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Item 1. Financial Statements

2023-09-11 compared with 2023-06-09 · 430 added, 333 removed, 392 unchanged (66% 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.

The results of operations for the three months

ended April 30, 2023, and 2022 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 six months

ended July 31, 2023, and 2022 are not necessarily indicative of the results for the entire fiscal year or for any other period.

NUTRIBAND INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

CURRENT ASSETS:

Cash and cash equivalents

Accounts receivable

Accounts receivable-net

Prepaid expenses

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Common stock, $ .001 par value, 291,666,666 shares authorized;

7,843,150 shares issued at April 30, 2023 and January 31, 2023 and 7,833,150 shares outstanding as of April 30,2023 and January 31, 2023, respectively

7,843,150 shares issued at July 31, 2023 and January 31, 2023, 7,833,150 shares outstanding as of July 31,2023 and January 31, 2023, respectively

Additional paid-in-capital

2 unchanged sentences

Accumulated deficit

( 24,339,107 )

( 22,494,705 )

Total Stockholders’ Equity

1 unchanged sentence

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE

For the Three Months Ended

For the Six Months Ended

Costs and expenses:

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Loss from operations

( 1,034,246 )

( 1,842,066 )

( 1,720,125 )

Other income (expense):

1 unchanged sentence

Interest expense

Total other income (expense)

Loss before provision for income taxes

Total other expenses

Loss before provision for

( 1,038,675 )

( 1,844,402 )

( 1,728,664 )

Provision for income taxes

$ ( 829,173 )

$ ( 1,038,675 )

$ ( 1,844,402 )

$ ( 1,728,664 )

Net loss per share of common stock-basic and diluted

1 unchanged sentence

Other Comprehensive Loss:

$ ( 829,173 )

$ ( 1,038,675 )

$ ( 1,844,402 )

$ ( 1,728,664 )

Foreign currency translation adjustment

Total Comprehensive Loss

$ ( 829,173 )

$ ( 1,038,675 )

$ ( 1,844,402 )

$ ( 1,728,664 )

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Months Ended April 30, 2023

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’ EQUITY

Months Ended July 31, 2023

Comprehensive

Balance, February 1, 2023

February 1, 2023

$ ( 22,494,705 )

Warrants issued for services

Options issued for services

Net loss for the three months ended April 30, 2023

issued for services

loss for the six months ended July 31, 2023

( 1,844,402 )

Balance, April 30, 2023

July 31, 2023

$ ( 24,339,107 )

Months Ended April 30, 2022

Six Months Ended July 31, 2022

Comprehensive

Balance, February 1, 2022

February 1, 2022

$ ( 18,011,231 )

$ ( 104,467 )

Treasury stock repurchased

Net loss for the three months ended April 30, 2022

Balance, April 30, 2022

Exercise of warrants

stock returned in settlement

( 1,400,000 )

stock issued for services

stock repurchased

loss for the six months ended July 31, 2022

( 1,728,664 )

See notes to unaudited consolidated financial

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

Cash flows from operating activities:

( 1,728,664 )

July 31, 2022

$ ( 19,739,895 )

$ ( 130,133 )

Three Months Ended July 31, 2023

Comprehensive

$ ( 23,509,934 )

issued for services

loss for the three months ended July 31, 2023

July 31, 2023

$ ( 24,339,107 )

Three Months Ended July 31, 2022

Comprehensive

$ ( 18,701,220 )

$ ( 193,653 )

Exercise of warrants

stock returned in settlement

( 1,400,000 )

stock issued for services

stock repurchased

loss for the three months ended July 31, 2022

( 1,038,675 )

July 31, 2022

$ ( 19,739,895 )

$ ( 130,133 )

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

For the Six Months Ended

Cash flows from operating activities:

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

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Amortization of right of use asset

Stock-based compensation-warrants

Stock-based compensation-options

Reserve for doubtful accounts

Common stock and treasury stock issued for services

Stock-based compensation-options and warrants

Changes in operating assets and liabilities:

