AUTO PARTS 4LESS GROUP, INC.

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

Condensed Consolidated Statements of Cash Flows

For the ~~Nine~~Six Months Ended ~~October~~July 31, ~~2022~~2023 and ~~October~~July 31, ~~2021~~2022

(Unaudited)

	2022			2021			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)	$	(12,228,775	)	$	(4,886,380	)
Net Income (Loss)							$	(5,820,807	)	$	(8,097,084	)
Adjustments to reconcile net income (loss) to cash used by operating activities:
Depreciation		38,587			35,930			21,458			25,844
Inventory Provision		143,000			—
Reduction of Right of Use Asset		77,782			69,691			42,343			52,658
Accretion of Lease Liability		12,396			21,746			4,659			8,300
(Gain) loss in Fair Value on Derivative Liabilities		841,772			88,551			2,139,790			657,626
Amortization of Debt Discount		4,309,329			442,075			1,087,238			2,376,607
Debt Discount Expensed								5,000			—
Debt Discount in Excess of Face Value of Note to Interest Expense		225,429			—			318,355			225,429
Loan Penalties Capitalized to Loan and Accrued Interest		600,000			28,000
Loan Penalties Capitalized to Loan								90,928			—
Interest Expense on Penalty Warrants		798,450			—			112,520			595,200
Stock Based Compensation		1,998,000			1,097,500			—			1,998,000
Stock Based Payment of Consulting Fees and Shares		—			303,555
Deferred Salary for Former CEO								20,000			—
Gain on Sale of Property and Equipment		—			(20,345	)		(3,056	)		—
PPP Loan Forgiveness		—			(209,447	)
Gain on Settlement of Debt		(19,539	)		(1,004,615	)		(37,382	)		(9,411	)
Change in Operating Assets and Liabilities:
(Increase) Decrease in Inventory		147,333			(78,033	)
Decrease in Prepaid Rent and Expenses		12,077			5,546
(Increase) in Other Current Assets		(17,779	)		(39,270	)
Decrease in Inventory								19,091			142,138
(Increase) in Prepaid Rent and Expenses								(4,417	)		(69,048	)
Decrease (Increase) in Other Current Assets								27,893			(10,117	)
Decrease in Bank Overdraft		(11,055	)		—			—			(11,055	)
Increase in Accounts Payable		95,931			230,225
Increase in Accrued Expenses		741,729			137,440
Decrease in Accounts Payable								(37,840	)		(293,652	)
Increase (Decrease) in Accrued Expenses								1,189,657			352,990
Operating Lease Payments		(90,178	)		(91,437	)		(47,002	)		(60,958	)
Decrease in Accrued Expenses -Related Party		(500	)		(60,000	)		—			(500	)
Increase (Decrease) in Customer Deposits		(473,044	)		32,391
Decrease in Customer Deposits								(27,365	)		(305,796	)
Decrease in Deferred Revenue		(598,990	)		(446,474	)		(64,754	)		(568,990	)
CASH FLOWS (USED IN) OPERATING ACTIVITIES		(3,398,045	)		(4,343,351	)		(963,691	)		(2,991,819	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds of Sales of Property and Equipment		—			25,060
Purchase of Property and Equipment		(1,142	)		(43,628	)		—			(1,142	)
CASH FLOWS (USED IN) INVESTING ACTIVITIES		(1,142	)		(18,568	)		—			(1,142	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issuance of Common Shares, Net of Issuance Costs		—			3,037,625
Proceeds from Convertible Notes Payable								688,702			3,541,918
Proceeds from Short Term Debt		—			1,568,472			107,980			—
Proceeds from Convertible Notes Payable		4,006,714			699,525
Payments on Short Term Debt		(376,699	)		(449,386	)		(4,715	)		(341,112	)
Shareholder Loans Payable		20,000			—			224,572			20,000
Repayments on Shareholder Loans Payable		(33,561	)		—			—			(30,061	)
Payments on Long Term Debt		(20,739	)		(14,857	)		(10,390	)		(15,809	)
Payments on Convertible Notes Payable		(228,000	)		(406,825	)		(10,000	)		(114,000	)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		3,367,715			4,434,554			996,149			3,060,936

NET INCREASE (DECREASE) IN CASH		(31,472	)		72,635
NET INCREASE IN CASH								32,458			67,975

CASH AT BEGINNING OF PERIOD		77,498			277,664			4,737			77,498

CASH AT END OF PERIOD	$	46,026		$	350,299		$	37,195		$	145,473

Supplemental Disclosure of Cash Flows Information:
Cash Paid for Interest	$	75,038		$	345,868		$	109,444		$	45,300
Convertible Notes Interest and Derivatives Converted to Common Stock	$	—		$	237,085
Issuance of Shares as payment for Accrued Expenses							$	122,109		$	—
Transfer of Vehicle At Fair Market Value to Accounts Payable Related Party							$	65,000		$	—
Transfer of Vehicle Loan to Accounts Payable Related Party							$	42,535		$	—
Convertible Notes Interest ,Fees and Derivatives Converted to Common Stock							$	187,249		$	—
Fair Value of Instruments Issued With Debt	$	2,427,336		$	487,284		$	32,984		$	1,859,430
Derivative Debt Discount	$	1,557,922		$	—		$	694,914		$	879,213
Debt Discount	$	772,796		$	—		$	96,425		$	696,972
Transfer of Short-term Loan , Shareholder Loan and Accounts payable to Convertible Note	$	210,740		$	—
Issuance of Warrants to Deferred Offering Costs	$	—		$	600,000
Deferred Offering Costs Against Share Proceeds	$	—		$	312,000
Loans to acquire Fixed Assets	$	—		$	151,327

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

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AUTO PARTS 4LESS GROUP, INC.

