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What changed in NutriBand Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NutriBand Inc.'s 2023 and 2024 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 2024 report.

+235 added−217 removedSource: 10-K (2024-05-01) vs 10-K (2023-04-26)

Top changes in NutriBand Inc.'s 2024 10-K

235 paragraphs added · 217 removed · 145 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

55 edited+39 added−6 removed71 unchanged
Biggest changeWhether 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. 7 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.
Biggest changeIntellectual 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.
The regulatory path for FDA approval is planned to be a 505(b)(2) NDA submission to access the safety and efficacy information on file for Duragesic ® fentanyl transdermal system as the reference-listed drug and to be able to obtain approval for abuse deterrent claims as a branded pharmaceutical product.
The regulatory path to FDA approval is planned to be a 505(b)(2) NDA submission to access the safety and efficacy information on file for the Duragesic ® fentanyl transdermal system as the reference-listed drug and to be able to obtain approval for abuse deterrent claims as a branded pharmaceutical product.
For example, we believe that our technology can be utilized in other transdermal products to deter the abuse of other drugs such as buprenorphine, an opioid used to treat acute pain and chronic pain, and methylphenidate, a central nervous system stimulant. Buprenorphine is an opioid used to treat opioid addiction, acute pain and chronic pain.
For example, we believe that our technology can be utilized in other transdermal products to deter the abuse of other drugs such as buprenorphine, an opioid, and methylphenidate, a central nervous system stimulant. Buprenorphine is an opioid used to treat opioid addiction, acute pain and chronic pain.
The purchase price for the assets of the Business is (i) $6,000,000 paid in 608,519 shares of the Company’s common stock, based on the average price for the Company’s common stock for the previous 90 days as of the date of Closing (the “Shares”); (ii) a promissory note of the Company in the principal amount of $1,500,000, which has been paid in full as of October 1, 2021.
The purchase price for the assets of the Business is (i) $6,000,000 paid in 608,519 shares of the Company’s common stock, based on the average price for the Company’s common stock for the previous 90 days as of the date of Closing; (ii) a promissory note of the Company in the principal amount of $1,500,000, which has been paid in full as of October 1, 2021.
The regulatory approval process outside the United States and the European Union generally includes all of the risks associated with obtaining FDA and European Union approval but can involve additional testing. In addition, in many countries worldwide, it is required that the product be approved for reimbursement before the product can be approved for sale in that country.
The regulatory approval process outside the United States and the European Union generally includes all of the risks associated with obtaining FDA and European Union approval but can involve additional testing. 8 In addition, in many countries worldwide, it is required that the product be approved for reimbursement before the product can be approved for sale in that country.
These drug trials are usually small, containing about 20 to 80 participants, according to the FDA. For drug delivery products incorporating already approved drugs, Phase 1 studies involve measuring blood levels of the drug to understand the pharmacokinetics for a new route of administration. 4 ● Phase two clinical trial .
These drug trials are usually small, containing about 20 to 80 participants, according to the FDA. For drug delivery products incorporating already approved drugs, Phase 1 studies involve measuring blood levels of the drug to understand the pharmacokinetics for a new route of administration. ● Phase two clinical trial .
Our Business Our lead product under development is AVERSA Fentanyl, an abuse deterrent fentanyl transdermal system that combines an approved generic fentanyl patch with our AVERSA abuse deterrent technology to reduce the abuse and misuse of fentanyl patches.
Our Business AVERSA Abuse Deterrent Transdermal Products Our lead product under development is AVERSA Fentanyl, an abuse deterrent fentanyl transdermal system that combines an approved generic fentanyl patch with our AVERSA abuse deterrent transdermal technology to reduce the abuse and misuse of fentanyl patches.
In addition, we may develop certain generic 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.
Our opioid products potentially offer a unique proposition to meet the unmet needs of patients by deterring the abuse and misuse of opioids while making opioids accessible to those patients who need them.
Our abuse deterrent opioid products potentially offer a unique proposition to meet the unmet needs of patients by deterring the abuse and misuse of opioids while making opioids accessible to those patients who need them.
This is typically the pathway used for new chemical entities. ● A 505(b)(2) application is an NDA submitted under Section 505(b)(1) and approved under Section 505(c) of the FD&C Act that contains full reports of investigations of safety and effectiveness, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use.
This is typically the pathway used for new chemical entities. ● A 505(b)(2) application is a limited NDA submitted under Section 505(b)(1) and approved under Section 505(c) of the FD&C Act that contains full reports of investigations of safety and effectiveness, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use.
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 .
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 .
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. 8
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
For example, the regulatory path for the AVERSA products in development is intended to follow a 505(b)(2) NDA regulatory pathway which reduces the amount of clinical work that needs to be performed to a single trial to evaluate the abuse potential of the product as the safety and efficacy of the drug has already been established.
For example, the regulatory path for the AVERSA products in development is intended to follow a 505(b)(2) NDA regulatory pathway which may reduce the amount of clinical work that needs to be performed to a single trial to evaluate the abuse potential of the product as the safety and efficacy of the drug has already been established.
We believe that our abuse deterrent technology can be broadly applied to various transdermal products and our strategy is to follow the development of our AVERSA Fentanyl with the development of additional products for pharmaceuticals that have a risk or history of abuse.
We believe that our abuse deterrent technology can be broadly applied to various transdermal products and our strategy is to follow the development of our AVERSA Fentanyl with the development of additional products for pharmaceuticals that have a risk or history of abuse, misuse or accidental exposure.
To obtain market access for our products in other countries we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution of our products.
To obtain market access for our products in other countries we must comply with numerous and varying regulatory requirements of such countries regarding the demonstration of safety and efficacy for authorization and governing, among other things, clinical trials and commercial sales, pricing and distribution of our products.
If the FDA accepts the application for review, the agency has ten months — or six months if the drug has priority review status — to make a decision, according to the report. The FDA can hold an advisory committee meeting where independent experts assess the data and recommend whether to approve the drug.
If the FDA accepts the application for review, the agency typically has ten months, or six months if the drug has priority review status, to make a decision whether to approve the drug or not. The FDA can hold an advisory committee meeting where independent experts assess the data and recommend whether to approve the drug.
We believe that AVERSA technology can be broadly applied to various transdermal products, and our plan is to follow the development of our abuse deterrent fentanyl transdermal system with the development of additional transdermal abuse deterrent products for pharmaceuticals that have a risk or history of abuse.
We believe that our AVERSA technology can be broadly applied to various transdermal products, and our plan is to follow the development of AVERSA Fentanyl with the development of additional abuse deterrent transdermal products for pharmaceuticals that have a risk or history of abuse, misuse or accidental exposure.
