stock Options under Section 422 of the Internal Revenue Code of 1986 or which are not intended to qualify as Incentive Stock

Options thereunder.

The Plan also provides for restricted stock awards representing shares of common stock that are issued subject to

such restrictions on transfer and other incidents of ownership and such forfeiture conditions as the Board of Directors, or the committee

administering the Plan composed of directors who qualify as “independent” under Nasdaq rules, may determine.

On November 3,

2021, the Company filed a Registration Statement on Form S-8, to register under the Securities Act of 1933, as amended, the 350,000 shares

of common stock reserved for issuance under the Plan.

On November 26, 2021, the Company

paid off two equipment leases in the amount of $116,000, which included a $10,000 purchase option on one of the leases.

In November 2021, 30,000 warrants issued in the IPO were exercised, with

net proceeds to the Company of $ 225,000 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements