Nutriband (NTRB) - 2026 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed notes for July 31, 2025, and 2024 Condensed Consolidated Balance Sheets Provides a snapshot of the company's assets, liabilities, and equity as of July 31, 2025, and January 31, 2025, highlighting changes over the period Condensed Consolidated Balance Sheets | ASSETS | July 31, 2025 (Unaudited) | January 31, 2025 | Change (Absolute) | Change (%) | | :-------------------------- | :------------------------ | :----------------- | :---------------- | :--------- | | Cash and cash equivalents | $6,995,101 | $4,311,719 | $2,683,382 | 62.23% | | Accounts receivable-net | $160,804 | $73,847 | $86,957 | 117.75% | | Inventory | $138,031 | $212,041 | $(74,010) | -34.90% | | Prepaid expenses | $226,500 | $196,658 | $29,842 | 15.17% | | Total Current Assets | $7,520,436 | $4,794,265 | $2,726,171 | 56.86% | | PROPERTY & EQUIPMENT-net | $615,857 | $695,063 | $(79,206) | -11.40% | | Goodwill | $1,719,535 | $1,719,535 | $0 | 0.00% | | Operating lease right of use asset | $90,000 | $- | $90,000 | N/A | | Intangible assets-net | $230,760 | $261,092 | $(30,332) | -11.62% | | TOTAL ASSETS | $10,176,588 | $7,469,955 | $2,706,633 | 36.24% | | LIABILITIES | | | | | | Accounts payable and accrued expenses | $1,393,013 | $698,821 | $694,192 | 99.34% | | Deferred revenue | $19,419 | $155,880 | $(136,461) | -87.54% | | Operating lease liability-current portion | $31,007 | $- | $31,007 | N/A | | Notes payable-current portion | $128,369 | $128,144 | $225 | 0.18% | | Total Current Liabilities | $1,571,808 | $982,845 | $588,963 | 59.92% | | Note payable-net of current portion | $47,290 | $58,205 | $(10,915) | -18.75% | | Operating lease liability-net of current portion | $63,682 | $- | $63,682 | N/A | | Total Liabilities | $1,682,780 | $1,041,050 | $641,730 | 61.64% | | STOCKHOLDERS' EQUITY | | | | | | Preferred stock | $3,009 | $- | $3,009 | N/A | | Common stock | $12,016 | $11,075 | $941 | 8.49% | | Additional paid-in-capital | $50,417,781 | $45,029,317 | $5,388,464 | 11.97% | | Accumulated deficit | $(41,851,842) | $(38,462,636) | $(3,389,206) | 8.81% | | Total Stockholders' Equity | $8,493,808 | $6,428,905 | $2,064,903 | 32.12% | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $10,176,588 | $7,469,955 | $2,706,633 | 36.24% | Condensed Consolidated Statements of Operations Details the company's revenues, expenses, and net loss for the three and six months ended July 31, 2025, and 2024 Three Months Ended July 31, 2025 and 2024 | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :--------- | | Revenue | $622,452 | $442,830 | $179,622 | 40.56% | | Cost of revenues | $465,571 | $341,272 | $124,299 | 36.42% | | Research and development | $562,554 | $773,975 | $(211,421) | -27.32% | | Selling, general and administrative | $1,597,540 | $737,325 | $860,215 | 116.67% | | Total Costs and Expenses | $2,625,665 | $1,852,572 | $773,093 | 41.73% | | Loss from operations | $(2,003,213) | $(1,409,742) | $(593,471) | 42.10% | | Interest income | $8,649 | $77,332 | $(68,683) | -88.81% | | Loss on extinguishment of debt | $- | $(368,036) | $368,036 | -100.00% | | Interest expense | $(5,773) | $(5,019) | $(754) | 15.02% | | Net loss | $(2,000,337) | $(1,705,465) | $(294,872) | 17.29% | | Preferred shares dividend | $(21,814,166) | $- | $(21,814,166) | N/A | | Net loss available to common stockholders - basic and diluted | $(23,814,503) | $(1,705,465) | $(22,109,038) | 1296.35% | | Net loss per share available to common stockholders - basic and diluted | $(2.12) | $(0.15) | $(1.97) | 1313.33% | | Weighted average common shares outstanding - basic and diluted | 11,218,581 | 11,061,725 | 156,856 | 1.42% | Six Months Ended July 31, 2025 and 2024 | Metric | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | Change (Absolute) | Change (%) | | :------------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :--------- | | Revenue | $1,289,884 | $851,362 | $438,522 | 51.51% | | Cost of revenues | $881,022 | $585,018 | $296,004 | 50.60% | | Research and development | $1,245,980 | $1,748,510 | $(502,530) | -28.74% | | Selling, general and administrative | $2,579,592 | $1,817,053 | $762,539 | 41.96% | | Total Costs