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Item 1. Financial Statements

2024-05-31 compared with 2023-12-13 · 633 added, 652 removed, 264 unchanged (83% of the section changed)

3 unchanged sentences

statements pursuant to the rules and regulations of the Securities and Exchange Commission.

The results of operations for the three and nine

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

The results of operations for the three months

ended April 30, 2024, and 2023 are not necessarily indicative of the results for the entire fiscal year or for any other period.

NUTRIBAND INC.

20 unchanged sentences

Note payable-related party

Operating lease liability-net of current portion

Total Liabilities

3 unchanged sentences

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

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

10,969,870 and 8,869,870 shares issued at April 30, 2024 and January 31,2024, respectively, 10,959,870 and 8,859,870 shares outstanding as of April 30, 2024 and January 31, 2024, respectively

Additional paid-in-capital

9 unchanged sentences

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

For the Nine Months Ended

Costs and expenses:

6 unchanged sentences

( 1,017,878 )

( 3,565,577 )

( 2,791,644 )

Other income (expense):

1 unchanged sentence

Interest expense

Total other expenses

Total other income (expense)

Loss before provision for income taxes

1 unchanged sentence

( 1,015,229 )

( 3,604,348 )

( 2,804,149 )

Provision for income taxes

1 unchanged sentence

$ ( 1,015,229 )

$ ( 3,604,348 )

$ ( 2,804,149 )

Net loss per share of common stock-basic and diluted

Weighted average shares of common stock outstanding - basic and diluted

Weighted average shares of common stock outstanding

- basic and diluted

See notes to unaudited consolidated financial statements

1 unchanged sentence

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’ EQUITY

Nine Months Ended October 31, 2023

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

Three Months Ended April 30, 2024

Comprehensive

Income (Loss)

Balance, February 1, 2024

$ ( 27,980,019 )

Warrants issued for services

Options issued for services

Net loss for the nine months ended October 31, 2023

Proceeds from sale of common stock and warrants

Net loss for the three months ended April 30, 2024

( 1,898,077 )

Balance, October 31, 2023

Balance, April 30, 2024

$ ( 29,878,096 )

Nine Months Ended October 31, 2022

Three Months Ended April 30, 2023

Comprehensive

Income (Loss)

Balance, February 1, 2023

$ ( 22,494,705 )

$ ( 104,467 )

Exercise of warrants

Common stock returned in settlement

( 1,400,000 )

Treasury stock issued for services

Treasury stock repurchased

Options issued for services

Net loss for the nine months ended October 31, 2022

( 2,804,149 )

Balance, October 31, 2022

$ ( 20,815,380 )

$ ( 130,133 )

Three Months Ended October 31, 2023

Comprehensive

Income (Loss)

Balance, August 1, 2023

$ ( 24,339,107 )

Warrants issued for services

Options issued for services

Net loss for the three months ended October 31, 2023

( 1,759,946 )

Balance, October 31, 2023

$ ( 26,099,053 )

Three Months Ended October 31, 2022

Comprehensive

Income (Loss)

Balance, August 1, 2022

$ ( 19,739,895 )

$ ( 130,133 )

Options issued for services

Net loss for the three months ended October 31, 2022

( 1,075,485 )

Net loss for the three months ended April 31, 2023

( 1,015,229 )

Balance, October 31, 2022

( 1,015,229 )

Balance, April 30, 2023

$ ( 23,509,934 )

2 unchanged sentences

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

For the Nine Months Ended

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

Cash flows from operating activities:

4 unchanged sentences

Operating lease expense

Reserve for doubtful accounts

Treasury stock issued for services

Stock-based compensation-warrants

7 unchanged sentences

Net Cash Used In Operating Activities

( 2,809,269 )

( 2,173,193 )

Cash flows from investing activities:

3 unchanged sentences

Proceeds from note payable-related party

Proceeds from secured borrowing liability

Proceeds from exercise of warrants

Proceeds from sale of common stock and warrants

Payment on note payable

Purchase of treasury stock

Net Cash Provided by Financing Activities

Net change in cash

( 2,075,550 )

Cash and cash equivalents - Beginning of period

2 unchanged sentences

Cash paid for:

Supplemental disclosure of non-cash investing and financing activities:

Adoption of ASC 842 Operating lease asset and liability

Promissory note on equipment purchase

Common stock returned in settlement

See notes to unaudited consolidated financial statements

NUTRIBAND INC.