The program assumes that the fentanyl transdermal system is already approved and the only change to the approved product will be to incorporate the AVERSA technology into the patch design with no change being made to the fentanyl drug matrix or its demonstrated safety, patch performance or drug release characteristics.
The development program is based on the fact that the fentanyl transdermal system is already approved and the only change to the approved product will be to incorporate the AVERSA technology into the patch design with no change being made to the fentanyl drug matrix or its demonstrated safety, patch performance or drug release characteristics.
With respect to the labeling for our abuse deterrent transdermal fentanyl system or any other opioid transdermal patch we develop, it is likely that we will need to disclose the risks of improper use or abuse using language required by the FDA.
With respect to the labeling for our abuse deterrent transdermal fentanyl system or any other opioid transdermal patch we develop, it is likely that the FDA will require us to disclose the risks of improper use or abuse using language required by the FDA upon approval.
Even though the drug used in each of our proposed products is currently approved by the FDA in other dosage forms, we will still need to conduct a development program that will include preclinical and clinical trials before we receive FDA marketing approval.
The definition of drug is broadly defined and includes the pharmaceutical products we have in development. Even though the drug used in each of our proposed products is currently approved by the FDA in other dosage forms, we will still need to conduct a development program that will include preclinical and clinical trials before we receive FDA marketing approval.
Preclinical studies to be performed primarily consist of laboratory-based in vitro manipulation and extraction studies in various extraction media per FDA guidance. Clinical evaluation primarily consists of a Phase 1 Human Abuse Liability (HAL) study to demonstrate the abuse potential of the product per FDA guidance.
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.
These patents provide patent coverage to 2035. We continue to build on our proprietary positions in the United States and internationally for our product candidates AVERSA Fentanyl, AVERSA buprenorphine and AVERSA methylphenidate as well as other products and technology that we may have in development.
We continue to build on our proprietary positions in the United States and internationally for our product candidates AVERSA Fentanyl, AVERSA Buprenorphine and AVERSA Methylphenidate as well as other products and technology that we may have in development.
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, and we agreed to pay Mr.
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.
As the United States faces an epidemic of opioid abuse, fentanyl transdermal patches have become an attractive target for recreational drug abusers due to the high potency of fentanyl and its ease of abuse by the oral route.
As the United States faces an epidemic of opioid abuse, fentanyl transdermal patches have become an attractive target for recreational drug abusers due to the high potency of fentanyl, the high drug content contained in patches designed for delivery over three days, and its ease of abuse by the oral route.
Damon the compensation received by independent board members. As a result of the acquisition, the focus of our business has 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.
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.
In other countries, we must comply with the laws and regulations of each country to legally market and sell our products. Obtaining FDA approval does not mean that the product will be approved in other countries. Each country may require that additional clinical and nonclinical studies be conducted prior to approval.
In the United States, we must comply with the rules and regulations of the FDA. In other countries, we must comply with the laws and regulations of each country to legally market and sell our products. Obtaining FDA approval does not mean that the product will be approved in other countries.
Potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, and medical technology companies. We believe the key competitive factors that will affect the development and commercial success of our products are product performance including safety and efficacy, level of patient compliance, healthcare professional acceptance, and the extent of insurance reimbursement of our products.
We believe the key competitive factors that will affect the development and commercial success of our products are product performance including safety and efficacy, level of patient compliance, healthcare professional acceptance, and the extent of insurance reimbursement of our 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. We cannot assure you that we will obtain FDA marketing approval for any of our 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.
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.
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.
Before a drug company can test an experimental treatment in humans, it must prove the drug is safe and effective in animals. Scientists run tests in various animals before presenting the data to the FDA as an investigational new drug application. For already approved drugs, an animal study may not be required prior to testing in humans.
Scientists run tests in various animals before presenting the data to the FDA as an investigational new drug application. For already approved drugs, an animal study may not be required prior to testing in humans.
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. We operate in two distinct business segments: pharmaceuticals and medical devices.
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.
However, we cannot be certain that we will be able to use any abbreviated approval pathway, in which event we will need to comply with the full regulatory pathway as described below. The full (although not typical for the AVERSA related products) FDA regulatory pathway consists of the following phases of development. ● Preclinical phase .
However, we cannot be certain that we will be able to use any abbreviated approval pathway, in which event we will need to comply with the full regulatory pathway as described below. In general, the full NDA product development program required for new drugs for FDA approval consists of the following phases of development listed below.
We manage and evaluate our operations, and report our financial results, through these two business segments. Our principal offices are located in Orlando, Florida, and we primarily operate and derive most of our revenues in the United States.
We manage and evaluate our operations, and report our financial results, through these two separate subsidiaries. Our principal offices are located in Orlando, Florida, and our subsidiary, Pocono Pharmaceuticals, has a manufacturing facility in Cherryville, North Carolina. We primarily operate and derive most of our revenues in the United States.
The product development program for the additional AVERSA pipeline products, AVERSA Buprenorphine and AVERSA Methylphenidate, are similar to that of AVERSA Fentanyl, assuming that the AVERSA technology is incorporated into an already approved transdermal patch. Through January 31, 2023, we had not generated any revenue from our transdermal consumer patches.
The product development program for the additional AVERSA pipeline products, AVERSA Buprenorphine and AVERSA Methylphenidate, are similar to that of AVERSA Fentanyl, assuming that the AVERSA technology is incorporated into an already approved transdermal patch.
There are currently a number of generic fentanyl patches on the market but none of them have abuse deterrent properties. We believe that our AVERSA ® abuse deterrent technology, containing aversive agents will significantly deter the abuse and accidental misuse of fentanyl from 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 US FDA will significantly deter the abuse and accidental misuse of fentanyl transdermal patches.
The product development program for AVERSA Fentanyl includes performing preclinical and clinical studies to demonstrate the abuse deterrent properties of the product.
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.
Discovery of problems with a product after approval may result in serious and extensive restrictions on a product, manufacturer or holder of an approved NDA, as well as lead to potential market disruptions.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. 7 Discovery of problems with a product after approval may result in serious and extensive restrictions on a product, manufacturer or holder of an approved NDA, as well as lead to potential market disruptions.
These entities are further subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with current good manufacturing practices and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.
These entities are further subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with current good manufacturing practices and other laws.
We plan to continue to rely on contract manufacturers and, potentially, collaboration partners to manufacture commercial quantities of our products, if and when approved for marketing by the FDA. Government Regulation United States The pharmaceutical business is subject to extensive government regulation. In the United States, we must comply with the rules and regulations of the FDA.