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

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Business:

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

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

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

Significant Accounting Policies:

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

Basis of Presentation:

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

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, ~~2022~~2023 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on ~~May 9, 2022.~~August 11, 2023.

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Principles of Consolidation:

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

Use of Estimates:

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

Reclassifications

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

Cash and Cash Equivalents:

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

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value. Inventories are valued on a first-in, first-out (FIFO) basis. Inventory is comprised of finished goods. ~~At October 31, 2022 the provision for inventory obsolescence was $143,000. (January 31, 2022 - $0)~~

Concentrations

Cost of Goods Sold

For the ~~nine~~three months ended ~~October~~July 31, ~~2022~~2023 the Company purchased approximately ~~51%~~20% of its inventory and items available for sale from third parties from three vendors. As of ~~October~~July 31, ~~2022,~~2023, the net amount due to ~~the~~one vendors included in accounts payable was ~~$426,606.~~$322,392. For the ~~nine~~three months ended ~~October~~July 31, ~~2021~~2022 the Company purchased approximately ~~58%~~51% of its inventory and items available for sale from third parties from three vendors. As of ~~October~~July 31, ~~2021,~~2022, the net amount due to the three vendors included in accounts payable was ~~$440,977.~~$308,886. The Company believes there are numerous other suppliers that could be substituted should a supplier become unavailable or non-competitive.

Leases

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

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Income Taxes

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

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

Fair Value of Financial Instruments:

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

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

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

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

Level 3 Inputs – Instruments with primarily unobservable value drivers.

The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of ~~October~~July 31, ~~2022:~~2023:

	October 31, 2022		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		July 31, 2023		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Derivative Liabilities – embedded redemption feature	$	3,663,597	$	—	$	—	$	3,663,597	$	6,470,081	$	—	$	—	$	6,470,081
Totals	$	3,663,597	$	—	$	—	$	3,663,597	$	6,470,081	$	—	$	—	$	6,470,081

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Related Party Transactions:

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

Derivative Liability

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

The fair value of the derivative liability is determined using a lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, historical stock price volatility, the expected term, and both high risk and the risk-free interest rate. The most sensitive inputs to the model are for expected time for the holder to convert or be repaid and the estimated historical volatility of the Company’s common stock. However, because the historical volatility of the Company’s common stock is so high (see Note 9), the sensitivity required to change the liability by 1% as of ~~October~~July 31, 2022 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability.

Revenue Recognition

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

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

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

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

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

Disaggregation of Revenue: Channel Revenue

The following table shows revenue split between proprietary and third-party website revenue for the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:

Schedule of revenue split between proprietary and third-party website revenue

					Change									Change
	2022		2021		$			%		2023		2022		$			%
Proprietary website revenue	$	611,799	$	2,392,668	$	(1,780,869	)	(74%	)
Proprietary website and marketplace revenues										$	11,183	$	902,594	$	(891,410	)	(99%	)
Third party website revenue		406,187		721,394		(315,207	)	(44%	)		48,173		438,528		(390,355	)	(89%	)
Total Revenue	$	1,017,986	$	3,114,062	$	(2,096,076	)	(67%	)	$	59,357	$	1,341,122	$	(1,281,765	)	(96%	)

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The following table shows revenue split between proprietary and third-party website revenue for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:

Change
2022 2021 $ %
Proprietary website revenue $ 2,750,636 $ 6,339,478 $ (3,588,842 ) (57% )
Third party website revenue 1,338,401 3,090,041 (1,751,640 ) (57% )
Total Revenue $ 4,089,037 $ 9,429,519 $ (5,340,482 ) (57% )
Change
2023 2022 $ %
Proprietary website and marketplace revenue $ 118,017 $ 2,138,837 $ (2,020,820 ) (94% )
Third party website revenue 77,403 932,215 (854,812 ) (92% )
Total Revenue $ 195,420 $ 3,071,052 $ (2,875,632 ) (94% )

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

Stock-Based Compensation:

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

Earnings (Loss) Per Common Share:

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

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

Recently Issued Accounting Standards:
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact.
~~Fair Value Measurement~~: In 2018, the FASB issued amended guidance to remove, modify and add disclosure requirements for fair value measurements. This amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosure requirements. Transition is on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated. The adoption of this guidance on February 1, 2020 did not have a material impact on our consolidated financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows.
In December 2019, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting and reporting of income taxes. The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intra-period tax allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate. The Company adopted the new guidance effective February 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.
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In January 2020, the FASB issued new guidance intended to clarify certain interactions between accounting standards related to equity securities, equity method investments and certain derivatives. The guidance addresses accounting for the transition into and out of the equity method of accounting and measuring certain purchased options and forward contracts to acquire investments. The Company adopted the new guidance effective February 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.

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

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

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

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

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

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

NOTE 2 – GOING CONCERN AND FINANCIAL POSITION

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of ~~$40,680,508~~$52,057,066 as of ~~October~~July 31, ~~2022~~2023 and has a working capital deficit at ~~October~~July 31, ~~2022~~2023 of ~~$15,279,670.~~$25,967,271. As of ~~October~~July 31, ~~2022,~~2023, the Company only had cash and cash equivalents of ~~$46,026~~$37,195 and approximately ~~$6,111,000~~$14,560,000 of ~~short-term~~short term and convertible debt in default. ~~The short-term~~These debt agreements provide legal remedies for satisfaction of defaults, none of the lenders ~~of which~~ to this point have pursued their legal remedies. The Company is renegotiating with its lenders. While the Company has plans to grow its revenues through the new ~~website ,~~marketplace, at this time, our current liquidity position raises substantial doubt about the Company’s ability to continue as a going concern.