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Cash flows from financing activities:

Proceeds from line of credit

Proceeds from note payable-related party

Proceeds from secured loan liability

Proceeds from exercise of warrants

Payment on note payable

Purchase of treasury stock

Net Cash Provided by (used in) Financing Activities

Net Cash Provided by Financing Activities

Effect of exchange rate on cash

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Promissory note on equipment purchase

Common stock returned in settlement

See notes to unaudited consolidated financial statements

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to Unaudited Consolidated Financial Statements

of and for the Three Months Ended April 30, 2023 and 2022

of and for the Six Months Ended July 31, 2023 and 2022

AND DESCRIPTION OF BUSINESS

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Intelligence”).

Pocono Pharmaceuticals

is a coated products manufacturing entity organized to take advantage of unique process capabilities and experience.

Pocono helps their

customers with product design and development along with manufacturing to bring new products to market with minimal capital investment.

Pharmaceuticals is a coated products manufacturing entity organized to take advantage of unique process capabilities and experience.

Pocono helps their customers 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 properties.

tape is used the same as traditional kinesiology tape.

The tape has transdermal and topical

This tape is used the same as traditional kinesiology tape.

December 2019, COVID-19 emerged and has subsequently spread world-wide.

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Financial Statements

consolidated balance sheet as of April 30, 2023, and the consolidated statements of operations and comprehensive loss, stockholders’

consolidated balance sheet as of July 31, 2023, 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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changes in stockholders’ equity and cash flows for all periods presented have been made.

The results for the three months ended

April 30, 2023, 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, 2023.

The results for the six months ended July

31, 2023, 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, 2023.

information and footnote disclosures required under generally accepted accounting principles in the United States of America (“U.S.

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Actual results could differ from

The Company’s

significant accounting policies in Note 2 in the Company’s Annual Report on Form 10-K for the year ended January 31, 2023.

were no significant changes to these accounting policies during the three months ending April 30, 2023.

2022, our Board of Directors approved the amendment to our Articles of Incorporation to affect a 7 for 6 forward stock split (the “Stock

Split”) of our outstanding common stock.

The Company filed the amendment set forth in a Certificate of Change with the Secretary

of State of Nevada on August 4, 2022.

The 7:6 forward stock split was effective for trading purposes on the Nasdaq Capital Market on August

Each shareholder of record as of the August 15, 2022, record date received one (1) additional share for each six (6) shares

held as of the record date.

Company’s significant accounting policies in Note 2 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 six months ended July 31, 2023.

July 26, 2022, our Board of Directors approved the amendment to our Articles of Incorporation to effect a 7 for 6 forward stock split

(the “Stock Split”) of our outstanding common stock.

The Company filed the amendment set forth in a Certificate of Change

with the Secretary of State of Nevada on August 4, 2022.

The 7:6 forward stock split was effective for trading purposes on the Nasdaq

Capital Market on August 12, 2022.

Each shareholder of record as of the August 15, 2022 record date received one (1) additional share

for each six (6) shares held as of the record date.

No fractional shares of common stock were issued in connection with the Stock Split.

Instead, all shares were

rounded up to the next whole share.

In connection with the Stock Split, which did not require shareholder approval under the Nevada corporation

law, the number of shares of common stock of the Company was increased in the same ratio as the shares of outstanding common stock were

increased in the Stock Split, from 250,000,000 authorized shares to 291,666,666 authorized shares.

Instead, all shares were rounded up to the next whole share.

In connection with the Stock Split, which did not require shareholder approval

under the Nevada corporation law, the number of shares of common stock of the Company was increased in the same ratio as the shares of

outstanding common stock were increased in the Stock Split, from 250,000,000 authorized shares to 291,666,666 authorized shares.

share and per share information in these financial statements retroactively reflect the forward stock split.

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31, 2023, the Company had cash and cash equivalents of $ 2,334,553 and working capital of $ 2,399,446 .

For the three months ended April

For the six months ended July 31,

2023, the Company incurred an operating loss of $ 1,884,402 and used cash flow from operations of $ 1,744,999 .