AND SUBSIDIARIES

to Unaudited Consolidated Financial Statements

of and for the Nine Months Ended October 31, 2023 and 2022

ORGANIZATION AND DESCRIPTION

Notes to Unaudited Consolidated Financial Statements

as of and for the Three Months Ended April 30,

2024 and 2023

AND DESCRIPTION OF BUSINESS

Nutriband Inc.

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

3 unchanged sentences

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

August 1, 2018, the Company acquired 4P Therapeutics LLC (“4P Therapeutics”) for $ 2,250,000 , consisting of 250,000 shares

of common stock, valued at $ 1,850,000 , and $ 400,000 , and a royalty of 6 % on all revenue generated by the Company from the abuse deterrent

intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics.

The former owner of

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

The former owner resigned as a director in January 2022.

Therapeutics is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development.

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

consumer patches.

Most of these products are considered drugs in the United States and cannot be marketed in the United States without

approval by the Food and Drug Administration (the “FDA”).

The Company entered a feasibility agreement as an initial step

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

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

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

Although these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal

product development program which will include the preclinical and clinical trials that are necessary to receive FDA approval before

we can market any of our pharmaceutical products.

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

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

On August 31, 2020, the Company acquired certain assets and liabilities associated with the Transdermal, Topical, Cosmetic,

and Nutraceutical business of Pocono Coated Products LLC (“PCP”).

2018, the Company acquired 4P Therapeutics LLC (“4P Therapeutics”) for $ 2,250,000 , consisting of 250,000 shares of common

stock, valued at $ 1,850,000 , and $ 400,000 , and a royalty of 6 % on all revenue generated by the Company from the abuse deterrent intellectual

property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics.

The former owner of 4P Therapeutics

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

owner resigned as a director in January 2022.

4P Therapeutics

is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development.

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

Most of these products are considered drugs in the United States and cannot be marketed in the United States without approval

by the Food and Drug Administration (the “FDA”).

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

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

With the acquisition

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

The Company’s

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

these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal product development

program which will include the preclinical and clinical trials that are necessary to receive FDA approval before we can market any of

our pharmaceutical products.

On August 25,

2020, the Company formed Pocono Pharmaceuticals Inc.

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

On August 31, 2020, the Company acquired certain assets and liabilities associated with the Transdermal, Topical, Cosmetic, and Nutraceutical

business of Pocono Coated Products LLC (“PCP”).

The net assets were contributed to Pocono Pharmaceuticals.

Included in the transaction, Pocono Pharmaceuticals also acquired 100 % of the membership interests of Active Intelligence LLC (“Active

Intelligence”).

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.

Included in the

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

Pocono Pharmaceuticals

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

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

This tape is used the same as traditional kinesiology tape.

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

The World Health Organization has declared COVID-19 a pandemic

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

OF SIGNIFICANT ACCOUNTING POLICIES

The tape has transdermal and topical properties.

tape is used the same as traditional kinesiology tape.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Statements

consolidated balance sheet as of October 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.

In the opinion of management, all

adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations,

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

The results for the nine months ended

October 31, 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.

GAAP”) have been condensed or omitted from these consolidated financial statements pursuant to the rules and regulations, including

interim reporting requirements of the U.S.

The consolidated

balance sheet as of April 30, 2024, and the consolidated statements of operations, stockholders’ equity, and cash flows for the

periods presented have been prepared by the Company and are unaudited.

In the opinion of management, all adjustments (consisting solely

of normal recurring adjustments) necessary to prepare fairly the financial position, results of operations, changes in stockholders’

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

The results for the three months ended April 30, 2024, 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

Certain information

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

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

requirements of the U.S.

Securities and Exchange Commission (“SEC”).

The preparation of consolidated financial

statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts and the

disclosures of contingent amounts in our consolidated financial statements and accompanying footnotes.

Actual results could differ from

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 nine months ended October 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.

The preparation of consolidated financial statements

in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosures

of contingent amounts in our consolidated financial statements and accompanying footnotes.

Actual results could differ from estimates.

The Company’s

significant accounting policies in Note 2 in the Company’s Annual Report on Form 10-K for the year ended January 31, 2024.

were no significant changes to these accounting policies during the three months ended April 30, 2024.

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

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.

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

All share and

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

Concern Assessment

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

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

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

period”, as defined in GAAP.

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

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

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

additional capital, if necessary, among other factors.

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

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

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

As of October 31, 2023, the Company had cash and cash equivalents of $ 1,265,323

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

cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date

the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”,

as defined in GAAP.

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

consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including timing and nature of projected

cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if

necessary, among other factors.