We plan to continue to rely on contract manufacturers and, potentially, collaboration partners to manufacture commercial quantities of our products, if and when approved for marketing by the FDA. 1 https://www.fda.gov/consumers/consumer-updates/accidental-exposures-fentanyl-patches-continue-be-deadly-children 4 Government Regulation and Regulatory Path United States The pharmaceutical business is subject to extensive government regulation.
Post-approval requirements Any drug products for which we receive FDA approval will be subject to continuing regulation by the FDA.
We cannot assure you that we will be able to take advantage of any of the available abbreviated approval pathways for any of our proposed products. Post-approval requirements Any drug products for which we receive FDA approval will be subject to continuing regulation by the FDA.
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. The definition of drug is broadly defined and includes the pharmaceutical products we have in development.
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.
Pharmaceutical Products in Development We have a pipeline of transdermal pharmaceutical products that are primarily in the early stages of development. Our current focus is on the development of AVERSA Fentanyl for which we have a feasibility agreement with Kindeva Drug Delivery, a contract development and manufacturing organization.
Our current focus is on developing our AVERSA abuse deterrent transdermal patch products. Our lead product is AVERSA Fentanyl for which we have a commercial development agreement with Kindeva Drug Delivery, a contract development and manufacturing organization.
The FDA also may require post-marketing testing, or Phase IV testing, as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could otherwise restrict the distribution or use of our products. 6 Other Government Regulations We may be subject to government regulations that are applicable to businesses generally, including those relating to workers’ health and safety, environmental and waste disposal, wage and hour and labor practices, including sexual harassment laws and regulations, and anti-discrimination laws and regulations.
The FDA also may require post-marketing testing, or Phase IV testing, as well as risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could otherwise restrict the distribution or use of our products.
In some cases, we are developing a non-injectable version of the drug utilizing our transdermal technology which represents a new route of administration.
In some cases, we are developing a non-injectable version of the drug utilizing our transdermal technology which represents a new route of administration. We believe that transdermal delivery has the potential to improve compliance, which can lead to improved therapeutic outcomes associated with these treatments.
Suite 1500, Orlando, Florida 32801, telephone (407) 377-6695. Our website is www.nutriband.com . Information contained on or available through our website or any other website does not constitute a portion of this annual report. 2 Effects of the COVID-19 Pandemic Our business may be affected by the COVID-19 pandemic and the response to the pandemic.
Suite 1500, Orlando, Florida 32801, telephone (407) 377-6695. Our website is www.nutriband.com . Information contained on or available through our website or any other website does not constitute a portion of this annual report. Pharmaceutical Products in Development We have a pipeline of transdermal pharmaceutical products that are primarily in the early stages of development.
We plan to follow on from this with development of additional products utilizing the AVERSA abuse deterrent transdermal technology, namely, AVERSA Buprenorphine and AVERSA Methylphenidate. AVERSA Fentanyl is an abuse deterrent fentanyl patch for the treatment of chronic pain.
We plan to follow on from this with the development of additional products utilizing the AVERSA abuse deterrent transdermal technology, namely, AVERSA Buprenorphine and AVERSA Methylphenidate. Transdermal patches containing opioid and stimulant drugs are designed to provide an alternative route of administration for treatment of conditions such as chronic pain, opioid use disorder or attention deficit/hyperactivity disorder.
With the acquisition of 4P Therapeutics, we acquired a research pipeline of other transdermal products, including peptides and proteins such as exenatide for type 2 diabetes and FSH for infertility.
With the acquisition of 4P Therapeutics, we acquired a research pipeline of other transdermal products, including novel transdermal products that involve delivery of peptides and proteins through the skin.
The aversive agents are not contained in the drug matrix and are not delivered to the skin during patch wear. In addition to the fentanyl patch, this technology has broad applicability to any patch where deterring abuse as well as accidental misuse by children and pets are valuable attributes.
In addition to the fentanyl patch, this technology has broad applicability to any patch where deterring abuse as well as accidental misuse by children and pets are valuable attributes. 3 According to the FDA 1 , accidental exposure to medication is a leading cause of poisoning in children.
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. 3 We are also exploring transdermal delivery of proteins and peptides such as exenatide for type 2 diabetes and follicle stimulating hormone (FSH) for infertility.
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.
We have not taken any steps to seek to obtain FDA approval for any of our consumer products in development that would permit sales of those products in the United States, and we have no plans to do so in the near term. 1 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.
We have a feasibility agreement with Kindeva Drug Delivery, formerly 3M Drug Delivery (“Kindeva”), for the development of AVERSA Fentanyl using Kindeva’s FDA approved Fentanyl patch. The feasibility agreement is focused on adapting Kindeva’s commercial transdermal manufacturing process to incorporate AVERSA abuse deterrent technology.
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 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. The work includes conducting early-stage drug and device clinical and preclinical studies and providing clinical-regulatory and formulation/analytical consulting services.
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.
Neither we nor current clients have any long-term commitments, and either party can terminate at any time. We do not expect to generate significant revenues from these services. Acquisition of Pocono Coated Products On August 25, 2020, the Company formed Pocono Pharmaceuticals Inc.(“Pocono”), a wholly owned subsidiary of the Company.
The work includes conducting early-stage drug and device clinical and preclinical studies and providing clinical-regulatory and formulation/analytical consulting services. Neither we nor current clients have any long-term commitments, and either party can terminate at any time. We do not expect to generate significant revenues from these services.
An ANDA may not be submitted if studies are necessary to establish the safety and effectiveness of the proposed product. This is the pathway taken for generic drugs. 5 We cannot assure you that we will be able to take advantage of any of the available abbreviated approval pathways for any of our proposed products.
An ANDA may not be submitted if studies are necessary to establish the safety and effectiveness of the proposed product.
We have registered the name Nutriband in the United States. We have received a notice of allowance for the AVERSA trademark for our abuse deterrent technology in the United States. Competition The pharmaceutical industry is highly competitive and subject to rapid change as new products are developed and marketed.
Competition The pharmaceutical industry is highly competitive and subject to rapid change as new products are developed and marketed. Potential competitors include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, and medical technology companies.
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The following is a description of the Company’s revenue types: service revenues, which include the contracting of research and development related services with the Company’s clients in the life sciences field on an as-needed basis; and contract manufacturing revenues, which are derived from the manufacture and production of products for a number of customers in the health, wellness and pharmaceutical space.