Management’s plan is to raise additional funds in the form of debt or equity in order to continue to fund losses until such time as revenues can sustain the Company. However, there is no assurance that management will be successful in being able to continue to obtain additional funding. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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NOTE 3 – PROPERTY

The Company capitalizes all property purchases over $1,000 and depreciates the assets on a straight-line basis over their useful lives of 3 years for computers and 7 years for all other assets. Property consists of the following at ~~October~~July 31, ~~2022~~2023 and January 31, 2022:

October 31, 2022 January 31, 2022 July 31, 2023 January 31, 2023
Office furniture, fixtures and equipment $ 95,183 $ 94,041 $ 95,183 $ 95,183
Shop equipment 43,004 43,004 43,004 43,004
Vehicles 206,760 206,760 117,049 206,760
Sub-total 344,947 343,805 255,236 344,947
Less: Accumulated depreciation (161,056 ) (122,469 ) (167,433 ) (173,475 )
Total Property $ 183,891 $ 221,336 $ 87,803 $ 171,472

Additions to fixed assets for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 were ~~$1,142.~~$0. Additions to fixed assets for the ~~nine~~six months ended ~~October~~July 31, ~~2021 and~~2022 were ~~$186,327 with $35,000 paid in cash and $151,327 financed through vehicle loans for vehicles and an additional $8,628 acquired in equipment.~~$1,142.

~~There were no disposals for~~For the ~~nine~~six months ended ~~October~~July 31, ~~2022. For the nine months ended October 31, 2021, vehicles~~2023, a vehicle having a cost of ~~$20,000~~$89,711 and a net book value of ~~$4,715~~$61,953 was ~~disposed of. Proceeds received~~sold to a former director for fair value proceeds of ~~$25,060~~$65,000 and a gain on sale of property and equipment of ~~$20,345~~$3,057 were recorded. There were no disposals for the six months ended July 31, 2022.

Depreciation expense was ~~$12,743~~$9,040 and ~~$12,479~~$12,906 for the three months ended ~~October~~July 31, ~~2022,~~2023, and ~~October~~July 31, ~~2021,~~2022, respectively.

Depreciation expense was ~~$38,587~~$21,458 and ~~$35,930~~$25,844 for the six months ended ~~October~~July 31, ~~2022,~~2023, and ~~October~~July 31, ~~2021,~~2022, respectively.

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NOTE 4 – LEASES

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

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

Below is a summary of our lease assets and liabilities at ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022.~~2023.

Leases Classification October 31, 2022 January 31, 2022 Classification July 31, 2023 January 31, 2023
Assets
Operating Operating Lease Assets $ 160,770 $ 242,583 Operating Lease Assets $ 96,208 $ 138,551
Liabilities
Current
Operating Current Operating Lease Liability $ 70,214 $ 100,001 Current Operating Lease Liability $ 23,917 $ 53,912
Noncurrent
Operating Noncurrent Operating Lease Liabilities 90,556 138,551 Noncurrent Operating Lease Liabilities 72,291 84,639
Total lease liabilities $ 160,770 $ 238,552 $ 96,208 $ 138,551

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

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

Operating lease cost and rent was ~~$29,219~~$20,301 and ~~$30,478~~$30,479 for the three months ended ~~October~~July 31, ~~2022,~~2023, and ~~October~~July 31, ~~2021,~~2022, respectively.

Operating lease cost and rent was ~~$90,177~~$47,002 and ~~$91,437~~$60,958 for the ~~nine~~six months ended ~~October~~July 31, 2023, and July 31, 2022, ~~and October 31, 2021,~~ respectively.
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NOTE 5 – CUSTOMER DEPOSITS

The Company receives payments from customers on orders prior to shipment and these customer deposits on cancelled orders were either returned to the customers subsequent to ~~October~~July 31 ~~2022~~2023 or will remain as deposits until the item is either delivered and recorded as revenue or cancelled and refunded. At ~~October~~July 31, ~~2022~~2023 the Company had received ~~$57,856~~$11,083 (January 31, ~~2022- $530,900)~~2023- $38,448) in customer deposits for orders that were unfulfilled at ~~October~~July 31, ~~2022~~2023 and either canceled subsequent to year end or still awaiting shipment.

NOTE 6 – DEFERRED REVENUE

The Company receives payments from customers on orders prior to shipment and orders that were unfulfilled at ~~October~~July 31, ~~2022~~2023 because of both normal order processing and fulfillment requirements, and back orders are recorded as deferred revenue. At ~~October~~July 31, ~~2022,~~2023 the Company had received ~~$66,153~~$1,399 (January 31, ~~2022- $665,143)~~2023 - $66,153) in customer payments for orders that were unfulfilled at ~~October~~July 31, ~~2022~~2023 and delivered subsequent to ~~October~~July 31, ~~2022.~~2023.
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NOTE 7 – SHORT-TERM AND LONG-TERM DEBT

The components of the Company’s debt as of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022~~2023 were as follows:

