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What changed in NutriBand Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NutriBand Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+179 added−193 removedSource: 10-K (2025-04-28) vs 10-K (2024-05-01)

Top changes in NutriBand Inc.'s 2025 10-K

179 paragraphs added · 193 removed · 134 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

35 edited+4 added−8 removed122 unchanged
Biggest changeThe prioritization of our portfolio product candidates will be reviewed on an ongoing basis and will take into account technical progress, market potential and R&D funding available. We cannot assure you that we will be able to develop and obtain FDA approval for any of these potential products or that we can be successful in marketing any such products.
Biggest changeHowever, we cannot assure you that the FDA will concur with our approach or that we will be able to receive FDA approval to market any of products that we develop. The prioritization of our portfolio of product candidates will be reviewed on an ongoing basis and will take into account technical progress, market potential, available funding and commercial interest.
We cannot assure you that we will obtain FDA marketing approval for any of our products. 2 In addition to performing research and development for its own products, 4P Therapeutics performs contract research and development services for a small number of clients in the life sciences field to help support its ongoing operations.
We cannot assure you that we will obtain FDA marketing approval for any of our products. In addition to performing research and development for its own products, 4P Therapeutics performs contract research and development services for a small number of clients in the life sciences field to help support its ongoing operations.
Our development pipeline consists of transdermal products that are based on our proprietary AVERSA ™ abuse deterrent transdermal technology that we believe can be incorporated into existing transdermal patches that contain drugs that are susceptible to abuse and misuse such as opioid and stimulant drugs.
Our development pipeline primarily consists of transdermal products that are based on our proprietary AVERSA ™ abuse deterrent transdermal technology that we believe can be incorporated into existing transdermal patches that contain drugs that are susceptible to abuse and misuse such as opioid and stimulant drugs.
In the case of drug delivery products that utilize an approved drug, Phase 3 trials will typically include a comparison to the already approved reference product. For example, a transdermal patch may be compared to an injection. ● New drug application (NDA) .
In the case of drug delivery products that utilize an approved drug, Phase 3 trials will typically include a comparison to the already approved reference product. For example, a transdermal patch may be compared to an injection. 5 ● New drug application (NDA) .
Recent Development On April 19, 2024, the Company completed an $8,400,000 equity financing with European investors (the “Offering”) of 2,100,000 units (“Units”), at a price of $4.00 per Unit, each Unit consisting of one share of common stock (“Shares”) and a Warrant to purchase two Shares of common stock, the Warrants having an initial exercise price of $6.43, are exercisable by payment of the exercise price in cash only and expire April 19, 2029, five years from the date of issuance (“Warrants”).
On April 19, 2024, the Company completed an $8,400,000 equity financing with European investors (the “Offering”) of 2,100,000 units (“Units”), at a price of $4.00 per Unit, each Unit consisting of one share of common stock (“Shares”) and a Warrant to purchase two Shares of common stock, the Warrants having an initial exercise price of $6.43, are exercisable by payment of the exercise price in cash only and expire April 19, 2029, five years from the date of issuance (“Warrants”).
However, a Phase 2 may be conducted to inform the design of the Phase 3 clinical trial in regards to the safety and efficacy of the product when used by patients. 5 ● Phase three clinical trial .
However, a Phase 2 may be conducted to inform the design of the Phase 3 clinical trial in regards to the safety and efficacy of the product when used by patients. ● Phase three clinical trial .
This is the pathway taken for generic drugs. 6 Nutriband plans to utilize the 505(b)(2) New Drug Application (NDA) regulatory pathway which limits the development required for products that contain drugs that have already been approved, and allows applicants to reference data already on file at the FDA.
This is the pathway taken for generic drugs. 6 Nutriband plans to utilize the 505(b)(2) New Drug Application (NDA) regulatory pathway for Aversa Fentanyl which limits the development required for products that contain drugs that have already been approved, and allows applicants to reference data already on file at the FDA.
Market Assessment The company engaged leading healthcare consulting company Health Advances to assess the market opportunity and commercial strategy for AVERSA Fentanyl and AVERSA Buprenorphine. AVERSA Fentanyl is the lead AVERSA product under development and has the potential to be the world’s first fentanyl transdermal systems with abuse deterrent properties.
Market Assessment The company engaged leading healthcare consulting company Health Advances to assess the market opportunity and commercial strategy for AVERSA™ Fentanyl and AVERSA™ Buprenorphine. AVERSA Fentanyl is the lead AVERSA product under development and has the potential to be the world’s first fentanyl transdermal system with abuse deterrent properties.
If approved, our AVERSA pipeline products will compete with the currently marketed products that do not contain abuse deterrent features as well as other products that may employ different abuse deterrent technology. We may also have to compete with products that do not contain opioids or other drugs that are susceptible to abuse.
If approved, our AVERSA pipeline products will compete with the currently marketed products that do not contain abuse deterrent features as well as other products that may employ different abuse deterrent technology. We may also have to compete with products being developed that do not contain opioids or drugs that are susceptible to abuse.
We are not aware of any abuse deterrent transdermal products that are in development or being marketed at this time. If we obtain regulatory approval to market our products, we cannot assure you that we will be successful in the marketplace. 11
We are not aware of any abuse deterrent transdermal products that are in development or being marketed at this time. If we obtain regulatory approval to market our products, we cannot assure you that we will be successful in the marketplace. 10
Preclinical studies to be performed consist of laboratory-based in vitro manipulation and chemical extraction studies per FDA guidance. Clinical evaluation consists of a Phase 1 human abuse potential study to demonstrate the abuse potential of the product per FDA guidance.
Laboratory studies to be performed consist of in vitro manipulation and chemical extraction studies per FDA guidance. Clinical evaluation consists of a Phase 1 human abuse potential study to demonstrate the abuse potential of the product per FDA guidance.
There are currently several generic fentanyl patches on the market but none of them have abuse deterrent properties. We believe that AVERSA Fentanyl, once approved by the US FDA will significantly deter the abuse and accidental misuse of fentanyl transdermal patches.
There are currently several generic fentanyl patches on the market but none of them have abuse deterrent properties. We believe that AVERSA Fentanyl, once approved by the U.S. FDA will significantly deter the abuse and accidental misuse of fentanyl transdermal patches.
Once approved by the United States FDA, Aversa Fentanyl will be priced competitively with the non-abuse deterrent patch and has the potential to reach peak annual US sales of $80-200 million according to the assessment performed by Health Advances in January 2022.
Once approved by the United States FDA, Aversa Fentanyl will be priced competitively with the non-abuse deterrent patches currently on the market and has the potential to reach peak annual US sales of $80-200 million according to the assessment performed by Health Advances in January 2022.
Each country may require that additional clinical and nonclinical studies be conducted prior to approval. The process required by the FDA to receive approval prior to marketing and distributing a drug in the United States generally involves a preclinical phase followed by three phases of clinical trials.
Each country may require that additional clinical and nonclinical studies be conducted prior to approval. The process required by the FDA to receive approval prior to marketing and distributing a drug in the United States generally involves a preclinical phase followed by three phases of clinical trials which culminates in a New Drug Application (NDA) to the FDA for approval.
As our development pipeline includes products that contain opioids (AVERSA Fentanyl and AVERSA Buprenorphine), we continually monitor the market for opioid products, particularly in the United States. Pharmaceutical companies engaged in the distribution and sale of opioids, in particular for the treatment of chronic pain, are promoting responsible opioid use.
As our development pipeline includes products that contain opioids (AVERSA Fentanyl and AVERSA Buprenorphine), we continually monitor the market for opioid products, particularly in the United States. It is important that pharmaceutical companies engaged in the distribution and sale of opioids, in particular for the treatment of chronic pain, promote responsible opioid use.
As a result of the acquisition, the focus of our business changed from the development and marketing outside of the U.S. of consumer transdermal products to the development of 4P Therapeutics’ portfolio of pharmaceutical transdermal products.
Damon resigned as a director in January 2022. As a result of the acquisition, the focus of our business changed from the development and marketing outside of the U.S. of consumer transdermal products to the development of 4P Therapeutics’ portfolio of pharmaceutical transdermal products.
Intellectual Property The AVERSA abuse deterrent technology utilized in our AVERSA product pipeline is covered by an international intellectual property portfolio with patents issued in 45 countries including the United States, Europe, Japan, Korea, Russia, Mexico, Canada, and Australia and pending in China and Hong Kong. These patents provide patent coverage to 2035.
Intellectual Property The AVERSA abuse deterrent technology utilized in our AVERSA products is covered by an international intellectual property portfolio with patents issued in 46 countries including the United States, Europe, Japan, Korea, Russia, Mexico, Canada, Australia, and China including the special administrative regions Hong Kong and Macao. These patents provide patent coverage to 2035.
This agreement replaced the previous feasibility agreement between the two companies which was focused on establishing the feasibility of incorporating our AVERSA abuse deterrent transdermal technology into Kindeva’s commercial transdermal manufacturing process.
This agreement replaced the previous feasibility agreement between the two companies which was focused on establishing the feasibility of incorporating our AVERSA abuse deterrent transdermal technology into Kindeva’s commercial transdermal manufacturing process. The commercial development and clinical supply agreement is focused on developing the commercial manufacturing process for AVERSA Fentanyl.
Damon a 6% royalty on any revenue we receive or derive from our utilization or sale of the abuse deterrent intellectual property that we acquired as a part of the assets 4P Therapeutics, including partner license milestones and development payments.
The acquisition agreement requires that we pay Mr. Damon a 6% royalty on any revenue we receive or derive from our utilization or sale of the abuse deterrent intellectual property that we acquired as a part of the assets 4P Therapeutics, including partner license milestones and development payments. The 62,500 shares were issued to Mr.
We also may rely on trade secrets to protect our commercial products and product candidates. Our commercial success also depends in part on our non-infringement of the patents or proprietary rights of third parties.
We also may rely on trade secrets to protect our commercial products and product candidates. Our commercial success also depends in part on our non-infringement of the patents or proprietary rights of third parties. Further, we plan to seek trademark protection in the United States and internationally where available and when appropriate.
In connection with the acquisition, Mr. Damon retained any cash and accounts receivable and assumed any liabilities other than those relating to the ongoing business. Pursuant to the acquisition agreement, we appointed Mr. Damon to our board of directors in April 2018, when we signed the acquisition agreement. Mr. Damon resigned as a director in January 2022.
Damon (41,750 shares pre-split) and Dr. Alan Smith (20,750 shares pre-split). In connection with the acquisition, Mr. Damon retained any cash and accounts receivable and assumed any liabilities other than those relating to the ongoing business. Pursuant to the acquisition agreement, we appointed Mr. Damon to our board of directors in April 2018, when we signed the acquisition agreement. Mr.
