What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-04-28 compared with 2024-05-01 · 457 added, 482 removed, 593 unchanged (61% of the section changed)

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Notes to Consolidated Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

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

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Nutriband

Opinion on the Financial Statements

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balance sheets of Nutriband Inc.

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

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

referred to as the “financial statements”).

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

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

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

in the United States of America.

and subsidiaries (“the Company”) as of January 31, 2025 and 2024, the related consolidated

statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended January 31, 2025

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

In our opinion, the financial statements referred

to above present fairly, in all material respects, the financial position of the Company as of January 31, 2025 and 2024, and the results

of its operations and its cash flows for each of the years in the two-year period ended January 31, 2025, in conformity with accounting

principles generally accepted in the United States of America.

Basis for Opinion

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

Long-Lived Asset Impairment Assessment

Goodwill Impairment Assessment

Critical Audit Matter Description

As described in note 2 to the consolidated

financial statements, the Company performs impairment testing for its long-lived assets when events or changes in circumstances indicate

that its carrying amount may not be recoverable and exceeds its fair value.

Due to challenging industry and economic conditions, the Company

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

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

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

respective carrying amounts.

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

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

We identified the evaluation of the

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

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

Performing audit procedures to evaluate the reasonableness

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

How the Critical Audit Matter was

Addressed in the Audit

Our audit procedures related to the

● Testing management’s process for developing

the undiscounted cash flow model.

● Evaluating the appropriateness of the undiscounted

cash flow models used by management.

● Testing the completeness and accuracy of underlying

data used in the undiscounted cash flow model.

● Evaluating the significant assumptions used by

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

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

(ii) the consistency with external

market and industry data;

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

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

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

As described in note 2 to the consolidated financial

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

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

Reporting units are tested

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

If the carrying amount of a reporting

unit exceeds its estimated fair value, an impairment loss is recorded based on the difference between the fair value and carrying amount,

not to exceed the associated carrying amount of goodwill.

The Company utilized a third-party valuation specialist to assist in the preparation

of the impairment assessment related to the Active Intelligence reporting unit which had a goodwill balance of approximately $3.3 million

prior to the impairment assessment.

The Company’s annual impairment test occurred on January 31, 2025 and resulted in full impairment

of this goodwill balance associated with the Active Intelligence reporting unit.

identified the evaluation of the impairment analysis for goodwill related to the Active Intelligence

reporting unit as a critical audit matter because of the

significant estimates and assumptions management or the third-party valuation specialist used

in the discounted cash flow analysis and the valuation of the reporting unit for determining

the fair value of the reporting unit.

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

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

In addition, the audit effort involved the use of professionals

with specialized skill and knowledge.

How the Critical Audit Matter Was Addressed

Our audit procedures related to the following:

management’s process for developing the fair value of the Active

Intelligence reporting

whether the valuation technique (discounted cash flow model)

applied was appropriate.

the appropriateness of the discounted cash flow model utilized by the Company.

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

the significant assumptions provided by management related to revenues, EBITDA, income taxes,

long term growth rate, and discount rate to discern whether they are reasonable considering

(i) the current and past performance of the entity; (ii) the consistency with external

market and industry data; and (iii) whether these assumptions were consistent with evidence

obtained in other areas of the audit.

● Professionals

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

of the discounted cash flow model.

/s/ Sadler, Gibb & Associates, LLC

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

CURRENT ASSETS:

Cash and cash equivalents

Accounts receivable

Accounts receivable-net

Prepaid expenses

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Note payable-net of current portion

Note payable-related party

Operating lease liability-net of current portion

Total Liabilities

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

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

11,107,210 and 8,869,870 shares issued at January 31,2025 and 2024, respectively,

11,074,810 and 8,859,870 shares outstanding as of January 31, 2025 and 2024, respectively

Additional paid-in-capital

Accumulated other comprehensive loss

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

Treasury stock, 32,400 and 10,000 shares at cost, as of January 31,

2025 and 2024, respectively

Accumulated deficit

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

See notes to consolidated financial statements

NUTRIBAND INC.