October 31, 2022 January 31, 2022
Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2020 repayable June 30, 2022 with an additional interest payment of $20,000⁽³⁾ $ — ^* $ 97,340
Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023⁽¹⁾ 4,947 ^* 8,183
Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on July 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $72,977. 70,277 ^# 81,346
Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $68,35. 47,675 ^# 54,108
Working Capital Note Payable - $700,000, dated October 29, 2021, repayment of $17,904 per week until Oct 29, 2022, interest rate of approximately 31%^(2)(4)(7) 407,423 ^{* ∞} 635,831
Working Capital Note Payable - $650,000, dated October 25, 2021, repayment of $15,875 per week until October 25, 2022, interest rate of approximately 26%^(2)(4)(8) 447,756 ^{* ∞} 596,047
Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 5,000 ^* 5,000
Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance 2,500 ^* 2,500
Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company 12,415 ^* 12,415
Promissory note - $60,000 dated September 18, 2020 maturing April 30, 2022⁽¹⁰⁾, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 ^{* ∞} 60,000
Promissory note - $425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This note matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note.⁽⁵⁾ 425,000 ^{* ∞} 425,000
Promissory note - $1,200,000 dated August 28, 2020, maturing August 28, 2022, 12%  interest payable monthly with the first six months interest deferred until the 6th month and added to principal.⁽⁶⁾ 1,200,000 ^{* ∞} 1,200,000
Promissory note - $420,000 dated December 27, 2021, including $20,000 original issue discount, maturing January 27, 2022, non-interest bearing⁽⁹⁾ 420,000 ^{* ∞} 420,000
Total $ 3,102,993 $ 3,597,770
Schedule of the components of the Company’s debt

July 31, 2023 January 31, 2023
Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023.⁽¹⁾ 1,558 * 3,836
Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on April 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $62,646. 58,966 # 66,538
Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $61,943. — 45,454
Working Capital Note Payable - $700,000, dated October 29, 2021, repayment of $17,904 per week until Oct 29, 2022, interest rate of approximately 31%.^(2,4,7)† 351,923 * 351,923
Working Capital Note Payable - $650,000, dated October 25, 2021, repayment of $15,875 per week until October 25, 2022, interest rate of approximately 26%.^(2,4,8)† 441,382 * 443,819
Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 5,000 * 5,000
Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance 2,500 * 2,500
Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company 12,415 * 12,415
Promissory note - $60,000 dated September 18, 2020 maturing April 30, 2022⁽¹⁰⁾, including $5,000 original issue discount, 15% compounded interest payable monthly.^† 60,000 * 60,000
Promissory note - $425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This note matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note.^(5)† 425,000 * 425,000
Promissory note - $1,200,000 dated August 28, 2020, maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal.^(6)† 1,200,000 * 1,200,000
Promissory note - $420,000 dated December 27, 2021, including $20,000 original issue discount, maturing January 27, 2022, non-interest bearing.^(9)† 420,000 * 420,000
Promissory note - $30,000 dated November 4, 2022, including $5,000 original issue discount, maturing April 30, 2023, non-interest bearing.^(11)† 30,000 * 30,000
Promissory note - $90,000 dated November 7, 2022, including $15,000 original issue discount, maturing April 30, 2023, non-interest bearing.^(3)† 90,000 * 90,000
Demand loan, non-interest bearing. 80,480 * 22,500
Promissory note - $22,000 dated December 27, 2022, including $2,000 original issue discount maturing January 6, 2023, non-interest bearing.^(10)† 22,000 * 22,000
Promissory note - $22,000 dated February 21, 2023, including $2,000 original issue discount maturing April 1, 2023, non-interest bearing.^(10)† 22,000 * —
Promissory note - $30,000 dated April 21, 2023, including $3,000 original issue discount maturing September 30, 2023, non-interest bearing.⁽¹⁰⁾ 33,000 * —
Total $ 3,256,224 $ 3,200,985

October 31, 2022 January 31, 2022
Short-Term Debt $ 2,985,041 $ 3,454,133
Current Portion of Long-Term Debt 22,149 27,737
Long-Term Debt 95,803 115,900
Total $ 3,102,993 $ 3,597,770

July 31, 2023 January 31, 2023
Short-Term Debt $ 3,197,258 $ 3,088,993
Current Portion of Long-Term Debt 15,445 24,569
Long-Term Debt 43,521 87,423
Total $ 3,256,224 $ 3,200,985
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† Loans totaling $3,062,305 in default.
* Short-term ~~loans~~loans.

# Long-term loans of ~~$47,675~~$58,966 including current portion ~~$8,317;~~
                                 ~~$70,277 including current portion $13,832~~
∞ ~~In default $2,960,179.~~of $15,445.

(1) Secured by equipment having a net book value of ~~$7,285.~~$5,089.

(2) The amounts due under the note are personally guaranteed by an officer or a director of the Company.

(3) ~~On November 10, 2020~~Secured by all the ~~Company amended~~assets of the ~~agreement extending the maturity to June~~Company. Penalty of 10% of principal amount and 60,000 3 year warrants with an exercise price based on based on previous day closing price on initial default and 2% of principal amount and 60,000 3 year warrants with an exercise price based on previous day closing price for every 30 2022 from April 8, 2021 and changing monthly payments to $0 from $5,705 and interest rate from 13% to a $20,000 lump sum payable at maturity. This loan and accrued interest are payable to a shareholder and were transferred to a convertible loan in August 2022.day default period thereafter.

(4) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company.

(5) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company has entered into such a transaction the loan has reached maturity and is treated as current. An extension was granted on December 13, 2021 amending the maturity date to April 30, ~~2022. The April 30,~~ 2022 ~~payment has not been made and the Company is working on another extension with the lender.~~

(6) Secured by all assets of the Company. Loan payable in 2 instalments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022. On December 13, 2021 the parties amended the maturity date for the first instalment to be April 30, 2022 with the second instalment date unchanged. ~~The April 30, 2022 payment has not been made and the Company is working on another extension with the lender.~~

(7) This loan replaces $500,000 loan dated June 4, 2021, ~~$422,009~~$422,009 proceeds were used to repay this loan, net cash received was $253,491 after payment of ~~$26,500~~$26,500 in fees.

(8) This loan replaces $500,000 loan dated June 4, 2021, ~~$359,919~~$359,919 proceeds were used to repay this loan, net cash received was $267,606 after payment of ~~$22,475~~$22,475 in fees.

