United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, ~~2021~~2022

[_] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period ___________ to ____________.

Commission File Number 333-152444

AUTO PARTS 4LESS GROUP, INC.

FORMERLY THE 4LESS GROUP, ~~INC~~.INC.

(Exact name of small business issuer as specified in its charter)

Nevada		7389		90-1494749
(State or jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification No.)

106 W. Mayflower, Las Vegas, NV89030

(Address of principal executive offices)

~~(702)~~ (702) 267-6100

(Issuer’s telephone number)

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FLES	OTCQB

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [_].

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer [_] Accelerated Filer [_]

Non-Accelerated Filer [X] Smaller Reporting Company ~~[X]~~[X] Emerging Growth Company ~~[_]~~[_]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act):

Yes [_] No [X].

As of June 14, ~~2021,~~2022, there were ~~2,584,413~~1,544,449 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	3

ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	3

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2223

ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	2627

ITEM 4.	Controls and Procedures	2627

PART II.	OTHER INFORMATION	27

ITEM 1.	Legal Proceedings	27

ITEM 1A.	Risk Factors	27

ITEM 2.	Unregistered Sales of Securities and Use of Proceeds	27

ITEM 3.	Default Upon Senior Securities	27

ITEM 4.	Mine Safety Disclosures	27

ITEM 5.	Other Information	27

ITEM 6.	Exhibits	27

- 2 -

PART 1: FINANCIAL INFORMATION

ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUTO PARTS 4LESS GROUP, INC.

FORMERLY THE 4LESS GROUP, INC.

Condensed Consolidated Balance Sheets


	April 30, 2021			January 31, 2021			April 30, 2022			January 31, 2022
	Unaudited			(*)			Unaudited			^(*)
Assets
Current Assets
Cash and Cash Equivalents	$	1,342,321		$	277,664		$	461,060		$	77,498
Share Subscriptions Receivable		94,817			100,000
Inventory		307,526			323,411			398,881			432,583
Prepaid Expenses		11,609			11,859			12,189			16,065
Deferred Offering Costs								23,000			23,000
Other Current Assets		4,827			2,149			4,123			15,469
Total Current Assets		1,761,100			715,083			899,253			564,615
Operating Lease Assets		319,698			344,413			213,714			242,583
Property and Equipment, net of accumulated depreciation of $99,558, and $88,823		255,619			80,027
Property and Equipment, net of accumulated depreciation of $135,406, and $122,469								209,541			221,336

Total Assets	$	2,336,417		$	1,139,523		$	1,322,508		$	1,028,534

Liabilities and Stockholders’ Deficit
Current Liabilities
Bank overdraft							$	—		$	11,055
Accounts Payable	$	865,586		$	869,765			1,093,942			1,228,039
Accrued Expenses		560,934			1,382,839			943,482			796,397
Accrued Expenses – Related Party		81,173			106,173			46,273			46,173
Customer Deposits		268,932			188,385			291,684			530,900
Deferred Revenue		981,830			687,766			332,823			665,143
Short-Term Debt		446,404			716,142			3,291,220			3,454,133
Current Operating Lease Liability		99,937			90,286			96,772			100,001
Short-Term Convertible Debt, net of debt discount of $180,789 and $309,317		340,711			336,683
Short-Term Convertible Debt, net of debt discount of $3,339,672 and $2,131,034								2,263,728			647,966
Derivative Liabilities		148,957			213,741			1,991,793			1,263,442
PPP Loan-current portion		79,362			43,294
Shareholder Loans Payable								50,000			119,476
Current Portion – Long-Term Debt		588,067			424,064			27,828			27,737
Total Current Liabilities		4,461,893			5,059,138			10,429,545			8,890,462

Non-Current Lease Liability		211,195			244,049			114,423			138,551
PPP Loan -long term portion		130,085			166,153
Long-Term Debt		1,018,990			890,373			108,962			115,900

Total Liabilities		5,822,163			6,359,713			10,652,930			9,144,913

Commitments and Contingencies		—			—			—			—
Redeemable Preferred Stock
Series D Preferred Stock, $0.001 par value, 870 shares authorized, 870 and 870 shares issued and outstanding		870,000			870,000
Series D Preferred Stock, $0.001 par value, 870 shares authorized, 870 and 870 shares issued and outstanding								870,000			870,000

Stockholders’ Deficit
Preferred Stock – Series A, $0.001 par value, 330,000 shares authorized, 0 and 0 shares issued and outstanding		—			—
Preferred Stock – Series B, $0.001 par value, 20,000 shares authorized, 20,000 and 20,000 shares issued and outstanding		20			20
Preferred Stock – Series C, $0.001 par value, 7,250 shares authorized, 7,250 and 7,250 shares issued and outstanding		7			7
Common Stock, $0.000001 par value, 15,000,000 shares authorized, 2,574,413 and 1,427,163 shares issued, issuable and outstanding		3			1
Preferred Stock – Series A, $0.001 par value, 330,000 shares authorized, 0 and 0 shares issued and outstanding								—			—
Preferred Stock – Series B, $0.001 par value, 20,000 shares authorized, 20,000 and 20,000 shares issued and outstanding								20			20
Preferred Stock – Series C, $0.001 par value, 7,250 shares authorized, 0 and 7,250 shares issued and outstanding								—			7
Common Stock, $0.000001 par value, 75,000,000 shares authorized, 1,500,362 and 341,023 shares issued, issuable and outstanding								1			—
Additional Paid In Capital		16,593,758			14,291,759			20,845,448			19,465,327
Accumulated Deficit		(20,949,534	)		(20,381,977	)		(31,045,891	)		(28,451,733	)
Total Stockholders’ Deficit		(4,355,746	)		(6,090,190	)		(10,200,422	)		(8,986,379	)

Total Liabilities and Stockholders’ Deficit	$	2,336,417		$	1,139,523		$	1,322,508		$	1,028,534

* Derived from audited information

Derived from audited information

The Accompanying Notes are an Integral Part of these Unaudited Condensed Consolidated Financial Statements.

- 3 -

AUTO PARTS 4LESS GROUP, INC.

FORMERLY THE 4LESS GROUP, INC.

Condensed Consolidated Statements of Operations

For the Three Months Ended April 30, ~~2021~~2022 and April 30, ~~2020~~2021

(Unaudited)


	2021			2020			2022			2021
Revenue	$	3,728,784		$	2,000,071		$	1,729,930		$	3,728,784

Cost of Revenue		2,766,578			1,428,304			1,468,003			2,766,578

Gross Profit		962,206			571,767			261,927			962,206

Operating Expenses:
Depreciation		10,735			6,647			12,938			10,735
Postage, Shipping and Freight		193,187			113,138			74,698			193,187
Marketing and Advertising		608,034			18,068			274,427			608,034
E Commerce Services, Commissions and Fees		416,127			166,419			330,697			416,127
Operating lease cost and rent		30,479			34,079			30,479			30,479
Personnel Costs		297,493			266,735			205,299			297,493
General and Administrative		648,509			175,642			354,417			648,509
Total Operating Expenses		2,204,564			780,728			1,282,955			2,204,564

Net Operating Loss		(1,242,358	)		(208,961	)		(1,021,028	)		(1,242,358	)

Other Income (Expense)
Gain (Loss) on Derivatives		4,187			(74,780	)
Gain (Loss) on Change in Fair Value of Derivatives								(337,737	)		4,187
Gain on Settlement of Debt		914,049			2,172,646			3,589			914,049
Amortization of Debt Discount		(128,528	)		(578,913	)		(725,280	)		(128,528	)
Interest Expense		(114,907	)		(123,094	)		(513,702	)		(114,907	)
Total Other Income (Expense)		674,801			1,395,859			(1,573,130	)		674,801

Net Income (Loss)	$	(567,557)		$	1,186,898		$	(2,594,158	)	$	(567,557	)

Basic Average Shares Outstanding		1,940,098			551,590			1,342,433			194,010
Basic Income (Loss) per Share	$	(0.29)		$	2.15		$	(1.93	)	$	(2.93	)
Diluted Weighted Average Shares Outstanding		1,940,098			88,598,209			1,342,433			194,010
Diluted Income (Loss) per Share	$	(0.29)		$	0.01		$	(1.93	)	$	(2.93	)

The Accompanying Notes are an Integral Part of these Unaudited Condensed Consolidated Financial Statements.

- 4 -

AUTO PARTS 4LESS GROUP, INC.

FORMERLY THE 4LESS GROUP, INC.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended April 30, ~~2021~~2022 and April 30, ~~2020~~2021

(Unaudited)


	2021			2020			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$	(567,557	)	$	1,186,898		$	(2,594,158	)	$	(567,557	)
Adjustments to reconcile net loss to cash used by operating activities:
Depreciation		10,735			6,647			12,938			10,735
(Gain) loss in Fair Value on Derivative Liabilities		(4,187	)		74,780			337,737			(4,187	)
Amortization of Debt Discount		128,528			578,913			725,280			128,528
Interest Expense on Penalty Warrants								315,150			—
Loan Penalties Capitalized to Loan and Accrued Interest		28,000			—			—			28,000
Stock Based Payment of Consulting Fees		107,500			—			—			107,500
Gain on Settlement of Debt		(914,049	)		(2,172,646	)		(3,589	)		(914,049	)
Reduction of Right of Use Asset								27,357			23,203
Accretion of Lease Liability								3,122			7,276
Change in Operating Assets and Liabilities:
Decrease (Increase) in Inventory		15,886			(35,451	)		33,702			15,886
Decrease in Prepaid Rent and Expenses		1,762			3,156
(Increase) Decrease in Prepaid Rent and Expenses								(5,667	)		1,762
(Increase) Decrease in Other Current Assets		(2,677	)		(21,721	)		11,346			(2,677	)
Increase (Decrease) in Accounts Payable		(2,558	)		175,430			(134,100	)		(2,558	)
Increase in Accrued Expenses		28,548			151,078			147,088			28,548
Decrease in Accrued Expenses -Related Party		(25,000	)		—
Increase in Customer Deposits		80,547			—
Increase in Deferred Revenue		294,064			—
Increase (Decrease) in Accrued Expenses -Related Party								100			(25,000	)
Operating Lease Payments								(30,479	)		(30,479	)
Increase (Decrease) in Customer Deposits								(239,216	)		80,547
Increase (Decrease) in Deferred Revenue								(332,320	)		294,064
CASH FLOWS (USED IN) OPERATING ACTIVITIES		(820,458	)		(52,916	)		(1,725,709	)		(820,458	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment		(35,000	)		—			(1,142	)		(35,000	)
CASH FLOWS (USED IN) INVESTING ACTIVITIES		(35,000	)		—			(1,142	)		(35,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issuance of Common Shares		2,099,683			—			—			2,099,683
Proceeds from Share Subscriptions Receivable		100,000			—			—			100,000
Repayment of Shareholder loans payable, net								(69,476	)		—
Proceeds from Short Term Debt		—			205,000			—			—
Payments on Short Term Debt		(128,075	)		(124,716	)		(162,913	)		(128,075	)
Payments on Long Term Debt		(1,993	)		(1,249	)		(6,848	)		(1,993	)
Proceeds from Issuance of Convertible Notes Payable								2,395,250			—
Payments on Convertible Notes Payable		(149,500	)		—			(45,600	)		(149,500	)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		1,920,115			79,035			2,110,413			1,920,115

NET INCREASE IN CASH		1,064,657			26,119			383,562			1,064,657

CASH AT BEGINNING OF PERIOD		277,664			162,124			77,498			277,664

CASH AT END OF PERIOD	$	1,342,321		$	188,243		$	461,060		$	1,342,321

Supplemental Disclosure of Cash Flows Information:
Cash Paid for Interest	$	42,949		$	13,210		$	23,872		$	42,949
Convertible Notes Interest and Derivatives Converted to Common Stock	$	—		$	11,503
Short Term Debt and Interest Extinguished Through Issuance of Series C Preferred Stock	$	—		$	144,076
Convertible Notes and Interest Extinguished Through Issuance of Series C Preferred Stock	$	—		$	1,245,456
Derivative Debt Discount							$	394,203		$	—
Relative Fair Value of Warrants and Common Shares Issued with Debt and Applies as Discount							$	1,064,965		$	—
Debt discount							$	474,750		$	—
Conversion of Series C Preferred Stock Into Common Stock							$	6		$	—

Issuance of Common Shares for Share Subscription Receivable	$	94,817		$	—		$	—		$	94,817
Loans to acquire Fixed Assets	$	151,327		$	—		$	—		$	151,327

The Accompanying Notes are an Integral Part of these Unaudited Condensed Consolidated Financial Statements.

- 6 -

AUTO PARTS 4LESS GROUP, INC.

FORMERLY THE 4LESS GROUP, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Business:

Nature of Business – ~~The 4LESS~~Auto Parts 4Less Group, Inc., (the “Company”), formerly The 4Less Group, Inc., was incorporated under the laws of the State of Nevada on December 5, ~~2007.~~2007. The Company, under the name MedCareers Group, Inc. (“MCGI”) formally operated a website for nurses, nursing schools and nurses’ organizations designed for better communication between nurses and the nursing profession.

On November 29, 2018, the Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion ~~date.~~date. The Share Exchange closed on November 29, 2018. As a result of the Share Exchange, the former shareholders of 4LESS became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein 4LESS is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the shares issued as a result of the reverse merger except otherwise noted.

4LESS was formed as Vegas Suspension & Offroad, LLC on October 24, 2013 as a Nevada limited liability company and converted to a Nevada corporation with the same name on May 8, 2017. On April 2, 2018, the Company changed its name to The 4LESS Corp. The Corporation had S Corporation status. The Corporation operates as an e-commerce auto and truck parts sales company. As a result of the share exchange, ~~the 4LESS~~The 4Less Group, Inc. is now a holding company operating through 4LESS and offers products including exhaust systems, suspension systems, wheels, tires, stereo systems, truck bed covers, and shocks. On December 30, 2019 4LESS changed its name to Auto Parts 4Less, Inc..On April 28, 2022 the Company changed its name from The 4Less Group, Inc. to Auto Parts 4Less Group, Inc.

Significant Accounting Policies:

The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these condensed financial statements.

Basis of Presentation:

The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States.

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, ~~2021~~2022 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May ~~14, 2021.~~9, 2022.

- 7 -

Principles of Consolidation:

The condensed financial statements include the accounts of ~~The 4LESS~~Auto Parts 4Less Group, Inc. as well as The Auto Parts 4Less, Inc., and JBJ Wholesale LLC. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated.

~~- 7 -~~

Use of Estimates:

In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determine whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. The most significant estimates included in these consolidated financial statements are those associated with the assumptions used to value derivative liabilities.

Reclassifications

Certain amounts in the Company’s condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods.

Cash and Cash Equivalents:

The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying amount of cash and cash equivalents approximates fair market value.

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value. Inventories are valued on a first-in, first-out (FIFO) basis. Inventory is comprised of finished goods.

Concentrations

Cost of Goods Sold

For the three months ended April 30, ~~2021~~2022 the Company purchased approximately ~~54%~~ 52% of its inventory and items available for sale from third parties from three vendors. As of April 30, ~~2021,~~2022, the net amount due to the vendors included in accounts payable was ~~$462,991.~~$433,897. For the three months ended April 30, ~~2020,~~2021, the Company purchased from three vendors approximately ~~53%~~54% of its inventory and items available for sale from third parties. As of April 30, ~~2020,~~2021, the net amount due to these vendors included in accounts payable was ~~$434,528.~~$462,991. The Company believes there are numerous other suppliers that could be substituted should a supplier become unavailable or non-competitive.

Leases

We ~~adopted ASU No. 2016-02—~~~~Leases (Topic 842)~~, as amended, as of February 1, 2019, using the full retrospective approach. The full retrospective approach provides a method for recording existing leases at adoption and in comparative periods. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification.

~~In addition, we~~ elected the hindsight practical expedient to determine the lease term for existing leases. Our election of the hindsight practical expedient resulted in the shortening of lease terms for certain existing leases and the useful lives of corresponding leasehold improvements. In our application of hindsight, we evaluated the performance of the leased stores and the associated markets in relation to our overall real estate strategies, which resulted in the determination that most renewal options would not be reasonably certain in determining the expected lease term.

Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $454,087 and $454,087 respectively, as of February 1, 2019. The standard did not materially impact our consolidated net earnings, retained earnings and had no impact on cash flows.

- 8 -

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized when items of income and expense are recognized in the financial statements in different periods than when recognized in the tax return. Deferred tax assets arise when expenses are recognized in the financial statements before the tax returns or when income items are recognized in the tax return prior to the financial statements. Deferred tax assets also arise when operating losses or tax credits are available to offset tax payments due in future years. Deferred tax liabilities arise when income items are recognized in the financial statements before the tax returns or when expenses are recognized in the tax return prior to the financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. ASC 740, Accounting for Income Taxes requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company’s gross deferred tax assets were revalued based on the reduction in the federal statutory tax rate from 35% to 21%. A corresponding offset has been made to the valuation allowance, and any potential other taxes arising due to the Tax Act will result in reductions to the Company’s net operating loss carryforward and valuation allowance. The Company will continue to analyze the Tax Act to assess its full effects on the Company’s financial results, including disclosures, for the Company’s fiscal year ending January 31, ~~2022,~~2023, but the Company does not expect the Tax Act to have a material impact on the Company’s consolidated financial statements.

Fair Value of Financial Instruments:

The Company’s financial instruments consist of cash, accounts payable, advances and notes payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments. Derivatives are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date.

The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Inputs – Quoted prices for identical instruments in active markets.

Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs – Instruments with primarily unobservable value drivers.

The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of April 30, ~~2021:~~2022:


	April 30, 2021		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		April 30, 2022		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Derivative Liabilities – embedded redemption feature	$	148,957	$	—	$	—	$	148,957	$	1,991,793	$	—	$	—	$	1,991,793
Totals	$	148,957	$	—	$	—	$	148,957	$	1,991,793	$	—	$	—	$	1,991,793

- 9 -

Related Party Transactions:

The Company has a verbal policy that includes procedures intended to ensure compliance with the related party provisions in common practice for public companies. For purposes of the policy, a “related party transaction” is a transaction in which the Company or any one of its subsidiaries participates and in which a related party has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Any transaction exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a director’s independence, must be approved by the CEO. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Guide to Ethical Conduct, must be approved by Board of Directors, following appropriate disclosure of all material aspects of the transaction.

Derivative Liability

The derivative liabilities are valued as a level 3 input under the fair value hierarchy for valuing financial instruments. The derivatives arise from convertible debt where the debt and accrued interest is convertible into common stock at variable conversion prices and reclassification of equity instrument to liability due to insufficient shares for issuance. As the price of the common stock varies, it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date. When evaluating the effect of the issuance of new equity-linked or equity-settled instruments on previously issued instruments, the Company uses first-in, first-out method (“FIFO”) where authorized and unused shares would first be used to satisfy the earliest issued equity-linked instruments.

The fair value of the derivative liability is determined using a lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, historical stock price volatility, the expected term, and both high risk and the risk-free interest rate. The most sensitive inputs to the model are for expected time for the holder to convert or be repaid and the estimated historical volatility of the Company’s common stock. However, because the historical volatility of the Company’s common stock is so high (see Note ~~10)~~9), the sensitivity required to change the liability by 1% as of April 30, ~~2021~~2022 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability.

Revenue Recognition

The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue when control is transferred over the promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle:

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the company satisfies a performance obligation

Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations.

Disaggregation of Revenue: Channel Revenue

The following table shows revenue split between proprietary and ~~third party~~third-party website revenue for the three months ended April 30, ~~2021~~2022 and ~~2020:~~2021:

					Change							Change
	2021		2020		$		%	2022		2021		$			%
Proprietary website revenue	$	2,123,101		1,109,106	$	1,013,995	91%	$	1,236,243		2,123,101	$	(886,858	)	(42%	)
Third party website revenue		1,605,683		890,965		714,718	80%
Third-party website revenue									493,687		1,605,683		(1,111,996	)	(69%	)
Total Revenue	$	3,728,784	$	2,000,071	$	1,728,713	86%	$	1,729,930	$	3,728,784	$	(1,998,854	)	(54%	)

- 10 -

The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and obtained the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product. Shipping and handling amounts paid by customers are primarily for online orders, and are included in revenue. Sales tax and other similar taxes are excluded from revenue.

Stock-Based Compensation:

The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option.

Earnings (Loss) Per Common Share:

Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive.

Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

Recently Issued Accounting Standards:

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact.

Fair Value Measurement: In 2018, the FASB issued amended guidance to remove, modify and add disclosure requirements for fair value measurements. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosure requirements. Transition is on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated. The adoption of this guidance on February 1, 2020 did not have a material impact on our consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2019, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting and reporting of income taxes. The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intra-period tax allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate. The Company adopted the new guidance effective February 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.

In January 2020, the FASB issued new guidance intended to clarify certain interactions between accounting standards related to equity securities, equity method investments and certain derivatives. The guidance addresses accounting for the transition into and out of the equity method of accounting and measuring certain purchased options and forward contracts to acquire investments. The Company adopted the new guidance effective February 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.

