Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 31, 2020 | Apr. 10, 2020 | Jul. 31, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NutriBand Inc. | ||
Entity Central Index Key | 0001676047 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-31 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 5,512,928 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity File Number | 000-55654 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 97,425,012 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 10,181 | $ 474,653 |
Accounts receivable | 12,833 | 13,088 |
Prepaid expenses | 20,167 | 102,725 |
Total Current Assets | 43,181 | 590,466 |
PROPERTY & EQUIPMENT-net | 111,029 | 146,147 |
OTHER ASSETS: | ||
Goodwill | 1,719,235 | 1,719,235 |
Right of use operating lease asset-net | 9,610 | |
Intangible assets-net | 314,700 | 351,770 |
TOTAL ASSETS | 2,197,755 | 2,807,618 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 771,931 | 291,781 |
Customer deposits | 71,225 | |
Operating lease liability | 10,050 | |
Derivative liability | 928,774 | |
Notes payable-related party | 29,067 | |
Notes payable | 215,000 | 40,000 |
Convertible debt- net of debt discount of $202,500 and $-0- as of January 31, 2020 and 2019, respectively | 67,500 | |
Total Current Liabilities | 2,022,322 | 403,006 |
Commitments and Contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, $.001 par value, 10,000,000 shares authorized, -0- outstanding | ||
Common stock, $.001 par value, 250,000,000 shares and 25,000,000 shares authorized; 5,441,100 and 5,423,956 shares issued and outstanding at January 31, 2020 and 2019, respectively | 5,441 | 5,424 |
Additional paid-in-capital | 9,072,573 | 8,579,890 |
Accumulated other comprehensive loss | (304) | (52) |
Accumulated deficit | (8,902,277) | (6,180,650) |
Total Stockholders' Equity | 175,433 | 2,404,612 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,197,755 | $ 2,807,618 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 25,000,000 |
Common stock, shares issued | 5,441,100 | 5,423,956 |
Common stock, shares outstanding | 5,441,100 | 5,423,956 |
Convertible debt, net of debt discount | $ 202,500 | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 370,647 | $ 245,285 |
Costs and expenses: | ||
Cost of revenues | 549,107 | 288,301 |
Selling, general and administrative expenses | 1,790,980 | 3,288,224 |
Total Operating Costs and Expenses | 2,340,087 | 3,576,525 |
Loss from operations | (1,969,440) | (3,331,240) |
Other income (expense) | ||
Derivative expense | (767,650) | |
Gain on change in fair value of derivative | 88,876 | |
Interest expense | (73,413) | |
Total other income (expense) | (752,187) | |
Loss from operations before provision for income taxes | (2,721,627) | (3,331,240) |
Provision for income taxes | ||
Net loss | $ (2,721,627) | $ (3,331,240) |
Net loss per share of common stock-basic and diluted | $ (0.50) | $ (0.62) |
Weighted average shares of common stock outstanding - basic and diluted | 5,423,956 | 5,352,321 |
Other Comprehensive Loss: | ||
Net loss | $ (2,721,627) | $ (3,331,240) |
Foreign currency translation adjustment | (252) | 394 |
Total Comprehensive Loss | $ (2,721,879) | $ (3,330,846) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Jan. 31, 2018 | $ 5,219 | $ 2,966,145 | $ (446) | $ (2,849,410) | $ 121,508 |
Balance, shares at Jan. 31, 2018 | 5,219,275 | ||||
Issuance of common stock for services | $ 81 | 1,763,869 | 1,763,950 | ||
Issuance of common stock for services, shares | 80,500 | ||||
Sale of common stock for cash | $ 80 | 1,499,920 | 1,500,000 | ||
Sale of common stock for cash, shares | 80,431 | ||||
Common stock issued on the exercise of warrants | $ 31 | 499,969 | 500,000 | ||
Common stock issued on the exercise of warrants, shares | 31,250 | ||||
Cancellation of common stock | $ (50) | 50 | |||
Cancellation of common stock, share | (50,000) | ||||
Common stock issued for acquisition | $ 63 | 1,849,937 | 1,850,000 | ||
Common stock issued for acquisition, shares | 62,500 | ||||
Net loss for the year ended | (3,331,240) | (3,331,240) | |||
Foreign currency translation adjustment | 394 | 394 | |||
Balance at Jan. 31, 2019 | $ 5,424 | 8,579,890 | (52) | (6,180,650) | 2,404,612 |
Balance, shares at Jan. 31, 2019 | 5,423,956 | ||||
Issuance of warrants for services | 252,700 | 252,700 | |||
Issuance of common stock for accounts payable | $ 17 | 239,983 | 240,000 | ||
Issuance of common stock for accounts payable, share | 17,144 | ||||
Net loss for the year ended | (2,721,627) | (2,721,627) | |||
Foreign currency translation adjustment | (252) | (252) | |||
Balance at Jan. 31, 2020 | $ 5,441 | $ 9,072,573 | $ (304) | $ (8,902,277) | $ 175,433 |
Balance, shares at Jan. 31, 2020 | 5,441,100 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (2,721,627) | $ (3,331,240) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Expenses paid on behalf of the Company by related party | 23,817 | 24,300 |
Depreciation and amortization | 72,188 | 37,011 |
Derivative expense | 767,650 | |
Gain on change in fair value of derivative | (88,876) | |
Amortization of debt discount | 67,500 | |
Amortization of right of use asset | 19,217 | |
Stock-based compensation | 252,700 | 1,763,950 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 255 | (12,825) |
Prepaid expenses | 82,558 | 57,778 |
Inventories | 4,133 | |
Customer deposits | (71,225) | 71,225 |
Operating lease liability | (18,777) | |
Accounts payable and accrued expenses | 720,150 | 280,202 |
Net Cash Used In Operating Activities | (894,470) | (1,105,466) |
Cash flows from investing activities: | ||
Payment on acquisition | (400,000) | |
Purchase of equipment | (4,163) | |
Net Cash Used in Investing Activities | (404,163) | |
Cash flows from financing activities: | ||
Payment of bank overdraft | (762) | |
Proceeds from sale of common stock | 1,500,000 | |
Proceeds from exercise of warrants | 500,000 | |
Proceeds from notes payable | 175,000 | 25,000 |
Proceeds from convertible debt | 250,000 | |
Payment of notes payable | (1,820) | |
Proceeds from related parties | 34,980 | 2,500 |
Payment of related party payables | (29,730) | (41,030) |
Net Cash Provided by Financing Activities | 430,250 | 1,983,888 |
Effect of exchange rate on cash | (252) | 394 |
Net change in cash | (464,472) | 474,653 |
Cash and cash equivalents - Beginning of period | 474,653 | |
Cash and cash equivalents - End of period | 10,181 | 474,653 |
Cash paid for: | ||
Interest | ||
Income taxes | ||
Supplemental disclosure of non-cash investing and financing activities | ||
Common stock to be issued for services | 1,763,950 | |
Adoption of ASC 842 Operating lease asset and liability | 28,827 | |
Debt discount on convertible notes | 270,000 | |
Common issued for services | 240,000 | |
Assets purchased | ||
Equipment | 160,065 | |
Intangible Asset | 2,089,935 | |
Total | 2,250,000 | |
Liabilities assumed | ||
Net assets purchased | 2,250,000 | |
Common stock issued | (1,850,000) | |
Cash paid | $ 400,000 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Nutriband Inc. (the "Company") is a Nevada corporation, incorporated on January 4, 2016. In January 2016, the Company acquired Nutriband Ltd, an Irish company which was formed by the Company's chief executive officer in 2012 to enter the health and wellness market by marketing transdermal patches. References to the Company relate to the Company and its subsidiaries unless the context indicates otherwise. On August 1, 2018, the Company acquired 4P Therapeutics LLC ("4P Therapeutics") for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics. 4P Therapeutics is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development. Prior to the acquisition of 4P Therapeutics, the Company's business was the development and marketing of a range of transdermal consumer patches. Most of these products are considered drugs in the United States and cannot be marketed in the United States without approval by the Food and Drug Administration (the "FDA"). The Company is not presently taking any steps to seek FDA approval of its consumer transdermal products and its consumer products are not being marketed in the United States. With the acquisition of 4P Therapeutics, 4P Therapeutics' drug development business became the Company's principal business. The Company's approach is to use generic drugs that are off patent and incorporate them into the Company's transdermal drug delivery system. Although these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal product development program which will include the preclinical and clinical trials that are necessary to receive FDA approval before we can market any of our pharmaceutical products. Reverse Stock Split On June 25, 2019, the Company effected one-for-four reverse split, pursuant to which each share of common stock became and was converted into 0.25 share of common stock. The reverse split became effective in the marketplace on July 24, 2019. All share and per share information in these financial statements retroactively reflect the reverse split. Going Concern The Company's consolidated financial statements for the year ended January 31, 2020 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company did not generate any revenue prior to the quarter ended October 31, 2018. For the year ended January 31, 2020, the Company generated revenue of $370,647 on which it recorded cost of revenues of $549,107 and a loss from operations of $1,969,440. Subsequent to January 31, 2020, because of the lack of available cash and the decline in business resulting in part from the effects of the COVID-19 pandemic, the Company has temporarily closed its operations, and does not expect that it will be able to commence operations until it received substantial funding. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue to support its cost structure, developing its products and obtaining FDA approval to market any product it develops and implementing a marketing program for such products. These factors raise substantial doubt about ability of the Company to continue as a going concern for a period of at least one year from the date of issuance of these financial statements. Without such financing, the Company may not be able to continue in business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Significant Accounting Policies Principles of Consolidation The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company's financial statements from the date of acquisition of August 1, 2018. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents include short-term investments in money-market funds and certificate of deposits with an original maturity of three months or less when purchased. Foreign Currency Translation The functional currency of the Company's Irish subsidiary is the Euro. The assets and liabilities of the subsidiary are translated into US dollars using the prevailing exchange rate as of the balance sheet date and income and expenses are translated into US dollars using the average exchange rate during the reporting period. Translation adjustments are recorded in other comprehensive income (loss). Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. Revenue Types The following is a description of the Company's revenue types, which include professional services and sale of consumer products: ● Professional services include the contract of research and development related services with the Company's clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged. ● Sales revenues are derived from the sale of the Company's consumer products. Upon the reception of a purchase order, we have the order filled and shipped. Contracts with Customers A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company's different revenue service types, the performance obligation is satisfied at different times. The Company's performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs on a monthly basis for the work performed during that month. All revenue recognized in the income statement is considered to be revenue from contracts with customers. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by service type and by geographical location. See the tables: Years Ended January 31, 2020 2019 Revenue by service type Sale of goods $ 124,958 $ 49,000 Services 245,679 196,285 Total $ 370,637 $ 245,285 Years Ended January 31, 2020 2019 Revenue by geographical location United States $ 245,679 $ 196,285 Non-United States 124,958 49,000 Total $ 370,637 $ 245,285 Accounts receivable Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-specific accounts. For the years ended January 31, 2020 and 2019, the Company recorded no bad debt expense and no allowance for doubtful accounts related to accounts receivable. Inventories Inventories are valued at the lower of cost and realizable value determined using the first-in, first-out (FIFO) method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in progress is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity). Property, Plant and Equipment Property and equipment represent an important component of the Company's assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 5 years as follows: Lab Equipment 5 years Furniture, fixtures and equipment 3 years Intangible Assets Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, "Intangibles-Goodwill and Other." The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company's acquisition has also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years. Goodwill Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceed their fair value. The Company does not amortize goodwill in accordance with ASC 350. Long-lived Assets Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between fair market value of the long-lived asset and the related net book value. Stock-Based Compensation ASC 718, "Compensation - Stock Compensation," prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees. Business Combinations The Company recognizes the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired entity at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the accounting literature. In accordance with this guidance, acquisition-related costs, including restructuring costs, must be recognized separately from the acquisition and will generally be expensed as incurred. That replaces the cost-allocation process detailed in previous accounting literature, which required the cost of an acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair value. Leases In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), to provide a new comprehensive model for lease accounting under this guidance, lessees and lessors should apply a "right-of-use" model in accounting for all leases (including subleases) and eliminate the concept of operating leases and off-balance-sheet leases. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance. The Company adopted ASU 2016-02 as amended effective February 1, 2019 using the modified retrospective approach. In connection with the adoption, the Company elected to utilize the Comparative Under 840 Option whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted under the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company completed the necessary changes to its accounting policies, processes, disclosure and internal control over financial reporting. Adoption of the new standard resulted in the recording of right-to-use assets in the amount of $28,827 and lease liabilities related to operating leases in the amount of $28,827 on the Company's consolidated balance sheet as of February 1, 2019. See Note 11, Leases, for Topic 842 disclosures in connection with the adoption of ASU 2016-02. Research and Development Research and developments costs are expensed as incurred. Income Taxes Taxes are calculated in accordance with taxation principles currently effective in the United States and Ireland. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent they believe these assets will more-likely-than-not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event the Company was to determine that it would be able to realize its deferred income tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company's cash and cash equivalents are concentrated primarily in banks. At times, such deposits could be in excess of insured limits. Management believes that the financial institutions that hold the Company's financial instruments are financially sound and, accordingly, minimal credit risk is believed to exist with respect to these financial instruments. As of and for the years ended January 31, 2020 and 2019, three customers accounted for 100% of the Company's revenues and two customers accounted for 100% of accounts receivable. Earnings Per Share Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. Potential shares of common stock consist of outstanding common stock purchase warrants. For the years ended January 31, 2020 and 2019 there were 83,116 and 182,500 potential shares of common stock that were not included in the calculation of diluted earnings per share as their effect would be anti-dilutive. Fair Value Measurements FASB ASC 820, "Fair Value Measurements and Disclosure" ("ASC 820"), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be to measure fair value. The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows: Level 1 -Observable inputs such as quoted market prices in active markets. Level 2 -Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 -Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying value of the Company's financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments. Derivative liabilities are determined based on "Level 3" inputs, which are significant and unobservable and have the lowest priority. The recorded values of all other financial instruments approximate their current fair value because of their nature and respective short maturity dates or durations. The Company's financial assets and liabilities carried at fair value measured on a recurring basis as of January 31, 2020, consisted of the following: Total fair Quoted Significant Significant value at in active observable unobservable 2020 (Level 1) (Level 2) (Level 3) $ $ $ $ Description: Derivative liability (1) 928,774 - - 928,774 Total 928,774 - - 928,774 (1) The Company has estimated the fair value of this liability using the Monte Carlo Model. Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, "Derivatives and Hedging" and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of January 31, 2020, the Company had a $928,774 derivative liability. Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Recent Accounting Standards In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation - Stock Compensation In August 2018, the FASB issued ASU 2018-13, "Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. ASU 2018-13 will be effective for the Company for its fiscal year beginning after December 15, 2019 and each quarterly period thereafter. Early adoption is permitted. The Company is currently assessing the impact this new guidance may have on the Company's consolidated financial statements and footnote disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact of this standard on our combined financial statements. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which removes Step 2 from the goodwill impairment test and replaces the qualitative assessment. Impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. Under this revised guidance, failing Step 1 will always result in a goodwill impairment. The amendments in this update should be applied prospectively for annual and interim periods in fiscal years beginning after December 15, 2019. The Company early adopted ASU 2018-07 on February 1, 2019. The Company's adoption of ASU 2018-07 has had no impact on its consolidated financial statements or disclosures. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of a business or as acquisitions (or disposals) of assets. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2018, with early adoption permitted under certain circumstances. The amendments of ASU No. 2017-01 were adopted by the Company effective February 1, 2019. The adoption of this standard had no impact on our consolidated financial position or results of operations. The Company has reviewed all other FASB-issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter previous GAAP and does not believe that any new or modified principles will have a material impact on the company's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 2. PROPERTY AND EQUIPMENT January 31, 2020 2019 Lab equipment $ 144,585 $ 144,585 Furniture, fixtures and equipment 19,643 19,643 164,228 164,228 Less: Accumulated depreciation (53,199 ) (18,081 ) Net Property and Equipment $ 111,029 $ 146,147 Depreciation expense amounted to $35,118 and $18,081 for the years ended January 31, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 3. INCOME TAXES The Company adopted the provisions of ASC 740, "Income Taxes, ("ASC 740"). As a result of the implementation of ASC 740, the Company recognized no adjustment in the net liability for unrecognized income tax benefits. The Company believes there are no potential uncertain tax positions and all tax returns are correct as filed. Should the Company recognize a liability for uncertain tax positions, the Company will separately recognize the liability for uncertain tax positions on its balance sheet. Included in any liability or uncertain tax positions, the Company will also setup a liability for interest and penalties. The Company's policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes. There is no U.S. tax provision due to losses from U.S. operations for the years ended January 31, 2020 and 2019. Deferred income taxes are provided for the temporary differences between the financial reporting and tax basis of the Company's assets and liabilities. The principal item giving rise to deferred taxes is the net operating loss carryforward in the U.S. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has set up a valuation allowance for losses for certain carryforwards that it believes may not be realized. The provision for income taxes consist of the following: Years Ended January 31, 2020 2019 Current Federal $ - $ - Foreign - - Deferred Federal - - Foreign - - $ - $ - A reconciliation of taxes on income computed at the federal statutory rate to amounts provided is as follows: Years Ended January 31, 2020 2019 Book loss from operations $ (571,542 ) $ (699,560 ) Common stock issued for services 52,931 370,430 Impairment expense - - Unused operating losses 518,611 329,130 Income tax expense $ - $ - As of January 31, 2020, the Company recorded a deferred tax asset associated with a net operating loss ("NOL") carryforward of approximately $4,340,328 that was fully offset by a valuation allowance due to the determination that it was more likely than not that the Company would be unable to utilize those benefits in the foreseeable future. The Company's NOL expires in 2037. The valuation allowance increased by approximately $581,000 during the year ended January 31, 2020. On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") significantly revised U.S. corporate income tax law by, among other things, reducing the corporate rate from 34% to 21%. Because the Company recognizes a valuation allowance for the entire balance, there is no net impact to the Company's balance sheet or results of operations. The types of temporary differences between tax basis of assets and liabilities and their financial reporting amounts that give rise to the deferred tax liability and deferred tax asset and their approximate tax effects are as follows: January 31, 2020 2019 Net operating loss carry forwards (expire through 2037) $ (688,858 ) $ (170,247 ) Stock issued for services (436,904 ) (383,973 ) Intangible impairment expense (525,000 ) (525,000 ) Valuation allowance 1,650,762 1,079,220 Net deferred taxes $ - $ - |
Notes Payable_Convertible Debt
