What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-05-01 compared with 2023-04-26 · 532 added, 598 removed, 543 unchanged (68% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets at January 31, 2023 and 2022 F-4

Consolidated Statements of Operations and Comprehensive Loss for the years ended January 31, 2023 and 2022 F-5

Consolidated Balance Sheet as of January 31, 2024 and 2023 F-3

Consolidated Statements of Operations for the years ended January 31, 2024 and 202 3 F-4

Consolidated Statements of Changes in Stockholder’s Equity for the years ended January 31,2024 and 202 3 F-5

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Notes to Consolidated Financial Statements F-7

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Nutriband

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Shareholders of Nutriband Inc.:

Opinion on the Financial Statements

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(“the Company”) as of January 31, 2024 and 2023, the related consolidated statements of operations,

and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended January 31, 2023

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred

to above present fairly, in all material respects, the financial position of the Company as of January 31, 2023 and 2022, and the results

of its operations and its cash flows for each of the years in the two-year period ended January 31, 2023, in conformity with accounting

principles generally accepted in the United States of America.

stockholders’ equity, and cash flows for each of the years in the two-year period ended January 31, 2024 and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in

all material respects, the financial position of the Company as of January 31, 2024 and 2023, and the results of its operations and its

cash flows for each of the years in the two-year period ended January 31, 2024, in conformity with accounting principles generally accepted

in the United States of America.

Basis for Opinion

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The communication of critical audit matters does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical matters below, providing separate opinions

on the critical audit matters or on the accounts or disclosures to which they relate.

on the financial statements, taken as a whole, and we are not, by communicating the critical matter below, providing separate opinions

on the critical audit matter or on the accounts or disclosures to which they relate.

Long-Lived Asset Impairment Assessment

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tested its long-lived assets during the year ended January 31, 2024.

The Company’s evaluation of the recoverability of these

long-lived asset groups involved comparing the undiscounted future cash flows expected to be generated by these long-lived asset

groups to its their respective carrying amounts.

The Company’s recoverability analysis requires management to make significant estimates

and assumptions related to forecasted sales growth rates and cash flows over the remaining useful life of these long-lived asset groups.

We identified the evaluation of the

recoverability analysis for these long-lived assets as a critical audit matter because of the significant estimates and assumptions management

used in the related cash flow analysis.

Performing audit procedures to evaluate the reasonableness of these estimates and assumptions

required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter was

Addressed in the Audit

Our audit procedures related to the

● Testing management’s process for developing the tests for recoverability.

● Evaluating the appropriateness of the undiscounted cash flow models used by management.

● Testing the completeness and accuracy of underlying data used in the undiscounted cash flow model.

● Evaluating the significant assumptions used by management, including assumptions related to revenues,

gross margin, other operating expenses and income taxes to discern whether they are reasonable considering (i) the current and past performance

of the entity;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence

obtained in other areas of the audit.

● Professionals with specialized skill and knowledge were utilized by the Firm to assist in the evaluation of the undiscounted cash

flow model and underlying assumptions.

Goodwill Impairment Assessment

Critical Audit Matter Description

As described in note 2 to the consolidated

financial statements, the Company tests goodwill for impairment annually at the reporting unit level, or more frequently, if events or

circumstances indicate it is more likely than not that the fair value of a reporting unit is less than it’s carrying amount.

units are tested for impairment by comparing the estimated fair value of each reporting unit with its carrying amount.

If the carrying

amount of a reporting unit exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value

and carrying amount, not to exceed the associated carrying amount of goodwill.

The Company’s annual impairment test occurred on

January 31, 2023.

The Company’s evaluation of the recoverability of these long-lived

asset groups involved comparing the undiscounted future cash flows expected to be generated by these long-lived asset groups to their

respective carrying amounts.

The Company’s recoverability analysis requires management to make significant estimates and assumptions

related to cash flows over the remaining useful life of these long-lived asset groups.

We identified the evaluation of the

impairment analysis for goodwill as a critical audit matter because of the significant estimates and assumptions management used in the

discounted cash flow analysis performed by management to determine fair value of the reporting unit.

Performing audit procedures to evaluate

the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort.

recoverability analysis for the long-lived assets in the 4P Therapeutics asset group as a critical audit matter because of the significant

estimates and assumptions management used in the related cash flow analysis.

Performing audit procedures to evaluate the reasonableness

of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort.

How the Critical Audit Matter was

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Our audit procedures related to the

● Testing management’s process for developing the fair value estimate.

● Evaluating the appropriateness of the discounted cash flow model used by management.

● Testing the completeness and accuracy of underlying data used in the fair value estimate.

● Evaluating the significant assumptions used by management including those related to revenues, gross margin,

other operating expenses, income taxes, long term growth rate, and discount rate to discern whether they are reasonable considering (i)

the current and past performance of the entity;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions

were consistent with evidence obtained in other areas of the audit.

● Professionals with specialized skill and knowledge were utilized by the Firm to assist in the evaluation

of the discounted cash flow model and underlying assumptions.

● Testing management’s process for developing

the undiscounted cash flow model.

● Evaluating the appropriateness of the undiscounted

cash flow models used by management.

● Testing the completeness and accuracy of underlying

data used in the undiscounted cash flow model.

● Evaluating the significant assumptions used by

management, including assumptions related to current and planned costs, future revenues, gross margin and other operating expenses to

discern whether they are reasonable considering (i) the current and past performance of the entity;

(ii) the consistency with external

market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

● Professionals with specialized skill and knowledge were utilized by the Firm

to assist in the evaluation of the undiscounted cash flow model and underlying assumptions.