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The Company’s revenues are based on providing services through our subsidiaries Pocono Pharmaceuticals operating as Active Intelligence and 4P Therapeutics. Pocono Pharmaceuticals provides contract manufacturing services for health, wellness and over-the-counter pharmaceutical customers and 4P Therapeutics performs contract research and development related services for pharmaceutical and medical devices customers.
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Consumer products are products that can be sold over-the-counter and do not require a prescription. Most transdermal patches are considered drugs in the United States and cannot be marketed in the United States without approval from the FDA.
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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”).
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Factors which may affect our business include, but are not limited to, the following: ● The decision by investors who would invest in early-stage pharmaceutical companies to limit their financing efforts to companies that are dealing with products or services related to COVID-19 diagnosis or treatment. ● The effect of recent stock market declines on the willingness of investors to make an investment in our securities. ● The financial health of our potential contract service customers. ● Our ability to perform contract services. ● Our ability to obtain any goods or services which we may need to perform contract services. ● The ability of our foreign distributors to obtain regulatory approval, which may be affected by the regulatory agencies giving a low priority to products such as our consumer patches.
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The Offering was made solely to investors resident outside the United States and was not registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any jurisdiction, including any jurisdiction outside the United States, but was made privately by the Company pursuant to the exemptions from registration provided in the SEC’s Regulation S and other exemptions under the Securities Act.
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Presently, these products are only available by injection. We believe that transdermal delivery has the potential to improve compliance, which can lead to improved therapeutic outcomes associated with these treatments.
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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.
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As stated above, without additional financing or a joint venture agreement we will not be able to take any steps to the development of any of these products.
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Acquisition of Pocono Coated Products On August 25, 2020, the Company formed Pocono Pharmaceuticals Inc.(“Pocono”), a wholly owned subsidiary of the Company.
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We currently have no branded OTC or consumer products nor do we plan to launch any OTC or consumer products in the near term as our focus is primarily on our pharmaceutical development pipeline and continuing the contract services offered by our subsidiaries.
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Although transdermal versions offer improved pharmacokinetic delivery as well as patient convenience with wear times of up to 7 days, they contain an increased drug payload which can often be a target for recreational drug abusers or subject to accidental pediatric exposure, particularly with infants and toddlers.
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Abuse of opioids in general, and in particular fentanyl abuse and overdose, continues to be an epidemic which can lead to the abuse of prescription transdermal fentanyl and other opioid containing transdermal products. AVERSA Fentanyl is an abuse deterrent fentanyl patch for the treatment of chronic pain.
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The aversive agents are not contained in the drug matrix and are not delivered to the skin during patch wear.
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Young children, in particular, have died or become seriously ill after being exposed to a skin patch containing fentanyl, a powerful opioid pain reliever. Children can overdose on new and used fentanyl patches by putting them in their mouth or sticking the patches on their skin.
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This can cause death by slowing the child’s breathing and decreasing the levels of oxygen in their blood.
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The full NDA pathway is not expected to be required for products incorporating AVERSA technology into an already approved transdermal patch. ● Preclinical phase . Before a drug company can test an experimental treatment in humans, it must prove the drug is safe and effective in animals.
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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.
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As a result, the NDA application will be primarily based on a single Phase 1 human abuse potential clinical study with no Phase 2 or 3 clinical trials needed.
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A clinical abuse potential study is typically performed in recreational drug abusers and is designed to demonstrate that the abuse-deterrent product is less preferable to recreational drug abusers than conventional fentanyl patches which contain no abuse-deterrent technology.
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Following a successful Phase 1 clinical abuse potential study, Nutriband intends to file a 505(b)(2) NDA to the FDA for marketing approval of AVERSA™ Fentanyl, which has the potential to be the first and only abuse deterrent patch approved anywhere in the world.
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The AVERSA™ Fentanyl NDA has the potential to receive an expedited review by FDA as has been granted for certain abuse-deterrent oral opioid products, which shortens the regulatory review period to six months from the conventional 10-month FDA review cycle for NDAs.
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Combined, the clinical development and regulatory path for AVERSA Fentanyl is substantially limited compared to conventional pharmaceutical product development, requiring only a single clinical trial and, following a limited NDA pathway, undergoing an expedited review by the FDA.
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Other Government Regulations We may be subject to government regulations that are applicable to businesses generally, including those relating to workers’ health and safety, environmental and waste disposal, wage and hour and labor practices, including sexual harassment laws and regulations, and anti-discrimination laws and regulations.
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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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur 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 former equity owners or officers may compete in violation of their non-competition covenants or the non-competition covenants may be held to be unenforceable. ● 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. 18 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.
Biggest changeOur 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.
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.
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. ● 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. 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.
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.
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.
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.
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.
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. 20 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. 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 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. 11 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.
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.
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. 14 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. 17 If we do not have sufficient product liability insurance, we may be subject to claims that are in excess of our net worth.
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. Patent prosecution is still pending in China. These patents provide patent coverage to 2035.
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. Patent prosecution is still pending in China and Hong Kong. These patents provide patent coverage to 2035.
The statements contained in this report include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. The risks set forth below are not the only risks facing us.
The statements contained in this prospectus include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. The risks set forth below are not the only risks facing us.
The 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 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.
The 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.
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.
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 cannot assure you that any acquisition we complete will be successful. We are dependent on third party distributors for the international marketing of our consumer products and complying with applicable laws.
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.
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.
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.
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. 17 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.
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.
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, given the economic environment resulting from the COVID-19 pandemic, 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; 19 ● 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.
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: ● 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, given the economic environment resulting from the COVID-19 pandemic, 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.
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.
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. We anticipate that we will require funds in addition to the net proceeds from this offering for our business.
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. We anticipate that we will require funds for our business.
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. We do not have any product that we can market in the United States.
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.
The trading volume in our stock is low, which may result in volatility in our stock price. 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.
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 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.
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.
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.
These officers have employment agreements with us, but the employment agreements do not guarantee that the officer will continue with us. The loss of any one of Mr. Sheridan, Mr. Melnik or Dr. Smith would materially impair our ability to conduct our business.
Melnik have employment agreements with us, the employment agreements does not guarantee that the officer will continue with us. We do not have an employment agreement with Dr. Smith. The loss of Mr. Sheridan, Mr. Melnik or Dr. Smith would materially impair our ability to conduct our business.
In 2017, we issued 1,400,000 shares of common stock (adjusted for the 1-for-4 reverse stock split effective June 23, 2019 and the 7-for-6 forward stock split effective August 15, 2022), 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.
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 anticipate that we will require funds in addition to the net proceeds from this offering 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.
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.
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. 16 It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.
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.
You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities.