We plan to develop transdermal delivery systems for buprenorphine and methylphenidate after we make significant progress on our abuse deterrent fentanyl transdermal system. Our research pipeline consists primarily of drug compounds which have been previously approved by the FDA and are now off-patent.
We plan to develop transdermal delivery systems for buprenorphine and methylphenidate as research and development funding becomes available. Our research pipeline consists primarily of drug compounds which have been previously approved by the FDA and are now off-patent.
The commercial development and clinical supply agreement is focused on developing the commercial manufacturing process for AVERSA Fentanyl. 1 The product development program for AVERSA Fentanyl includes performing preclinical and clinical studies to demonstrate the abuse deterrent properties of the product.
The product development program for AVERSA Fentanyl includes performing preclinical and clinical studies to demonstrate the abuse deterrent properties of the product.
Health Advances was able to confirm the significant unmet patient need for AVERSA Fentanyl based on rigorous primary and secondary market research accompanied with deep experience in the abuse deterrence pain space.
Health Advances was able to confirm the significant unmet patient need for AVERSA Fentanyl based on rigorous primary and secondary market research accompanied with deep experience in the abuse deterrence pain space. Nutriband is also considering developing the product for strategic international markets as protected by its global abuse deterrent patent portfolio.
Acquisition of 4P Therapeutics Pursuant to an acquisition agreement dated April 5, 2018 between us and 4P Therapeutics, on August 1, 2018, we acquired all of the equity interest in 4P Therapeutics from Steven Damon, the owner of 4P Therapeutics.
Acquisition of 4P Therapeutics Pursuant to an acquisition agreement dated April 5, 2018 between us and 4P Therapeutics, on August 1, 2018, we acquired all of the equity interest in 4P Therapeutics from Steven Damon, the owner of 4P Therapeutics. The purchase price of $2,250,000 consisted of 62,500 shares of common stock, valued at $1,850,000, and cash of $400,000.
The data indicate that transdermal patch abuse and accidental pediatric exposures to patches continues to be a serious problem resulting in major medical outcomes and death, suggesting an unmet need for safer abuse-deterrent versions of transdermal patches containing drugs with a risk of abuse, misuse or accidental exposure.
Poster presented at the 40th Annual Meeting of the American Academy of Pain Medicine; 2024 Mar 7-10; Scottsdale, Arizona. https://www.radars.org/system/publications/39.%20Olsen.pdf 9 The data indicate that transdermal patch abuse and accidental pediatric exposures to patches continues to be a serious problem resulting in major medical outcomes and death, suggesting an unmet need for safer abuse-deterrent versions of transdermal patches containing drugs with a risk of abuse, misuse or accidental exposure.
The USPTO will require us to show the mark used in commerce prior to fully registering the trademark. 9 Publications On March 8, 2024, Nutriband presented data on the incidence of transdermal patch abuse and accidental pediatric exposure as a scientific poster at the 2024 American Academy of Pain Medicine (AAPM) Annual Meeting 2 .
Scientific Publications On March 8, 2024, Nutriband presented data on the incidence of transdermal patch abuse and accidental pediatric exposure as a scientific poster at the 2024 American Academy of Pain Medicine (AAPM) Annual Meeting 2 . The American Academy of Pain Medicine (AAPM) is dedicated to advancing multidisciplinary pain care, education, advocacy, and research.
The FDA approval process can take many years to complete successfully, and we will require substantial funding for each product that goes through the process.
We cannot assure you that we will be able to develop and obtain FDA approval for any of these potential products or that we can be successful in marketing any such products. The FDA approval process can take many years to complete successfully, and we will require substantial funding for each product that goes through the process.
Specifically, we have expanded our development pipeline to include AVERSA Buprenorphine and AVERSA Methylphenidate. In addition, we are developing a portfolio of transdermal pharmaceutical products to deliver already approved drugs or biologics that are typically delivered by injection but with the potential to improve compliance and therapeutic outcomes through transdermal delivery.
In addition, we are developing a portfolio of transdermal pharmaceutical products to deliver already approved drugs or biologics that are typically delivered by injection but with the potential to improve compliance and therapeutic outcomes through transdermal delivery. 1 In January 2024, we signed a commercial development and clinical supply agreement with Kindeva Drug Delivery, formerly 3M Drug Delivery (“Kindeva”), for the development of AVERSA Fentanyl using Kindeva’s FDA-approved fentanyl patch.
In addition, we may develop certain generic passive transdermal products where we think we can make an improvement to existing patches and where we believe we can take significant market share with good profit margins.
In addition, we may develop certain generic passive transdermal products where we think we can make an improvement to existing patches and where we believe we can take significant market share with good profit margins. 2 The prioritization of our portfolio product candidates will be reviewed on an ongoing basis and will take into account technical progress, market potential and R&D funding availability.
RMPDS utilized the Researched Abuse, Diversion and Addiction-Related Surveillance (RADARS®) System, a surveillance system that collects real-world safety and effectiveness data about prescription drugs (https://www.radars.org/).
RMPDS utilized the Researched Abuse, Diversion and Addiction-Related Surveillance (RADARS®) System, a surveillance system that collects real-world safety and effectiveness data about prescription drugs (https://www.radars.org/). 2 Olsen, H, Mogusu, E, Black, JC, Sumbundu, K, Dart, RC. Poison center exposure calls involving fentanyl, buprenorphine, and methylphenidate transdermal patches in the United States.
Pharmaceutical Manufacturing and Supply Manufacturing of our pharmaceutical transdermal products in development will be performed in compliance with FDA current Good Manufacturing Practices (cGMP) and all applicable local regulations by contract manufacturers. All manufacturing processes and facilities will be subject to review by the FDA during development, prior to approval and during subsequent routine FDA inspections.
All manufacturing processes and facilities will be subject to review by the FDA during development, prior to approval and during subsequent routine FDA inspections.
Poster presented at the 40th Annual Meeting of the American Academy of Pain Medicine; 2024 Mar 7-10; Scottsdale, Arizona. https://www.radars.org/system/publications/39.%20Olsen.pdf 10 AVERSA Buprenorphine is the second AVERSA product under development and has the potential to be the world’s first buprenorphine transdermal systems with abuse deterrent properties.
AVERSA Buprenorphine is the second AVERSA product under development and has the potential to be the world’s first buprenorphine transdermal system with abuse deterrent properties.
The prioritization of our portfolio of product candidates will be reviewed on an ongoing basis and will take into account technical progress, market potential, available funding and commercial interest. Our ability to take any meaningful steps to the development of any of these products is determined by our ability to provide sufficient funding for such activities.
Our ability to take any meaningful steps to the development of any of these products is determined by our ability to provide sufficient funding for such activities. Pharmaceutical Manufacturing and Supply Manufacturing of our pharmaceutical transdermal products will be performed in compliance with FDA current Good Manufacturing Practices (cGMP) and all applicable local regulations.
We have filed an intent to use Trademark application for AVERSA.
We have registered the name Nutriband in the United States. We have filed an intent to use Trademark application for AVERSA. The USPTO will require us to show the mark used in commerce prior to fully registering the trademark.
Removed
In January 2024, we signed a commercial development and clinical supply agreement with Kindeva Drug Delivery, formerly 3M Drug Delivery (“Kindeva”), for the development of AVERSA Fentanyl using Kindeva’s FDA-approved fentanyl patch.
Added
Recent Developments On February 13, 2025, we signed an addendum to the Commercial Development and Clinical Supply Agreement for our lead product, Aversa™ Fentanyl, being developed with our partner, Kindeva Drug Delivery, a leading global contract development and manufacturing organization (CDMO) focused on drug-device combination products.
Removed
The purchase price of $2,250,000, consisting of 62,500 shares of common stock, valued at $1,850,000, and cash of $400,000, and are to pay Mr.
Added
Nutriband and Kindeva have revised their agreement to formalize their exclusive product development partnership and long-term commitment based on shared development costs in exchange for milestone payments.
Removed
The royalty is payable pursuant to the acquisition agreement and continues as long as we generate revenue from our utilization or sale of the abuse deterrent intellectual property we acquired as part of the acquisition of 4P Therapeutics. The 62,500 shares were issued to Mr. Damon (41,750 shares pre-split) and Dr. Alan Smith (20,750 shares pre-split).
Added
The development work being conducted under this agreement supports the development of Nutriband’s AVERSA™ abuse-deterrent technology in general, which can be utilized to incorporate aversive agents into transdermal patches to prevent the abuse, diversion, misuse, and accidental exposure of drugs with abuse potential including opioids and stimulants.
Removed
However, we cannot assure you that the FDA will concur with our approach or that we will be able to receive FDA approval to market any of products that we develop.
Added
Specifically, we have expanded our development pipeline to include AVERSA Buprenorphine and AVERSA Methylphenidate.
Removed
On September 19, 2023, the United States Patent and Trademark Office (USPTO) granted US Patent No. 11,759,431 for Nutriband’s proprietary AVERSA abuse deterrent technology utilizing taste aversion to address the primary routes of abuse of opioid based transdermal patches.
Removed
The issuance of this patent, entitled, “Abuse and Misuse Deterrent Transdermal Systems,” further expands Nutriband’s intellectual property protection in the United States for its portfolio of AVERSA abuse deterrent transdermal products. Further, we plan to seek trademark protection in the United States and internationally where available and when appropriate. We have registered the name Nutriband in the United States.
Removed
The American Academy of Pain Medicine (AAPM) is dedicated to advancing multidisciplinary pain care, education, advocacy, and research.
Removed
Nutriband is also considering developing the product for strategic international markets as protected by its global abuse deterrent patent portfolio. 2 Olsen, H, Mogusu, E, Black, JC, Sumbundu, K, Dart, RC. Poison center exposure calls involving fentanyl, buprenorphine, and methylphenidate transdermal patches in the United States.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+21 added−21 removed103 unchanged
Biggest changeThe clinical and commercial success of our product candidates depends on a number of factors, many of which are beyond our control, including: ● the FDA’s acceptance of our parameters for regulatory approval relating to our product candidates, including our proposed indications, primary endpoint assessments, primary endpoint measurements and regulatory pathways; ● the FDA’s acceptance of the number, design, size, conduct and implementation of our clinical trials, our trial protocols and the interpretation of data from preclinical studies or clinical trials; ● the FDA’s acceptance of the sufficiency of the data we collect from our preclinical studies and pivotal clinical trials to support the submission of a New Drug Application, known as an NDA, without requiring additional preclinical or clinical trials; ● the FDA’s acceptance of our abuse deterrent labelling relating to our products, including our abuse deterrent fentanyl transdermal system; ● when we submit our NDA upon completion of our clinical trials, the FDA’s willingness to schedule an advisory committee meeting, if applicable, in a timely manner to evaluate and decide on the approval of our NDA; ● the recommendation of the FDA’s advisory committee, if applicable, to approve our application without limiting the approved labelling, specifications, distribution, or use of the products, or imposing other restrictions; ● our ability to satisfy any issued raised by the FDA in response to our test data; ● the FDA’s satisfaction with the safety and efficacy of our product candidates; ● the prevalence and severity of adverse events associated with our product candidates; ● the timely and satisfactory performance by third party contractors of their obligations in relation to our clinical trials; ● if we receive FDA approval, our success in educating physicians and patients about the benefits, administration and use our product candidates; ● our ability to raise additional capital on acceptable terms in order to achieve conduct the necessary clinical trials; ● the availability, perceived advantages and relative cost of alternative and competing treatments; ● the effectiveness of our marketing, sales and distribution strategy and operations; ● our ability to develop, validate and maintain a commercially viable manufacturing process that is compliant with current good manufacturing practices; ● our ability to obtain, protect and enforce our intellectual property rights; ● our ability to bring an action timely for patent infringement arising out of the filing of ANDAs by generic companies seeking approval to market generic versions of our products, if applicable, before the expiry of our patents; and ● our ability to avoid third party claims of patent infringement or intellectual property violations. 14 If we fail to achieve these objectives or to overcome the challenges presented above, many of which are beyond our control, in a timely manner, we could experience significant delays or an inability to successfully commercialize our product candidates.
