What changed in this filing

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Item 1. Financial Statements

2022-05-31 compared with 2021-12-14 · 371 added, 440 removed, 447 unchanged (64% of the section changed)

3 unchanged sentences

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.

The results of operations for the three months

ended April 30, 2022 and 2021 are not necessarily indicative of the results for the entire fiscal year or for any other period.

NUTRIBAND INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE

CURRENT ASSETS:

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OTHER ASSETS:

Operating lease right of use asset

Intangible assets-net

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Deferred revenue

Notes payable-related party, net

Finance lease liabilities-current portion

Operating lease liability-current portion

Notes payable-current portion

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Note payable-net of current portion

Finance lease liabilities-net of currnt portion

Operating lease liability-net of current portion

Total Liabilities

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

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

7,871,359 shares issued at April 30, 2022 and January 31, 2022, 7,820,232 and 7,843,234 shares outstanding as of April 30,2022 and January 31, 2022, respectively

Additional paid-in-capital

Subscription payable

Accumulated other comprehensive loss

Treasury stock, 51,127 and 28,125 shares at cost, respectively

Accumulated deficit

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See notes to unaudited consolidated financial statements

See notes to unaudited condensed consolidated financial statements.

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

Three Months Ended

Nine Months Ended

CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

For the Three

Costs and expenses:

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Loss from operations

( 1,538,441 )

( 2,335,647 )

Other income (expense):

Gain (loss) on extinguishment of debt

Early prepayment fee on convertible debentures

Gain on change of fair value of derivative

Gain on extinguishment of debt

Interest expense

1 unchanged sentence

Loss before provision for income taxes

( 1,571,821 )

( 2,407,701 )

Provision for income taxes

1 unchanged sentence

$ ( 315,057 )

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

Weighted average shares of common stock outstanding - basic and diluted

Other Comprehensive Income (Loss):

$ ( 1,768,410 )

Other Comprehensive Loss:

$ ( 689,989 )

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$ ( 315,057 )

$ ( 680,632 )

See notes to unaudited consolidated financial statements

See notes to unaudited condensed consolidated financial statements.

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’ EQUITY

Nine Months Ended October 31, 2021

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended April 30, 2022

Comprehensive

Income (Loss)

Balance, February 1, 2022

$ ( 18,011,231 )

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

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

$ ( 104,467 )

Treasury stock repurchased

Net loss for the three months ended April 30, 2022

Balance, April 30, 2022

$ ( 18,701,220 )

Balance, October 31, 2021

$ ( 193,663 )

Nine Months Ended October 31, 2020

Three Months Ended April 30, 2021

Comprehensive

Income (Loss)

Balance, February 1, 2021

$ ( 11,835,105 )

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 nine months ended October 31, 2020

Balance, October 31, 2020

$ ( 9,582,909 )

Three Months Ended October 31, 2021

Comprehensive

Income (Loss)

Balance, July 31, 2021

$ ( 12,670,985 )

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 proceeds and in payment for license

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, July 31, 2020

$ ( 9,540,340 )

Issuance of common stock for acquisition

Net loss for the three months ended October 31, 2020

Balance, October 31, 2020

Net loss for the three months ended April 30, 2021

Balance, April 30, 2021

$ ( 12,151,062 )

See notes to unaudited consolidated financial statements

See notes to unaudited condensed consolidated financial statements.

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

Nine Months Ended

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

For the Three

Cash flows from operating activities:

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Adjustments to reconcile net loss to net cash used in operating activities:

Expenses paid on behalf of the Company by related party

Depreciation and amortization

Amortization of debt discount

Gain on change in fair value of derivative

Early prepayment fee on convertible debentures

Amortization of right of use asset

(Gain) loss on extinguisment of debt

Stock-based compensation

(Gain) loss on extinguishment of debt

Common stock issued for services

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses

Deposit on sales

Deferred revenue

Operating lease liability

1 unchanged sentence

Net Cash Used In Operating Activities

( 1,576,789 )

Cash flows from investing activities:

Cash received from acquisition

Purchase of equipment

Net Cash Used in Investing Activities

Cash flows from financing activities:

Proceeds from sale of common stock

Proceeds from sale of common stock in public offering

Proceeds from exercise of warrants

Proceeds from notes payable

Payment on convertible debt

Payment on note payable

Payment on related party note payable

( 1,500,000 )

Payment on finance leases

Proceeds from related parties

Payment of related party payables

Net Cash Provided by Financing Activities

Purchase of treasury stock

Net Cash Provided by (used in) Financing Activities

Effect of exchange rate on cash

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Supplemental disclosure of non-cash investing and financing activities:

Common stock issued for settlement of notes payable

Common stock issued for prepaid consulting

Non-cash payment for license agreement

Derivative liability warrant reclassed to equity

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

Adoption of ASC 842 Operating lease asset and liability

Promissory note on equipment purchase

See notes to unaudited condensed consolidated

financial statements.