ITEM 1A. RISK FACTORS RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this prospectus before making an investment decision with regard to our securities.
Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.
Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock. We do not intend to pay any cash dividends in the foreseeable future.
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.
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.
A serious adverse finding concerning the risk of any of our products by any regulatory authority could adversely affect our reputation, business and financial results. 13 If we obtain FDA approval to market our products, we expect to spend considerable time and money complying with federal and state laws and regulations governing their sale, and, if we are unable to fully comply with such laws and regulations, we could face substantial penalties.
If we obtain FDA approval to market our products, we expect to spend considerable time and money complying with federal and state laws and regulations governing their sale, and, if we are unable to fully comply with such laws and regulations, we could face substantial penalties.
Further, if we are able to raise funds from the sale of debt securities, the lenders may impose restrictions on our operations and may impair our working capital as we service any such debt obligations. Stockholders may experience significant dilution from future equity offerings and other issuances of our common stock or other securities.
Further, if we are able to raise funds from the sale of debt securities, the lenders may impose restrictions on our operations and may impair our working capital as we service any such debt obligations. We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
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.
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.
We cannot assure you that a marketing program for any of our products can or will be implemented effectively or that we will be successful in developing physician and emergency service acceptance of our products. 15 If we seek to market any products in our pipeline in countries other than the United States, we will need to comply with the regulations of each country in which we seek to market our products.
We cannot assure you that a marketing program for any of our products can or will be implemented effectively or that we will be successful in developing physician and emergency service acceptance of our products.
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.
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.
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.
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.
Accordingly, even if we obtain FDA approval to market our products, we may not be able to generate sufficient revenues through the sale of our products to enable us to continue our business. 12 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 manufacture thereof becomes compliant.
Accordingly, even if we obtain FDA approval to market our products, we may not be able to generate sufficient revenues through the sale of our products to enable us to continue our business.
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.
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.
We have recently expanded our business by acquisition, and we may make acquisitions in the future.
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 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 rely on trade secrets to protect our commercial products and product candidates.
The FDA also will need to approve the manufacturing process and the manufacturing facility. 10 We may need to rely on a contract research organization to conduct our preclinical and clinical trials. We may need to rely on third party contract research organizations to conduct our preclinical and clinical trials.
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.
Our products will continue to be subject to FDA review after FDA approval is given.
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.
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ITEM 1A. RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the risks described An investment in our common stock involves a high degree of risk.
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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 Because we are an early-stage company with minimal revenue and a history of losses and we expect to continue to incur substantial losses for the foreseeable future, we cannot assure you that we can or will be able to operate profitably.
Added
Since we do not have commercial manufacturing capability, if we are unable to establish manufacturing facilities, we may have to enter into a manufacturing agreement with a manufacturer that has been approved by the FDA. Any commercial manufacturer of our products and the manufacturing facilities where we make our commercial products will be subject to FDA inspection.
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During the year ended January 31, 2023, we generated revenues of $2,079,609, a loss of $4,483,474 and a negative cash flow from operations of $2,987,198. As of January 31, 2023, we had a working capital surplus of $1,945,132, as compared with a working capital surplus of $4,686,112 as of January 31, 2022.
Added
Part of the process of seeking FDA approval to market our products is the FDA’s approval of the manufacturing process and facility.
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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.
Added
Although we may establish our own manufacturing facilities, the establishment of a manufacturing facility is very costly, and, unless we obtain funding for that purpose, it would be necessary for us to engage a contract manufacturer who has experience is manufacturing FDA-approved transdermal products.
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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.
Added
By relying on a contract manufacturer, we will be dependent upon the manufacturer, whose interests may be different from ours. Any contract manufacturer will be responsible for product quality and for meeting regulatory requirements.
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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.
Added
If the manufacturer does not meet our quality standards and delivers products that do not meet our specifications, we may both incur liability for breach of our warranty to our customer, as well as liability for any adverse events, including death, that may result from the use, abuse or accidental misuse of the product.
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If we cannot achieve profitability, we may be forced to cease operations and you may suffer a total loss of your investment. The Russian/Belarus-Ukrainian conflict may adversely affect our business, financial condition and results of operations. In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine.
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Regardless of whether we are able to make a claim against the contract manufacturer, our reputation may be harmed and we may lose business as a result. Further, the contract manufacturer may have other customers and may allocate its resources based on the contract manufacturer’s interest rather than our interest.
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The specific impact on our financial condition, results of operations and cash flows is not determinable as of the date hereof. However, to the extent that such military action spreads to other countries, intensifies, or otherwise remains active, such conflict could have a material adverse effect on our financial condition, results of operations, and cash flows.
Added
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.
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To date, this conflict is having a destabilizing effect on the world’s economy, resulting in higher energy prices and inflationary pressures generally in the world’s economy, as well as possible supply chain restraints, which negatively affects the world’s economy generally and possibly our ongoing operations specifically.
Added
A serious adverse finding concerning the risk of any of our products by any regulatory authority could adversely affect our reputation, business and financial results.
Removed
The duration of this conflict, as well as its effects on the world economy are not known at this point. These factors may lead to a lack of certainty or other changes in the capital markets and limit or reduce our potential for raising the additional capital that we will require to execute our business plan in a timely fashion.
Added
A recent district court decision which struck down Obamacare, if upheld, could have a material adverse effect upon reimbursement and payment for products such as our proposed products.
Removed
Our business will likely be adversely affected by the COVID-19 pandemic.
Added
It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection.
Removed
The COVID-19 pandemic and the response to the pandemic could affect our business in a number of ways, including, but are not limited to, the following: ● Our ability to raise financing for our operations may be affected by both the willingness and ability of potential financing sources and potential joint venture partners to invest our business. ● The decision by investors who would invest in early-stage pharmaceutical companies to limit their financing efforts to companies that are dealing with products or services related to COVID-19 diagnosis or treatment. ● The effect of recent stock market decline on the willingness of investors to make an investment in our securities. 9 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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In September 2018, we entered into an agreement to acquire Carmel Biosciences Inc., and in November 2018, we terminated the agreement. We previously entered into another acquisition agreement which was rescinded shortly after the agreement was executed.
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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.
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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.
Removed
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.
Added
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.
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None of our pharmaceutical products are currently approved for sale by any government authority in any jurisdiction.
Added
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. We anticipate that we will require funds for our business.
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If we fail to comply with regulatory requirements in any market we decide to enter, or to obtain and maintain required approvals, or if regulatory approvals in the relevant markets are delayed, our target market will be reduced and our ability to realize the full market potential of our products will be harmed.