- 11 -

In August 2020, the FASB issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity. The guidance removes the separation model for convertible debt instruments and preferred stock, amends requirements for conversion options to be classified in equity as well as amends diluted earnings per share (EPS) calculations for certain convertible debt instruments. The amended guidance is effective for interim and annual periods in 2022. The application of the amendments in the new guidance are to be applied either on a modified retrospective or a retrospective basis. We are currently assessing the effect that the adoption of this standard will have on the Company’s consolidated financial statements upon adoption

In addition to the above, the Company has reviewed all other recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

Recently Issued Accounting Standards Not Yet Adopted

In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for accounting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations.

In November 2021, the FASB issued new guidance to increase the transparency of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance requires annual disclosures of such transactions to include the nature of the transactions and the significant terms and conditions, the accounting treatment and the impact to the company’s financial statements. The guidance is effective for annual periods beginning in 2022 and is to be applied on either a prospective or retrospective basis. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.

~~- 11 -~~

NOTE 2 – GOING CONCERN AND FINANCIAL POSITION

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of ~~$20,949,534~~$31,045,891 as of April 30, ~~2021~~2022 and has a working capital deficit at April 30, ~~2021~~2022 of ~~$2,700,793.~~$9,530,292. As of April 30, ~~2021,~~2022, the Company only had cash and cash equivalents of ~~$1,342,321~~$461,060 and approximately ~~$151,000~~$151,000 of short-term debt in default. The short-term debt agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. While the Company has ~~continued~~plans to grow its revenues through the new website , at this time, the three months ended July 31, 2020 was only the first quarter the Company was able to achieve profitability from operations prior to interest and other expenses. While the Company believes it will continue to build on the results achieved in this quarter, our current liquidity position raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plan is to raise additional funds in the form of debt or equity in order to ~~(a) grow the business through building up brand awareness and developing and launching a potentially much larger auto parts e-commerce web site, autoparts4less.com while (b) continuing~~continue to fund losses until such time as revenues can sustain the Company. However, there is no assurance that management will be successful in being able to continue to obtain additional funding. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

- 12 -

NOTE 3 – PROPERTY

The Company capitalizes all property purchases over $1,000 and depreciates the assets on a straight-line basis over their useful lives of 3 years for computers and 7 years for all other assets. Property consists of the following at April 30, ~~2021~~2022 and January 31, ~~2021:~~ 2022:

April 30, 2021

January 31, 2021

Office furniture, fixtures and equipment

$
85,413

$
85,413

Shop equipment

43,004

43,004

Vehicles

226,760

40,433

Sub-total

355,177

168,850

Less: Accumulated depreciation

(99,558
)

(88,823
)
Total Property

$
255,619

$
80,027

	April 30, 2022			January 31, 2022
Office furniture, fixtures and equipment	$	95,183		$	94,041
Shop equipment		43,004			43,004
Vehicles		206,760			206,760
Sub-total		344,947			343,805
Less: Accumulated depreciation		(135,406	)		(122,469	)
Total Property	$	209,541		$	221,336

Additions to fixed assets for the three months ended April 30, ~~2021 and~~2022 were ~~$186,327 with $35,000 paid in cash and $151,327 financed through vehicle loans.~~$1,142. Additions to fixed assets ~~were nil for the three months ended April 30, 2020.~~

~~Depreciation expense was $10,735 and $6,647~~ for the three months ended April 30, 2021 were $186,327 with $35,000 paid in cash and $151,327 financed through vehicle loans.

Depreciation expense was $12,938 and $10,735 for the three months ended April 30, 2022 and April 30, ~~2020,~~2021, respectively.

~~- 12 -~~

NOTE 4 – LEASES

We lease certain warehouses and office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, we did not combine lease and non-lease components.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 17 years or ~~more.~~more. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Below is a summary of our lease assets and liabilities at April 30, ~~2021~~2022 and January 31, ~~2021.~~2022.

Leases

Classification

April 30, 2021

January 31, 2021

Assets

Operating

Operating Lease Assets

$
319,698

$
344,413

Liabilities

Current

Operating

Current Operating Lease Liability

$
99,937

$
90,286

Noncurrent

Operating

Noncurrent Operating Lease Liabilities

211,195

244,049

Total lease liabilities

$
311,132

$
334,335

Leases	Classification	April 30, 2022		January 31, 2022
Assets
Operating	Operating Lease Assets	$	213,714	$	242,583
Liabilities
Current
Operating	Current Operating Lease Liability	$	96,772	$	100,001
Noncurrent
Operating	Noncurrent Operating Lease Liabilities		114,423		138,551
Total lease liabilities		$	211,195	$	238,552

Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate of 8%8% based on the information available at commencement date in determining the present value of lease payments.

CAM charges were not included in operating lease expense and were expensed in general and administrative expenses as incurred.

Operating lease cost and rent was ~~$30,479~~$30,479 and ~~$34,079~~$30,479 for the three months ended April 30, ~~2021~~2022 and April 30, ~~2020,~~2021, respectively.

NOTE 5 – CUSTOMER DEPOSITS

The Company receives payments from customers on orders prior to ~~shipment.~~shipment and these customer deposits on cancelled orders were either returned to the customers subsequent to April 30, 2022 or will remain as deposits until the item is either delivered and recorded as revenue or cancelled and refunded. At April 30, ~~2021~~2022 the Company had received ~~$268,932~~$291,684 (January 31, ~~2021- $188,385)~~2022- $530,900) in customer deposits for orders that were unfulfilled at April 30, ~~2021~~2022 and either canceled subsequent to year end. The orders were unfulfilled at April 30, 2021 because of supply chain issues due to supplier back-orders because of the Covid-19 pandemic. The deposits were returned to the customers subsequent to April 30, 2021.end or still awaiting shipment.

- 13 -

NOTE 6 – DEFERRED REVENUE

The Company receives payments from customers on orders prior to ~~shipment.~~shipment and orders that were unfulfilled at April 30, 2022 because of both normal order processing and fulfillment requirements, and back orders are recorded as deferred revenue. At April 30, ~~2021~~2022 the Company had received ~~$981,830~~$332,823 (January 31, ~~2021- $687,766)~~2022- $665,143) in customer payments for orders that were unfulfilled at April 30, ~~2021~~2022 and delivered subsequent to April 30, ~~2021. The orders were unfulfilled at April 30, 2021 because of supply chain issues due to supplier back-orders because of the Covid-19 pandemic as well as processing and delivery timing.~~2022.

~~NOTE 7 – PPP LOAN~~

On May 2, 2020 the Company entered into a Paycheck Protection Promissory (PPP) Note Agreement whereby the lender would advance proceeds of $209,447 at a fixed rate of 1% per annum and a May 2, 2022 maturity. The loan is repayable in monthly installments of $8,818 commencing September 2, 2021 and continuing on the second day of every month thereafter until maturity when any remaining principal and interest are due and payable. At April 30, 2021 the loan is classified as $79,362 current and $130,085 long-term. The Company used the proceeds of this loans for working capital and the Company intends to use these proceeds in a manner consistent with obtaining loan forgiveness, which the Company is currently in the process of gathering the required information to file its forgiveness application and expects to have filed its application before the end of its second fiscal quarter.

~~- 13 -~~

NOTE 87 – SHORT-TERM AND LONG-TERM DEBT

The components of the Company’s debt as of April 30, ~~2021~~2022 and January 31, ~~2021~~2022 were as follows:


	April 30, 2022			January 31, 2022
Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2020 repayable June 30, 2022 with an additional interest payment of $20,000⁽³⁾	$	97,340	^*	$	97,340
Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023⁽¹⁾		7,120	^#		8,183
Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on April 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $94,316.		77,677	^#		81,346
Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $76,164.		51,993	^#		54,108
Working Capital Note Payable - $700,000, dated October 29, 2021, repayment of $17,904 per week until Oct 29, 2022, interest rate of approximately 31%^(2,4,7)		528,407	^*		635,831
Working Capital Note Payable - $650,000, dated October 25, 2021, repayment of $15,875 per week until October 25, 2022, interest rate of approximately 26%^(2,4,8)		540,558	^*		596,047
Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance		5,000	^*		5,000
Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance		2,500	^*		2,500
Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company		12,415	^*		12,415
Promissory note - $60,000 dated September 18, 2020 maturing April 30, 2022⁽¹⁰⁾, including $5,000 original issue discount, 15% compounded interest payable monthly		60,000	^*		60,000
Promissory note - $425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This note matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note.⁽⁵⁾		425,000	^*		425,000
Promissory note - $1,200,000 dated August 28, 2020, maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal.⁽⁶⁾		1,200,000	^*		1,200,000
Promissory note - $420,000 dated December 27, 2021, including $20,000 original issue discount, maturing January 27, 2022, non-interest bearing^(9)†		420,000	^*		420,000
Total	$	3,428,010		$	3,597,770

April 30,

January 31,

2021
2021

Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2010 repayable June 30, 2022 with an additional interest payment of $20,000⁽³⁾

102,168
#

102,168

SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing July 28, 2021⁽²⁾

83,152
*

161,227

Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023⁽¹⁾

11,269
#

12,269

Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on April 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $94,316.

92,246
#

Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $87,575.

59,711
#

Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance

5,000
*

5,000

Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance

2,500
*

2,500

Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company

12,415
*

12,415

Promissory note -$60,000 dated September 18, 2020 maturing September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly

60,000
*

60,000

Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This notes matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note. (4)

425,000
*

425,000

Promissory note -$1,200,000 dated August 28, 2020,maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal. (5)

1,200,000
#

1,200,000

Promissory note -$50,000 dated August 31, 2020,maturing February 28, 2021, 10% interest payable accrued monthly payable at maturity Fully repaid at April 30, 2021

—
*

50,000

Total

$
2,053,461

$
2,030,579

	April 30, 2022		January 31, 2022
Short-Term Debt	$	3,291,220	$	3,454,133
Current Portion of Long-Term Debt		27,828		27,737
Long-Term Debt		108,962		115,900
Total	$	3,428,010	$	3,597,770

__________

†	In default
*	Short-term loans
#	Long-term loans of $7,120 including current portion of $4,325
	$51,992 including current portion $8,633
	$81,346 including current portion $14,780