Biggest changeThe clinical and commercial success of our product candidates depends on a number of factors, many of which are beyond our control, including: ● the FDA’s acceptance of our parameters for regulatory approval relating to our product candidates, including our proposed indications, primary endpoint assessments, primary endpoint measurements and regulatory pathways; ● the FDA’s acceptance of the number, design, size, conduct and implementation of our clinical trials, our trial protocols and the interpretation of data from preclinical studies or clinical trials; ● the FDA’s acceptance of the sufficiency of the data we collect from our preclinical studies and pivotal clinical trials to support the submission of a New Drug Application, known as an NDA, without requiring additional preclinical or clinical trials; ● the FDA’s acceptance of our abuse deterrent labelling relating to our products, including our abuse deterrent fentanyl transdermal system; 14 ● when we submit our NDA upon completion of our clinical trials, the FDA’s willingness to schedule an advisory committee meeting, if applicable, in a timely manner to evaluate and decide on the approval of our NDA; ● the recommendation of the FDA’s advisory committee, if applicable, to approve our application without limiting the approved labelling, specifications, distribution, or use of the products, or imposing other restrictions; ● our ability to satisfy any issued raised by the FDA in response to our test data; ● the FDA’s satisfaction with the safety and efficacy of our product candidates; ● the prevalence and severity of adverse events associated with our product candidates; ● the timely and satisfactory performance by third party contractors of their obligations in relation to our clinical trials; ● if we receive FDA approval, our success in educating physicians and patients about the benefits, administration and use our product candidates; ● our ability to raise additional capital on acceptable terms in order to achieve conduct the necessary clinical trials; ● the availability, perceived advantages and relative cost of alternative and competing treatments; ● the effectiveness of our marketing, sales and distribution strategy and operations; ● our ability to develop, validate and maintain a commercially viable manufacturing process that is compliant with current good manufacturing practices; ● our ability to obtain, protect and enforce our intellectual property rights; and ● our ability to avoid third party claims of patent infringement or intellectual property violations.
As a result, any reported prices may not reflect the price at which you would be able to sell shares of common stock if you want to sell any shares you own or buy if you wish to buy shares.
As a result, any reported prices may not reflect the price at which you would be able to sell shares of common stock if you want to sell any shares you own or buy if you wish to buy shares.
Further, stocks with a low trading volume may be more subject to manipulation than a stock that has a significant public float and is actively traded. The price of our stock may fluctuate significantly in response to a number of factors, many of which are beyond our control.
Further, stocks with a low trading volume may be more subject to manipulation than a stock that has a significant public float and is actively traded. The price of our stock may fluctuate significantly in response to a number of factors, many of which are beyond our control.
If the additional equity securities were issued at a per share price less than the market price, which is customary in the private placement of equity securities, the holders of the outstanding shares would suffer dilution, which could be significant.
If the additional equity securities were issued at a per share price less than the market price, which is customary in the private placement of equity securities, the holders of the outstanding shares would suffer dilution, which could be significant.
Our failure to obtain funds on reasonable terms may impair the value of the acquisition. ● The acquired company may not operate at the revenue level or with the gross margin shown in the financial statements or projections. ● Patents may not be granted for patent applications which the acquired company filed or patents may be successfully challenged. ● There may be conflicts in management styles that prevent us from integrating the acquired company with us. ● The business of the acquired company may have problems of which management was unaware and which do not become evident until after the acquisition and we may require significant funding to remedy the problem. ● The indemnification obligations of the seller under the purchase agreement, if any, may be inadequate to compensate us for any loss, damage or expense which we may sustain, including undisclosed claims or liabilities. ● To the extent that the acquired company is dependent upon its management to maintain relationships with existing customers, we may have difficulty in retaining the business of these customers if there is a change in management. ● Government agencies may seek damages after we make the acquisition for conduct which occurred prior to the acquisition and we may not have adequate recourse against the seller.
Our failure to obtain funds on reasonable terms may impair the value of the acquisition. ● The acquired company may not operate at the revenue level or with the gross margin shown in the financial statements or projections. ● Patents may not be granted for patent applications which the acquired company filed or patents may be successfully challenged. ● There may be conflicts in management styles that prevent us from integrating the acquired company with us. 22 ● The business of the acquired company may have problems of which management was unaware and which do not become evident until after the acquisition and we may require significant funding to remedy the problem. ● The indemnification obligations of the seller under the purchase agreement, if any, may be inadequate to compensate us for any loss, damage or expense which we may sustain, including undisclosed claims or liabilities. ● To the extent that the acquired company is dependent upon its management to maintain relationships with existing customers, we may have difficulty in retaining the business of these customers if there is a change in management. ● Government agencies may seek damages after we make the acquisition for conduct which occurred prior to the acquisition and we may not have adequate recourse against the seller.
These factors include, but are not limited to, the following, in addition to the risks described above and general market and economic conditions: ● the market’s perception as to our ability to generate positive cash flow or earnings; ● changes in our or any securities analysts’ estimate of our financial performance; 23 ● the perception of our ability to raise the necessary financing to complete the product development activities including preclinical and clinical testing required for FDA approval and our ability to generate revenue and cash flow from our products; ● the anticipated or actual results of our operations; ● changes in market valuations of other companies in our industry; ● litigation or changes in regulations and insurance company reimbursement policies affecting prescription drugs; ● concern that our internal controls are ineffective; ● any discrepancy between anticipated or projected results and actual results of our operations; ● actions by third parties to either sell or purchase stock in quantities which would have a significant effect on our stock price; and ● other factors not within our control.
These factors include, but are not limited to, the following, in addition to the risks described above and general market and economic conditions: ● the market’s perception as to our ability to generate positive cash flow or earnings; ● changes in our or any securities analysts’ estimate of our financial performance; ● the perception of our ability to raise the necessary financing to complete the product development activities including preclinical and clinical testing required for FDA approval and our ability to generate revenue and cash flow from our products; ● the anticipated or actual results of our operations; ● changes in market valuations of other companies in our industry; ● litigation or changes in regulations and insurance company reimbursement policies affecting prescription drugs; ● concern that our internal controls are ineffective; ● any discrepancy between anticipated or projected results and actual results of our operations; ● actions by third parties to either sell or purchase stock in quantities which would have a significant effect on our stock price; and ● other factors not within our control.
Clinical trials can be delayed or terminated for a number of reasons, including delay or failure to: ● obtain necessary financing; ● obtain regulatory approval to commence a trial; ● reach agreement on acceptable terms with prospective contract research organizations, investigators and clinical trial sites, the terms of which may be subject to extensive negotiation and vary significantly among different research organizations and trial sites; ● obtain institutional review board approval at each site; ● enlist suitable patients to participate in a trial; ● have patients complete a trial or return for post-treatment follow-up; ● ensure clinical sites observe trial protocol or continue to participate in a trial; ● address any patient safety concerns that arise during the course of a trial; ● address any conflicts with new or existing laws or regulations; ● add a sufficient number of clinical trial sites; or ● manufacture sufficient quantities of the product candidate for use in clinical trials.
Clinical trials can be delayed or terminated for a number of reasons, including delay or failure to: ● obtain necessary financing; ● obtain regulatory approval to commence a trial; ● reach agreement on acceptable terms with prospective contract research organizations, investigators and clinical trial sites, the terms of which may be subject to extensive negotiation and vary significantly among different research organizations and trial sites; ● obtain institutional review board approval at each site; ● enlist suitable patients to participate in a trial; ● have patients complete a trial or return for post-treatment follow-up; ● ensure clinical sites observe trial protocol or continue to participate in a trial; ● address any patient safety concerns that arise during the course of a trial; 13 ● address any conflicts with new or existing laws or regulations; ● add a sufficient number of clinical trial sites; or ● manufacture sufficient quantities of the product candidate for use in clinical trials.
Applicable federal and state health care laws and regulations are expected to include, but not be limited to, the following: ● The federal anti-kickback statute is a criminal statute that makes it a felony for individuals or entities knowingly and willfully to offer or pay, or to solicit or receive, direct or indirect remuneration, in order to induce the purchase, order, lease, or recommending of items or services, or the referral of patients for services, that are reimbursed under a federal health care program, including Medicare and Medicaid; 16 ● The federal False Claims Act imposes liability on any person who knowingly submits, or causes another person or entity to submit, a false claim for payment of government funds.
Applicable federal and state health care laws and regulations are expected to include, but not be limited to, the following: ● The federal anti-kickback statute is a criminal statute that makes it a felony for individuals or entities knowingly and willfully to offer or pay, or to solicit or receive, direct or indirect remuneration, in order to induce the purchase, order, lease, or recommending of items or services, or the referral of patients for services, that are reimbursed under a federal health care program, including Medicare and Medicaid; ● The federal False Claims Act imposes liability on any person who knowingly submits, or causes another person or entity to submit, a false claim for payment of government funds.
If we discontinue a program in which we have invested significant resources, we will not receive any return on our investment. 18 If any of our potential products are approved for marketing but fail to achieve the broad degree of physician or market acceptance necessary for commercial success, our operating results and financial condition will be adversely affected.
If we discontinue a program in which we have invested significant resources, we will not receive any return on our investment. If any of our potential products are approved for marketing but fail to achieve the broad degree of physician or market acceptance necessary for commercial success, our operating results and financial condition will be adversely affected.
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. 17 If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.
Because we are an early-stage company, our reputation, and our ability to market products, could be affected more severely than a major pharmaceutical company. In addition, the use of our products could be associated with serious and unexpected adverse events, or with less serious reactions at a greater than expected frequency.
