Cover
Cover - shares | 9 Months Ended | |
Oct. 31, 2022 | Dec. 23, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | On January 6, 2023, we filed our Form 10-Q for the quarterly period ended October 31, 2022 (the “10-Q”). We are filing herein Amendment Number 1 to the 10-Q to submit the Inline XBRL data for the quarterly period ended October 31, 2022 and amend a typo in the prior year nine-month basic and diluted weighted average shares outstanding and basic and diluted loss per share on the Condensed Consolidated Statements of Operations. | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 31, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --01-31 | |
Entity File Number | 333-152444 | |
Entity Registrant Name | AUTO PARTS 4LESS GROUP, INC. | |
Entity Central Index Key | 0001438901 | |
Entity Tax Identification Number | 90-1494749 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 106 W. Mayflower | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89030 | |
City Area Code | (702) | |
Local Phone Number | 267-6100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | FLES | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,890,862 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets Unaudited - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | |
Current Assets | |||
Cash and Cash Equivalents | $ 46,026 | $ 77,498 | [1] |
Inventory | 142,251 | 432,583 | [1] |
Prepaid Expenses | 8,018 | 16,065 | [1] |
Deferred Offering Costs | 23,000 | 23,000 | [1] |
Other Current Assets | 33,248 | 15,469 | [1] |
Total Current Assets | 252,543 | 564,615 | [1] |
Operating Lease Assets | 160,770 | 242,583 | [1] |
Property and Equipment, net of accumulated depreciation of $161,056, and $122,469 | 183,891 | 221,336 | [1] |
Total Assets | 597,204 | 1,028,534 | [1] |
Current Liabilities | |||
Bank overdraft | 11,055 | [1] | |
Accounts Payable | 1,317,984 | 1,228,039 | [1] |
Accrued Expenses | 1,536,626 | 796,397 | [1] |
Accrued Expenses – Related Party | 45,673 | 46,173 | [1] |
Customer Deposits | 57,856 | 530,900 | [1] |
Deferred Revenue | 66,153 | 665,143 | [1] |
Short-Term Debt | 2,985,041 | 3,454,133 | [1] |
Current Operating Lease Liability | 70,214 | 100,001 | [1] |
Short-Term Convertible Debt, net of debt discount of $2,374,330 and $2,131,034 | 5,766,920 | 647,966 | [1] |
Derivative Liabilities | 3,663,597 | 1,263,442 | [1] |
Shareholder Loans Payable | 119,476 | [1] | |
Current Portion – Long-Term Debt | 22,149 | 27,737 | [1] |
Total Current Liabilities | 15,532,213 | 8,890,462 | [1] |
Non-Current Lease Liability | 90,556 | 138,551 | [1] |
Long-Term Debt | 95,803 | 115,900 | [1] |
Total Liabilities | 15,718,572 | 9,144,913 | [1] |
Commitments and Contingencies | [1] | ||
Stockholders’ Deficit | |||
Common Stock, $0.000001 par value, 75,000,000 shares authorized, 1,823,708 and 341,023 shares issued, issuable and outstanding | 2 | [1] | |
Additional Paid In Capital | 24,689,118 | 19,465,327 | [1] |
Accumulated Deficit | (40,680,508) | (28,451,733) | [1] |
Total Stockholders’ Deficit | (15,991,368) | (8,986,379) | [1] |
Total Liabilities and Stockholders’ Deficit | 597,204 | 1,028,534 | [1] |
Series D Preferred Stock [Member] | |||
Current Liabilities | |||
Preferred stock | 870,000 | 870,000 | [1] |
Series A Preferred Stock [Member] | |||
Current Liabilities | |||
Preferred stock | [1] | ||
Stockholders’ Deficit | |||
Total Stockholders’ Deficit | |||
Series B Preferred Stock [Member] | |||
Current Liabilities | |||
Preferred stock | 20 | 20 | [1] |
Stockholders’ Deficit | |||
Total Stockholders’ Deficit | 20 | 20 | |
Series C Preferred Stock [Member] | |||
Current Liabilities | |||
Preferred stock | 7 | [1] | |
Stockholders’ Deficit | |||
Total Stockholders’ Deficit | $ 7 | ||
[1]Derived from audited information |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets Unaudited (Parenthetical) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 |
Net of accumulated depreciation | $ 161,056 | $ 122,469 |
Net of debt discount | $ 2,374,330 | $ 2,131,034 |
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares outstanding | 1,823,708 | 341,023 |
Common stock, shares issued | 1,823,708 | 341,023 |
Series D Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 870 | 870 |
Preferred stock, shares issued | 870 | 870 |
Preferred stock, shares outstanding | 870 | 870 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 330,000 | 330,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000 | 20,000 |
Preferred stock, shares issued | 20,000 | 20,000 |
Preferred stock, shares outstanding | 20,000 | 20,000 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 7,250 | 7,250 |
Preferred stock, shares issued | 0 | 7,250 |
Preferred stock, shares outstanding | 0 | 7,250 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,017,986 | $ 3,114,062 | $ 4,089,037 | $ 9,429,519 |
Cost of Revenue | 846,898 | 2,274,564 | 3,296,546 | 6,975,126 |
Gross Profit | 171,088 | 839,498 | 792,491 | 2,454,393 |
Operating Expenses: | ||||
Depreciation | 12,743 | 12,479 | 38,587 | 35,930 |
Postage, Shipping and Freight | 32,013 | 94,356 | 146,962 | 430,105 |
Marketing and Advertising | 156,522 | 609,252 | 671,348 | 1,876,576 |
E Commerce Services, Commissions and Fees | 396,065 | 434,832 | 1,076,787 | 1,160,569 |
Operating lease cost | 29,219 | 30,478 | 90,177 | 91,437 |
Personnel Costs | 131,937 | 319,256 | 505,253 | 1,078,449 |
PPP Loan Forgiveness | (209,447) | (209,447) | ||
General and Administrative | 251,408 | 1,569,721 | 2,849,042 | 2,682,866 |
Total Operating Expenses | 1,009,907 | 2,860,927 | 5,378,156 | 7,146,485 |
Net Operating Loss | (838,819) | (2,021,429) | (4,585,665) | (4,692,092) |
Other Income (Expense) | ||||
Gain (Loss) on Sale of Property and Equipment | 20,345 | |||
Gain (Loss) on Derivatives | (184,146) | (76,444) | (841,772) | (88,551) |
Gain on Settlement of Debt | 10,128 | 41,249 | 19,539 | 1,004,615 |
Amortization of Debt Discount | (1,932,722) | (130,139) | (4,309,329) | (442,075) |
Interest Expense | (1,186,132) | (379,811) | (2,511,548) | (688,622) |
Total Other Income (Expense) | (3,292,872) | (545,145) | (7,643,110) | (194,288) |
Net (Loss) | $ (4,131,691) | $ (2,566,574) | $ (12,228,775) | $ (4,886,380) |
Basic Weighted Average Shares Outstanding; | 1,805,316 | 319,866 | 1,576,024 | 257,577 |
Basic (Loss) per Share | $ (2.29) | $ (8.02) | $ (7.76) | $ (18.97) |
Diluted Average Shares Outstanding; | 1,805,316 | 319,866 | 1,576,024 | 257,577 |
Diluted (Loss) per Share | $ (2.29) | $ (8.02) | $ (7.76) | $ (18.97) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | |
Beginning balance, value at Jan. 31, 2021 | $ 20 | $ 7 | $ 14,291,760 | $ (20,381,977) | $ (6,090,190) | |||
Beginning balance (in shares) at Jan. 31, 2021 | 20,000 | 7,250 | 142,716 | |||||
Common Stock Issued as Payment for Fees | 107,500 | 107,500 | ||||||
Common Stock Issued as Payment for Fees (in shares) | 5,000 | |||||||
Issuance of Common Stock as Part of REG A Subscription | 2,194,500 | 2,194,500 | ||||||
Issuance of Common Stock as Part of REG A (in shares) | 109,725 | |||||||
Rounding shares | 1 | 1 | ||||||
Net (Loss) | (567,557) | (567,557) | ||||||
Ending balance, value at Apr. 30, 2021 | $ 20 | $ 7 | 16,593,761 | (20,949,534) | (4,355,746) | |||
Ending balance (in shares) at Apr. 30, 2021 | 20,000 | 7,250 | 257,441 | |||||
Beginning balance, value at Jan. 31, 2021 | $ 20 | $ 7 | 14,291,760 | (20,381,977) | (6,090,190) | |||
Beginning balance (in shares) at Jan. 31, 2021 | 20,000 | 7,250 | 142,716 | |||||
Net (Loss) | (4,886,380) | |||||||
Ending balance, value at Oct. 31, 2021 | $ 20 | $ 7 | 19,212,126 | (25,268,357) | (6,056,204) | |||
Ending balance (in shares) at Oct. 31, 2021 | 20,000 | 7,250 | 341,023 | |||||
Beginning balance, value at Apr. 30, 2021 | $ 20 | $ 7 | 16,593,761 | (20,949,534) | (4,355,746) | |||
Beginning balance (in shares) at Apr. 30, 2021 | 20,000 | 7,250 | 257,441 | |||||
Net (Loss) | (1,752,249) | (1,752,249) | ||||||
Conversion of Notes Payable and Accrued Interest and Fees to Common Stock | 59,100 | 59,100 | ||||||
Conversion of Notes Payable to Common Stock (in shares) | 3,000 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of Notes | 17,640 | 17,640 | ||||||
Issuance of shares | 200,500 | 200,500 | ||||||
Issuance of Shares (in shares) | 10,475 | |||||||
Relative Fair Value of Equity Issued with Debt | 59,801 | 59,801 | ||||||
Relative Fair Value of Equity Issued with Debt (in shares) | 9,181 | |||||||
Issuance of warrants | 600,000 | 600,000 | ||||||
Ending balance, value at Jul. 31, 2021 | $ 20 | $ 7 | 17,530,802 | (22,701,783) | (5,170,954) | |||
Ending balance (in shares) at Jul. 31, 2021 | 20,000 | 7,250 | 280,097 | |||||
Net (Loss) | (2,566,574) | (2,566,574) | ||||||
Conversion of Notes Payable and Accrued Interest and Fees to Common Stock | 102,341 | 102,341 | ||||||
Conversion of Notes Payable to Common Stock (in shares) | 5,977 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of Notes | 58,504 | 58,504 | ||||||
Share Issuances, Net of Issuance Costs of $359,445 | 392,924 | 392,924 | ||||||
Share issuances, net of issuance costs (in shares) | 52,100 | |||||||
Share Issuance for fees | 30,055 | 30,055 | ||||||
Share issuance for fees (in shares) | 1,301 | |||||||
Additional Shares Issued as Part of Relative Fair Value for Debt | ||||||||
Additional shares issued as part of relative fair value for debt (in shares) | 1,548 | |||||||
Options Issued to Director and CEO | 585,000 | 585,000 | ||||||
Warrants Issued for Fees | 512,500 | 512,500 | ||||||
Ending balance, value at Oct. 31, 2021 | $ 20 | $ 7 | 19,212,126 | (25,268,357) | (6,056,204) | |||
Ending balance (in shares) at Oct. 31, 2021 | 20,000 | 7,250 | 341,023 | |||||
Beginning balance, value at Jan. 31, 2022 | $ 20 | $ 7 | 19,465,327 | (28,451,733) | (8,986,379) | [1] | ||
Beginning balance (in shares) at Jan. 31, 2022 | 20,000 | 7,250 | 341,023 | |||||
Rounding shares | ||||||||
Net (Loss) | (2,594,158) | (2,594,158) | ||||||
Relative Fair Value of Equity Issued with Debt | 1,064,965 | 1,064,965 | ||||||
Relative Fair Value of Equity Issued with Debt (in shares) | 254,141 | |||||||
Conversion of Preferred Series C Shares into Shares Of Common Stock | $ (7) | $ 1 | 6 | |||||
Conversion of Preferred Series C Shares into Shares Of Common Stock (in shares) | (7,250) | 905,110 | ||||||
Penalty Warrants Recorded as Interest | 315,150 | 315,150 | ||||||
Rounding shares (in shares) | 88 | |||||||
Ending balance, value at Apr. 30, 2022 | $ 20 | $ 1 | 20,845,448 | (31,045,891) | (10,200,422) | |||
Ending balance (in shares) at Apr. 30, 2022 | 20,000 | 1,500,362 | ||||||
Beginning balance, value at Jan. 31, 2022 | $ 20 | $ 7 | 19,465,327 | (28,451,733) | (8,986,379) | [1] | ||
Beginning balance (in shares) at Jan. 31, 2022 | 20,000 | 7,250 | 341,023 | |||||
Net (Loss) | (12,228,775) | |||||||
Ending balance, value at Oct. 31, 2022 | $ 20 | $ 2 | 24,689,118 | (40,680,508) | (15,991,368) | |||
Ending balance (in shares) at Oct. 31, 2022 | 20,000 | 1,823,708 | ||||||
Beginning balance, value at Apr. 30, 2022 | $ 20 | $ 1 | 20,845,448 | (31,045,891) | (10,200,422) | |||
Beginning balance (in shares) at Apr. 30, 2022 | 20,000 | 1,500,362 | ||||||
Rounding shares | ||||||||
Net (Loss) | (5,502,926) | (5,502,926) | ||||||
Relative Fair Value of Equity Issued with Debt | 1 | 794,465 | 794,466 | |||||
Penalty Warrants Recorded as Interest | 280,050 | 280,050 | ||||||
Rounding shares (in shares) | 2,587 | |||||||
Relative Fair Value of Equity Issued with Debt (in shares) | 221,500 | |||||||
Exercise of Warrants | ||||||||
Exercise of warrants (in shares) | 10,000 | |||||||
Stock Based Compensation | 1,998,000 | 1,998,000 | ||||||
Ending balance, value at Jul. 31, 2022 | $ 20 | $ 2 | 23,917,963 | (36,548,817) | (12,630,832) | |||
Ending balance (in shares) at Jul. 31, 2022 | 20,000 | 1,734,449 | ||||||
Net (Loss) | (4,131,691) | (4,131,691) | ||||||
Relative Fair Value of Equity Issued with Debt | 567,905 | 567,905 | ||||||
Penalty Warrants Recorded as Interest | 203,250 | 203,250 | ||||||
Relative Fair Value of Equity Issued with Debt (in shares) | 80,000 | |||||||
Exercise of Warrants | ||||||||
Exercise of warrants (in shares) | 10,000 | |||||||
Cancelled Shares Pursuant to SEC Ruling | ||||||||
Cancelled Shares Pursuant to SEC Ruling (in shares) | (741) | |||||||
Ending balance, value at Oct. 31, 2022 | $ 20 | $ 2 | $ 24,689,118 | $ (40,680,508) | $ (15,991,368) | |||
Ending balance (in shares) at Oct. 31, 2022 | 20,000 | 1,823,708 | ||||||
[1]Derived from audited information |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net (Loss) | $ (12,228,775) | $ (4,886,380) | |
Adjustments to reconcile net income (loss) to cash used by operating activities: | |||
Depreciation | 38,587 | 35,930 | |
Inventory Provision | 143,000 | 0 | |
Reduction of Right of Use Asset | 77,782 | 69,691 | |
Accretion of Lease Liability | 12,396 | 21,746 | |
(Gain) loss in Fair Value on Derivative Liabilities | 841,772 | 88,551 | |
Amortization of Debt Discount | 4,309,329 | 442,075 | |
Debt Discount in Excess of Face Value of Note to Interest Expense | 225,429 | ||
Loan Penalties Capitalized to Loan and Accrued Interest | 600,000 | 28,000 | |
Interest Expense on Penalty Warrants | 798,450 | ||