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continue to use the funds as needed.

In March 2023, the Company entered a three-year $ 2,000,000 Credit Line Note facility which will permit

the Company to draw down on the credit line to fund the Company’s research and development of its Aversa product.

In March 2023, the Company entered into a three-year $ 2,000,000 Credit Line Note facility with a

related party, amended on July 13, 2023 to $ 5,000,000 , which will permit the Company to draw down on the credit line to fund the Company’s

research and development of its Aversa product.

As of July 31, 2023, the Company was advanced $ 2,000,000 .

has prepared estimates of operations for the next twelve months and believes that sufficient funds will be generated from operations

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of Consolidation

The consolidated

financial statements of the Company include the Company and its wholly owned subsidiaries.

All material intercompany balances and transactions

have been eliminated.

The operations of 4P Therapeutics are included in the Company’s financial statements from the date of acquisition

of August 1, 2018, and the operations of Pocono and Active Intelligence are included in the Company’s financial statements from

the date of acquisition of September 1, 2020, under Pocono Pharmaceuticals Inc.

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 under Pocono Pharmaceuticals Inc.

The wholly owned subsidiaries are as follows:

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Actual results could differ from those estimates.

and Cash Equivalents

Cash and cash

equivalents include cash on hand, cash on deposit and money market accounts.

The Company considers short-term highly liquid investments

with an original maturity date of three months or less that are not part of an investment pool to be cash equivalents.

As of July 31,

2023, the Company’s balances of approximately $ 1.47 million exceeded federally insured limits.

May 2014, the FASB issued ASU No.

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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 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 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

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See the tables:

Six Months Ended

Three Months Ended

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Sale of goods

Six Months Ended

Three Months Ended

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The Company maintains allowances for doubtful accounts

for estimated losses from the inability of its customers to make the required payments.

The Company determines its allowances by both

the specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts.

For the three months ended April 30, 2023, and 2022, the Company recorded no bad debt expense for doubtful accounts related to account

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, 2023 and 2022, the Company recorded bad debt expense of $ 11,836 and $- 0 -, respectively, for doubtful accounts related to

accounts receivable.

During the six months ended July 31, 2023, the Company entered into an assignment agreement to sell account receivable

for one of its subsidiaries.

The Company received $ 106,528 in funds against an account receivable of $ 118,675 of 4P Therapeutics that

is currently a claim in bankruptcy.

4P Therapeutics recorded a bad debt expense of $ 11,836 against the receivable.

The net accounts receivable

remain on the books of the Company and a corresponding amount has been included as a secured loan payable.

The account receivable of $ 118,365

is collateralized to secure liability.

If the bankruptcy claim is not paid in full by the debtor, the Company is obligated to pay any

difference to the factor.

are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method.

The net realized 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 April 30, 2023, total inventory was $ 181,497 , consisting of work-in-process of $ 41,432 and raw materials

Net realized 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, 2023, total inventory was $ 156,921 , consisting of work-in-process of $ 34,467 and raw materials

of $ 122,454 .

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assets are depreciated range from 3 to 20 years as follows:

Furniture and fixtures

Lab Equipment

and equipment

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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 has also been assigned

to intellectual property and other intangibles.

Under the guidance, other intangible assets with definite lives are amortized over their

estimated useful lives.

Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” The Company capitalizes certain costs

related to patent technology.

A substantial component of the purchase price related to the Company’s acquisitions have also been

assigned to intellectual property and other intangibles.

Under the guidance, other intangible assets with definite lives are amortized

over their estimated useful lives.

Intangible assets with indefinite lives are tested annually for impairment.

Trademarks, intellectual property,

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

Goodwill 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.

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 years ended January 31, 2023, and 2022, the Company recorded an impairment charge

of $ 327,326 and $ 2,180,836 , respectively, reducing the Active Intelligence LLC Goodwill to $ 3,302,478 .