Notes Payable/Convertible Debt | 12 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE/CONVERTIBLE DEBT | 4. NOTES PAYABLE/CONVERTIBLE DEBT On September 12, 2017, the Company borrowed $15,000 on an interest-free basis from a minority stockholder. In April 2018, the Company borrowed an additional $25,000 from the minority stockholder. During 2019, the Company borrowed an additional $175,000. The loans are interest free and due upon demand. The balance due on such loans was $215,000 on January 31, 2020, and $40,000 on January 31, 2019, which is included in notes payable. During the year ended January 31, 2019, the Company's chief financial officer and chief operating officer advanced the Company $34,980, paid $23,817 expenses on behalf of the Company, of which $29,730 was repaid as of January 31, 2020. The balance due to the officers as of January 31, 2020 was $29,067. On October 30, 2019, the Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross cash proceeds from this financing were of $250,000. The notes are convertible at a conversion price equal to the lesser of (i) the per share price of common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180 day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company's securities or (b) the next private placement of the Company's equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender. The embedded conversion option qualified for derivative accounting and bifurcation of under ASC 815-15 Derivatives and Hedging. The initial fair value of the conversion feature was $128,870 and the fair value of the warrants issued in connection with the notes were valued at $888,780 and were recorded based on their relative fair values. A debt discount to the note payables of $270,000 and an initial derivative expense of $767,650 was recorded. The debt discount will be amortized over the life of the note. Amortization of debt discount for the year ended January was $67,500. As of January 31, 2020, the debt discount remaining was $202,500. Interest expense for the year ended January 31, 2020 including the amortization of the debt discount was $71,550. In March 2020, the Company repaid the $270,000 convertible debt and recorded a loss on the extinguishment of debt of $69,132. |
Acquisition of Business
Acquisition of Business | 12 Months Ended |
Jan. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITION OF BUSINESS | 5. ACQUISITION OF BUSINESS On August 1, 2018, the Company acquired 100% of the membership interests of 4P Therapeutics, pursuant to an agreement dated April 5, 2018, for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by us from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The primary purpose of the acquisition is to acquire the intellectual property of 4P Therapeutics and complete the development and seek FDA approval, initially for 4P Therapeutics' lead product, its abuse deterrent fentanyl transdermal system, which is in the development stage. Acquisition costs, which were minimal, have been expensed as incurred in accordance with ASC 350. Details of the net assets acquired are as follows: Fair Value Recognized On Acquisition Equipment $ 160,065 Customer base 136,500 Intellectual Property 191,900 Trademark 42,300 Goodwill 1,719,235 Net assets acquired $ 2,250,000 Satisfied by: Common stock issued (1,850,000 ) Cash outflows on acquisition $ (400,000 ) The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and 4P Therapeutics as if the acquisition occurred as of the beginning of the year ended January 31, 2019. The unaudited pro forma condensed financial information is not intended to represent or be indicative of the consolidated results of operations of the Company that would have been reported had the acquisition occurred at the beginning of the prior year period presented and should not be taken as being representation of the future consolidated results of operations of the Company. The pro forma results for the year ended January 31, 2020 are not included in the table below because the operating results 4P Therapeutics were included in our consolidated of operations and comprehensive income. 2019 As Reported Pro Forma Net revenue $ 245,285 $ 577,149 Net loss (3,331,240 ) (3,307,614 ) Loss per common share - basic and diluted $ (0.16 ) $ (0.16 ) |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Jan. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | 6. INTANGIBLE ASSETS AND GOODWILL At January 31, 2020 and 2019, intangible assets consisted of intellectual property, customer base and trademarks, net of amortization, as follows: January 31, 2020 2019 Customer base $ 136,500 $ 136,500 Intellectual property 234,200 234,200 Goodwill 1,719,235 1,719,235 Total 2,089,935 2,089,935 Less: Accumulated amortization (56,000 ) (18,930 ) Net Intangible Assets $ 2,033,935 $ 2,071,005 The value of the intangible assets, consisting of intellectual property and customer base has been recorded at their fair value by the Company after completing a valuation and are being amortized over a period of ten years. Amortization expense for the years ended January 31, 2020 and 2019 was $37,070 and $18,930, respectively. No value has been given to the potential royalty payable to the former owner since the royalty is contingent upon the Company generating revenue from any source and there is no marketable product and there are material uncertainties, including the need for FDA approval, as to whether or when any revenue will be generated from the intellectual property subject to the royalty. If any royalties are paid to the former owner of 4P Therapeutics, the royalties will be expensed as incurred and treated as an operating expense. January 31, 2020 2019 Intellectual property $ 234,200 $ 234,200 Accumulated amortization (35,525 ) (12,105 ) Book value $ 198,675 $ 222,095 Customer base $ 136,500 $ 136,500 Accumulated amortization (20,475 ) (6,825 ) Book value $ 116,025 $ 129,675 Total Intangible Assets, Net $ 314,700 $ 351,770 Estimated Amortization: Trademarks and Intellectual Property Customer Base Total Year Ended January 31, 2021 $ 23,420 $ 13,650 $ 37,070 2022 $ 23,420 $ 13,650 37,070 2023 $ 23,420 $ 13,650 37,070 2024 $ 23,420 $ 13,650 37,070 2025 $ 23,420 $ 13,650 37,070 Thereafter $ 81,525 $ 47,775 129,350 |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Jan. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | 7. DERIVATIVE LIABILITIES The embedded conversion option of the convertible debentures described in Note 4 contain conversion features that qualify for embedded derivative classification. The fair value of the liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments. The table below sets forth a summary in the fair value of the Company's Level 3 financial liabilities: Original discount limited to proceeds of notes $ 250,000 Fair value of derivative liabilities in excess of notes proceeds received 767,650 Change in value of embedded conversion option (88,876 ) $ 928,774 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option and warrant liabilities as their fair value were determined by using the Monte Carlo Model based on various assumptions. At issuance, the expected volatility was 158.3%; risk-free interest rate of 1.58%; and expected term of one year. For the revaluation at January 31, 2020, the expected volatility was 184.4%; risk-free rate of return of 1.43%; and expected term of nine months. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8. RELATED PARTY TRANSACTIONS a) An interest-free advance from the mother of the chief executive officer was $10,230 at January 31, 2018. The advance was repaid in full May 2018. b) The chief financial officer made payments on behalf of the Company during the year ended January 31, 2019 in the total amount of $34,800, all of which was repaid in May 2018. During the year ended January 31, 2020, the Company's chief financial officer and chief operating officer advanced the Company $34,980, paid expenses on behalf of the Company of $23,817, of which $29,730 was repaid. As of January 31, 2020, the amounts due the officers were $29,067 which is non-interest bearing. c) The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics. See Note 6 in connection with the terms of the acquisition of 4P Therapeutics from the former owner and the royalty payable to the former. The former owner was not a director of the Company when the acquisition agreement was signed. d) During the year ended January 31, 2019, the Company issued 210,000 shares of common stock, valued at $967,500, to executives of the Company based on the market price of the common stock on the date of issuance and (ii) 5,000 shares of common stock to each of the Company's six independent directors for a total of 30,000 shares valued at $222,000, based on the market price on the date of issuance. e) On February 19, 2019, the Company granted an executive officer an option to purchased 25,000 shares of the Company's common stock at an exercise price equal to 75% of the market price on the date the Company receives notice of exercise. The fair value of the warrant on the date of grant using the Black Scholes model was $252,700 and was expensed during the year ended January 31, 2020. The warrant expired unexercised on May 19, 2019. f) On January 31, 2020, the Company issued 8,572 shares common stock to each of its president, who is also a director, and to a limited liability company controlled by the Company's chief scientific officer for accrued salaries valued at $120,000. These issuances were made pursuant to employment agreements with the president and chief scientific officer which provide for annual compensation of $60,000 and represented compensation for the years ended January 31, 2020 and 2019. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS' EQUITY Preferred Stock On January 15, 2016, the board of directors of the company approved a certificate of amendment to the articles of incorporation and changed the authorized capital stock of the Company to include and authorize 10,000,000 shares of Preferred Stock, par value $0.001 per share. On May 24, 2019, the Board of Directors created a series of preferred stock consisting of 2,500,000 shares designated as the Series A Convertible Preferred Stock ("Series A Preferred Stock"). On June 20, 2019, the Series A preferred Stock was terminated and the 2,500,000 shares were restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series, until such stock is once more designated as part of a particular series by the Board of Directors. Common Stock On June 25, 2019, the Company effected a one-for-four reverse split, pursuant to which each share of common stock became converted into 0.25 shares of common stock, and the Company decreased its authorized common stock from 100,000,000 to 25,000,000 shares. On January 27, 2020, the Company amended its articles of incorporation to increase its authorized common stock from 25,000,000 shares to 250,000,000 shares. On January 31, 2020, the Company issued 8,572 shares to each of its president, who is also a director, and to a limited liability company controlled by the Company's chief scientific officer for services valued at $120,000 pursuant to employment agreements with the president and chief scientific officer. The compensation related to services for the years ended January 31, 2020 and 2019. See Note 12. During the year ended January 31, 2019, the Company issued a total of 80,500 shares for services valued at $1,763,950 as follows: (i) 68,000 shares of common stock, valued at $1,419,300, issued to executive officers and their affiliates; (ii) 7,500 shares of common stock, valued at $222,000, issued to the Company's independent directors; (iii) 2,500 shares of common stock, valued at $74,000, issued to the Company's advisory board member; and (iv) 2,500 shares of common stock, valued at $48,600, issued to a non-affiliated party for services. On May 2, 2018, the Company sold to an unrelated party for $1.0 million, 62,500 shares stock and 30-day warrants to purchase 62,500 shares of common stock at $16.00 per share. On May 27, 2018, the unrelated party exercised warrants to purchase 31,250 shares of common stock for $500,000. and on June 2, 2018, warrants to purchase 31,250 shares of common stock expired unexercised. On July 31, 2018, the Company issued 62,500 shares of common stock valued at $1,850,000 representing a portion of the purchase price for the equity of 4P Therapeutics. See Notes 4 and 6. In November 2018, one of the defendants in the legal proceedings with Advanced Health Brands, Inc. (see Note 12), returned 50,000 shares of common stock that had been issued to her, and these shares were cancelled as of January 31, 2019. On November 23, 2018, the Company sold 17,931 shares of its common stock to a minority stockholder for $500,000. |
Warrants and Options
Warrants and Options | 12 Months Ended |