and Expenses | $4,706,594 | $4,150,581 | $556,013 | 13.39% | | Loss from operations | $(3,416,710) | $(3,299,219) | $(117,491) | 3.56% | | Interest income | $39,157 | $77,350 | $(38,193) | -49.38% | | Loss on extinguishment of debt | $- | $(368,036) | $368,036 | -100.00% | | Interest expense | $(11,653) | $(13,637) | $1,984 | -14.55% | | Net loss | $(3,389,206) | $(3,603,542) | $214,336 | -5.95% | | Preferred shares dividend | $(21,814,166) | $- | $(21,814,166) | N/A | | Net loss available to common stockholders - basic and diluted | $(25,203,372) | $(3,603,542) | $(21,599,830) | 599.39% |\n| Net loss per share available to common stockholders - basic and diluted | $(2.26) | $(0.36) | $(1.90) | 527.78% | | Weighted average common shares outstanding - basic and diluted | 11,172,543 | 10,111,357 | 1,061,186 | 10.50% | Consolidated Statements of Stockholders' Equity Outlines changes in stockholders' equity, including preferred stock, common stock, additional paid-in capital, and accumulated deficit for the periods presented - For the six months ended July 31, 2025, total stockholders' equity increased by $2,064,903 to $8,493,808. Key activities included the issuance of 3,008,642 preferred shares as a common stock dividend valued at $3,009, and significant proceeds from the exercise of warrants ($5,305,503) and employee stock options ($44,206). The accumulated deficit increased by $3,389,206 due to net loss[12][15] - For the six months ended July 31, 2024, total stockholders' equity increased by $6,022,751 to $12,460,986. This was primarily driven by $8,400,000 in proceeds from the sale of common stock and warrants, and $553,335 from options issued for services. The period also saw a net loss of $3,603,542[13][14][17] Condensed Consolidated Statements of Cash Flows Presents the cash inflows and outflows from operating, investing, and financing activities for the six months ended July 31, 2025, and 2024 Cash Flow Activity Summary | Cash Flow Activity | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------------------------- | :------------------------------- | :---------------- | :--------- | | Net Cash Used In Operating Activities | $(2,650,313) | $(2,377,673) | $(272,640) | 11.47% | | Net Cash Used in Investing Activities | $(5,324) | $(45,085) | $39,761 | -88.19% | | Net Cash Provided by Financing Activities | $5,339,019 | $8,689,783 | $(3,350,764) | -38.56% | | Net change in cash | $2,683,382 | $6,267,025 | $(3,583,643) | -57.18% | | Cash and cash equivalents - End of period | $6,995,101 | $6,759,967 | $235,134 | 3.48% | - Non-cash financing activities for the six months ended July 31, 2025, included $21,814,166 for Preferred Shares issued as Common stock dividend and $108,000 for the measurement of operating lease right-of-use assets and liabilities[19] - Non-cash financing activities for the six months ended July 31, 2024, included $672,956 for debt settlement issued by the issuance of common stock and warrants[19] Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Nutriband Inc. develops transdermal pharmaceutical products using Aversa technology, operating through 4P Therapeutics (drug development) and Pocono Pharmaceuticals (contract manufacturing) - Nutriband Inc. was incorporated in Nevada on January 4, 2016, and acquired Nutriband Ltd. in the same month[22] - On August 1, 2018, the Company acquired 4P Therapeutics LLC for $2,250,000, making its drug development business the principal focus, particularly incorporating Aversa abuse deterrent technology into transdermal patches[23][24] - On August 31, 2020, the Company acquired assets and liabilities of Pocono Coated Products LLC and 100% of Active Intelligence LLC, contributing them to its wholly-owned subsidiary Pocono Pharmaceuticals Inc., which specializes in coated products contract development and manufacturing[25][26] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Outlines Nutriband Inc.'s significant accounting policies, including going concern, consolidation, revenue recognition, and asset valuation, with no major changes from the prior fiscal year - As of July 31, 2025, the Company had cash and cash equivalents of $6,995,101 and working capital of $5,948,628. For the six