Because we are an early-stage company, our reputation, and our ability to market products, could be affected more severely than a major pharmaceutical company. 16 In addition, the use of our products could be associated with serious and unexpected adverse events, or with less serious reactions at a greater than expected frequency.
Furthermore, we may not be able to assure ourselves that we will get favorable pricing. If we or any third-party manufacturer fails to comply with FDA current good manufacturing practices, we may not be able to sell our products until and unless the manufacturer becomes compliant.
Furthermore, we may not be able to assure ourselves that we will get favorable pricing. 15 If we or any third-party manufacturer fails to comply with FDA current good manufacturing practices, we may not be able to sell our products until and unless the manufacturer becomes compliant.
Before we can market our products outside of the United States, we will need to obtain regulatory approval in each country in which we propose to sell our products. In order to market and sell our products in jurisdictions other than the United States, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.
Before we can market our products outside of the United States, we will need to obtain regulatory approval in each country in which we propose to sell our products. To market and sell our products in jurisdictions other than the United States, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.
We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares of common stock for sale will have on the market price of our common stock. Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock.
We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares of common stock for sale will have on the market price of our common stock. 24 Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock.
In 2017, we issued 1,458,333 shares of common stock, valued at $2,500,000, in connection with our proposed acquisition of Advanced Health Brands, Inc., but the stock of Advanced Health Brands was never transferred to us and the value of the intellectual property we were to have acquired did not have the value we anticipated, with the result that we incurred a $2,500,000 impairment loss in the year ended January 31, 2018.
For example, in 2017, we issued 1,458,333 shares of common stock, valued at $2,500,000, in connection with our proposed acquisition of Advanced Health Brands, Inc., but the stock of Advanced Health Brands was never transferred to us and the value of the intellectual property we were to have acquired did not have the value we anticipated, with the result that we incurred a $2,500,000 impairment loss in the year ended January 31, 2018.
We have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. ITEM 1B. UNRESOLVED STAFF COMMENTS. Not Applicable.
We have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. 26 ITEM 1B. UNRESOLVED STAFF COMMENTS. Not Applicable.
We may also encounter delays if a clinical trial is suspended or terminated by us, by the independent review boards of the institutions in which such trials are being conducted, by the trial’s data safety monitoring board, or by the FDA.
We may also encounter delays if a clinical trial is suspended or terminated by us or our CDMO, by the independent review boards of the institutions in which such trials are being conducted, by the trial’s data safety monitoring board, or by the FDA.
An acquisition can be unsuccessful for a number of reasons, including the following: ● We may incur significant expenses and devote significant management time to the acquisition and we may be unable to consummate the acquisition on acceptable terms. ● The integration of any acquisition with our existing business may be difficult and, if we are not able to integrate the business successfully, we may not only be unable to operate the business profitably, but management may be unable to devote the necessary time to the development of our existing business; ● The key employees who operated the acquired business successfully prior to the acquisition may not be happy working for us and may resign, thus leaving the business without the necessary continuity of management. 21 ● Even if the business is successful, our senior executive officers may need to devote significant time to the acquired business, which may distract them from their other management activities. ● If the business does not operate as we expect, we may incur an impairment charge based on the value of the assets acquired. ● The products or proposed products of the acquired company may have regulatory problems with the FDA or any other regulatory agency, including the need for additional and unanticipated testing or the need for a recall or a change in labeling. ● We may have difficulty maintaining the necessary quality control over the acquired business and its products and services. ● To the extent that an acquired company operates at a loss prior to our acquisition, we may not be able to develop profitable operations following the acquisition. ● The acquired company may have liabilities or obligations which were not disclosed to us, or the acquired assets, including any intellectual property, may not have the value we anticipated. ● The assets, including intellectual property, of the acquired company may not have the value that we anticipated. ● We may require significant capital both to acquire and to operate the business, and the capital requirements of the business may be greater than we anticipated.
An acquisition can be unsuccessful for a number of reasons, including the following: ● We may incur significant expenses and devote significant management time to the acquisition and we may be unable to consummate the acquisition on acceptable terms. ● The integration of any acquisition with our existing business may be difficult and, if we are not able to integrate the business successfully, we may not only be unable to operate the business profitably, but management may be unable to devote the necessary time to the development of our existing business; ● The key employees who operated the acquired business successfully prior to the acquisition may not be happy working for us and may resign, thus leaving the business without the necessary continuity of management. ● If the business does not operate as we expect, we may incur an impairment charge based on the value of the assets acquired. ● The products or proposed products of the acquired company may have regulatory problems with the FDA or any other regulatory agency, including the need for additional and unanticipated testing or the need for a recall or a change in labeling. ● We may have difficulty maintaining the necessary quality control over the acquired business and its products and services. ● To the extent that an acquired company operates at a loss prior to our acquisition, we may not be able to develop profitable operations following the acquisition. ● The acquired company may have liabilities or obligations which were not disclosed to us, or the acquired assets, including any intellectual property, may not have the value we anticipated. ● The assets, including intellectual property, of the acquired company may not have the value that we anticipated. ● We may require significant capital both to acquire and to operate the business, and the capital requirements of the business may be greater than we anticipated.
At any point, the FDA could ask us to perform additional tests or to refine and redo a test that we had previously completed. The process of obtaining FDA approval could take many years, with no assurance that the FDA will approve the product. The FDA also will need to approve the manufacturing process and the manufacturing facility.
At any point, the FDA could ask us to perform additional tests or to refine and redo a test that we had previously completed. The process of obtaining FDA approval could take many years, with no assurance that the FDA will approve the product.
Our failure to develop our abuse deterrent fentanyl transdermal system will impair our ability to continue in business. Our lead product is our abuse deterrent fentanyl transdermal system, and we are devoting our resources primarily to developing this product to enable us to obtain FDA approval and to market the product.
Our failure to develop our abuse deterrent fentanyl transdermal system will impair our ability to continue in business. Our lead product is our abuse deterrent fentanyl transdermal system, and we are devoting our resources primarily to developing this product to enable us to obtain FDA approval so as to be able to market the product.
A number of factors, including, but not limited to the following, may affect our ability to develop our business and operate profitably: ● our ability to obtain necessary funding to develop our proposed products; ● the success of clinical trials for our products; ● our ability to obtain FDA approval for us to market any proposed product in our pipeline in the United States; ● any delays in regulatory review and approval of product in development; ● if we obtain FDA approval to market our product, our ability to establish manufacturing and distribution operations or entering into manufacturing and distribution agreements with qualified third parties; ● market acceptance of our products; ● our ability to establish an effective sales and marketing infrastructure; ● our ability to protect our intellectual property; ● competition from existing products or new products that may emerge; ● the ability to commercialize our products; ● potential product liability claims and adverse events; ● our ability to adequately support future growth; and ● our ability to attract and retain key personnel to manage our business effectively.
If we cannot achieve profitability, we may be forced to cease operations and you may suffer a total loss of your investment. 11 A number of factors, including, but not limited to the following, may affect our ability to develop our business and operate profitably: ● our ability to obtain necessary funding to develop our proposed products; ● the success of clinical trials for our products; ● our ability to obtain FDA approval for us to market any proposed product in our pipeline in the United States; ● any delays in regulatory review and approval of product in development; ● if we obtain FDA approval to market our product, our ability to establish manufacturing and distribution operations or entering into manufacturing and distribution agreements with qualified third parties; ● market acceptance of our products; ● our ability to establish an effective sales and marketing infrastructure; ● our ability to protect our intellectual property; ● competition from existing products or new products that may emerge; ● the ability to commercialize our products; ● potential product liability claims and adverse events; ● our ability to adequately support future growth; and ● our ability to attract and retain key personnel to manage our business effectively.
For example: ● others may be able to make compositions or formulations that are similar to our product s but that are not covered by the claims of our patents; ● other persons may have filed patents covering inventions, technology or processes that we use, with the result that we may infringe upon the prior patents; ● others may independently develop similar or alternative technologies or duplicate any of our technologies; ● our pending patent applications may not result in the grant of patents; ● any patents which may be issued may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties; ● our inability to fund any litigation to defend our proprietary rights, either in defense of an action against us or a plaintiff to seek to prevent infringement. ● our failure to develop additional proprietary technologies that are patentable.
For example: ● others may be able to make compositions or formulations that are similar to our product s but that are not covered by the claims of our patents; ● other persons may have filed patents covering inventions, technology or processes that we use, with the result that we may infringe upon the prior patents; ● others may independently develop similar or alternative technologies or duplicate any of our technologies; ● our pending patent applications may not result in the grant of patents; ● any patents which may be issued may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties; ● our inability to fund any litigation to defend our proprietary rights, either in defense of an action against us or a plaintiff to seek to prevent infringement. ● our failure to develop additional proprietary technologies that are patentable. 21 If we seek to expand our business through acquisition, we may not be successful in identifying acquisition targets or integrating their businesses with our existing business.
These factors include, but are not limited to, the following, in addition to the risks described above and general market and economic conditions: ● concern about the effects of our settlement with the SEC; ● the market’s reaction to our financial condition and its perception of our ability to raise necessary funding or enter into a joint venture, as well as its perception of the possible terms of any financing or joint venture; ● the market’s perception as to our ability to generate positive cash flow or earnings; ● changes in our or any securities analysts’ estimate of our financial performance; ● the perception of our ability to raise the necessary financing to complete the product development activities including preclinical and clinical testing required for FDA approval and our ability to generate revenue and cash flow from our products; ● the anticipated or actual results of our operations; ● changes in market valuations of other companies in our industry; ● litigation or changes in regulations and insurance company reimbursement policies affecting prescription drugs; ● concern that our internal controls are ineffective; ● any discrepancy between anticipated or projected results and actual results of our operations; ● actions by third parties to either sell or purchase stock in quantities which would have a significant effect on our stock price; and ● other factors not within our control. 25 Because of our executive officers’ stock ownership and stock ownership of certain other stockholders that have invested in the company, these stockholders have the power to elect all directors and to approve any action requiring stockholder approval.
These factors include, but are not limited to, the following, in addition to the risks described above and general market and economic conditions: ● the market’s reaction to our financial condition and its perception of our ability to raise necessary funding or enter into a joint venture, as well as its perception of the possible terms of any financing or joint venture; ● the market’s perception as to our ability to generate positive cash flow or earnings; ● changes in our or any securities analysts’ estimate of our financial performance; 25 ● the perception of our ability to raise the necessary financing to complete the product development activities including preclinical and clinical testing required for FDA approval and our ability to generate revenue and cash flow from our products; ● the anticipated or actual results of our operations; ● changes in market valuations of other companies in our industry; ● litigation or changes in regulations and insurance company reimbursement policies affecting prescription drugs; ● concern that our internal controls are ineffective; ● any discrepancy between anticipated or projected results and actual results of our operations; ● actions by third parties to either sell or purchase stock in quantities which would have a significant effect on our stock price; and ● other factors not within our control.
