What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-04-28 compared with 2024-05-01 · 155 added, 227 removed, 225 unchanged (63% of the section changed)

8 unchanged sentences

AVERSA™ Abuse Deterrent Transdermal Products

Our primary business is the development of a

portfolio of transdermal pharmaceutical products.

Our lead product under development is AVERSA Fentanyl, our abuse deterrent fentanyl

transdermal system which will require approval from the Food and Drug Administration (“FDA”) and substantial capital for

research and development.

AVERSA Fentanyl has the potential to provide clinicians and patients with an extended-release transdermal fentanyl

product for use in managing chronic pain requiring around the clock opioid therapy combined with properties designed to deter the abuse

and misuse of fentanyl patches.

In addition, we believe that our abuse deterrent technology can be broadly applied to various other transdermal

products and our strategy is to follow the development of our abuse deterrent fentanyl transdermal system with the development of abuse

deterrent transdermal products for pharmaceuticals that have a risk of abuse, misuse or accidental exposure.

Our primary business is the development of a portfolio

of transdermal pharmaceutical products.

Our lead product under development is AVERSA Fentanyl, our abuse deterrent fentanyl transdermal

system which will require approval from the Food and Drug Administration (“FDA”) and substantial capital for research and

AVERSA Fentanyl has the potential to provide clinicians and patients with an extended-release transdermal fentanyl product

for use in managing chronic pain requiring around the clock opioid therapy combined with properties designed to deter the abuse and misuse

of fentanyl patches.

In addition, we believe that our abuse deterrent technology can be broadly applied to various other transdermal products

and our strategy is to follow the development of our abuse deterrent fentanyl transdermal system with the development of abuse deterrent

transdermal products for pharmaceuticals that have a risk of abuse, misuse or accidental exposure.

On September 19, 2023, the United States Patent

3 unchanged sentences

The issuance of this patent, entitled, “Abuse

and Misuse Deterrent Transdermal Systems," further expands Nutriband's intellectual property protection in the United States for

its portfolio of AVERSA abuse deterrent transdermal products.

and Misuse Deterrent Transdermal Systems,” further expands Nutriband’s intellectual property protection in the United States

for its portfolio of AVERSA abuse deterrent transdermal products.

Transdermal Pharmaceutical Products

19 unchanged sentences

can terminate at any time.

With the change in our focus, our capital requirements increased

substantially.

The process of developing pharmaceutical products and submitting them for FDA approval is both time consuming and expensive,

with no assurance of obtaining approval from the FDA to market our product in the United States.

We will require approximately $13 million

for research and development of our abuse deterrent fentanyl transdermal system, including clinical manufacturing and clinical trials

that need to be completed in order to obtain FDA approval.

With the change in our focus, our capital requirements

increased substantially.

The process of developing pharmaceutical products and submitting them for FDA approval is both time consuming

and expensive, with no assurance of obtaining approval from the FDA to market our product in the United States.

We will require approximately

$13 million for research and development of our abuse deterrent fentanyl transdermal system, including clinical manufacturing and clinical

trials that need to be completed in order to obtain FDA approval.

However, the total cost could be substantially in excess of that amount.

On August 31, 2020, the Company entered into a

Purchase Agreement (“Agreement”), with Pocono Coated Products (“PCP”), pursuant to which PCP agreed to sell the

Company all of the assets associated with its Transdermal, Topical, Cosmetic and Nutraceutical business (the “Assets”).

was the manufacturer of our transdermal consumer products, and we bought that business from them.

The purchase price for the Assets was

(i) $6,000,000 paid in shares of the Company’s common stock at a value of the average price of the previous 90 days at the date

of Closing (the “Shares”);

(ii) a promissory note of the Company in the principal amount of $1,500,000, which is due upon

the earlier of (a) twelve (12) months from issuance, or (b) immediately following a capital raise of no less than $4,000,000 and/or a

public offering of no less than $4,000,000.

The note was repaid in full in October 2021.

Subsequent to the repayment of the note, the

Shares were released from escrow.

On October 5, 2021, the Company, having been

approved for the listing of its common stock on The Nasdaq Capital Market effective October 1, 2021, consummated a public offering

(the “IPO”) of units (the “Units”), of common stock and warrants that were offered in the IPO on The Nasdaq

Capital Market, which included 1,231,200 (each a “Unit”), each Unit consisting of one share of common stock, par value

$0.001 per share, and one warrant (each a “Warrant”) at a price of $5.36 per Unit.