NUTRIBAND INC.

AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

as of and for the Nine Months Ended October 31,

Notes to Unaudited Condensed Consolidated

Financial Statements

as of and for the Three Months Ended April 30,

2022 and 2021

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has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics.

owner resigned as a director in January 2022.

4P Therapeutics

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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 Company entered a feasibility agreement as an initial step to seek FDA

approval of its consumer transdermal products and its consumer products which are not being marketed in the United States.

With the acquisition

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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.

transaction, Pocono Pharmaceuticals also acquired 100 % of the membership interests of Active Intelligence LLC (“Active Intelligence”).

Pocono Pharmaceuticals

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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

in federal, state and local governments and private entities proscribing 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.

these orders, government imposed quarantines and measures the Company and suppliers and customers it works with might have to 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, 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

Financial Statements

The consolidated

balance sheet as of October 31, 2021, and the consolidated statements of operations and comprehensive loss, stockholders’ equity,

balance sheet as of April 30, 2022, 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.

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in stockholders’ equity and cash flows for all periods presented have been made.

The results for the nine months ended October 31, 2021,

The results of the three months ended April 30,

2022, 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.

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, 2022.

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.

have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including interim reporting

requirements of the U.S.

Securities and Exchange Commission (“SEC”).

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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.

There were no significant changes to these accounting policies during the three months ended April 30, 2022.

Concern Assessment

assesses liquidity and going concern uncertainty in the Company’s condensed consolidated financial statements to determine whether

there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one

year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward

period”, as defined in GAAP.

As part of this assessment, based on conditions that are known and reasonably knowable to management,

management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing

and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise

additional capital, if necessary, among other factors.

Based on this assessment, as necessary or applicable, management makes certain

assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable

those implementations can be achieved and management has the proper authority to execute them within the look-forward period.

30, 2022, we had cash and cash equivalents of $ 4,010,644 and working capital of $ 3,918,885 .

For the three months ended April 30, 2022,

the Company incurred an operating loss of $ 689,989 and used cash flow from operations of $ 744,257 .

The Company has generated operating

losses since its inception and has relied on sales of securities and issuance of third-party and related party debt to support cash flow

from operations.

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 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.

The plans enable the Company to meet its obligations for at least one year from the date when the

financial statements are issued.

The Company also

received $ 2,942,970 proceeds from the exercise of warrants.

has prepared estimates of operations for fiscal year 2022 and 2023 believes that sufficient funds will be generated from operations to

fund its operations for one year from the date of the filing of these condensed consolidated financial statements, which indicates improved

operations and the Company’s ability to continue operations as a going concern.

The impact of COVID-19 on the Company’s business

has been considered in these assumptions;

however, it is too early to know the full impact of COVD-19 or its timing on a return to more

normal operations.

Management believes

the substantial doubt about the ability of the Company to continue as a going concern is alleviated by the above assessment.

of Consolidation

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intent and ability to pay the promised consideration.

Deferred Revenue

Contract Liabilities

Deferred revenue is a liability related

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Three Months Ended

Nine Months Ended

Revenue by type

Sale of goods

Revenue by type Sale of goods

Three Months Ended

Nine Months Ended

Revenue by geographic location:

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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.

For the three

months ended April 30, 2022 and 2021, 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

Net realized value is the

estimated selling price in the ordinary course of business, less applicable variable selling expenses.

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operating capacity).

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

As of April 30, 2022 and January 31, 2022, 100 % of the inventory consists of raw materials.

Plant and Equipment

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Furniture and fixtures

and equipment

Machinery and equipment

10 - 20 years

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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 .

In connection with the Company’s acquisition of 4P Therapeutics LLC in 2018, the Company recorded Goodwill of $ 1,719,235 .

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 .

During the year ended January 31, 2022, the Company recorded an impairment charge of $ 2,180,836

reducing the Active Intelligence LLC Goodwill to $ 3,629,813 .

As of April 30, 2022 and January 31, 2022, Goodwill amounted to $ 5,349,039 .

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

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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.

As of April 30, 2022, and 2021, there were 1,394,034 and

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.