- 14 -

30-Apr-21

31-Jan-21

Short-Term Debt

$
446,404

$
716,142

Current Portion Of Long-Term Debt

588,067

424,064

Long-Term Debt

1,018,990

890,373

$
2,053,461

$
2,030,579

*Short-term loans (1)
~~#Long-term loans of $11,269 including current portion of $3,812~~
~~$102,168 including current portion of $0~~
~~$ 59,711 including current portion $8,077~~
~~$ 92,246 including current portion $14,515~~
~~$1,200,000 including current portion of $420,000~~
~~(1)~~ Secured by equipment having a net book value of ~~$11,650~~ $8,733
(2)	The amounts due under the note are personally guaranteed by an officer or a director of the Company.
(3)	On November 10, 2020 the Company amended the agreement extending the maturity to June 30, 2022 from April 8, 2021 and changing monthly payments to $0 from ~~$5,705~~$5,705 and interest rate from ~~13%~~13% to a ~~$20,000~~$20,000 lump sum payable at maturity.
~~(3)~~ (4)	The Company has pledged a security interest on all accounts receivable and banks accounts of the Company.
~~(4)~~ (5)	Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company ~~expects to enter~~has entered into such a transaction ~~within~~ the ~~calendar year this~~ loan has reached maturity and is treated as current. An extension was granted on December 13, 2021 amending the maturity date to April 30, 2022. The April 30, 2022 payment has not been made and the Company is working on another extension with the lender.
~~(5)~~ (6)	Secured by all assets of the Company. Loan payable in 2 instalments, ~~$445,200~~$445,200 payable August 28, 2021 and ~~$826,800~~$826,800 payable August 28, 2022. On December 13, 2021 the parties amended the maturity date for the first instalment to be April 30, 2022 with ethe second instalment date unchanged. The April 30, 2022 payment has not been made and the Company is working on another extension with the lender.
(7)	This loan replaces $500,000 loan dated June 4, 2021, $422,009 proceeds were used to repay this loan, net cash received was $253,491 after payment of $26,500 in fees.
(8)	This loan replaces $500,000 loan dated June 4, 2021, $359,919 proceeds were used to repay this loan, net cash received was $267,606 after payment of $22,475 in fees.
(9)	Penalty of 10% of principal amount and 30,000 3 year warrants with an exercise price of $15.00 on initial default and 2% of principal amount and 15,000 3 year warrants with an exercise price of $15.00 for every 30 day default period thereafter. Initial default has been recorded at January 31, 2022 with an interest charge of $42,000 and another $276,000 which was the fair value of the warrants (see Note 11). The Company has defaulted on the February26, 2022, March 28, 2022, April 27, 2022 and will issue an additional 15,000 warrants for each of those defaults. The company recorded $315,050 based on the fair value of the warrants and $25,200 for the 2% fee as interest expense.
(10)	The April 30, 2022 payment has not been made and the Company is working on another extension with the lender.

The following are the minimum amounts due on the notes as of April 30, 2022:

Year Ended	Amount
April 30, 2023	$	3,319,048
April 30, 2024		27,574
April 30, 2025		26,118
April 30, 2026		27,447
April 30, 2027		27,823
Total	$	3,428,010

NOTE 98 – SHORT-TERM CONVERTIBLE DEBT

The components of the Company’s debt as of April 30, ~~2021~~2022 and January 31, ~~2021~~2022 were as follows:

Interest

Default Interest

Conversion

Outstanding Principal at

Maturity Date

Rate

Rate

Price

April 30, 2021

January 31, 2021

Nov 4, 2013*

12%

12%

$1,800,000

$
100,000

$
100,000

Jan 31, 2014*

12%

18%

$2,400,000

16,000

16,000

July 31, 2013*

12%

12%

$1,440,000

5,000

5,000

Jan 31, 2014*

12%

12%

$2,400,000

30,000

30,000

Oct. 12, 2021

12%

16%

(1)

130,000

230,000

Nov. 16, 2021

12%

16%

(1)

125,000

100,000

Nov. 23, 2021

12%

16%

(1)

115,500

165,000

Sub-total

521,500

646,000

Debt Discount

(180,789
)

(309,317
)

$
340,711

$
336,683

Short Term Convertible Debt

	Interest	Default Interest	Conversion	Outstanding Principal at
Maturity Date	Rate	Rate	Price	April 30, 2022			January 31, 2022
Nov 4, 2013^*	12%	12%	$1,800,000	$	100,000		$	100,000
Jan 31, 2014^*	12%	18%	$2,400,000		16,000			16,000
July 31, 2013^*	12%	12%	$1,440,000		5,000			5,000
Jan 31, 2014^*	12%	12%	$2,400,000		30,000			30,000
Nov 12, 2022	8%	12%	⁽¹⁾		2,400,000			2,400,000
Jan. 13, 2023	12%	22%	⁽²⁾		182,400			228,000
Aug. 11, 2022	10%	10%	⁽³⁾		220,000			—
Aug 14, 2022	12%	20%	⁽⁴⁾		1,200,000			—
Aug. 25, 2022	12%	20%	⁽⁴⁾		150,000			—
Aug. 25, 2022	12%	20%	⁽⁴⁾		350,000			—
Oct.. 9, 2022	12%	20%	⁽⁴⁾		200,000			—
Oct.. 9, 2022	12%	20%	⁽⁴⁾		200,000			—
Oct. 22, 2022	12%	20%	⁽⁴⁾		440,000			—
Oct. 22, 2022	12%	20%	⁽⁴⁾		110,000			—
Sub-total					5,603,400			2,779,000
Debt Discount					(3,339,672	)		(2,131,034	)
				$	2,263,728		$	647,966

* In default.- 15 -

__________

~~(1)~~ *	In default.
(1)	lesser of $ 1.25 or 75 % of offering price if there is an uplisting to a national securities exchange.
(2)	75% of closing bid price on ~~the~~ day preceding conversion date in event of default
(3)	convertible at 20% discount of the offering price on company’s uplist to NASDAQ
(4)	convertible upon default at conversion ~~date.~~ price lower of i) lowest price 20 days prior to Issuance ii) lowest price 20 days prior to conversion

The Company had accrued interest payable of ~~$222,667~~$320,433 and ~~$240,713~~$231,412 on the notes at April ~~31, 2021~~30, 2022 and January 31, ~~2021,~~2022, respectively.

The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that some instruments should be classified as liabilities due to there being a variable number of shares to be delivered upon settlement of the above conversion options. The instruments are measured at fair value at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. The fair value of the embedded conversion option resulted in a discount to the note on the debt modification date. For the three months ended April 30, ~~2021~~2022 and ~~2020,~~2021, the Company recorded amortization of debt discount expense of ~~$128,538~~$725,280 and ~~$578,913,~~$128,528, respectively. See more information in Note 10.

On February 11, 2022 the Company entered into an unsecured convertible note for $220,000 with a one year maturity, interest rate of 10%, the Company received $200,000 in cash proceeds, recorded, an original issue discount of $20,000, and a derivative discount of $117,676 related to a conversion feature. The discount is amortized over the term of the loan. The note is repayable October 11, 2022.

On February 14, 2022 the Company entered into a new convertible note for $1,200,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 120,000 common shares with a five year maturity and an exercise price of $15.00, and 115,000 common shares. If the loan is not in default the company may extend the term to February 14, 2023 with 10 days notice. If the Company does not extend the loan then 60,000 of the issued shares were returnable. On April 7, 2022 the parties agreed to not have the shares returnable in exchange for a waiver on the Company’s breach of certain provisions. The Company received $979,000 in cash proceeds, recorded an original issue discount of $120,000, a derivative discount of $131,489 for the conversion feature, recognized $484,032 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $101,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

On February 25, 2022 the Company entered into a new convertible note for $350,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 35,000 common shares with a five year maturity and an exercise price of $15.00, and 33,542 common shares. If the loan is not in default the company may extend the term to February 25, 2023 with 10 days notice. If the Company does not extend the loan then 17,500 of the issued shares were returnable. The Company received $294,000 in cash proceeds, recorded an original issue discount of $35,000, a derivative discount of $37,784 for the conversion feature, recognized $132,255 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $21,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

On February 25, 2022 the Company entered into a new convertible note for $150,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 15,000 common shares with a five year maturity and an exercise price of $15.00, and 14,400 common shares. If the loan is not in default the company may extend the term to February 25, 2023 with 10 days notice. If the Company does not extend the loan then 7,500 of the issued shares were returnable. The Company received $119,250 in cash proceeds, recorded an original issue discount of $15,000, a derivative discount of $16,193 for the conversion feature, recognized $52,613 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $15,750. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

On March 9, 2022 the Company entered into a new convertible note for $200,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 20,000 common shares with a five year maturity and an exercise price of $15.00, and 19,200 common shares. If the loan is not in default the company may extend the term to March 9, 2023 with 10 days notice. If the Company does not extend the loan then 10,000 of the issued shares were returnable. The Company received $168,000 in cash proceeds, recorded an original issue discount of $20,000, a derivative discount of $22,533 for the conversion feature, recognized $85,815 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $12,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

- 1516 -

On March 9, 2022 the Company entered into a new convertible note for $200,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 20,000 common shares with a five year maturity and an exercise price of $15.00, and 9,200 common shares. If the loan is not in default the company may extend the term to March 9, 2023 with 10 days notice. If the Company does not extend the loan then 10,000 of the issued shares were returnable. The Company received $168,000 in cash proceeds, recorded an original issue discount of $20,000, a derivative discount of $22,533 for the conversion feature, recognized $85,728 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $12,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

On April 22, 2022 the Company entered into a new convertible note for $440,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 44,000 common shares with a five year maturity and an exercise price of $15.00, and 42,240 common shares. If the loan is not in default the company may extend the term to April 22, 2023 with 10 days notice. If the Company does not extend the loan then 22,000 of the issued shares were returnable. The Company received $373,600 in cash proceeds, recorded an original issue discount of $40,000, a derivative discount of $36,796 for the conversion feature, recognized $161,815 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $26,400. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

On April 22, 2022 the Company entered into a new convertible note for $110,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 11,000 common shares with a five year maturity and an exercise price of $15.00, and 10,560 common shares. If the loan is not in default the company may extend the term to April 22, 2023 with 10 days notice. If the Company does not extend the loan then 5,500 of the issued shares were returnable. The Company received $93,400 in cash proceeds, recorded an original issue discount of $10,000, a derivative discount of $9,199 for the conversion feature, recognized $62,707 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $6,600. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.

During the three months ended April 30, ~~2021~~2022 and April 30, ~~2020~~2021 the Company added ~~$28,000~~$0 and ~~nil~~$28,000 in penalty interest to ~~the loan,~~these loans, respectively.

As of April 30, ~~2021,~~2022, the Company had ~~$151,000~~$151,000 of aggregate debt in default. The agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. The Company continues to accrue interest at the listed rates, and plans to seek their conversion or payoff within the next twelve months.

NOTE 109 – DERIVATIVE LIABILITIES

As of April 30, ~~2021~~2022 and January 31, ~~2021,~~2022, the Company had derivative liabilities of ~~$148,957~~$1,991,793 and ~~$213,741,~~$1,263,442, respectively. During the three months ended April 30, ~~2021~~2022 and ~~2020,~~2021, the Company recorded a loss of $337,737 and a gain of ~~$4,187 and a loss of $74,780,~~$4,187, respectively, from the change in the fair value of derivative liabilities. Any liabilities resulting from the warrants outstanding are immaterial.