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

curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can

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

As of April 30, 2024, the Company had cash and cash equivalents of

$ 8,347,740 and working capital of $ 7,313,082 .

For the nine months ended October 31, 2023, the Company incurred a loss from operations of $ 3,565,577

and used cash flow from operations of $ 2,809,269 .

The Company has generated operating losses since its inception and has relied on sales

of securities and issuance of third-party and related-party debt to support cash flow from operations.

In October 2021, the Company consummated

a public offering and received net proceeds of $ 5,836,230 .

The Company also received to date $ 3,239,845 proceeds from the exercise of

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.

As of October

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

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

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

The impact of COVID-19 on the Company’s

business has been considered in these assumptions;

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

to normal operations.

For the three months ended April 30, 2024, the Company incurred a net loss from operations

of $ 1,898,077 and used cash flow from operations of $ 833,926 .

The Company has generated operating losses since its inception and has relied

on sales of securities and issuance of third-party and related-party debt to support cash flow from operations.

The Company has used these

proceeds from the sales of securities and issuance of third-party and related party debt 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.

On April 19, 2024, the Company received proceeds of $ 8,400,000 from equity financing with European

investors, of which $ 7.12 million is from related parties.

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

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

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

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

of Consolidation

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

All material intercompany balances

and transactions have been eliminated.

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

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

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

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.

The wholly owned subsidiaries are as follows:

1 unchanged sentence

Pharmaceuticals Inc.

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

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

expenses, and related disclosure of contingent assets and liabilities.

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

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

and valuation allowances.

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

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

and liabilities that are not readily apparent from other sources.

The preparation

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

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

disclosure of contingent assets and liabilities.

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

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

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

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

are not readily apparent from other sources.

Actual results could differ from those estimates.

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 October 31, 2023, the Company’s

balances of approximately $ 0.5 million exceeded federally insured limits.

May 2014, the FASB issued ASU No.

2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which

amends the accounting standards for revenue recognition.

ASU 2014-09 is based on principles that govern the recognition of revenue at

an amount an entity expects to be entitled when products are transferred to a customer.

The Company recognizes revenue based on the five

criteria for revenue recognition established under Topic 606:

1) identify the contract, 2) identify separate performance obligations,

3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as

the performance obligations are satisfied.

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

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

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

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

with Customers

contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights

regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract

has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred

is probable based on the customer’s intent and ability to pay the promised consideration.

revenue is a liability related to a revenue producing activity for which revenue has not been recognized.

The Company records deferred

revenue when it receives consideration from a contract before achieving certain criteria that must be met for revenue to be recognized

in conformity with GAAP.

performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in

the new revenue standard.

The contract transaction price is allocated to each distinct performance obligation and recognized as revenue

when, or as, the performance obligation is satisfied.

For the Company’s different revenue service types, the performance obligation

is satisfied at different times.

The Company’s performance obligations include providing products and professional services in

the area of research.

The Company recognizes product revenue performance obligations in most cases when the product has shipped to the

When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work

completed, which typically occurs over time on a monthly basis for the work performed during that month.

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

Disaggregation

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

the FASB issued ASU No.

2014-09, “Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the

accounting standards for revenue recognition.

ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an

entity expects to be entitled when products are transferred to a customer.

The Company recognizes revenue based on the five criteria for

revenue recognition established under Topic 606:

1) identify the contract, 2) identify separate performance obligations, 3) determine

the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance

obligations are satisfied.

The following

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

development and manufacturing services for consumer health transdermal, topical and tape products with revenues listed under sale of

revenues derived from the sale of the Company’s consumer transdermal, topical and tape products with sales listed under sale of

research and development services for pharmaceutical and medical devices for life sciences customers with revenues listed under services.

Contracts with Customers

A contract with a customer exists when

(i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be

transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii)

we determine that collection of substantially all consideration for services that are transferred is probable based on the customer’s

intent and ability to pay the promised consideration.

Deferred revenue is a liability related

to a revenue producing activity for which revenue has not been recognized.

The Company records deferred revenue when it receives consideration

from a contract before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

Performance Obligations

A performance obligation is a promise

in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard.

transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation

is satisfied.

For the Company’s different revenue service types, the performance obligation is satisfied at different times.

Company’s performance obligations include providing products and professional services in the area of research.

The Company recognizes

product revenue performance obligations in most cases when the product has shipped to the customer.

When we perform professional service

work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs over time on

a monthly basis for the work performed during that month.