“Compensation - Stock Compensation,” prescribes accounting and reporting standards for all share-based payment

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non-employees.

recognizes the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired entity at the acquisition date,

measured at their fair values as of that date, with limited exceptions specified in the accounting literature.

In accordance with this

guidance, acquisition-related costs, including restructuring costs, must be recognized separately from the acquisition and will generally

be expensed as incurred.

That replaces the cost-allocation process detailed in previous accounting literature, which required the cost

of an acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair value.

February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), to provide a new comprehensive model for lease accounting

under this guidance, lessees and lessors should apply a “right-of-use” model in accounting for all leases (including subleases)

and eliminate the concept of operating leases and off-balance-sheet leases.

Recognition, measurement and presentation of expenses will

depend on classification as a finance or operating lease.

Similar modifications have been made to lessor accounting in-line with revenue

recognition guidance.

Company adopted ASU 2016-02 as amended effective February 1, 2019 using the modified retrospective approach.

In connection with the adoption,

the Company elected to utilize the Comparative Under 840 Option whereby the Company will continue to present prior period financial statements

and disclosures under ASC 840.

In addition, the Company elected the transition package of three practical expedients permitted under the

standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial

direct costs.

The Company completed the necessary changes to its accounting policies, processes, disclosure and internal control over

financial reporting.

and Development Expenses

development expenses are expensed as incurred.

development costs are expensed as incurred.

Taxes are calculated

in accordance with taxation principles currently effective in the United States and Ireland.

accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the financial statements.

Under this method,

deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and

liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of

a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

records net deferred tax assets to the extent they believe these assets will more-likely-than-not be realized.

In making such

determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary

differences, projected future taxable income, tax planning strategies and recent financial operations.

In the event the Company

was to determine that it would be able to realize its deferred income tax assets in the future in excess of its net recorded amount, the

Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

Value Measurements

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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.

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

Observable inputs such as quoted market prices in active

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.

Reclassification

has reclassified prior year amounts to show the allocation of depreciation expense to cost of goods sold.

Accounting Standards

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

Common stock issued

Note payable issued

Accounts receivable

Equipment and fixtures

Customer base

Intellectual property and trademarks

Accounts payable and accrued expenses

Deferred revenue

Net assets acquired

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

2021, the FASB issued ASU 2021-08, Business Combinations (Topic805):

Accounting for Contract Assets and Contract Liabilities from Contracts

with Customers, which clarifies how to properly account for deferred revenue in a business combination.

ASU 2021-08 is effective for periods

after December 15, 2022.

The Company adopted ASU 2021-08 on February 1, 2022.

The adoption of ASU 2021-08 did not have a material effect

on the Company’s consolidated financial statements.

has reviewed all other FASB-issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period

reported and in future periods.

The Company has carefully considered the new pronouncements that alter previous GAAP and does not believe

that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the

The applicability of any standard is subject to the formal review of the Company’s financial management and certain standards

are under consideration.

PROPERTY AND EQUIPMENT

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Net Property and Equipment

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

NOTES PAYABLE/CONVERTIBLE DEBT

Depreciation expense amounted

to $ 45,021 and $ 43,808 for the three months ended April 30, 2022 and 2021, respectively .

During the three months ended April 30.

2022 and 2021, depreciation expense of $ 27,693 and $ 27,166 , respectively, have been allocated to cost of goods sold.

NOTES PAYABLE

Notes Payable

2020, the Coronavirus Aid Relief and Economic Security Act (“CARES ACT” was enacted.

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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.

Company recorded a gain on the extinguishment of debt of $34,870 during the three months ended April 30, 2021.

July 2020, a minority shareholder made an additional loan to the Company in the amount of $ 100,000 .

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

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

During the year ended January 31, 2022, 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 October 31,

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

During the three months

ended April 30, 2022, the Company made principal payments of $ 3,647 .

As of April 30, 2022, the amount due was $ 111,591 , of which $ 14,119

2022, the Company entered into a retail installment agreement for the purchase of an automobile.

The contract price was $32,274, of which

$22,795 was financed.

The agreement is for five years bearing interest at 2.95% per annum with payments of $495 per month.

secured by automobile.

As of April 30, 2022, the amount due was $22,483 of which $3,960 is current.

two finance leases secured by equipment.

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The incremental borrowing rate is 5.0 %.

As of October 31,

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

The amount due on

the leases was $ 121,544 , all of which was paid during the year ended January 2022.

Party Payable

On August 31,

2020, in connection with the Company’s acquisition of Pocono Products LLC, the Company issued to Pocono Coated Products LLC a promissory

note, net of debt discount, in the amount of $1,332,893 with interest accruing at an annual rate of 0.17%, due on August 28, 2021, or

immediately following the earlier of a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000.