Removed
Marketing approval in one jurisdiction, including the United States, does not ensure marketing approval in another, but a failure or delay in obtaining marketing approval in one jurisdiction may have a negative effect on the regulatory process in others.
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Failure to obtain a marketing approval in countries in which we seek to market our products or any delay or setback in obtaining such approval would impair our ability to develop foreign markets for any of our products.
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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.
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We initiated litigation against Advance Health Brands and certain of its stockholders, and as a result recovered all of the original Nutriband share certificates. We previously entered into another acquisition agreement which was rescinded shortly after the agreement was executed.
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There are risks associated with our February 2023 dual listing of our common stock on the MERJ Upstream Exchange, which is available solely for our non-U.S. resident stockholders. Listing shares of the Company on Upstream is only suitable for investors who are familiar with and willing to accept the high risk associated with speculative investments.
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There can be no assurance in that marketplace that the valuation of any particular company’s securities is accurate or in agreement with the market or industry comparative valuations. Investors must be able to afford market volatility and afford the loss of their investment.
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Companies listed on Upstream are subject to significant ongoing corporate obligations including, but not limited to disclosure, filings, and notification requirements, as well as compliance with applicable quantitative and qualitative listing standards.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease manufacturing space in Cherryville, North Carolina, for $3,000 per month under a three-year lease entered into on February 1, 2022, with a renewal option. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable 23 PART II
Biggest changeWe lease manufacturing space in Cherryville, North Carolina, for $3,000 per month under a three-year lease entered into on February 1, 2022, with a renewal option.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 23 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. [Reserved] 25 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31 Item 8.
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities During the year ended January 31,2023, the Company purchased 35,584 shares of its common stock for $119,006 and recorded the purchase as Treasury Stock.
Biggest changeIssuer Purchases of Equity Securities In the fiscal year ended January 31, 2024, the Company made no purchases in the market of its common stock.
The transfer agent for the common stock is American Stock Transfer & Trust Company, LLC, 6201 15th Ave, Brooklyn, NY 11219, telephone (800) 937-5449. Dividends We have not declared any cash dividends at any time, and we do not anticipate declaring any cash dividends in the foreseeable future.
The transfer agent for the common stock is Equiniti Trust Company, LLC, 6201 15th Ave, Brooklyn, NY 11219, telephone (800) 937-5449. Dividends We have not declared any cash dividends at any time, and we do not anticipate declaring any cash dividends in the foreseeable future.
Shareholders of Record As of April 15, 2023, we had approximately 77 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.
Shareholders 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.
Removed
Dual Listing on Upstream We have set up the dual listing of our common stock (“common stock”) on the MERJ Upstream stock exchange, operated by MERJ Exchange (“Upstream”), that is an exchange registered in the Seychelles under the Seychelles Securities Act, 2007.
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Our shares that are listed and traded on Upstream by our global stockholders would be uncertificated common stock represented by digital share tokens, that represent the same class and shares that are currently traded on the Nasdaq Stock Exchange.
Removed
U.S. or Canada residents are not permitted to list their Nutriband shares on Upstream, which limits stockholder listings to non-residents of the U.S. and Canada. At present, a total of 250,000 shares of our common stock have been listed on Upstream by global holders.
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We have received comment letters from the SEC as to our disclosures in the Current Report on Form 8-K that we filed on January 5, 2023, announcing the dual listing, and expect that we will be filing further disclosures on the operation of the exchange and its rules regarding listing of Nutriband shares by our shareholders on that exchange.
Removed
Unresolved Staff Comments.” in this Annual Report, as well as risk factors associated with the listing by Nutriband shareholders of their shares on that exchange set forth under “Risk Factors—Risks Concerning Our Securities”. 24 Sales of Unregistered Securities The following table sets forth the sales of unregistered securities since the Company’s last report filed under this item.
Removed
Date Title and Amount (1) Purchaser Principal Underwriter Total Offering Price/ Underwriting Discounts May 10, 2022 1,667 shares of common stock Radu Bujoreanu, Director NA $ 3,800/NA May 10, 2022 1,667 shares of common stock Stefani Mancas, Director NA $ 3,800/NA May 10, 2022 1,667 shares of common stock Irina Gram, Director NA $ 3,800/NA May 10, 2022 1,667 shares of common stock Consultant NA $ 3,800/NA May 10, 2022 1,667 shares of common stock Mark Hamilton, Director NA $ 3,800/NA May 10, 2022 1,667 shares of common stock Michael Meyer NA $ 38,000/NA May 10, 2022 11,667 shares of common stock Gareth Sheridan, CEO NA $ 38,000/NA May 10, 2022 583 shares of common stock Employee NA $ 1,900/NA May 10, 2022 583 shares of common stock Employee NA $ 1,900/NA May 10, 2022 583 shares of common stock Employee NA $ 1,900/NA May 10, 2022 583 shares of common stock Employee NA $ 1,900/NA November 8, 2022 583 shares of common stock Employee NA $ 1,900/NA November 8, 2022 1,667 shares of common stock Consultant NA $ 19,000/NA November 8, 2022 5,833 shares of common stock Consultant NA $ 102,750/NA (1) The issuances to employees, consultants and investors are viewed by the Company as exempt from registration under the Securities Act of 1933, as amended (“Securities Act”), alternatively, as transactions either not involving any public offering, or as exempt under the provisions of Regulation D or Rule 701, promulgated by the SEC under the Securities Act.

Item 7. Management's Discussion & Analysis

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

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Biggest changeStock-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.
Biggest changeTransactions 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.
In connection with the Stock Split, which did not require shareholder approval under the Nevada corporation law, the number of 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.
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.
We are, for the near term, continuing this activity, although we do not anticipate that it will generate significant revenues and, since our acquisition, it has generated minor gross margins. We have no long-term contractual obligations, and either party can terminate at any time. 26 With the change in our focus, our capital requirements have increased substantially.
We are, for the near term, continuing this activity, although we do not anticipate that it will generate significant revenues and, since our acquisition, it has generated minor gross margins. We have no long-term contractual obligations, and either party can terminate at any time. With the change in our focus, our capital requirements increased substantially.
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 is the manufacturer of our transdermal consumer products, and we bought that business from them.
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.
Actual results could differ from those estimates. 29 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.
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.
Following our acquisition of selected assets from Pocono Coated Products, LLC (“Pocono”), we are primarily focused on providing contract manufacturing services and consulting services to 3 rd party brands with no intention at this time to launch our own consumer products. 4P Therapeutics has not generated any revenue from any of its products under development.