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

Disaggregation of Revenues

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

See the tables:

Nine Months Ended

Three Months Ended

1 unchanged sentence

Sale of goods $ 408,532 $ 401,057

Nine Months Ended

Total $ 408,532 $ 476,932

Three Months Ended

1 unchanged sentence

United States

accounts receivables are recorded at the net invoice value and are not interest bearing.

The Company maintains allowances for doubtful

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

The Company determines its allowances by

estimating credit losses on current accounts by

evaluating actual historical losses.

For the nine months ended October 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 nine months ended October 31, 2023, 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.

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

to pay any difference to the factor.

The secured borrowing liability bears interest at 10 %.

The bankruptcy claim has not yet been settled

by the bankruptcy court.

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 April 30, 2024, the Company had $ 7,879,000 that exceeded federally

insured limits.

Trade accounts receivables are recorded at the net invoice value and

are not interest bearing.

The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers

to make 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, 2024, and 2023, the Company recorded

bad debt expenses of $ 1,200 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 April 30, 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

The loan bears interest at 10 %.

The Company adopted ASU 2016-13 during 2013 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.

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The cost of finished goods and

work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on

normal operating capacity).

As of October 31, 2023, total inventory was $ 174,641 , consisting of work-in-process of $ 30,089 and raw materials

of $ 144,552 .

As of January 31, 2023, total inventory was $ 229,335 , consisting of work-in-process of $ 11,021 and raw materials of $ 218,334 .

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, 2024, total inventory was $ 168,505 , consisting of work-in-process of $ 27,447 , finished goods of $ 26,751

and raw materials of $ 114,307 .

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 .

Plant and Equipment

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

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

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

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Lab Equipment

Furniture and fixtures

Machinery 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 have also been

assigned to intellectual property and other intangibles.

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

over their estimated useful lives.

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

to patent technology.

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

to intellectual property and other intangibles.

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

estimated useful lives.

Intangible assets with indefinite lives are tested annually for impairment.

Trademarks, intellectual

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

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

the date of acquisition.

Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and

written down only in the period in which the recorded value of such assets exceeds their fair value.

The Company does not amortize goodwill

in accordance with ASC 350.

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 October 31, 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 .

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, 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 April 30, 2024, and January 31,

2024, 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 October 31, 2023, and 2022, there

were 2,157,873 and 1,645,506 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per

share as their effect would be anti-dilutive.

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

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

Transactions include

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

plans and stock appreciation rights.

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

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

That expense is recognized over the period during

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

vesting 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.

Company 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.

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 April 30, 2024, and 2023, there were 6,747,873 and

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

would be anti-dilutive.

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 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.

and Development Expenses

and development costs are expensed as incurred.

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

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

development costs are expensed as incurred.

Taxes are calculated

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

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

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

Under this method,

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

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

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

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.

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

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

The effect of

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

The Company records net deferred tax assets to the extent they believe

these assets will more likely than not be realized.

In making such determination, the Company considers all available positive and

negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning

strategies and recent financial operations.

In the event the Company was to determine that it would be able to realize its

deferred income tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the valuation allowance

which would reduce the provision for income taxes.

Value Measurements

ASC 820, “Fair Value Measurements and Disclosure” (“ASC 820”), defines fair value as the exchange price that

would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset

or liability in an orderly transaction between participants on the measurement date.

ASC 820 also establishes a fair value hierarchy

which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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

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

820, “Fair Value Measurements and Disclosure” (“ASC 820”), defines fair value as the exchange price that would

be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or

liability in an orderly transaction between participants on the measurement date.

ASC 820 also establishes a fair value hierarchy which

requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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

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

assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during

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These tiers are defined as follows:

Level 1 - Observable inputs such as quoted market prices in active

Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly

Level 3 - Unobservable inputs about which little or no market data exists, therefore requiring an entity to

develop its own assumptions.

carrying value of the Company’s financial instruments, including 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.

inputs such as quoted market prices in active markets.

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

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

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

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

the period reported and in future periods.

The Company has carefully considered the new pronouncements that alter previous GAAP and does

not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations

in the near term.

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

standards are under consideration.

AND EQUIPMENT

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

reported and in future periods.

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

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

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

are under consideration.

PROPERTY AND EQUIPMENT

Lab equipment

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Net Property and Equipment

expenses amounted to $ 133,520 and $ 137,730 for the nine months ended October 31, 2023 and 2022, respectively.

During the nine months

ended October 31, 2023 and 2022, depreciation expenses of $ 101,315 and $ 104,767 , respectively, have been allocated to cost of goods sold.

Depreciation expenses amounted to $ 40,814

and $ 46,914 for the three months ended April 30, 2024, and 2023, respectively.