Jan. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS AND OPTIONS | 1 0. WARRANTS AND OPTIONS The following table summarizes the changes in warrants outstanding and the related price of the shares of the Company's common stock issued to non-employees of the Company. Exercise Remaining Intrinsic Shares Price Life Value Outstanding, January 31, 2018 182,500 $ 6.32 1.35 years Granted 62,500 16.00 - Exercised (31,250 ) 16.00 - - Expired/Cancelled (31,250 ) 16.00 - - Outstanding, January 31, 2019 182,500 $ 6.32 0.35 years $ 4,101,000 Issued 50,000 20.90 3.00 years - Expired/Cancelled (162,500 ) 5.38 - - Exercised - - - - Outstanding-period ending January 31, 2020 70,000 $ 18.93 2.08 years $ - Exercisable - period ending January 31, 2020 70,000 $ 18.93 2.08 years $ - The exercise price for these warrants to purchase 50,000 shares, which were issued in the year ended January 31, 2020 is the lesser of (i) $20.90 or, (ii) if the Company completes its public offering of its common stock, 110% of the initial public offering price of the Common Stock in the next firm commitment public offering of the Company's securities. Since the Company has not completed a public offering since the issuance of the warrants, an exercise price of $20.90 has been used in the in the foregoing table and table below. The exercise price and number of shares subject to the warrant is subject to adjustment in the event that the Company issues stock at a price or warrants, options or other convertible securities at an exercise or conversion price less than the then current exercise price of the warrant. The following table summarizes additional information relating to the warrants outstanding at January31, 2020: Range of Exercise Prices Number Remaining Contractual Life(Years) Exercise Price for Shares Outstanding Number Exercise Price for Shares Exercisable $ 20.90 50,000 2.75 $ 20.90 50,000 $ 20.90 $ 14.00 20,000 0.41 $ 14.00 20,000 $ 14.00 The following table summarizes the changes in options outstanding and the related price of the shares of the Company's common stock issued to non-employees of the Company. Exercise Remaining Intrinsic Shares Price Life Value Outstanding, January 31, 2019 - $ - - $ - Granted 25,000 34.20 0.05 years 232,750 Expired (25,000 ) 34.20 - - Exercised - - - - Outstanding-period ending January 31, 2020 - $ - - $ - Exercisable - period ending January 31, 2020 - $ - - $ - |
Leases
Leases | 12 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
LEASES | 11. LEASES The Company has operating leases for its facilities used for research and development, sales and administration. These leases have remaining lease terms of less than one year. Certain of these leases contain options to extend the term of the lease and certain of these leases contain options to terminate the lease within a specified period of time. The options to extend or terminate a lease are included in the lease term when it is reasonably likely that the Company will elect that option. The Company is not a party to any material sublease arrangements. The components of lease expense, which are included in cost of revenues and general and administrative expense, based on the underlying uses of the right of use asset, were as follows: Year Ended January 31, Amortization of right-of-use asset $ 19,652 Interest on lease liability 1,863 Operating lease costs - Total Lease Cost $ 21,515 Supplementary cash flow information related to leases are as follows: Year Ended January 31, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,610 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 28,827 Supplementary balance sheet information related to leases are as follows: January 31, Operating Leases: Operating lease right-of -use assets $ 9,610 Operating lease liabilities 10,050 Weighted-Average Remaining Lease Term: Operating leases 0.50 Weighted-Average Discount Rate: Operating leases 4.40 % The discount rate is based on the Company's incremental borrowing rate. Maturities of lease liabilities were as follows as of January 31, 2020: Year Ending Operating January 31, Leases 2021-remaining 10,320 Total undiscounted cash flows 10,320 Less: imputed interest (270 ) Present value of lease liabilities $ 10,050 Under ASC 840, approximate future minimum rental payments due under these leases as of January 31, 2020 would have been as follows: Year Ended January 31, 2021 $ 10,320 Operating Leases The Company leases office space in Orlando, Florida at a monthly rental of $1,720 which expires on July 31, 2019. For the year ended January 31, 2019 the Company had lease commitments of $10,320. The Company leased 7,201 square feet of manufacturing space in Norcross, Georgia. The lease was month-to-month at a monthly rate of $13,637. The Company is downsizing its operations in Georgia and will relocate from this facility. The Company is in the process of finding a new location and will negotiate a new long-term lease. |
Commitments and Contigencies
Commitments and Contigencies | 12 Months Ended |
Jan. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTIGENCIES | 12. COMMITMENTS AND CONTIGENCIES Legal Proceedings On July 27, 2018, the Company commenced an action in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida, against Advanced Health Brands, Inc., Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Laura Fillman and John Baker, together with a Motion for Temporary Injunction Without Notice and a Motion for Prejudgment Writ of Replevin arising from the Company's decision to seek to rescind for misrepresentation the agreement by which the Company acquired advanced Health Brands, Inc. for 1,250,000 shares of common stock valued at $2,500,000 and seek return of the shares. On August 2, 2018, the court entered a Temporary Injunction Without Notice and an Order to Show Cause against the defendants. Defendants Kalmar, Murphy, Polly-Murphy, and Baker filed a Motion to Dismiss the Company's Verified Complaint, Motion to Dissolve Temporary Injunction Without Notice and Response to Order to Show Cause, and Motion to Compel Arbitration. On January 4, 2019, the court dismissed the Company's complaint with prejudice, and directed the defendants to assign the Company within 30 days, the six patents never duly transferred to the Company. On February 1, 2019, the Company appealed the court's order. Pursuant to a settlement agreement with one of the defendants, that defendant returned the 50,000 shares which had been issued to her, and the shares were cancelled as of January 31, 2019. On June 7, 2019, the individual defendants (other than the defendant whom the Company has a settlement agreement), filed a motion for sanctions and civil contempt against us, which generally claimed that we failed to comply with the Court's January 4, 2019 order by refusing to issue the Ruling 144 letters that would allow the defendants to transfer their shares of common stock. On October 29, 2019, the Court denied the defendants motion. On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state court action that dismissed our complaint with prejudice, and gave us leave to file an amended complaint On August 22, 2018, four of the defendants in the Florida action described in the previous paragraph filed a complaint against the Company in the Franklin County, Ohio Court of Common Pleas seeking a declaratory judgment permitting them to sell the shares of common stock they received pursuant to the acquisition agreement. The parties have agreed to a stay pending the outcome of the Florida litigation. On April 29, 2019, the Company filed a securities fraud action in the U.S. District Court for the Eastern District of New York against Raymond Kalmar, Paul Murphy, Michelle Polly-Murphy, Advanced Health Brands and TD Therapeutic, Inc. In the complaint the Company alleges that in 2017, the defendants fraudulently and deceitfully obtained 1,250,000 shares of common stock by orchestrating a months-long scheme to defraud the Company. The Company is seeking the return of the 1,200,000 shares of common stock and monetary damages resulting from the defendants' fraudulent conduct. The defendants filed a motion to dismiss on August 23, 2019, and the Company filed its response on September 13, 2019. Employment Agreements The Company has employment agreements with its chief executive officer and chief financial officer dated April 23, 2019 pursuant to which we agree to employ them as chief executive officer and chief financial officer, respectively. The agreement also provides that the Company will include each of them as our nominee for director. The agreements have a term ending on January 31, 2024, and continuing on a year-to-year basis thereafter unless terminated by either party on not less than 30 days' notice given prior to the expiration of the initial term or any one-year extension. Pursuant to the employment agreements at January 31, 2020, the chief executive officer is receiving compensation at an annual rate of $42,000, and chief financial officer is not currently receiving any compensation. Commencing with the month in which the Company has raised at least $2,500,000 from public or private financing of its equity securities, they will each receive salary at the annual rate of $170,000. The Company has an employment agreement May 16, 2018 with its president pursuant to which the Company employed him as president for a term with no expiration date at annual salary of $60,000, which may paid in stock or cash. The president serves on a part-time basis. The Company has an employment agreement dated February 19, 2019 with its chief scientific officer pursuant to which the Company agrees to employ him as chief scientific officer for annual compensation of $60,000, payable in cash or stock, as the Company may elect. The agreement has a term ending on January 31, 2021 and continues thereafter on a quarter-to-quarter basis unless terminated by either party on 30 days' notice. The chief scientific officer serves on a part-time basis. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS In December 2019, COVID-19 emerged and has subsequently spread world-wide. The World Health Organization has declared COVID-19 a pandemic resulting in federal, state and local governments and private entities mediating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders, and advisories and quarantining people who may have been exposed to the virus. The effect of these orders, government imposed quarantines and measures the Company would take, such as work-at-home policies, may negatively impact productivity, disrupt our business and could delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition. Further, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which could disrupt our supply chain. On March 22, 2020, the Company issued in a private placement 46,828 units at a price of $11 per unit. Each unit consisted of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $14.per share. The warrants expire April 30, 2023. The Company issued a total of 46,828 shares of common stock and warrants to purchase 46,828 shares of common stock The Company received proceeds of $515,113. In March 2020, a minority stockholder who had previously made loans of $215,000, made an additional loan to the Company in the amount of $60,000, increasing the total loans from the stockholder to $275,000. See Note 4. On March 27, 2020, the Company issued 25,000 shares upon conversion of the notes in the principal balance of $275,000. On March 21, 2020, the Company prepaid the convertible notes in the principal amount of $270,000 from the proceeds of the private placement. The total payments, including the prepayment penalty and accrued interest, was $345,565. As a result of the payment of the notes, the derivative liability, which was $928,774 at January 31, 2020, was reduced to zero. As a result of the terms of the private placement, the warrants to purchase 50,000 shares at lesser of (a) $20.90 or (b) if the Company completes a private offering, 110% of the initial offering price of the common stock in the public offering, became a warrant to purchase 95,000 shares at $11 per share, subject to adjustment pursuant to the antidilution provisions of the warrant. See Notes 4 and 10. On March 20, 2020, the Florida district court of appeal reversed the lower court ruling in the Florida state court action that dismissed the Company's complaint with prejudice against Advanced Health Brands, Inc., Raymond Kalmer, Paul Murphy, Michelle Polly-Murphy and John Baker, and gave the Company leave to file an amended complaint. See Note 12. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization Nutriband Inc. (the "Company") is a Nevada corporation, incorporated on January 4, 2016. In January 2016, the Company acquired Nutriband Ltd, an Irish company which was formed by the Company's chief executive officer in 2012 to enter the health and wellness market by marketing transdermal patches. References to the Company relate to the Company and its subsidiaries unless the context indicates otherwise. On August 1, 2018, the Company acquired 4P Therapeutics LLC ("4P Therapeutics") for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics. 4P Therapeutics is engaged in the development of a series of transdermal pharmaceutical products, that are in the preclinical stage of development. Prior to the acquisition of 4P Therapeutics, the Company's business was the development and marketing of a range of transdermal consumer patches. Most of these products are considered drugs in the United States and cannot be marketed in the United States without approval by the Food and Drug Administration (the "FDA"). The Company is not presently taking any steps to seek FDA approval of its consumer transdermal products and its consumer products are not being marketed in the United States. With the acquisition of 4P Therapeutics, 4P Therapeutics' drug development business became the Company's principal business. The Company's approach is to use generic drugs that are off patent and incorporate them into the Company's transdermal drug delivery system. Although these medications have received FDA approval in oral or injectable form, the Company needs to conduct a transdermal product development program which will include the preclinical and clinical trials that are necessary to receive FDA approval before we can market any of our pharmaceutical products. |
Reverse Stock Split | Reverse Stock Split On June 25, 2019, the Company effected one-for-four reverse split, pursuant to which each share of common stock became and was converted into 0.25 share of common stock. The reverse split became effective in the marketplace on July 24, 2019. All share and per share information in these financial statements retroactively reflect the reverse split. |
Going Concern | Going Concern The Company's consolidated financial statements for the year ended January 31, 2020 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company did not generate any revenue prior to the quarter ended October 31, 2018. For the year ended January 31, 2020, the Company generated revenue of $370,647 on which it recorded cost of revenues of $549,107 and a loss from operations of $1,969,440. Subsequent to January 31, 2020, because of the lack of available cash and the decline in business resulting in part from the effects of the COVID-19 pandemic, the Company has temporarily closed its operations, and does not expect that it will be able to commence operations until it received substantial funding. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue to support its cost structure, developing its products and obtaining FDA approval to market any product it develops and implementing a marketing program for such products. These factors raise substantial doubt about ability of the Company to continue as a going concern for a period of at least one year from the date of issuance of these financial statements. Without such financing, the Company may not be able to continue in business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. The operations of 4P Therapeutics are included in the Company's financial statements from the date of acquisition of August 1, 2018. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates including, but not limited to, those related to such items as income tax exposures, accruals, depreciable/useful lives, allowance for doubtful accounts and valuation allowances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include short-term investments in money-market funds and certificate of deposits with an original maturity of three months or less when purchased. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company's Irish subsidiary is the Euro. The assets and liabilities of the subsidiary are translated into US dollars using the prevailing exchange rate as of the balance sheet date and income and expenses are translated into US dollars using the average exchange rate during the reporting period. Translation adjustments are recorded in other comprehensive income (loss). |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which amends the accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to a customer. The Company adopted the guidance under the new revenue standards using the modified retrospective method effective February 1, 2018 and determined no cumulative effect adjusted to retained earnings was necessary upon adoption. Topic 606 requires the Company to recognize revenues when control of the promised goods or services and receipt of payment is probable. The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied. Revenue Types The following is a description of the Company's revenue types, which include professional services and sale of consumer products: ● Professional services include the contract of research and development related services with the Company's clients in the life sciences field on an as-needed basis. Deliverables primarily consist of detailed findings and conclusion reports provided to the client for each given research project engaged. ● Sales revenues are derived from the sale of the Company's consumer products. Upon the reception of a purchase order, we have the order filled and shipped. Contracts with Customers A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) we determine that collection of substantially all consideration for services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the Company's different revenue service types, the performance obligation is satisfied at different times. The Company's performance obligations include providing products and professional services in the area of research. The Company recognizes product revenue performance obligations in most cases when the product has shipped to the customer. When we perform professional service work, we recognize revenue when we have the right to invoice the customer for the work completed, which typically occurs on a monthly basis for the work performed during that month. All revenue recognized in the income statement is considered to be revenue from contracts with customers. Disaggregation of Revenues The Company disaggregates its revenue from contracts with customers by service type and by geographical location. See the tables: Years Ended January 31, 2020 2019 Revenue by service type Sale of goods $ 124,958 $ 49,000 Services 245,679 196,285 Total $ 370,637 $ 245,285 Years Ended January 31, 2020 2019 Revenue by geographical location United States $ 245,679 $ 196,285 Non-United States 124,958 49,000 Total $ 370,637 $ 245,285 |
Accounts receivable | Accounts receivable Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company maintains allowances for doubtful accounts for estimated losses from the inability of its customers to make required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-specific accounts. For the years ended January 31, 2020 and 2019, the Company recorded no bad debt expense and no allowance for doubtful accounts related to accounts receivable. |
Inventories | Inventories Inventories are valued at the lower of cost and realizable value determined using the first-in, first-out (FIFO) method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in progress is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity). |
Property, Plant and Equipment | Property, Plant and Equipment Property and equipment represent an important component of the Company's assets. The Company depreciates its plant and equipment on a straight-line basis over the estimated useful life of the assets. Property, plant and equipment is stated at historical cost. Expenditures for minor repairs, maintenance and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. All major additions and improvements are capitalized. Depreciation is computed using the straight-line method. The lives over which the fixed assets are depreciated range from 3 to 5 years as follows: Lab Equipment 5 years Furniture, fixtures and equipment 3 years |
Intangible Assets | Intangible Assets Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, "Intangibles-Goodwill and Other." The Company capitalizes certain costs related to patent technology. A substantial component of the purchase price related to the Company's acquisition has also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years. |
Goodwill | Goodwill Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition. Goodwill is reviewed for impairment annually on January 31, and more frequently as circumstances warrant, and written down only in the period in which the recorded value of such assets exceed their fair value. The Company does not amortize goodwill in accordance with ASC 350. |
Long-lived Assets | Long-lived Assets Management reviews long-lived assets for potential impairment whenever significant events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment exists when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between fair market value of the long-lived asset and the related net book value. |
Stock-Based Compensation | Stock-Based Compensation ASC 718, "Compensation - Stock Compensation," prescribes accounting and reporting standards for all share-based payment transactions in which employee services, and, since February 1, 2019, non-employees, are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees. |
Business Combinations | Business Combinations The Company recognizes the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired entity at the acquisition date, measured at their fair values as of that date, with limited exceptions specified in the accounting literature. In accordance with this guidance, acquisition-related costs, including restructuring costs, must be recognized separately from the acquisition and will generally be expensed as incurred. That replaces the cost-allocation process detailed in previous accounting literature, which required the cost of an acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair value. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), to provide a new comprehensive model for lease accounting under this guidance, lessees and lessors should apply a "right-of-use" model in accounting for all leases (including subleases) and eliminate the concept of operating leases and off-balance-sheet leases. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Similar modifications have been made to lessor accounting in-line with revenue recognition guidance. The Company adopted ASU 2016-02 as amended effective February 1, 2019 using the modified retrospective approach. In connection with the adoption, the Company elected to utilize the Comparative Under 840 Option whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted under the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company completed the necessary changes to its accounting policies, processes, disclosure and internal control over financial reporting. Adoption of the new standard resulted in the recording of right-to-use assets in the amount of $28,827 and lease liabilities related to operating leases in the amount of $28,827 on the Company's consolidated balance sheet as of February 1, 2019. See Note 11, Leases, for Topic 842 disclosures in connection with the adoption of ASU 2016-02. |
Research and Development | Research and Development Research and developments costs are expensed as incurred. |