See accompanying notes to the consolidated financial

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS

For the Years Ended

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Research and development

Goodwill impairment

Goodwill and intangibles impairment

Selling, general and administrative

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Net loss per share of common stock-basic and diluted

Weighted average shares of common stock outstanding - basic and diluted

See notes to consolidated financial statements

NUTRIBAND INC.

Weighted average of common shares outstanding

- basic and diluted

See accompanying notes to the consolidated financial

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Comprehensive

STATEMENTS OF STOCKHOLDERS’ EQUITY

Year Ended January 31, 2025

Comprehensive

Balance, February 1, 2024

$ ( 27,980,019 )

Warrants issued for services

Proceeds from sale of common stock and warrants

Issuance of common stock and warrants for note payable

Treasury stock and warrants issued for services

Options issued for services

Issuance of common stock for note payable and interest

Net loss for the year ended January 31, 2024

Purchase of treasury stock

Exercise of warrants

( 10,482,617 )

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$ ( 38,462,636 )

$ ( 148,547 )

Ended January 31, 2024

Comprehensive

Year Ended January 31, 2023

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 and warrants issued for termination

Treasury stock repurchased

Warrants issued for services

Options issued for services

Net loss for the year ended January 31, 2023

Issuance of common stock for note payable and interest

( 5,485,314 )

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$ ( 27,980,019 )

See notes to consolidated financial statements

NUTRIBAND INC.

See accompanying notes to the consolidated financial statements

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS

OF CASH FLOWS

STATEMENTS OF CASH FLOWS

For the Years Ended

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Reserve for doubtful accounts

Treasury stock issued for services

Treasury stock and warrants issued for termination agreement

Goodwill impairment

Goodwill and intangibles impairment

Stock-based compensation-warrants

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Proceeds from secured borrowing liability

Proceeds from exercise of warrants

Proceeds from sale of common stock and exercise of warrants

Payment on note payable

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( 1,492,498 )

( 2,906,428 )

Cash and cash equivalents - Beginning of period

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Supplemental disclosure of non-cash investing and financing activities:

Adoption of ASC 842 Operating lease asset and liability

Promissory note on equipment purchase

Common stock returned in settlement

Cashless conversion of warrant

Debt settlement issued by the issuance of common stock and warrants

Issuance of common stock for extinguishment of debt

See notes to consolidated financial statements

See accompanying notes to the consolidated financial

NUTRIBAND INC.

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Notes to Consolidated Financial Statements

as of and for the Years Ended January 31, 2024

AND DESCRIPTION OF BUSINESS

as of and for the Years Ending January 31, 2025

ORGANIZATION AND DESCRIPTION OF BUSINESS

Nutriband Inc.

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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.

was a director of the Company from April 2018, when the Company entered into an agreement to acquire 4P Therapeutics until he 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.

is engaged in the development of transdermal pharmaceutical products.

With the acquisition of 4P Therapeutics, 4P Therapeutics’

drug development business became the Company’s principal business.

The primary focus of the business is to incorporate the Company’s

Aversa abuse deterrent technology into transdermal patches containing already approved drugs.

Although these drugs are already approved,

the Company needs to conduct a 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,

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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”).

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

The net assets were contributed to Pocono Pharmaceuticals.

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Pocono Pharmaceuticals

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

Pocono helps their customers with product design and development along with manufacturing to bring new products to market with minimal

capital investment.

Pocono Pharmaceutical’s competitive edge is a low-cost manufacturing base:

a result of its unique processes

and state-of-the-art material technology.

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

is a coated products contract development and manufacturing organization that supports their customers with product design, development

and manufacturing services.

Pocono Pharmaceuticals has specialized expertise and state-of-the-art manufacturing capabilities for topical,

transdermal and kinesiology tape products.

Active Intelligence manufactures activated kinesiology tape for customers in the sports and

physical markets.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

All share and

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

Concern Assessment

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be achieved, 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 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 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.

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

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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.

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:

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obligations are satisfied.

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

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

products with revenues listed under sale of goods

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

products with sales listed under sale of goods

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

customers with revenues listed under services

The following

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

● 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 device life sciences customers with revenues listed under services.