As of April 30, 2023, and January

31, 2023, Goodwill amounted to $ 5,021,713 and $ 5,021,713 , respectively.

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.

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 years ended January 31, 2023 and 2022, the Company recorded an impairment

charge of $ 327,326 and $ 2,180,836 , respectively, reducing the Active Intelligence LLC Goodwill to $ 3,302,478 .

As of July 31, 2023 and

January 31, 2023, Goodwill amounted to $ 5,021,713 and $ 5,021,713 , respectively.

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 April 30, 2023, and 2022, there were

1,783,373 and 1,626,373 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share

as their effect would be anti-dilutive.

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 July 31, 2023, and 2022, there were 1,783,373 and 1,570,954

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

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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.

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

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recognition guidance.

Company applies guidance for right-of-use accounting for all leases and records the operating lease liabilities on its balance sheet.

Company applies the guidance for right-of-use accounting for all leases and records the operating lease liabilities on its balance sheet.

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

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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.

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

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.

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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Net Property and Equipment

Depreciation expenses amounted to $ 46,914

and $ 45,021 for the three months ended April 30, 2023, and 2022, respectively.

During the three months ended April 30, 2023, and 2022,

depreciation expenses of $ 36,179 and $ 27,693 , respectively, have been allocated to cost of goods sold.

expenses amounted to $ 93,936 and $ 91,237 for the six months ended July 31, 2023 and 2022, respectively.

During the six months ended July

31, 2023 and 2022, depreciation expenses of $ 72,445 and $ 69,845 , respectively, have been allocated to cost of goods sold.

Intelligence, the Company’s newly acquired subsidiary, entered into an agreement with the Carolina Small Business Development Fund

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

During the three months ended April 30, 2023, the Company made $ 4,877 of principal

As of April 30, 2023, the amount due was $ 96,837 , of which $ 15,535 is current.

During the six months ended July 31, 2023, the Company made $ 7,983 of principal

As of July 31, 2023, the amount due was $ 93,021 , of which $ 15,725 is current.

April 3, 2022, the Company entered into a retail installment agreement for the purchase of an automobile.

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loan is secured by automobile.

As of April 30, 2023, the amount due was $18,523 of which $4,396 is current.

March 19, 2023, the Company entered into a Credit Line Note agreement with TII Jet Services LDA, a shareholder of the Company, for a

credit facility of $ 2 million.

As of July 31, 2023, the amount due was $17,424 of which $4,456 is current.

2023, the Company entered into an amended Credit Line Note agreement, for an increased $ 5,000,000 credit line facility Note, with TII

Jet Services LDA, a shareholder of the Company (replacing the $ 2,000,000 facility with the same lender that the Company entered into

on March 17, 2023).

Outstanding advances under the Note bears interest at 7 % per annum.

The promissory note is due and payable

in full on March 19, 2026.

The promissory note is due and payable in full

on July 31, 2026.

Interest is payable annually on December 31 of each year during the term of the note.

In March 2023, the Company

was advanced $ 50,000 on the Note.

The Company recorded interest expense of $ 504 for the three months ended April 30, 2023.

Interest expense

for the three months ended April 30, 2023, and 2022, was $ 3,166 and $ 4,110 , respectively.

INTANGIBLE ASSETS

30, 2023, and January 31, 2023, intangible assets consisted of intellectual property and trademarks, customer base, and license agreement,

net of amortization, as follows:

During the six months ended July

31,2023, the Company was advanced $ 2,000,000 on the Note.

The Company recorded interest expense of $ 7,002 for the six months ended July

Borrowing Liability

2023, 4P Therapeutics assigned its claim under the bankruptcy proceedings from Sorrento Therapeutics Inc.

and received proceeds of $ 106,528 .

The amount due under claim was $ 118,675 and 4P Therapeutics recorded a bad debt expense of $ 11,836 during the six months ended July 31,

Under the agreement with the buyer of the claim, 4P Therapeutics will make proportional restitution and/or repayment of the purchase

amount to the extent the claim is disallowed, reduced or not paid at the same time or distribution rate as other general unsecured claims

against the Debtor are paid.