(9) Penalty of 10% of principal amount and 30,000 3 year warrants with an exercise price of $15.00 on initial default and 2% of principal amount and 15,000 3 year warrants with an exercise price ~~of $15.00~~based on previous day closing price for every 30 day default period thereafter. Initial default ~~has been recorded at January 31, 2022 with an interest charge of $42,000~~ and another $276,000 which was the fair value of the warrants (see Note 11). The Company has defaulted on the February 26, 2022, through to July 26, 2022 and will issue an additional 15,000 warrants for each of those sixsubsequent defaults ~~for a total of 90,000 warrants. The Company has recorded $798,450 based on the fair value of the warrants and $75,600 for the 2% fee as interest expense~~ to October 31, ~~2022.~~2022 have been recorded.

(10) Secured by all the assets of the Company and a personal guaranty from the CEO. Penalty of 15% of principal amount on initial default and 1.5% for every subsequent 7 day default period. The ~~April 30, 2022 payment~~loan has not been ~~made~~repaid.
(11) Secured by all the assets of the Company. Penalty of 10% of principal amount and ~~the Company is working~~20,000 3 year warrants with an exercise price based on ~~another extension~~based on previous day closing price on initial default and 2% of principal amount and 20,000 3 year warrants with ~~the lender.~~an exercise price based on previous day closing price for every 30 day default period thereafter.

The following are the minimum amounts due on the notes as of ~~October~~July 31, ~~2022:~~2023:

Year Ended Amount
October 31, 2023 $ 3,007,190
October 31, 2024 25,174
October 31, 2025 26,443
October 31, 2026 27,792
October 31, 2027 16,394
Total $ 3,102,993
Year Ended Amount
July 31, 2024 $ 3,212,703
July 31, 2025 15,905
July 31, 2026 16,379
July 31, 2027 11,237
Total $ 3,256,224

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NOTE 8 – SHORT-TERM CONVERTIBLE DEBT

The components of the Company’s debt as of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022~~2023 were as follows.

Interest Default Interest Conversion Outstanding Principal at
Maturity Date Rate Rate Price ^(a) October 31, 2022 January 31, 2022
Nov 4, 2013^* 12% 12% $1,800,000 $ 100,000 $ 100,000
Jan 31, 2014^* 12% 18% $2,400,000 16,000 16,000
July 31, 2013^* 12% 12% $1,440,000 5,000 5,000
Jan 31, 2014^* 12% 12% $2,400,000 30,000 30,000
Nov 12, 2022* 8% 12% ⁽¹⁾ 3,000,000 2,400,000
Jan. 13, 2023 12% 22% ⁽²⁾ — 228,000
Aug. 11, 2022 10% 10% ⁽³⁾ — —
Feb. 14, 2023 12% 20% ⁽⁴⁾ 1,200,000 —
Feb 25, 2023 12% 20% ⁽⁴⁾ 150,000 —
Feb. 25, 2023 12% 20% ⁽⁴⁾ 350,000 —
Mar. 9 2023 12% 20% ⁽⁴⁾ 200,000 —
Mar. 9, 2023 12% 20% ⁽⁴⁾ 200,000 —
Apr. 22, 2023 12% 20% ⁽⁴⁾ 440,000 —
Apr. 22, 2023 12% 20% ⁽⁴⁾ 110,000 —
May 19,2023 12% 16% ⁽⁵⁾ 400,000 —
Feb.11, 2023 12% 18% ⁽⁴⁾ 275,000 —
Dec 27, 2022 12% 18% ⁽⁴⁾ 275,000 —
Jan. 5, 2023 12% 18% ⁽⁴⁾ 250,000 —
Jan.6 ,2023 12% 18% ⁽⁴⁾ 125,000 —
Jan.6 ,2023 12% 18% ⁽⁴⁾ 125,000 —
Jan.11 ,2023 12% 18% ⁽⁴⁾ 138,890 —
Apr. 22, 2023 12% 18% ⁽⁴⁾ 275,000 —
Apr. 22, 2023 12% 18% ⁽⁴⁾ 275,000 —
Sept. 9, 2023 12% 22% ⁽⁶⁾ 201,360 —
Sub-total 8,141,250 2,779,000
Debt Discount (2,374,330 ) (2,131,034 )
$ 5,766,920 $ 647,966
Interest Default Interest Conversion Outstanding Principal at
Maturity Date Rate Rate Price ^(a) July 31, 2023 January 31, 2023
Nov. 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000
Jan. 31, 2014* 12% 18% $2,400,000 16,000 16,000
July 31, 2013* 12% 12% $1,440,000 5,000 5,000
Jan. 31, 2014* 12% 12% $2,400,000 30,000 30,000
Nov. 12, 2022* 8% 12% (1) 3,000,000 3,000,000
Feb. 14, 2023* 12% 20% (4) 2,400,000 2,400,000
Feb. 25, 2023* 12% 20% (4) 195,000 250,000
Feb. 25, 2023* 12% 20% (4) 700,000 700,000
Mar. 9, 2023* 12% 20% (4) 400,000 400,000
Mar. 9, 2023* 12% 20% (4) 400,000 400,000
Apr. 22, 2023* 12% 20% (4) 880,000 880,000
Apr. 22, 2023* 12% 20% (4) 220,000 220,000
May 19, 2023* 12% 16% (5) 500,000 500,000
Feb. 11, 2023* 12% 18% (4) 275,000 275,000
Dec. 27, 2022* 12% 18% (4) 275,000 275,000
Jan. 6, 2023* 12% 18% (4)(b)(iv) 140,000 125,000
Jan. 6, 2023* 12% 18% (4)(b)(iv) 140,000 125,000
Jan. 11, 2023* 12% 18% (4)(b)(iv) 153,890 138,890
Apr. 22, 2023* 12% 18% (4)(b)(iv) 290,000 275,000
Apr. 22, 2023* 12% 18% (4)(b)(iv) 290,000 275,000
Sept. 29, 2023* 12% 22% (6)(b)(iii) 177,101 211,428
May 10, 2023 12% 18% (2) 186,450 186,450
May 10, 2023 12% 18% (2) 186,450 186,450
Nov. 21, 2023 12% 22% (2) 54,432 54,432
July 5, 2023* 12% 18% (4) 483,502 250,000
Apr. 20, 2024 12% 18% (3) 77,000 —
May 3, 2024 10% 18% (7) 176,000 —
June 13, 2024 10% 18% (7) 127,500 —
June 13, 2024 12% 16% (3) 64,625 —
July 17, 2024 10% 18% (7) 127,500 —
Sub-total 12,070,450 11,278,650
Debt Discount (598,166 ) (840,067 )
$ 11,472,284 $ 10,438,583