Stock Based Compensation | 1,998,000 | 1,097,500 | |
Stock Based Payment of Consulting Fees and Shares | 303,555 | ||
Gain on Sale of Property and Equipment | (20,345) | ||
PPP Loan Forgiveness | (209,447) | ||
Gain on Settlement of Debt | (19,539) | (1,004,615) | |
Change in Operating Assets and Liabilities: | |||
(Increase) Decrease in Inventory | 147,333 | (78,033) | |
Decrease in Prepaid Rent and Expenses | 12,077 | 5,546 | |
(Increase) in Other Current Assets | (17,779) | (39,270) | |
Decrease in Bank Overdraft | (11,055) | ||
Increase in Accounts Payable | 95,931 | 230,225 | |
Increase in Accrued Expenses | 741,729 | 137,440 | |
Operating Lease Payments | (90,178) | (91,437) | |
Decrease in Accrued Expenses -Related Party | (500) | (60,000) | |
Increase (Decrease) in Customer Deposits | (473,044) | 32,391 | |
Decrease in Deferred Revenue | (598,990) | (446,474) | |
CASH FLOWS (USED IN) OPERATING ACTIVITIES | (3,398,045) | (4,343,351) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds of Sales of Property and Equipment | 25,060 | ||
Purchase of Property and Equipment | (1,142) | (43,628) | |
CASH FLOWS (USED IN) INVESTING ACTIVITIES | (1,142) | (18,568) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from Issuance of Common Shares, Net of Issuance Costs | 3,037,625 | ||
Proceeds from Short Term Debt | 1,568,472 | ||
Proceeds from Convertible Notes Payable | 4,006,714 | 699,525 | |
Payments on Short Term Debt | (376,699) | (449,386) | |
Shareholder Loans Payable | 20,000 | ||
Repayments on Shareholder Loans Payable | (33,561) | ||
Payments on Long Term Debt | (20,739) | (14,857) | |
Payments on Convertible Notes Payable | (228,000) | (406,825) | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 3,367,715 | 4,434,554 | |
NET INCREASE (DECREASE) IN CASH | (31,472) | 72,635 | |
CASH AT BEGINNING OF PERIOD | 77,498 | [1] | 277,664 |
CASH AT END OF PERIOD | 46,026 | 350,299 | |
Supplemental Disclosure of Cash Flows Information: | |||
Cash Paid for Interest | 75,038 | 345,868 | |
Convertible Notes Interest and Derivatives Converted to Common Stock | 237,085 | ||
Fair Value of Instruments Issued With Debt | 2,427,336 | 487,284 | |
Derivative Debt Discount | 1,557,922 | ||
Debt Discount | 772,796 | ||
Transfer of Short-term Loan , Shareholder Loan and Accounts payable to Convertible Note | 210,740 | ||
Issuance of Warrants to Deferred Offering Costs | 600,000 | ||
Deferred Offering Costs Against Share Proceeds | 312,000 | ||
Loans to acquire Fixed Assets | $ 151,327 | ||
[1]Derived from audited information |
NATURE OF BUSINESS AND SIGNIFIC
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Business: Nature of Business – 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 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 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, 2022 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May 9, 2022. Principles of Consolidation: The condensed financial statements include the accounts of 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. 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. At October 31, 2022 the provision for inventory obsolescence was $ 143,000 0 Concentrations Cost of Goods Sold For the nine months ended October 31, 2022 the Company purchased approximately 51 426,606 58 440,977 Leases 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. 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 21 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 Level 2 Inputs Level 3 Inputs 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 October 31, 2022: October 31, 2022 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 3,663,597 $ — $ — $ 3,663,597 Totals $ 3,663,597 $ — $ — $ 3,663,597 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 9), the sensitivity required to change the liability by 1% as of October 31, 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 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 website revenue for the three months ended October 31, 2022 and 2021: Change 2022 2021 $ % Proprietary website revenue $ 611,799 $ 2,392,668 $ (1,780,869 ) ( 74 ) Third party website revenue 406,187 721,394 (315,207 ) ( 44 ) Total Revenue $ 1,017,986 $ 3,114,062 $ (2,096,076 ) ( 67 ) The following table shows revenue split between proprietary and third-party website revenue for the nine months ended October 31, 2022 and 2021: Change 2022 2021 $ % Proprietary website revenue $ 2,750,636 $ 6,339,478 $ (3,588,842 ) ( 57 ) Third party website revenue 1,338,401 3,090,041 (1,751,640 ) ( 57 ) Total Revenue $ 4,089,037 $ 9,429,519 $ (5,340,482 ) ( 57 ) 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 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. 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. |
GOING CONCERN AND FINANCIAL POS
GOING CONCERN AND FINANCIAL POSITION | 9 Months Ended |
Oct. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN AND FINANCIAL POSITION | 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 $ 40,680,508 15,279,670 46,026 6,111,000 Management’s plan is to raise additional funds in the form of debt or equity in order to 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. |
PROPERTY
PROPERTY | 9 Months Ended |
Oct. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY | 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 October 31, 2022 and January 31, 2022: October 31, 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 (161,056 ) (122,469 ) Total Property $ 183,891 $ 221,336 Additions to fixed assets for the nine months ended October 31, 2022 were $ 1,142 186,327 35,000 151,327 There were no disposals for the nine months ended October 31, 2022. For the nine months ended October 31, 2021, vehicles having a cost of $ 20,000 4,715 25,060 20,345 Depreciation expense was $ 12,743 12,479 Depreciation expense was $ 38,587 35,930 |
LEASES
LEASES | 9 Months Ended |
Oct. 31, 2022 | |
Leases | |
LEASES | 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. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 17 years Below is a summary of our lease assets and liabilities at October 31, 2022 and January 31, 2022. Leases Classification October 31, 2022 January 31, 2022 Assets Operating Operating Lease Assets $ 160,770 $ 242,583 Liabilities Current Operating Current Operating Lease Liability $ 70,214 $ 100,001 Noncurrent Operating Noncurrent Operating Lease Liabilities 90,556 138,551 Total lease liabilities $ 160,770 $ 238,552 Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate of 8 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 $ 29,219 30,478 Operating lease cost and rent was $ 90,177 91,437 |
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS | 9 Months Ended |
Oct. 31, 2022 | |
Disclosure Customer Deposits Abstract | |
CUSTOMER DEPOSITS | NOTE 5 – CUSTOMER DEPOSITS The Company receives payments from customers on orders prior to shipment and these customer deposits on cancelled orders were either returned to the customers subsequent to October 31, 2022 or will remain as deposits until the item is either delivered and recorded as revenue or cancelled and refunded. At October 31, 2022 the Company had received $ 57,856 530,900 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Oct. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED REVENUE | NOTE 6 – DEFERRED REVENUE The Company receives payments from customers on orders prior to shipment and orders that were unfulfilled at October 31, 2022 because of both normal order processing and fulfillment requirements, and back orders are recorded as deferred revenue. At October 31, 2022, the Company had received $ 66,153 665,143 |
SHORT-TERM AND LONG-TERM DEBT
SHORT-TERM AND LONG-TERM DEBT | 9 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
SHORT-TERM AND LONG-TERM DEBT | NOTE 7 – SHORT-TERM AND LONG-TERM DEBT The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows: October 31, 2022 January 31, 2022 Loan dated October 8, 2019 February 29, 2020 November 10, 2020 June 30, 2022 20,000 (3) $ — * $ 97,340 Forklift Note Payable, original note of $ 20,433 Sept 26, 2018 6.23 60 monthly 394.54 (1) 4,947 * 8,183 Vehicle loan original loan of $ 93,239 February 16, 2021 2.90 72 monthly 1,414 72,977 70,277 # 81,346 Vehicle loan original loan of $ 59,711 March 20,2021 7.89 72 1,048 68,35 47,675 # 54,108 Working Capital Note Payable - $ 700,000 October 29, 2021 17,904 Oct 29, 2022 31 (2)(4)(7) 407,423 * ∞ 635,831 Working Capital Note Payable - $ 650,000 October 25, 2021 15,875 October 25, 2022 26 (2)(4)(8) 447,756 * ∞ 596,047 Demand loan - $ 5,000 February 1, 2020 15 5 5,000 * 5,000 Demand loan - $ 2,500 March 8, 2019 25 2,500 * 2,500 Demand loan - $ 65,500 February 27, 2019 25 12,415 * 12,415 Promissory note - $ 60,000 September 18, 2020 April 30, 2022 (10) 5,000 15 60,000 * ∞ 60,000 Promissory note - $ 425,000 August 28, 2020 50,000 15 825,000 (5) 425,000 * ∞ 425,000 Promissory note - $ 1,200,000 August 28, 2020 August 28, 2022 12 (6) 1,200,000 * ∞ 1,200,000 Promissory note - $ 420,000 December 27, 2021 20,000 January 27, 2022 (9) 420,000 * ∞ 420,000 Total $ 3,102,993 $ 3,597,770 October 31, 2022 January 31, 2022 Short-Term Debt $ 2,985,041 $ 3,454,133 Current Portion of Long-Term Debt 22,149 27,737 Long-Term Debt 95,803 115,900 Total $ 3,102,993 $ 3,597,770 * Short-term loans # Long-term loans of $ 47,675 8,317 70,277 13,832 ∞ In default $2,960,179. (1) Secured by equipment having a net book value of $7,285. (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 5,705 13 20,000 (4) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (5) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company has entered into such a transaction the 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. (6) Secured by all assets of the Company. Loan payable in 2 instalments, $ 445,200 826,800 (7) This loan replaces $500,000 loan dated June 4, 2021, $ 422,009 253,491 26,500 (8) This loan replaces $500,000 loan dated June 4, 2021, $ 359,919 267,606 22,475 (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 February 26, 2022, through to July 26, 2022 and will issue an additional 15,000 warrants for each of those six defaults for a total of 90,000 warrants. The Company has recorded $798,450 based on the fair value of the warrants and $75,600 for the 2% fee as interest expense to October 31, 2022. (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 October 31, 2022: Year Ended Amount October 31, 2023 $ 3,007,190 October 31, 2024 25,174 October 31, 2025 26,443 October 31, 2026 27,792 October 31, 2027 16,394 Total $ 3,102,993 |
SHORT-TERM CONVERTIBLE DEBT
SHORT-TERM CONVERTIBLE DEBT | 9 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
SHORT-TERM CONVERTIBLE DEBT | NOTE 8 – SHORT-TERM CONVERTIBLE DEBT The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows. Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price (a) October 31, 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) 3,000,000 2,400,000 Jan. 13, 2023 12 22 (2) — 228,000 Aug. 11, 2022 10 10 (3) — — Feb. 14, 2023 12 20 (4) 1,200,000 — Feb 25, 2023 12 20 (4) 150,000 — Feb. 25, 2023 12 20 (4) 350,000 — Mar. 9 2023 12 20 (4) 200,000 — Mar. 9, 2023 12 20 (4) 200,000 — Apr. 22, 2023 12 20 (4) 440,000 — Apr. 22, 2023 12 20 (4) 110,000 — May 19,2023 12 16 (5) 400,000 — Feb.11, 2023 12 18 (4) 275,000 — Dec 27, 2022 12 18 (4) 275,000 — Jan. 5, 2023 12 18 (4) 250,000 — Jan.6 ,2023 12 18 (4) 125,000 — Jan.6 ,2023 12 18 (4) 125,000 — Jan.11 ,2023 12 18 (4) 138,890 — Apr. 22, 2023 12 18 (4) 275,000 — Apr. 22, 2023 12 18 (4) 275,000 — Sept. 9, 2023 12 22 (6) 201,360 — Sub-total 8,141,250 2,779,000 Debt Discount (2,374,330 ) (2,131,034 ) $ 5,766,920 $ 647,966 * In default at filing date $3,151,000 (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 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 price lower of i) lowest price 20 days prior to Issuance ii) lowest price 20 days prior to conversion. (5) lesser of $ 5.00 or 75 % of offering price if there is an uplisting to a national securities exchange. (6) 75% of lowest closing bid price ten days preceding conversion date in event of default. (a) Note all conversions are subject to dilutive issuance clauses where the conversion price will revert to the lowest transacted share price. The Company had accrued interest payable of $ 478,271 231,412 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 October 31, 2022 and 2021, the Company recorded amortization of debt discount expense of $ 1,932,722 130,139 4,309,329 442,075 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. 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. The Company has extended the loan term. 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. The Company has extended the loan term. 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. The Company has extended the loan term. 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. The Company has extended the loan term. 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%. 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. The Company has extended the loan term. 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. The Company has extended the loan term. 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. The Company has extended the loan term. 