/s/ Sadler, Gibb & Associates, LLC

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April 30, 2024

NUTRIBAND INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS

CURRENT ASSETS:

cash equivalents

Cash and cash equivalents

Accounts receivable

Current Assets

Prepaid expenses

Total Current Assets

PROPERTY & EQUIPMENT-net

OTHER ASSETS:

Operating lease right

LIABILITIES AND

STOCKHOLDERS’ EQUITY

Operating lease right of use asset

Intangible assets-net

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable and

accrued expenses

Accounts payable and accrued expenses

Deferred revenue

Operating lease liability-current

payable-current portion

Current Liabilities

Operating lease liability-current portion

Notes payable-current portion

Total Current Liabilities

LONG-TERM LIABILITIES:

Note payable-net of

current portion

lease liability-net of current portion

Note payable-net of current portion

Note payable-related party

Operating lease liability-net of current portion

Total Liabilities

Commitments and Contingencies

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

7,843,150 shares issued at January 31, 2023 and 9,187,659 issued at January 31, 2022, 7,833,150 and 9,154,846 shares outstanding as of January 31,2023 and 2022, respectively

8,869,870 and 7,843,150 shares issued at January 31,2024 and 2023, respectively, 8,859,870 and 7,833,150 shares outstanding as of January 31, 2024 and 2023, respectively

Additional paid-in-capital

Accumulated other comprehensive

Accumulated other comprehensive loss

Treasury stock, 10,000 and 10,000 shares at cost, respectively

Accumulated deficit

( 27,980,019 )

( 22,494,705 )

Stockholders' Equity

LIABILITIES AND STOCKHOLDERS' EQUITY

See notes to consolidated

financial statements

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See notes to consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended

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Other income (expense):

Gain on extinguishment of debt

Interest income

Loss on extinguishment of debt

Interest expense

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$ ( 4,483,474 )

Deemed dividend related to warrant round-down

Net loss attributable to common shareholders

$ ( 4,483,474 )

$ ( 6,372,715 )

Net loss per share of common stock-basic and diluted

Weighted average shares of common stock outstanding - basic and diluted

Other Comprehensive Loss:

$ ( 4,483,474 )

$ ( 6,372,715 )

Foreign currency translation adjustment

Total Comprehensive Loss

$ ( 4,483,474 )

$ ( 6,372,715 )

See notes to consolidated

financial statements

See notes to consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF STOCKHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Comprehensive

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$ ( 22,494,705 )

$ ( 104,467 )

Exercise of warrants

Common stock returned in settlement

( 1,400,000 )

Treasury stock issued for services

Treasury stock and warrants issued for termination agreement

Treasury stock repurchased

Warrants issued for services

Options issued for services

Issuance of common stock for note payable and interest

Net loss for the year ended January 31, 2024

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$ ( 18,011,231 )

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 notes payable

Common stock issued for settlement of liabilities

Warrants issued for services

Common stock issued for proceeds and in payment for license

Common stock issued for services

$ ( 104,467 )

Exercise of warrants

Common stock returned in settlement

( 1,400,000 )

Treasury stock issued for services

Treasury stock and warrants issued for termination

Treasury stock repurchased

Employee stock options issued for services

Settlement of warrant round down

Deemed dividend for warrants

Options issued for services

Net loss for the year ended January 31, 2023

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$ ( 22,494,705 )

$ ( 104,467 )

See notes to consolidated

financial statements

See notes to consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended

CONSOLIDATED STATEMENTS

OF CASH FLOWS

For the Years Ended

Cash flows from operating activities:

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Depreciation and amortization

Amortization of debt discount

Amortization of right of use asset

(Gain) loss on extinguishment of debt

Stock-based compensation-options

Stock-based compensation-warrants

Treasury stock and warrants issued for termination agreement

Operating lease expense

Loss on extinguishment of debt

Reserve for doubtful accounts

Treasury stock issued for services

Treasury stock and warrants issued for termination agreement

Goodwill impairment

Common stock issued for services

Stock-based compensation-warrants

Stock-based compensation-options

Changes in operating assets and liabilities:

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Cash flows from financing activities:

Proceeds from sale of common stock

Proceeds from sale of common stock in public offering

Proceeds from the exercise of warrants

Proceeds from note payable-related party

Proceeds from secured borrowing liability

Proceeds from exercise of warrants

Payment on note payable

Payment on related party note payable

( 1,500,000 )

Payment on finance leases

Purchase of treasury stock

Net Cash Provided by (used in) Financing Activities

Effect of exchange rate on cash

Net Cash Provided by Financing Activities

Net change in cash

( 1,492,498 )

( 2,906,428 )

Cash and cash equivalents - Beginning of period

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Supplemental disclosure of non-cash investing and financing activities:

Common stock returned in settlement

Common stock issued for settlement of notes payable

Common stock issued for prepaid consulting

Non-cash payment for license agreement

Common stock issued for subscription payable

Adoption of ASC 842 Operating lease asset and liability

Promissory note on equipment purchase

Settlement of liabilities for common stock

Deemed dividend in connection with warrant round down

Cashless exercise of warrant

See notes to consolidated

financial statements

Common stock returned in settlement

Issuance of common stock for extinguishment of debt

See notes to consolidated financial statements

NUTRIBAND INC.

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as of and for the Years Ended January 31, 2024

ORGANIZATION AND DESCRIPTION OF

AND DESCRIPTION OF BUSINESS

Nutriband Inc.

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Pocono Pharmaceuticals

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

Pocono helps their

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

is a contract development and manufacturing organization with unique process capabilities and experience focused on coated product manufacturing.

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.

Active Intelligence manufactures activated kinesiology tape.

The tape has transdermal and topical properties.

tape is used as the same as traditional kinesiology tape.

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

The World Health Organization has declared COVID-19 a pandemic resulting

in federal, state and local governments and private entities 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 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.

a result of its unique processes

and state-of-the-art material technology.

Active Intelligence manufactures activated kinesiology tape for transdermal or topical use.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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31, 2024, the Company had cash and cash equivalents of $ 492,942 and working capital of $ 22,770 .

For the year ended January 31, 2023,

the Company incurred an operating loss of $ 4,483,474 and used cash flow from operations of $ 2,987,198 .

For the year ended January 31, 2024, the

Company incurred a loss from operations of $ 4,871,926 and used cash flow from operations of $ 3,527,509 .

The Company has generated operating

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

The Company also

received to date $ 3,239,845 proceeds from the exercise of warrants.

The Company has used these proceeds to fund operations and will continue

to use the funds as needed.

In March 2023, the Company entered into 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.