months ended July 31, 2025, the Company incurred a net loss from operations of $3,416,710 and used cash flow from operations of $2,650,313[31] - Management believes sufficient funds will be generated from operations and recent financing activities (including $8,400,000 from equity financing in April 2024 and $5,305,503 from warrant exercises in the six months ended July 31, 2025) to fund operations for one year, alleviating substantial doubt about going concern[31][32] Revenue Disaggregation by Type and Geographic Location | Revenue by type | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Sale of goods | $1,289,884 | $851,362 | $622,452 | $442,830 | | Services | $- | $- | $- | $- | | Total | $1,289,884 | $851,362 | $622,452 | $442,830 | | Revenue by geographic location | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | United States | $1,282,254 | $851,362 | $614,822 | $442,830 | | Foreign | $7,630 | $- | $7,630 | $- | | Total | $1,289,884 | $851,362 | $622,452 | $442,830 | 3. PROPERTY AND EQUIPMENT Net property and equipment decreased to $615,857 by July 31, 2025, primarily due to accumulated depreciation, with $84,530 in depreciation expenses Property and Equipment Details | Category | July 31, 2025 | January 31, 2025 | | :-------------------------- | :-------------- | :--------------- | | Lab equipment | $144,585 | $144,585 | | Machinery and equipment | $1,389,756 | $1,384,432 | | Furniture and fixtures | $19,643 | $19,643 | | Total | $1,553,984 | $1,548,660 | | Less: Accumulated depreciation | $(938,127) | $(853,597) | | Net Property and Equipment | $615,857 | $695,063 | - Depreciation expenses amounted to $84,530 for the six months ended July 31, 2025, compared to $82,475 for the same period in 2024. $67,624 of the 2025 depreciation expense was allocated to the cost of goods sold[64] 4. NOTES PAYABLE Details various notes payable, including a $160,000 line of credit, a converted $5,000,000 related-party credit line, and a $106,528 secured borrowing liability - Active Intelligence has a $160,000 line of credit due October 16, 2028, with 5% annual interest. As of July 31, 2025, $60,748 was due, with $17,109 current[66] - A $5,000,000 related-party credit line note was amended on July 17, 2023. On May 15, 2024, $300,000 of principal and $4,922 of accrued interest were converted into 76,230 common shares and 152,460 warrants, resulting in a $368,036 loss on extinguishment. The balance due as of July 31, 2025, was $-0-[68] - A secured borrowing liability of $106,528 was recorded on July 19, 2023, from an accounts receivable sale related to a bankruptcy claim, bearing 10% interest. This is classified as a current liability[69] - Total interest expenses for the six months ended July 31, 2025, were $11,653, compared to $12,401 for the same period in 2024[70] 5. INTANGIBLE ASSETS Net intangible assets decreased to $230,760 by July 31, 2025, due to amortization expenses and a prior impairment charge to intellectual property Intangible Asset Details | Intangible Asset Category | July 31, 2025 | January 31, 2025 | | :-------------------------------- | :-------------- | :--------------- | | Customer base | $214,640 | $214,640 | | Intellectual property and trademarks | $623,822 | $623,822 | | Total | $838,462 | $838,462 | | Less: Accumulated amortization | $(607,702) | $(577,370) |\n| Net Intangible Assets | $230,760 | $261,092 | - Amortization expenses for the six months ended July 31, 2025, amounted to $30,332, a decrease from $56,575 for the same period in 2024[71] - During the year ended January 31, 2025, the Company recorded an impairment charge of $293,038 to its Intellectual property[71] 6. RELATED PARTY TRANSACTIONS Details related party transactions, including warrant exercises, participation in equity financing, and conversion of a credit line into common stock and warrants - During the six months ended July 31, 2025, a director and a related party exercised warrants, resulting in the issuance of 311,041 and 160,000 shares of common stock, respectively[73] - On April 19, 2024, related parties invested $7,120,000 in an $8,400,000 equity financing, receiving 1,780,000 shares of common stock and warrants to purchase 3,560,000 shares[78] - On