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%. On May 18, 2022, the lender and Company amended the November 12, 2021 $2,400,000 note whereby the $432,000 amortization payments due on June 12, 2022, July 12, 2022 and August 12, 2022 all totaling $1,296,000 are now payable on October 25, 2022. In exchange the second warrant to acquire 90,000 common shares can no longer be cancelled. On May 19, 2022 the Company entered into a 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 $325,400 in cash proceeds, recorded an original issue discount of $40,000, a derivative discount of $358,088 for the conversion feature, recognized $192,341 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $35,000. The discount is amortized over the term of the loan. The excess discount over the face value of the note of $ $225,429 was expensed to interest. 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 125%. In June 2022, the Company received $50,000 cash proceeds and recorded an original issue discount of $5,000 from the lender of February 11, 2022 maturing August 11, 2022 and on that date the old note of $220,000 plus the accrued interest matures on February 11, 2023 along with new advances of $55,000 forming a combined new note of $275,000 dated August 11, 2022. The new note bears interest at 12% and came with 100,000 warrants with an exercise price of $ 15.00 and a 5 year term and 40,000 common shares . The Company received $50,000 in cash proceeds (in June), recorded an original issue discount of $5,000, a derivative discount of $37,261 for the conversion feature, and recognized $195,219 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. On June 27, 2022, the Company entered into a new convertible note for $275,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $250,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $34,488 for the conversion feature, and recognized $197,559 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. 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 July 5, 2022 the Company entered into a new convertible note for $250,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $200,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $33,860 for the conversion feature, recognized $139,638 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $35,000. 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 July 6, 2022, the Company entered into a new convertible note for $125,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $102,000 in cash proceeds, recorded an original issue discount of $12,000, a derivative discount of $16,484 for the conversion feature, recognized $83,796 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $10,000. 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 July 6, 2022, the Company entered into another new convertible note for $125,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $102,000 in cash proceeds, recorded an original issue discount of $12,500, a derivative discount of $16,388 for the conversion feature, recognized $83,796 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $10,000. 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 July 11, 2022, the Company entered into another new convertible note for $138,890 with a six month maturity, interest rate of 12%,with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $116,668 in cash proceeds, recorded an original issue discount of $13,889, a derivative discount of $18,735 for the conversion feature, recognized $97,336 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $8,333. 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 July 11, 2022, the Company entered into another new convertible note for $138,890 with a six month maturity, interest rate of 12%,with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $116,668 in cash proceeds, recorded an original issue discount of $13,889, a derivative discount of $18,735 for the conversion feature, recognized $97,336 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $8,333. 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 August 22, 2022, the Company entered into a new convertible note with a shareholder for $275,000 with a six month maturity, interest rate of 12%,with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $39,260 in cash proceeds, and transferred the following to the note holder : a short term loan of $97,340, a shareholder loan of $50,000, accrued interest of $25,000,and accounts payable for unpaid rent of $38,400. The Company recorded an original issue discount of $25,000, a derivative discount of $36,947 for the conversion feature, recognized $186,343 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. On August 22, 2022, the Company entered into another new convertible note with a shareholder for $275,000 with a six month maturity, interest rate of 12%,with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $250,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $37,070 for the conversion feature, recognized $186,343 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. On September 29, 2022, the Company entered into another new convertible note for $201,360 with a six month maturity, interest rate of 12%. The Company received $175,536 in cash proceeds, recorded an original issue discount of $21,574, a derivative discount of $17,736 for the conversion feature, and transaction fees of $4,250. 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 150%. During the three and nine months ended October 31, 2022 and October 31, 2021 the Company added $ 600,000 28,000 As of October 31, 2022, the Company had $ 3,151,000 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Oct. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 9 – DERIVATIVE LIABILITIES As of October 31, 2022, and January 31, 2022, the Company had derivative liabilities of $ 3,663,597 1,263,442 184,146 76,444 841,772 88,551 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 October 31, 2022. Level 3 Derivatives Balance, January 31, 2022 $ 1,263,442 Changes Due to Issuance of New Convertible Notes 1,577,922 Settlement Due to Repayment of Debt (19,539 ) Mark to Market Change in Derivatives 841,772 Balance, October31, 2022 $ 3,663,597 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. 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 October 31, 2022, is as follows: Embedded Strike price 5.20 5.55 Contractual term (years) 0.25 1.00 Volatility (annual) 182.9 213.76 Underlying fair market value 5.20 Risk-free rate 7.11 8.46 Dividend yield (per share) 0 |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 9 Months Ended |
Oct. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 10 – 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 October31, 2022, and January 31, 2022, the Company had 0 330,000 0.001 At both October 31, 2022, and January 31, 2022, there were 20,000 20,000 20,000 0.001 At both October 31, 2022, and January 31, 2022, there were 0 7,250 7,250 905,110 0 0.001 At both October 31, 2022, and January 31, 2022, there were 870 0.001 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 (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. (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 October 31, 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 October 31, 2022, and January 31, 2022. Common Stock The Company is authorized to issue 75,000,000 0.000001 The Company undertook a 10-1 reverse stock split on April 28, 2022. 1,823,708 341,023 The Company issued the following shares of common stock in the nine months ended October 31, 2022: The Company issued 905,110 7,250 The Company issued 555,641 948,333 2,427,336 A lender exercised on a cash-free basis warrants to acquire 29,155 20,000 The Company cancelled 741 common shares pursuant to an SEC enforcement action against a lender. As part of the reverse split on April 28, 2022 the Company issued 2,675 Options and Warrants: The Company has 250,000 50,000 The Company recorded option and warrant expense of $ 0 0 The Company cancelled the options to acquire 50,000 shares issued to the CEO on July 14, 2021 and issued new options on October11, 2022 to acquire 250,000 shares with a 5 year term and an exercise price of $4.00. The Company recorded stock-based compensation of $1,998,000 with a corresponding adjustment to paid-in capital. This amount is the incremental value between the new options of $2,497,500 and the revalued cancelled options if $499,500 Schedule Of Warrants Fair Value Expected volatility 753 1,735 Exercise price $ 4.00 15.00 Stock price $ 9.99 Expected life 1.5 5 Risk-free interest rate 3.05 3.07 Dividend yield 0 For the nine months ended October 31, 2022 the Company issued 555,641 common shares and warrants to purchase 948,333 common shares along with debt to various lenders as well as warrants to acquire 135,000 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 555,641 common shares and 948,333 warrants at $2,427,336, which has been recorded as a debt discount and the 135,000 warrants at $798,450 which has been recorded as interest both with corresponding adjustments to paid-in capital. Expected volatility 1,686 2,227 Exercise price $ 4.45 15.00 Stock price $ 0.95 11.99 Expected life 3 5 Risk-free interest rate 1.76 4.45 Dividend yield 0 The Company had the following fully vested warrants outstanding at October 31,2022: Issued To # Warrants Dated Expire Strike Price * Expired Exercised Lender 95,000 08/28/2020 08/28/2023 $ 4.00 N N Broker 250 10/11/2020 10/11/2025 $ 45.00 N N Broker 300 11/25/2020 11/25/2025 $ 30.00 N N Triton 30,000 07/27/2021 07/27/2024 $ 21.10 N N Consultant 25,000 08/26/2021 08/26/2024 $ 15.00 N N Lender 60,845 11/12/2021 11/12/2026 $ 15.00 N N Lender 90,000 11/12/2021 11/12/2026 $ 15.00 N N Lender 30,000 1/27/2022 1/27/2025 $ 15.00 N N Lender 120,000 2/14/2022 2/14/2027 $ 15.00 N N Lender 35,000 2/25/2022 2/25/2027 $ 15.00 N N Lender 15,000 2/25/2022 2/25/2027 $ 15.00 N N Lender 20,000 3/9/2022 3/9/2027 $ 15.00 N N Lender 20,000 3/9/2022 3/9/2027 $ 15.00 N N Lender 11,000 4/22/2022 4/22/2027 $ 15.00 N N Lender 44,000 4/22/2022 4/22/2027 $ 15.00 N N Lender 15,000 2/26/2022 2/26/2025 $ 5.40 N N Lender 15,000 3/28/2022 3/28/2025 $ 7.50 N N Lender 15,000 4/27/2022 4/27/2025 $ 6.99 N N Lender 15,000 5/27/2022 5/27/2025 $ 5.12 N N Lender 33,333 5/19/2022 5/19/2027 $ 15.00 N N Lender 100,000 6/27/2022 6/27/2027 $ 15.00 N N Lender 15,000 6/26/2022 6/26/2025 $ 5.12 N N Lender 15,000 7/26/2022 7/26/2025 $ 5.12 N N Lender 100,000 7/5/2022 7/5/2027 $ 15.00 N N Lender 50,000 7/6/2022 7/6/2027 $ 15.00 N N Lender 50,000 7/6/2022 7/6/2027 $ 15.00 N N Lender 50,000 7/11/2022 7/11/2027 $ 15.00 N N Lender 100,000 8/11/2022 8/11/2027 $ 15.00 N N Lender 100,000 8/22/2022 8/22/2027 $ 15.00 N N Lender 100,000 8/22/2022 8/22/2027 $ 15.00 N N Lender 15,000 8/25/2022 8/25/2025 $ 5.10 N N Lender 15,000 9/24/2022 9/24/2025 $ 4.00 N N Lender 15,000 10/24/2022 10/24/2025 $ 3.30 N N * The strike price is subject to price adjustments due to dilutive issuance clauses. The Company had the following fully vested options outstanding at October 31, 2022: Issued To # Options Dated Expire Strike Price Expired Exercised T. Armes 50,000 10/14/2021 7/11/2022 $ 15.00 Y N T. Armes 250,000 7/11/2022 7/11/2027 $ 4.00 N N The following table summarizes the activity of options and warrants issued and outstanding as of and for the three months ended October 31, 2022: Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2022 50,000 $ 15.00 360,550 $ 12.64 Granted 250,000 4.00 1,083,333 15.00 Exercised — — (29,155 ) 5.00 Forfeited and canceled (50,000 ) (15.00 ) — — Outstanding at October 31, 2022 250,000 $ 4.00 1,414,728 $ 13.70 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS As of October 31, 2022 and January 31, 2021, the Company had $ 45,673 46,173 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – 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 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 In October 2019 the Company entered into an operating lease for a vehicle with an annual cost of $9,067 and a three year term. The company paid initial fees of $ 17,744 Schedule of minimum lease obligations Maturity of Lease Liabilities Operating October 31 2023 $ 81,203 October 31, 2024 30,003 October 31, 2025 30,003 October 31, 2026 30,003 October 31, 2027 2,501 Total lease payments 173,713 Less: Interest (12,943 ) Present value of lease liabilities $ 160,770 The Company had total operating lease and rent expense of $ 29,219 30,478 90,177 91,437 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Oct. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 13 – EARNINGS (LOSS) PER SHARE The net income (loss) per common share amounts were determined as follows: For the Three Months Ended October 31, 2022 2021 Numerator: Net income (loss) available to common shareholders $ (4,131,691 ) $ (2,566,574 ) Denominator: Weighted average shares – basic 1,805,316 319,866 Net income (loss) per share – basic $ (2.29 ) $ (8.02 ) Effect of common stock equivalents Add: interest expense on convertible debt 166,046 19,247 Add: amortization of debt discount 1,932,722 130,139 Less: gain on settlement of debt on convertible notes (10,128 ) (41,249 ) Add (Less): loss (gain) on change of derivative liabilities 186,146 76,444 Net income (loss) adjusted for common stock equivalents (1,856,905 ) (2,381,993 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — — Convertible Class C Preferred shares — — Warrants and options — — Denominator: Weighted average shares – diluted 1,805,316 319,866 Net income (loss) per share – diluted $ (2.29 ) $ (8.02 ) The net income (loss) per common share amounts were determined as follows: For the Nine Months Ended October 31, 2022 2021 Numerator: Net income (loss) available to common shareholders $ (12,228,775 ) $ (4,886,380 ) Denominator: Weighted average shares – basic 1,576,024 257,577 Net income (loss) per share – basic $ (7.76 ) $ (18.97 ) Effect of common stock equivalents Add: interest expense on convertible debt 278,788 35,237 Add: amortization of debt discount 4,309,329 442,075 Less: gain on settlement of debt on convertible notes (19,539 ) (1,004,615 ) Add (Less): loss (gain) on change of derivative liabilities 841,772 88,551 Net income (loss) adjusted for common stock equivalents (6,818,425 ) (5,325,132 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — — Convertible Class C Preferred shares — — Warrants and options — — Denominator: Weighted average shares – diluted 1,576,024 257,577 Net income (loss) per share – diluted $ (7.76 ) $ (18.97 ) The anti-dilutive shares of common stock equivalents for the three and nine months ended October 31, 2022 and October 31, 2021 were as follows: For the Three and Nine Months Ended October 31, 2022 2021 Convertible notes and accrued interest 7,093,733 94,564 Convertible Class C Preferred shares 4,796,352 896,892 Options 250,000 50,000 Warrants 1,414,728 150,550 Total 13,554,813 1,192,006 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Oct. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS Subsequent to October 31, 2022 through to December 26, 2022: • a lender converted $ 25,000 1,541 6434 • the Company issued 3,600 18,000 • On November 11, 2022. the Company entered into a new convertible note for $ 186,450 12 75,000 five 15.00 27,120 169,500 cash proceeds in 3 monthly instalments of $56,500 each starting in November and recorded an original issue discount of $ 16,950 The note is convertible at a 20% discount in the event of an uplisting to NASDAQ exchange as well as in any event of default. The discount is amortized over the term of the loan. The note is secured on all assets of the Company. • On November 11, 2022, the Company entered into a similar convertible note with another lender for $ 186,450 12 75,000 five 15.00 27,120 169,500 cash proceeds in 3 monthly instalments of $56,500 each starting in November and recorded an original issue discount of $ 16,950 The note is convertible at a 20% discount in the event of an uplisting to NASDAQ exchange as well as in any event of default. The discount is amortized over the term of the loan. • On November 21, 2022, the Company entered into a new convertible note for $ 60,480 12 54,000 16,950 The discount is amortized over the term of the loan. The loan and interest are repayable in 10 monthly instalments of $6,774 , starting January 5, 2023. 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 150%. • On December 27, 2022, the Company entered into a promissory note for $ 22,000 January 6, 2023 20,000 2,000 If the note is not repaid at maturity there is an initial 15% penalty , followed by a 1.5 % penalty for every subsequent default every seven day period thereafter. |
NATURE OF BUSINESS AND SIGNIF_2
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies: | 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: | 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, 2022 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May 9, 2022. |
Principles of Consolidation: | Principles of Consolidation: The condensed financial statements include the accounts of 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. |
Use of Estimates: | 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 | 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: | 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 | 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. At October 31, 2022 the provision for inventory obsolescence was $ 143,000 0 |
Concentrations | Concentrations Cost of Goods Sold For the nine months ended October 31, 2022 the Company purchased approximately 51 426,606 58 440,977 |
Leases | Leases 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. |
Income Taxes | 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 21 |
Fair Value of Financial Instruments: | 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 Level 2 Inputs Level 3 Inputs 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 October 31, 2022: October 31, 2022 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 3,663,597 $ — $ — $ 3,663,597 Totals $ 3,663,597 $ — $ — $ 3,663,597 |
Related Party Transactions: | 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 | 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 9), the sensitivity required to change the liability by 1% as of October 31, 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 | Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers 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 website revenue for the three months ended October 31, 2022 and 2021: Change 2022 2021 $ % Proprietary website revenue $ 611,799 $ 2,392,668 $ (1,780,869 ) ( 74 ) Third party website revenue 406,187 721,394 (315,207 ) ( 44 ) Total Revenue $ 1,017,986 $ 3,114,062 $ (2,096,076 ) ( 67 ) The following table shows revenue split between proprietary and third-party website revenue for the nine months ended October 31, 2022 and 2021: Change 2022 2021 $ % Proprietary website revenue $ 2,750,636 $ 6,339,478 $ (3,588,842 ) ( 57 ) Third party website revenue 1,338,401 3,090,041 (1,751,640 ) ( 57 ) Total Revenue $ 4,089,037 $ 9,429,519 $ (5,340,482 ) ( 57 ) 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: | 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: | 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: | 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 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. 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. |
NATURE OF BUSINESS AND SIGNIF_3
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
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 October 31, 2022: | 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 October 31, 2022: October 31, 2022 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 3,663,597 $ — $ — $ 3,663,597 Totals $ 3,663,597 $ — $ — $ 3,663,597 |
The following table shows revenue split between proprietary and third-party website revenue for the three months ended October 31, 2022 and 2021: | The following table shows revenue split between proprietary and third-party website revenue for the three months ended October 31, 2022 and 2021: Change 2022 2021 $ % Proprietary website revenue $ 611,799 $ 2,392,668 $ (1,780,869 ) ( 74 ) Third party website revenue 406,187 721,394 (315,207 ) ( 44 ) Total Revenue $ 1,017,986 $ 3,114,062 $ (2,096,076 ) ( 67 ) The following table shows revenue split between proprietary and third-party website revenue for the nine months ended October 31, 2022 and 2021: Change 2022 2021 $ % Proprietary website revenue $ 2,750,636 $ 6,339,478 $ (3,588,842 ) ( 57 ) Third party website revenue 1,338,401 3,090,041 (1,751,640 ) ( 57 ) Total Revenue $ 4,089,037 $ 9,429,519 $ (5,340,482 ) ( 57 ) |
PROPERTY (Tables)
PROPERTY (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property consists of the following at October 31, 2022 and January 31, 2022: | 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 October 31, 2022 and January 31, 2022: October 31, 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 (161,056 ) (122,469 ) Total Property $ 183,891 $ 221,336 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Leases | |
Below is a summary of our lease assets and liabilities at October 31, 2022 and January 31, 2022. | Below is a summary of our lease assets and liabilities at October 31, 2022 and January 31, 2022. Leases Classification October 31, 2022 January 31, 2022 Assets Operating Operating Lease Assets $ 160,770 $ 242,583 Liabilities Current Operating Current Operating Lease Liability $ 70,214 $ 100,001 Noncurrent Operating Noncurrent Operating Lease Liabilities 90,556 138,551 Total lease liabilities $ 160,770 $ 238,552 |
SHORT-TERM AND LONG-TERM DEBT (
SHORT-TERM AND LONG-TERM DEBT (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows: | The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows: October 31, 2022 January 31, 2022 Loan dated October 8, 2019 February 29, 2020 November 10, 2020 June 30, 2022 20,000 (3) $ — * $ 97,340 Forklift Note Payable, original note of $ 20,433 Sept 26, 2018 6.23 60 monthly 394.54 (1) 4,947 * 8,183 Vehicle loan original loan of $ 93,239 February 16, 2021 2.90 72 monthly 1,414 72,977 70,277 # 81,346 Vehicle loan original loan of $ 59,711 March 20,2021 7.89 72 1,048 68,35 47,675 # 54,108 Working Capital Note Payable - $ 700,000 October 29, 2021 17,904 Oct 29, 2022 31 (2)(4)(7) 407,423 * ∞ 635,831 Working Capital Note Payable - $ 650,000 October 25, 2021 15,875 October 25, 2022 26 (2)(4)(8) 447,756 * ∞ 596,047 Demand loan - $ 5,000 February 1, 2020 15 5 5,000 * 5,000 Demand loan - $ 2,500 March 8, 2019 25 2,500 * 2,500 Demand loan - $ 65,500 February 27, 2019 25 12,415 * 12,415 Promissory note - $ 60,000 September 18, 2020 April 30, 2022 (10) 5,000 15 60,000 * ∞ 60,000 Promissory note - $ 425,000 August 28, 2020 50,000 15 825,000 (5) 425,000 * ∞ 425,000 Promissory note - $ 1,200,000 August 28, 2020 August 28, 2022 12 (6) 1,200,000 * ∞ 1,200,000 Promissory note - $ 420,000 December 27, 2021 20,000 January 27, 2022 (9) 420,000 * ∞ 420,000 Total $ 3,102,993 $ 3,597,770 October 31, 2022 January 31, 2022 Short-Term Debt $ 2,985,041 $ 3,454,133 Current Portion of Long-Term Debt 22,149 27,737 Long-Term Debt 95,803 115,900 Total $ 3,102,993 $ 3,597,770 * Short-term loans # Long-term loans of $ 47,675 8,317 70,277 13,832 ∞ In default $2,960,179. (1) Secured by equipment having a net book value of $7,285. (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 5,705 13 20,000 (4) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (5) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company has entered into such a transaction the 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. (6) Secured by all assets of the Company. Loan payable in 2 instalments, $ 445,200 826,800 (7) This loan replaces $500,000 loan dated June 4, 2021, $ 422,009 253,491 26,500 (8) This loan replaces $500,000 loan dated June 4, 2021, $ 359,919 267,606 22,475 (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 February 26, 2022, through to July 26, 2022 and will issue an additional 15,000 warrants for each of those six defaults for a total of 90,000 warrants. The Company has recorded $798,450 based on the fair value of the warrants and $75,600 for the 2% fee as interest expense to October 31, 2022. (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 October 31, 2022: | The following are the minimum amounts due on the notes as of October 31, 2022: Year Ended Amount October 31, 2023 $ 3,007,190 October 31, 2024 25,174 October 31, 2025 26,443 October 31, 2026 27,792 October 31, 2027 16,394 Total $ 3,102,993 |
SHORT-TERM CONVERTIBLE DEBT (Ta
SHORT-TERM CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows. | The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows. Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price (a) October 31, 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) 3,000,000 2,400,000 Jan. 13, 2023 12 22 (2) — 228,000 Aug. 11, 2022 10 10 (3) — — Feb. 14, 2023 12 20 (4) 1,200,000 — Feb 25, 2023 12 20 (4) 150,000 — Feb. 25, 2023 12 20 (4) 350,000 — Mar. 9 2023 12 20 (4) 200,000 — Mar. 9, 2023 12 20 (4) 200,000 — Apr. 22, 2023 12 20 (4) 440,000 — Apr. 22, 2023 12 20 (4) 110,000 — May 19,2023 12 16 (5) 400,000 — Feb.11, 2023 12 18 (4) 275,000 — Dec 27, 2022 12 18 (4) 275,000 — Jan. 5, 2023 12 18 (4) 250,000 — Jan.6 ,2023 12 18 (4) 125,000 — Jan.6 ,2023 12 18 (4) 125,000 — Jan.11 ,2023 12 18 (4) 138,890 — Apr. 22, 2023 12 18 (4) 275,000 — Apr. 22, 2023 12 18 (4) 275,000 — Sept. 9, 2023 12 22 (6) 201,360 — Sub-total 8,141,250 2,779,000 Debt Discount (2,374,330 ) (2,131,034 ) $ 5,766,920 $ 647,966 * In default at filing date $3,151,000 (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 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 price lower of i) lowest price 20 days prior to Issuance ii) lowest price 20 days prior to conversion. (5) lesser of $ 5.00 or 75 % of offering price if there is an uplisting to a national securities exchange. (6) 75% of lowest closing bid price ten days preceding conversion date in event of default. (a) Note all conversions are subject to dilutive issuance clauses where the conversion price will revert to the lowest transacted share price. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2022. | The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2022. Level 3 Derivatives Balance, January 31, 2022 $ 1,263,442 Changes Due to Issuance of New Convertible Notes 1,577,922 Settlement Due to Repayment of Debt (19,539 ) Mark to Market Change in Derivatives 841,772 Balance, October31, 2022 $ 3,663,597 |