The Company has also

received to date $ 3,239,845 in proceeds from the exercise of warrants.

The Company has used these proceeds to fund operations and will

continue to use the funds as needed.

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.

The Company was advanced $ 2,000,000 , all of which was settled by the issuance of common

stock during the year ended January 31, 2024.

The $ 2,000,000 debt and accrued interest was converted into 1,026,720 shares of the Company’s

common stock.

On April 19, 2024, the Company received proceeds of $ 8,400,000 from a private placement of its common stock.

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

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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 COVID-19 or its timing on a return to normal

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

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

the date of acquisition of September 1, 2020.

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

The wholly owned subsidiaries are as follows:

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Pharmaceuticals Inc.

Intelligence LLC

The preparation

of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America

requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses,

and related disclosure of contingent assets and liabilities.

On an ongoing basis, the Company evaluates its estimates including, but

not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts

and valuation allowances.

The Company bases its estimates on historical experience and on other various assumptions that are believed

to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets

and liabilities that are not readily apparent from other sources.

of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires

the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related

disclosure of contingent assets and liabilities.

On an ongoing basis, the Company evaluates its estimates including, but not limited to,

those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation

The Company bases its estimates on historical experience and on other various assumptions that are believed to be reasonable

under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that

are not readily apparent from other sources.

Actual results could differ from those estimates.

Cash and Cash

Cash equivalents are short-term, highly liquid investments that have

a maturity of three months or less.

the FASB issued ASU No.

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obligations are satisfied.

The following

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

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

clients in the life sciences field on an as-needed basis.

Deliverables primarily consist of detailed findings and conclusion reports provided

to the client for each given research project engaged.

● Product revenues are derived from the sale of the Company’s consumer transdermal and coated products.

Upon the reception of a purchase order, we have the order filled and shipped.

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

development and manufacturing services for consumer health transdermal, topical and tape

products with revenues listed under sale of goods

revenues derived from the sale of the Company’s consumer transdermal, topical and tape

products with sales listed under sale of goods

research and development services for pharmaceuticals and medical devices for life sciences

customers with revenues listed under services

Contracts with Customers

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United States

Cash and cash equivalents.

Cash and cash equivalents include cash on hand, cash on deposit

in 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 January 31, 2024, the Company has no balances that exceed federally

insured limits.

Trade accounts

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The Company maintains allowances for doubtful accounts

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

The Company determines its allowances by both specific

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

For the years

ended January 31, 2023 and 2022, the Company recorded no bad debt expense for doubtful accounts related to account receivable.

Inventories are valued at the lower of cost and reasonable value determined

using the first-in, first-out (FIFO) method.

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 January 31, 2023, total inventory

was $ 29,335 , consisting of work in process of $ 11,021 and raw materials of $ 218,334 .

As of January 31, 2022, 100 % of the inventory consists

of raw materials.

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 years ended January 31, 2024, and 2023, the Company recorded bad debt expenses of $ 118,364 and $- 0 -, respectively, for doubtful

accounts related to accounts receivable.

During the year ended January 31, 2024, the Company entered into an accounts receivable sale

agreement for one of its subsidiaries.

The Company received $ 106,528 in funds against an account receivable that is currently a claim

in bankruptcy.

The net accounts receivable remain on the books of the Company and a corresponding amount has been included as a secured

borrowing liability under Notes payable.

As of January 31, 2024, the receivable has been reserved in full.

If the bankruptcy claim is

not paid in full by the debtor, Company is obligated to pay any difference to the factor.

The loan bears interest at 10 %.

adopted ASU 2016-13 during 2023 and implemented the guidance on expected credit losses.

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

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 January 31, 2024, total inventory was $ 168,605 , consisting of work-in-process of $ 7,466 , finished goods of

$ 8,707 and raw materials of $ 134,691 .

As of January 31, 2023, total inventory was $ 229,335 , consisting of work-in-process of $ 11,021 and

raw materials of $ 218,334 .

Plant and Equipment

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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 .

During the years ended January 31, 2024, and 2023, the Company recorded an impairment charge

of $- 0 - and $ 327,326 , respectively, reducing the Active Intelligence LLC Goodwill to $ 3,302,478 .

As of January 31, 2024, and 2023, Goodwill

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would be anti-dilutive.

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

transactions in which employee services, and, since February 1, 2019, non-employees, are acquired.

Transactions include incurring

liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and

stock appreciation rights.

Share-based payments to employees, including grants of employee stock options, are recognized as

compensation expense in the financial statements based on their fair values.

That expense is recognized over the period during which

an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting

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

non-employees.

ASC 718, “Compensation

- Stock Compensation,” prescribes accounting and reporting standards for all share-based payment transactions in which employee

services, and, since February 1, 2019, non-employees, are acquired.

Transactions include incurring liabilities, or issuing or offering

to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights.

payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements

based on their fair values.

That expense is recognized over the period during which an employee is required to provide services in exchange

for the award, known as the requisite service period (usually the vesting period).

As of February 1, 2019, pursuant to ASC 2018-07, ASC

718 was applied to stock-based compensation for both employees and non-employees.

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

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recognition guidance.

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

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

Concentration

of Credit Risk

Financial instruments

which potentially subject the Company to concentrations of credit risk consist principally of cash.

The Company’s cash and cash

equivalents are concentrated primarily in banks.

At times, such deposits could be in excess of insured limits.

Management believes that

the financial institutions that hold the Company’s financial instruments are financially sound and, accordingly, minimal credit

risk is believed to exist with respect to those financial interests.

As of and for the year ended January 31, 2023, two customers accounted

for 34 % and 14 % of the Company’s revenue and one customer accounted for 94 % of accounts receivable.

As of and for the year ended

January 31, 2022, three customers accounted for 19 %, 17 % and 13 % of the Company’s revenue and three customers accounted for 58 %,

21 % and 17 % of accounts receivable.

Value Measurements

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-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.

The carrying value of the Company’s financial instruments including

cash and cash equivalents, accounts receivable, prepaid expenses, inventories, deferred revenue, accounts payableand accrued expenses

approximate their fair value due to the short maturities of these financial instruments.