Contracts with Customers

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See the tables:

Years Ending January 31,

Revenue by type

Sale of goods

Years Ending January 31,

Revenue by geographic location:

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Cash and cash equivalents.

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

in money market accounts.

The Company considers short-term highly liquid investments with an original maturity date of three months or

less that are not part of an investment pool to be cash equivalents.

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

insured limits.

Cash and cash equivalents include

cash on hand and 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.

Trade accounts

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The Company determines its allowances by both

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

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

accounts related to accounts receivable.

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

agreement for one of its subsidiaries.

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

in bankruptcy.

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

borrowing liability under Notes payable.

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

the years ended January 31, 2025, and 2024, the Company recorded bad debt expenses of $ 1,200 and $ 11,836 , respectively, for doubtful accounts

related to accounts receivable.

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

for one of its subsidiaries.

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

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

under Notes payable.

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

If the bankruptcy claim is

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

If the bankruptcy claim is not paid in full by

the debtor, Company is obligated to pay any difference to the factor.

The loan bears interest at 10 %.

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

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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$ 16,609 and 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 of $ 218,334 .

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 .

Plant and Equipment

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Machinery and equipment

10 - 20 years

assets include trademarks, intellectual property and customer base acquired through business combinations.

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to patent technology.

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

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

to intellectual property and other intangibles.

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

During the year ending January 31, 2025, the Company

recorded an impairment charge of $ 293,038 to its Intellectual property.

Goodwill represents

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Company recorded Goodwill of $ 5,810,640 .

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

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-.

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recognition guidance.

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

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

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

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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

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

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Accounting Standards

In June 2016,

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

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

about credit risk.

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

The Company adopted ASU

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

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

sheet or statement of operations.

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

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Net Property and Equipment

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

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

During the years ended January 31, 2024, and 2023, depreciation expenses of

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

The Company adopted the provisions of

ASC 740, “Income Taxes, (“ASC 740”).

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

in the net liability for unrecognized income tax benefits.

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

tax returns are correct as filed.

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

the liability for uncertain tax positions on its balance sheet.

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

also set up a liability for interest and penalties.

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

tax positions as a component of the current

provision for income taxes.

Depreciation expenses amounted to $ 171,903

and $ 174,572 for the years ending January 31, 2025, and 2024, respectively.

During the years ending January 31, 2025, and 2024, depreciation

expenses of $ 127,888 and $ 131,360 , respectively, have been allocated to the cost of goods sold.

NOTES PAYABLE

Notes Payable

Active Intelligence,

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

interest of 5 % per year.

The amount assumed was $ 139,184 .

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

the year ending January 31, 2025, the Company made $ 16,117 of principal payments.

As of January 31, 2025, the amount due was $ 69,132 ,

of which $ 16,953 is current.

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.

The contract price was $ 32,274 , of which

$ 22,795 was financed.

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

secured by automobile.

As of January 31, 2025, the amount due was $ 10,689 of which $ 4,663 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 to the Company entered

on March 17, 2023.

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

The promissory note is due and payable in full

on March 19, 2026.

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

The Company received advances

of $ 300,000 during the nine months ending October 31, 2024.

On May 15, 2024, the Company agreed to convert the $ 300,000 debt.

The conversion

was made pursuant to the terms of a Conversion Agreement, which provided the conversion of $ 300,000 of principal and $ 4,922 of accrued

The Company issued 76,230 shares of common stock and 152,460 warrants exercisable at $ 6.43 per share, resulting in a $ 368,036

loss on extinguishment.

As of January 31, 2025, the balance due was $ -0- .

The Company recorded interest expense of $ 4,163 and $ 60,453

for the years ending January 31, 2025, and 2024, respectively.

borrowing liability.

2023, the Company entered into an accounts receivable sale agreement for one of its subsidiaries in connection with a bankruptcy claim.

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

The sale of the account

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

back the unpaid portion.

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 years ending January 31, 2025, and 2024, the Company recorded an interest expense

of $ 10,482 and $ 5,470 , respectively.

Interest expenses

for the years ending January 31, 2025, and 2024, were $ 21,407 and $ 75,815 , respectively.

The Company adopted the provisions of ASC 740, “Income

Taxes, (“ASC 740”).

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

for unrecognized income tax benefits.

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

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

uncertain tax positions on its balance sheet.

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

for interest and penalties.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a

component of the current provision for income taxes.

There is no U.S.

tax provision due to losses from U.S.

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

operations for the years ending January 31, 2025 and 2024.

Deferred income taxes are provided for the temporary differences between

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The provision for income taxes consists of the following:

Years Ending January 31,

A reconciliation of taxes on income computed at the federal

statutory rate to amounts provided is as follows:

Years Ending January 31,

Book Income (loss from operations)

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Income tax expense

As of January 31, 2024, the

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

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

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

As of January 31, 2025, the Company recorded a deferred tax asset associated

with a net operating loss (“NOL”) carryforward of approximately $ 21,000,000 that was fully offset by a valuation allowance

due to the determination that it was more likely than not that the Company would be unable to utilize those benefits in the foreseeable

The Company’s NOL expires in 2041.

The tax effect

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

On December 22, 2017, the

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

corporate income tax law by, among other things,

reducing the corporate rate from 34 % to 21 %.

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

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

The tax effect of the valuation allowance increased by approximately $ 2,200,000 during

the year ending January 31, 2025.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) significantly revised U.S.

corporate income tax law by, among other things, reducing the corporate rate from 34 % to 21 %.

Because the Company recognizes a valuation

allowance for the entire balance, there is no net impact on the Company’s balance sheet or results of operations.

The types of temporary differences between tax basis of

12 unchanged sentences

Net deferred taxes

NOTES PAYABLE

Notes Payable

Active Intelligence,

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

interest of 5 % per year.

The amount assumed was $ 139,184 .

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

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

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

which $ 16,129 is current.

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

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

The contract price was $ 32,274 ,

of which $ 22,795 was financed.

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

As of January 31,

2023, the amount due was $ 19,610 .

Note payable-related

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

LDA, a shareholder of the Company (replacing the $ 2,000,000 facility with the same lender that the Company entered on March 17, 2023).

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

The promissory note is due and payable in full on March 19, 2026.

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

During the year ended January 31, 2024, the Company

received $ 2,000,000 on the Note.

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

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

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

on extinguishment.

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

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

January 31, 2024.

borrowing liability.

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

The Company received

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

The sale of the account receivable balance

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

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

The loan bears interest at 10 %.

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

Interest expenses

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

INTANGIBLE ASSETS

5 unchanged sentences

Net Intangible Assets

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

for $ 50,000 .

The value of the intangible assets,

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

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

The Company terminated the license agreement in October 2022.

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

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

The Company recorded a termination expense of $ 174,025

during the year ended January 31, 2023.

Which is included in selling, general and administrative expenses.

The Company expensed the

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

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

expenses for the years ending January 31, 2025, and 2024 amounted to $ 113,150 and $ 113,150 , respectively.

During the year ending January

31, 2025, the Company recorded an impairment charge of $ 298,038 to its Intellectual property.

Year Ended January 31,

2 unchanged sentences

Activity during the year ended January 31, 2025

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

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

The options vest immediately and expire in three years .

The fair value

of the options issued for services amounted to $ 75,030 and was expensed during the year ended January 31, 2024.

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

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

a) During the year ended January 31, 2025, options to purchase 689,584 shares of common stock were issued

to executives and employees of the Company at a price of $ 2.37 and $ 8.08 per share.

The options vest immediately and expire in three years .

The fair value

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

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

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

The warrant expires in three years .

The fair value of the warrants issued

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

d) On July 17, 2023, the Company entered an amended Credit Line Note facility with TII Jet Services LDA,

a shareholder of the Company, for a credit facility of $ 5 million (replacing the $ 2,000,000 facility with the same lender that the Company

entered on March 17, 2023).

The fair value of the options issued amounted to $ 1,408,935 and were expensed during the year ending January 31, 2025.

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

included two related parties.

The two related parties invested a total of $ 6,420,000 and received 1,605,000 shares of common stock and

warrants to purchase 3,210,000 shares of common stock @ $ 6.43 per share.

See Note 8 for further information.

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

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

In December 2023, TII Jet Services LDA converted

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

c) During the year ending January 31, 2025, the Company received $ 300,000 from the credit line facility with

TII Jet Services LDA.

On May 15, 2024, the Company converted the debt and accrued interest into 76,230 shares of common stock and issued

152,460 warrants to the lender.

See Note 4 for further information.

d) On June 5, 2024, the Company’s Chief Financial Officer exercised 87,500 warrants as a cashless conversion

and was issued 60,085 shares of common stock.

Activity during the year

ended January 31, 2024

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

the Board of Directors.

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

The Company recorded a compensation

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

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

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

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 .

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

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

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

The options vest immediately and expire in five years .

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

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

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

The fair value

of the options issued for services amounted to $ 75,030 and was expensed during the year ending January 31, 2024.

b) On July 17, 2023, the Company entered into an amended Credit Line Note facility with TII Jet Services,

LDA, a shareholder of the Company, for a credit facility of $ 5,000,000 replacing the $ 2,000,000 facility with the same lender that the

Company entered into on March 17, 2023.

See Note 4 for further information.

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

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

In December 2023, TII Jet

Services LDA converted the balance of credit facility of $ 2,000,000 and $ 53,436 of accrued interest into 1,036,520 shares of the Company’s

common stock.

c) In September and October 2023, options to purchase 374,500 shares of common stock were issued 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 .

value of the options issued amounted to $ 245,170 and was expensed during the year ended January 31, 2023.

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

d) On October 31, 2023, warrants to purchase 87,500 shares of the Company’s common stock were issued

to the Company’s 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 were expensed during the year ending January 31, 2024.

STOCKHOLDERS’ EQUITY

19 unchanged sentences

stock of the Company was increased from 250,000,000 shares to 291,666,666 shares in connection with the forward split.

Activity during the Year Ended January

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

There was no activity during

the year ended January 31, 2024.

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

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

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

in a $ 554,423 loss on extinguishment.

Activity during the Year Ended January

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

the purchase as Treasury Stock.

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

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

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

As of January 31, 2023, the Company

held 10,000 of its shares comprising $ 32,641 of treasury stock.

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

Activity during the Year Ending January

(a) As of January 31, 2025, the Company holds 32,400 shares of treasury stock.

On September 10, 2024, 10,000 shares of treasury stock

held by the Company were issued to an investor relations firm for services rendered.

The Company recorded an expense of $ 38,700 during

the year ending January 31, 2025, in connection with the transaction.

During the year ending January 31, 2025, the Company purchased 32,400

shares of treasury stock for $ 148,547 .

(b) 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, 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.

(c) On May 15, 2024, the Company agreed to convert $ 300,000 of debt and $ 4,922 of accrued interest under the Credit Line Note agreement.

The conversion was made pursuant to the terms of a Conversion Agreement, which provided the conversion of the debt and accrued interest.

The Company issued 76,230 shares of common stock and 152,460 warrants exercisable at $ 6.43 per share resulting in a loss on settlement

of $ 368,036 .

(d) On June 5, 2024, the Company’s Chief Financial Officer exercised 87,500 warrants as a cashless conversion and the Company issued

60,085 shares of common stock.

See Note 11 for further information.

(e) During the year ending January 31, 2025, the Company received $ 6,591 from the exercise of warrants and issued 1,025 shares of common

Activity during the Year Ending

January 31, 2024

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

was no activity during the year ending January 31, 2024.

(b) In December 2023, TII Jet Services LDA converted $ 2,000,000 of its outstanding credit facility and $ 53,436

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

The fair value of the common stock at the date of issuance

was $ 2,554,423 , resulting in a $ 554,423 loss on extinguishment.

OPTIONS and WARRANTS

The following table summarizes the changes

in warrants outstanding and the related price of the shares of the Company’s common stock issued to non-employees of the Company

during the year ended January 31, 2024.

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

to Barandnic Holdings Ltd.

On March 7, 2023, the Company issued

30,000 warrants to purchase the Company’s common shares to Barandnic Holdings Ltd.

for services provided.

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

the date of issuance.

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

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

The warrants are exercisable at a price

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

These warrants replace previously issued warrants that have now

been cancelled.

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

The valuation model used a dividend rate

The warrants are exercisable

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

On October 27, 2023, the Company issued 145,833 warrants

to purchase the Company’s common shares to management ( 87,500 warrants were issued to the Chief Financial Officer) and non-employees

of the Company.

The warrants are exercisable at a price of $ 1.93 per share and expire in three years from the date of issuance.

warrants replace previously issued warrants that have now been cancelled.

The Company used the Black-Scholes valuation model to record

the fair value.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatility rates of 152.10 - 174.45 %;

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

Non-cash compensation for

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

Outstanding, January 31, 2022

risk-free rate of 4.31 %- 4.84 %.

Non-cash compensation for the year ending 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.

On May 15, 2024, the Company issued

152,460 warrants in connection with extinguishment of debt of $ 300,000 and accrued interest.

The warrants are exercisable at a price of

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

Non-cash expense of $ 390,145 is included in loss on extinguishment of

On June 5, 2024, the Company’s

Chief Financial Officer exercised 87,500 warrants as a cashless conversion and the Company issued 60,085 shares of common stock.

On September 10, 2024, the Company issued

50,000 warrants to an investor relations firm.

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

the date of issuance.

The Company recorded a non-cash expense of $ 94,650 during the year ending January 31, 2025.

The agreement is for

twelve months and includes the issuance of 10,000 treasury shares and monthly payments of $ 12,500 .

The warrants and shares vest immediately

and because they are non-forfeitable, the expense was recognized immediately.

The Company cancelled the warrants as of January 31, 2025.

Non-cash compensation for the year ending

January 31, 2025, amounted to $ 484,975 .

The Company used the Black Scholes valuation

model to record fair value of the value of the warrants issued during the year ending January 31, 2025.

The valuation model used a dividend

expected terms of 1.5 - 2.5 years;

volatility rates of 105.98 %- 145.05 %;

and risk-free rates of 3.65 %- 4.45 %.

The following table summarizes the changes

in the warrants outstanding and the related price of the shares of the common stock issued to non-employees of the Company during the

year ending January 31, 2025.

Exercise Remaining Intrinsic

Shares Price Life Value

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 4,402,460 6.40 4.72 years -

Expired/Cancelled ( 50,000 ) 4.00 - -

Outstanding - January 31, 2024

Exercisable - January 31, 2024

Exercised ( 88,525 ) 1.98 - -

Outstanding- January 31, 2025 5,546,973 $ 6.37 3.68 years $ 10,626,018

Exercisable - January 31, 2025 5,546,973 $ 6.37 3.68 years $ 10,626,018

The following

table summarizes additional information relating to the warrants outstanding as of January 31, 2025:

Range of Exercise

Weighted Average

Exercise Price for

Weighted Average

Exercise Price for

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.

Exercise Number Remaining Contractual Exercise Price for Shares Number Exercise Price

for Shares Intrinsic

Prices Outstanding Life(Years) Outstanding Exercisable Exercisable Value

$ 1.93 58,333 1.74 $ 1.93 58,333 $ 1.93 $ 370,988

$ 4.00 30,000 3.10 $ 4.00 30,000 $ 4.00 $ 128,700

$ 6.43 5,433,640 3.71 $ 6.43 5,433,640 $ 6.43 $ 10,106,570

$ 7.50 25,000 2.77 $ 7.50 25,000 $ 7.50 $ 19,760

5,546,973 $ 6.37 5,546,973 $ 6.37 $ 10,626,018

On November 1, 2021, the Board of Directors

13 unchanged sentences

the 408,333 shares of common stock reserved for issuance under the Plan.

As of January 31, 2024, 166 shares remain available and issuance

under the Plan.

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 submitted

the Amendment to the Plan to our stockholders for adoption and approval at the 2025 Annual Meeting.

The Amendment was approved by the

stockholders on January 23, 2025.

As of January 31, 2025, 26,332 shares remain available for issuance of options under the Plan.

During the year ending January 31, 2025,

689,584 options to purchase shares of the Company’s common stock were issued to executive officers and employees at prices of $ 2.37 -

$ 8.07 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 $ 1,408,935 and were recorded during the year ending January 31, 2025.

The Company used the Black-Scholes valuation

model to record the fair value.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatility rate of 97.83 %- 114.86 %;

and a risk-free rate of 4.00 %- 4.87 %.

During the year ended January 31, 2024,

9 unchanged sentences

risk-free rate of 3.00 - 4.5 %.

During the year ended January 31, 2023,

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

at prices of $ 3.59 to $ 4.50 per share.

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

The fair value of

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

The Company used the Black-Scholes

valuation model to record the fair value.

The valuation model used a dividend rate of 0 %;

expected term of 1.5 years;

volatility rate

of 152.10 - 174.45 %;

and a risk-free rate of 3 %.

The following table summarizes

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

Outstanding, January 31, 2022

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.

Exercise Remaining Intrinsic

Shares Price Life Value

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 689,584 4.40 1.93 years

Expired/Cancelled ( 190,751 ) -

Outstanding- January 31, 2024

Exercisable - January 31, 2024

Outstanding- January 31, 2025 1,373,668 $ 3.68 1.90 years $ 6,337,984

Exercisable - January 31, 2025 1,373,668 $ 3.68 1.90 years $ 6,337,984

The following table summarizes additional

information relating to the options outstanding as of January 31, 2025:

Shares Outstanding

Shares Exercisable

Weighted Average Weighted Average

Range of Exercise Number Weighted Average Exercise Price for Shares Number Exercise Price for Shares Intrinsic

Prices Outstanding Life(Years) Outstanding Exercisable Exercisable Value

$ 1.93 214,500 1.73 $ 1.93 214,500 $ 1.93 $ 1,364,220

$ 2.12 140,000 1.73 $ 2.12 140,000 $ 2.12 $ 863,800

$ 2.37 195,000 2.13 $ 2.37 195,000 $ 2.37 $ 1,154,400

$ 2.61 195,000 2.13 $ 2.61 195,000 $ 2.61 $ 1,107,600

$ 2.65 20,000 1.63 $ 2.65 20,000 $ 2.65 $ 112,800

$ 2.75 30,000 2.00 $ 2.75 30,000 $ 2.75 $ 166,200

$ 3.59 35,000 2.66 $ 3.59 35,000 $ 3.59 $ 164,500

$ 3.75 57,500 1.00 $ 3.75 57,500 $ 3.75 $ 261,050

$ 3.98 30,000 1.00 $ 3.98 30,000 $ 3.98 $ 129,300

$ 4.09 78,750 0.50 $ 4.09 78,750 $ 4.09 $ 330,750

$ 4.12 50,000 0.85 $ 4.12 50,000 $ 4.12 $ 208,500

$ 4.50 58,334 0.50 $ 4.50 58,334 $ 4.50 $ 221,086

$ 5.99 30,000 2.41 $ 5.99 30,000 $ 5.99 $ 69,000

$ 7.34 180,918 2.98 $ 7.34 180,918 $ 7.34 $ 171,872

$ 8.07 58,666 2.98 $ 8.07 58,666 $ 8.07 $ 12,907

1,373,668 1.90 $ 3.68 1,373,668 $ 3.68 $ 6,337,984

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:

Goods and Services.

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

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

allocation decisions for our segments.

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

Years Ended January 31,

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.

Years Ending January 31,

Pocono Pharmaceuticals

6 unchanged sentences

Selling, general and administrative-Corporate

Goodwill and intangibles impairment

Research and development-4P Therapeutics

Goodwill impairment-Pocono Pharmacueticals

Depreciation and Amortization

1 unchanged sentence

4P Therapeutics

The following table presents

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

The following table presents information

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

Years Ending January 31,

United States

25 unchanged sentences

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

These agreements, and the employment of Mr.

Goodman, automatically renew for one-year

terms following expiration of the initial three-year terms and each successive one-year term.

The Company entered into a three-year

9 unchanged sentences

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.

The feasibility Workplan was completed in February 2024.

The estimated cost to complete the feasibility

Workplan was approximately $ 2.5 million.

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

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

invoices is included in prepaid expenses.

In January 2024, Nutriband signed a

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

FDA-approved fentanyl patch.

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

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

The agreement replaces the previous

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

to incorporate AVERSA abuse deterrent transdermal technology.

The estimated cost to complete the commercial process development and clinical

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

On January 4, 2024, Nutriband signed

a commercial development and clinical supply agreement for their lead product, Aversa Fentanyl, with Kindeva Drug Delivery, L.P.

Under this agreement, Kindeva will perform commercial manufacturing process development, manufacturing of clinical supplies for the human

abuse liability clinical study, and development of chemistry, manufacturing and controls (CMC) information required by the FDA in support

of a New Drug Application (“NDA”).

As of January 31, 2025, Nutriband has incurred expenses of $ 3.0 million under this agreement.

The Company estimates approximately $ 5.2 million to complete the development.

On February 4, 2025, the agreement was amended to reduce

the hourly rate for the labor on the project in exchange for a milestone payment payable upon FDA approval.

Under the amended agreement,

the remaining budget as of January 31, 2025, through NDA submission for the current workplan was reduced to $ 3.2 million.

agreement also includes a milestone payment of $ 3.0 million to be paid to Kindeva when the Company receives FDA approval.

Lease Agreement

2 unchanged sentences

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

The lease has been extended for an additional three years at the

same monthly rental.

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

MDM Worldwide Agreement

In September 2022, the Company entered into a public relations agreement

with MDM Worldwide.

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

In October 2023, the

contract was mutually terminated, and no options were issued.

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

Money Channel Agreement

On March 13, 2023, the Company entered

into a media advertising agreement with Money Channel Inc.

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

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

at an exercise price

of $ 4.00 per share.

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

No options were issued.

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

Sorrento Therapeutics, Inc.

4P Therapeutics had unpaid

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

On February 13,

2023, Sorrento declared Chapter 11 bankruptcy.

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

from Sorrento Therapeutics Inc.

On July 25, 2023, 4P Therapeutics

assigned its claim under the bankruptcy proceedings from Sorrento Therapeutics Inc.

and received proceeds of $ 106,528 .

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

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

Under the agreement with the buyer of the

claim, 4P Therapeutics will make proportional restitution and/or repayment of the purchase amount to the extent the claim is

disallowed, reduced or not paid at the same time or distribution rate as other general unsecured claims against the Debtor are paid.

The amount due

under the claim was $ 118,675 and 4P Therapeutics recorded a reserve for bad debts of $ 118,675 during the year ended January 31, 2024.

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

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

the Debtor are paid.

The Company has recorded the amount of the proceeds as a secured loan payable to the factor as of January 31, 2025.

Upstream Termination

On May 24, 2023, the Company sent notice

of the termination of the Securities Facility Services Agreement, dated January 3, 2023, by and between MERJ DEP Ltd.

And the Company

(“Agreement”), which provided for the dual listing of the Company’s common stock on the MERJ Upstream exchange (“Upstream”),

which is operated as a fully registered and licensed integrated securities exchange, clearing system and depository for digital and non-digital

securities under the Seychelles security laws.

The termination was effective May 31, 2023.

Legal Proceedings

15 unchanged sentences

Currently, there are no pending hearings

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

or motions, and the case is in the discovery stage.

In early 2024, the plaintiffs proposed a settlement offer of $ 100,000 .

has not responded to that proposed settlement offer.

SUBSEQUENT EVENTS

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

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

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

The options vest immediately and expire three years from the date

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

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

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

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

and approval at the 2025 Annual Meeting.

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

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

Plan by our stockholders.

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

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

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

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

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

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

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

AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

(a) Subsequent to January 31, 2025, the Company’s outside corporate counsel exercised 58,333 warrants as a cashless conversion and the Company issued 46,961 shares of common stock.

(b) On February 6, 2025, the Company entered into an agreement with a consultant to provide consulting services to the Company’s Board of Directors.

The Company issued 5,000 shares of the Company’s common stock to the consultant, valued at $ 39,050 .

The shares were issued from the treasury shares held by the Company.

The term of the agreement is for twelve months.

common stock to employees for services rendered.

The fair value of the shares issued was $ 24,360 .

The shares were issued from the treasury

shares held by the Company.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURES

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data