Each Warrant is immediately

exercisable, will entitle the holder to purchase one share of common stock at an exercise price of $6.43 and will expire five (5)

years from the date of issuance.

The underwriters’ over-allotment option was exercised for 184,800 warrants to purchase shares

of common stock bringing to total net proceeds to the Company from the IPO to $5,836,230.

The shares of common stock and Warrants

are separately transferred immediately upon issuance.

As of January 31, 2023, 457,795 warrants issued in the IPO have been

exercised, with net proceeds to the Company of $ 2,942,970.

On November 1, 2021, The Board

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

The Company has reserved 408,333 shares to issue and

sell upon the exercise of stock options issued under the Plan.

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,

and on October 12, 2022, a Post-Effective Amendment to the Form S-8 was filed with the SEC.

Forward Split of our

Common Stock.

On 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.

We 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 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 of common stock for each six (6) shares held as of the

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 authorized 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.

On December 15, 2023, the Company filed the Proxy

Statement with the SEC for its Annual Meeting of Stockholders, to be held January 21, 2024, in Orlando, Florida.

This Proxy Statement

is available on our website at HTTPS://Nutriband.com/proxy .

On March 20, 2024, our Board of Directors adopted an amendment to the

Company’s 2021 Employees 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 1,400,00 shares (the “Amendment”).

The plan adopted by the Board on November

1, 2021, provided for an initial 350,000 shares to issue and sell upon the exercise of stock options issued under the Plan.

provides for an automatic annual increase to be added on February 1 of each year equal to the lesser of (i) 250,000 shares of

Common Equity or (ii) five percent (5%) of the total shares of Common Stock outstanding on such date (including for this purpose

any shares of Common Stock issuable upon conversion of any outstanding capital equity of the Company) or (iii) such lesser number

as determined by the Board.

We will submit the Amendment to the Plan to our stockholders for adoption and approval at the 2025 Annual

If the Amendment is not approved by stockholders within one year of adoption by 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.

On April 19, 2024, the Company completed

an $8,400,000 equity financing with European investors (the “Offering”) of 2,100,000 units (“Units”), at a price

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

stock, the Warrants having an initial exercise price of $6.43, are exercisable by payment of the exercise price in cash only and expire

April 19, 2029, five years from the date of issuance (“Warrants”).

The Offering was made solely to investors resident outside

the United States and was not registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities

laws of any jurisdiction, including any jurisdiction 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.

On March 20, 2024, our Board of Directors adopted

an amendment to the Company’s 2021 Employees Stock Option Plan (the “Plan”) increasing the number of shares of

common stock subject to the Plan (as of March 20, 2024) to 1,400,00 shares (the “Amendment”).

The Plan adopted by the Board

on November 1, 2021, provided for an initial 350,000 shares to issue and sell upon the exercise of stock options issued under the

We submitted the Amendment to the Plan to our stockholders for adoption and approval at the 2025 Annual Meeting, increasing the

authorized number of shares of common stock available for issuance of options to 1,400,000 shares, which Amendment was approved by our

stockholders at the meeting.

On April 19, 2024, the Company completed an $8,400,000

equity financing with European investors (the “Offering”) of 2,100,000 units (“Units”), at a price of $4.00 per

Unit, each Unit consisting of one share of common stock (“Shares”) and a Warrant to purchase two Shares of common stock, the

Warrants having an initial exercise price of $6.43, are exercisable by payment of the exercise price in cash only and expire April 19,

2029, five years from the date of issuance (“Warrants”).

The Offering was made solely to investors resident outside the United

States and was not registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws

of any jurisdiction, including any jurisdiction 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.

Years Ended January 31, 2025 and 2024

For the year ended January 31, 2024, we generated

revenue of $2,085,314 and our costs of revenue were $1,223,209.

For the year ended January 31, 2023, we generated revenue of $2,079,609

and our costs of revenue were $1,329,200.

Our revenue for the year ended January 31, 2024, included sales of $1,920,280 from contract

manufacturing services performed in our Pocono Pharmaceuticals (Active Intelligence) segment and $165,034 from contract research and

For the year ending January 31, 2025, we generated

revenue of $2,139,537 and our costs of revenue were $1,396,220 resulting in a gross margin of $743,317.

For the year ending January 31,

2024, we generated revenue of $2,085,314 and our costs of revenue were $1,223,209 resulting in a gross margin of $862,105.

for the year ended January 31, 2025, was derived from sales from our Pocono Pharmaceuticals segment and $-0- from contract research and

development services from our 4P Therapeutics segment.