-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 accounts receivable, prepaid expenses, accounts payable and accrued expenses,

and deferred revenue approximate their fair value due to the short maturities of these financial instruments.

Accounting Standards

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.

In June 2016,

the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), The ASU introduces a new credit loss methodology.

Expected Credit Loss (“CECL”), which requires earlier recognition of credit losses, which also provides additional transparency

about credit risk.

Since its original issuance in 2016, the FASB has issued several updates to the original ASU.

The Company adopted ASU

2016-13 during the year ended January 31, 2024.

The adoption of ASU 2016-13 did not have a material impact on the Company’s balance

sheet or statement of operations.

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

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Net Property and Equipment

Depreciation expense amounted to $ 183,660 and $ 178,924 for

Depreciation expenses amounted to $ 174,572 and $ 183,660 for

the years ended January 31, 2024, and 2023, respectively.

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$ 131,360 and $ 139,689 , respectively, have been allocated to cost of goods sold.

adopted the provisions of ASC 740, “Income Taxes, (“ASC 740”).

As a result of the implementation of ASC 740, the Company

recognized no adjustment in the net liability for unrecognized income tax benefits.

The Company believes there are no potential uncertain

tax positions, and all tax returns are correct as filed.

Should the Company recognize a liability for uncertain tax positions, the Company

will separately recognize the liability for uncertain tax positions on its balance sheet.

Included in any liability or uncertain tax positions,

the Company will also setup a liability for interest and penalties.

The Company’s policy is to recognize interest and penalties

related to uncertain tax positions as a component of the current provision for income taxes.

The Company adopted the provisions of

ASC 740, “Income Taxes, (“ASC 740”).

As a result of the implementation of ASC 740, the Company recognized no adjustment

in the net liability for unrecognized income tax benefits.

The Company believes there are no potential uncertain tax positions, and all

tax returns are correct as filed.

Should the Company recognize a liability for uncertain tax positions, the Company will separately recognize

the liability for uncertain tax positions on its balance sheet.

Included in any liability or uncertain tax positions, the Company will

also set up a liability for interest and penalties.

The Company’s policy is to recognize interest and penalties related to uncertain

tax positions as a component of the current

provision for income taxes.

There is no U.S.

tax provision due to losses from U.S.

operations for the years ended January 31, 2024 and 2023.

Deferred income taxes are provided

for the temporary differences between the financial reporting and tax basis of the Company’s assets and liabilities.

The principal

item giving rise to deferred taxes is the net operating loss carryforward in the U.S.

Valuation allowances are established when necessary

to reduce deferred tax assets to the amount expected to be realized.

The Company has set up a valuation allowance for losses for certain

carryforwards that it believes may not be realized.

The provision

for income taxes consists of the following:

A reconciliation of taxes on income

computed at the federal statutory rate to amounts provided is as follows:

Deferred income taxes are provided for the temporary differences between

the financial reporting and tax basis of the Company’s assets and liabilities.

The principal item giving rise to deferred

taxes is the net operating loss carryforward in the U.S.

Valuation allowances are established when necessary to reduce deferred tax

assets to the amount expected to be realized.

The Company has set up a valuation allowance for losses for certain carryforwards that

it believes may not be realized.

The provision for income taxes consists of the following:

A reconciliation of taxes on income computed at the federal

statutory rate to amounts provided is as follows:

Book Income (loss from operations)

5 unchanged sentences

Income tax expense

As of January

31, 2023, the Company recorded a deferred tax asset associated with a net operating loss (“NOL”) carryforward of approximately

$ 11,000,000 that was fully offset by a valuation allowance due to the determination that it was more likely than not that the Company

would be unable to utilize those benefits in the foreseeable future.

As of January 31, 2024, the

Company recorded a deferred tax asset associated with a net operating loss (“NOL”) carryforward of approximately

$ 15,800,000 that was fully offset by a valuation allowance due to the determination that it was more likely than not that the

Company would be unable to utilize those benefits in the foreseeable future.

The Company’s NOL expires in 2041.

The tax effect of the valuation

allowance increased by approximately $ 1,000,000 during the year ended January 31, 2023.

On December 22, 2017, the Tax Cuts and Jobs Act

(the “Tax Act”) significantly revised U.S.

corporate income tax law by, among other things, reducing the corporate rate from

Because the Company recognizes a valuation allowance for the entire balance, there is no net impact to the Company’s

balance sheet or results of operations.

types of temporary differences between tax basis of assets and liabilities and their financial reporting amounts that give rise to the

deferred tax liability and deferred tax asset and their approximate tax effects are as follows:

The tax effect

of the valuation allowance increased by approximately $ 1,151,916 during the year ended January 31, 2024.

On December 22, 2017, the

Tax Cuts and Jobs Act (the “Tax Act”) significantly revised U.S.

corporate income tax law by, among other things,

reducing the corporate rate from 34 % to 21 %.

Because the Company recognizes a valuation allowance for the entire balance, there is

no net impact on the Company’s balance sheet or results of operations.

The types of temporary differences between tax basis of

assets and liabilities and their financial reporting amounts that give rise to the deferred tax liability and deferred tax asset and

their approximate tax effects are as follows:

Net operating loss carryforward (expire through 2040)

6 unchanged sentences

$ ( 1,051,714 )

( 1,051,714 )

Valuation allowance

2 unchanged sentences

Notes Payable

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

The CARES ACT established the Paycheck

Protection Program (“PPP”) which funds small businesses through federally guaranteed loans.

Under the PPP, companies are eligible

for forgiveness of principal and interest if the proceeds are used for eligible payroll costs, rent and utility costs.

On June 17, 2020,

the Company’s subsidiary, 4P Therapeutics, was advanced $34,870 under the PPP, all of which was forgiven as of April 30, 2021.

Company recorded a gain on the extinguishment of debt of $34,870 during the year ended January 31, 2022.

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

The loan is interest-free and

due upon demand.