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 October 31, 2022, is as follows: | 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 October 31, 2022, is as follows: Embedded Strike price 5.20 5.55 Contractual term (years) 0.25 1.00 Volatility (annual) 182.9 213.76 Underlying fair market value 5.20 Risk-free rate 7.11 8.46 Dividend yield (per share) 0 |
STOCKHOLDERS_ DEFICIT (Tables)
STOCKHOLDERS’ DEFICIT (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Equity [Abstract] | |
Schedule Of Warrants Fair Value | Schedule Of Warrants Fair Value Expected volatility 753 1,735 Exercise price $ 4.00 15.00 Stock price $ 9.99 Expected life 1.5 5 Risk-free interest rate 3.05 3.07 Dividend yield 0 For the nine months ended October 31, 2022 the Company issued 555,641 common shares and warrants to purchase 948,333 common shares along with debt to various lenders as well as warrants to acquire 135,000 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 555,641 common shares and 948,333 warrants at $2,427,336, which has been recorded as a debt discount and the 135,000 warrants at $798,450 which has been recorded as interest both with corresponding adjustments to paid-in capital. Expected volatility 1,686 2,227 Exercise price $ 4.45 15.00 Stock price $ 0.95 11.99 Expected life 3 5 Risk-free interest rate 1.76 4.45 Dividend yield 0 |
The Company had the following fully vested warrants outstanding at October 31,2022: | The Company had the following fully vested warrants outstanding at October 31,2022: Issued To # Warrants Dated Expire Strike Price * Expired Exercised Lender 95,000 08/28/2020 08/28/2023 $ 4.00 N N Broker 250 10/11/2020 10/11/2025 $ 45.00 N N Broker 300 11/25/2020 11/25/2025 $ 30.00 N N Triton 30,000 07/27/2021 07/27/2024 $ 21.10 N N Consultant 25,000 08/26/2021 08/26/2024 $ 15.00 N N Lender 60,845 11/12/2021 11/12/2026 $ 15.00 N N Lender 90,000 11/12/2021 11/12/2026 $ 15.00 N N Lender 30,000 1/27/2022 1/27/2025 $ 15.00 N N Lender 120,000 2/14/2022 2/14/2027 $ 15.00 N N Lender 35,000 2/25/2022 2/25/2027 $ 15.00 N N Lender 15,000 2/25/2022 2/25/2027 $ 15.00 N N Lender 20,000 3/9/2022 3/9/2027 $ 15.00 N N Lender 20,000 3/9/2022 3/9/2027 $ 15.00 N N Lender 11,000 4/22/2022 4/22/2027 $ 15.00 N N Lender 44,000 4/22/2022 4/22/2027 $ 15.00 N N Lender 15,000 2/26/2022 2/26/2025 $ 5.40 N N Lender 15,000 3/28/2022 3/28/2025 $ 7.50 N N Lender 15,000 4/27/2022 4/27/2025 $ 6.99 N N Lender 15,000 5/27/2022 5/27/2025 $ 5.12 N N Lender 33,333 5/19/2022 5/19/2027 $ 15.00 N N Lender 100,000 6/27/2022 6/27/2027 $ 15.00 N N Lender 15,000 6/26/2022 6/26/2025 $ 5.12 N N Lender 15,000 7/26/2022 7/26/2025 $ 5.12 N N Lender 100,000 7/5/2022 7/5/2027 $ 15.00 N N Lender 50,000 7/6/2022 7/6/2027 $ 15.00 N N Lender 50,000 7/6/2022 7/6/2027 $ 15.00 N N Lender 50,000 7/11/2022 7/11/2027 $ 15.00 N N Lender 100,000 8/11/2022 8/11/2027 $ 15.00 N N Lender 100,000 8/22/2022 8/22/2027 $ 15.00 N N Lender 100,000 8/22/2022 8/22/2027 $ 15.00 N N Lender 15,000 8/25/2022 8/25/2025 $ 5.10 N N Lender 15,000 9/24/2022 9/24/2025 $ 4.00 N N Lender 15,000 10/24/2022 10/24/2025 $ 3.30 N N * The strike price is subject to price adjustments due to dilutive issuance clauses. |
The Company had the following fully vested options outstanding at October 31, 2022: | The Company had the following fully vested options outstanding at October 31, 2022: Issued To # Options Dated Expire Strike Price Expired Exercised T. Armes 50,000 10/14/2021 7/11/2022 $ 15.00 Y N T. Armes 250,000 7/11/2022 7/11/2027 $ 4.00 N N |
The following table summarizes the activity of options and warrants issued and outstanding as of and for the three months ended October 31, 2022: | The following table summarizes the activity of options and warrants issued and outstanding as of and for the three months ended October 31, 2022: Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2022 50,000 $ 15.00 360,550 $ 12.64 Granted 250,000 4.00 1,083,333 15.00 Exercised — — (29,155 ) 5.00 Forfeited and canceled (50,000 ) (15.00 ) — — Outstanding at October 31, 2022 250,000 $ 4.00 1,414,728 $ 13.70 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease obligations | Schedule of minimum lease obligations Maturity of Lease Liabilities Operating October 31 2023 $ 81,203 October 31, 2024 30,003 October 31, 2025 30,003 October 31, 2026 30,003 October 31, 2027 2,501 Total lease payments 173,713 Less: Interest (12,943 ) Present value of lease liabilities $ 160,770 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Earnings Per Share [Abstract] | |
The net income (loss) per common share amounts were determined as follows: | The net income (loss) per common share amounts were determined as follows: For the Three Months Ended October 31, 2022 2021 Numerator: Net income (loss) available to common shareholders $ (4,131,691 ) $ (2,566,574 ) Denominator: Weighted average shares – basic 1,805,316 319,866 Net income (loss) per share – basic $ (2.29 ) $ (8.02 ) Effect of common stock equivalents Add: interest expense on convertible debt 166,046 19,247 Add: amortization of debt discount 1,932,722 130,139 Less: gain on settlement of debt on convertible notes (10,128 ) (41,249 ) Add (Less): loss (gain) on change of derivative liabilities 186,146 76,444 Net income (loss) adjusted for common stock equivalents (1,856,905 ) (2,381,993 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — — Convertible Class C Preferred shares — — Warrants and options — — Denominator: Weighted average shares – diluted 1,805,316 319,866 Net income (loss) per share – diluted $ (2.29 ) $ (8.02 ) The net income (loss) per common share amounts were determined as follows: For the Nine Months Ended October 31, 2022 2021 Numerator: Net income (loss) available to common shareholders $ (12,228,775 ) $ (4,886,380 ) Denominator: Weighted average shares – basic 1,576,024 257,577 Net income (loss) per share – basic $ (7.76 ) $ (18.97 ) Effect of common stock equivalents Add: interest expense on convertible debt 278,788 35,237 Add: amortization of debt discount 4,309,329 442,075 Less: gain on settlement of debt on convertible notes (19,539 ) (1,004,615 ) Add (Less): loss (gain) on change of derivative liabilities 841,772 88,551 Net income (loss) adjusted for common stock equivalents (6,818,425 ) (5,325,132 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — — Convertible Class C Preferred shares — — Warrants and options — — Denominator: Weighted average shares – diluted 1,576,024 257,577 Net income (loss) per share – diluted $ (7.76 ) $ (18.97 ) |
The anti-dilutive shares of common stock equivalents for the three and nine months ended October 31, 2022 and October 31, 2021 were as follows: | The anti-dilutive shares of common stock equivalents for the three and nine months ended October 31, 2022 and October 31, 2021 were as follows: For the Three and Nine Months Ended October 31, 2022 2021 Convertible notes and accrued interest 7,093,733 94,564 Convertible Class C Preferred shares 4,796,352 896,892 Options 250,000 50,000 Warrants 1,414,728 150,550 Total 13,554,813 1,192,006 |
The following table sets forth,
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 October 31, 2022: (Details) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | |
Liabilities: | |||
Derivative Liabilities – embedded redemption feature | $ 3,663,597 | $ 1,263,442 | |
Totals | 3,663,597 | $ 1,263,442 | [1] |
Fair Value, Inputs, Level 1 [Member] | |||
Liabilities: | |||
Derivative Liabilities – embedded redemption feature | |||
Totals | |||
Fair Value, Inputs, Level 2 [Member] | |||
Liabilities: | |||
Derivative Liabilities – embedded redemption feature | |||
Totals | |||
Fair Value, Inputs, Level 3 [Member] | |||
Liabilities: | |||
Derivative Liabilities – embedded redemption feature | 3,663,597 | ||
Totals | $ 3,663,597 | ||
[1]Derived from audited information |
The following table shows reven
The following table shows revenue split between proprietary and third-party website revenue for the three months ended October 31, 2022 and 2021: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Product Information [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,017,986 | $ 3,114,062 | $ 4,089,037 | $ 9,429,519 |
Contract with Customer Change in Revenue | $ (2,096,076) | $ (5,340,482) | ||
Contract with Customer Percentage Change in Revenue | 67% | 57% | ||
Proprietary Website Revenue [Member] | ||||
Product Information [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 611,799 | 2,392,668 | $ 2,750,636 | 6,339,478 |
Contract with Customer Change in Revenue | $ (1,780,869) | $ (3,588,842) | ||
Contract with Customer Percentage Change in Revenue | 74% | 57% | ||
Third Party Website Revenue [Member] | ||||
Product Information [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 406,187 | $ 721,394 | $ 1,338,401 | $ 3,090,041 |
Contract with Customer Change in Revenue | $ (315,207) | $ (1,751,640) | ||
Contract with Customer Percentage Change in Revenue | 44% | 57% |
NATURE OF BUSINESS AND SIGNIF_4
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Dec. 22, 2017 | Nov. 29, 2018 | Oct. 31, 2022 | Oct. 31, 2021 | Jul. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Date of incorporation | Dec. 05, 2007 | ||||
Business acquisition transaction of equity securities, description | 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 | ||||
Inventory provision | $ 143,000 | $ 0 | |||
Percentage of inventory | 51% | 58% | |||
Accounts Payable | $ 426,606 | $ 440,977 | |||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Federal statutory tax | 35% | ||||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Federal statutory tax | 21% |
GOING CONCERN AND FINANCIAL P_2
GOING CONCERN AND FINANCIAL POSITION (Details Narrative) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | [1] |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Retained Earnings (Accumulated Deficit) | $ (40,680,508) | $ (28,451,733) | |
Working Capital Deficit | 15,279,670 | ||
Cash and cash equivalents | 46,026 | ||
Short-term debt in default | $ 6,111,000 | ||
[1]Derived from audited information |
Property consists of the follow
Property consists of the following at October 31, 2022 and January 31, 2022: (Details) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Sub-total | $ 344,947 | $ 343,805 | |
Less: Accumulated depreciation | (161,056) | (122,469) | |
Total Property | 183,891 | 221,336 | [1] |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Sub-total | 95,183 | 94,041 | |
Shop equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Sub-total | 43,004 | 43,004 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Sub-total | $ 206,760 | $ 206,760 | |
[1]Derived from audited information |
PROPERTY (Details Narrative)
PROPERTY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||||
Addition to fixed assets | $ 1,142 | $ 186,327 | $ 1,142 | $ 186,327 | $ 1,142 | $ 186,327 |
Cash | 35,000 | 35,000 | 35,000 | |||
Financed Through Vehicle Loans | 151,327 | |||||
Addition to Fixed assets cost | 20,000 | |||||
Addition to fixed assets book value | 4,715 | |||||
Proceeds to addition to fixed assets | 25,060 | |||||
Gain on addition to fixed assets | 20,345 | |||||
Depreciation expense | $ 12,743 | $ 12,479 | $ 38,587 | $ 35,930 | $ 38,587 | $ 35,930 |
Below is a summary of our lease
Below is a summary of our lease assets and liabilities at October 31, 2022 and January 31, 2022. (Details) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | |
Leases | |||
Operating lease assets | $ 160,770 | $ 242,583 | [1] |
Operating | 70,214 | 100,001 | [1] |
Operating | 90,556 | 138,551 | [1] |
Total lease liabilities | $ 160,770 | $ 238,552 | |
[1]Derived from audited information |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Leases | |||||
Leases, description | 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. | ||||
Description of renewal lease term | one to 17 years | ||||
Incremental borrowing rate | 8% | ||||
Operating lease cost and rent | $ 29,219 | $ 30,478 | $ 90,177 | $ 91,437 |
CUSTOMER DEPOSITS (Details Narr
CUSTOMER DEPOSITS (Details Narrative) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | |
Disclosure Customer Deposits Abstract | |||
Customer deposits | $ 57,856 | $ 530,900 | [1] |
[1]Derived from audited information |
DEFERRED REVENUE (Details Narra
DEFERRED REVENUE (Details Narrative) - USD ($) | Oct. 31, 2022 | Jan. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred revenue | $ 66,153 | $ 665,143 | [1] |
[1]Derived from audited information |
The components of the Company_s
The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows: (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||||||||||
Jun. 04, 2021 | Jun. 04, 2021 | Jun. 04, 2021 | Nov. 10, 2020 | Oct. 31, 2022 | Jan. 31, 2022 | Jan. 31, 2022 | Aug. 28, 2022 | Aug. 28, 2021 | |||||
Short-Term Debt [Line Items] | |||||||||||||
Total | $ 3,102,993 | $ 3,597,770 | $ 3,597,770 | ||||||||||
Short-Term Debt | 2,985,041 | 3,454,133 | [1] | 3,454,133 | [1] | ||||||||
Current Portion of Long-Term Debt | 22,149 | 27,737 | 27,737 | ||||||||||
Long-term loan | 95,803 | 115,900 | 115,900 | ||||||||||