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.

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.

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

The members of Pocono Coated Products LLC, which include Mike Myer who was a related party, are shareholders of the Company.

During the three months ended April 30, 2021, the Company recorded amortization of debt discount of $ 36,554 .

In October 2021, the note

in the amount of $ 1,500,000 was paid in full.

Interest expense

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 .

for the three months ended April 30, 2022, was $ 4,110 .

Interest expense for the three months ended April 30, 2021, was $ 40,869 including

the amortization of debt discount of $ 36,554 and interest expense of $ 4,315 .

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:

As of April 30, 2022 and January

31, 2022, intangible assets consisted of intellectual property and trademarks, customer base, and license agreement, net of amortization,

Customer base

License agreement

Intellectual property

Intellectual property and trademarks

Accumulated amortization

5 unchanged sentences

Amortization expense for the

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

Estimated Amortization:

three months ended April 30, 2022, and 2021 was $ 32,454 and $ 32,454 , respectively.

Year Ended January 31,

Remainder of 2022

2028 and thereafter

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.

a) In connection with the acquisition of Pocono, the Company recorded various transactions and operations

through Pocono Coated Products LLC, of which Mike Myer was a related party.

During the year ended January 31, 2022, the Company

was advanced $ 7,862 in finance payments.

As of January 31, 2022, the balance due Pocono was paid in full.

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 .

See Note 3 for

further discussion.

STOCKHOLDERS’ EQUITY

13 unchanged sentences

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.

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.

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

Activity during the Three Months

Ended April 30, 2022

(a) In March 2022, the Company purchased 22,058 shares of its common stock for $ 89,196 and recorded the purchase as Treasury Stock.

of April 30, 2022, the Company holds 50,183 of its shares comprising the $ 193,663 of treasury stock.

Activity during the Three Months

Ended April 30, 2021

(a) 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.

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 8.

(b) 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.

Subscription Payable

(a) 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

in the Company’s consolidated balance sheet as of January 31, 2021.

The balance of the funds was received in February 2021.

(b) 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.

OPTIONS and WARRANTS

The following table summarizes the changes

in warrants outstanding and the related price of the shares of the Company’s common stock issued to management ( 75,000 warrants

were issued to the Chief Financial Officer) and non-employees of the Company.

Outstanding, January 31, 2021

Expired/Cancelled

Outstanding - period ending October 31, 2021

Exercisable - period ending October 31, 2021

Outstanding, January 31, 2022

Expired/Cancelled

Outstanding - April 30, 2022

Exercisable - April 30, 2022

The following

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

Range of Exercise

Remaining Contractual

table summarizes additional information relating to the warrants outstanding as of April 30, 2022:

Range of Exercise Prices

Exercise Price

The following table summarizes the changes

in options outstanding and the related price of the shares of the Company’s common stock issued to employees of the Company.

On November 1, 2021, The Board of Directors adopted the 2021 Employee Stock Option Plan (the”Plan”).

The Company has reserved 350,000 shares to issue and sell upon the exercise of stock options.

The options vest immediately upon issuance

and expire in three years.

Under the Plan, options may be granted which are intended to qualify as Incentive Stock Options (“ISOs”)

under Section 422 of the Internal Revenue Code of 1986 (the “Code”) or which are not (“non-ISOs”) intended to

qualify as Incentive Stock Options thereafter.

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 Committee filed a Registration Statement on Form S-8, to register under the Securities Act of

1933, as amended, 350,000 shares of common stock reserved for issuance under the Plan.

As of April 30, 2022, 186,500 shares remain in

Outstanding, January 31, 2021

Expired/Cancelled

Outstanding, January 31, 2022

Expired/Cancelled

Outstanding - April 30, 2022

Exercisable - April 30, 2022

The following table summarizes additional

information relating to the options outstanding as of April 30, 2022:

Range of Exercise Prices

Exercise Price

COMMITMENTS AND CONTIGENCIES

9 unchanged sentences

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.

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.

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.

to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the

shares were cancelled as of January 31, 2019.

On June 7, 2019, the individual defendants (other than the defendant whom the Company has

a settlement agreement), filed a motion for sanctions and civil contempt against us, which generally claimed that we failed to comply

with the Court’s January 4, 2019, order by refusing to issue the Ruling 144 letters that would allow the defendants to transfer

their shares of common stock.

On October 29, 2019, the Court denied the Defendants motion.