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

The shares were issued at fair

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

Active Intelligence,

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

of credit of $160,000 due October 16, 2029, with interest of 5% per year.

entered into an agreement with the Carolina Small Business Development Fund for a line of credit of $ 160,000 due October 16, 2028 , with

interest of 5 % per year.

The amount assumed was $ 139,184 .

The loan requires monthly payments

of principal and interest of $ 1,697 .

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.

During the year ended January 31, 2023, the

Company made $ 13,611 of principal payments.

As of January 31, 2023, the amount due was $ 100,627 , of which $ 15,344 is current.

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

the year ended January 31, 2024, the Company made $ 15,378 of principal payments.

As of January 31, 2024, the amount due was $ 85,249 , of

which $ 16,129 is current.

As of January 31, 2023, the amount due was $ 100,627 .

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

The contract price was $32,274, of which

$22,794 was financed.

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 $ 410 per month.

secured by automobile.

The loan is secured by automobile.

As of January 31, 2024, the amount due was $ 15,232 of which $ 4,456 is current.

two finance leases secured by equipment.

The leases mature in 2025 and 2026.

The incremental borrowing rate is 5.0 %.

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.

members of Pocono Coated Products LLC, which include Mike Myer who is 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 year ended January 31, 2023, was $ 6,289 .

expense for the year ended January 31, 2022, was $ 118,421 including the amortization of debt discount of $ 97,477 and interest expense

of $ 20,944 .

As of January 31,

2023, the amount due was $ 19,610 .

Note payable-related

2023, the Company entered 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 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.

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

During the year ended January 31, 2024, the Company

received $ 2,000,000 on the Note.

In December 2023, the Company converted the balance of the credit facility of $ 2,000,000 and $ 53,476

of accrued interest into 1,026,520 shares of common stock.

The fair value of the common stock was $ 2,554,423 resulting in a $ 554,423 loss

on extinguishment.

As of January 31, 2024, the balance due was $- 0 -.

The Company recorded interest expense of $ 60,453 for the year ended

January 31, 2024.

borrowing liability.

entered into an accounts receivable sale agreement for one of its subsidiaries in connection with a bankruptcy claim.

The Company received

$ 106,528 and recorded the transaction as a secured loan payable against the account receivable.

The sale of the account receivable balance

was to an outside third party, whereby if the bankruptcy court does not pay the balance in full, the Company will owe back the unpaid

The loan is classified as a current liability as the Company expects the bankruptcy will be resolved in the next twelve months.

The loan bears interest at 10 %.

For the year ended January 31, 2024, the Company recorded interest expense of $ 5,470 .

Interest expenses

for the year ended January 31, 2024, and 2023, were $ 75,815 and $ 6,289 , respectively.

INTANGIBLE ASSETS

2 unchanged sentences

Customer base

License agreement

Intellectual property and trademarks

1 unchanged sentence

Net Intangible Assets

In February 2021, the Company acquired an IP license for $ 50,000 , see

Note 10- “Rambam Agreement” for further discussion regarding the license agreement.

The value of the intangible assets, consisting

of intellectual property, license agreement and customer base has been recorded at their fair value by the Company and are being amortized

over a period of three to ten years .

February 2021, the Company acquired an IP license from Rambam Med-Tech Ltd.

for $ 50,000 .

The value of the intangible assets,

consisting of intellectual property, license agreement and customer base has been recorded at their fair value by the Company and

are being amortized over a period of three to ten years .

The Company terminated the license agreement in October 2022.

The Company issued 25,000 shares of

its common stock from its treasury shares held by the Company and warrants to purchase 25,000 shares at an exercise price of $ 7.50 per

share as part of the termination agreement.

The Company recorded a termination expense of $ 174,025 during the year ended January 31, 2023

which is included in selling and administrative expenses.

The Company expensed the balance of the agreement of $ 33,334 during the year

ended January 31, 2023, which is included in selling, general and administrative expenses.

Amortization expense for the years ended January

31, 2023, and 2022 was $ 146,483 and $ 129,817 , respectively.

issued 25,000 shares of its common stock from its treasury shares held by the Company and warrants to purchase 25,000 shares at an

exercise price of $ 7.50 per share as part of the termination agreement.

The Company recorded a termination expense of $ 174,025

during the year ended January 31, 2023.

Which is included in selling, general and administrative expenses.

The Company expensed the

balance of the agreement of $ 33,334 during the year ended January 31, 2023, which is included in selling, general and administrative

Amortization expenses for the years ended January 31, 2024, and 2023 amounted to $ 113,150 and $ 146,483 , respectively.

Year Ended January 31,

1 unchanged sentence

RELATED PARTY TRANSACTIONS

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 member and 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) In May 2022, the Company issued stock awards to the Company’s CEO and independent members of the

Board of Directors.

Activity during the year ended January 31, 2024

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 year ended January 31, 2024.

b) In September and October 2023, options to purchase 374,500 shares of common stock to executives and directors

of the Company at a price of $ 1.93 , $ 2.12 and $ 2.65 per share.

The options vest immediately and expire in three years .

The fair value

of the options issued amounted to $ 424,826 and was expensed during the year ended January 31, 2024.

c) On October 26, 2023, warrants to purchase 87,500 shares of the Company’s common stock were issued

to the Chief Financial Officer at a price of $ 1.93 per share.

The warrant expires in three years .

The fair value of the warrants issued

amounted to $ 93,450 and was expensed during the year ended January 31, 2024.

d) On July 17, 2023, the Company entered 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 on March 17, 2023).

See Note 5 for further information.

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

the year ended January 31, 2024, the Company received $ 2,000,000 from the credit facility.

In December 2023, TII Jet Services LDA converted

the balance of the credit facility of $ 2,000,000 and $ 53,436 of accrued interest into 1,026,520 shares of the Company’s common stock.

Activity during the year

ended January 31, 2023

a) 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 compensation

The Company recorded a compensation

expense of $ 53,200 in connection with the issuance of the shares.

c) On August 2, 2022, options to purchase 137,084 shares of the Company’s common stock were issued

b) On August 2, 2022, 137,084 options to purchase shares of the Company’s common stock were issued

to executives of the Company at prices of $ 4.09 and $ 4.50 per share.