The revenue from the Transdermal Patches segment remained relatively constant

The revenue from the Pocono Pharmaceuticals segment remained relatively constant

from the prior year.

An increase in demand is expected in the subsequent year.

Our cost of revenue for our contract research and

development services represents our labor cost plus a modest amount of material costs which we passed on to the client.

Our cost of sales

during the year for our contract services in comparison to the prior year as our main contract has been completed and the balance of

the contract is being recognized with limited additional costs.

For the year ended January 31, 2024, our selling,

general and administrative expenses were $3,773,606, primarily legal, accounting, administrative salaries non-cash compensation from the

issuance of warrants and employee stock options, compared to $3,916,041 for the year ended January 31, 2023.

The decrease from 2023 is

primarily due to a decrease in salaries and wages to executives of the Company.

During the years ended January 31, 2024 and 2023,

the Company recorded an impairment expense of $-0- and $327,326, respectively, due to a write down of Goodwill in connection with its

Pocono acquisition.

The write down of goodwill for the year ended January 31, 2023, was attributable primarily to the effects of the pandemic.

As of January 31, 2024, the valuation of the reporting unit exceeds the carrying amount of goodwill using the value in use or the going

concern premise.

During the year ended January 31, 2024, the Company

There were no sales in our 4P Therapeutics segment in the

current year due to a shift in focus and the main contract wound down in the prior year.

The decline in gross margin is due primarily to lower margins on tape sales.

For the year ending January 31, 2025, our selling,

general and administrative expenses were $4,313,810, primarily salaries and wages, public relations, legal, accounting, and non-cash compensation

from the issuance of warrants and employee stock options, compared to $3,773,606 for the year ending January 31, 2024.

The increase from

2024 is primarily due to an increase in non-cash compensation and public relations.

During the year ending January 31, 2025, the Company

incurred research and development expenses for its Aversa Fentanyl product of $3,119,134, primarily due to labor and material costs incurred

at our contract manufacturer, Kindeva Drug Delivery, as compared to $982,227 for the year ended January 31, 2023.

During the year ended January 31, 2024, the Company

incurred a loss on extinguishment of debt of $554,423, consisting primarily of the loss on the conversion of $2,000,000 of credit line

note into 1,026,750 shares of the Company’s common stock.

There was no gain or loss on extinguishment of debt during the year ended

January 31, 2023.

at our contract manufacturer, Kindeva Drug Delivery, as compared to $1,960,425 for the year ending January 31, 2024.

During the year ending January 31, 2025, the Company

recorded an impairment charge of $3,595,216 reducing the value of its Goodwill and intangible assets.

The impairment charge reflected

an updated valuation primarily of the Company’s Goodwill.

During the year ending January 31, 2025, the Company

incurred a loss on extinguishment of debt of $368,036 in connection with issuance of common stock and warrants to a related party debtor.

During the year ending January 31, 2024, the Company incurred a loss on extinguishment of debt of $554,423, consisting primarily of the

loss on the conversion of $2,000,000 of credit line note into 1,026,750 shares of the Company’s common stock.

We incurred interest expense of $21,407 for the

year ended January 31, 2024, as compared to $6,289 for the year ended January 31, 2023.

The increase is primarily due to interest on the

Company’s related party credit line note.

year ending January 31, 2025, as compared to $75,815 for the year ended January 31, 2024.

The decrease is primarily due to the decrease

in the Company’s related party credit line note.

Interest income for the year ending January 31,

2025, was $191,669 as compared to $16,850 for the year ending January 31, 2024.

The increase is primarily due to the investment of excess

cash from the Company’s equity financing.

As a result of the foregoing, we sustained a net

5 unchanged sentences

$22,770 as of January 31, 2024.

During the year ended January 31, 2024, the Company on March 19, 2023, entered a three-year Credit Line Note facility

for $2 million, to fund its research and development of its Aversa Fentayl product and an amendment thereto on July 13, 2023, increasing

the amount under the credit line to $5 million.

During 2024, the Company drew down a total of $2,000,000 under the credit line.

2023, the $2,000,000 was converted into shares of the Company’s common stock.

On April 19, 2024, the Company completed an

$8,400,000 equity financing with European investors (the “Offering”) of 2,100,000 units (“Units”), at a price

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

For the year ended January 31, 2024, we used cash

of $3,527,509 in our operations.

The principal adjustments to our net loss of $5,485,314 were depreciation and amortization of $287,722,

net loss on extinguishment of debt of $554,423 and stock-based compensation of $742,696.

For the year ended January 31, 2024, we used cash

in investing activities of $51,761 primarily for the purchase of equipment.