In addition, even if we are able to commercialize our product candidates, we may not be able to price them competitively with current standard of care products or their price may drop considerably due to factors outside our control.
We cannot assure you that we will be able to compete successfully. In addition, even if we are able to commercialize our product candidates, we may not be able to price them competitively with current standard of care products or their price may drop considerably due to factors outside our control.
Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns. These changes may not, however, be effective in developing or maintaining internal control.
Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns.
If we were to raise capital by issuing equity securities, either alone or in connection with a non-equity financing, the net tangible book value of the then outstanding common stock could decline.
We anticipate that we will require funds for our business. If we were to raise capital by issuing equity securities, either alone or in connection with a non-equity financing, the net tangible book value of the then outstanding common stock could decline.
Our commercial success also depends in part on our non-infringement of the patents or proprietary rights of third parties. 20 Our ability to stop third parties from making, using, selling, offering to sell or importing products utilizing our proprietary or patented technology is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.
Our ability to stop third parties from making, using, selling, offering to sell or importing products utilizing our proprietary or patented technology is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.
If any of the foregoing or any other events which we do not contemplate happen, we may incur significant expenses, which we may not be able to cover, and the development of our business can be impaired.
If any of the foregoing or any other events which we do not contemplate happen, we may incur significant expenses, which we may not be able to cover, and the development of our business can be impaired. We cannot assure you that any acquisition we will make will be successful.
In the event of a de-listing, we would take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. 24 We and our senior executive officers settled an SEC investigation, which may affect the market for and the market price of our common stock and our ability to list on a stock exchange.
In the event of a de-listing, we would take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.
Our failure to comply with any of these federal and state health care laws and regulations, or health care laws in foreign jurisdictions, could have a material adverse effect on our business, financial condition, result of operations and cash flows.
Some state laws also require pharmaceutical companies to comply with certain price reporting and other compliance requirements. 17 Our failure to comply with any of these federal and state health care laws and regulations, or health care laws in foreign jurisdictions, could have a material adverse effect on our business, financial condition, result of operations and cash flows.
If we obtain FDA approval, we will face significant competition from better known and better capitalized companies. If we obtain FDA approval for any of our products, we expect to face significant competition from existing companies, which are better known and already have developed relationships with physicians within the healthcare system.
If we obtain FDA approval for any of our products, we expect to face significant competition from existing companies, which are better known and already have developed relationships with physicians within the healthcare system. Any product we may develop will compete with existing medications performing the same medicinal functions, which may include transdermal patches.
The market price for our common stock may be volatile and your investment in our common stock could suffer a decline in value. The trading volume in our stock is low, which may result in volatility in our stock price.
These changes may not, however, be effective in developing or maintaining internal control. 23 The market price for our common stock may be volatile and your investment in our common stock could suffer a decline in value. The trading volume in our stock is low, which may result in volatility in our stock price.
Regulatory changes which have the effect of decreasing the use of opioids has resulted in a decrease in the size of the market for opioid products, including fentanyl, could impact the market for our abuse deterrent fentanyl transdermal system or any other opioid-based transdermal product we may develop.
Regulatory changes which have the effect of decreasing the use of opioids has resulted in a decrease in the size of the market for opioid products, including fentanyl, could impact the market for our abuse deterrent fentanyl transdermal system or any other opioid-based transdermal product we may develop. 20 It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.
In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not which is less than the market price and which may be based on a discount from market at the time of issuance.
We will need to raise substantial funds in order to develop our products. In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that maybe based on a discount from market at the time of issuance.
If we are unable to attract, train and retain technical and financial personnel, our business may be materially and adversely affected. Our future success depends, to a significant extent, on our ability to attract, train and retain key management, technical, regulatory and financial personnel. Recruiting and retaining capable personnel with experience in pharmaceutical product development is vital to our success.
Smith would materially impair our ability to conduct our business. If we are unable to attract, train and retain technical and financial personnel, our business may be materially and adversely affected. Our future success depends, to a significant extent, on our ability to attract, train and retain key management, technical, regulatory and financial personnel.
If we are not able to obtain necessary financing to develop, obtain FDA marketing approval and market this product successfully, we may not have the resources to develop additional products, and we may not be able to continue in business. 12 Before we can market in the United States any product which is classified by the FDA as a drug, we must obtain FDA marketing approval.
If we are not able to obtain necessary financing to develop our product, obtain FDA marketing approval and market this product successfully, we may not have the resources to develop additional products, and we may not be able to continue in business.
Risks Concerning our Securities Our lack of internal controls over financial reporting may affect the market for and price of our common stock. Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to file a report by our management on our internal control over financial reporting.
Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to file a report by our management on our internal control over financial reporting. Our disclosure controls and our internal controls over financial reporting are not effective.
We do not plan to seek FDA approval or market these products in the United States at this time. We plan to sell our transdermal consumer products to distributors in those countries in which the products can be sold in compliance with all applicable regulations without our spending significant monies for preclinical and clinical studies to obtain regulatory approval.
We plan to sell our transdermal consumer products to distributors in those countries in which the products can be sold in compliance with all applicable regulations without our spending significant monies for preclinical and clinical studies to obtain regulatory approval. We are dependent upon our chief executive officer, our president and our chief operating officer.
These potential competitors may include large and experienced companies that enjoy significant competitive advantages over us, such as greater financial, research and development, manufacturing, personnel and marketing resources, greater brand recognition and more experience and expertise in obtaining marketing approvals from the FDA and foreign regulatory authorities. 19 Healthcare reforms by governmental authorities, court decisions affecting health care policies and related reductions in pharmaceutical pricing, reimbursement and coverage by third-party payors may adversely affect our business.
These potential competitors may include large and experienced companies that enjoy significant competitive advantages over us, such as greater financial, research and development, manufacturing, personnel and marketing resources, greater brand recognition and more experience and expertise in obtaining marketing approvals from the FDA and foreign regulatory authorities.
Our proposed transdermal products are drug-device combinations that are considered by the FDA to be drugs, which require approval by the FDA. In order to obtain FDA approval, it is necessary to conduct a series of preclinical and clinical tests to confirm that the product is safe and effective.
In order to obtain FDA approval, it is necessary to conduct a series of preclinical and clinical tests to confirm that the product is safe and effective.
We are dependent upon our chief executive officer, our president and our chief operating officer. We are dependent upon Gareth Sheridan, our chief executive officer, Serguei Melnik, our president and Dr. Alan Smith, our chief operating officer who is president of 4P Therapeutics. Although Mr. Sheridan and Mr.
We are dependent upon Gareth Sheridan, our chief executive officer, Serguei Melnik, our president and Dr. Alan Smith, our chief operating officer who is president of 4P Therapeutics. Although these officers have employment agreements with us, the employment agreements do not guarantee that the officer will continue with us. The loss of Mr. Sheridan, Mr. Melnik or Dr.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. 13 Our ability to finance our operations and generate revenues depends on the clinical and commercial success of our abuse deterrent fentanyl transdermal system and our other related product candidates and failure to achieve such success will negatively impact our business.
Our ability to finance our operations and generate revenues depends on the clinical and commercial success of our abuse deterrent fentanyl transdermal system and our other related product candidates, and failure to achieve such success will negatively impact our business.
There is substantial competition for qualified personnel, and competition is likely to increase. We cannot assure you we will be able to attract or retain the personnel we require. Our financial condition is likely to impair our ability to attract qualified candidates. If we are unable to attract and retain qualified employees, our business may be materially and adversely affected.
Recruiting and retaining capable personnel with experience in pharmaceutical product development is vital to our success. There is substantial competition for qualified personnel, and competition is likely to increase. We cannot assure you we will be able to attract or retain the personnel we require. Our financial condition is likely to impair our ability to attract qualified candidates.
Depending on the extent of the REMS requirements, any U.S. launch may be delayed, the costs to commercialize may increase substantially and the potential commercial market could be restricted.
Depending on the extent of the REMS requirements, any U.S. launch may be delayed, the costs to commercialize may increase substantially and the potential commercial market could be restricted. Furthermore, risks that are not adequately addressed through the proposed REMS program may also prevent or delay its approval for commercialization.
Our future success will depend upon our ability to keep abreast of the latest developments in the industry and to keep pace with advances in technology and changing customer requirements. If we cannot keep pace with such changes and advances, our proposed products could be rendered obsolete, which would result in our having to cease its operations.
Our future success will depend upon our ability to keep abreast of the latest developments in the industry and to keep pace with advances in technology and changing customer requirements.
We do not have the financial resources or personnel to develop or implement systems that would provide us with the necessary information on a timely basis so as to be able to implement financial controls The absence of internal controls over financial reporting may inhibit investors from purchasing our stock and may make it more difficult for us to raise capital or borrow money.
We do not have the financial resources or personnel to develop or implement systems that would provide us with the necessary information on a timely basis so as to be able to implement financial controls.
We do not currently sell or market our consumer transdermal products domestically, or for our international sales, directly to international consumers, and we rely on distributors to sell and market these products. We cannot market our consumer transdermal patch products in the United States without first obtaining FDA approval.
We cannot market our consumer transdermal patch products in the United States without first obtaining FDA approval. We do not plan to seek FDA approval or market these products in the United States at this time.
We cannot assure you that we will not face significant liability as a result of such side effects and we may not have sufficient product liability insurance to cover any damages that may be assessed against us.
We cannot assure you that we will not face significant liability as a result of such side effects and we may not have sufficient product liability insurance to cover any damages that may be assessed against us. 18 We may decide not to continue developing or commercializing any products at any time during development or after approval, which would reduce or eliminate our potential return on investment for those product candidates.
Our officers and directors as a group beneficially own approximately 32% of our common stock as of April 29, 2024. As a result, they have the effective power using their contacts with a limited number of other shareholders to elect all of our directors and to approve any action requiring stockholder approval.
As a result, they have the effective power using their contacts with a limited number of other shareholders to elect all of our directors and to approve any action requiring stockholder approval. Raising funds by issuing equity or convertible debt securities could dilute the net tangible book value of the common stock and impose restrictions on our working capital.
In some cases, these state laws impose more strict requirements than the federal laws. Some state laws also require pharmaceutical companies to comply with certain price reporting and other compliance requirements.
In some cases, these state laws impose more strict requirements than the federal laws.
We also rely on trade secrets to protect our commercial products and product candidates.
We also rely on trade secrets to protect our commercial products and product candidates. Our commercial success also depends in part on our non-infringement of the patents or proprietary rights of third parties.
We cannot assure you that any acquisition we will make will be successful. 22 We are dependent on third party distributors for the international marketing of our consumer products and complying with applicable laws.