May 14, 2024, a $300,000 credit line facility from TII Jet Services LDA (a related party) was converted into 76,240 shares of common stock and 152,460 warrants[78] 7. STOCKHOLDERS' EQUITY Covers the issuance of Series A Convertible Preferred Stock dividend, convertible upon FDA approval, and various common stock activities including warrant conversions and option exercises - On July 9, 2025, the board authorized a preferred stock dividend, issuing one share of Series A Preferred Stock for each four shares of common stock held. On August 5, 2025, 3,008,642 shares of Series A Preferred Stock were issued, with a fair value of $21,814,166[75][127] - Series A Preferred Stock is convertible into one share of Common Stock at the holder's option following FDA approval for commercial sale of the Company's AVERSA abuse deterrent transdermal products[76][82][127] - During the six months ended July 31, 2025, common stock activities included issuing 8,500 treasury shares for services ($65,410 expense), issuing 5,000 common shares to a consultant ($39,050 expense), cashless conversions of warrants resulting in 46,961 and 35,540 common shares, and employee stock option exercises for 20,055 common shares ($44,206 proceeds)[86] 8. OPTIONS and WARRANTS Details outstanding warrants and stock options as of July 31, 2025, including issuance, exercise activities, and Black-Scholes valuation parameters Warrants Outstanding Summary | | Shares | Exercise Price | Remaining Life | Intrinsic Value | | :-------------------------- | :----- | :------------- | :------------- | :-------------- | | Outstanding, January 31, 2025 | 5,546,973 | $6.37 | 3.68 years | $- | | Exercised | (982,010) | $6.15 | - | $- | | Outstanding- July 31, 2025 | 4,564,963 | $6.42 | 3.19 years | $3,614,071 | | Exercisable - July 31, 2025 | 4,564,963 | $6.42 | 3.19 years | $3,614,071 | Options Outstanding Summary | | Shares | Exercise Price | Remaining Life | Intrinsic Value | | :-------------------------- | :----- | :------------- | :------------- | :-------------- | | Outstanding, January 31, 2025 | 1,373,668 | $3.68 | 1.90 years | $- | | Exercised | (20,055) | $1.07 | - | $- | | Outstanding- July 31, 2025 | 1,353,613 | $3.70 | 1.40 years | $4,822,505 | | Exercisable - July 31, 2025 | 1,353,613 | $3.70 | 1.40 years | $4,822,505 | - The Company used the Black-Scholes valuation model for warrants and options, with dividend rates of 0%, expected terms of 1.5-2.5 years for warrants and 1.5 years for options, volatility rates of 105.98%-145.05% for warrants and 97.83%-114.86% for options, and risk-free rates of 3.65%-4.45% for warrants and 4.00%-4.87% for options[91][97] 9. SEGMENT REPORTING Reports financial performance for Pocono Pharmaceuticals (contract manufacturing) and 4P Therapeutics (drug development), with Pocono generating $1,289,884 in net sales Net Sales and Gross Profit by Segment | Segment | Six Months Ended July 31, 2025 (Net Sales) | Six Months Ended July 31, 2024 (Net Sales) | Six Months Ended July 31, 2025 (Gross Profit) | Six Months Ended July 31, 2024 (Gross Profit) | | :--------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Pocono Pharmaceuticals | $1,289,884 | $851,362 | $408,862 | $266,344 | | 4P Therapeutics | $- | $- | $- | $- | | Total | $1,289,884 | $851,362 | $408,862 | $266,344 | Operating Expenses by Segment (Six Months Ended July 31, 2025) | Operating Expense Category | Amount | | :--------------------------------------- | :----- | | Selling, general and administrative-Pocono Pharmaceuticals | $311,354 | | Selling, general and administrative-4P Therapeutics | $52,627 | | Selling, general and administrative-Corporate | $2,215,615 | | Research and development-4P Therapeutics | $1,245,980 | | Total Operating Expenses | $3,825,576 | Assets by Segment (July 31, 2025) | Segment | Assets | | :--------------------- | :------------- | | Corporate | $6,435,611 | | Pocono Pharmaceuticals | $1,899,844 | | 4P Therapeutics | $1,841,133 | | Total | $10,176,588 | 10. COMMITMENTS AND CONTINGENCIES Details employment agreements, Aversa Fentanyl development budget and milestone, a secured loan, and ongoing litigation with Joseph Gunnar, LLC - CEO Gareth Sheridan and President Serguei