The derivative liabilities are valued as a level 3 input for valuing financial instruments.

The following table presents changes in Level 3 liabilities measured at fair value for the three months ended April 30, ~~2021.~~2022. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs.

Level 3

Derivatives

Balance, January 31, 2021

$
213,741

Settlement due to Repayment of Debt

(60,597
)
Mark to Market Change in Derivatives

(4,187)

Balance, April 30, 2021

$
148,957

	Level 3
	Derivatives
Balance, January 31, 2022	$	1,263,442
Changes Due to Issuance of New Convertible Notes		394,203
Settlement Due to Repayment of Debt		(3,589	)
Mark to Market Change in Derivatives		337,737
Balance, April 30, 2022	$	1,991,793

- 17 -

The derivatives arise from convertible debt where the debt is convertible into common stock at variable conversion prices which are linked to the trading and/or bid prices of the Company’s common stock as traded on the OTC market.

~~As the price of the common stock varies it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date.~~

The fair value of the derivative liability is determined using the lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, the expected term, and the risk-free interest rate. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of April 30, ~~2021~~2022 is as follows:

Embedded

Derivative Liability

As of
April 30, 2021

Strike price

$
2.10 - 4.30

Contractual term (years)

0.25 - 1.00 years

Volatility (annual)

116.5% - 537.3
%
High yield cash rate

24.90% - 29.42
%
Underlying fair market value

$
2.10

Risk-free rate

0.07% - 0.17
%
Dividend yield (per share)

0
%

~~- 16 -~~

		Embedded Derivative Liability As of April 30, 2022
Strike price		5.40 - 10.00
Contractual term (years)		0.28 - 0.79 years
Volatility (annual)		137.1% - 201.8
Underlying fair market value		10.00
Risk-free rate		7.38% -8.46
Dividend yield (per share)		0

NOTE 1110 – STOCKHOLDERS’ DEFICIT

Preferred Stock:

The Series A Preferred Stock has an automatic forced conversion into common stock upon the completion of the repurchase or extinguishing of all “toxic” debt (notes having conversion features tied to the Company’s common stock), the extinguishing of all other existing dilutive debt or equity structures, and total recapitalization of the Company. As of both April 30, ~~2021,~~2022, and January 31, ~~2021~~2022 the Company had 0 shares of Series A Preferred issued and outstanding and 330,000 authorized with a par value of ~~$0.001~~$0.001 per share.

At both April 30, ~~2021~~2022 and January 31, ~~2021,~~2022, there were 20,000 and 20,000 Series B preferred shares outstanding, respectively. The Series B Preferred Stock have voting rights equal to 51% of the total voting rights at any time. There are no conversion rights granted holders of Series B Preferred shares, they are not entitled to dividends, and the Company does not have the right of redemption. Currently, there are 20,000 Series B preferred shares authorized and issued of the Series B Preferred Stock with a par-value of $0.001 per share.

At both April 30, ~~2021~~2022 and January 31, ~~2021,~~2022, there were ~~7,250~~0 and 7,250 Series C preferred shares outstanding, respectively. The Series C Preferred Stock have the right to convert into the common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The holders of Series C Preferred shares are not entitled to dividends, and the Company does not have the right of redemption. On February 1, 2022 the 7,250 Series C Preferred stockholders converted all of their outstanding shares for 905,110 shares of common stock. Currently, there are ~~7,250~~0 Series C preferred shares authorized and issued with a par-value of ~~$0.001~~$0.001 per share.

At both April 30, ~~2021~~2022 and January 31, ~~2021,~~2022, there were 870 Series D preferred shares authorized and outstanding, respectively which with a par value ~~$.001.~~$0.001. All shares of Series D Preferred Stock will rank subordinate and junior to all shares of Series A, B and C of Preferred Stock of the Corporation and pari passu with any of the Corporation’s preferred stock hereafter created as to distributions of assets upon dissolution or winding up of the Corporation, whether voluntary or involuntary. These shares are non-voting, do not receive dividends and are redeemable according to the terms set out as follows:

OPTIONAL REDEMPTION.

(1) At any time, either the Corporation or the holder may redeem for cash out of funds legally available therefor, any or all of the outstanding Series D Preferred Stock (“Optional Redemption”) at ~~$1,000~~$1,000 per share.

- 18 -

(2) Should the Corporation exercise the right of Optional Redemption it shall provide each holder of Preferred Stock with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). Any optional redemption pursuant to this Section VI shall be made ratably among holders in proportion to the Liquidation Value of Preferred Stock then outstanding and held by such holders. The Optional Redemption Notice shall state the Liquidation Value of Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the Corporation to the holders at the address of such holder appearing on the register of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holders, and (B) the holders will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption.

~~- 17 -~~

(3) Should the holder exercise the right of Optional Redemption it shall provide the Corporation with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). The Optional Redemption Notice shall state the value of the Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the holder to the Corporation at the address of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holder, and (B) the holder will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption.

The Series D Preferred Stock is not entitled to any pre-emptive or subscription rights in respect of any securities of the Corporation.

Neither the Company nor any Series D preferred stockholders has given notice to exercise the redemption as of April 30, ~~2021~~2022 on the date of the financial statements.

Because the holders of the Series D preferred stock have the right to demand cash redemption, the cumulative amount of the redemption feature is included in Temporary Equity as of April 30, ~~2021~~2022 and January 31, ~~2021.~~2022.

Common Stock

The Company is authorized to issue ~~15,000,000~~75,000,000 common shares at a par value of ~~$0.000001~~$0.000001 per share. These shares have full voting rights. The Company undertook a 10-1 reverse stock split on April 28, 2022. The share capital has been retrospectively adjusted accordingly to reflect these reverse stock splits. At April 30, ~~2021~~2022 and January 31, ~~2021~~2022 there were ~~2,574,413~~1,500,362 and ~~1,427,163~~341,023 shares outstanding and issuable, respectively. No dividends were paid in the three months ended April 30, ~~2021~~2022 or ~~2020.~~2021. The Company’s articles of incorporation include a provision that the Company is not allowed to issue fractional shares.

The Company issued the following shares of common stock in the three months ended April 30, ~~2021:~~2022:

The Company issued ~~1,097,250~~905,110 shares ~~for $2,194,500 as part~~upon conversion of ~~Regulation A filing. The company received $2,099,683 in cash proceeds~~7,250 Series C preferred shares. Along with associated debt, the ~~remaining $94,817 recorded as share proceeds receivable.~~

~~Issuance of 50,000~~Company issued 254,141 shares and warrants to purchase 265,000 shares all with a relative fair value of ~~$107,500 as payment for fees to a consultant.~~$1,064,965.

- 19 -

Options and Warrants:

The Company has no75,000 options outstanding as of both April 30, ~~2021~~2022 and or January 31, ~~2021.~~2022.

The Company recorded option and warrant expense of $0$0 and $0$0 for the three months ended April 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Schedule Of Warrants Fair Value

For the quarter ended April 30, 2022 the Company issued warrants to purchase 265,000 common shares along with debt to various lenders as well as warrants to acquire 45,000 common shares as penalty interest. The table below provides the significant estimates used that resulted in the Company determining the relative fair value of the 265,000 warrants at $1,064,965, which has been recorded as a debt discount and the 45,000 warrants at $315,150 which has been recorded as interest both with corresponding adjustments to paid-in capital.

Expected volatility	1,686-2,186%
Exercise price	$5.50 -$15.00
Stock price	$5.40-$9.49
Expected life	3-5 years
Risk-free interest rate	1.76%-2.94%
Dividend yield	0%

The Company had the following fully vested warrants outstanding at April ~~30,2021:~~30,2022:

Issued To	# Warrants	Dated	Expire	Strike Price	Expired	Exercised
~~Issued To~~ Lender	~~# Warrants~~ 95,000	~~Dated~~ 08/28/2020	~~Expire~~ 08/28/2023	~~Strike Price~~ $4.00 per share	~~Expired~~ N	~~Exercised~~ N
~~Lender~~ Broker	~~950,000~~ 250	~~08/28/~~10/11/2020	~~08/28/2023~~ 10/11/2025	$~~0.40~~45.00 per share	N	N
Broker	~~2,500~~ 300	~~10/~~11/25/2020	~~10/~~11/25/2025	$~~4.50~~30.00 per share	N	N
~~Broker~~ Triton	~~3,000~~ 30,000	~~11/25/2020~~ 07/27/2021	~~11/25/2025~~ 07/27/2024	$~~3.00~~21.10 per share	N	N
Consultant	25,000	08/26/2021	08/26/2024	$15.00 per share	N	N
Lender	90,000	11/12/2021	11/12/2026	$15.00 per share	N	N
Lender	90,000^*	11/12/2021	11/12/2026	$15.00 per share	N	N
Lender	30,000	1/27/2022	1/27/2025	$15.00 per share	N	N
Lender	120,000	2/14/2022	2/14/2027	$15.00 per share	N	N
Lender	35,000	2/25/2022	2/25/2027	$15.00 per share	N	N
Lender	15,000	2/25/2022	2/25/2027	$15.00 per share	N	N
Lender	20,000	3/9/2022	3/9/2027	$15.00 per share	N	N
Lender	20,000	3/9/2022	3/9/2027	$15.00 per share	N	N
Lender	11,000	4/22/2022	4/22/2027	$15.00 per share	N	N
Lender	44,000	4/22/2022	4/22/2027	$15.00 per share	N	N
Lender	15,000	2/26/2022	2/26/2025	$5.40 per share	N	N
Lender	15,000	3/28/2022	3/28/2025	$7.50 per share	N	N
Lender	15,000	4/27/2022	4/27/2025	$6.99 per share	N	N

__________

These warrants are extinguished if Company repays note by 11/12/2022 maturity.

The Company had the following fully vested options outstanding at April 30, 2022:

Issued To	# Options	Dated	Expire	Strike Price	Expired	Exercised
Consultant	25,000	8/26/2021	8/26/2024	$15.00 per share	N	N
T. Armes	50,000	10/14/2021	10/14/2023	$15.00 per share	N	N

- 1820 -

Options

Weighted Average
Exercise Price

Warrants

Weighted Average
Exercise Price

Outstanding at January 31, 2021

—

$
—

955,000

$
0.42

Granted

—

—

—

—

Exercised

—

—

—

—

Forfeited and canceled

—

—

—

—

Outstanding at April 30, 2021

—

$
—

955,000

$
0.42

The following table summarizes the activity of options and warrants issued and outstanding as of and for the three months ended

April 30, 2022:

Schedule of warrants outstanding

	Options	Weighted Average Exercise Price		Warrants	Weighted Average Exercise Price
Outstanding at January 31, 2022	75,000	$	15.00	360,550	$	12.64
Granted	—		—	310,000		15.00
Exercised	—		—	—		—
Forfeited and canceled	—		—	—		—
Outstanding at April 30, 2022	75,000	$	15.00	670,550	$	13.17

NOTE 1211 – RELATED PARTY TRANSACTIONS

As of April 30, ~~2021~~2022 and January 31, 2021, the Company had ~~$81,173~~$46,273 and ~~$106,173,~~$46,173, respectively of related party accrued expenses related to accrued compensation for employees and consultants.