During the three months ended April 30, 2024, and 2023,

depreciation expenses of $ 30,242 and $ 36,179 , respectively, have been allocated to cost of goods sold.

NOTES PAYABLE

Notes Payable

Active Intelligence,

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

the nine months ended October 31, 2023, the Company made $ 11,460 of principal payments.

As of October 31, 2023, the amount due was $ 89,160 ,

the three months ended April 30, 2024, the Company made $ 3,959 of principal payments.

As of April 30, 2024, the amount due was $ 81,290 ,

of which $ 16,331 is current.

On April 3, 2022,

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

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

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The agreement is for five years bearing interest at 2.95 % per annum with payments of $ 410 per month.

The loan is secured

by automobile.

As of October 31, 2023, the amount due was $16,235 of which $4,456 is current.

payable-related party

July 17, 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).

secured by automobile.

As of April 30, 2024, the amount due was $ 14,860 of which $ 4,560 is current.

As of January 31, 2024, the amount

due was $ 15,232 .

Note payable-related

2023, the Company entered an amended Credit Line Note agreement, for an increased $ 5,000,000 credit line facility t 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.

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 nine months

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

The Company recorded interest expense of $ 42,012 for the nine

months ended October 31, 2023.

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.

The Company received advances of $ 300,000 during the three months ended April 30, 2024.

30, 2024, the balance due was $ 300,000 .

The Company recorded interest expense of $ 4,163 for the three months ended April 30, 2024.

borrowing liability.

The Company entered

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

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.

If the claim is not paid in full by the debtor,

the Company will pay any difference to the factor.

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 nine months ended October 31, 2023, the Company

recorded interest expense of $ 2,835 .

The bankruptcy claim has not yet been settled by the bankruptcy court.

expenses for the nine months ended October 31, 2023 and 2022, were $ 52,601 and $ 12,505 , respectively.

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

agreement, net of amortization, as follows:

For the three months ended April 30, 2024, the Company recorded interest expense of $ 2,578 .

Interest expenses

for the three months ended April 30, 2024, and 2023, were $ 8,618 and $ 3,166 , respectively.

INTANGIBLE ASSETS

30, 2024, and January 31, 2024, 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

expenses for the nine months ended October 31, 2023, and 2022 amounted to $ 84,862 and $ 118,195 , respectively.

expenses for the three months ended April 30, 2024, and 2023 amounted to $ 28,287 and $ 28,287 , respectively.

Year Ended January 31,

2030 and thereafter

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 nine months ended October 31, 2023.

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 nine months ended October 31, 2023.

c) On October 31, 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 nine months ended October 31, 2023.

d) 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).

RELATED PARTY TRANSACTIONS

Activity during the year ended April

a) In March 2024, options to purchase 390,000 shares of common

stock to executives and employees of the Company at a price of $ 2.37 and $ 2.61 per share.

The options vest immediately and expire in

three years .

The fair value of the options issued amounted to $ 422,955 and was expensed during the three months ended April 30, 2024.

b) On April 19, 2024, the Company completed an $ 8,400,000 equity financing

with European investors which included related parties.

The related parties invested a total of $ 7,120,000 and received 1,780,000 shares

of common stock and warrants to purchase 3,560,000 shares of common stock @ $ 6.43 per share.

One related party, a director of the Company,

invested $ 4.5 million which included $ 500,000 from his son and $ 700,000 from an entity he controls.

The other related party invested $ 2.62

million from entities controlled by the investor.

See Note 7 for further information.

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

e) 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.

f) 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.

The options vest immediately and expire in three years .

The fair value of the options issued for services amounted to $ 329,691 and was expensed during the nine months ended October 31, 2022.

g) 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 three years .

The fair value of the options issued for services amounted to $ 75,530 and was expensed during the nine months ended October 21, 2022.

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.

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 Nine Months Ended October 31, 2023

(a) As of October 31, 2023, the Company holds 10,000 of its shares comprising $ 32,641 of treasury stock.

There was no activity during the nine months ended October 31, 2023.

during the Nine Months Ended October 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.

c) During the three months ended April 30, 2024, the Company

received $ 300,000 from the credit line facility with TII Jet Services LDA.

See Note 4 for further information.

Activity during the three

months ended April 30, 2023

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.

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 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 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.

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 Three Months Ended April 30, 2024

(a) As of April 30, 2024, 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, 2024.