Melnik have three-year employment agreements (effective Feb 1, 2022) with annual salaries of $150,000 (reduced from $250,000). CFO Gerald Goodman's agreement (effective Feb 1, 2022) has an annual salary of $110,000 (reduced from $210,000)[105][106] - The commercial development and clinical supply agreement with Kindeva Drug Delivery for Aversa Fentanyl has a remaining budget of approximately $3.6 million through NDA submission (amended from $5.2 million) and includes a $3.0 million milestone payment upon FDA approval[107] - The Company is a defendant in a lawsuit by Joseph Gunnar, LLC and Lucosky Brookman LLP, alleging breach of contract and seeking over $500,000 in damages. The Company denies allegations and has initiated counterclaims seeking $1,000,000 for each claim[110][111] 11. SUBSEQUENT EVENTS Reports subsequent grants of stock options to executive officers and employees in August 2025, totaling 409,167 options with a combined fair value of $1,285,142 - On August 11, 2025, 40,000 options to purchase common shares were issued to an executive officer at $6.85 per share, with a fair value of $137,040[113] - On August 20, 2025, 369,167 options to purchase common shares were issued to executive officers and employees at prices of $6.22 - $6.84 per share, with a fair value of $1,148,102[113] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis of financial condition and results of operations, covering transdermal products, recent developments, performance comparison, liquidity, and critical accounting policies FORWARD LOOKING STATEMENTS Discusses the nature of forward-looking statements in the report, their inherent risks, and the Company's policy on updates - This report contains forward-looking statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions[115] - Forward-looking statements are subject to inherent risks and uncertainties, and actual results may differ materially due to factors discussed in the 10-K and 10-Q reports[116] - The Company undertakes no obligation to revise or update any forward-looking statements, except as required by law[117] Overview Provides a general description of Nutriband Inc.'s primary business, revenue generation through subsidiaries, and operational locations - Nutriband Inc.'s primary business is the development of transdermal pharmaceutical products, particularly those based on its proprietary AVERSA abuse deterrent transdermal technology[118] - Revenues are generated through subsidiaries Pocono Pharmaceuticals (contract manufacturing for health, wellness, and OTC products) and 4P Therapeutics (contract research and development for pharmaceutical and medical devices)[119] - The Company's principal offices are in Orlando, Florida, with a manufacturing facility in Cherryville, North Carolina, and primarily operates in the United States[120] Recent Developments Highlights key recent events, including the revised agreement with Kindeva Drug Delivery for Aversa™ Fentanyl and an $8,400,000 equity financing - On February 13, 2025, Nutriband and Kindeva Drug Delivery revised their Commercial Development and Clinical Supply Agreement for Aversa™ Fentanyl, formalizing an exclusive product development partnership with shared development costs and milestone payments[121] - On April 19, 2024, the Company completed an $8,400,000 equity financing with European investors, issuing 2,100,000 units (each consisting of one common stock share and two warrants exercisable at $6.43)[122] Our Business Details the Company's core business activities, including its AVERSA abuse deterrent transdermal products, employee stock option plan, and preferred stock dividend AVERSA Abuse Deterrent Transdermal Products Focuses on the development of AVERSA Fentanyl and the expansion of AVERSA technology to other transdermal pharmaceutical products - The lead product under development is AVERSA Fentanyl, an abuse deterrent fentanyl transdermal system, which combines an approved generic fentanyl patch with the Company's AVERSA technology[123] - The AVERSA technology is being expanded to include AVERSA Buprenorphine and AVERSA Methylphenidate, and other transdermal pharmaceutical products for drugs typically delivered by injection[123] - In