Total | 3,102,993 | 3,597,770 | 3,597,770 | ||||||||||
Long-Term Debt, Current Maturities | 22,149 | 27,737 | [1] | $ 27,737 | [1] | ||||||||
Loan One [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Oct. 08, 2019 | ||||||||||||
Debt Revised Date | Feb. 29, 2020 | ||||||||||||
Debt Instrument Repayment Date | Nov. 10, 2020 | ||||||||||||
Debt Instrument, Maturity Date | Jun. 30, 2022 | ||||||||||||
Debt instrument periodic payment | $ 20,000 | ||||||||||||
Total | [2],[3] | 97,340 | $ 97,340 | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 13% | ||||||||||||
Lump sump amount payable | $ 20,000 | ||||||||||||
Loan One [Member] | Minimum [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt instrument periodic payment | 0 | ||||||||||||
Loan One [Member] | Maximum [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt instrument periodic payment | $ 5,705 | ||||||||||||
Forklift Note Payable [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Sep. 26, 2018 | ||||||||||||
Debt instrument periodic payment | $ 39,454 | ||||||||||||
Total | 4,947 | [4] | 8,183 | [2],[3] | 8,183 | [2],[3] | |||||||
Conversion of notes payable | $ 20,433 | $ 20,433 | |||||||||||
Interest rate | 6.23% | 6.23% | |||||||||||
Description of payment terms | 60 monthly | ||||||||||||
Vehicle Loan [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Feb. 16, 2021 | ||||||||||||
Debt instrument periodic payment | $ 1,414 | ||||||||||||
Total | 70,277 | $ 81,346 | 81,346 | ||||||||||
Conversion of notes payable | $ 93,239 | $ 93,239 | |||||||||||
Interest rate | 2.90% | 2.90% | |||||||||||
Description of payment terms | 72 monthly | ||||||||||||
Secured equipment net bookvalue | $ 72,977 | $ 72,977 | |||||||||||
Vehicle Loan One [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Mar. 20, 2021 | ||||||||||||
Debt instrument periodic payment | $ 1,048 | ||||||||||||
Total | 47,675 | 54,108 | 54,108 | ||||||||||
Conversion of notes payable | $ 59,711 | $ 59,711 | |||||||||||
Interest rate | 7.89% | 7.89% | |||||||||||
Description of payment terms | 72 | ||||||||||||
Secured equipment net bookvalue | $ 6,835 | $ 6,835 | |||||||||||
Working Capital Note Payable [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Oct. 29, 2021 | ||||||||||||
Debt Instrument, Maturity Date | Oct. 29, 2022 | ||||||||||||
Debt instrument periodic payment | $ 17,904 | ||||||||||||
Total | [3],[5],[6],[7] | 407,423 | 635,831 | 635,831 | |||||||||
Conversion of notes payable | $ 700,000 | $ 700,000 | |||||||||||
Interest rate | 31% | 31% | |||||||||||
Working Capital Note Payable One [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Oct. 25, 2021 | ||||||||||||
Debt Instrument, Maturity Date | Oct. 25, 2022 | ||||||||||||
Debt instrument periodic payment | $ 15,875 | ||||||||||||
Total | [3],[5],[6],[8] | 447,756 | $ 596,047 | 596,047 | |||||||||
Conversion of notes payable | $ 650,000 | $ 650,000 | |||||||||||
Interest rate | 26% | 26% | |||||||||||
Demand Loan [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Feb. 01, 2020 | ||||||||||||
Total | [3] | 5,000 | $ 5,000 | $ 5,000 | |||||||||
Interest rate | 15% | 15% | |||||||||||
DemandLoanMember | 5 | ||||||||||||
Demand Loan One [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Mar. 08, 2019 | ||||||||||||
Total | [3] | 2,500 | $ 2,500 | $ 2,500 | |||||||||
Interest rate | 25% | 25% | |||||||||||
Demand Loan Three [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Total | 65,500 | ||||||||||||
Demand Loan Two [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Feb. 27, 2019 | ||||||||||||
Total | [3] | 12,415 | $ 12,415 | $ 12,415 | |||||||||
Interest rate | 2,500% | 2,500% | |||||||||||
Promissory Note [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Sep. 18, 2020 | ||||||||||||
Debt Instrument, Maturity Date | Apr. 30, 2022 | ||||||||||||
Total | [9] | 60,000 | $ 60,000 | $ 60,000 | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 5,000 | $ 5,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 15% | 15% | |||||||||||
Promissory Note One [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Aug. 28, 2020 | ||||||||||||
Total | [10] | 425,000 | $ 425,000 | $ 425,000 | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 50,000 | $ 50,000 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 15% | 15% | |||||||||||
Interest Payable | $ 825,000 | $ 825,000 | |||||||||||
Promissory Note Two [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Aug. 28, 2020 | ||||||||||||
Debt Instrument, Maturity Date | Aug. 28, 2022 | ||||||||||||
Total | [3],[11] | 1,200,000 | $ 1,200,000 | $ 1,200,000 | |||||||||
Conversion of notes payable | $ 826,800 | $ 445,200 | |||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 12% | 12% | |||||||||||
Promissory Note Three [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt issuance date | Dec. 27, 2021 | ||||||||||||
Debt Instrument, Maturity Date | Jan. 27, 2022 | ||||||||||||
Total | [3],[12] | $ 420,000 | $ 420,000 | $ 420,000 | |||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 20,000 | 20,000 | |||||||||||
Debt Instrument, Description | 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 February 26, 2022, through to July 26, 2022 and will issue an additional 15,000 warrants for each of those six defaults for a total of 90,000 warrants. The Company has recorded $798,450 based on the fair value of the warrants and $75,600 for the 2% fee as interest expense to October 31, 2022. | ||||||||||||
Long Term Loans One [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Long-term loan | 8,317 | 8,317 | |||||||||||
Long-Term Debt, Current Maturities | 47,675 | 47,675 | |||||||||||
Long Term Loans Two [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Long-term loan | 13,832 | 13,832 | |||||||||||
Long-Term Debt, Current Maturities | $ 70,277 | $ 70,277 | |||||||||||
Loan Two [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Proceeds from Debt, Net of Issuance Costs | $ 422,009 | ||||||||||||
Net cash received | 253,491 | ||||||||||||
Payment fees | $ 26,500 | ||||||||||||
Loan Four [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Proceeds from Debt, Net of Issuance Costs | $ 359,919 | ||||||||||||
Net cash received | $ 267,606 | ||||||||||||
Payment fees | $ 22,475 | ||||||||||||
[1]Derived from audited information[2]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 5,705 13 20,000 422,009 253,491 26,500 359,919 267,606 22,475 445,200 826,800 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 February 26, 2022, through to July 26, 2022 and will issue an additional 15,000 warrants for each of those six defaults for a total of 90,000 warrants. The Company has recorded $798,450 based on the fair value of the warrants and $75,600 for the 2% fee as interest expense to October 31, 2022. |
The following are the minimum a
The following are the minimum amounts due on the notes as of October 31, 2022: (Details) | 9 Months Ended |
Oct. 31, 2022 USD ($) | |
Short-Term Debt [Line Items] | |
Minimum amount due | $ 3,102,993 |
Loans Payable [Member] | |
Short-Term Debt [Line Items] | |
Short term debt terms | October 31, 2023 |
Minimum amount due | $ 3,007,190 |
Loans Payable1 [Member] | |
Short-Term Debt [Line Items] | |
Short term debt terms | October 31, 2024 |
Minimum amount due | $ 25,174 |
Loans Payable2 [Member] | |
Short-Term Debt [Line Items] | |
Short term debt terms | October 31, 2025 |
Minimum amount due | $ 26,443 |
Loans Payable3 [Member] | |
Short-Term Debt [Line Items] | |
Short term debt terms | October 31, 2026 |
Minimum amount due | $ 27,792 |
Loans Payable4 [Member] | |
Short-Term Debt [Line Items] | |
Short term debt terms | October 31, 2027 |
Minimum amount due | $ 16,394 |
The components of the Company_2
The components of the Company’s debt as of October 31, 2022 and January 31, 2022 were as follows. (Details) - USD ($) | 9 Months Ended | ||
Oct. 31, 2022 | Jan. 31, 2022 | ||
Extinguishment of Debt [Line Items] | |||
Sub-total | $ 8,141,250 | $ 2,779,000 | |
Debt Discount | (2,374,330) | (2,131,034) | |
Total | $ 5,766,920 | 647,966 | |
Debt1 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | Nov. 04, 2013 | ||
Interest rate | 12% | ||
Default interest rate | 12% | ||
Conversion price | [1] | $ 1,800,000 | |
Sub-total | $ 100,000 | 100,000 | |
Debt2 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | Jan. 31, 2014 | ||
Interest rate | 12% | ||
Default interest rate | 18% | ||
Conversion price | [1] | $ 2,400,000 | |
Sub-total | $ 16,000 | 16,000 | |
Debt3 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | Jul. 31, 2013 | ||
Interest rate | 12% | ||
Default interest rate | 12% | ||
Conversion price | [1] | $ 1,440,000 | |
Sub-total | $ 5,000 | 5,000 | |
Debt 4 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | Jan. 31, 2014 | ||
Interest rate | 12% | ||
Default interest rate | 12% | ||
Conversion price | [1] | $ 2,400,000 | |
Sub-total | $ 30,000 | 30,000 | |
Debt5 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [2] | Nov. 12, 2022 | |
Interest rate | [2] | 8% | |
Default interest rate | [2] | 12% | |
Sub-total | [2] | $ 3,000,000 | 2,400,000 |
Debt6 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [3] | Jan. 13, 2023 | |
Interest rate | [3] | 12% | |
Default interest rate | [3] | 22% | |
Sub-total | [3] | $ 228,000 | |
Debt7 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [4] | Aug. 11, 2022 | |
Interest rate | [4] | 10% | |
Default interest rate | [4] | 10% | |
Sub-total | [4] | ||
Debt8 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Feb. 14, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 20% | |
Sub-total | [5] | $ 1,200,000 | |
Debt9 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Feb. 25, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 20% | |
Sub-total | [5] | $ 150,000 | |
Debt10 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [2] | Feb. 25, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [2] | 20% | |
Sub-total | [5] | $ 350,000 | |
Debt11 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Mar. 09, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 20% | |
Sub-total | [5] | $ 200,000 | |
Debt12 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Mar. 09, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 20% | |
Sub-total | [5] | $ 200,000 | |
Debt13 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Apr. 22, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 20% | |
Sub-total | [5] | $ 440,000 | |
Debt14 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Apr. 22, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 20% | |
Sub-total | [5] | $ 110,000 | |
Debt15 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [6] | May 19, 2023 | |
Interest rate | [6] | 12% | |
Default interest rate | [6] | 16% | |
Sub-total | [6] | $ 400,000 | |
Debt16 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Feb. 11, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 275,000 | |
Debt 17 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Dec. 27, 2022 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 275,000 | |
Debt 18 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Jan. 05, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 250,000 | |
Debt 19 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Jan. 06, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 125,000 | |
Debt 20 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Jan. 06, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 125,000 | |
Debt 21 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Jan. 11, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 138,890 | |
Debt 22 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Apr. 22, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 275,000 | |
Debt 23 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Apr. 22, 2023 | |
Interest rate | [5] | 12% | |
Default interest rate | [5] | 18% | |
Sub-total | [5] | $ 275,000 | |
Debt 24 [Member] | |||
Extinguishment of Debt [Line Items] | |||
Maturity date | [5] | Sep. 09, 2023 | |
Interest rate | [7] | 12% | |
Default interest rate | [7] | 22% | |
Sub-total | [7] | $ 201,360 | |
[1]Note all conversions are subject to dilutive issuance clauses where the conversion price will revert to the lowest transacted share price.[2]lesser of $ 1.25 or 75 % of offering price if there is an uplisting to a national securities exchange.[3]75% of closing bid price on day preceding conversion date in event of default.[4]convertible at 20% discount of the offering price on Company’s uplist to NASDAQ.[5]convertible upon default at conversion price lower of i) lowest price 20 days prior to Issuance ii) lowest price 20 days prior to conversion.[6]lesser of $ 5.00 or 75 % of offering price if there is an uplisting to a national securities exchange.[7]75% of lowest closing bid price ten days preceding conversion date in event of default. |
SHORT-TERM CONVERTIBLE DEBT (De
SHORT-TERM CONVERTIBLE DEBT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||
Sep. 29, 2022 | Aug. 22, 2022 | Jul. 11, 2022 | Jul. 06, 2022 | Jul. 05, 2022 | Jun. 27, 2022 | May 19, 2022 | May 18, 2022 | Apr. 22, 2022 | Mar. 09, 2022 | Feb. 25, 2022 | Feb. 14, 2022 | Feb. 11, 2022 | Jun. 30, 2022 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Short-Term Debt [Line Items] | |||||||||||||||||||