1 unchanged sentence

value of the options issued for services amounted to $ 399,075 and was expensed during the year ended January 31, 2023.

d) On September 30, 2022, options to purchase 35,000 shares of the Company’s

common stock were issued to the independent directors of the Company at a price of $ 3.59 per share.

The options vest immediately and expire

in five years .

The fair value of the options issued for services amounted to $ 85,995 and was expensed during the year ended January 31,

e) On December 7, 2022, options to purchase 107,500 shares of the Company’s common stock were issued

c) On September 30, 2022, 35,000 options to purchase shares of the Company’s common stock were issued

to the independent directors of the Company at a price of $ 3.59 per share.

The options vest immediately and expire in five years .

fair value of the options issued for services amounted to $ 85,995 and was expensed during the year ended January 31, 2023

d) On December 7, 2022, options to purchase 107,500 shares of the Company’s common stock were issued

to executives of the Company at prices of $ 3.53 and $ 3.88 per share.

12 unchanged sentences

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.

stock split, pursuant to which each outstanding share of common stock was changed into 0.25 shares of common stock, and the Company decreased

its authorized common stock in the same ratio 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 (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.

On 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.

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.

Activity during the Year Ended January

(a) In March and May 2022, the Company purchased 35,584 shares of its common

stock for $ 119,006 and recorded the purchase as Treasury Stock.

In May and December 2022, the Company issued 33,397 shares of stock awards

to management, directors and employees from the treasury shares and recorded the fair value of the compensation expense of $ 113,155 .

December 2022, the Company issued 25,000 shares from the treasury shares to non-employees in connection of the termination of the Rambam

license agreement.

As of January 31, 2023, the Company holds 10,000 of its shares comprising the $ 32,641 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 10 for further

(a) As of January 31, 2024, the Company holds 10,000 of its shares comprising $ 32,641 of treasury stock.

There was no activity during

the year ended January 31, 2024.

(b) In December 2024, TII Jet Services LDA converted $ 2,000,000 of its outstanding credit facility and $ 53,436 of accrued interest into

1,026,720 shares of the Company’s common stock.

The fair value of the common stock at the date of issuance was $ 2,554,423 , resulting

in a $ 554,423 loss on extinguishment.

Activity during the Year Ended January

(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 94,962 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 14,583 shares of common stock, valued at $350,000, for consulting fees in connection with the Rambam License

Agreement discussed in Note 10.

(b) On February 25, 2021, the Company issued 6,536 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 1,090 shares as

Subscription Payable in the Stockholders’ Equity in the Company’s consolidated balance sheet as of January 31, 2021.

Capital Market effective October 1, 2021, consummated a public offering (the “IPO”) of units (the “Units”), of

common stock and warrants that were offered in the IPO on The Nasdaq Capital Market, which included 1,232,000 (each a “Unit”),

each Unit consisting of one share of common stock, par value $0.001 per share, and one warrant (each a “Warrant”) at a price

of $5.36 per Unit.

Each Warrant is immediate exercisable, will entitle the holder to purchase one share of common stock at an exercise

price of $6.43 and will expire five (5) years from the date of issuance.

The underwriters’ over-allotment option was exercised for

184,800 warrants to purchase shares of common stock bringing to total net proceeds to the Company from the IPO to $5,836,230.

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

(d) During the year ended January 31, 2021, the Company issued 457,795

shares of its common stock and received proceeds of $ 2,942,970 from the exercise of 457,795 public warrants.

(e) On October 25, 2021, the Company issued 20,005 shares of its common stock in exchange for the extinguishment

of debt in the amount of $ 100,000 .

See Note 5 for further details.

(f) On October 25, 2021, the Company issued 28,749 shares, valued at $ 144,000 ,

for consulting services in connection with research and development expenses.

The shares were issued in settlement of liabilities.

(g) On October 5, 2021, in connection with the Company’s IPO, two former debtholders were issued an

additional 84,233 warrants at an exercise of $ 5.36 per share in accordance with the anti-dilution provisions of their agreement.

value of the warrants issued amounted to $ 196,589 and the Company recorded the transaction as adeemed dividend related to the warrant

In October 2021, one of the debtholders exercised 42,117 warrants as a cashless warrant and was issued 17,381 shares of common

(h) In December 2021, the Company purchased 32,813 shares of its common

stock for $ 104,467 and recorded the purchase as Treasury Stock as of January 31, 2022.

(i) In January 2022, the Company issued 11,667 shares, valued at $ 66,900

for services in connection with investor relations for the Company.

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 ( 87,500 warrants were issued to the Chief

Financial Officer) and non-employees of the Company during the year ended January 31, 2022.

The Company issued 25,000 warrants to non-employees

during the year ended January 31, 2023, in connection with the termination of the RAMBAM license agreement.

(a) In March and May 2022, the Company purchased 35,584 shares of its common stock for $ 119,006 and recorded

the purchase as Treasury Stock.

In May and December 2022, the Company issued 33,397 shares of stock awards to management, directors and

employees from the treasury shares and recorded compensation expense of $ 113,155 In December 2022, the Company issued 25,000 shares from

the treasury shares to non-employees in connection of the termination of the Rambam license agreement.

As of January 31, 2023, the Company

held 10,000 of its shares comprising $ 32,641 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 11 for further information.

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 year ended January 31, 2024.

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

to Barandnic 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.

On October 27, 2023, the Company issued 145,833 warrants to purchase the Company’s common shares to management

( 87,500 warrants were issued to the Chief Financial Officer) and non-employees of the Company.

The warrants are exercisable at a price

of $ 1.93 per share and expire in three years from the date of issuance.

These warrants replace previously issued warrants that have now

been cancelled.

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

The valuation model used a dividend rate

expected term of 1.5 years;

volatility rates of 152.10 - 174.45 %;

and a risk-free rate of 4.31 %- 4.84 %.

Non-cash compensation for

the year ended January 31, 2024, amounted to $ 242,840 .

Outstanding, January 31, 2022

6 unchanged sentences

table summarizes additional information relating to the warrants outstanding as of January 31, 2024:

Weighted Average

Range of Exercise

Weighted Average

Range of Exercise

Remaining Contractual

Exercise Price for

Weighted Average

Exercise Price for

Shares Outstanding

Shares Exercisable

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.