January 2024, a commercial development and clinical supply agreement was signed with Kindeva Drug Delivery for AVERSA Fentanyl, focusing on developing the commercial manufacturing process[124] Employee Stock Option Plan Describes the 2021 Employee Stock Option Plan, including reserved shares, automatic annual increases, and recent amendments - The 2021 Employee Stock Option Plan initially reserved 350,000 shares, increasing to 1,645,751 shares as of September 8, 2025[125] - The Plan includes an automatic annual increase on February 1st, equal to the lesser of 250,000 shares or 5% of outstanding common stock[126] - An amendment to the Plan, increasing shares to 1,400,000, was approved by stockholders at the 2025 Annual Meeting[126] Preferred Stock Dividend Details the issuance of Series A Convertible Preferred Stock dividend on August 5, 2025, and its conversion terms upon FDA approval - On August 5, 2025, the Company issued a preferred stock dividend of Series A Convertible Preferred Stock to shareholders of record July 25, 2025[127] - 3,008,643 shares of Series A Preferred Stock were issued, with a fair value of $21,814,166[127] - Each Series A Preferred Stock share is convertible into one common stock share following FDA approval for commercial sale of the Company's AVERSA abuse deterrent transdermal technology[127] Results of Operations Analyzes the Company's financial performance, including revenue, gross profit, expenses, and net loss for the three and six months ended July 31, 2025, and 2024 Three Months Ended July 31, 2025 and 2024 Compares key financial metrics for the three months ended July 31, 2025, and 2024, highlighting revenue growth, expense increases, and net loss - Revenue increased by 40.56% to $622,452 for the three months ended July 31, 2025, primarily from the Pocono Pharmaceuticals segment due to increased demand and equipment implementation[128] - Gross profit increased by 54.42% to $156,881, driven by higher margins in the sales mix[128] - Selling, general and administrative expenses surged by 116.67% to $1,597,540, mainly due to increases in compensation-based expenses[129] - Net loss available to common stockholders significantly increased to $(23,814,503) or $(2.12) per share, primarily due to a preferred stock dividend of $(21,814,166)[132] Six Months Ended July 31, 2025 and 2024 Compares key financial metrics for the six months ended July 31, 2025, and 2024, detailing revenue growth, expense changes, and net loss - Revenue increased by 51.51% to $1,289,884 for the six months ended July 31, 2025, driven by sales from the Pocono Pharmaceuticals segment[133] - Gross profit increased by 53.51% to $408,862, attributed to higher margins in the sales mix[133] - Selling, general and administrative expenses rose by 41.96% to $2,579,592, mainly due to increases in equity-based expenses[134] - Net loss available to common stockholders significantly increased to $(25,203,372) or $(2.26) per share, primarily due to a preferred stock dividend of $(21,814,166)[137] Liquidity and Capital Resources Assesses the Company's cash position, working capital, and cash flow activities from operations, investing, and financing Liquidity and Capital Resources Summary | Metric | July 31, 2025 | January 31, 2025 | Change (Absolute) | Change (%) | | :-------------------------- | :-------------- | :--------------- | :---------------- | :--------- | | Cash and cash equivalents | $6,995,101 | $4,311,719 | $2,683,382 | 62.23% | | Working capital | $5,948,628 | $3,811,420 | $2,137,208 | 56.07% | - For the six months ended July 31, 2025, the Company used $2,650,313 in operating activities, $5,324 in investing activities (primarily equipment purchases), and generated $5,339,019 from financing activities (primarily warrant exercises)[139][140] Off Balance Sheet Arrangements States the Company has no off-balance sheet arrangements with a material effect on its financial condition or results of operations - The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources[141] Critical Accounting Policies Confirms that critical accounting policies remained consistent from the prior fiscal year - Critical accounting policies remained relatively consistent