Accrued interest payable | $ 478,271 | $ 478,271 | $ 231,412 | ||||||||||||||||
Amortization of Debt Issuance Costs and Discounts | 1,932,722 | $ 130,139 | |||||||||||||||||
Amortization | 4,309,329 | $ 442,075 | |||||||||||||||||
Penalty interest to Loan | 600,000 | $ 28,000 | 600,000 | $ 28,000 | |||||||||||||||
Short-term debt in default | $ 3,151,000 | $ 3,151,000 | |||||||||||||||||
Promissory Convertible Notes [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Convertible debt, description | 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. The Company has extended the loan term. 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%. | 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. The Company has extended the loan term. 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%. | 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. The Company has extended the loan term. 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% | 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. The Company has extended the loan term. 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%. | 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. | ||||||||||||||
Promissory Convertible Notes1 [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Convertible debt, description | 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. The Company has extended the loan term. 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%. | ||||||||||||||||||
Promissory Convertible Notes2 [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Convertible debt, description | 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. The Company has extended the loan term. 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%. | ||||||||||||||||||
Promissory Convertible Notes3 [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Convertible debt, description | the Company entered into another new convertible note for $201,360 with a six month maturity, interest rate of 12%. The Company received $175,536 in cash proceeds, recorded an original issue discount of $21,574, a derivative discount of $17,736 for the conversion feature, and transaction fees of $4,250. 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 150%. | the Company entered into a new convertible note with a shareholder for $275,000 with a six month maturity, interest rate of 12%,with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $39,260 in cash proceeds, and transferred the following to the note holder : a short term loan of $97,340, a shareholder loan of $50,000, accrued interest of $25,000,and accounts payable for unpaid rent of $38,400. The Company recorded an original issue discount of $25,000, a derivative discount of $36,947 for the conversion feature, recognized $186,343 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. | the Company entered into another new convertible note for $138,890 with a six month maturity, interest rate of 12%,with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $116,668 in cash proceeds, recorded an original issue discount of $13,889, a derivative discount of $18,735 for the conversion feature, recognized $97,336 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $8,333. 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%. | the Company entered into a new convertible note for $125,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $102,000 in cash proceeds, recorded an original issue discount of $12,000, a derivative discount of $16,484 for the conversion feature, recognized $83,796 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $10,000. 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%. | the Company entered into a new convertible note for $250,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $200,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $33,860 for the conversion feature, recognized $139,638 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $35,000. 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%. | the Company entered into a new convertible note for $275,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $250,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $34,488 for the conversion feature, and recognized $197,559 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. 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%. | the Company entered into a 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 $325,400 in cash proceeds, recorded an original issue discount of $40,000, a derivative discount of $358,088 for the conversion feature, recognized $192,341 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $35,000. The discount is amortized over the term of the loan. The excess discount over the face value of the note of $ $225,429 was expensed to interest. 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 125%. | the lender and Company amended the November 12, 2021 $2,400,000 note whereby the $432,000 amortization payments due on June 12, 2022, July 12, 2022 and August 12, 2022 all totaling $1,296,000 are now payable on October 25, 2022. In exchange the second warrant to acquire 90,000 common shares can no longer be cancelled. | 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. The Company has extended the loan term. 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%. | the Company received $50,000 cash proceeds and recorded an original issue discount of $5,000 from the lender of February 11, 2022 maturing August 11, 2022 and on that date the old note of $220,000 plus the accrued interest matures on February 11, 2023 along with new advances of $55,000 forming a combined new note of $275,000 dated August 11, 2022. The new note bears interest at 12% and came with 100,000 warrants with an exercise price of $ 15.00 and a 5 year term and 40,000 common shares . The Company received $50,000 in cash proceeds (in June), recorded an original issue discount of $5,000, a derivative discount of $37,261 for the conversion feature, and recognized $195,219 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. | |||||||||
Promissory Convertible Notes4 [Member] | |||||||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||||||
Convertible debt, description | the Company entered into another new convertible note with a shareholder for $275,000 with a six month maturity, interest rate of 12%,with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $250,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $37,070 for the conversion feature, recognized $186,343 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. | the Company entered into another new convertible note for $138,890 with a six month maturity, interest rate of 12%,with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $116,668 in cash proceeds, recorded an original issue discount of $13,889, a derivative discount of $18,735 for the conversion feature, recognized $97,336 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $8,333. 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%. | the Company entered into another new convertible note for $125,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares. The Company received $102,000 in cash proceeds, recorded an original issue discount of $12,500, a derivative discount of $16,388 for the conversion feature, recognized $83,796 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $10,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%. |
The following table presents ch
The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2022. (Details) | 9 Months Ended |
Oct. 31, 2022 USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance at beginning | $ 1,263,442 |
Changes due to issuance of new convertible notes | 1,577,922 |
Reduction of derivative due to extinguishment or repayment | (19,539) |
Mark to market change in derivatives | 841,772 |
Balance at ending | $ 3,663,597 |
A summary of the weighted avera
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 Oct (Details) - Fair Value, Inputs, Level 3 [Member] | Oct. 31, 2022 $ / shares |
Measurement Input, Share Price [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 5.20 |
Measurement Input, Share Price [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 5.55 |
Measurement Input, Expected Term [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Contractual term | 2 months 30 days |
Measurement Input, Expected Term [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Contractual term | 1 year |
Measurement Input, Price Volatility [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 182.9 |
Measurement Input, Price Volatility [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 213.76 |
Underlying Fair Market Value [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 5.20 |
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 7.11 |
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 8.46 |
Dividend Yield [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative liabilities | $ 3,663,597 | $ 3,663,597 | $ 1,263,442 | ||
Gain (loss) fair value of derivative liabilities | $ 184,146 | $ 76,444 | $ 841,772 | $ 88,551 |
Schedule Of Warrants Fair Value
Schedule Of Warrants Fair Value (Details) | 3 Months Ended | 9 Months Ended |
Oct. 31, 2022 $ / shares | Oct. 31, 2022 $ / shares | |
Stock price | $ 9.99 | $ 9.99 |
Dividend yield | 0% | 0% |
Minimum [Member] | ||
Expected volatility | 753% | 1,686% |
Exercise price | $ 4 | $ 4 |
Expected life | 1 year 6 months | 3 years |
Risk-free interest rate | 3.05% | 1.76% |
Exercise price | $ 4.45 | $ 4.45 |
Stock price | $ 0.95 | $ 0.95 |
Maximum [Member] | ||
Expected volatility | 1,735% | 2,227% |
Exercise price | $ 15 | $ 15 |
Expected life | 5 years | 5 years |
Risk-free interest rate | 3.07% | 4.45% |
Exercise price | $ 15 | $ 15 |
Stock price | $ 11.99 | $ 11.99 |
The Company had the following f
The Company had the following fully vested warrants outstanding at October 31,2022: (Details) | 9 Months Ended |
Oct. 31, 2022 $ / shares shares | |
Lender One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 95,000 |
Dated | Aug. 28, 2020 |
Expire | Aug. 28, 2023 |
Strike Price | $ / shares | $ 4 |
Broker One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Broker |
# Warrants | shares | 250 |
Dated | Oct. 11, 2020 |
Expire | Oct. 11, 2025 |
Strike Price | $ / shares | $ 45 |
Broker Two [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Broker |
# Warrants | shares | 300 |
Dated | Nov. 25, 2020 |
Expire | Nov. 25, 2025 |
Strike Price | $ / shares | $ 30 |
Triton [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Triton |
# Warrants | shares | 30,000 |
Dated | Jul. 27, 2021 |
Expire | Jul. 27, 2024 |
Strike Price | $ / shares | $ 21.10 |
Consultant One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Consultant |
# Warrants | shares | 25,000 |
Dated | Aug. 26, 2021 |
Expire | Aug. 26, 2024 |
Strike Price | $ / shares | $ 15 |
Lender Two [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 60,845 |
Dated | Nov. 12, 2021 |
Expire | Nov. 12, 2026 |
Strike Price | $ / shares | $ 15 |
Lender Three [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 90,000 |
Dated | Nov. 12, 2021 |
Expire | Nov. 12, 2026 |
Strike Price | $ / shares | $ 15 |
Lender Four [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 30,000 |
Dated | Jan. 27, 2022 |
Expire | Jan. 27, 2025 |
Strike Price | $ / shares | $ 15 |
Lender Five [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 120,000 |
Dated | Feb. 14, 2022 |
Expire | Feb. 14, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Six [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 35,000 |
Dated | Feb. 25, 2022 |
Expire | Feb. 25, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Seven [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Feb. 25, 2022 |
Expire | Feb. 25, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Eight [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 20,000 |
Dated | Mar. 09, 2022 |
Expire | Mar. 09, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Nine [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 20,000 |
Dated | Mar. 09, 2022 |
Expire | Mar. 09, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Ten [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 11,000 |
Dated | Apr. 22, 2022 |
Expire | Apr. 22, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Eleven [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 44,000 |
Dated | Apr. 22, 2022 |
Expire | Apr. 22, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twelve [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Feb. 26, 2022 |
Expire | Feb. 26, 2025 |
Strike Price | $ / shares | $ 5.40 |
Lender Thirteen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Mar. 28, 2022 |
Expire | Mar. 28, 2025 |
Strike Price | $ / shares | $ 7.50 |
Lender Fourteen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Apr. 27, 2022 |
Expire | Apr. 27, 2025 |
Strike Price | $ / shares | $ 6.99 |
Lender Fifteen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | May 27, 2022 |
Expire | May 27, 2025 |
Strike Price | $ / shares | $ 5.12 |
Lender Sixteen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 33,333 |
Dated | May 19, 2022 |