* In default at filing date ~~$3,151,000~~
$11,497,825.
(1) lesser of $ 1.25 or 75 % of offering price if there is an uplisting to a national securities exchange.
(2) ~~75% of closing bid price on day preceding conversion date in event of default.~~
~~(3)~~ convertible at 20% discount of the offering price on ~~Company’s~~company’s uplist to ~~NASDAQ.~~NASDAQ and convertible upon default at conversion price lower of 75% of lowest trading price 20 days prior to conversion.
(3) lesser of $ 0.25 or 75 % of offering price if there is an uplisting to a national securities exchange.
(4) convertible upon default at conversion price lower of i) lowest price 20 days prior to Issuance ii) lowest price 20 days prior to conversion.
(5) lesser of $ 5.00 or 75 % of offering price if there is an uplisting to a national securities exchange.
(6)
75% of lowest closing bid price ten days preceding conversion date in event of default.
(7) lower of $0.20 or 20% discount on previous days close
(a) Note all conversions are subject to dilutive issuance clauses where the conversion price will revert to the lowest transacted share price.
(b) All debt issuances are subject to events of default which may trigger penalties. The Company was in default of non payment at maturity and therefore penalties resulted on some of the loans. Penalties totaling $90,928 were added to the principal of the loan with a corresponding adjustment to interest expense.
(i) Penalty of 100% of the loan and accrued interest added to the principal and accrued interest, respectively.
(ii) Penalty of 25% of the loan and accrued interest added to the principal and accrued interest, respectively.
(iii) Penalty of 50% of the loan and accrued interest added to the principal and accrued interest, respectively.
(iv) Penalty of 15,000 added to the principal of the loan.

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The Company had accrued interest payable of ~~$478,271~~$1,810,560 and ~~$231,412~~$1,342,097 on the notes at July 31, ~~2022~~2023 and January 31, ~~2022,~~2023, respectively.

The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that some instruments should be classified as liabilities due to there being a variable number of shares to be delivered upon settlement of the above conversion options. The instruments are measured at fair value at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. The fair value of the embedded conversion option resulted in a discount to the note on the debt modification date. For the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded amortization of debt discount expense of ~~$1,932,722~~$458,625 and ~~$130,139,~~$1,651,327, respectively. For the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded amortization of debt discount expense of ~~$4,309,329~~$1,087,238 and ~~$442,075,~~$2,376,607, respectively.

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~~Table~~For both the three months ended July 31, 2023 and 2022 there was $0 in penalty interest to the loans. For the six months ended July 31, 2023 and 2022 there was $90,028 and $0 in penalty interest to the loans, respectively. For both the three months ended July 31, 2023 and 2022 there was no debt conversions. For the six months ended July 31, 2023, lenders converted $95,256 of ~~Contents~~principal, $7,965 of interest, derivative of $81,429 and $2,600 of fees all totaling $187,249 into 434,434 common shares.

On ~~February 11, 2022,~~ April 20, 2023, the Company entered into ~~an unsecured~~a convertible note for ~~$220,000~~$77,000 with a one year maturity, interest rate of 10%, the Company received $200,000 in cash proceeds, recorded, an original issue discount of $20,000, and a derivative discount of $117,676 related to a conversion feature. The discount is amortized over the term of the loan. The note is repayable August 11, 2022.
~~On February 14, 2022, the Company entered into a new convertible note for $1,200,000 with a six month maturity, interest rate of~~ 12%, with a warrant to purchase ~~120,000~~388,884 common shares with a five year maturity and an exercise price of ~~$15.00,~~$0.25, and ~~115,000~~50,000 common shares. ~~If the loan is not in default the company may extend the term to February 14, 2023 with 10 days’ notice.~~ The Company has extended the loan term. On April 7, 2022 the parties agreed to not have the shares returnable in exchange for a waiver on the Company’s breach of certain provisions. The Company received $979,000 in cash proceeds,will receive $60,800 and recorded an original issue discount of ~~$120,000,~~$7,000 along with fees of $9,200, a derivative discount of ~~$131,489~~60,800 for the conversion feature, recognized ~~$484,032~~$27,541 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and ~~transaction fees~~shares. The Company expensed $13,428 as interest which was the amount of ~~$101,000.~~the derivative discount that exceeded the face value of the loan. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at ~~200%~~150%. The note is secured on all assets of the Company subordinated to a prior security.