(b) On April 19, 2024, the Company completed an $ 8,400,000 equity financing

with European investors, of which $ 7.12 million is from related parties, (the “Offering”) of 2,100,000 units (“Units”),

at a price of $ 4.00 per Unit, consisting of one share of common stock (“Shares”) and a Warrant to purchase two Shares of common

stock, the Warrant having an 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”).

The offering 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 security 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 Act.

See Note 6 for further information.

Activity during the Three Months

Ended January 31, 2023

(a) As of April 30, 2023, the Company held 10,000 of its shares

comprising $ 32,641 of treasury stock.

There was no activity during the three months ended April 30, 2023.

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 nine months ended October 31, 2023.

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

shares to Barandic Holdings Ltd.

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.

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

7 unchanged sentences

expected term of 1.5 years;

volatility rate of 152.10 - 174.45 %;

volatility rates of 152.10 - 174.45 %;

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

For the nine months ended October 31,

2023, the Company recorded non-cash compensation of $ 242,840 .

See Note 6 for further information.

Outstanding, January 31, 2022

Non-cash compensation for

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

On April 19, 2024, in connection with

a private placement of the Company’s common stock, the Company issued 4,200,000 warrants.

The warrants are exercisable at a price

of $ 6.43 per share and expire five years from the date of issuance.

Shares Exercise

Price Remaining

Life Intrinsic

Outstanding, January 31, 2023 1,307,671 $ 6.43 3.34 years $ -

Granted 175,833 2.28 2.97 years -

Expired/Cancelled ( 200,466 ) 6.33 -

Outstanding, January 31, 2023

Outstanding, January 31, 2024 1,283,038 5.88 2.97 years -

Granted 4,200,000 6.43 5.00 years -

Expired/Cancelled -

Outstanding - October 31, 2023

Exercisable - October 31, 2023

following table summarizes additional information relating to the warrants outstanding as of October 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 October 31, 2023, 166 shares remain in the

the nine months ended October 31, 2023, 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 per share.

Outstanding- April 30, 2024 5,483,038 $ 6.30 4.25 years $ 233,125

Exercisable - April 30, 2024 5,483,038 $ 6.30 4.25 years $ 233,125

The following

table summarizes additional information relating to the warrants outstanding as of April 30, 2024:

Range of Exercise

Prices Number

Outstanding Weighted

Life(Years) Weighted

Exercise Price

Outstanding Number

Exercisable Weighted

Exercise Price

Exercisable Intrinsic Value

$ 4.00 30,000 4.10 $ 4.00 30,000 $ 4.00 $ -

$ 6.43 5,282,205 2.68 $ 6.43 5,282,205 $ 6.43 $ -

$ 1.93 145,833 2.74 $ 1.93 145,833 $ 1.93 $ 233,125

$ 7.50 25,000 3.77 $ 7.50 25,000 $ 7.50 $ -

5,483,038 5,483,038 $ 233,125

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 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.

On March 20, 2024, our Board of Directors

adopted an amendment to the Company’s Employee Stock Option 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.

As of April 30, 2024, 135,165 shares remain available

for issuance of options under the Plan.

During the three months ended April

30, 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 of issuance.

The fair value of the options issued for services amounted to $ 499,856 and was recorded during the nine months ended October 31, 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 $ 422,955 and was recorded during the three months ended April 30, 2024.

The Company used the Black-Scholes

valuation model to record the fair value.

The valuation model used a dividend rate of 0 %;

term of 1.5 years;

volatility rates of 121.52 - 143.54 %;

expected term of 1.5 years;

volatility rate

and a risk-free rate of 4.87 %.

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.

During the year ended January 31, 2024,

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.

The valuation model used a dividend rate of 0 %;

term of 1.5 years;

volatility rate of 152.10 - 174.45 %;

and a risk-free rate of 3 %.

Outstanding, January 31, 2022

expected term of 1.5 years;

volatility rates of 121.52 - 143.54 %;

risk-free rate of 3.00 - 4.5 %.

Shares Exercise

Price Remaining

Life Intrinsic

Outstanding, January 31, 2023 470,335 $ 4.13 2.53 years

Granted 404,500 2.18 2.68 years -

Expired/Cancelled -

Outstanding, January 31, 2023

Outstanding, January 31, 2024 874,835 3.23 2.31 years

Granted 390,000 2.49 2.80 years $ 378,300

Expired/Cancelled -

Outstanding - October 31, 2023

Exercisable - October 31, 2023

following table summarizes additional information relating to the options outstanding as of October 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

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.