The Company has recorded the amount of the proceeds as a secured loan payable to the buyer as of July 31,

Any amounts not paid by the Debtor on the claim will bear 10 % interest to be paid by 4P Therapeutics.

See Note 2 for further information.

expenses for the six months ended July 31, 2023 and 2022, were $ 12,401 and $ 8,539 , respectively.

of July 31, 2023 and January 31 2023, intangible assets consisted of intellectual property and trademarks, customer base, and license

agreement, net of amortization, as follows:

Customer base

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Net Intangible Assets

expense for the three months ended April 30, 2023, and 2022 was $ 28,287 and $ 32,454 , respectively.

expenses for the six months ended July 31, 2023, and 2022 was $ 56,575 and $ 64,909 , respectively.

Year Ended January 31,

2029 and thereafter

RELATED PARTY TRANSACTIONS

a) On February 1, 2023, options to purchase 30,000 shares of the Company’s common stock were issued

to an executive of the Company at a price of $ 3.975 per share.

PARTY TRANSACTIONS

a) On February 1, 2023, options to purchase 30,000 shares of the Company’s common stock were issued to an executive of the Company at a price of $ 3.975 per share.

The options vest immediately and expire in three years .

The fair value

of the options issued for services amounted to $ 75,030 and was expensed during the three months ended April 30, 2023.

b) On March 19, 2023, the Company entered into a Credit Line Note agreement with TII Jet Services LDA, a

shareholder of the Company, for a credit facility of $ 2 million.

The fair value of the options issued for services amounted to $ 75,030 and was expensed during the six months ended July 31, 2023.

b) On July 17, 2023, the Company entered into an amended Credit Line Note facility with TII Jet Services LDA, a shareholder of the Company, for a credit facility of $ 5 million (replacing the $ 2,000,000 facility with the same lender that the Company entered into on March 17, 2023).

See Note 4 for further information.

TII Jet Services LDA is owned 100 %

by a shareholder of the Company.

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 authorized shares to 250,000,000 authorized shares.

On July 26, 2022, the Company effected a 7-for-6 forward stock

split pursuant to which each shareholder of record as of the August 12, 2022, record date received one (1) additional share for each six

TII Jet Services LDA is owned 100 % by a shareholder of the Company.

c) In May 2022, the Company issued stock awards to the Company’s CEO and the independent members of the Board of Directors.

The CEO received 11,667 shares and the four directors received 1,167 shares each.

The Company recorded a compensation expense of $ 53,200 in connection with the issuance of the shares.

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 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.

January 27, 2020, the Company amended its Articles of Incorporation to increase its authorized common shares from 25,000,000 authorized

shares to 250,000,000 authorized shares.

July 26, 2022, the Board of Directors of the Company approved a 7-for-6 forward stock split, effective for trading purposes as of August

12, 2022, pursuant to which each shareholder as of the August 15, 2022 record date received one (1) additional share for each six (6)

shares held as of the record date.

On August 4, 2022, the Company amended its Articles of Incorporation

to increase its authorized common shares from 250,000,000 authorized shares to 291,666,666 authorized shares.

Activity during the Three Months Ended April 30, 2023

(a) As of April 30, 2023, the Company holds 10,000 of its shares comprising $ 32,641 of treasury stock.

There was no activity during the

three months ended April 30, 2023.

Activity during the Three Months Ended

April 30, 2022

(a) In March 2022, the Company purchased 26,836 shares of its common stock for $ 89,196 and recorded the purchase

as Treasury Stock.

As of April 30, 2022, the Company holds 58,547 of its shares comprising the $ 193,633 of treasury stock.

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 non-employees of the Company

during the three months ended April 30, 2023.

On March 7, 2023, the Company issued 30,000 warrants to purchase the Company’s common

shares to Barandic Holdings Ltd.