NOTE 1312 – COMMITMENTS AND CONTINGENCIES

On August 30, 2016, the Company entered into a 60-month lease agreement for its 3,554 sf warehouse facility starting in December 2016 with a minimum base rent of ~~$2,132~~$2,132 and estimated monthly CAM charges of $1,017 per ~~month.~~month. This lease is with a shareholder.

On July 1, 2018, the Company entered into a 60-month lease agreement with its minority shareholder for its 8,800 sf warehouse facility with a minimum base rent of ~~$6,400~~$6,400 per ~~month.~~month.

In October 2019 the Company entered into an operating lease for a vehicle with an annual cost of ~~$9,067~~$9,067 and a three year term. The company paid initial fees of $17,744 and will pay fees on lease termination of $395. On a straight-line basis these costs amount to $1,259 per ~~month.~~ month.

Maturity of Lease Liabilities
Operating
Leases

April 30 2022
$
121,917

April 30, 2023

113,100

April 30, 2024

42,803

April 30, 2025

30,003

April 30, 2026

30,003

After April 30, 2026

17,503

Total lease payments

355,329

Less: Interest

(44,197
)
Present value of lease liabilities
$
311,132

Schedule of minimum lease obligations


Maturity of Lease Liabilities	Operating Leases
April 30 2023	$	113,100
April 30, 2024		42,803
April 30, 2025		30,003
April 30, 2026		30,003
April 30, 2027		17,503
Total lease payments		233,412
Less: Interest		(22,217	)
Present value of lease liabilities	$	211,195

The Company had total operating lease and rent expense of $30,479 and ~~$34,079~~$30,479 for the three months ended April 30, ~~2021~~2022 and ~~2020~~2021 respectively.

There is pending litigation initiated by the Company around the validity of a $100,000 note which the Company signed based upon representations of funding from the maker which were never received. The Company initiated litigation to dispute the note and the 1,692 shares that have been issued. There was no consideration for the issuance of the shares and the shares have been accounted for as if they were returned and cancelled although they have not been returned.- 21 -

~~- 19 -~~

NOTE 1413 – EARNINGS (LOSS) PER SHARE

The net income (loss) per common share amounts were determined as follows:


	For the Years Ended					For the Three Months Ended
	April 30,					April 30,
	2021			2020		2022			2021
Numerator:
Net income (loss) available to common shareholders	$	(567,557	)	$	1,186,898	$	(2,594,158	)	$	(567,557)

Denominator:
Weighted average shares – basic		1,940,098			551,590		1,342,433			194,010

Net income (loss) per share – basic	$	(0.29	)	$	2.15	$	(1.93	)	$	(2.93	)

Effect of common stock equivalents
Add: interest expense on convertible debt		34,652			103,540		112,742			34,652
Add: amortization of debt discount		128,528			—		725,280			128,528
Less: gain on settlement of debt on convertible notes							—			—
Add (Less): loss (gain) on change of derivative liabilities		(4,187	)		—		337,737			(4,187	)
Net income (loss) adjusted for common stock equivalents		(408,564	)		1,290,438		(1,418,399	)		(408,564	)


Dilutive effect of common stock equivalents:
Convertible notes and accrued interest		—			86,413,848		—			—
Convertible Class C Preferred shares		—			1,632,770		—			—
Warrants (1)		—			1
Warrants and options							—			—

Denominator:
Weighted average shares – diluted		1,940,098			88,598,209		1,342,433			194,010

Net income (loss) per share – diluted	$	(0.29	)	$	0.01	$	(1.93	)	$	(2.93	)

The anti-dilutive shares of common stock equivalents for the three months ended April 30, ~~2021~~2022 and April 30, ~~2020~~2021 were as follows:

For the Years Ended
April 30,
2021 2020
Convertible notes and accrued interest 354,365 —
Convertible Class C Preferred shares 6,770,706 —
Warrants 955,500 —
Total 8,080,571 —

~~- 20 -~~

~~NOTE 15 – GAIN ON SETTLEMENT OF DEBT~~

For the three months ended April 30, 2021 the gain on settlement of debt of $914,049 consisted of a $853,452 gain that resulted from the settlement of accounts payable totaling $950,151 that was settled for $96,699, and a $60,597 gain that resulted from the reduction in the derivative liability due to cash repayments on convertible debt. For the three months ended April 30, 2020 the gain on settlement of debt of $2,172,646 consisted of a gain that resulted from the settlement of $1,070,035 in convertible notes, and $175,422 in accrued interest, as well as $122,000 in short-term debt and $22,076 in accrued interest, and the associated derivative liability of $792,218 all totaling $2,181,751 in exchange for 250 Class C shares having a fair-value of $9,105.

	For the Three Months Ended
	April 30,
	2022		2021

Convertible notes and accrued interest		701,281		35,437
Convertible Class C Preferred shares		—		677,071
Options		75,000		—
Warrants		670,550		95,550
Total		1,446,831		808,058

NOTE 1614 – SUBSEQUENT EVENTS

Subsequent to ~~quarter year end up~~April 30, 2022 through to June ~~8, 2021~~10, 2022:

• The Company issued 2,587 rounding shares due to 10:1 reverse split on April 28, 2022

• On May 19, 2022 the Company entered into a ~~lender converted $18,750~~new convertible note for $400,000 with a one year maturity, interest rate of 12%, with a warrant to purchase 33,333 common shares with a five year maturity and an exercise price of $15.00, and 41,500 common shares. The Company received $325,000 in cash proceeds, recorded an original issue discount of $20,000 and transaction fees of $12,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal ~~for 10,000~~or interest when due and failure to issue shares upon conversion. In the event of ~~common stock~~these or any other default provisions, the note becomes due and payable at 125%.

- 2122 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to in this quarterly report as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to in this quarterly report as the Exchange Act. Forward-looking statements are not statements of historical fact but rather reflect our current expectations, estimates and predictions about future results and events. These statements may use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management’s beliefs and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties and assumptions, including but not limited to, risks, uncertainties and assumptions discussed in this quarterly report. Factors that can cause or contribute to these differences include those described under the headings “Risk Factors” and “Management Discussion and Analysis and Plan of Operation.”

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statement you read in this quarterly report reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this quarterly report. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any change in its views or expectations. The Company can give no assurances that such forward-looking statements will prove to be correct.

Company

The ~~4LESS~~Auto Parts 4Less Group Inc. (“FLES”, the “Company”, “we” or “us”), the Company described herein, was incorporated under the laws of the State of Nevada on December 5, 2007, with offices located at 106 W Mayflower, Las Vegas, Nevada 89030. Our phone number is (702) 267-7100.

Nature of Business – ~~The 4LESS~~Auto Parts 4Less Group ~~Inc.~~Inc.., formerly known The 4Less Group, Inc.and as MedCareers Group, Inc. (the “Company”, “MCGI”), was incorporated under the laws of the State of Nevada on December 5, 2007.

On November 29, 2018, the Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4Less Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The Share Exchange closed on November 29, 2018. As a result of the Share Exchange, the former shareholders of 4LESS became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein 4LESS is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the shares issued as a result of the reverse merger except otherwise noted.

On November 19, 2019 The 4Less Group acquired the URL Autoparts4Less.com and changed the name of their wholly owned subsidiary from the 4Less Corp. to Auto Parts 4Less, Inc.On April 28, 2022 the Company changed its name from The 4LESS Group, Inc. to Auto Parts 4Less Group, Inc.

Our Business

~~Along with our website currently under development, autoparts4less.com (as described below)~~Like many small businesses, Christopher Davenport, the founder of Auto Parts 4Less (“4Less”) previously named The 4less Corp., ~~that we are developing into our flagship website, we operate 3 niche websites through which we sell~~the wholly owned subsidiary of Auto Parts 4Less Group, Inc., began selling auto parts on eBay and shipping those items out of his garage in 2013. What started out as a hobby, quickly grew into a fully functioning ecommerce aftermarket auto parts company that ~~are~~required a significant technical staff and facilities to support their growth. In June of 2015, they leased their first office.

Originally the company listed their auto parts in the different marketplaces such as Amazon, eBay, Walmart and Jet.

- 23 -

Starting in 2016 the company began investing to become their own ecommerce platform thereby allowing their auto parts to be direct listed across marketplace and social media ~~sites,~~sites. Technical achievements including ~~marketing products through online~~CRM system, warehouse integration API, warehouse inventory software to name a few.

In 2019, shortly after the share exchange with MedCareers Group, Inc., with technology upgrades in place, 4Less began successfully moving majority of sales from third party marketplaces ~~and social media platforms,~~direct to their proprietary ecommerce web site Liftkits4Less.com. By doing so the company saves 8%-10% in fees charged by the major marketplace’s such as ~~Facebook, Instagram, YouTube~~e-Bay and ~~Google:~~Amazon as well as further building the 4less brand as a leading ecommerce site for auto parts.

On November 19, 2019 the Company acquired the URL Autoparts4Less.com and changed the name of their wholly owned subsidiary from the 4Less Corp. to Auto Parts 4Less, Inc. With the acquisition of the URL AutoParts4Less.com, the Company also began focusing all of their efforts and resources on building out a flagship automotive marketplace with the potential to offer buyers a wide range of automotive parts for cars, trucks, boats, motorcycles and RV’s on a single platform.

•

LiftKits4LESS.com*

•

Bumpers4LESS.com*

•

TruckBedCovers4LESS.com*

~~- 22 -~~In August 2021 the Company launched a beta test version of Autoparts4less.com. In a short period of time after the beta launch the company realized that with the amount of interest received from numerous types of larges sellers, which included not only ecommerce sites presently selling parts online, but also interest from other large parts sellers such as warehouse distributors, new car dealers with large inventories of parts as well as brick and mortar parts retailers looking to move sales online, the platform originally created would soon be inadequate. As such, the Company made the decision to upgrade to a larger and more advanced platform solution so they immediately began implementation of the AWS Fargate serverless platform solution.

The platform upgrade was completed in the 1^st quarter FYE 2023, with marketplace sales expected to begin in 2^nd quarter 2023.

On April 28. 2022 the Company changed its name from The 4Less Group, Inc. to Auto Parts 4Less Group, Inc.