Nine Months Ended

Outstanding- April 30, 2024 1,264,835 $ 2.63 2.31 years $ 910,285

Exercisable - April 30, 2024 1,264,835 $ 2.63 2.31 years $ 910,285

The following table summarizes additional

information relating to the options outstanding as of April 30, 2024:

Range of Exercise

Prices Number

Outstanding Weighted

Life(Years) Weighted

Exercise Price

Outstanding Number

Exercisable Weighted

Exercise Price

Exercisable Intrinsic

$ 1.93 214,500 2.74 $ 1.93 214,500 $ 1.93 $ 328,185

$ 2.12 140,000 2.74 $ 2.12 140,000 $ 2.12 $ 187,600

$ 2.37 195,000 2.37 $ 2.37 195,000 $ 2.37 $ 212,550

$ 2.61 195,000 2.61 $ 2.61 195,000 $ 2.61 $ 165,750

$ 2.65 20,000 2.63 $ 2.65 20,000 $ 2.65 $ 16,200

$ 3.59 35,000 3.67 $ 3.59 35,000 $ 3.59 $ -

$ 3.75 57,500 1.85 $ 3.75 57,500 $ 3.75 $ -

$ 3.98 30,000 2.01 $ 3.98 30,000 $ 3.98 $ -

$ 4.09 78,750 1.50 $ 4.09 78,750 $ 4.09 $ -

$ 4.12 50,000 1.85 $ 4.12 50,000 $ 4.12 $ -

$ 4.16 144,083 0.97 $ 4.16 144,083 $ 4.16 $ -

$ 4.50 58,334 1.50 $ 4.50 58,334 $ 4.50 $ -

$ 4.58 46,668 0.97 $ 4.58 46,668 $ 4.58 $ -

SEGMENT REPORTING

We organize and manage our business

by 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 officer decision maker, who is our chief executive officer, in

making resource allocation decisions for our segments.

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

of gross profit.

Three Months Ended

11 unchanged sentences

4P Therapeutics

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

and elsewhere.

Nine Months Ended

The following table presents information

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

Three Months Ended

6 unchanged sentences

4P Therapeutics

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 directors.

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.

Sheridan and Mr.

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 .

Company entered into a three-year employment agreement with Gerald Goodman, our CFO, effective February 1, 2022.

COMMITMENTS AND CONTIGENCIES

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 directors and officers of the Company for the respective terms thereof.

The agreement provides

2 unchanged sentences

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.

For their services to the Company during the term of the agreement, Mr.

Sheridan and Mr.

Melnik will receive

an annual salary of $ 250,000 per annum, commencing on the effective date of the agreement.

Sheridan and Mr.

Melnik will also receive

a performance bonus of 3.5 % of net income before income taxes.

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

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 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:

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.

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, 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 adapting Kindeva’s commercial transdermal manufacturing process to incorporate AVERSA technology

in the fentanyl transdermal system.

The agreement will remain in force until

the earlier of:

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

or (2) two (2)

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

estimated cost to complete the feasibility Workplan is approximately $ 2.1 million and the time to complete will be between eight to fifteen

Nutriband made an advance deposit 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 will be completed in the time estimated in the agreement.

As of October 31, 2023,

the Company has incurred expenses of $ 1,849,371 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.

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

which time the agreement will expire.

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 April 30, 2024, Nutriband has incurred expenses of $ 2,950,998 and the deposit of $ 250,000 has been applied to the final

On January 15, 2024, the Nutriband signed

a commercial development and clinical supply agreement for their lead product with Kindeva.

Kindeva will perform commercial manufacturing

process development and manufacturing clinical supplies for the human abuse liability clinical study required by the FDA in support of

a New Drug Application.

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

Lease Agreement

On February 1, 2022, Pocono Pharmaceuticals

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

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

The lease can

be extended for an additional three years at the same monthly rental.

The Company recorded a Right of Use asset in the amount of $ 94,134

in connection with the valuation.

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.

In October 2023, the contract was mutually terminated, and no options were issued.

the nine months ended October 31, 2023, the Company paid MDM Worldwide $ 210,000 .

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 nine months ended October 31, 2023, the Company paid the Money Channel $ 100,000 .

Therapeutics, Inc.

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 bad debt expense of $ 11,836 during the nine months

ended October 31, 2023.

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 October 31, 2023.

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”), witch 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.

respect to 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.