Pursuant to the operation of the amendment providing for the forward stock split filed with the Secretary

of State of Nevada on August 4, 2022, the authorized common stock of the Company was increased from 250,000,000 shares to 291,666,666

shares in connection with the forward split.

during the Six Months Ended July 31, 2023

(a) As of July 30, 2023, the Company holds 10,000 of its shares comprising $ 32,641 of treasury stock.

There was no activity during the six months ended July 31, 2023.

Activity during the Six Months Ended July 31, 2022

(a) In March and May 2022, the Company purchased 35,583 shares of its common stock for $ 118,766 and recorded the purchase as Treasury Stock.

In May 2022, the Company issued 28,583 shares of stock awards to management, directors and employees from the treasury shares and recorded compensation expense of $ 93,100 .

As of July 31, 2022, the Company held 39,811 of its shares comprising $ 130,133 of treasury stock.

(b) On July 29, 2022, the Company received proceeds of $ 296,875 from the exercise of warrants and issued 55,417 shares of common stock.

See Note 9 for further information.

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 during the six months ended July 31, 2023.

On March 7, 2023, the Company issued 30,000 warrants

to purchase the Company’s common shares to Barandic Holdings Ltd.

for services provided.

The warrants are exercisable at a price of $ 4.00 per share and expire five years

from the date of issuance.

The warrants are exercisable at a price

of $ 4.00 per share and expire five years from the date of issuance.

Outstanding, January 31, 2022

2 unchanged sentences

Expired/Cancelled

Outstanding- April 30, 2023

Exercisable - April 30, 2023

The following

table summarizes additional information relating to the warrants outstanding as of April 30, 2023:

Weighted Average

Remaining Contractual

Shares Outstanding

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.

Note 7 for the issuance of related party options.

On November 1, 2021, the Board of Directors

adopted the 2021 Employee Stock Option Plan (the “Plan”).

The Company has reserved 408,333 shares to issue and sell upon the

exercise of stock options.

In accordance with the Plan, on February 1, 2022, the Company reserved an additional 233,333 shares and on

February 1, 2023, the Company reserved an additional 233,333 shares.

The options vest immediately and expire in three years.

Plan, options may be granted which are intended to qualify as Incentive Stock Options (“ISO’s”) under Section 422 of

the Internal Revenue Code of 1986 (the “Code”) or which are not (“non-ISO’s”) 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 408,333 shares

of common stock reserved for issuance under the Plan.

As of April 30, 2023, 374,664 shares remain in the Plan.

During the three months ended April 30,

2023, 30,000 options to purchase shares of the Company’s common stock were issued to an executive officer at a price of $ 3.975 per

Outstanding- July 31, 2023

Exercisable - July 31, 2023

following table summarizes additional information relating to the warrants outstanding as of July 31, 2023:

Range of Exercise Prices

Number Outstanding

Weighted Average Remaining Contractual Life(Years)

Weighted Average Exercise Price for Shares Outstanding

Number Exercisable

Weighted Average Exercise Price for Shares Exercisable

Intrinsic Value

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.

See Note 7 for the issuance of related party options.

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

The Company has reserved

408,333 shares to issue and sell upon the exercise of stock options.

In accordance with the Plan, on February 1, 2022, the Company reserved

an additional 233,333 shares and on February 1, 2023, the Company reserved an additional 233,333 shares.

The options vest immediately

and expire in three years.

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

under Section 422 of the Internal Revenue Code of 1986 (the “Code”) or which are not (“non-ISO’s”) 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 408,333 shares of common stock reserved for issuance under the Plan.

As of July 31, 2023, 374,666 shares remain in the

the six months ended July 31, 2023, 30,000 options to purchase shares of the Company’s common stock were issued to an executive

officer at a price of $ 3.975 per share.

The options vest immediately and expire three years from the date of issuance.

The fair value of the options issued for services

amounted to $ 75,030 and was recorded during the three months ended April 30, 2023.

The Company used the Black-Scholes valuation model

to record the fair value.

The fair value

of the options issued for services amounted to $ 75,030 and was recorded during the six months ended July 31, 2023.