See Note 7 for the issuance of

related party options.

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.

vest and expire as determined by the Board of Directors.

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 January 31, 2023, 171,331

shares remain in the Plan.

The Company has reserved 408,333 shares for issuance and sale 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.

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 January 31, 2024, 166 shares remain available and issuance

under the Plan.

During the year ended January 31, 2024,

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-five years from the date of issuance.

404,500 options to purchase shares of the Company’s common stock were issued to executive officers and employees at prices of $ 1.93 -$ 3.975

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

The fair value of the options issued for services

amounted to $ 499,856 and was recorded during the year ended January 31, 2024.

The Company used the Black-Scholes valuation model to record

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.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

rate of 152.10 - 174.45 %;

and a risk-free rate of 3 %.

On January 21, 2022, 190,751 options

to purchase shares of the Company’s common stock were issued to executive officers and directors of the Company at prices of $ 4.16

and $ 4.58 per share.

The options vest immediately and expire on January 21, 2025.

The fair value of the options issued for services amounted

to $ 532,832 and was recorded during the year ended January 31, 2022.

The Company used the Black-Scholes valuation model to record the

volatility rates of 121.52 - 143.54 %;

risk-free rate of 3.00 - 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.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatility rate of 162.69 %;

and a risk-free rate

volatility rate

of 152.10 - 174.45 %;

and a risk-free rate of 3 %.

The following table summarizes

additional information relating to the options outstanding as of January 31, 2024.

Outstanding, January 31, 2022

6 unchanged sentences

information relating to the options outstanding as of January 31, 2024:

Weighted Average

Range of Exercise

Remaining Contractual

Exercise Price for

Shares Outstanding

1 unchanged sentence

SEGMENT REPORTING

We organize and manage our business by the following two

segments which meet the definition of reportable segments under ASC 280-10, Segment Reporting:

4P Therapeutics and Pocono Pharmaceuticals.

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 or chief executive officer, in making resource allocation decisions for our

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

We organize and manage our

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

Goods and Services.

These segments are based on the 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 officer decision maker, in making resource

allocation decisions for our segments.

Our chief officer decision maker evaluates segment performance to the GAAP measure of gross

Years Ended January 31,

Pocono Pharmaceuticals

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Selling, general and administrative-4P Therapeutics

Corporate overhead

Selling, general and administrative-Corporate

Research and development-4P Therapeutics

Goodwill impairment-Pocono Pharmaceuticals

Goodwill impairment-Pocono Pharmacueticals

Depreciation and Amortization

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4P Therapeutics

The following table presents information about net sales and property

and equipment, net of accumulated depreciation, in the United States and elsewhere.

The following table presents

information about net sales and property and equipment, net of accumulated depreciation, in the United States and elsewhere.

United States

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COMMITMENTS AND CONTIGENCIES

Legal Proceedings

Following a three-day trial, on July

20, 2022, the Orange County Circuit Court entered a Final Judgment in favor of Nutriband for breach of contract, replevin and rescission

to rescind in the May 22, 2017 Share Exchange Agreement involving Nutriband, Advanced Health Brands Inc., and TD Therapeutics Inc.

Court directed the return and cancellation of the 1,400,000 Nutriband shares ( adjusted for the 1-for-4 reverse stock split effective June

23, 2019 and the 7-for-6 forward stock split effective August 15, 2022 ) previously issued to Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy

and John Baker.

Thereafter, by Settlement Agreement

and Release dated August 19, 2022, all parties agreed that the above-referenced Final Judgment in favor of Nutriband is binding and enforceable,

no appeal would be taken, related Ohio and New York lawsuits were dismissed and all of the original Nutriband share certificates issued

to Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy and John Baker were returned to Nutriband.

The Company entered into a three-year

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

The Company entered into three-year

employment agreements 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.

provides that the executives will continue as directors and officers of the Company for the respective terms thereof.

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.

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 .

Melnik mutually

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

The Company entered into a three-year

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Goodman mutually agreed to reduce his annual salary to

Rambam Agreement

On December 9, 2020, the Company entered

into a License Agreement (the “License Agreement”) with Rambam Med-Tech Ltd.

(“Rambam”), Haifa, Israel, to develop

the RAMBAM Closed System Transfer Device (“CTSD”) and such other products as the parties agree to develop/commercialize.

Company will license from Rambam the full technology, IP, and title to CTSD in the field, with an Initial license fee of $ 50,000 and running

royalties on net sales.

The $ 50,000 license fee was paid by a third party at the direction of the Company in February 2021, at which time

the agreement became effective.

As of October 31, 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.

As of November 11, 2022,

the Company has terminated the agreement with Rambam and all intellectual property has been returned to Rambam.

The Company had entered into a prior agreement, dated November 13,

2020, with BPM Inno Ltd., Kiryat, Israel (“BPM”), that, in consideration of BPM’s introduction of Rambam to the Company,

provided for BPM to have the rights as the exclusive of agent of the Company with Rambam and any other parties similarly introduced by

BPM, and for a commission payable to BPM by the Company of 4.5% of revenues received by the Company resulting from the introduction of

Rambam (and any other companies as to which the exclusive agency of BPM was in effect), and for BPM’s payment of a royalty to Rambam.

If the Company fails to commercialize the medical products subject to the License Agreement with Rambam within 36 months, under the November

13, 2020 agreement, BPM and the Company would share 50/50 in the revenues generated from sales of the licensed products from Rambam.

agreement further provides that it will be effective for a period of 10 years, with either party having the right to terminate on notice

given 30 days prior to the desired termination, and also provided for certain territorial distribution rights of BPM as are set forth

in the March 10, 2021 Distribution Agreement between the Company and BPM.

As of January 31, 2023, no revenues have been earned and royalties

have been accrued.

On November 22, 2022, the Company and BPM entered into a termination agreement abandoning all elements of the distribution

agreement dated January 15, 2021 between the parties.