We are dependent on third party distributors for the international marketing of our consumer products and complying with applicable laws. We do not currently sell or market our consumer transdermal products domestically, or for our international sales, directly to international consumers, and we rely on distributors to sell and market these products.
If we seek to expand our business through acquisition, we may not be successful in identifying acquisition targets or integrating their businesses with our existing business. We have recently expanded our business by acquisition, and we may make acquisitions in the future.
We have expanded our business by acquisition, and we may make acquisitions in the future. Acquisitions may lead to our acquiring assets the value of which is not commensurate with the purchase price we paid.
Furthermore, risks that are not adequately addressed through the proposed REMS program may also prevent or delay its approval for commercialization. 15 Our products will continue to be subject to FDA review after FDA approval is given.
Our products will continue to be subject to FDA review after FDA approval is given.
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Risks Concerning our Business Because we do not have a product we can market in the United States, we cannot predict when or whether we will operate profitably.
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Risks Concerning our Business There is economic uncertainty concerning economic policies being pursued by the new administration in the United States that may affect the costs and timing of the process of bringing our products to market through approvals with the FDA.
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Our lead product, which is our abuse deterrent fentanyl transdermal system, is currently in development and is not yet approved by the FDA in the United States or by any other regulatory agency in any other country.
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Our operating results are affected by the current political and economic uncertainties related to the economy of the United States, the domestic pharmaceutical industry and world economies. Future conditions may also adversely affect our pricing strategy, promotional activities and our profitability and margins.
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Because of the numerous risks and uncertainties associated with product development, we cannot assure you that we will be able to develop and market any products or achieve or attain profitability. If we are able to obtain financing for our operations, we expect that we will incur substantial expenses as we continue with our product development programs and clinical trials.
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Additionally, many of the effects and consequences of U.S. and global financial and economic conditions could potentially have a material adverse effect on our liquidity and capital resources, including the ability to raise additional capital, if needed, or could otherwise negatively affect our business and financial results.
Removed
Further, if we are required by applicable regulatory authorities, including the FDA as well as the comparable regulatory agencies in other countries in which we may seek to market product, to perform studies in addition to those we currently anticipate, our expenses will increase beyond expectations and the timing of any potential product approval may be delayed.
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Market instability could make it more difficult for us and our suppliers to accurately forecast future product demand trends. Additionally, inflationary factors such as increases in the costs to purchase products, acquire product rights and overhead costs may adversely affect our operating results.
Removed
As a result, we expect to continue to incur substantial losses and negative cash flow for the foreseeable future.
Added
We are subject to the risks common to start-up, pre-revenue enterprises, including, among other factors, undercapitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues.
Removed
We may need to rely on a contract research organization to conduct our preclinical and clinical trials. Although we believe that we, through 4P Therapeutics, have the capabilities to conduct certain preclinical studies and early- stage clinical studies in house, we may need to rely on third party contract research organizations to conduct our pivotal preclinical and clinical trials.
Added
Drug development companies typically incur substantial losses during the product development and FDA testing phase of the business and do not generate revenues until after the drug has received FDA approval, which cannot be assured, and until the company has started to sell the product.
Removed
Our failure or the failure of the contract research organization to conduct the trials in compliance with FDA regulations could possibly derail our obtaining FDA approval and could require us to redo any preclinical or clinical trials which we or the contract research organization administered.
Added
We can give no assurance that we can or will ever be successful in achieving profitability and the likelihood of our success must be considered in light of our early stage of operations. We cannot assure you that we will be able to operate profitably or generate positive cash flow.
Removed
Because of our lack of funds, we may have to enter into a joint venture or strategic relationship or licensing agreement with a third party to develop and seek to obtain FDA approval of our potential products.
Added
Before we can market in the United States any product which is classified by the FDA as a drug, we must obtain FDA marketing approval. Our proposed transdermal products are drug-device combinations that are considered by the FDA to be drugs, which require approval by the FDA.
Removed
Our present efforts are directed to developing and seeking FDA approval for our pipeline of transdermal pharmaceutical products including our lead product, the abuse deterrent fentanyl transdermal system. The development of pharmaceutical products is very expensive with no assurance of obtaining FDA approval.
Added
The FDA also will need to approve the manufacturing process and the manufacturing facility. 12 Risk of delays at FDA due to restructuring and layoffs.
Removed
Because of the costs involved, we may need to enter into a joint venture or strategic alliance or licensing or similar agreement with a third party to bring our products to market, in which event we would have to give up a significant percentage of the equity in or rights to the product and require the other party to provide the necessary financing and personnel and to take a significant role in making the decisions relating to the development, testing, marketing and manufacturing of the product.
Added
Changes at the Food and Drug Administration (FDA) and other federal agencies under the incoming Trump administration include implementing a hiring freeze and employee layoffs by executive orders and other measures implemented by the Department of Government Efficiency, may lead to new policies, changes in the regulations, and disruption of normal operations of the FDA and other agencies, any of which may adversely impact our clinical development plans and business operations.
Removed
The third party may have interests which are different from, and possibly in conflict with, our own. If we are unable to attract competent parties to distribute and market any product which we may develop, or if such parties’ efforts are inadequate, we will not be able to implement our business strategy and may have to cease operations.
Added
Disruptions at the FDA may lead to slower response times and longer review periods, potentially affecting our ability to progress with development of our product candidates or obtain timely regulatory approval for our product candidates. Changes in regulations may result in unexpected delays, increased costs, or other negative impacts on our business that are difficult to predict.
Removed
We cannot assure you that we will be successful in entering into joint ventures or other strategic relationships or that any relationship into which we may enter will develop a marketable product or that we will generate any revenue or net income from such a venture.
Added
Risk of increased tariffs on foreign goods. The United States government has imposed tariffs on foreign goods being imported into the United States. Although our Company does not plan to sell any pharmaceutical products in the United States that are manufactured overseas, some of the raw materials used in our products under development are obtained from foreign manufacturers.
Removed
We may decide not to continue developing or commercializing any products at any time during development or after approval, which would reduce or eliminate our potential return on investment for those product candidates.
Added
An increase in the costs of any of the raw materials used in our products under development could be detrimental to our commercial forecasts and projected profit margins which are based in part on our ability to price our products competitively with existing products marketed in the United States.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeCurrently, there are no pending hearings or motions as both parties are engaged in discovery and are attempting to resolve the matter amicably. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable. 26 PART II
Biggest changeCurrently, there are no pending hearings or motions, and the case is in the discovery stage. In early 2024, the plaintiffs proposed a settlement offer of $100,000. The Company has not responded to that settlement offer. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable. 27 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 26 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. [Reserved] 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 34 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 27 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. [Reserved] 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShareholders of Record As of April 26, 2024, we had approximately 110 holders of record of our common stock; our Warrants are held in book entry form by the Depository Trust Corporation, which is the holder of record of all of the publicly-traded warrants, based upon data provided by our transfer agent.
Biggest changeShareholders of Record As of April 25, 2025, we had approximately 118 holders of record of our common stock; our Warrants are held in book entry form by the Depository Trust Corporation, which is the holder of record of all of the publicly-traded warrants, based upon data provided by our transfer agent.
Removed
Issuer Purchases of Equity Securities In the fiscal year ended January 31, 2024, the Company made no purchases in the market of its common stock.
Added
Sales of Unregistered Securities The following table sets forth the sales of unregistered securities since the Company’s last report filed under this item. Date Title and Amount (1) Purchaser Principal Underwriter Total Offering Price/ Underwriting Discounts 1/23/2025 Three Year Option to Purchase 17,667 shares of Common Stock at an exercise price of $7.34 per share.
Added
Gerald Goodman NA $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 17,667 shares of common stock at an exercise price of $7.34 per share. Alan Smith NA $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 17,667 shares of common stock at an exercise price of $7.34 per share.
Added
Dianna Mather NA $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 17,667 shares of common stock at an exercise price of $7.34 per share. Mike Myer NA $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 13,583 shares of common stock at an exercise price of $7.34 per share.
Added
Stefani Mancas NA $ 99,699.22 /NA 1/23/2025 Three Year Option to Purchase 15,333 shares of common stock at an exercise price of $7.34 per share. Radu Bujoreanu NA $ 112,544.22/NA 1/23/2025 Three Year Option to Purchase 11,833 shares of common stock at an exercise price of $7.34 per share.
Added
Vselovod Grigore NA $ 86,854.22/NA 1/23/2025 Three Year Option to Purchase 17,667 shares of common stock at an exercise price of $7.34 per share. Tyler Overk $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 29,333 shares of common stock at an exercise price of $8.07 per share.
Added
Gareth Sheridan NA $ 236,717.31 /NA 1/23/2025 Three Year Option to Purchase 29,333 shares of common stock at an exercise price of $8.07 per share. Serguei Melnik NA $ 236,717.31/ NA 1/23/2025 Three Year Option to Purchase 17,667 shares of common stock at an exercise price of $7.34 per share.
Added
Jeff Patrick NA $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 17,667 shares of common stock at an exercise price of $7.34 per share.
Added
Patrick Ryan NA $ 129,675.78 /NA 1/23/2025 Three Year Option to Purchase 16,500 shares of common stock at an exercise price of $7.34 per share Mark Hamilton NA $ 121,110.00/NA 28 Issuer Purchases of Equity Securities The following table sets forth purchases in the market by the Company of 32,400 shares of its common stock in its fourth fiscal quarter ended January 31, 2025 and recorded the purchase as Treasury Stock.
Added
Period (a) Total number of shares of common stock purchased (b) Average price paid per share (c) Total number of shares purchased as part of publicly announced plans of programs (d) Maximum number (or approximate dollar value) of shares that may yet to be purchased under the plans or programs January 2025 32,400 $ 4.57 32,400 $ 854,455

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRevenue Types The following is a description of the Company’s revenue types, which include professional services and sale of goods: ● Contract development and manufacturing services for consumer health transdermal, topical and tape products with revenues listed under sale of goods ● Product revenues derived from the sale of the Company’s consumer transdermal, topical and tape products with sales listed under sale of goods ● Contract research and development services for pharmaceuticals and medical devices for life sciences customers with revenues listed under services 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.
Biggest changeContracts 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.
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 applies the guidance for right-of-use accounting for all leases and records the operating lease liabilities on its balance sheet.
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 applies guidance for right-of-use accounting for all leases and records the operating lease liabilities on its balance sheet.
The lives over which the fixed assets are depreciated range from 3 to 20 years as follows: Lab Equipment 5-10 years Furniture and fixtures 3 years Machinery and equipment 10-20 years Intangible Assets Intangible assets include trademarks, intellectual property and customer base acquired through business combinations.