The Company used the

Black-Scholes valuation model to record the fair value.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatility rate of 143.54 %;

a risk-free rate of 4.5 %.

During the year ended January 31, 2023,

279,584 options to purchase shares of the Company’s common stock were issued to executive officers and directors of the Company

at prices of $ 3.59 to $ 4.50 per share.

The options vest immediately and expire three years from the date of issuance.

The fair value of

the options issued for services amounted to $ 732,130 and was recorded during the year ended January 31, 2023.

The Company used the Black-Scholes

valuation model to record the fair value.

rate of 143.54 %;

and a risk-free rate of 4.5 %.

the year ended January 31, 2023, 279,584 options to purchase shares of the Company’s common stock were issued to executive officers

and directors of the Company at prices of $ 3.59 to $ 4.50 per share.

The options vest immediately and expire three years from the date

The fair value of the options issued for services amounted to $ 732,130 and was recorded during the year ended January 31,

The Company used the Black-Scholes valuation model to record the fair value.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatility rate

of 152.10 - 174.45 %;

term of 1.5 years;

volatility rate of 152.10 - 174.45 %;

and a risk-free rate of 3 %.

3 unchanged sentences

Expired/Cancelled

Outstanding- April 30, 2023

Exercisable - April 30, 2023

following table summarizes additional information relating to the options outstanding as of April 30, 2023:

Weighted Average

Remaining Contractual

We organize and manage our business

in the following two segments which meet the definition of reportable segments under ASC280-10, Segment Reporting:

Sales of Goods and

These segments are based on the customer type of products or services provided and are the same as our business units.

financial information is available and regularly reviewed by our chief decision maker, who is our chief executive officer, in making resource

allocation decisions for our segments.

Our chief-decision maker evaluates segment performance to the GAAP measure of gross profit.

Three Months Ended

Pocono Pharmaceuticals

4P Therapeutics

Pocono Pharmaceuticals

4P Therapeutics

Operating expenses

Selling ,general and administrative

Pocono Pharmaceuticals

4P Therapeutics

Research and development - 4P Therapeutics

Depreciation and Amortization

Pocono Pharmaceuticals

4P Therapeutics

Outstanding- July 31, 2023

Exercisable - July 31, 2023

following table summarizes additional information relating to the options outstanding as of July 31, 2023:

Range of Exercise Prices

Number Outstanding

Remaining Contractual Life(Years)

Exercise Price for Shares Outstanding

Number Exercisable

Exercise Price for Shares Exercisable

Intrinsic Value

organize and manage our business by the following two segments which meet the definition of reportable segments under ASC280-10, Segment

Sales of Goods and Services.

These segments are based on the customer type of products or services provided and are the same

as our business units.

Separate financial information is available and regularly reviewed by our chief-decision maker, who is our chief

executive officer, in making resource allocation decisions for our segments.

Our chief-decision maker evaluates segment performance to

the GAAP measure of gross profit.

Pharmaceuticals

general and administrative-Pocono Pharmaceuticals

general and administrative-4P Therapeutics

general and administrative-Corporate

and development-4P Therapeutics

and Amortization

Pharmaceuticals

following table presents information about net sales and property and equipment, net of accumulated depreciation, in the United States

and elsewhere.

Six Months Ended

Three Months Ended

the United States

Property and equipment, net

of accumulated depreciation

of the United States

Property and equipment, net of accumulated depreciation

the United States

Pharmaceuticals

COMMITMENTS AND CONTIGENCIES

Employment Agreements

The Company entered into a three-year

employment agreement with Gareth Sheridan, our CEO, and 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.

AND CONTIGENCIES

Company entered into a three-year employment agreement with Gareth Sheridan, our CEO, and Serguei Melnik, our President, effective February

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.

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.

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.

Melnik will also receive a performance bonus of 3.5 %

of net income before income taxes.

As of July 31, 2022, the Company and Mr.

Sheridan and Mr.

Melnik mutually agreed to reduce their annual salary to $ 150,000 .