~~On February 25, 2022,~~ In April 2023, the Company ~~entered into a new convertible~~issued an amended and restated note ~~for $350,000~~replacing the July 5, 2022 $250,000 note with a ~~six month maturity, interest rate of 12%, with~~January 5, 2023 maturity. In addition, the Company issued a warrant to ~~purchase 35,000 common~~acquire 97,221 shares with a ~~five~~$1.00 exercise price and a 5 year maturity, and ~~an exercise price~~the maturity of ~~$15.00, and 33,542 common shares. If~~ the ~~loan is not in default~~note was revised to July 5, 2023. The terms of the ~~company may extend~~amended note are that the ~~term to February 25, 2023 with 10 days’ notice. The Company has extended the loan term. The~~ Company received ~~$294,000 in cash proceeds, recorded~~$70,000 with an original issue discount of ~~$35,000,~~$7,000 a derivative discount of ~~$37,784~~$76,212 for the conversion feature, recognized ~~$132,255~~$5,443 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached ~~warrants, and transaction fees of $21,000.~~warrants. The ~~discount is amortized over the term of the loan. The~~original note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
On February 25, 2022, the Company entered into a new convertible note for $150,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 15,000 common shares with a five year maturity and an exercise price of $15.00, and 14,400 common shares. If the loan is not in default the company may extend the term to February 25, 2023 with 10 days’ notice. The Company has extended the loan term. The Company received $119,250 inhad cash proceeds ~~recorded~~of $225,000 and an original issue discount of ~~$15,000,~~$25,000, a derivative discount of ~~$16,193~~$33,860 for the conversion feature, recognized $52,613 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $15,750. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
On March 9, 2022, the Company entered into a new convertible note for $200,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 20,000 common shares with a five year maturity and an exercise price of $15.00, and 19,200 common shares. If the loan is not in default the company may extend the term to March 9, 2023 with 10 days’ notice. The Company has extended the loan term. The Company received $168,000 in cash proceeds, recorded an original issue discount of $20,000, a derivative discount of $22,533 for the conversion feature, recognized $85,815 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $12,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
On March 9, 2022, the Company entered into a new convertible note for $200,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 20,000 common shares with a five year maturity and an exercise price of $15.00, and 9,200 common shares. If the loan is not in default the company may extend the term to March 9, 2023 with 10 days’ notice. The Company has extended the loan term. The Company received $168,000 in cash proceeds, recorded an original issue discount of $20,000, a derivative discount of $22,533 for the conversion feature, recognized $85,728 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $12,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
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On April 22, 2022, the Company entered into a new convertible note for $440,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 44,000 common shares with a five year maturity and an exercise price of $15.00, and 42,240 common shares. If the loan is not in default the company may extend the term to April 22, 2023 with 10 days’ notice. The Company has extended the loan term. The Company received $373,600 in cash proceeds, recorded an original issue discount of $40,000, a derivative discount of $36,796 for the conversion feature, recognized $161,815 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $26,400. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
On April 22, 2022, the Company entered into a new convertible note for $110,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 11,000 common shares with a five year maturity and an exercise price of $15.00, and 10,560 common shares. If the loan is not in default the company may extend the term to April 22, 2023 with 10 days’ notice. The Company has extended the loan term. The Company received $93,400 in cash proceeds, recorded an original issue discount of $10,000, a derivative discount of $9,199 for the conversion feature, recognized $62,707 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants, and transaction fees of $6,600. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
On May 18, 2022, the lender and Company amended the November 12, 2021 $2,400,000 note whereby the $432,000 amortization payments due on June 12, 2022, July 12, 2022 and August 12, 2022 all totaling $1,296,000 are now payable on October 25, 2022. In exchange the second warrant to acquire 90,000 common shares can no longer be cancelled. The Company has accrued the loan penalty of $600,000 with a corresponding charge to interest as the loan was not repaid. The Company recognized a debt discount of $570,195 on this amount. The discount is amortized over the term of the loan.
On May 19, 2022 the Company entered into a new convertible note for $400,000 with a one year maturity, interest rate of 12%, with a warrant to purchase 33,333 common shares with a five year maturity and an exercise price of $15.00, and 41,500 common shares.. The Company received $325,400 in cash proceeds, recorded an original issue discount of $40,000, a derivative discount of $358,088 for the conversion feature, recognized $192,341$139,638 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $35,000. ~~The discount is amortized over~~When combined with the ~~term of~~original note, the ~~loan. The excess discount over the face value of the~~total new note of $ $225,429 was expensed to interest. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 125%.
~~In June 2022, the Company received $50,000~~will now be for $327,000 having total cash proceeds of $295,000 and ~~recorded an~~total original issue discount of $5,000 from the lender of February 11, 2022 maturing August 11, 2022 and on that date the old note of $220,000 plus the accrued interest matures on February 11, 2023 along with new advances of $55,000 forming a combined new note of $275,000 dated August 11, 2022. The new note bears interest at 12% and came with 100,000 warrants with an exercise price of $ 15.00 and a 5 year term and 40,000 common shares . The Company received $50,000 in cash proceeds (in June), recorded an original issue discount of $5,000,$32,000 a derivative discount of $37,261 for the conversion feature, and recognized $195,219 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. The discount is amortized over the term of the loan.
On June 27, 2022, the Company entered into a new convertible note for $275,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $250,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $34,488 for the conversion feature, and recognized $197,559 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 200%.
On July 5, 2022 the Company entered into a new convertible note for $250,000 with a six month maturity, interest rate of 12%, with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $200,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $33,860$110,072 for the conversion feature, recognized ~~$139,638~~$145,101 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares and transaction fees of $35,000. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. ~~In the event of these or any other default provisions, the note becomes due and payable at 200%.~~
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On ~~July 6, 2022,~~ May 5, 2023, the Company entered into a ~~new~~ convertible note for ~~$125,000~~$176,000 with a ~~six month~~May 3, 2024, maturity, interest rate of ~~12%,~~10% with ~~a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000~~352,000 common shares. The Company ~~received $102,000 in cash proceeds,~~will receive $155,000 and recorded an original issue discount of ~~$12,000,~~$16,000 along with fees of $5,000. The Company recognized a derivative discount of ~~$16,484~~$155,000 for the conversion feature ~~recognized $83,796 based on a relative fair value calculation~~with an additional $82,212 expensed as ~~debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $10,000.~~interest. The discount is amortized over the term of the loan. The note is convertible at a price lower of $0.20 or 80% of closing market price prior to conversion date. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, default interest is 18%. Penalty shares of 16.67% of the outstanding loan balance, per month is due if the note ~~becomes due and payable at 200%.~~is not paid by November 3, 2023.