For the year ended January 31, 2024, we provided

cash in financing activities of $2,086,772, primarily from the proceeds of $2,000,000 from the proceeds of $2,000,000 from its line of

credit and $106,528 from a factoring arrangement, offset from the payment on notes of $19,756.

For the year ended January 31, 2023, we

had cash flows of $160,074 from financing activities, primarily of $296,875 from the exercise of warrants, offset by a payment on notes

and the repurchase of treasury stock.

On April 19, 2024, the Company completed an $8,400,000 equity financing with European investors

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

of common stock (“Shares”) and a Warrant to purchase two Shares of common stock.

For the year ending January 31, 2025, we used

cash of $4,626,564 in our operations.

The principal adjustments to our net loss of $10,284,483 were an impairment charge of $3,595,216,

depreciation and amortization of $285,054, net loss on extinguishment of debt of $368,036 and stock-based compensation of $1,542,285.

For the year ending January 31, 2025, we used

cash in investing activities of $92,043 primarily for the purchase of equipment.

For the year ending January 31, 2025, we provided

cash in financing activities of $8,537,384, primarily from the proceeds of $8,400,000 from the sale of common stock and warrants and $300,000

from its line of credit.

Off Balance Sheet Arrangements

15 unchanged sentences

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

As of January 31, 2024,

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

For the year ended January 31, 2024, the Company

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

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 has also

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

The Company has used these proceeds to fund operations and will

continue to use the funds as needed.

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

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

research and development of its Aversa product.

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

stock during the year ended January 31, 2024.

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

common stock.

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

As of January 31, 2025, the Company had cash and cash equivalents of

$4,311,719 and working capital of $3,811,420.

For the year ended January 31, 2025, the Company incurred a net loss from operations of

$10,284,843 and used cash flow from operations of $4,626,564.

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

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

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.

On April 19, 2024, the Company received proceeds

of $8,400,000 from equity financing with European investors.

Management has prepared

7 unchanged sentences

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

All material intercompany balances and transactions

have been eliminated.

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 Pharmaceuticals (Active Intelligence) are included in the Company’s financial statements

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

of August 1, 2018, and the acquired operations of Pocono Coated Products 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:

Nutriband Ltd.

4P Therapeutics LLC

Pocono Pharmaceuticals

Therapeutics LLC

Pharmaceuticals Inc.

Use of Estimates

23 unchanged sentences

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

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

products with revenues listed under sale of goods

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

products with sales listed under sale of goods

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

customers with revenues listed under services

● Contract development and manufacturing services

for consumer health transdermal, topical and tape products with revenues listed under sale of goods.

● Product revenues derived from the sale of the

Company’s consumer transdermal, topical and tape products with sales listed under sale of goods.

● Contract 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.

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.

Contract Liabilities

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.

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.

The contract transaction

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

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.

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 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.

All revenue recognized

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

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.

Cash and cash equivalents.

Cash equivalents are

short-term, highly liquid investments that have a maturity of three months or less.

Cash and cash equivalents include cash on

hand, snd cash on deposit in money market accounts.

The Company considers short-term highly liquid investments with an original maturity

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

As of January 31, 2025, the Company had $3,804,000

that exceeded federally insured cash balance limits.

Accounts receivable

12 unchanged sentences

As of January 31, 2025, the receivable has been reserved in full.

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

is obligated to pay any difference to the factor.

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

obligated to pay any difference to the factor.

The loan bears interest at 10%.

9 unchanged sentences

raw materials of $149,177.

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

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 $152,432.

Property, Plant

14 unchanged sentences

Furniture and fixtures

and equipment

Machinery and equipment

Intangible Assets

3 unchanged sentences

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

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

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

property and other intangibles.

3 unchanged sentences

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 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

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 January 31, 2024, and 2023, Goodwill

amounted to $5,021,713 and $5,021,713, respectively.

During the year ending January 31, 2025, the Company recorded an impairment

charge of $293,038 to its Intellectual property.

Goodwill 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 ending

January 31, 2025 and 2024, the Company recorded an impairment charge of $3,302,478 and $-0-, respectively, reducing the Active Intelligence

LLC Goodwill to $-0-.

As of January 31, 2025, and 2024, Goodwill amounted to $1,719,535 and $5,021,713, respectively.

Long-lived Assets

34 unchanged sentences

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

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

5 unchanged sentences

recognition guidance.

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

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

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

14 unchanged sentences

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

In making such determination,

In making such a 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

In the event the Company was determined

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

5 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis