Core Insights - Nutriband has formalized an exclusive product development partnership with Kindeva Drug Delivery to develop Aversa™ Fentanyl, which integrates Nutriband's abuse-deterrent technology with Kindeva's FDA-approved fentanyl patch [1][2] - The partnership involves shared development costs in exchange for milestone payments, indicating a long-term commitment between the two companies [2] Company Overview - Nutriband is focused on developing prescription transdermal pharmaceutical products, with Aversa™ Fentanyl being its lead product under development [5] - The Aversa™ technology aims to prevent the abuse, diversion, misuse, and accidental exposure of drugs with abuse potential, particularly opioids and stimulants [2][4] Technology Details - Aversa™ abuse-deterrent technology employs a proprietary aversive agent coating that utilizes taste aversion to deter oral abuse and accidental exposure to transdermal opioid and stimulant patches [3] - The technology is protected by a broad international intellectual property portfolio, with patents issued in 46 countries, including the United States, Europe, Japan, and China [3][4] Market Potential - Aversa™ Fentanyl has the potential to be the world's first abuse-deterrent opioid patch, with projected peak annual U.S. sales estimated between $80 million and $200 million [4]

Core Viewpoint - Nutriband Inc. has appointed Olympic medalist Anastasia Nichita to its Product Advisory Board to enhance the brand and promote its sports and consumer products internationally [1][2]. Group 1: Company Overview - Nutriband Inc. specializes in the development of transdermal pharmaceutical products, with a focus on an abuse deterrent fentanyl patch utilizing AVERSA™ technology [4]. - The company produces various products through its subsidiary Pocono Pharma, including AI Tape, which combines traditional kinesiology tape benefits with therapeutic ingredients [3]. Group 2: Strategic Initiatives - The addition of Anastasia Nichita is expected to provide valuable insights and experience to strengthen Nutriband's consumer product categories globally [2].

Core Viewpoint - Nutriband Inc. has received a Notice of Allowance from the USPTO for its patent application related to the Aversa™ abuse deterrent technology, which is expected to enhance its intellectual property protection in the U.S. for transdermal products aimed at preventing drug abuse and misuse [1][2][4]. Group 1: Technology Overview - The Aversa™ abuse deterrent technology incorporates aversive agents into transdermal patches to prevent the abuse, diversion, misuse, and accidental exposure of drugs with abuse potential, including opioids and stimulants [3][6]. - This technology employs a proprietary aversive agent coating that utilizes taste aversion to deter oral abuse and accidental exposure to transdermal products [3][6]. Group 2: Product Development - Nutriband's lead product under development is Aversa™ Fentanyl, which aims to be the first abuse deterrent fentanyl transdermal system on the market [2][5]. - Aversa™ Fentanyl has the potential to achieve peak annual U.S. sales ranging from $80 million to $200 million [5]. Group 3: Intellectual Property - The Aversa™ technology is protected by a broad international intellectual property portfolio, with patents issued in 46 countries, including the U.S., Europe, Japan, Korea, Russia, China, Canada, Mexico, and Australia [1][4][6].

Core Insights - Nutriband is planning to file for FDA approval for its AVERSA™ Fentanyl product in the first half of 2025 [1] - The AVERSA™ technology aims to deter abuse and misuse of transdermal fentanyl patches, potentially improving safety for patients [4][11] - The technology is protected by a broad intellectual property portfolio with patents granted in 46 countries, including major markets [10][15] Company Developments - Nutriband is collaborating with Kindeva Drug Delivery to develop AVERSA™ Fentanyl, which integrates Nutriband's abuse-deterrent technology into an FDA-approved transdermal system [3] - The company has completed the registration requirements to extend its Chinese patent to Macao, enhancing its intellectual property protection [9] - AVERSA™ Fentanyl is projected to achieve peak annual sales in the U.S. ranging from $80 million to $200 million [12] Technology Overview - The AVERSA™ abuse-deterrent technology incorporates aversive agents into transdermal patches to prevent drug abuse and accidental exposure [4][11] - This technology is designed to maintain accessibility for patients who genuinely need these medications while reducing the risk of misuse [4][11] - The technology's broad patent coverage includes regions such as Hong Kong and Macao, in addition to other major markets [10][15]

Revenue and Financial Performance - Revenue for the three months ended October 31, 2024, was $645,796, representing a 50.9% increase from $427,841 in the same period of 2023[15]. - Total revenue for the nine months ended October 31, 2024, was $1,497,158, compared to $1,560,701 for the same period in 2023, representing a decrease of approximately 4.05%[47]. - Revenue from the sale of goods was $1,497,158 for the nine months ended October 31, 2024, compared to $1,395,667 for the same period in 2023, indicating an increase of approximately 7.27%[47]. - For the three months ended October 31, 2024, the net loss was $1,362,637, compared to a net loss of $1,759,946 for the same period in 2023, representing a decrease of approximately 22.5%[17][18]. - The company reported a net loss from operations of $4,726,060 for the nine months ended October 31, 2024, compared to a net loss of $3,604,348 for the same period in 2023, indicating an increase in operational losses[21][34]. Assets and Liabilities - Total current assets increased to $6,191,602 as of October 31, 2024, compared to $1,021,863 as of January 31, 2024[13]. - Total liabilities as of October 31, 2024, were $1,311,503, compared to $1,078,919 as of January 31, 2024, showing a 21.5% increase[13]. - Cash and cash equivalents increased to $5,698,187 as of October 31, 2024, from $492,942 as of January 31, 2024[13]. - The total working capital as of October 31, 2024, was $4,934,816, compared to a working capital deficit of $(26,099,053) as of October 31, 2023, reflecting a substantial turnaround[18][34]. - As of October 31, 2024, the company had cash and cash equivalents of $5,698,187, an increase from $1,265,323 as of October 31, 2023, indicating a significant improvement in liquidity[21][34]. Research and Development - Research and development expenses for the three months ended October 31, 2024, were $880,768, up from $551,503 in the same period of 2023, indicating a 59.6% increase[15]. - Research and development expenses for the Aversa Fentanyl product totaled $2,629,278 for the nine months ended October 31, 2024, an increase of 88.5% from $1,397,055 for the same period in 2023[165]. - The company is focused on developing transdermal pharmaceutical products, with a primary emphasis on incorporating its Aversa abuse deterrent technology into existing approved drugs[26]. - The company requires approximately $13 million for research and development of its abuse deterrent fentanyl transdermal system, which includes clinical manufacturing and clinical trials[147]. - The company has entered into a commercial development agreement with Kindeva Drug Delivery for Aversa Fentanyl, with an estimated cost of $8.1 million for completion[129]. Financing and Capital Structure - The company raised $8,400,000 from equity financing with European investors on April 19, 2024, which will support ongoing research and development efforts[34]. - The company has relied on sales of securities and issuance of debt to support cash flow from operations, highlighting its ongoing need for external financing[34]. - The company has a credit line facility of $5,000,000, which was amended in July 2023, to fund research and development of its Aversa product[34]. - The company completed an $8,400,000 equity financing on April 19, 2024, issuing 2,100,000 units at a price of $4.00 per unit, each consisting of one share of common stock and a warrant[156]. - The company entered into an amended three-year $5,000,000 credit line facility on July 13, 2023, replacing a previous $2,000,000 facility, with drawdowns bearing interest at 7% per annum[154]. Expenses and Cost Management - Total costs and expenses for the nine months ended October 31, 2024, were $6,223,218, compared to $5,126,278 for the same period in 2023, reflecting a 21.5% increase[15]. - Operating expenses totaled $5,183,433 for the nine months ended October 2024, compared to $4,269,915 for the same period in 2023, representing an increase of approximately 21.4%[123]. - Selling, general and administrative expenses decreased to $737,102 for the three months ended October 31, 2024, down from $1,330,929 in the same period in 2023, a reduction of approximately 44%[159]. - Selling, general and administrative expenses for the nine months ended October 31, 2024, were $2,554,155, a decrease of 10.4% compared to $2,849,399 for the same period in 2023[164]. - The company recorded bad debt expenses of $1,200 for the nine months ended October 31, 2024, significantly lower than $11,836 for the same period in 2023, reflecting improved credit management[51]. Stock and Equity - The weighted average shares of common stock outstanding for the three months ended October 31, 2024, were 11,101,945, compared to 7,833,150 in the same period of 2023[15]. - The total number of outstanding options as of October 31, 2024, is 1,324,835, with an intrinsic value of $4,139,797[120]. - The company has reserved a total of 1,400,000 shares under the Employee Stock Option Plan, pending stockholder approval[115]. - The Company issued 450,000 options to purchase shares at prices ranging from $2.37 to $5.99 during the nine months ended October 31, 2024[116]. - As of October 31, 2024, there are 5,597,998 warrants outstanding with an average exercise price of $6.35 and an intrinsic value of $314,199[109]. Compliance and Governance - The company recognized revenue from contracts with customers based on five criteria established under Topic 606, ensuring compliance with updated revenue recognition standards[39]. - The company applies a "right-of-use" model for lease accounting, recording operating lease liabilities on its balance sheet in accordance with ASU 2016-02[61]. - The company utilizes fair value measurements for financial and non-financial assets and liabilities, adhering to the fair value hierarchy established by ASC 820[68]. - The Company applies the asset and liability method for income taxes, recognizing deferred tax assets and liabilities based on future tax consequences[205]. - The Company concluded that its disclosure controls and procedures are not effective in ensuring timely and accurate reporting as required by SEC rules[209].

Financial Performance - Total revenue for the three months ended July 31, 2024, was $442,830, a decrease of 32.5% compared to $655,928 for the same period in 2023[5]. - Net loss for the six months ended July 31, 2024, was $3,603,542, compared to a net loss of $1,844,402 for the same period in 2023, representing an increase in loss of 95.2%[5]. - The company generated total revenue of $851,362 for the six months ended July 31, 2024, compared to $1,132,860 for the same period in 2023, representing a decrease of approximately 25%[31]. - For the six months ended July 31, 2024, the company incurred a net loss from operations of $3,603,542 and used cash flow from operations of $2,377,673[19]. - For the three months ended July 31, 2024, the net loss was $1,705,465, indicating a continued trend of losses[8]. Assets and Liabilities - Total assets as of July 31, 2024, were $13,633,709, an increase from $7,517,154 as of January 31, 2024[4]. - Total current liabilities increased to $1,103,590 as of July 31, 2024, compared to $999,093 as of January 31, 2024, reflecting a rise of 10.5%[4]. - As of July 31, 2024, total assets increased to $12,460,986, with an accumulated deficit of $(31,583,561)[8]. - The total assets of the company as of July 31, 2024, were $13,633,709, an increase from $9,793,599 as of January 31, 2023, representing a growth of approximately 39%[82]. Cash and Cash Equivalents - Cash and cash equivalents as of July 31, 2024, were $6,759,967, compared to $492,942 as of January 31, 2024, indicating a significant increase[4]. - The company reported a cash and cash equivalents balance of $6,759,967 as of the end of the period, up from $2,334,553 in the previous year[10]. - As of July 31, 2024, the Company had cash and cash equivalents of $6,759,967 and working capital of $6,144,483[19]. Research and Development - Research and development expenses for the three months ended July 31, 2024, were $773,975, an increase of 73.8% from $445,122 in the same period of 2023[5]. - Research and development expenses for 4P Therapeutics rose significantly to $1,748,510 for the six months ended July 31, 2024, compared to $845,552 in the prior year, marking an increase of about 106%[81]. - The company has incurred expenses of $1,080,329 related to the commercial development and clinical manufacturing agreement with Kindeva Drug Delivery, with an estimated total cost of $8.1 million[86]. Stock and Equity - Total stockholders' equity as of July 31, 2024, was $12,460,986, up from $6,438,235 as of January 31, 2024, showing a growth of 93.5%[6]. - The company issued 2,100,000 shares of common stock for proceeds of $8,400,000 during the six months ended July 31, 2024[6]. - The Company completed an $8,400,000 equity financing with European investors, which included two related parties investing a total of $6,420,000[61]. Expenses - Operating expenses for Pocono Pharmaceuticals increased to $321,068 for the six months ended July 31, 2024, compared to $272,283 in the same period in 2023, reflecting an increase of approximately 18%[81]. - The Company recorded interest expenses of $13,637 during the six months ended July 31, 2024, compared to $12,401 for the same period in 2023[56]. - Depreciation expenses for the six months ended July 31, 2024, were $82,475, compared to $93,936 for the same period in 2023[52]. Legal and Compliance - The company is currently involved in a lawsuit seeking over $500,000 in damages, while also pursuing counterclaims for $1,000,000 against the plaintiffs[89][90]. - The company recorded a reserve for bad debts of $118,675 related to the bankruptcy proceedings from Sorrento Therapeutics Inc.[88]. Future Outlook - The company believes it will generate sufficient funds from operations to continue as a going concern for at least one year from the date of the financial statements[20]. - The estimated cost to complete the commercial development and clinical manufacturing agreement with Kindeva is approximately $8.1 million, with an expected FDA submission in twelve to eighteen months[86].

Financial Performance - For the three months ended April 30, 2024, revenue was $408,532, a decrease of 14.3% compared to $476,932 for the same period in 2023[12]. - Net loss for the three months ended April 30, 2024, was $1,898,077, compared to a net loss of $1,015,229 for the same period in 2023, representing an increase in loss of 86.7%[12]. - Revenue for the three months ended April 30, 2024, was $408,532, a decrease of 14.3% compared to $476,932 for the same period in 2023[42]. - For the three months ended April 30, 2024, net sales were $408,532 for Pocono Pharmaceuticals, compared to $401,057 in the same period of 2023[96]. - Gross profit for Pocono Pharmaceuticals was $164,786 for the three months ended April 30, 2024, down from $169,308 in 2023[96]. - Total operating expenses for the three months ended April 30, 2024, were $2,054,263, compared to $1,240,162 in the same period of 2023[96]. - The company's net loss for the three months ended April 30, 2024, was $1,898,077, or $(0.21) per share, compared to a loss of $1,015,235, or $(0.13) per share for the same period in 2023[134]. Assets and Liabilities - Total current assets increased to $8,729,940 as of April 30, 2024, compared to $1,021,863 as of January 31, 2024[10]. - Total liabilities increased to $1,791,367 as of April 30, 2024, compared to $1,078,919 as of January 31, 2024[10]. - As of April 30, 2024, the company recorded total assets of $15,154,480, with corporate assets at $8,210,779 and Pocono Pharmaceuticals at $5,044,569[98]. - As of April 30, 2024, net property and equipment amounted to $740,305, a decrease from $774,924 as of January 31, 2024[64]. - As of April 30, 2024, net intangible assets were $638,993, down from $667,280 as of January 31, 2024[71]. - Goodwill as of April 30, 2024, amounted to $5,021,713, unchanged from January 31, 2024[48]. Cash Flow and Financing - Cash and cash equivalents increased to $8,347,740 as of April 30, 2024, from $492,942 at the beginning of the period[17]. - The company reported a net cash used in operating activities of $833,926 for the three months ended April 30, 2024, compared to $749,864 for the same period in 2023[17]. - The company raised $8,400,000 from the sale of common stock and warrants during the three months ended April 30, 2024[17]. - The company generated $8,400,000 from equity financing with European investors on April 19, 2024, of which $7.12 million was from related parties[31]. - The company completed an $8,400,000 equity financing with European investors, where related parties invested a total of $7,120,000, receiving 1,780,000 shares of common stock and warrants for 3,560,000 shares[82]. - The company has relied on sales of securities and issuance of debt to support cash flow from operations since inception[31]. Research and Development - Research and development expenses rose significantly to $974,535 for the three months ended April 30, 2024, compared to $400,430 in the same period of 2023, an increase of 143.5%[12]. - Research and development expenses for 4P Therapeutics were $974,535 for the three months ended April 30, 2024, compared to $400,430 in 2023[96]. - The company incurred approximately $2,950,998 in expenses related to the feasibility Workplan for the AVERSA Fentanyl product, with an estimated total cost of $2.5 million[103]. - The company requires approximately $13 million for research and development of the abuse deterrent fentanyl transdermal system, including clinical manufacturing and trials[120]. - The company has a three-year $5,000,000 Credit Line Note facility to fund research and development of its Aversa product[31]. - Research and development costs are expensed as incurred, with no specific figures provided in the documents[55]. Operational Challenges - The company expects to continue incurring substantial losses and negative cash flow for the foreseeable future due to ongoing product development and clinical trials[183]. - The company faces significant challenges in achieving market acceptance for its products post-FDA approval, which could adversely affect its operating results and financial condition[184]. - The drug delivery industry is rapidly evolving, and the company's future success depends on its ability to keep pace with technological advancements and changing customer requirements[185]. - If FDA approval is obtained, the company anticipates facing strong competition from well-established firms with better resources and existing relationships within the healthcare system[186]. - The FDA regulatory process may be more time-consuming and costly than anticipated, with no guarantee of approval for the lead product[189]. - There is a risk that the company may not be able to launch any products even after receiving FDA marketing approval[189]. Stock and Options - The weighted average shares of common stock outstanding increased to 9,159,869 for the three months ended April 30, 2024, from 7,833,150 in the same period of 2023[12]. - The company issued 390,000 options to purchase shares at prices ranging from $2.37 to $2.61 per share during the three months ended April 30, 2024[91]. - As of April 30, 2024, there are 1,264,835 options outstanding with an average exercise price of $2.63[93]. - The company has reserved a total of 1,400,000 shares for its Employee Stock Option Plan, pending stockholder approval[90]. - The company has reserved a total of 1,400,000 shares under the 2021 Employee Stock Option Plan as of March 20, 2024[123]. Miscellaneous - The company recorded bad debt expenses of $1,200 for the three months ended April 30, 2024, compared to $0 for the same period in 2023[44]. - The company recorded a reserve for bad debts of $118,675 related to a claim from Sorrento Therapeutics, with proceeds of $106,528 received[106]. - The company has established additional monitoring controls over financial statements and improved internal controls for detailed accounting review of revenue items and accounts receivable[172]. - The company has not generated any revenue from 4P Therapeutics' products under development since the acquisition, continuing only contract research and development services[119]. - The company has entered into three-year employment agreements with key executives, with salaries reduced to $150,000 for the CEO and President, and $110,000 for the CFO as of July 31, 2022[99][100]. - The company completed the feasibility Workplan for the AVERSA product in February 2024, marking a significant milestone in its development[102].

Revenue and Financial Performance - For the year ended January 31, 2024, the company generated revenue of $2,085,314, a slight increase from $2,079,609 in the previous year, with costs of revenue at $1,223,209 compared to $1,329,200[178]. - The company reported a net loss of $5,485,314, or $(0.69) per share, for the year ended January 31, 2024, compared to a loss of $4,483,474, or $(0.53) per share, for the previous year[183]. - 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[191]. - The company’s total revenue from contract manufacturing services was $1,920,280 for the year ended January 31, 2024[178]. Expenses - The company incurred research and development expenses of $1,960,425 for its Aversa Fentanyl product, up from $982,227 in the previous year[181]. - Selling, general and administrative expenses decreased to $3,773,606 for the year ended January 31, 2024, from $3,916,041 in the prior year[179]. - The company recorded bad debt expenses of $118,364 for doubtful accounts related to accounts receivable for the year ended January 31, 2024[201]. - The company’s interest expense increased to $75,815 for the year ended January 31, 2024, compared to $6,289 in the previous year[183]. - The company recorded an impairment expense of $327,326 in the previous year due to a write-down of goodwill related to its Pocono acquisition[180]. Cash and Financing - As of January 31, 2024, the company had cash and cash equivalents of $492,942, down from $1,985,440 a year earlier[184]. - The company completed an $8,400,000 equity financing with European investors on April 19, 2024, consisting of 2,100,000 units at a price of $4.00 per unit[177]. - The Company entered into a three-year $5,000,000 Credit Line Note facility to fund research and development of its Aversa product[191]. - The Company recorded proceeds of $8,400,000 from a private placement of its common stock on April 19, 2024[191]. Inventory and Assets - As of January 31, 2024, total inventory was $168,605, a decrease from $229,335 as of January 31, 2023[204]. - Goodwill amounted to $5,021,713 as of January 31, 2024, unchanged from the previous year[207]. Future Outlook - The Company believes it will generate sufficient funds from operations to continue for one year from the date of the financial statements[192]. - The Company has generated operating losses since inception and has relied on sales of securities and debt issuance to support cash flow[191]. - Research and development costs are expensed as incurred, reflecting the Company's commitment to innovation[214]. Capital Requirements - The company has a capital requirement of approximately $13 million for the research and development of its abuse deterrent fentanyl transdermal system[169].

Revenue Performance - For the three months ended October 31, 2023, revenue was $427,841, a decrease of 30.7% compared to $618,003 for the same period in 2022[11]. - For the nine months ended October 31, 2023, revenue was $1,560,701, slightly up by 0.6% from $1,552,074 in the prior year[11]. - Total revenue for the nine months ended October 31, 2023, was $1,560,701, compared to $1,552,074 for the same period in 2022, representing a growth of 0.1%[48]. - Revenue from the sale of goods was $1,395,667 for the nine months ended October 31, 2023, an increase from $1,325,127 in the prior year, while service revenues decreased to $165,034 from $226,947[48]. - For the three months ended October 31, 2023, the company generated revenue of $427,841, a decrease of 30.7% from $618,003 in the same period of 2022[143]. - For the nine months ended October 31, 2023, the company generated revenue of $1,560,701, a slight increase from $1,552,074 in the same period of 2022[147]. Expenses and Losses - Total costs and expenses for the three months ended October 31, 2023, were $2,151,352, an increase of 27.3% from $1,689,522 in the same period of 2022[11]. - The net loss for the three months ended October 31, 2023, was $1,759,946, compared to a net loss of $1,075,485 for the same period in 2022, representing an increase of 63.7%[11]. - For the nine months ended October 31, 2023, the company reported a net loss of $3,604,348, compared to a net loss of $2,804,149 for the same period in 2022, representing an increase in losses of approximately 28.5%[17]. - The company incurred a loss from operations of $3,565,577 for the nine months ended October 31, 2023, highlighting ongoing operational challenges[34]. - Selling, general and administrative expenses for the nine months ended October 31, 2023, were $2,849,399, an increase from $2,726,256 in the same period of 2022[148]. - Research and development expenses for the three months ended October 31, 2023, were $551,503, up 89.8% from $290,718 in the same period of 2022[11]. - Research and development expenses for the nine months ended October 31, 2023, increased significantly to $1,397,055 from $686,401 in the previous year, marking a 103.5% increase[97]. Cash and Assets - Cash and cash equivalents decreased to $1,265,323 as of October 31, 2023, from $1,985,440 as of January 31, 2023, a decline of 36.2%[10]. - Total assets as of October 31, 2023, were $8,523,076, down 10.0% from $9,456,377 as of January 31, 2023[10]. - The company reported a working capital of $1,281,963 as of October 31, 2023, indicating a need for careful cash management moving forward[34]. - As of October 31, 2023, total inventory was valued at $174,641, down from $229,335 as of January 31, 2023, indicating a reduction of approximately 23.8%[50]. - Net property and equipment as of October 31, 2023, was $766,839, a decrease from $897,735 as of January 31, 2023, showing a decline of approximately 14.5%[69]. - As of October 31, 2023, net intangible assets amounted to $695,568, down from $780,430 as of January 31, 2023, with accumulated amortization increasing from $351,070 to $435,932[76]. Liabilities and Debt - Total liabilities increased significantly to $2,811,738 as of October 31, 2023, compared to $883,387 as of January 31, 2023[10]. - Interest expenses for the nine months ended October 31, 2023, totaled $52,601, compared to $12,505 for the same period in 2022, indicating a significant increase[74]. - The company entered into a three-year credit line facility for $5,000,000 on July 13, 2023, increasing from a previous facility of $2,000,000[152]. - The company recorded interest expense of $42,012 for the nine months ended October 31, 2023, related to the Credit Line Note with TII Jet Services LDA[72]. Legal and Regulatory Matters - The Company is facing a legal complaint seeking damages exceeding $500,000 due to the termination of an engagement letter for a public offering of common stock[115]. - The Company has counterclaimed for damages of $1,000,000 on multiple counts, including intentional interference with prospective economic advantage and breach of contract[117]. - The Company believes that any potential loss from the ongoing legal proceedings will not materially affect its consolidated financial position or operations[120]. - The Company has not accrued any amount for possible loss as of October 31, 2023[120]. - The company has identified material weaknesses in its internal controls, including a lack of qualified accounting personnel and excessive reliance on third-party consultants[178]. - The company has added qualified accounting personnel to reduce reliance on third-party consultants and has established additional monitoring controls over financial statements[178]. Future Outlook and Development - Management believes that sufficient funds will be generated from operations to support the company for at least one year from the date of the financial statements, indicating a positive outlook despite current losses[35]. - The company expects to continue incurring substantial losses and negative cash flow for the foreseeable future due to ongoing product development and clinical trials[193]. - The Company estimates it will require approximately $13 million for research and development of its abuse deterrent fentanyl transdermal system, including clinical trials[134]. - The company is currently facing a lawsuit claiming damages exceeding $500,000 related to the termination of an engagement letter for a public offering of its common stock[186]. - The company has not generated any revenue from its products under development since the acquisition of 4P Therapeutics, which previously generated minor gross margins[132]. Stock and Equity - The weighted average shares of common stock outstanding for the three months ended October 31, 2023, were 7,833,150, compared to 7,803,264 for the same period in 2022[11]. - As of October 31, 2023, the total outstanding stock options were 874,835, with an average exercise price of $3.23 and an intrinsic value of $86,840[95]. - The company has reserved 408,333 shares for its 2021 Employee Stock Option Plan, with additional shares reserved in subsequent years[137]. - The company recorded a non-cash compensation of $242,840 for warrants issued during the nine months ended October 31, 2023[86]. - During the nine months ended October 31, 2023, 404,500 options were issued to executive officers and employees at prices ranging from $1.93 to $3.975 per share, with a total fair value of $499,856[92]. Compliance and Reporting - The company has filed various certifications including Section 302 and Section 906 by the CEO and CFO, ensuring compliance with regulatory requirements[201][202]. - The report includes Inline XBRL documents for detailed financial data presentation, enhancing transparency and accessibility of financial information[200]. - The company is committed to maintaining accurate financial reporting through the certifications provided by its principal executive and financial officers[202].

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%3A%20Financial%20Information) [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=Item%201%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $9.87 million, driven by increased cash and a significant rise in related-party notes payable Key Balance Sheet Metrics | Metric | July 31, 2023 (Unaudited) | January 31, 2023 | | :-------------------------------- | :-------------------------- | :----------------- | | Cash and cash equivalents | $2,334,553 | $1,985,440 | | Total Current Assets | $3,273,573 | $2,693,745 | | Total Assets | $9,872,628 | $9,456,377 | | Total Current Liabilities | $874,127 | $748,613 | | Note payable-related party | $2,000,000 | $- | | Total Liabilities | $2,981,920 | $883,387 | | Total Stockholders' Equity | $6,890,708 | $8,572,990 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenue increased for the three and six-month periods, though higher R&D expenses drove a larger net loss for the six-month period Key Operations Metrics | Metric | 3 Months Ended July 31, 2023 | 3 Months Ended July 31, 2022 | 6 Months Ended July 31, 2023 | 6 Months Ended July 31, 2022 | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $655,928 | $456,149 | $1,132,860 | $934,071 | | Cost of revenues | $356,256 | $304,353 | $610,904 | $581,789 | | Research and development | $445,122 | $277,869 | $845,552 | $395,683 | | Selling, general and administrative | $678,738 | $908,173 | $1,518,470 | $1,676,724 | | Loss from operations | $(824,188) | $(1,034,246) | $(1,842,066) | $(1,720,125) | | Net loss | $(829,173) | $(1,038,675) | $(1,844,402) | $(1,728,664) | | Net loss per share (basic and diluted) | $(0.11) | $(0.12) | $(0.24) | $(0.20) | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased to $6.89 million from $8.57 million due to the net loss incurred during the six-month period Changes in Stockholders' Equity | Metric | February 1, 2023 | July 31, 2023 | | :-------------------------------- | :--------------- | :-------------- | | Total Stockholders' Equity | $8,572,990 | $6,890,708 | | Net loss for the six months | - | $(1,844,402) | | Warrants issued for services | - | $87,090 | | Options issued for services | - | $75,030 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) A significant cash inflow from financing activities offset cash used in operations, resulting in an overall increase in cash Summary of Cash Flows | Cash Flow Activity | 6 Months Ended July 31, 2023 | 6 Months Ended July 31, 2022 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net Cash Used In Operating Activities | $(1,744,999) | $(1,652,750) | | Net Cash Used in Investing Activities | $(2,624) | $(68,009) | | Net Cash Provided by Financing Activities | $2,096,736 | $173,449 | | Net change in cash | $349,113 | $(1,547,310) | | Cash and cash equivalents - End of period | $2,334,553 | $3,344,558 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on the company's business, accounting policies, and specific financial statement line items [1. ORGANIZATION AND DESCRIPTION OF BUSINESS](index=11&type=section&id=1.%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) The company focuses on developing transdermal pharmaceutical products through strategic acquisitions like 4P Therapeutics and Pocono Pharmaceuticals - Nutriband Inc. acquired 4P Therapeutics in 2018, shifting its principal business to the development of **transdermal pharmaceutical products**, including abuse-deterrent systems[25](index=25&type=chunk)[27](index=27&type=chunk) - In 2020, the company expanded into **coated product manufacturing** and **activated kinesiology tape** through acquisitions[28](index=28&type=chunk)[29](index=29&type=chunk) - The company's lead product, **AVERSA™** transdermal abuse deterrent technology, is in the preclinical stage and requires **FDA approval**[26](index=26&type=chunk)[27](index=27&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Key accounting policies cover the going concern assessment, revenue recognition, and valuation of assets like goodwill and intangibles - The company's financial statements are unaudited and prepared in accordance with **U.S. GAAP**, with no significant changes to accounting policies during the six months ended July 31, 2023[31](index=31&type=chunk)[33](index=33&type=chunk) - A **7-for-6 forward stock split** was effective on August 12, 2022, increasing authorized common shares from 250,000,000 to 291,666,666[34](index=34&type=chunk) - Management believes the company can continue as a **going concern** for at least one year, supported by **$2,334,553 in cash** and a **$5,000,000 credit line facility**, despite historical operating losses[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Revenue is recognized based on five criteria under **Topic 606**, with performance obligations satisfied either upon product shipment or over time[43](index=43&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) Revenue by Type | Revenue Type | 6 Months Ended July 31, 2023 | 6 Months Ended July 31, 2022 | 3 Months Ended July 31, 2023 | 3 Months Ended July 31, 2022 | | :------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Sale of goods | $967,826 | $796,894 | $566,769 | $394,904 | | Services | $165,034 | $137,177 | $89,159 | $61,245 | | Total Revenue | $1,132,860 | $934,071 | $655,928 | $456,149 | - Goodwill amounted to **$5,021,713** as of July 31, 2023, with prior impairment charges related to the Active Intelligence LLC acquisition[56](index=56&type=chunk) [3. PROPERTY AND EQUIPMENT](index=20&type=section&id=3.%20PROPERTY%20AND%20EQUIPMENT) Net property and equipment decreased to $806,423 due to accumulated depreciation, with a portion allocated to cost of goods sold Property and Equipment, Net | Asset Category | July 31, 2023 | January 31, 2023 | | :----------------------- | :------------ | :--------------- | | Lab equipment | $144,585 | $144,585 | | Machinery and equipment | $1,243,252 | $1,240,628 | | Furniture and fixtures | $19,643 | $19,643 | | Total Cost | $1,407,480 | $1,404,856 | | Less: Accumulated depreciation | $(601,057) | $(507,121) | | Net Property and Equipment | $806,423 | $897,735 | - Depreciation expenses for the six months ended July 31, 2023, were **$93,936**, with **$72,445** allocated to cost of goods sold[73](index=73&type=chunk) [4. NOTES PAYABLE](index=22&type=section&id=4.