On March 20, 2020, the Florida district court

of appeal reversed the lower court ruling in the Florida state court action that dismissed our complaint, with prejudice, and gave us

leave to file an amended complaint.

On July 7, 2020, Defendants filed Notice for Trial, requesting the court to set a trial date.

The Company and defendants have served their

first set of interrogatories on each other and have filed answers and responses to each other’s first set of interrogatories.

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

15 unchanged sentences

the litigation.

The Court has scheduled a trial date in early 2022.

The Court has scheduled a trial date in June 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.

employment agreement with Gareth Sheridan, our CEO, Serguei Melnik, our President, effective February 1, 2022.

The agreement also provides

that the executives 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, 2025, 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 their services to the Company during

the term of the agreement, Mr.

Sheridan and Mr.

Melnik will receive an annual salary of $ 250,000 per annum, commencing on the effective

date of the agreement.

Sheridan and Mr.

Melnik will also receive a performance bonus of 3.5 % of net income before income taxes.

The Company entered into a three-year

employment agreement with Gerald Goodman, our CFO, effective February 1, 2022.

The agreement provides for an initial term, commencing

on the effective date of the agreement and ending on January 31, 2025, 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.

his services to the Company during the term of the agreement, Mr.

Goodman will receive an annual salary of $ 210,000 per annum, commencing

on the effective date of the agreement.

Rambam Agreement

7 unchanged sentences

the agreement became effective.

As of April 30, 2022, the development of the RAMBAM CSTD Device has been suspended until further notice

as preliminary reviews and market research found the product was not commercially viable in its current form.

The Company had entered into a prior

10 unchanged sentences

of BPM as are set forth in the March 10, 2021 Distribution Agreement between the Company and BPM.

As of April 30, 2022, no revenues have

been earned and royalties have been accrued.

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.

On March 10, 2021, the Company finalized

the Distribution Agreement with BPM, providing for distribution of the medical products developed and produced under the License Agreement.

Under the Distribution Agreement, BPM has the right to distribute the medical products in Israel and has a right of first refusal

in relation to all other countries/states, other than United States, Korea, China, Vietnam, Canada and Ecuador, which are termed excluded

Kindeva Drug Delivery Agreement

On January 4, 2022, the Company signed

a feasibility agreement with Kindeva Drug Delivery, L.P.

(“Kindeva”) to develop Nutriband’s lead product, AVERSAL Fentanyl,

based on its proprietary AVERSAL abuse deterrent transdermal technology and Kindeva’s FDA-approved transdermal fentanyl patch (fentanyl

transdermal system).

The feasibility agreement is focused on adapting Kindeva’s commercial transdermal manufacturing process to

incorporate AVERSAI technology.

The agreement will remain in force until

the earlier of:

(1) the completion of the work and deliverables under the Workplan;

or (2) two (2) years after the Effective Date, after

which time the agreement will expire.

The estimated cost to complete the feasibility

Workplan is approximately $1.7 million and the timing to complete will be between eight to twelve months.

Nutriband made an advance deposit

of $250,000 in January 2022, to be applied against the final invoice.

The Workplan has commenced in February 2022, and the parties believe

the Workplan will be completed in the time estimated in the agreement.

As of April 30, 2022, the Company has incurred expenses of $ 36,000

and the deposit of $ 250,000 is included in prepaid expenses.

Lease Agreement

On February 1, 2022, Pocono Pharmaceuticals

entered into a lease agreement with Geometric Group, LLC for 12,000 square feet of warehouse space currently occupied by Active Intelligence.

The monthly rental is $ 3,000 and the lease expires on January 31, 2025.

The lease can be extended for an additional three years at the

same monthly rental.

The Company recorded a Right of Use asset in the amount of $ 94,134 in connection with the valuation using an incremental

borrowing rate of 9 %.

During the three months ended April 30, 2022, the Company paid $ 9,000 and recorded rent expense of $ 7,844 .

April 30, 2022, the operating lease liability was $ 87,235 , of which $ 65,569 is long-term, which represents the operating liability less

interest of $ 11,765 .

SEGMENT REPORTING

Three Months Ended

April 30,2022

Gross Profit %

Three Months Ended

April 30,2021

Gross Profit %

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 .

Subsequent to April 30, 2022, the Company

purchased 944 shares of its common stock for $ 3,746 and recorded the transaction as Treasury Stock.

On May 10, 2022, the Company issued

24,500 shares to management, directors and employees from the treasury shares.

The issuance of the shares was recorded as compensation

and the fair value at the date of issuance was $ 93,100 .

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