Competition

We ~~target online consumers’ buying habits by shifting away from~~directly compete for buyers to use our web sites over current e-commerce sites as well as sellers that utilize major marketplaces such as Amazon and eBay. However, we believe our specialty ecommerce website liftkits4less.com offers substantial value-added content including installation guides, install videos, high impact photos, order customization and live chat with a technical expert.

Additionally, we believe that our automotive parts marketplace AutoParts4less.com, with no known large challengers presently in the space outside of “all things to all people” ~~web sites to highly targeted niche websites~~online marketplaces Amazon and eBay, has the opportunity to quickly ~~respond~~be branded when launched as the auto part’s industry premier marketplace just as sites like Etsy, Wayfair, Uber and Chewey’s have been able to ~~market forces.~~successfully do in their industries.

~~Our LiftKit4Less.com web site, represents:~~

	•	~~Approximately 179,000 Parts~~
	•	~~From 46 Manufacturers~~

~~Can Search Products Listed~~

	•	~~9 Categories Including Lights & Exterior Accessories~~
	•	~~66 Subcategories Including Wheels, Electronics & Interior Parts~~

~~Select Parts for Over~~

	•	~~28 Makes of Vehicles Such as Ford, Chevy and Land Rover~~
	•	~~100 Models Including Trucks, SUVs and Jeeps~~

~~AutoParts4Less.com Launch Expected Timeline~~

~~4Less plans to finish development and beta testing with goal to launch AutoParts4Less.com for aftermarket auto parts manufacturers to sell their parts direct to the public.~~

	•	~~Development Team~~
		~~March 2020 India Development Team is hired.~~

	•	~~Platform~~
		~~Amazon Web Services (AWS) cloud computing platform chosen to operate AutoParts4Less.com~~

	•	~~Marketing~~
		~~Begin marketing marketplace services to aftermarket manufacturers in December 2020~~

	•	~~Data Input~~
		~~Manufacturers start loading their parts info 1~~^st ~~quarter 2021~~

~~Auto Parts 4less Marketplace Functionality for Manufacturers~~

~~Our Auto Parts 4less website will have the following elements:~~

	•	~~Manufacturers create an account allowing easy onboarding of products.~~
	•	~~Offer premium placement in search results.~~
	•	~~Ratings and reviews can be responded to.~~
	•	~~Ability to answer basic questions from purchasers.~~
	•	~~How-to video galleries.~~
	•	~~Keyword advertising.~~
	•	~~Promote discounts on products.~~
	•	~~4Less can push product lines to other marketplaces such as eBay and Amazon.~~

~~Distribution~~

~~Our distribution is accomplished as follows:~~

	•	~~Direct drop ship from manufacturers to consumers – Approximately 80%~~
	•	~~Direct drop ship from Warehouse Inventory Companies to consumers – Approximately 15%~~
	•	~~Consumer Purchases directly through our own warehouses – Approximately 5%~~

~~- 23 -~~

~~Sales~~

~~Our sales are derived from the following:~~

~~Proprietary websites. 57% of our sales are currently generated through our own websites. We intend to build and launch additional niche websites~~

~~Third Party Websites (such as eBay and Walmart)– We sell our products on third party websites and pay fees to these websites in connection with each sale.~~

~~Business Strategies~~

	•	~~Continually develop best in class technological modules to increase visitor conversions.~~
	•	~~Work to develop and launch the website www.autoparts4less.com by approximately mid-to-late FY2022 into what we believe will be the first standalone multi-vendor automotive parts marketplace.~~

Results of Operations for the Three Months Ended April 30, ~~2021~~2022 Compared to the Three Months Ended April 30, ~~2020~~2021

The following table shows our results of operations for the three months ended April 30, ~~2021~~2022 and ~~2020.~~2021. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

						Change												Change
	2021			2020		$			%			2022			2021			$			%
Total Revenues		3,728,784			2,000,071		1,728,713			86	%	$	1,729,930			3,728,784		$	(1,998,854	)	(54%	)
Gross Profit		962,206			571,767		390,439			68	%		261,927			962,206			(700,279	)	(73%	)
Total Operating Expenses		2,204,564			780,728		1,423,836			182	%		1,282,955			2,204,564			(921,609	)	(42%	)
Total Other Income (Expense)		674,801			1,395,859		(721,058	)		(52	%)		(1,573,130	)		674,801			(2,247,931	)	(333%	)
Net Income (Loss)		(567,557	)		1,186,898		(1,754,455	)		(148	%)	$	(2,594,158	)	$	(567,557	)	$	(2,026,601	)	(357%	)

Revenue

The following table shows revenue split between proprietary and third-party website revenue for the three months ended April 30, ~~2021~~2022 and ~~2020:~~2021:

					Change
	2022		2021		$			%
Proprietary website revenue	$	1,236,243		2,123,101	$	(886,858	)	(42%	)
Third-party website revenue		493,687		1,605,683		(1,111,996	)	(69%	)
Total Revenue	$	1,729,930	$	3,728,784	$	(1,998,854	)	(54%	)

Change
2021 2020 $ %
Proprietary website revenue $ 2,123,101 1,109,106 $ 1,013,995 91 %
Third party website revenue 1,605,683 890,965 714,718 80 %
Total Revenue $ 3,728,784 $ 2,000,071 $ 1,728,713 86 %

- 24 -

We had total revenue of $1,729,930 for the three months ended April 30, 2022, compared to $3,728,784 for the three months ended April 30, ~~2021, compared~~2021. Sales decreased by $1,998,854 primarily due to ~~$2,000,071~~present economic conditions reducing consumer demand. In the prior year’s quarter, sales were driven by high consumer demand as a result of economic stimulus packages provided during the pandemic and an aggressive marketing push by the Company. In the current fiscal we are still dealing with supply issues as we have less product available for sale as a result. The Company also recorded $332,823 in deferred revenue for the three months ended April 30, ~~2020. Sales increased by $1,728,713 due to aggressive advertising and increased consumer demand. The Company also recorded $981,830 in deferred revenue,~~2022, which will be recognized as revenue next quarter and recognized ~~$687,766~~$425,560 out of the total $665,143 from last quarter. The deferred revenue represents orders paid by customers this period but delivered in the following period due to back orders and processing and delivery times. The Company also recorded ~~$268,932~~$291,684 in customer deposits for the three months ended April 30, ~~2021~~2022 and recognized ~~$188,385~~$324,211 from the prior ~~quarter.~~quarter out of a total of $530,900. The customer deposits are orders ~~paid by~~that were either cancelled and payment refunded to the customers subsequent to April 30, 2022 or shall remain as deposits until the item is either delivered and ~~canceled in the following period due to back orders~~recorded as revenue or ~~other reasons.~~cancelled and refunded.

The Company’s focus continues in growing its proprietary website revenues and the Company was successful in that, increasing its proprietary website revenue ~~by 91%.~~to 71% of total sales this current quarter from 57% the previous year’s quarter.

~~- 24 -~~

Gross Profit

We had gross profit of $261,927 for the three months ended April 30, 2022, compared to gross profit of $962,206 for the three months ended April 30, ~~2021, compared to gross profit of $571,767 for the three months ended April 30, 2020.~~2021. Gross profit ~~increased~~decreased by ~~$390.439~~$700,279 as a result of the ~~increased~~decreased revenues explained above and ~~partly offset by~~also due to an increase in cost ~~of revenue due to~~because the Company ~~having~~had to purchase goods at higher product costs from distributers rather than the usual manufacturers for many of the new available products or some of the products that were not available from the usual manufacturers due to ~~higher than anticipated demand which manufacturers were not able to meet.~~still existing supply chain issues.

Operating Expenses

The following table shows our operating expenses for the three months ended April 30, ~~2021~~2022 and ~~2020:~~2021:

Operating expenses					Change
															Change
	2021		2020		$			%			2022		2021		$			%
Depreciation		10,735		6,647		4,088			62	%	$	12,938	$	10,735		2,203		21%
Postage, Shipping and Freight		193,187		113,138		80,049			71	%		74,698		193,187		(118,489	)	(61%	)
Marketing and Advertising		608,034		18,068		589,966			3265	%		274,427		608,034		(333,607	)	(55%	)
E Commerce Services, Commissions and Fees		416,127		166,419		249,708			150	%		330,697		416,127		(85,430	)	(21%	)
Operating lease cost		30,479		34,079		(3,600	)		(11	%)		30,479		30,479		—		0%
Personnel Costs		297,493		266,735		30,758			12	%		205,299		297,493		(92,194	)	(31%	)
General and Administrative		648,509		175,642		472,867			269	%		354,417		648,509		(294,092	)	(45%	)
Total Operating Expenses		2,204,564		780,728		1,423,836			182	%	$	1,282,955	$	2,204,564		(921,609	)	(42%	)

• Depreciation increased by ~~$4,088~~$2,203 due to full depreciation on the two new vehicles acquired ~~this quarter..~~last year’s quarter.

• Postage shipping and freight ~~increased~~decreased by ~~$80,049~~$118,489 due to ~~higher~~lower sales.

• Marketing and advertising ~~increased~~decreased by ~~$589,966~~$333,607 due to aggressive promotional efforts in 2021 to drive sales to our proprietary websites and build our brands. ~~Note for~~For the ~~three months~~quarter ended April 30, ~~2020~~2022 the ~~Company had reduced~~ spending ~~due~~has resumed to ~~the Covid 19 pandemic.~~usual levels.

• E Commerce Services, Commissions and Fees ~~increased~~decreased by ~~$249,708~~$85,430 due to ~~higher~~lower sales.

~~• Operating Lease Cost decreased by $3,600 due to one less operating lease in 2021.~~

• Personnel Costs ~~increased~~decreased by ~~$30,758~~$92,194 due to ~~temporary layoffs in the prior year’s quarter commencing March 2020~~staff reductions as a result of ~~the Covid-19 pandemic.~~lower demand.

• General and Administrative ~~in increased~~decreased by ~~$472,867~~$294,092 due to ~~increases~~a decrease of ~~$273,720~~$272,320 in investor relations costs as a result of the REG A subscription offering in the prior year’s quarter and ~~$173,543~~a reduction of $57,516 in professional fees due to associated reporting and business ~~requirements. Note for~~requirements of the ~~three months ended April 30, 2020,~~afore mentioned REG A subscription from the ~~Company had reduced spending significantly due to the Covid 19 pandemic.~~prior year’s quarter. These decreases were partially offset by increases in insurance costs.