Income Taxes | Income Taxes Taxes are calculated in accordance with taxation principles currently effective in the United States and Ireland. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent they believe these assets will more-likely-than-not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event the Company was to determine that it would be able to realize its deferred income tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company's cash and cash equivalents are concentrated primarily in banks. At times, such deposits could be in excess of insured limits. Management believes that the financial institutions that hold the Company's financial instruments are financially sound and, accordingly, minimal credit risk is believed to exist with respect to these financial instruments. As of and for the years ended January 31, 2020 and 2019, three customers accounted for 100% of the Company's revenues and two customers accounted for 100% of accounts receivable. |
Earnings Per Share | Earnings Per Share Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. Potential shares of common stock consist of outstanding common stock purchase warrants. For the years ended January 31, 2020 and 2019 there were 83,116 and 182,500 potential shares of common stock that were not included in the calculation of diluted earnings per share as their effect would be anti-dilutive. |
Fair Value Measurements | Fair Value Measurements FASB ASC 820, "Fair Value Measurements and Disclosure" ("ASC 820"), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be to measure fair value. The Company utilizes the accounting guidance for fair value measurements and disclosures for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period. The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability. ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are defined as follows: Level 1 -Observable inputs such as quoted market prices in active markets. Level 2 -Inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 -Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions. The carrying value of the Company's financial instruments including cash and cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair value due to the short maturities of these financial instruments. Derivative liabilities are determined based on "Level 3" inputs, which are significant and unobservable and have the lowest priority. The recorded values of all other financial instruments approximate their current fair value because of their nature and respective short maturity dates or durations. The Company's financial assets and liabilities carried at fair value measured on a recurring basis as of January 31, 2020, consisted of the following: Total fair Quoted Significant Significant value at in active observable unobservable 2020 (Level 1) (Level 2) (Level 3) $ $ $ $ Description: Derivative liability (1) 928,774 - - 928,774 Total 928,774 - - 928,774 (1) The Company has estimated the fair value of this liability using the Monte Carlo Model. |
Derivative Liabilities | Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC Topic 815, "Derivatives and Hedging" and all derivative instruments are reflected as either assets or liabilities at fair value on the balance sheet. The Company uses estimates at fair value to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, when available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The value presented may not represent future fair values and may not be reliable. The Company categorizes its fair value estimates in accordance with ASC 820 based on the hierarchical framework associated with the three levels of price transparency utilized in measuring financial instruments at fair value as discussed above. As of January 31, 2020, the Company had a $928,774 derivative liability. Fair value estimates are made at a specific point in time, based on relevant market information about the financial statement. These estimates are subjective in nature and involve uncertainties and matter of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Recent Accounting Standards | Recent Accounting Standards In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation - Stock Compensation In August 2018, the FASB issued ASU 2018-13, "Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." ASU 2018-13 modifies the fair value measurements disclosures with the primary focus to improve effectiveness of disclosures in the notes to the financial statements that is most important to the users. The new guidance modifies the required disclosures related to the valuation techniques and inputs used, uncertainty in measurement, and changes in measurements applied. ASU 2018-13 will be effective for the Company for its fiscal year beginning after December 15, 2019 and each quarterly period thereafter. Early adoption is permitted. The Company is currently assessing the impact this new guidance may have on the Company's consolidated financial statements and footnote disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently assessing the impact of this standard on our combined financial statements. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which removes Step 2 from the goodwill impairment test and replaces the qualitative assessment. Impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. Under this revised guidance, failing Step 1 will always result in a goodwill impairment. The amendments in this update should be applied prospectively for annual and interim periods in fiscal years beginning after December 15, 2019. The Company early adopted ASU 2018-07 on February 1, 2019. The Company's adoption of ASU 2018-07 has had no impact on its consolidated financial statements or disclosures. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of a business or as acquisitions (or disposals) of assets. ASU No. 2017-01 is effective for annual periods beginning after December 15, 2018, with early adoption permitted under certain circumstances. The amendments of ASU No. 2017-01 were adopted by the Company effective February 1, 2019. The adoption of this standard had no impact on our consolidated financial position or results of operations. The Company has reviewed all other FASB-issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter previous GAAP and does not believe that any new or modified principles will have a material impact on the company's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of disaggregation of revenues | Years Ended January 31, 2020 2019 Revenue by service type Sale of goods $ 124,958 $ 49,000 Services 245,679 196,285 Total $ 370,637 $ 245,285 Years Ended January 31, 2020 2019 Revenue by geographical location United States $ 245,679 $ 196,285 Non-United States 124,958 49,000 Total $ 370,637 $ 245,285 |
Schedule of property plant and equipment | Lab Equipment 5 years Furniture, fixtures and equipment 3 years |
Schedule of assets and liabilities carried at fair value | Total fair Quoted Significant Significant value at in active observable unobservable 2020 (Level 1) (Level 2) (Level 3) $ $ $ $ Description: Derivative liability (1) 928,774 - - 928,774 Total 928,774 - - 928,774 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | January 31, 2020 2019 Lab equipment $ 144,585 $ 144,585 Furniture, fixtures and equipment 19,643 19,643 164,228 164,228 Less: Accumulated depreciation (53,199 ) (18,081 ) Net Property and Equipment $ 111,029 $ 146,147 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of provision for income taxes | Years Ended January 31, 2020 2019 Current Federal $ - $ - Foreign - - Deferred Federal - - Foreign - - $ - $ - |
Schedule of reconciliation of taxes on income computed at the federal statutory rate to amounts | Years Ended January 31, 2020 2019 Book loss from operations $ (571,542 ) $ (699,560 ) Common stock issued for services 52,931 370,430 Impairment expense - - Unused operating losses 518,611 329,130 Income tax expense $ - $ - |
Schedule of deferred tax asset and Liabilities | January 31, 2020 2019 Net operating loss carry forwards (expire through 2037) $ (688,858 ) $ (170,247 ) Stock issued for services (436,904 ) (383,973 ) Intangible impairment expense (525,000 ) (525,000 ) Valuation allowance 1,650,762 1,079,220 Net deferred taxes $ - $ - |
Acquisition of Business (Tables
Acquisition of Business (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of net assets acquired | Fair Value Recognized On Acquisition Equipment $ 160,065 Customer base 136,500 Intellectual Property 191,900 Trademark 42,300 Goodwill 1,719,235 Net assets acquired $ 2,250,000 Satisfied by: Common stock issued (1,850,000 ) Cash outflows on acquisition $ (400,000 ) |
Schedule of unaudited pro forma condensed financial information | 2019 As Reported Pro Forma Net revenue $ 245,285 $ 577,149 Net loss (3,331,240 ) (3,307,614 ) Loss per common share - basic and diluted $ (0.16 ) $ (0.16 ) |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets consisted of intellectual property, customer base and trademarks, net of amortization | January 31, 2020 2019 Customer base $ 136,500 $ 136,500 Intellectual property 234,200 234,200 Goodwill 1,719,235 1,719,235 Total 2,089,935 2,089,935 Less: Accumulated amortization (56,000 ) (18,930 ) Net Intangible Assets $ 2,033,935 $ 2,071,005 |
Schedule of changes in intangible assets | January 31, 2020 2019 Intellectual property $ 234,200 $ 234,200 Accumulated amortization (35,525 ) (12,105 ) Book value $ 198,675 $ 222,095 Customer base $ 136,500 $ 136,500 Accumulated amortization (20,475 ) (6,825 ) Book value $ 116,025 $ 129,675 Total Intangible Assets, Net $ 314,700 $ 351,770 |
Schedule of estimated amortization | Trademarks and Intellectual Property Customer Base Total Year Ended January 31, 2021 $ 23,420 $ 13,650 $ 37,070 2022 $ 23,420 $ 13,650 37,070 2023 $ 23,420 $ 13,650 37,070 2024 $ 23,420 $ 13,650 37,070 2025 $ 23,420 $ 13,650 37,070 Thereafter $ 81,525 $ 47,775 129,350 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule reconciliation of Derivative Liabilities | Original discount limited to proceeds of notes $ 250,000 Fair value of derivative liabilities in excess of notes proceeds received 767,650 Change in value of embedded conversion option (88,876 ) $ 928,774 |
Warrants and Options (Tables)
Warrants and Options (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Schedule of additional warrants outstanding | Range of Exercise Prices Number Remaining Contractual Life(Years) Exercise Price for Shares Outstanding Number Exercise Price for Shares Exercisable $ 20.90 50,000 2.75 $ 20.90 50,000 $ 20.90 $ 14.00 20,000 0.41 $ 14.00 20,000 $ 14.00 |
Stock Options [Member] | |
Schedule of warrants | Exercise Remaining Intrinsic Shares Price Life Value Outstanding, January 31, 2019 - $ - - $ - Granted 25,000 34.20 0.05 years 232,750 Expired (25,000 ) 34.20 - - Exercised - - - - Outstanding-period ending January 31, 2020 - $ - - $ - Exercisable - period ending January 31, 2020 - $ - - $ - |
Warrants [Member] | |
Schedule of warrants | Exercise Remaining Intrinsic Shares Price Life Value Outstanding, January 31, 2018 182,500 $ 6.32 1.35 years Granted 62,500 16.00 - Exercised (31,250 ) 16.00 - - Expired/Cancelled (31,250 ) 16.00 - - Outstanding, January 31, 2019 182,500 $ 6.32 0.35 years $ 4,101,000 Issued 50,000 20.90 3.00 years - Expired/Cancelled (162,500 ) 5.38 - - Exercised - - - - Outstanding-period ending January 31, 2020 70,000 $ 18.93 2.08 years $ - Exercisable - period ending January 31, 2020 70,000 $ 18.93 2.08 years $ - |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Schedule of components of lease expense | Year Ended January 31, Amortization of right-of-use asset $ 19,652 Interest on lease liability 1,863 Operating lease costs - Total Lease Cost $ 21,515 |
Schedule of cash flow information related to leases | Year Ended January 31, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 9,610 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 28,827 |
Schedule of balance sheet information | January 31, Operating Leases: Operating lease right-of -use assets $ 9,610 Operating lease liabilities 10,050 Weighted-Average Remaining Lease Term: Operating leases 0.50 Weighted-Average Discount Rate: Operating leases 4.40 % |
Schedule of maturities of lease liabilities | Year Ending Operating January 31, Leases 2021-remaining 10,320 Total undiscounted cash flows 10,320 Less: imputed interest (270 ) Present value of lease liabilities $ 10,050 |
Schedule of future minimum rental payments due under these leases | Year Ended January 31, 2021 $ 10,320 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Accounting Policies [Abstract] | ||
Sale of goods | $ 124,958 | $ 49,000 |