The lives over which the fixed assets are depreciated range from 3 to 20 years as follows: Lab Equipment 5-10 years Furniture and fixtures 3-5 years Machinery and equipment 5-20 years 34 Intangible Assets Intangible assets include trademarks, intellectual property and customer base acquired through business combinations.
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 making such a 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.
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 acquisitions have also been assigned to intellectual property and other intangibles.
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 acquisitions has also been assigned to intellectual property and other intangibles.
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.
In the event the Company was determined 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.
The issuance of this patent, entitled, "Abuse and Misuse Deterrent Transdermal Systems," further expands Nutriband's intellectual property protection in the United States for its portfolio of AVERSA abuse deterrent transdermal products. Transdermal Pharmaceutical Products Through October 31, 2018, our business was the development of a line of consumer and health products that are delivered through a transdermal or topical patch.
The issuance of this patent, entitled, “Abuse and Misuse Deterrent Transdermal Systems,” further expands Nutriband’s intellectual property protection in the United States for its portfolio of AVERSA abuse deterrent transdermal products. 29 Transdermal Pharmaceutical Products Through October 31, 2018, our business was the development of a line of consumer and health products that are delivered through a transdermal or topical patch.
On March 20, 2024, our Board of Directors adopted an amendment to the Company’s 2021 Employees Stock Option Plan (the “Plan”) increasing the number of shares of common stock subject to the plan (as of March 20, 2024 875,000 shares) to 1,400,00 shares (the “Amendment”).
On March 20, 2024, our Board of Directors adopted an amendment to the Company’s 2021 Employees Stock Option Plan (the “Plan”) increasing the number of shares of common stock subject to the Plan (as of March 20, 2024) to 1,400,00 shares (the “Amendment”).
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 over time 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.
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 over time on a monthly basis for the work performed during that month. 33 All revenue recognized in the income statement is considered to be revenue from contracts with customers. Cash and cash equivalents.
The Company bases its estimates on historical experience and on other various 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.
The Company bases its estimates on historical experience and on other various 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.
The operations of 4P Therapeutics are included in the Company’s financial statements from the date of acquisition of August 1, 2018, and the operations of Pocono Pharmaceuticals (Active Intelligence) are included in the Company’s financial statements from the date of acquisition of September 1, 2020 under Pocono Pharmaceuticals Inc.
The operations of 4P Therapeutics are included in the Company’s financial statements from the date of acquisition of August 1, 2018, and the acquired operations of Pocono Coated Products and Active Intelligence are included in the Company’s financial statements from the date of acquisition of September 1, 2020, under Pocono Pharmaceuticals Inc.
The Company adopted ASU 2016-13 during 2023 and implemented the guidance on expected credit losses. 32 Inventories Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net realized value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
The loan bears interest at 10%. The Company adopted ASU 2016-13 during 2013 and implemented the guidance on expected credit losses. Inventories Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method. Net realized value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
The Company does not amortize goodwill in accordance with ASC 350. In connection with the Company’s acquisition of 4P Therapeutics LLC in 2018, the Company recorded Goodwill of $1,719,235. On August 31, 2020, in connection with the Company’s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640.
In connection with the Company’s acquisition of 4P Therapeutics LLC in 2018, the Company recorded Goodwill of $1,719,235. On August 31, 2020, in connection with the Company’s acquisition of Pocono Coated Products LLC and Active Intelligence LLC, the Company recorded Goodwill of $5,810,640.
During the year ended January 31, 2024, the Company incurred a loss on extinguishment of debt of $554,423, consisting primarily of the loss on the conversion of $2,000,000 of credit line note into 1,026,750 shares of the Company’s common stock. There was no gain or loss on extinguishment of debt during the year ended January 31, 2023.
During the year ending January 31, 2024, the Company incurred a loss on extinguishment of debt of $554,423, consisting primarily of the loss on the conversion of $2,000,000 of credit line note into 1,026,750 shares of the Company’s common stock.
The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the years ended January 31, 2024, and 2023, the Company recorded bad debt expenses of $118,364 and $-0-, respectively, for doubtful accounts related to accounts receivable.
The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts. For the years ended January 31, 2025, and 2024, the Company recorded bad debt expenses of $1,200 and $11,836, respectively, for doubtful accounts related to accounts receivable.
During the years ended January 31, 2024, and 2023, the Company recorded an impairment charge of $-0- and $327,326, respectively, reducing the Active Intelligence LLC Goodwill to $3,302,478. As of January 31, 2024, and 2023, Goodwill amounted to $5,021,713 and $5,021,713, respectively.
During the years ending January 31, 2025 and 2024, the Company recorded an impairment charge of $3,302,478 and $-0-, respectively, reducing the Active Intelligence LLC Goodwill to $-0-. As of January 31, 2025, and 2024, Goodwill amounted to $1,719,535 and $5,021,713, respectively.
As a result of the foregoing, we sustained a net loss of $5,485,314, or $(0.69) per share (basic and diluted) for the year ended January 31, 2024, compared with a loss of $4,483,474, or $(0.53) per share (basic and diluted) for the year ended January 31, 2023.
As a result of the foregoing, we sustained a net loss of $10,482,617, or $(0.99) per share (basic and diluted) for the year ended January 31, 2025, compared with a loss of $5,485,314, or $(0.69) per share (basic and diluted) for the year ended January 31, 2024.
We incurred interest expense of $75,815 for the year ended January 31, 2024, as compared to $6,289 for the year ended January 31, 2023. The increase is primarily due to interest on the Company’s related party credit line note.
We incurred interest expense of $21,407 for the year ending January 31, 2025, as compared to $75,815 for the year ended January 31, 2024. The decrease is primarily due to the decrease in the Company’s related party credit line note.
Off Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 30 Critical Accounting Policies Going Concern Assessment Management assesses liquidity and going concern uncertainty in the Company’s condensed financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP.
Critical Accounting Policies Going Concern Assessment Management assesses liquidity and going concern uncertainty in the Company’s condensed financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP.
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.
The wholly owned subsidiaries are as follows: Nutriband Ltd. 4P Therapeutics LLC Pocono Pharmaceuticals Inc. 32 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.
As of January 31, 2023, total inventory was $229,335, consisting of work-in-process of $11,021 and raw materials of $218,334. 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.
As of January 31, 2024, total inventory was $168,605, consisting of work-in-process of $7,466, finished goods of $8,707 and raw materials of $152,432. 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.
For the year ended January 31, 2024, we used cash in investing activities of $51,761 primarily for the purchase of equipment.
For the year ending January 31, 2025, we used cash in investing activities of $92,043 primarily for the purchase of equipment.
The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity). As of January 31, 2024, total inventory was $168,605, consisting of work-in-process of $7,466, finished goods of $8,707 and raw materials of $152,717.
The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity). As of January 31, 2025, total inventory was $212,041, consisting of work-in-process of $46,255, finished goods of $16,609 and raw materials of $149,177.
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.
As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees. 35 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.
The net accounts receivable remain on the books of the Company and a corresponding amount has been included as a secured borrowing liability under Notes payable. As of January 31, 2024, the receivable has been reserved in full.
The net accounts receivable remain on the books of the Company and a corresponding amount has been included as a secured borrowing liability under Notes payable. As of January 31, 2025, the receivable has been reserved in full. If the bankruptcy claim is not paid in full by the debtor, Company is obligated to pay any difference to the factor.
Liquidity and Capital Resources As of January 31, 2024, we had $492,942 in cash and cash equivalents and working capital of $22,770, as compared with cash and cash equivalents of $1,985,440 and working capital of $1,945,132 as of January 31, 2023.
Liquidity and Capital Resources As of January 31, 2025, we had $4,311,719 in cash and cash equivalents and working capital of $3,811,420, as compared with cash and cash equivalents of $492,942 and working capital of $22,770 as of January 31, 2024.
For the year ended January 31, 2024, our selling, general and administrative expenses were $3,773,606, primarily legal, accounting, administrative salaries non-cash compensation from the issuance of warrants and employee stock options, compared to $3,916,041 for the year ended January 31, 2023. The decrease from 2023 is primarily due to a decrease in salaries and wages to executives of the Company.
The decline in gross margin is due primarily to lower margins on tape sales. 30 For the year ending January 31, 2025, our selling, general and administrative expenses were $4,313,810, primarily salaries and wages, public relations, legal, accounting, and non-cash compensation from the issuance of warrants and employee stock options, compared to $3,773,606 for the year ending January 31, 2024.
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 exceeds their fair value.
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 exceeds their fair value. The Company does not amortize goodwill in accordance with ASC 350.
As of January 31, 2024, the valuation of the reporting unit exceeds the carrying amount of goodwill using the value in use or the going concern premise. 29 During the year ended January 31, 2024, the Company incurred research and development expenses for its Aversa Fentanyl product of $1,960,425, primarily due to labor and material costs incurred at our contract manufacturer, Kindeva Drug Delivery, as compared to $982,227 for the year ended January 31, 2023.
During the year ending January 31, 2025, the Company incurred research and development expenses for its Aversa Fentanyl product of $3,119,134, primarily due to labor and material costs incurred at our contract manufacturer, Kindeva Drug Delivery, as compared to $1,960,425 for the year ending January 31, 2024.
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.
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.
As of January 31, 2024, the Company had cash and cash equivalents of $492,942 and working capital of $22,770. For the year ended January 31, 2024, the Company incurred a net loss from operations of $4,871,926 and used cash flow from operations of $3,527,509.
As of January 31, 2025, the Company had cash and cash equivalents of $4,311,719 and working capital of $3,811,420. For the year ended January 31, 2025, the Company incurred a net loss from operations of $10,284,843 and used cash flow from operations of $4,626,564.
In addition, we believe that our abuse deterrent technology can be broadly applied to various other transdermal products and our strategy is to follow the development of our abuse deterrent fentanyl transdermal system with the development of abuse deterrent transdermal products for pharmaceuticals that have a risk of abuse, misuse or accidental exposure. 27 On September 19, 2023, the United States Patent and Trademark Office (USPTO) granted US Patent No. 11,759,431 for Nutriband's proprietary AVERSA abuse deterrent technology utilizing taste aversion to address the primary routes of abuse of opioid based transdermal patches.
In addition, we believe that our abuse deterrent technology can be broadly applied to various other transdermal products and our strategy is to follow the development of our abuse deterrent fentanyl transdermal system with the development of abuse deterrent transdermal products for pharmaceuticals that have a risk of abuse, misuse or accidental exposure.
Cash and cash equivalents Cash equivalents are short-term, highly liquid investments that have a maturity of three months or less. Accounts receivable Trade accounts receivables 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 the required payments.
As of January 31, 2025, the Company had $3,804,000 that exceeded federally insured cash balance limits. Accounts receivable Trade accounts receivables 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 the required payments.
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.
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).