from the year ended January 31, 2025[142] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK States that quantitative and qualitative disclosures about market risk are not applicable to the Company - Quantitative and qualitative disclosures about market risk are not applicable[143] ITEM 4. CONTROLS AND PROCEDURES Details the evaluation of disclosure controls and procedures, identifying material weaknesses and outlining corrective actions, with no material changes to internal controls Disclosure controls and procedures Reports that disclosure controls and procedures were not effective as of July 31, 2025, due to material weaknesses, and outlines corrective actions - As of July 31, 2025, the Company's disclosure controls and procedures were evaluated and concluded to be not effective[145] - Material weaknesses identified include the absence of segregation of duties, lack of qualified accounting personnel, and excessive reliance on third-party consultants[146] - Corrective actions include adding qualified accounting personnel, establishing additional monitoring controls, and improving internal controls for detailed accounting review of revenue, accounts receivable, and accounts payable transactions[146] Changes in internal controls over financial reporting States that no material changes were made to internal controls over financial reporting during the quarter - No changes were made to internal controls in the quarterly period covered by this report that have materially affected, or are reasonably likely materially to affect, internal control over financial reporting[148] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Details ongoing litigation where Nutriband Inc. is a defendant, denying allegations and pursuing counterclaims for breach of contract and other claims - The Company is a defendant in a lawsuit by Joseph Gunnar, LLC and Lucosky Brookman LLP, alleging breach of contract, fraudulent activities, and tortious interference, seeking over $500,000 in damages[151] - Nutriband denies all allegations, claiming the engagement letter was unenforceable, and has initiated counterclaims against Joseph Gunnar & Co. for intentional interference and breach of fiduciary duty, seeking $1,000,000 for each claim[152] - The case is in the discovery stage, and the Company has not responded to a settlement offer of $100,000 proposed by the plaintiffs in early 2024[153] ITEM 1A. RISK FACTORS Outlines significant risks including economic uncertainty, substantial losses in drug development, stock price volatility, potential dilution, and rapid technological changes - Economic uncertainty, including U.S. economic policies and inflationary factors, may affect product costs, timing of FDA approvals, and overall profitability[155] - As a low-revenue start-up in drug development, the Company incurs substantial losses during product development and FDA testing, with no assurance of achieving profitability or positive cash flow[156][157] - The Company's stock price is likely to remain volatile, and future equity offerings or sales of common stock could lead to significant dilution for stockholders[159][160] - The drug delivery industry is subject to rapid technological change, and the Company's future success depends on its ability to keep pace with these advancements to avoid product obsolescence[161] ITEM 5. OTHER INFORMATION Reports CEO Gareth Sheridan's temporary leave for an election campaign, with Co-Founder Serguei Melnik assuming interim CEO responsibilities - On August 11, 2025, CEO Gareth Sheridan stepped aside for three months to enter the Irish Presidential election campaign[163] - Serguei Melnik, co-Founder and Chairman, has taken over as interim CEO, guiding the Company towards its target NDA filing with the FDA in 2026 and focusing on strategic development and shareholder value[164] ITEM 6. EXHIBITS Lists exhibits filed with the Form 10-Q, including Section 302 and 906 certifications and various Inline XBRL documents - The exhibits include Section 302 Certifications from the CEO and CFO, Section 906 Certifications from the CEO and CFO, and various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents, and Cover Page Interactive Data File)[165]