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.

Melnik mutually agreed to reduce their annual

salary to $ 150,000 .

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.

For 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.

As of July 31, 2022, the Company and Mr.

Goodman mutually agreed to reduce his annual salary to

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 provides for on adapting Kindeva’s commercial transdermal manufacturing process to

incorporate AVERSAI technology in the fentanyl transdermal system.

The agreement will remain in force until

the earlier of:

Goodman mutually

agreed to reduce his annual salary to $ 110,000 .

Drug Delivery Agreement

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 provides for on adapting Kindeva’s commercial

transdermal manufacturing process to incorporate AVERSAI technology in the fentanyl transdermal system.

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.

or (2) two (2)

years after the Effective Date, after which time the agreement will expire.

The estimated cost to complete the feasibility

2 unchanged sentences

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

The Workplan commenced in February 2022, and the parties believe

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

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

During the three months ended April 30, 2023, the Company has incurred

expenses of $ 400,430 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.

As of July 31, 2023, the Company has incurred expenses of $ 1,510,000

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

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.

MDM Worldwide Agreement

In September 2022, the Company entered

into a public relations agreement with MDM Worldwide.

In connection with the agreement, the Company agreed to issue 20,000 options to

MDM Worldwide.

The terms of the options have not yet been agreed and the Company will issue the options when the exercise price and term

are finalized.

Money Channel Agreement

On March 13, 2023, the Company entered

into a media advertising agreement with Money Channel Inc.

The Company will pay a monthly fee and after ninety days can cancel the agreement.

The Company, after 90 days, will also issue options to purchase 50,000 shares of common stock to Money Channel Inc.

at an exercise price

of $ 4.00 per share.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing of this

Quarterly Report on Form 10-Q and determined there have been no events that have occurred that would require adjustments to our disclosures

in the consolidated financial statements.

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.

Worldwide Agreement

September 2022, the Company entered into a public relations agreement with MDM Worldwide.

In connection with the agreement, the Company

agreed to issue 20,000 options to MDM Worldwide.

The terms of the options have not yet been agreed and the Company will issue the options

when the exercise price and term are finalized.

For the six months ended July 31, 2023, the Company paid MDM Worldwide $ 60,000 .

Channel Agreement

March 13, 2023, the Company entered into a media advertising agreement with Money Channel Inc.

The Company will pay a monthly fee and

after ninety days can cancel the agreement.

The Company, after 90 days, will also issue options to purchase 50,000 shares of common stock

to Money Channel Inc.

at an exercise price of $ 4.00 per share.

In June 2023, the parties agreed to terminate the agreement by mutual

No options were issued.

For the six months ended July 31, 2023, the Company paid the Money Channel $ 100,000 .

May 24, 2023, the Company sent notice of the termination of the Securities Facility Services Agreement, dated January 3, 2023, by and

between MERJ DEP Ltd.

And the Company (“Agreement”), which provided for the dual listing of the Company’s common stock

on the MERJ Upstream exchange (“Upstream”), which is operated as a fully registered and licensed integrated securities exchange,

clearing system and depository for digital and non-digital securities under the Seychelles security laws.

The termination is effective

May 31, 2023.

From time to time, the Company is a party to various lawsuits,

claims and other legal proceedings that arise in the ordinary course of business.

When the Company becomes aware of a claim or potential

claim, it assesses the likelihood of any loss or exposure.

In accordance with authoritative guidance, the Company records loss contingencies

in its financial statements only for matters in which losses are probable and can be reasonably estimated.

The Company is currently involved in a dispute with Joseph

Gunnar regarding fees related to our cancellation of the offering that we believe was justified.

Should litigation be commenced, the outcome of this legal

proceeding is uncertain at this point because of the many questions of fact and law that may arise and based on information available

to the Company at present, it cannot reasonably estimate a range of loss for this action.

However, at present we are not aware of any actions of the Company

which we believe would individually or in the aggregate materially adversely affect our business, consolidated results of operations,

financial position, or cash flows.

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