Following our acquisition of selected assets from Pocono Coated Products, LLC (“Pocono”), we are primarily focused on providing contract manufacturing services and consulting services to third party brands with no intention at this time to launch our own consumer products. 4P Therapeutics has not generated any revenue from any of its products under development.
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.
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.
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 also received to date $2,942,970 proceeds from the exercise of warrants.
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.
Our abuse deterrent transdermal product under development has the potential to provide clinicians and patients with an extended-release transdermal fentanyl product for use in managing chronic pain requiring around the clock opioid therapy combined with properties designed to deter the abuse and misuse of fentanyl patches.
AVERSA Fentanyl has the potential to provide clinicians and patients with an extended-release transdermal fentanyl product for use in managing chronic pain requiring around the clock opioid therapy combined with properties designed to deter the abuse and misuse of fentanyl patches.
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.
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.
During the years ended January 31, 2023 and 2022, the Company recorded an impairment charge of $327,326 and $2,180,836, respectively, reducing the Active Intelligence LLC Goodwill to $3,302,478. As of January 31, 2023 and 2022, Goodwill amounted to $5,021,713 and $5,349,039, respectively.
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 ended January 31, 2023 and 2022, the Company recorded an impairment expense of $327,326 and $2,180,836, respectively, due to a write down of Goodwill in connection with its Pocono acquisition. The write down of goodwill is attributable primarily to the effects of the pandemic.
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.
As a result of the foregoing, we sustained a net loss of $4,483,474, or $(0.53) per share (basic and diluted) for the year ended January 31, 2023, compared with a loss of $6,372,715, or $(0.80) per share (basic and diluted) for the year ended January 31, 2022.
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.
Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. Potential shares of common stock consist of shares issuable upon the exercise of outstanding options and common stock purchase warrants.
Earnings per Share Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period.
Our primary business is the development of a portfolio of transdermal pharmaceutical products. Our lead product is our abuse deterrent fentanyl transdermal system which will require approval from the Food and Drug Administration (“FDA”) and substantial additional capital for research and development.
Our lead product under development is AVERSA Fentanyl, our abuse deterrent fentanyl transdermal system which will require approval from the Food and Drug Administration (“FDA”) and substantial capital for research and development.
On October 31, 2022, the Company filed the Proxy Statement with the SEC for its Annual Meeting of Stockholders, to be held December 9, 2022, in Orlando, Florida. This Proxy Statement is available on our website at HTTPS://Nutriband.com/proxy . Forward Split of our Common Stock.
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 .
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.
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.
As of October 31, 2022, 457,795 Warrants issued in the IPO have been exercised, with net proceeds to the Company of $2,942,970. On November 1, 2021, The Board of Directors adopted the 2021 Employee Stock Option Plan (the “Plan”). The Company has reserved 408,333 shares to issue and sell upon the exercise of stock options issued under the Plan.
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”).
The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset.
The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value.
For the year ended January 31, 2023, we provided cash in financing activities of $160,074, primarily from the proceeds of $296,875 from the exercise of warrants, offset from the purchase of treasury stock of $119,006.
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.
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.
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.
The Company has used these proceeds to fund operations and will continue to use the funds as needed. In March 2023, the Company entered into a three-year $2,000,000 Creditline Note facility for $2 million which will permit the Company to draw on the credit line to fund the Company’s research and development of its Aversa Fentanyl product.
In March 2023, the Company entered into a three-year $2,000,000 Credit Line Note facility with a related party, amended on July 13, 2023, to $5,000,000, which will permit the Company to draw down on the credit line to fund the Company’s research and development of its Aversa product.
See “Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this report. It should be noted that current public health threats could adversely affect our ongoing or planned business operations.
See “Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors” and elsewhere in this report. Overview AVERSA™ Abuse Deterrent Transdermal Products Our primary business is the development of a portfolio of transdermal pharmaceutical products.
A substantial component of the purchase price related to the Company’s acquisitions have also been assigned to intellectual property and other intangibles. Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment.
Under the guidance, other intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are tested annually for impairment. Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years.
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).
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.
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. 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 transdermal patch manufacturing segment increased its margin by 3% during the period. 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. Our sales and cost of sales remained constant for our contract services compared to the prior year.
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.
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 required payments. The Company determines its allowances by both specific identification of customer accounts where appropriate and the application of historical loss to non-applicable accounts.
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, 2023, and 2022, there were 1,778,006 and 1,503,171 common stock equivalents outstanding, that were not included in the calculation of dilutive earnings per share as their effect would be anti-dilutive.
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.
In addition, we believe that our abuse deterrent technology can be broadly applied to various 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 risks or a history of abuse.
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.
As of January 31, 2023, the Company had cash and cash equivalents of $1,985,440 and working capital of $1,945,132. For the year ended January 31, 2023, the Company incurred an operating loss of $4,483,474 and used cash flow from operations of $2,987,198.
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.
The net loss for 2022 includes a deemed dividend of $196,589 from the settlement of a warrant round down. Liquidity and Capital Resources As of January 31, 2023, we had $1,985,440 in cash and cash equivalents and working capital of $1,945,132, as compared with cash and cash equivalents of $4,891,868 and working capital of $4,686,112 as of January 31, 2022.
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.
As of January 31, 2023 and 2022, 100% of the inventory consists of raw materials. Intangible Assets Intangible assets include trademarks, intellectual property and customer base acquired through business combinations. The Company accounts for Other Intangible Assets under the guidance of ASC 350, “Intangibles-Goodwill and Other.” The Company capitalizes certain costs related to patent technology.
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.
During the year ended January 31, 2022, the Company incurred a gain on extinguishment of debt of $53,028, consisting primarily of forgiveness of a PPP loan. There was no gain on extinguishment of debt during the year ended January 31, 2023.
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.
Net realized value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. The cost of finished goods and work in process is comprised of material costs, direct labor costs and other direct costs and related production overheads (based on normal operating capacity).
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.
We incurred interest expense of $8,289 for the year ended January 31, 2023, as compared to $118,421 for the year ended January 31, 2022, primarily from the amortization of debt discounts.
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.
During the year January 31, 2023, the Company incurred research and development expenses on its Aversa Fentanyl product of $982,227, primarily of salaries and development costs from Kindeva as compared to $411,383 for the year ended January 31, 2022.
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.
As of February 1, 2019, pursuant to ASC 2018-07, ASC 718 was applied to stock-based compensation for both employees and non-employees. Research and Development Expenses Research and development costs are expensed as incurred. Income Taxes Taxes are calculated in accordance with taxation principles currently effective in the United States and Ireland.