Services | 245,679 | 196,285 |
Total | $ 370,647 | $ 245,285 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Total | $ 370,647 | $ 245,285 |
UNITED STATES [Member] | ||
Total | 245,679 | 196,285 |
Non-US [Member] | ||
Total | $ 124,958 | $ 49,000 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies (Details 2) | 12 Months Ended |
Jan. 31, 2020 | |
Lab Equipment [Member] | |
Property plant and equipment, Usefull life | 5 years |
Furniture, fixtures and equipment [Member] | |
Property plant and equipment, Usefull life | 3 years |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies (Details 3) | Jan. 31, 2020USD ($) | |
Derivative Liability | $ 928,774 | [1] |
Total | 928,774 | |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative Liability | [1] | |
Total | ||
Fair Value, Inputs, Level 2 [Member] | ||
Derivative Liability | [1] | |
Total | ||
Fair Value, Inputs, Level 3 [Member] | ||
Derivative Liability | 928,774 | [1] |
Total | $ 928,774 | |
[1] | The Company has estimated the fair value of this liability using the Monte Carlo Model. |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies (Details Textual) | 1 Months Ended | 12 Months Ended | |||
Jun. 25, 2019 | Aug. 01, 2018 | Jan. 31, 2020USD ($)Customershares | Jan. 31, 2019USD ($)Customershares | ||
Summary of Significant Accounting Policies (Textual) | |||||
Description of acquired | The Company acquired 4P Therapeutics LLC ("4P Therapeutics") for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty of 6% on all revenue generated by the Company from the abuse deterrent intellectual property that had been developed by 4P Therapeutics payable to the former owner of 4P Therapeutics. The former owner of 4P Therapeutics has been a director of the Company since April 2018, when the Company entered into an agreement to acquire 4P Therapeutics. | ||||
Reverse stock split, description | The Company effected one-for-four reverse split, pursuant to which each share of common stock became and was converted into 0.25 share of common stock. | ||||
Revenue | $ 370,647 | $ 245,285 | |||
Cost of revenues | 549,107 | ||||
Loss from operations | $ (1,969,440) | (3,331,240) | |||
Intangibles assets estimated useful lives | 10 years | ||||
Right of use asset-net | $ 9,610 | ||||
Operating lease liability | $ 10,050 | ||||
Potential shares of common stock | shares | 83,116 | 182,500 | |||
Derivative Liability | [1] | $ 928,774 | |||
Sales Revenue Net [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Concentration risk, percentage | 100.00% | 100.00% | |||
Number of customers | Customer | 3 | 3 | |||
Accounts Receivable [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Concentration risk, percentage | 100.00% | 100.00% | |||
Number of customers | Customer | 2 | 2 | |||
Leases [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Right of use asset-net | $ 28,827 | ||||
Operating lease liability | $ 28,827 | ||||
Maximum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Property plant and equipment | 5 years | ||||
Minimum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Property plant and equipment | 3 years | ||||
[1] | The Company has estimated the fair value of this liability using the Monte Carlo Model. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 164,228 | $ 164,228 |
Less: Accumulated depreciation | (53,199) | (18,081) |
Net Property and Equipment | 111,029 | 146,147 |
Lab equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net Property and Equipment | 144,585 | 144,585 |
Furniture, fixtures and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net Property and Equipment | $ 19,643 | $ 19,643 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Property and Equipment (Textual) | ||
Depreciation expense | $ 35,118 | $ 18,081 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Current | ||
Federal | ||
Foreign | ||
Current Total | ||
Deferred | ||
Federal | ||
Foreign | ||
Deferred Total |
Income taxes (Details 1)
Income taxes (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Book loss from operations | $ (571,542) | $ (699,560) |
Common stock issued for services | 52,931 | 370,430 |
Impairment expense | ||
Unused operating losses | 518,611 | 329,130 |
Income tax expense |
Income taxes (Details 2)
Income taxes (Details 2) - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards (expire through 2037) | $ (688,858) | $ (170,247) |
Stock issued for services | (436,904) | (383,973) |
Intangible impairment expense | (525,000) | (525,000) |
Valuation allowance | 1,650,762 | 1,079,220 |
Net deferred taxes |
Income taxes (Details Textual)
Income taxes (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended |
Dec. 22, 2017 | Jan. 31, 2020 | |
Income taxe (Textual) | ||
Valuation allowance | $ 581,000 | |
Description on net operating loss expires | The Company's NOL expires in 2037. | |
Net operating loss carryforward | $ 4,340,328 | |
Corporate rate | The Tax Cuts and Jobs Act (the "Tax Act") significantly revised U.S. corporate income tax law by, among other things, reducing the corporate rate from 34% to 21%. |
Notes Payable_Convertible Debt
Notes Payable/Convertible Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Mar. 20, 2020 | Oct. 30, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Apr. 30, 2018 | Sep. 12, 2017 | |
Notes Payable Convertible Debt (Textual) | ||||||
Balance due | $ 215,000 | $ 40,000 | ||||
Repaid amount | 29,730 | |||||
Debt discount | $ 270,000 | 67,500 | ||||
Discount remaining amount | $ 202,500 | |||||
Notes payable convertible debt description | The Company entered into a securities purchase agreement with two investors pursuant to which the Company issued to the investors (i) 6% one-year convertible promissory notes in the principal amount of $270,000 and (ii) three-year warrant to purchase 50,000 shares of common stock at an exercise price equal to the lesser of (i) $20.90 or (ii) if the Company completes a public offering, 110% of the initial public offering price of the common stock in the public offering. The loans contained an original issue discount of $20,000 resulting in gross cash proceeds from this financing were of $250,000. | |||||
Description of convertible notes | The lesser of (i) the per share price of common stock offered in a public offering or (ii) the variable conversion price, which is defined as 70% of the lowest trading price of the common stock during the 20 trading days preceding the date of conversion. The conversion price and the percentage of the trading price is subject to downward adjustment in the event the Company fails to comply with the obligations under the notes. The Company has the right to prepay the notes during the 180 days following the issuance of the notes at a premium of 115% of the outstanding principal and interest during the 60 days following the date of issuance of the note, which percentage increases to 125% during the remainder of the 180 day period. The Company is required to pay the notes one business day after the closing of the first to occur of (a) the next public offering of the Company's securities or (b) the next private placement of the Company's equity or debt securities in which the Borrower received net proceeds of at least $1.0 million, (c) issuance of securities pursuant to an equity line of credit or (d) a financing with a bank or other institutional lender. | |||||
Common stock shares authorized | 250,000,000 | 25,000,000 | ||||
Securities purchase agreement | Jan. 28, 2020 | |||||
Fair value of conversion price | $ 128,870 | |||||
Fair value of the warrants | 888,780 | |||||
Initial derivative expense | $ 767,650 | |||||
Interest expenses including debt discount amount | $ 71,550 | |||||
Subsequent Event [Member] | ||||||
Notes Payable Convertible Debt (Textual) | ||||||
Loss on the extinguishment of debt | $ 69,132 | |||||
Notes Payable Convertible Debt [Member] | ||||||
Notes Payable Convertible Debt (Textual) | ||||||
Common stock shares authorized | 250,000,000 | |||||
Minority Stockholder [Member] | ||||||
Notes Payable Convertible Debt (Textual) | ||||||
Borrowed amount | $ 175,000 | $ 25,000 | $ 15,000 | |||
Officers [Member] | ||||||
Notes Payable Convertible Debt (Textual) | ||||||
Balance due | 29,067 | |||||
Advanced amount | 34,980 | |||||
Expenses amount | $ 23,817 |
Acquisition of Business (Detail
Acquisition of Business (Details) - USD ($) | Aug. 01, 2018 | Jan. 31, 2020 | Jan. 31, 2019 |
Fair Value Recognized On Acquisition | |||
Equipment | $ 160,065 | ||
Customer base | 136,500 | ||
Intellectual property | 191,900 | ||
Trademark | 42,300 | ||
Goodwill | 1,719,235 | $ 1,719,235 | $ 1,719,235 |
Net assets acquired | 2,250,000 | ||
Satisfied by: | |||
Common stock issued | (1,850,000) | $ (1,850,000) | |
Cash outflows on acquisition | $ (400,000) |
Acquisition of Business (Deta_2
Acquisition of Business (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Business Combinations [Abstract] | ||
Net Revenue | $ 370,647 | $ 245,285 |
Net loss | $ (2,721,627) | $ (3,331,240) |
Loss per share of common stock (basic and diluted) | $ (0.50) | $ (0.62) |
Net Revenue, Pro Forma | $ 577,149 | |
Net loss, Pro Forma | $ (3,307,614) | |
Loss per share of common stock (basic and diluted), Pro Forma | $ (0.16) |
Acquisition of Business (Deta_3
Acquisition of Business (Details Textual) - 4P Therapeutics LLC [Member] - USD ($) | Apr. 05, 2018 | Aug. 01, 2018 |
Acquisition of Business (Textual) | ||
Acquired common stock, shares | 250,000 | |
Acquired common stock value | $ 1,850,000 | |
Acquired consisting | 2,250,000 | |
Acquired consisting gross payment | $ 400,000 | |
Payment of royalty percentage | 6.00% | |
Acquired of membership interests | 100.00% |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - Intangible Assets [Member] - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Total | $ 2,089,935 | $ 2,089,935 |
Less: Accumulated amortization | (56,000) | (18,930) |
Net Intangible Assets | 2,033,935 | 2,071,005 |
Customer base [Member] | ||
Total | 136,500 | 136,500 |
Intellectual property [Member] | ||
Total | 234,200 | 234,200 |
Goodwill [Member] | ||
Total | $ 1,719,235 | $ 1,719,235 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Total Intangible Assets, Net | $ 314,700 | $ 351,770 |
Intangible Assets [Member] | ||
Intellectual property | 234,200 | 234,200 |
Accumulated amortization | (35,525) | (12,105) |
Book value | 198,675 | 222,095 |
Customer base | 136,500 | 136,500 |
Accumulated amortization | (20,475) | (6,825) |
Book value | 116,025 | 129,675 |
Total Intangible Assets, Net | $ 314,700 | $ 351,770 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details 2) - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Year Ended January 31, | ||
2020 | $ 37,070 | |
2021 | 37,070 | |
2022 | 37,070 | |
2023 | 37,070 | |
2024 and thereafter | 37,070 | |
Total amortization | 314,700 | $ 351,770 |
Trademark and Intellectual Property [Member] | ||
Year Ended January 31, | ||
2020 | 23,420 | |
2021 | 23,420 | |
2022 | 23,420 | |
2023 | 23,420 | |
2024 and thereafter | 23,420 | |
Total amortization | 81,525 | |
Customer Base [Member] | ||
Year Ended January 31, | ||
2020 | 13,650 | |
2021 | 13,650 | |
2022 | 13,650 | |
2023 | 13,650 | |
2024 and thereafter | 13,650 | |
Total amortization | $ 47,775 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details Textual) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Intangible Assets and Goodwill (Textual) | ||
Amortization expense of intangible assets | $ 37,070 | $ 18,930 |
Derivative Liabilities (Details
Derivative Liabilities (Details) - Level 3 [Member] | 12 Months Ended |
Jan. 31, 2020USD ($) | |
Original discount limited to proceeds of notes | $ 250,000 |
Fair value of derivative liabilities in excess of notes proceeds received | 776,000 |
Change in value of embedded conversion option | (88,876) |
Fair value of derivative liabilities total | $ 928,774 |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details Textual) | 12 Months Ended |
Jan. 31, 2020 | |
Derivative Liability (Textual) | |
Expected volatility | 158.30% |
Risk-free interest rate | 1.58% |
Re-Valuation [Member] | |
Derivative Liability (Textual) | |
Expected volatility | 184.40% |
Risk-free interest rate | 1.43% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 19, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2018 | |