Years Ended January 31, 2024 and 2023 For the year ended January 31, 2024, we generated revenue of $2,085,314 and our costs of revenue were $1,223,209. For the year ended January 31, 2023, we generated revenue of $2,079,609 and our costs of revenue were $1,329,200.
Years Ended January 31, 2025 and 2024 For the year ending January 31, 2025, we generated revenue of $2,139,537 and our costs of revenue were $1,396,220 resulting in a gross margin of $743,317. For the year ending January 31, 2024, we generated revenue of $2,085,314 and our costs of revenue were $1,223,209 resulting in a gross margin of $862,105.
Our revenue for the year ended January 31, 2024, included sales of $1,920,280 from contract manufacturing services performed in our Pocono Pharmaceuticals (Active Intelligence) segment and $165,034 from contract research and development services from our 4P Therapeutics segment. The revenue from the Transdermal Patches segment remained relatively constant from the prior year.
Our revenue for the year ended January 31, 2025, was derived from sales from our Pocono Pharmaceuticals segment and $-0- from contract research and development services from our 4P Therapeutics segment. The revenue from the Pocono Pharmaceuticals segment remained relatively constant from the prior year. An increase in demand is expected in the subsequent year.
The Company has generated operating losses since its inception and has relied on sales of securities and issuance of third-party and related-party debt to support cash flow from operations. In October 2021, the Company consummated a public offering and received net proceeds of $5,836,230. The Company has also received to date $3,239,845 in proceeds from the exercise of warrants.
The Company has generated operating losses since its inception and has relied on sales of securities and the issuance of third-party and related-party debt to support cash flow from operations. The Company has used these proceeds to fund operations and will continue to use the funds as needed.
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.
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.
For the year ended January 31, 2024, we used cash of $3,527,509 in our operations. The principal adjustments to our net loss of $5,485,314 were depreciation and amortization of $287,722, net loss on extinguishment of debt of $554,423 and stock-based compensation of $742,696.
For the year ending January 31, 2025, we used cash of $4,626,564 in our operations. The principal adjustments to our net loss of $10,284,483 were an impairment charge of $3,595,216, depreciation and amortization of $285,054, net loss on extinguishment of debt of $368,036 and stock-based compensation of $1,542,285.
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.
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.
We will submit the Amendment to the Plan to our stockholders for adoption and approval at the 2025 Annual Meeting.
We submitted the Amendment to the Plan to our stockholders for adoption and approval at the 2025 Annual Meeting, increasing the authorized number of shares of common stock available for issuance of options to 1,400,000 shares, which Amendment was approved by our stockholders at the meeting.
As of January 31, 2024, and 2023, there were 2,157,873 and 1,778,006 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive. 33 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.
Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants. As of January 31, 2025, and 2024, there were 6,920,641 and 2,157,873 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.
Removed
On August 31, 2020, the Company entered into a Purchase Agreement (“Agreement”), with Pocono Coated Products (“PCP”), pursuant to which PCP agreed to sell the Company all of the assets associated with its Transdermal, Topical, Cosmetic and Nutraceutical business (the “Assets”). PCP was the manufacturer of our transdermal consumer products, and we bought that business from them.
Added
On September 19, 2023, the United States Patent and Trademark Office (USPTO) granted US Patent No. 11,759,431 for Nutriband’s proprietary AVERSA abuse deterrent technology utilizing taste aversion to address the primary routes of abuse of opioid based transdermal patches.
Removed
The purchase price for the Assets was (i) $6,000,000 paid in shares of the Company’s common stock at a value of the average price of the previous 90 days at the date of Closing (the “Shares”); (ii) a promissory note of the Company in the principal amount of $1,500,000, which is due upon the earlier of (a) twelve (12) months from issuance, or (b) immediately following a capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000.
Added
There were no sales in our 4P Therapeutics segment in the current year due to a shift in focus and the main contract wound down in the prior year.
Removed
The note was repaid in full in October 2021. Subsequent to the repayment of the note, the Shares were released from escrow.
Added
The increase from 2024 is primarily due to an increase in non-cash compensation and public relations.
Removed
On October 5, 2021, the Company, having been approved for the listing of its common stock on The Nasdaq Capital Market effective October 1, 2021, consummated a public offering (the “IPO”) of units (the “Units”), of common stock and warrants that were offered in the IPO on The Nasdaq Capital Market, which included 1,231,200 (each a “Unit”), each Unit consisting of one share of common stock, par value $0.001 per share, and one warrant (each a “Warrant”) at a price of $5.36 per Unit.
Added
During the year ending January 31, 2025, the Company recorded an impairment charge of $3,595,216 reducing the value of its Goodwill and intangible assets. The impairment charge reflected an updated valuation primarily of the Company’s Goodwill.
Removed
Each Warrant is immediately exercisable, will entitle the holder to purchase one share of common stock at an exercise price of $6.43 and will expire five (5) years from the date of issuance.
Added
During the year ending January 31, 2025, the Company incurred a loss on extinguishment of debt of $368,036 in connection with issuance of common stock and warrants to a related party debtor.
Removed
The underwriters’ over-allotment option was exercised for 184,800 warrants to purchase shares of common stock bringing to total net proceeds to the Company from the IPO to $5,836,230. The shares of common stock and Warrants are separately transferred immediately upon issuance.
Added
Interest income for the year ending January 31, 2025, was $191,669 as compared to $16,850 for the year ending January 31, 2024. The increase is primarily due to the investment of excess cash from the Company’s equity financing.
Removed
As of January 31, 2023, 457,795 warrants issued in the IPO have been exercised, with net proceeds to the Company of $ 2,942,970. 28 On November 1, 2021, The Board of Directors adopted the 2021 Employee Stock Option Plan (the “Plan”).
Added
For the year ending January 31, 2025, we provided cash in financing activities of $8,537,384, primarily from the proceeds of $8,400,000 from the sale of common stock and warrants and $300,000 from its line of credit. 31 Off Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Removed
The Company has reserved 408,333 shares to issue and sell upon the exercise of stock options issued under the Plan.
Added
On April 19, 2024, the Company received proceeds of $8,400,000 from equity financing with European investors.
Removed
On November 3, 2021, the Company filed a Registration Statement on Form S-8, to register under the Securities Act of 1933, as amended, the 408,333 shares of common stock reserved for issuance under the Plan, and on October 12, 2022, a Post-Effective Amendment to the Form S-8 was filed with the SEC. Forward Split of our Common Stock.
Added
Revenue Types The following is a description of the Company’s revenue types, which include professional services and sale of goods: ● Contract development and manufacturing services for consumer health transdermal, topical and tape products with revenues listed under sale of goods. ● Product revenues derived from the sale of the Company’s consumer transdermal, topical and tape products with sales listed under sale of goods. ● Contract research and development services for pharmaceutical and medical devices for life sciences customers with revenues listed under services.
Removed
On July 26, 2022, our Board of Directors approved the amendment to our Articles of Incorporation to effect a 7 for 6 forward stock split (the “Stock Split”) of our outstanding common stock. We filed the amendment set forth in a Certificate of Change with the Secretary of State of Nevada on August 4, 2022.
Added
Cash and cash equivalents include cash on hand, snd cash on deposit in money market accounts. The Company considers short-term highly liquid investments with an original maturity date of three months or less that are not part of an investment pool to be cash equivalents.
Removed
The 7:6 forward split was effective for trading purposes on the Nasdaq Capital Market on August 12, 2022. Each shareholder of record as of the August 15, 2022 record date received one (1) additional share of common stock for each six (6) shares held as of the record date.
Added
During the year ending January 31, 2025, the Company recorded an impairment charge of $293,038 to its Intellectual property. 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.
Removed
No fractional shares of common stock were issued in connection with the Stock Split. Instead, all shares were rounded up to the next whole share.
Removed
In connection with the Stock Split, which did not require shareholder approval under the Nevada corporation law, the number of authorized shares of common stock of the Company was increased in the same ratio as the shares of outstanding common stock were increased in the Stock Split, from 250,000,000 authorized shares to 291,666,666 authorized shares.
Removed
On December 15, 2023, the Company filed the Proxy Statement with the SEC for its Annual Meeting of Stockholders, to be held January 21, 2024, in Orlando, Florida. This Proxy Statement is available on our website at HTTPS://Nutriband.com/proxy .
Removed
The Plan provides for an automatic annual increase to be added on February 1 of each year equal to the lesser of (i) 250,000 shares of Common Equity or (ii) five percent (5%) of the total shares of Common Stock outstanding on such date (including for this purpose any shares of Common Stock issuable upon conversion of any outstanding capital equity of the Company) or (iii) such lesser number as determined by the Board.
Removed
If the Amendment is not approved by stockholders within one year of adoption by the increase in shares subject to the Plan will be void, together with any options issued following March 20, 2024 in the period pending approval of the Plan by our stockholders.
Removed
An increase in demand is expected in the subsequent year. Our cost of revenue for our contract research and development services represents our labor cost plus a modest amount of material costs which we passed on to the client.
Removed
Our cost of sales during the year for our contract services in comparison to the prior year as our main contract has been completed and the balance of the contract is being recognized with limited additional costs.
Removed
During the years ended January 31, 2024 and 2023, the Company recorded an impairment expense of $-0- and $327,326, respectively, due to a write down of Goodwill in connection with its Pocono acquisition. The write down of goodwill for the year ended January 31, 2023, was attributable primarily to the effects of the pandemic.
Removed
During the year ended January 31, 2024, the Company on March 19, 2023, entered a three-year Credit Line Note facility for $2 million, to fund its research and development of its Aversa Fentayl product and an amendment thereto on July 13, 2023, increasing the amount under the credit line to $5 million.
Removed
During 2024, the Company drew down a total of $2,000,000 under the credit line. In December 2023, the $2,000,000 was converted into shares of the Company’s common stock.
Removed
For the year ended January 31, 2024, we provided cash in financing activities of $2,086,772, primarily from the proceeds of $2,000,000 from the proceeds of $2,000,000 from its line of credit and $106,528 from a factoring arrangement, offset from the payment on notes of $19,756.
Removed
For the year ended January 31, 2023, we had cash flows of $160,074 from financing activities, primarily of $296,875 from the exercise of warrants, offset by a payment on notes and the repurchase of treasury stock.
Removed
The Company has used these proceeds to fund operations and will continue to use the funds as needed.
Removed
The Company was advanced $2,000,000, all of which was settled by the issuance of common stock during the year ended January 31, 2024. The $2,000,000 of debt and accrued interest was converted into 1,026,720 shares of the Company’s common stock. On April 19, 2024, the Company received proceeds of $8,400,000 from a private placement of its common stock.
Removed
The wholly owned subsidiaries are as follows: Nutriband Ltd. 4P Therapeutics LLC Pocono Pharmaceuticals Inc.
Removed
Actual results could differ from those estimates. 31 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.

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