%20NOTES%20PAYABLE) The company utilized a related-party line of credit and a secured borrowing liability, contributing to increased interest expenses - A **$5,000,000 credit line facility** with a related party was amended on July 17, 2023, with **$2,000,000** advanced as of July 31, 2023[77](index=77&type=chunk) - A secured borrowing liability of **$106,528** was recorded from the assignment of a bankruptcy claim, with a corresponding bad debt expense of **$11,836**[78](index=78&type=chunk) Interest Expense | Metric | 6 Months Ended July 31, 2023 | 6 Months Ended July 31, 2022 | | :------------- | :--------------------------- | :--------------------------- | | Interest expense | $12,401 | $8,539 | [5. INTANGIBLE ASSETS](index=22&type=section&id=5.%20INTANGIBLE%20ASSETS) Net intangible assets decreased to $723,855 due to amortization, with future amortization expenses scheduled over several years Intangible Assets, Net | Asset Category | July 31, 2023 | January 31, 2023 | | :----------------------------- | :------------ | :--------------- | | Customer base | $314,100 | $314,100 | | Intellectual property and trademarks | $817,400 | $817,400 | | Total | $1,131,500 | $1,131,500 | | Less: Accumulated amortization | $(407,645) | $(351,070) | | Net Intangible Assets | $723,855 | $780,430 | - Amortization expenses for the six months ended July 31, 2023, were **$56,575**[80](index=80&type=chunk) Future Amortization Schedule | Year Ended January 31, | Amortization | | :--------------------- | :----------- | | 2024 | $56,534 | | 2025 | $113,109 | | 2026 | $113,109 | | 2027 | $113,109 | | 2028 | $113,109 | | 2029 and thereafter | $214,885 | | Total | $723,855 | [6. RELATED PARTY TRANSACTIONS](index=24&type=section&id=6.%20RELATED%20PARTY%20TRANSACTIONS) The company maintains a significant credit line facility with TII Jet Services LDA, a shareholder - The company entered into an amended **$5,000,000 Credit Line Note facility** with TII Jet Services LDA, a shareholder of the Company, on July 17, 2023[77](index=77&type=chunk)[90](index=90&type=chunk) [7. STOCKHOLDERS' EQUITY](index=24&type=section&id=7.%20STOCKHOLDERS'%20EQUITY) Stockholders' equity changes reflect a forward stock split, issuance of options and warrants, and a common stock cancellation - The company's authorized common stock increased to **291,666,666 shares** following a 7-for-6 forward stock split effective August 12, 2022[87](index=87&type=chunk) - Options to purchase **30,000 shares** were issued to an executive, valued at **$75,030**, and expensed during the six months ended July 31, 2023[90](index=90&type=chunk) - In July 2022, the company cancelled **1,400,000 shares** of common stock following a favorable lawsuit settlement[91](index=91&type=chunk) [8. OPTIONS and WARRANTS](index=26&type=section&id=8.%20OPTIONS%20and%20WARRANTS) This section summarizes changes in outstanding warrants and stock options, including new grants, expirations, and valuation details Warrant Activity | Warrants | January 31, 2022 | January 31, 2023 | July 31, 2023 | | :---------------------- | :--------------- | :--------------- | :------------ | | Outstanding Shares | 1,435,622 | 1,307,671 | 1,283,038 | | Weighted Average Price | $6.91 | $6.43 | $6.14 | | Remaining Life (Years) | 3.93 | 3.34 | 3.02 | | Granted (6 months ended July 31, 2023) | - | - | 30,000 | | Expired/Cancelled (6 months ended July 31, 2023) | - | - | (54,633) | Option Activity | Options | January 31, 2022 | January 31, 2023 | July 31, 2023 | | :---------------------- | :--------------- | :--------------- | :------------ | | Outstanding Shares | 190,751 | 470,335 | 500,335 | | Weighted Average Price | $4.26 | $4.13 | $4.12 | | Remaining Life (Years) | 2.97 | 2.53 | 2.06 | | Granted (6 months ended July 31, 2023) | - | - | 30,000 | | Intrinsic Value (July 31, 2023) | - | - | $19,475 | - The fair value of options issued for services during the six months ended July 31, 2023, amounted to **$75,030**, valued using the Black-Scholes model[97](index=97&type=chunk) [9. SEGMENT REPORTING](index=29&type=section&id=9.%20SEGMENT%20REPORTING) The company operates in two segments, Sales of Goods and Services, with all revenue generated within the United States Segment Performance | Segment | 6 Months Ended July 31, 2023 Net Sales | 6 Months Ended July 31, 2022 Net Sales | 6 Months Ended July 31, 2023 Gross Profit | 6 Months Ended July 31, 2022 Gross Profit | | :--------------------- | :------------------------------------- | :------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Pocono Pharmaceuticals | $967,826 | $796,894 | $400,061 | $364,112 | | 4P Therapeutics | $165,034 | $137,177 | $121,895 | $(11,830) | | Total | $1,132,860 | $934,071 | $521,956 | $352,282 | - All net sales and property and equipment are located within the **United States**[102](index=102&type=chunk) [10. COMMITMENTS AND CONTINGENCIES](index=30&type=section&id=10.%20COMMITMENTS%20AND%20CONTIGENCIES) The company has employment agreements with executives and a significant development agreement for its AVERSAL Fentanyl product - CEO and President annual salaries were mutually reduced from **$250,000 to $150,000**, and CFO's salary from **$210,000 to $110,000**, effective July 31, 2022[103](index=103&type=chunk)[104](index=104&type=chunk) - A feasibility agreement with Kindeva Drug Delivery for AVERSAL Fentanyl development has an estimated cost of **$2.3 million**, with **$1,510,000** incurred as of July 31, 2023[105](index=105&type=chunk)[107](index=107&type=chunk) - The company terminated its Securities Facility Services Agreement for dual listing on the **MERJ Upstream exchange**, effective May 31, 2023[112](index=112&type=chunk) [11. SUBSEQUENT EVENTS](index=31&type=section&id=11.%20SUBSEQUENT%20EVENTS) The company is involved in a dispute over offering cancellation fees, with an uncertain outcome and no estimable loss - The company is in a dispute with Joseph A. Gunnar over fees related to an offering cancellation, with the outcome currently **uncertain** and no reasonable estimate of loss[114](index=114&type=chunk) - Management believes current legal actions will not materially adversely affect the company's business or financial position[115](index=115&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=32&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, liquidity, and capital resources, focusing on its transdermal pharmaceutical business [Overview](index=32&type=section&id=Overview) The company's primary focus is developing its AVERSA™ abuse-deterrent fentanyl system, which requires significant capital and FDA approval - The primary business is the development of transdermal pharmaceutical products, with the lead product being the **AVERSA™ abuse-deterrent fentanyl transdermal system**[123](index=123&type=chunk) - The company's focus expanded to prescription pharmaceuticals after the **4P Therapeutics acquisition** in 2018 and now provides contract manufacturing services[124](index=124&type=chunk)[125](index=125&type=chunk) - Approximately **$13 million** is required for research and development of the abuse-deterrent fentanyl transdermal system[128](index=128&type=chunk) - The company consummated a public offering in October 2021, receiving net proceeds of **$5,836,230**, and has received **$2,942,970** from warrant exercises as of July 31, 2023[130](index=130&type=chunk) - A three-year **$5,000,000 credit line facility** was entered into on July 13, 2023, to fund the FDA approval process and commercial manufacturing of AVERSA™ Fentanyl[135](index=135&type=chunk)[136](index=136&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Revenue grew in recent periods, but higher R&D expenses for the Aversa Fentanyl product led to increased net losses [Three Months Ended July 31, 2023 and 2022](index=36&type=section&id=Three%20Months%20Ended%20July%2031%2C%202023%20and%202022) Revenue increased to $655,928, and despite lower SG&A costs, a rise in R&D expenses resulted in a net loss of $829,173 Three-Month Operational Performance | Metric | 3 Months Ended July 31, 2023 | 3 Months Ended July 31, 2022 | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Revenue | $655,928 | $456,149 | +43.8% | | Gross Margin | $299,672 | $151,796 | +97.4% | | Selling, General and Administrative | $678,738 | $908,173 | -25.3% | | Research and Development | $445,122 | $277,869 | +60.2% | | Net Loss | $(829,173) | $(1,038,675) | -20.2% | | Net Loss Per Share (Basic & Diluted) | $(0.11) | $(0.12) | -8.3% | [Six Months Ended July 31, 2023 and 2022](index=36&type=section&id=Six%20Months%20Ended%20July%2031%2C%202023%20and%202022) Revenue increased to $1,132,860, but R&D expenses more than doubled, leading to a higher net loss of $1,844,402 Six-Month Operational Performance | Metric | 6 Months Ended July 31, 2023 | 6 Months Ended July 31, 2022 | Change (YoY) | | :----------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Revenue | $1,132,860 | $934,071 | +21.3% | | Gross Margin | $521,956 | $352,282 | +48.2% | | Selling, General and Administrative | $1,518,470 | $1,676,624 | -9.4% | | Research and Development | $845,552 | $395,683 | +113.7% | | Net Loss | $(1,844,402) | $(1,728,664) | +6.7% | | Net Loss Per Share (Basic & Diluted) | $(0.24) | $(0.20) | +20.0% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position and working capital improved due to a $2 million credit line drawdown and a factoring arrangement Key Liquidity Metrics | Metric | July 31, 2023 | January 31, 2023 | | :----------------------- | :------------ | :--------------- | | Cash and cash equivalents | $2,334,553 | $1,985,440 | | Working capital | $2,399,446 | $1,945,132 | - The company used **$1,744,999 in cash from operations** and **$2,624 in investing activities** for the six months ended July 31, 2023[146](index=146&type=chunk)[148](index=148&type=chunk) - Cash provided by financing activities totaled **$2,096,736**, mainly from a **$2,000,000 credit line drawdown** and **$106,528** from a factoring arrangement[148](index=148&type=chunk) [Off Balance Sheet Arrangements](index=38&type=section&id=Off%20Balance%20Sheet%20Arrangements) The company has no off-balance sheet arrangements that are likely to materially affect its financial condition or liquidity - The company has **no off-balance sheet arrangements**[149](index=149&type=chunk) [Critical Accounting Policies](index=38&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies include the going concern assessment, use of estimates, revenue recognition, and asset valuation methods - Management believes the company can continue as a **going concern** for at least one year, supported by current cash and a **$5 million credit line**[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - The company's accounting policies are consistent with those detailed in **Note 2** of the financial statements[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=42&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There are no quantitative and qualitative disclosures about market risk applicable to the company - Quantitative and qualitative disclosures about market risk are **not applicable** to the company[169](index=169&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=42&type=section&id=Item%204%20Controls%20and%20Procedures) Disclosure controls were deemed ineffective due to material weaknesses, and management has initiated remediation efforts - Disclosure controls and procedures were evaluated as **not effective** as of July 31, 2023[171](index=171&type=chunk) - Material weaknesses identified include **absence of segregation of duties** and a **lack of qualified accounting personnel**[172](index=172&type=chunk) - Improvements include adding qualified accounting personnel and establishing additional monitoring controls[172](index=172&type=chunk) - **No material changes** were made to internal controls over financial reporting during the quarter[174](index=174&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=Part%20II%3A%20Other%20Information) [ITEM 1. LEGAL PROCEEDINGS](index=43&type=section&id=Item%201%20Legal%20Proceedings) This section states that there are no legal proceedings to report - There are **no legal proceedings** to report[177](index=177&type=chunk) [ITEM 1A. RISK FACTORS](index=43&type=section&id=Item%201A%20Risk%20Factors) The company faces significant risks related to its early-stage status, history of losses, and uncertainty of FDA approval - The company is an **early-stage enterprise** with minimal revenue and a history of losses, expecting to incur further losses[179](index=179&type=chunk) - There is **no assurance of obtaining FDA approval** for its lead product, which is critical for future profitability[180](index=180&type=chunk)[181](index=181&type=chunk) - The business is susceptible to adverse effects from **health pandemics**, such as COVID-19, which could disrupt operations and delay clinical programs[181](index=181&type=chunk) - Other key risks include challenges in establishing distribution networks and FDA-compliant manufacturing facilities[181](index=181&type=chunk)[182](index=182&type=chunk) [ITEM 6. EXHIBITS](index=45&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL documents - The exhibits include **Section 302 and 906 certifications** from the CEO and CFO, as well as various Inline XBRL documents[183](index=183&type=chunk) [SIGNATURES](index=46&type=section&id=SIGNATURES) This section contains the required signatures of the company's executive officers certifying the report - The report is signed by **Gareth Sheridan, Chief Executive Officer**, and **Gerald Goodman, Chief Financial Officer**, on September 8, 2023[187](index=187&type=chunk)