The Company issued 25,000 shares of its common stock from its treasury shares held

by the Company and warrants to purchase 25,000 shares at an exercise price of $ 7.50 per share as part of the termination agreement.

Company recorded a termination expense in selling and administrative of approximately$ 175,000 during the year ended January 31, 2023.

BPM Distribution and Stock Purchase

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

The distribution was terminated November 22, 2022.

Kindeva Drug Delivery Agreement

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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

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

based on its proprietary AVERSA 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 feasibility agreement provides for adapting Kindeva’s commercial transdermal manufacturing process to incorporate

AVERSA technology in the fentanyl transdermal system.

The agreement will remain in force until

3 unchanged sentences

which time the agreement will expire.

The estimated cost to complete the feasibility Workplan is approximately

$2.1 million and the timing to complete will be between eight to fifteen 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 January 31, 2023, the Company has incurred expenses of $ 737,654 and the deposit

of $ 250,000 is included in prepaid expenses.

The feasibility Workplan was completed in February 2024.

The estimated cost to complete the feasibility

Workplan was approximately $ 2.5 million.

Nutriband made an advance deposit of $ 250,000 in January 2022, to be applied against the final

As of January 31, 2024, Nutriband has incurred expenses of $ 2,369,508 and the net deposit of $ 138,250 after application to final

invoices is included in prepaid expenses.

In January 2024, Nutriband signed a

commercial development and clinical supply agreement with Kindeva Drug Delivery for development of AVERSA Fentanyl using Kindeva’s

FDA-approved fentanyl patch.

Kindeva will perform commercial manufacturing process development and clinical supplies manufacturing for

the human abuse potential clinical study required by the FDA in support of a New Drug Application.

The agreement replaces the previous

feasibility agreement between the two companies which was focused on adapting Kindeva’s commercial transdermal manufacturing process

to incorporate AVERSA abuse deterrent transdermal technology.

The estimated cost to complete the commercial process development and clinical

supplies manufacturing is approximately $ 8.1 million and the expected timing of FDA submission is twelve to eighteen months.

Lease Agreement

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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.

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.

In October 2023, the

contract was mutually terminated, and no options were issued.

For the year ended January 31, 2024, the Company paid MDM Worldwide $ 190,000 .

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.

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

No options were issued.

ended January 31, 2024, the Company paid the Money Channel $ 100,000 .

Sorrento Therapeutics, Inc.

4P Therapeutics had unpaid

account receivables related to a contract clinical research services agreement in place with Sorrento Therapeutics.

On February 13,

2023, Sorrento declared Chapter 11 bankruptcy.

On July 25, 2023, 4P Therapeutics assigned its claim under the bankruptcy proceedings

from Sorrento Therapeutics Inc.

and received proceeds of $ 106,528 .

The amount due under the claim was $ 118,675 and 4P Therapeutics

recorded a reserve for bad debts of $ 118,675 during the year ended January 31, 2024.

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 factor as of January 31, 2024.

Upstream Termination

On 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 was effective May 31, 2023.

Legal Proceedings

The Company is currently a defendant

in a lawsuit initiated by Joseph Gunnar, LLC (“Gunnar”) and Lucosky Brookman LLP (“LB”) in the Supreme Court of

the State of New York, New York County, under Index No.654633/2023.

The lawsuit alleges multiple allegations such as breach of contract,

fraudulent activities, and tortious interference and seeks damages following the Company’s termination of an engagement letter for

assistance with a public stock offering.

Gunnar is seeking over $ 500,000 in damages plus punitive damages, while LB is demanding reimbursement

of legal fees.

In response, the Company denies all

allegations, alleging that the engagement letter was unenforceable, and its termination was legally justified.

The Company has also initiated

counterclaims against Joseph Gunnar & Co., accusing them of intentional interference and breach of fiduciary duty, and is seeking

$ 1,000,000 for each claim along with a declaratory judgment affirming the legality and justification of the termination.

The plaintiffs

have denied these counterclaims.

Currently, there are no pending hearings

or motions as both parties are engaged in discovery and are attempting to resolve the matter amicably.

SUBSEQUENT EVENTS

(a) 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.

Outstanding advances under the Note bears interest at 7 % per

The promissory note is due and payable in full on March 19, 2025.

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.

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

Barandnic Holdings Ltd.

for services provided.

The warrants are exercisable @ $ 4.00 per share and expire five years from the date of issuance.

agreement Money Channel Inc..

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

The Company, after 90 days, will

also issue options to purchase 50,000 shares of common stock to at an exercise price of $ 4.00 per share to Money Channel, Inc.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

(a) In February and April 2024, the Company received proceeds of $ 300,000 from its Credit Line Facility.

(b) On March 20, 2024, 390,000 options to purchase shares of the Company’s common stock were issued

to executive officers and employees at prices of $ 2.37 -$ 2.61 per share.

The options vest immediately and expire three years from the date

The fair value of the options issued amounted to $ 450,000 .

Plan (the “Plan”) increasing the number of shares of common stock subject to the Plan (as of March 20, 2024, 875,000 shares)

to 1,400,000 shares (the “Amendment”).

The Company will submit the Amendment to the Plan to our stockholders for adoption

and approval at the 2025 Annual Meeting.

If the Amendment is not approved by stockholders within one year of adoption, the increase in

shares subject to the Plan will be void, together with any options issued following March 20,2024, in the period pending approval of the

Plan by our stockholders.

(d) On April 19, 2024, the Company completed an $ 8,400,000 equity financing with European investors (the “Offering”)

of 2,100,000 units (“Units”), at a price of $ 4.00 per Unit, each Unit consisting of one share of common stock (“Shares”)

and a Warrant to purchase two Shares of common stock, the Warrants having an initial exercise price of $ 6.43 , are exercisable by payment

of the exercise price in cash only and expire April 19,2029 , five years from the date of issuance (“Warrants”).

was made solely to investors residing outside the United States and was not registered under the Security Act of 1933, as amended, (the

“Security Act”), or the securities law of any jurisdiction, including outside the United States, but was made privately by

the Company pursuant to the exemptions from registration provided in the SEC’s Regulation S and other exemptions under the Securities

AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data