Expire | May 19, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Seventeen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 100,000 |
Dated | Jun. 27, 2022 |
Expire | Jun. 27, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Eighteen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Jun. 26, 2022 |
Expire | Jun. 26, 2025 |
Strike Price | $ / shares | $ 5.12 |
Lender Nineteen [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Jul. 26, 2022 |
Expire | Jul. 26, 2025 |
Strike Price | $ / shares | $ 5.12 |
Lender Twenty [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 100,000 |
Dated | Jul. 05, 2022 |
Expire | Jul. 05, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 50,000 |
Dated | Jul. 06, 2022 |
Expire | Jul. 06, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty Two [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 50,000 |
Dated | Jul. 06, 2022 |
Expire | Jul. 06, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty Three [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 50,000 |
Dated | Jul. 11, 2022 |
Expire | Jul. 11, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty Four [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 100,000 |
Dated | Aug. 11, 2022 |
Expire | Aug. 11, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty Five [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 100,000 |
Dated | Aug. 22, 2022 |
Expire | Aug. 22, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty Six [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 100,000 |
Dated | Aug. 22, 2022 |
Expire | Aug. 22, 2027 |
Strike Price | $ / shares | $ 15 |
Lender Twenty Seven [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Aug. 25, 2022 |
Expire | Aug. 25, 2025 |
Strike Price | $ / shares | $ 5.10 |
Lender Twenty Eight [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Sep. 24, 2022 |
Expire | Sep. 24, 2025 |
Strike Price | $ / shares | $ 4 |
Lender Twenty Nine [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 15,000 |
Dated | Oct. 24, 2022 |
Expire | Oct. 24, 2025 |
Strike Price | $ / shares | $ 3.30 |
The Company had the following_2
The Company had the following fully vested options outstanding at October 31, 2022: (Details) | 9 Months Ended |
Oct. 31, 2022 $ / shares shares | |
T Armes One [Member] | |
Line of Credit Facility [Line Items] | |
Issued to | T. Armes |
Options | shares | 50,000 |
Dated | Oct. 14, 2021 |
Expire | Jul. 11, 2022 |
Strike Price | $ / shares | $ 15 |
T Armes Two [Member] | |
Line of Credit Facility [Line Items] | |
Issued to | T. Armes |
Options | shares | 250,000 |
Dated | Jul. 11, 2022 |
Expire | Jul. 11, 2027 |
Strike Price | $ / shares | $ 4 |
The following table summarizes
The following table summarizes the activity of options and warrants issued and outstanding as of and for the three months ended October 31, 2022: (Details) - Warrant [Member] | 9 Months Ended |
Oct. 31, 2022 $ / shares shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance (in shares) | shares | 50,000 |
Beginning balance | $ / shares | $ 15 |
Beginning balance (in shares) | shares | 360,550 |
Beginning balance | $ / shares | $ 12.64 |
Granted | shares | 250,000 |
Granted | $ / shares | $ 4 |
Granted | shares | 1,083,333 |
Granted | $ / shares | $ 15 |
Exercised | shares | (29,155) |
Exercised | $ / shares | $ 5 |
Forfeited and canceled | shares | (50,000) |
Forfeited and canceled | $ / shares | $ (15) |
Ending balance (in shares) | shares | 250,000 |
Ending balance | $ / shares | $ 4 |
Ending balance (in shares) | shares | 1,414,728 |
Ending balance | $ / shares | $ 13.70 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Jul. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2022 | Feb. 01, 2022 | Jan. 31, 2022 | |
Class of Stock [Line Items] | |||||
Common stock, shares authorized | 75,000,000 | 75,000,000 | 75,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 | $ 0.000001 | ||
Reverse stock split | The Company undertook a 10-1 reverse stock split on April 28, 2022. | ||||
Common stock, shares outstanding | 1,823,708 | 1,823,708 | 341,023 | ||
Number of shares issued | 555,641 | 555,641 | |||
Warrants issued | 948,333 | 948,333 | |||
Fair value of shares | $ 2,427,336 | $ 2,427,336 | |||
Exercise of warrants | 29,155 | ||||
Number of shares received | 20,000 | ||||
Number of shares issues as part of the reverse split | 2,675 | ||||
Number of shares outstanding | 250,000 | 250,000 | 50,000 | ||
Option and warrant expense | $ 0 | $ 0 | |||
Description of options | The Company cancelled the options to acquire 50,000 shares issued to the CEO on July 14, 2021 and issued new options on October11, 2022 to acquire 250,000 shares with a 5 year term and an exercise price of $4.00. The Company recorded stock-based compensation of $1,998,000 with a corresponding adjustment to paid-in capital. This amount is the incremental value between the new options of $2,497,500 and the revalued cancelled options if $499,500 | ||||
Description of warrants | the Company issued 555,641 common shares and warrants to purchase 948,333 common shares along with debt to various lenders as well as warrants to acquire 135,000 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 555,641 common shares and 948,333 warrants at $2,427,336, which has been recorded as a debt discount and the 135,000 warrants at $798,450 which has been recorded as interest both with corresponding adjustments to paid-in capital. | ||||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock converted into common stock ( in shares) | 905,110 | 905,110 | 905,110 | ||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 0 | 0 | 0 | ||
Preferred stock, shares authorized | 330,000 | 330,000 | 330,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||
Series B Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 20,000 | 20,000 | 20,000 | ||
Preferred stock, shares authorized | 20,000 | 20,000 | 20,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares outstanding | 20,000 | 20,000 | 20,000 | ||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 0 | 0 | 7,250 | ||
Preferred stock, shares authorized | 7,250 | 7,250 | 7,250 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares outstanding | 0 | 0 | 7,250 | ||
Preferred Stock converted into common stock ( in shares) | 7,250 | 7,250 | 7,250 | ||
Series D Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized | 870 | 870 | 870 | ||
Preferred stock, shares authorized | 870 | 870 | 870 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred stock, shares outstanding | 870 | 870 | 870 | ||
Redemption price | $ 1,000 | $ 1,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 31, 2022 | Jan. 31, 2021 |
Related Party Transactions [Abstract] | ||
Related party accrued expenses | $ 45,673 | $ 46,173 |
Schedule of minimum lease oblig
Schedule of minimum lease obligations (Details) | Oct. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
October 31 2023 | $ 81,203 |
October 31, 2024 | 30,003 |
October 31, 2025 | 30,003 |
October 31, 2026 | 30,003 |
October 31, 2027 | 2,501 |
Total lease payments | 173,713 |
Less: Interest | (12,943) |
Present value of lease liabilities | $ 160,770 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 01, 2018 | Aug. 30, 2016 | Oct. 31, 2019 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||||||
Operating Leases, Rent Expense | $ 29,219 | $ 30,478 | $ 90,177 | $ 91,437 | |||
Warehouse Lease Facility Two [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease description | 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 and estimated monthly CAM charges of $1,017 per month. | ||||||
Operating leases, rent expense | $ 2,132 | ||||||
Warehouse Lease Facility Three [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease description | 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 per month. | ||||||
Operating leases, rent expense | $ 6,400 | ||||||
Vehicles [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Operating lease description | the Company entered into an operating lease for a vehicle with an annual cost of $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. | ||||||
Operating leases, rent expense | $ 17,744 |
The net income (loss) per commo
The net income (loss) per common share amounts were determined as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Numerator: | ||||
Net income (loss) available to common shareholders | $ (4,131,691) | $ (2,566,574) | $ (12,228,775) | $ (4,886,380) |
Denominator: | ||||
Weighted average shares - basic | 1,805,316 | 319,866 | 1,576,024 | 257,577 |
Weighted average shares - basic | $ (2.29) | $ (8.02) | $ (7.76) | $ (18.97) |
Effect of common stock equivalents | ||||
Add: interest expense on convertible debt | $ 166,046 | $ 19,247 | $ 278,788 | $ 35,237 |
Add: amortization of debt discount | 1,932,722 | 130,139 | 4,309,329 | 442,075 |
Less: gain on settlement of debt on convertible notes | (10,128) | (41,249) | (19,539) | (1,004,615) |
Add (Less): loss (gain) on change of derivative liabilities | 186,146 | 76,444 | 841,772 | 88,551 |
Net income (loss) adjusted for common stock equivalents | (1,856,905) | (2,381,993) | (6,818,425) | (5,325,132) |
Dilutive effect of common stock equivalents: | ||||
Convertible class c preferred shares | ||||
Denominator: | ||||
Weighted average shares – diluted | 1,805,316 | 319,866 | 1,576,024 | 257,577 |
Net income (loss) per share - diluted | $ (2.29) | $ (8.02) | $ (7.76) | $ (18.97) |
Warrant [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible class c preferred shares | ||||
Convertible Class C Preferred Shares [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible class c preferred shares |
The anti-dilutive shares of com
The anti-dilutive shares of common stock equivalents for the three and nine months ended October 31, 2022 and October 31, 2021 were as follows: (Details) - shares | 9 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Short-Term Debt [Line Items] | ||
Anti-dilutive shares | 13,554,813 | 1,192,006 |
Convertible Notes and Accrued interest [Member] | ||
Short-Term Debt [Line Items] | ||
Anti-dilutive shares | 7,093,733 | 94,564 |
Convertible Class C Preferred Shares [Member] | ||
Short-Term Debt [Line Items] | ||
Anti-dilutive shares | 4,796,352 | 896,892 |
Options Held [Member] | ||
Short-Term Debt [Line Items] | ||
Anti-dilutive shares | 250,000 | 50,000 |
Warrant [Member] | ||
Short-Term Debt [Line Items] | ||
Anti-dilutive shares | 1,414,728 | 150,550 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 9 Months Ended | |||||
Dec. 27, 2022 | Nov. 21, 2022 | Nov. 11, 2022 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Subsequent Event [Line Items] | ||||||
Principal amount | $ 25,000 | |||||
Debt | $ 1,541 | |||||
Common shares | 1,823,708 | 341,023 | ||||
Share issued | 3,600 | |||||
Marketing services | $ 18,000 | |||||
Proceeds from issuance of common stock | $ 3,037,625 | |||||
Convertible Debt [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Principal amount | $ 22,000 | $ 60,480 | $ 186,450 | |||
Investment interest rate | 12% | 12% | ||||
Exercise price of shares | $ 15 | |||||
Fair value | 27,120 | |||||
Debt instrument | cash proceeds in 3 monthly instalments of $56,500 each starting in November and recorded an original issue discount of $16,950. | |||||
Original issue discount | $ 2,000 | $ 16,950 | $ 16,950 | |||
Description of conversion | The note is convertible at a 20% discount in the event of an uplisting to NASDAQ exchange as well as in any event of default. The discount is amortized over the term of the loan. The note is secured on all assets of the Company. | |||||
Maturing date | Jan. 06, 2023 | |||||
Maturity date description | If the note is not repaid at maturity there is an initial 15% penalty , followed by a 1.5 % penalty for every subsequent default every seven day period thereafter. | |||||
Convertible Debt [Member] | Subsequent Event [Member] | Lender [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Principal amount | $ 186,450 | |||||
Investment interest rate | 12% | |||||
Exercise price of shares | $ 15 | |||||
Fair value | 27,120 | |||||
Debt instrument | The discount is amortized over the term of the loan. The loan and interest are repayable in 10 monthly instalments of $6,774 , starting January 5, 2023. | cash proceeds in 3 monthly instalments of $56,500 each starting in November and recorded an original issue discount of $16,950. | ||||
Original issue discount | $ 16,950 | |||||
Description of conversion | 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 150%. | The note is convertible at a 20% discount in the event of an uplisting to NASDAQ exchange as well as in any event of default. The discount is amortized over the term of the loan. | ||||
Convertible Debt 4 [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Conversion of shares | 75,000 | |||||
Maturities term | 5 years | |||||
Proceeds from issuance of common stock | $ 20,000 | $ 54,000 | $ 169,500 | |||
Convertible Debt 4 [Member] | Subsequent Event [Member] | Lender [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Conversion of shares | 75,000 | |||||
Maturities term | 5 years | |||||
Proceeds from issuance of common stock | $ 169,500 | |||||
Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common shares | 6,434 |