Related Party Transactions (Textual) | ||||
Advance repaid | $ 29,730 | $ 41,030 | ||
Advance from related party | 34,980 | |||
Related party payments | 29,067 | |||
Related party expenses | 23,817 | |||
Shares of common stock, value | $ 1,500,000 | |||
Accured salaries | 120,000 | |||
Executive Officers [Member] | ||||
Related Party Transactions (Textual) | ||||
Shares of common stock, issued | 68,000 | |||
Shares of common stock, value | $ 1,419,300 | |||
Independent Directors [Member] | ||||
Related Party Transactions (Textual) | ||||
Shares of common stock, issued | 7,500 | |||
Shares of common stock, value | $ 222,000 | |||
Stock, description | The year ended January 31, 2019, the Company issued 210,000 shares of common stock, valued at $967,500, to executives of the Company based on the market price of the common stock on the date of issuance and (ii) 5,000 shares of common stock to each of the Company’s six independent directors for a total of 30,000 shares valued at $222,000, based on the market price on the date of issuance. | |||
Chief Executive Officer [Member] | ||||
Related Party Transactions (Textual) | ||||
Advance from related party | $ 10,230 | |||
Related party payments | $ 34,800 | |||
Stock, description | The Company granted an executive officer an option to purchased 25,000 shares of the Company's common stock at an exercise price equal to 75% of the market price on the date the Company receives notice of exercise. The fair value of the warrant on the date of grant using the Black Scholes model was $252,700 and was expensed during the year ended January 31, 2020. The warrant expired unexercised on May 19, 2019. | |||
Chief Scientific Officer [Member] | ||||
Related Party Transactions (Textual) | ||||
Related party payments | $ 60,000 | |||
President [Member] | ||||
Related Party Transactions (Textual) | ||||
Shares of common stock, issued | 8,572 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | May 24, 2019 | May 27, 2018 | May 02, 2018 | Nov. 30, 2018 | Nov. 23, 2018 | Jul. 31, 2018 | Jun. 02, 2018 | Jan. 31, 2020 | Jan. 31, 2019 | Jan. 27, 2020 | Jun. 25, 2019 | Jan. 15, 2016 |
Common Stock (Textual) | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||||||
Shares issued for services, value | $ 1,763,950 | |||||||||||
Common stock, value | $ 1,500,000 | |||||||||||
Common stock issued | 5,441,100 | 5,423,956 | ||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Preferred stock, shares designated | 2,500,000 | |||||||||||
Preferred stock, unissued shares | 2,500,000 | |||||||||||
Executive Officers [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Issuance shares of common stock, shares | 68,000 | |||||||||||
Common stock, value | $ 1,419,300 | |||||||||||
Independent Directors [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Issuance shares of common stock, shares | 7,500 | |||||||||||
Common stock, value | $ 222,000 | |||||||||||
Advisory Board [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Issuance shares of common stock, shares | 2,500 | |||||||||||
Common stock, value | $ 74,000 | |||||||||||
Non-affiliated [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Issuance shares of common stock, shares | 2,500 | |||||||||||
Common stock, value | $ 48,600 | |||||||||||
President [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Shares issued for services, value | $ 120,000 | |||||||||||
Issuance shares of common stock, shares | 8,572 | |||||||||||
Common stock issued | 8,572 | |||||||||||
Board of directors [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Preferred stock, par value | $ 0.001 | |||||||||||
Preferred stock, shares authorized | 10,000,000 | |||||||||||
Common Stock [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Shares issued for services | 80,500 | |||||||||||
Shares issued for services, value | $ 81 | |||||||||||
Issuance shares of common stock, shares | 62,500 | 62,500 | 80,431 | |||||||||
Common stock, value | $ 1,850,000 | $ 80 | ||||||||||
Proceeds from common stock received | $ 1,000,000 | |||||||||||
Warrant to purchase of common stock | 62,500 | |||||||||||
Warrant maturity date | 30 days | |||||||||||
Exercise price of warrants | $ 16 | |||||||||||
Common stock warrants exercised | $ 500,000 | |||||||||||
Common stock warrants exercised, shares | 31,250 | 31,250 | ||||||||||
Converted price of common stock | $ 0.25 | |||||||||||
Sale of common stock | 17,931 | |||||||||||
Common stock to a minority stockholder | $ 500,000 | |||||||||||
Common Stock [Member] | Minimum [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Increase decreased in authorized common stock | 25,000,000 | 100,000,000 | ||||||||||
Common Stock [Member] | Maximum [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Increase decreased in authorized common stock | 250,000,000 | 25,000,000 | ||||||||||
Common Stock [Member] | Advanced Health Brands [Member] | ||||||||||||
Common Stock (Textual) | ||||||||||||
Common stock issued | 50,000 | |||||||||||
Shares cancelled date | Jan. 31, 2019 |
Warrants and Options (Details)
Warrants and Options (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Shares | ||
Outstanding, Beginning Balance | 182,500 | |
Outstanding, Ending Balance | 83,116 | 182,500 |
Weighted Average/Exercise Price | ||
Granted | $ 20.90 | |
Options [Member] | ||
Shares | ||
Outstanding, Beginning Balance | ||
Granted | 25,000 | |
Exercised | ||
Expired/Cancelled | (25,000) | |
Outstanding, Ending Balance | ||
Exercisable | ||
Weighted Average/Exercise Price | ||
Outstanding, Beginning Balance | ||
Granted | 34.20 | |
Expired/Cancelled | 34.20 | |
Exercised | ||
Outstanding, Ending Balance | ||
Exercisable | ||
Remaining Life | ||
Outstanding, Beginning period | ||
Granted | 18 days | |
Expired/Cancelled | ||
Exercised | ||
Intrinsic Value | ||
Outstanding, Beginning Balance | ||
Granted | 232,750 | |
Expired/Cancelled | ||
Exercised | ||
Outstanding, Ending Balance | ||
Exercisable, Ending Balance | ||
Warrant [Member] | ||
Shares | ||
Outstanding, Beginning Balance | 182,500 | 182,500 |
Issued | 50,000 | |
Granted | 62,500 | |
Exercised | (31,250) | |
Expired/Cancelled | (162,500) | (31,250) |
Outstanding, Ending Balance | 70,000 | 182,500 |
Exercisable | 70,000 | |
Weighted Average/Exercise Price | ||
Outstanding, Beginning Balance | $ 6.32 | $ 6.32 |
Granted | 16 | |
Issued | 20.90 | |
Expired/Cancelled | 5.38 | 16 |
Exercised | 16 | |
Outstanding, Ending Balance | 18.93 | $ 6.32 |
Exercisable | $ 18.93 | |
Remaining Life | ||
Outstanding, Beginning period | 3 years | 1 year 4 months 6 days |
Expired/Cancelled | ||
Exercised | ||
Outstanding, Ending period | 2 years 29 days | 4 months 6 days |
Exercisable | 2 years 29 days | |
Intrinsic Value | ||
Outstanding, Beginning Balance | $ 4,101,000 | |
Granted | ||
Expired/Cancelled | ||
Exercised | ||
Outstanding, Ending Balance | $ 4,101,000 | |
Exercisable, Ending Balance |
Warrants and Options (Details 1
Warrants and Options (Details 1) | 12 Months Ended |
Jan. 31, 2020$ / sharesshares | |
Range of Exercise Prices | 20.90 |
Number Outstanding | 50,000 |
Remaining Contractual Life (Years) | 2 years 9 months |
Exercise Price for Shares Outstanding | $ / shares | $ 20.90 |
Number Exercisable | 50,000 |
Exercise Price for Shares Exercisable | $ / shares | $ 20.90 |
Warrants [Member] | |
Range of Exercise Prices | 14 |
Number Outstanding | 20,000 |
Remaining Contractual Life (Years) | 4 months 28 days |
Exercise Price for Shares Outstanding | $ / shares | $ 14 |
Number Exercisable | 20,000 |
Exercise Price for Shares Exercisable | $ / shares | $ 14 |
Warrants and Options (Details T
Warrants and Options (Details Textual) - $ / shares | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Exercise price | $ 20.90 | |
Initial public offering price percentage | 110.00% | |
Warrants [Member] | ||
Exercise price | $ 16 | |
Purchase of warrants shares | 50,000 |
Leases (Details)
Leases (Details) | 12 Months Ended |
Jan. 31, 2020USD ($) | |
Leases [Abstract] | |
Amortization of right-of-use asset | $ 19,652 |
Interest on lease liability | 1,863 |
Operating lease costs | |
Total Lease Cost | $ 21,515 |
Leases (Details 1)
Leases (Details 1) | 12 Months Ended |
Jan. 31, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 9,610 |
Operating leases | $ 28,827 |
Leases (Details 2)
Leases (Details 2) - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Operating Leases: | ||
Operating lease right-of -use assets | $ 9,610 | |
Operating lease liabilities | $ 10,050 | |
Weighted-Average Remaining Lease Term: | ||
Operating leases | 6 months | |
Weighted-Average Discount Rate: | ||
Operating leases | 4.40% |
Leases (Details 3)
Leases (Details 3) | Jan. 31, 2020USD ($) |
Leases [Abstract] | |
2021-remaining | $ 10,320 |
Total undiscounted cash flows | 10,320 |
Less: imputed interest | (270) |
Present value of lease liabilities | $ 10,050 |
Leases (Details 4)
Leases (Details 4) | Jan. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 10,320 |
Leases (Details Textual)
Leases (Details Textual) | 12 Months Ended | |
Jan. 31, 2020USD ($)ft² | Jan. 31, 2019USD ($) | |
Leases (Textual) | ||
Monthly rental | $ 1,720 | |
Lease commitments | $ 10,320 | |
Lease expiration date | Jul. 31, 2019 | |
Operating Leases [Member] | ||
Leases (Textual) | ||
Monthly rental | $ 13,637 | |
Lease square feet | ft² | 7,201 |
Commitments and Contigencies (D
Commitments and Contigencies (Details) - USD ($) | Apr. 29, 2019 | Jan. 31, 2019 | May 16, 2018 | Jul. 27, 2018 | Jan. 31, 2020 | Jan. 31, 2019 | Feb. 19, 2019 |
Contingencies (Textual) | |||||||
Acquired advanced shares of common stock value | $ 2,500,000 | $ 1,850,000 | |||||
Acquired advanced shares of common stock | 1,250,000 | ||||||
Compensation annual rate | $ 170,000 | ||||||
Public or private financing | 2,500,000 | ||||||
Health Brans, Inc. [Member] | |||||||
Contingencies (Textual) | |||||||
Acquired advanced shares of common stock | 1,250,000 | ||||||
Returned, shares | 1,200,000 | ||||||
Defendants [Member] | |||||||
Contingencies (Textual) | |||||||
Shares cancelled | 50,000 | ||||||
Chief Executive Officer [Member] | |||||||
Contingencies (Textual) | |||||||
Compensation annual rate | $ 42,000 | ||||||
President [Member] | |||||||
Contingencies (Textual) | |||||||
Annual salary | $ 60,000 | ||||||
Chief Scientific Officer [Member] | |||||||
Contingencies (Textual) | |||||||
Compensation annual rate | $ 60,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 27, 2020 | Mar. 21, 2020 | Mar. 31, 2020 | Mar. 22, 2020 | Jan. 31, 2020 | |
Subsequent Events (Detail Textual) | ||||||
Derivative Liability | [1] | $ 928,774 | ||||
Subsequent Event [Member] | ||||||
Subsequent Events (Detail Textual) | ||||||
Issue of common stock | 25,000 | |||||
Additional loan, description | A minority stockholder who had previously made loans of $215,000, made an additional loan to the Company in the amount of $60,000, increasing the total loans from the stockholder to $275,000. | |||||
Principal amount | $ 275,000 | |||||
Subsequent Event [Member] | Common Stock [Member] | ||||||
Subsequent Events (Detail Textual) | ||||||
Issue of common stock | 46,828 | |||||
Subsequent Event [Member] | Warrant [Member] | ||||||
Subsequent Events (Detail Textual) | ||||||
Issue of common stock | 46,828 | |||||
Subsequent Event [Member] | Private Placement [Member] | ||||||
Subsequent Events (Detail Textual) | ||||||
Issued of units | $ 46,828 | |||||
Price per unit | $ 11 | |||||
Exercise price | $ 14 | |||||
Received amount value | $ 515,113 | |||||
Convertible debt principal amount | $ 270,000 | |||||
Total payments | $ 345,565 | |||||
Subsequent Event [Member] | Private Placement [Member] | Warrant [Member] | ||||||
Subsequent Events (Detail Textual) | ||||||
Private placements and Warrants, description | The private placement, the warrants to purchase 50,000 shares at lesser of (a) $20.90 or (b) if the Company completes a private offering, 110% of the initial offering price of the common stock in the public offering, became a warrant to purchase 95,000 shares at $11 per share, subject to adjustment pursuant to the antidilution provisions of the warrant. See Notes 4 and 10. | |||||
[1] | The Company has estimated the fair value of this liability using the Monte Carlo Model. |