The Company completed the necessary changes to its accounting policies, processes, disclosure and internal control over financial reporting. Research and Development Expenses Research and development costs are expensed as incurred. Income Taxes Taxes are calculated in accordance with taxation principles currently effective in the United States and Ireland.
For the year ended January 31, 2023, our selling, general and administrative expenses were $3,916,041, primarily legal, accounting, administrative salaries and equity-based payments, compared to $4,022,824 for the year ended January 31, 2022. The amount remained relatively constant for the prior year.
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 principal adjustments to our net loss of $4,483,474 were depreciation and amortization of $330,143, and stock-based compensation of $1,019,310, and goodwill impairment of $327,326. For the year ended January 31, 2023, we used cash in investing activities of $79,304 primarily for the purchase of equipment.
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 ended January 31, 2022, we generated revenue of $1,422,154 and our costs of revenue were $917,844, resulting in a gross margin of $504,310 in the subsequent year.
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.
The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is too early to know the full impact of COVID-19 or its timing on a return to normal operations. Management believes the substantial doubt about the ability of the Company to continue as a going concern is alleviated by the above assessment.
Management believes the substantial doubt about the ability of the Company to continue as a going concern is alleviated by the above assessment. Principles of Consolidation The consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated.
Our revenue for the year ended January 31, 2023, was derived from sales of $1,785,507 from our transdermal patch manufacturing segment and $294,102 from contract services from our 4P Therapeutics segment. The increase in revenue of $657,455 from the transdermal patch manufacturing segment is primarily due to an increase in demand which has continued in the subsequent year.
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.
Removed
In particular, the novel coronavirus (COVID-19) has resulted in quarantines, restrictions on travel and other business and economic disruptions.
Added
The Company has reserved 408,333 shares to issue and sell upon the exercise of stock options issued under the Plan.
Removed
We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including the partners and other third parties with whom we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and adversely impacted.
Added
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”).
Removed
The measures being taken by service providers and government agencies to suppress the spread of COVID-19 infection may delay time to production of our planned abuse deterrent fentanyl transdermal system product and therefor delay the time of filing with FDA for approval. Overview AVERSA™ transdermal abuse deterrent technology.
Added
The plan adopted by the Board on November 1, 2021, provided for an initial 350,000 shares to issue and sell upon the exercise of stock options issued under the Plan.
Removed
We received on January 28, 2022 an Issue Notification from the United States Patent and Trademark Office (USPTO) for its United States patent entitled, “Abuse and Misuse Deterrent Transdermal System,” that protects our Aversa™ technology platform.
Added
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
On January 21, 2022, the Board approved options to purchase 190,751 shares of the Company’s common stock under the Plan issued to executive officers and directors of the Company at an exercise price of $4.16 ($4.58 per share for two of the officers as required by IRS rules).
Added
We will submit the Amendment to the Plan to our stockholders for adoption and approval at the 2025 Annual Meeting.
Removed
On August 1, 2022, the Board approved option grants previously approved by the Compensation Committee for an aggregate of 137,084 shares of common stock at exercise prices $4.09 or $4.50 per share depending on IRS rules as applicable to the recipient,, and on September 30, 2022, approved option issuances under the Plan for an aggregate of 35,000 shares of common stock at an exercise price of $3.59 per share for services provided by the independent directors, as previously approved by the Compensation Committee.
Added
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
The Company received a favorable verdict on July 13, 2022 from the Circuit Court, Orange County, Florida, providing for rescission of the Company’s 2017 acquisition of Advanced Health Brands and recovery by the Company of the 1,400,000 shares(adjusted for a 1-for-4 reverse stock split effective June 23, 2019 and the 7-for-six forward stock split effective August 15, 2022) of common stock issued in the acquisition, effectively allowing the Company on July 25, 2022 to cancel 1.4M shares of common stock held by the defendants.
Added
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”).
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. 27 Years Ended January 31, 2023 and 2022 For the year ended January 31, 2023, we generated revenue of $2,079,609 and our costs of revenue were $1,329,200, resulting in a gross margin of $750,409.
Added
The Offering was made solely to investors resident outside the United States and was not registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any jurisdiction, including any jurisdiction outside the United States, but was made privately by the Company pursuant to the exemptions from registration provided in the SEC’s Regulation S and other exemptions under the Securities Act.
Removed
The valuation of the reporting unit does not exceed the carrying amount of goodwill using the value in use or the going concern premise.
Added
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
The Company received proceeds of approximately $8.8 million from the completion of its public offering, exercise of warrants and the sale of common stock during the year ended January 31, 2022. For the year ended January 31, 2023, we used cash of $2,987,198 in our operations.
Added
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
For the year ended January 31, 2022, we had cash flows of $7,630,693 from financing activities, primarily $9.4 million from the completion of our public offering, exercise of warrants, and gross proceeds from the sale of common stock offset by a payment on long-term debt of $1.5 million and the repurchase of treasury stock.
Added
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
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. 28 Critical Accounting Policies Forward Stock Split 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.
Added
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.
Removed
The Company filed the amendment set forth in a Certificate of Change with the Secretary of State of Nevada on August 4, 2022. The 7:6 forward stock split was effective for trading purposes on the Nasdaq Capital Market on August 12, 2022.
Added
For the year ended January 31, 2024, we used cash in investing activities of $51,761 primarily for the purchase of equipment.
Removed
Each shareholder of record as of the August 15, 2022 record date received one (1) additional share for each six (6) shares held as of the record date. 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.
Added
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
All share and per share information in these financial statements retroactively reflect the forward stock split.
Added
The Company has used these proceeds to fund operations and will continue to use the funds as needed.
Removed
For the years ended January 31, 2023 and 2022, the Company recorded no bad debt expense for doubtful accounts related to account receivable. Inventories Inventories are valued at the lower of cost and reasonable value determined using the first-in, first-out (FIFO) method.
Added
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
Trademarks, intellectual property and customer base are being amortized over their estimated useful lives of ten years. Goodwill Goodwill represents the difference between the total purchase price and the fair value of assets (tangible and intangible) and liabilities at the date of acquisition.
Added
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.
Removed
If an impairment exists, the resulting write-down would be the difference between the fair market value of the long-lived asset and the related book value. 30 Earnings per Share Basic earnings per share of common stock is computed by dividing net earnings by the weighted average number of shares of common stock outstanding during the period.
Added
The wholly owned subsidiaries are as follows: Nutriband Ltd. 4P Therapeutics LLC Pocono Pharmaceuticals Inc.
Removed
Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company’s cash and cash equivalents are concentrated primarily in banks. At times, such deposits could be in excess of insured limits.

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