- 25 -

Other Income (Expense)

The following table shows our other income and expenses for the three months ended April 30, ~~2021~~2022 and ~~2020:~~2021:

							Change												Change
Other Income (Expense)	2021			2020			$			%			2022			2022			$			%
Gain (Loss) on Derivatives		4,187			(74,780	)		78,967			(106	%)	$	(337,737	)	$	4,187			(341,924	)	(8,166%	)
Gain on Settlement of Debt		914,049			2,172,646			(1,258,597	)		(58	%)		3,589			914,049			(910,460	)	(100%	)
Amortization of Debt Discount		(128,528	)		(578,913	)		450,385			(78	%)		(725,280	)		(128,528	)		(596,752	)	464%
Interest Expense		(114,907	)		(123,094	)		8,187			(7	%)		(513,702	)		(114,907	)		(398,795	)	347%
Total Other Income (Expense)		674,801			1,395,859			(721,058	)		(52	%)	$	(1,573,130	)	$	674,801			(2,247,931	)	(333%	)

~~- 25 -~~

The changes above can be explained by the ~~reduction~~increase in convertible debt ~~that started in the prior year’s~~this quarter ended April ~~30,2020.~~30,2022. Convertible debt increased to $5,603,400 from $521,500 so accordingly there were large increases in amortization expense and interest expense. As a result of the debt exchanges and settlements for the quarter ended April 30, 2021, the gain on settlement of debt was ~~higher and there were reductions in amortization expense and interest expense due to the lower debt.~~higher. The higher loss on derivatives is a function of the market factors in the valuation of the derivative liability described in Note 8.

We had a net loss of ~~$567,557~~$2,594,158 for three months ended April 30, ~~2021,~~2022, compared to net income of ~~$1,186,898~~$567,557 for three months ended April 30, 2021. The decrease in net income was mainly due to the lower sales and higher financing costs for the current year’s quarter as well as the gain on settlement in debt that occurred in the three months ended April 30, ~~2020, the higher~~2021. These changes were partially offset by a large decrease in operating expenses ~~specifically marketing, investor relations and professional fees in the three months ended April 30, 2021 which were partly offset by the 86% increase in revenues.~~for reason set out above.

Liquidity and Capital Resources

Management believes that we will continue to incur losses for the immediate future. Therefore, we will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities, if ever. These conditions raise substantial doubt about our ability to continue as a going concern. Our unaudited consolidated financial statements do not include any adjustments relating to the recovery of assets or the classification of liabilities that may be necessary should we be unable to continue as a going concern. ~~For the three months ended April 30, 2021, we have increased revenue and are working to achieve positive cash flows from operations.~~

As of April 30, ~~2021,~~2022, we had a cash balance of ~~$1,342,321, share subscription receivable of $94,817,~~$461,060, inventory of ~~$307,526~~$398,881 and ~~$4,461,893~~$10,429,545 in current liabilities. At the current cash consumption rate, we will need to consider additional funding sources going forward. We are taking proactive measures to reduce operating expenses and drive growth in revenue.

The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results.

Capital Resources

The following table summarizes total current assets, liabilities and working capital (deficit) for the periods indicated:

April 30, 2021

January 31, 2021

Current assets

$
1,761,100

$
715,083

Current liabilities

4,461,893

5,059,138

Working capital (deficits)

$
(2,700,783
)
$
(4,344,055
)

	April 30, 2022			January 31, 2022
Current assets	$	899,253		$	564,615
Current liabilities		10,429,545			8,890,462
Working capital (deficits)	$	(9,530,292	)	$	(8,325,847	)

Net cash used in operations for the three months ended April 30, ~~2021~~2022 was ~~$820,458~~$1,725,709 as compared to net cash used in operations of ~~$52,916~~$820,458 for the three months ended April 30, ~~2020.~~2021. Net cash used in investing activities for the three months ended April 30, ~~2021~~2022 was ~~$35,000~~$1,142 as compared to $0$35,000 for the same period in ~~2020.~~2021. Net cash provided by financing activities for the three months ended April 30, ~~2021~~2022 was ~~$1,920,115~~$2,110,413 as compared to ~~$79,035~~$1,920,115 for the three months ended April 30, ~~2020.~~2021.

- 26 -

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk.

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), we are not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Moving forward, we hope that our Chief Executive Officer and Principal Financial Officer will be able to devote the additional time and effort required so that our disclosure controls and procedures can become effective. Notwithstanding the assessment that our internal controls and procedures were not effective, we believe that our financial statements contained in this Quarterly Report for the quarter ended April 30, ~~2021~~2022 fairly present our financial position, results of operations and cash flows for the years and months covered thereby in all material respects.

~~- 26 -~~

(b) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

None.

Item 3. Default Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

See the Exhibit Index immediately following the signature page of this Report on Form 10-Q.

- 27 -

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~The~~Auto Parts 4Less Group, Inc.

~~By:~~

~~/s/~~

By: /s/ Timothy Armes

Timothy Armes

Chairman (Director), Chief Executive Officer, President, Secretary and Treasurer

Date: June 14, ~~2021~~2022

- 2728 -

EXHIBIT INDEX

Exhibit Number		Description of Exhibit

31.1*31.1		Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32.1*32.1		Certificate of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

101**101.INS		Inline XBRL ~~data files of Financial Statement~~Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. **

101.SCH		Inline XBRL Taxonomy Extension Schema Document **

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document **

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document **

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document **

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document **

104		Cover Page Interactive Data File (formatted as Inline XBRL and ~~Notes~~ contained in ~~this Quarterly Report on Form 10-Q.~~Exhibit 101) **

__________

* Filed herewith.

** In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”

- 2829 -

	Preferred Series A			Preferred Series B			Preferred Series C			Common Stock			Paid in		Retained
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings			Total			Preferred Series A			Preferred Series B			Preferred Series C					Common Stock			Paid in		Retained
January 31, 2020	—	$	—	20,000	$	20	6,750	$	7	538,464	$	1	$	13,449,336	$	(21,569,153	)	$	(8,119,789	)

Conversion of Notes Payable to Common Stock	—		—	—		—	—		—	82,361		—		3,399		—			3,399

Derivative Liability Reclassified as Equity Upon Conversion of notes	—		—	—		—	—		—	—		—		8,104		—			8,104

Exchange of Debt	—		—	—		—	250		—	—		—		9,105		—			9,105

Net Income	—		—	—		—	—		—	—		—		—		1,186,898			1,186,898

April 30, 2020	—	$	—	20,000	$	20	7,000	$	7	620,825	$	1	$	13,469,944	$	(20,382,255	)	$	(6,912,283	)
																					Shares	Amount		Shares	Amount		Shares		Amount			Shares	Amount		Capital		Earnings			Total
January 31, 2021	—		—	20,000		20	7,250		7	1,427,163		1		14,291,759		(20,381,977	)		(6,090,190	)	—	$	—	20,000	$	20	7,250		$	7		142,716	$	—	$	14,291,760	$	(20,381,977	)	$	(6,090,190	)

Common Stock Issued as Payment for Fees	—		—	—		—	—		—	50,000		—		107,500		—			107,500		—		—	—		—	—			—		5,000		—		107,500		—			107,500

Issuance of Common Stock as Part of REG A Subscription	—		—	—		—	—		—	1,097,250		1		2,194,499		—			2,194,500		—		—	—		—	—			—		109,725		—		2,194,500		—			2,194,500

Rounding	—		—	—		—	—		—	—		1		—		—			1		—		—	—		—	—			—		—		—		1		—			1

Net Income																					—		—	—		—	—			—		—		—		—		(567,557	)		(567,557	)

April 30, 2021																					—	$	—	20,000	$	20	7,250		$	7		257,441	$	—	$	16,593,761	$	(20,949,534	)	$	(4,355,746	)

January 31, 2022																					—		—	20,000		20	7,250			7		341,023		—		19,465,327		(28,451,733	)		(8,986,379	)

Conversion of Preferred Series C Shares into Shares Of Common Stock																					—		—	—		—	(7,250	)		(7	)	905,110		1		6		—			—

Relative Fair Value of Equity Issued with Debt																					—		—	—		—	—			—		254,141		—		1,064,965		—			1,064,965

Penalty Warrants Recorded as Interest																					—		—	—		—	—			—		—		—		315,150		—			315,150

Rounding shares																					—		—	—		—	—			—		88		—		—		—			—

Net (Loss)	—		—	—		—	—		—	—		—		—		(567,557	)		(567,557	)	—		—	—		—	—			—		—		—		—		(2,594,158	)		(2,594,158	)

April 30, 2021	—	$	—	20,000	$	20	7,250	$	7	2,574,413	$	3	$	16,593,758	$	(20,949,534	)	$	(4,355,746	)
April 30, 2022																					—	$	—	20,000	$	20	—		$	—		1,500,362	$	1	$	20,845,448	$	(31,045,891	)	$	(10,200,422	)

	April 30,			January 31,
	2021			2021

Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2010 repayable June 30, 2022 with an additional interest payment of $20,000⁽³⁾		102,168	#		102,168

SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing July 28, 2021⁽²⁾		83,152	*		161,227

Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023⁽¹⁾		11,269	#		12,269

Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on April 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $94,316.		92,246	#

Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $87,575.		59,711	#

Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance		5,000	*		5,000

Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance		2,500	*		2,500

Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company		12,415	*		12,415

Promissory note -$60,000 dated September 18, 2020 maturing September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly		60,000	*		60,000

Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This notes matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note. (4)		425,000	*		425,000

Promissory note -$1,200,000 dated August 28, 2020,maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal. (5)		1,200,000	#		1,200,000

Promissory note -$50,000 dated August 31, 2020,maturing February 28, 2021, 10% interest payable accrued monthly payable at maturity Fully repaid at April 30, 2021		—	*		50,000

Total	$	2,053,461		$	2,030,579

	30-Apr-21		31-Jan-21
Short-Term Debt	$	446,404	$	716,142
Current Portion Of Long-Term Debt		588,067		424,064
Long-Term Debt		1,018,990		890,373
	$	2,053,461	$	2,030,579


	Level 3
	Derivatives
Balance, January 31, 2021	$	213,741
Settlement due to Repayment of Debt		(60,597	)
Mark to Market Change in Derivatives		(4,187)
Balance, April 30, 2021	$	148,957

	Embedded
	Derivative Liability
	As of April 30, 2021
Strike price	$	2.10 - 4.30
Contractual term (years)		0.25 - 1.00 years
Volatility (annual)		116.5% - 537.3	%
High yield cash rate		24.90% - 29.42	%
Underlying fair market value	$	2.10
Risk-free rate		0.07% - 0.17	%
Dividend yield (per share)		0	%


Maturity of Lease Liabilities	Operating Leases
April 30 2022	$	121,917
April 30, 2023		113,100
April 30, 2024		42,803
April 30, 2025		30,003
April 30, 2026		30,003
After April 30, 2026		17,503
Total lease payments		355,329
Less: Interest		(44,197	)
Present value of lease liabilities	$	311,132