September 21, 2023, we were served with a complaint (the “Complaint”) filed in the Supreme Court of the State of New York,

County of New York, Commercial Division (the “Court”) under Index Number 654633/2023, by Joseph Gunnar, LLC, an investment

broker-dealer located in New York City (“Gunnar”), and Lucosky Brookman LLP, the attorneys for Gunnar during the relevant

period (collectively the “Plaintiffs”), suing the Company, Gareth Sheridan (our CEO and a director), Serguei Melnik, (our President

and a director),Vitalie Botgros (a stockholder of the Company), TII Jet Services LDA (an aircraft leasing firm, “Jet Services”)

and Wolf Blitz, Inc.

(a consulting company, “Wolf Blitz”), collectively the “Defendants”.

Complaint alleges, in multiple counts, damages resulting from the Company’s termination in or about July 2023 of an April 6, 2023

engagement letter between Gunnar and the Company, (the “Engagement Letter”), that contemplated a public offering of our common

stock to be underwritten and sold by Gunnar as the sole underwriter.

Subsequently, the Company, due to market conditions and prior to

executing an underwriting agreement or similar commitment as to the terms of the offering with Gunnar, declined to proceed with the offering

and accordingly terminated the Engagement Agreement in July 2023.

Complaint alleges claims for damages against:

(1) the Company, Gareth Sheridan and Serguei Melnik (the “Company Defendants”)

for breach of contract due to the Company’s failure to proceed with the offering;

(2) the Company Defendants for fraudulently inducing

Gunnar to enter into the Engagement Letter;

(3) the Company Defendants for fraudulent statements made in connection with the contemplated

(4) the Company Defendants for fraudulent concealment of pursuit of alternative financing during the engagement period under

the Engagement Letter;

(5) Jet Services, Vitalie Botgros and Wolf Blitz for tortious interference resulting from discussions concerning

alternative financing during the engagement period;

(6) Jet Services, Vitalie Botgros, and Wolf Blitz for tortious interference with

a prospective business opportunity;

(7) the Company Defendants for negligent misrepresentation;

and (8) against the Defendants other

than Jet Services for promissory estoppel as to promises purportedly made to complete the offering.

Gunnar seeks an award of actual and compensatory damages in an amount exceeding $ 500,000 , as well as exemplary and punitive damages,

while Lucosky Brookman LLP seeks attorneys’ fees, costs and expenses pursuant to indemnification obligations under the Engagement

Additionally,

the Company believes the Engagement Letter is unenforceable and, even if enforceable, was properly terminated by the Company under the

terms of the Engagement Letter and the market conditions under which the Engagement Letter was terminated.

or about November 2, 2023, legal counsel for the Company filed an Answer, Affirmative Defenses and Counterclaims with the Court in response

to the Complaint.

The Company vigorously denied the claims asserted against it and asserted the following counterclaims with their Answer:

Intentional interference with prospective economic advantage, consumer fraud, breach of fiduciary duty, breach of contract (damages in

the amount of $ 1,000,000 were requested on each of the preceding counterclaims) and a declaratory judgment affirming that Gunnar’s

actions constituted gross negligence or willful misconduct, and the Company’s termination of the Engagement Letter on such grounds

was proper pursuant to its terms.

have denied the allegations surrounding the Company’s counterclaims and asserted their own affirmative defenses against the counterclaims

and argue that they have the right to be reimbursed for attorneys’ fees, costs and expenses incurred in responding to the counterclaims.

The outcome of the legal

proceedings 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.

The Company has asserted counterclaims exceeding

the claims of the Plaintiffs.

Management, in consultation

with legal counsel, has determined that it is “reasonably possible” that some of the claims may ultimately result in a loss

to the Company.

However, at this time, Management believes that any amount of any possible loss (damages), if any, will not have a material

effect on the Company’s consolidated statement of financial position or statement of operations.

As of October 31, 2023, the Company

has not accrued any amount for possible loss.

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 adjustment 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.

Sorrento Therapeutics, Inc.

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.

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 April 30, 2024.

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) The Company agreed on May 14, 2024, to convert $ 300,000 , which as of that

date of all the outstanding principal on the Credit line Promissory Note of the Company held by TII Jet Services LDA, a related party,

(the “Holder”).

The conversion was made pursuant to the terms of a Conversion Agreement dated May 14, 2024, which provided

that the conversion of $ 300,000 of principal and $ 4,922 of accrued interest would be made at a price of $ 4.00 per share, resulting in

the Company issuing on May 14, 2024, a total of 76,230 shares of common stock at the conversion price of $ 4.00 per share.

On May 22, 2024,

the Conversion Agreement was amended allowing the lender to purchase an additional 152,460 shares of common stock at a rate of two warrants

per converted share, with an exercise price of $ 6.43 per share and a term of five years from the conversion date (May 14, 2024).

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