On ~~July 6, 2022,~~ June 1, 2023 the Company ~~entered into another new convertible~~further amended the July 5, 2022 note ~~for $125,000~~above with a ~~six month maturity, interest rate of 12%, with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares.~~second amendment. The Company received ~~$102,000 in cash proceeds, recorded~~$72,652 with an original issue discount of ~~$12,500,~~$8,850 bringing the value of the new note to $408,502 having total cash proceeds of $367,652 with a total original issue discount of $40,850. In addition, the Company issued 100,000 common shares and a warrant to acquire up to 1,000,000 common shares at an exercise price of $0.00001 and a maturity upon full exercise of this warrant. The Company recognized a derivative discount of ~~$16,388~~$72,652 for the conversion feature ~~recognized $83,796 based on a relative fair value calculation~~with an additional $665 expensed as ~~debt discount~~interest. On July 12, 2023, the Company again amended the above note with a ~~corresponding adjustment to paid-in capital~~third amendment. The Company received $50,000 with an original issue discount of $25,000. The Company recognized a derivative discount of $50,000 for the ~~attached warrants and shares, and transaction fees of $10,000.~~conversion feature with an additional $16,119 expensed as interest. The discount is amortized over the term of the loan. The principal value of this amended note is now $483,502 with total cash proceeds of $417,652 and total original issue discount of $65,850. All other terms and conditions remain the same. Default interest is 18%.
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On June 13, 2023, the Company entered into a convertible note for $127,500 with a June 13, 2024, maturity, interest rate of 10% with 255,000 common shares. The Company received $115,000 and recorded an original issue discount of $11,500 along with fees of $1,000. The Company recognized a derivative discount of $115,000 for the conversion feature with an additional $80,908 expensed as interest. The discount is amortized over the term of the loan. The note is convertible at a price lower of $0.20 or 80% of closing market price prior to conversion date. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, default interest is 18%. Penalty shares of 16.67% of the outstanding loan balance, per month is due if the note ~~becomes due and payable at 200%.~~is not paid by November 3, 2023.

On ~~July 11, 2022,~~ June 13, 2023, the Company entered into ~~another new~~a convertible note for ~~$138,890~~$64,625 with a ~~six month~~June 13, 2024, maturity and an interest rate of ~~12%,with a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000 common shares.~~10%. The Company received ~~$116,668 in cash proceeds,~~$50,250 and recorded an original issue discount of ~~$13,889,~~$6,425 along with fees of $8,500. In addition, the Company issued a warrant to acquire up to 427,750 common shares at an exercise price of $0.25 and a five year term. The Company recognized a derivative discount of ~~$18,735~~$50,250 for the conversion feature ~~recognized $97,336 based on a relative fair value calculation~~with an additional $17,605 expensed as ~~debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $8,333.~~interest. The discount is amortized over the term of the loan. The note is convertible at a price lower of $0.25 or 75% of offering price on uplisting. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, ~~the note becomes due and payable at 200%~~default interest is 16%.

On July ~~11, 2022,~~ 17, 2023, the Company entered into ~~another new~~a convertible note for ~~$138,890~~$127,500 with a ~~six month~~July 17, 2024, maturity, interest rate of ~~12%,~~10% with ~~a warrant to purchase 50,000 common shares with a five year maturity and an exercise price of $15.00, and 20,000~~255,000 common shares. The Company received ~~$116,668 in cash proceeds,~~$115,000 and recorded an original issue discount of ~~$13,889,~~$11,500 along with fees of $1,000. The Company recognized a derivative discount of ~~$18,735~~$115,000 for the conversion feature ~~recognized $97,336 based on a relative fair value calculation~~with an additional $107,418 expensed as ~~debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares, and transaction fees of $8,333.~~interest. The discount is amortized over the term of the loan. The note is convertible at a price lower of $0.20 or 80% of closing market price prior to conversion date. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, default interest is 18%. Penalty shares of 16.67% of the outstanding loan balance, per month is due if the note ~~becomes due and payable at 200%.~~
On August 22, 2022, the Company entered into a new convertible note with a shareholder for $275,000 with a six month maturity, interest rate of 12%,with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $39,260 in cash proceeds, and transferred the following to the note holder : a short term loan of $97,340, a shareholder loan of $50,000, accrued interest of $25,000,and accounts payable for unpaid rent of $38,400. The Company recorded an original issue discount of $25,000, a derivative discount of $36,947 for the conversion feature, recognized $186,343 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. The discount is ~~amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion.~~
On August 22, 2022, the Company entered into another new convertible note with a shareholder for $275,000 with a six month maturity, interest rate of 12%,with a warrant to purchase 100,000 common shares with a five year maturity and an exercise price of $15.00, and 40,000 common shares. The Company received $250,000 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $37,070 for the conversion feature, recognized $186,343 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital for the attached warrants and shares. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion.
On September 29, 2022, the Company entered into another new convertible note for $201,360 with a six month maturity, interest rate of 12%. The Company received $175,536 in cash proceeds, recorded an original issue discount of $21,574, a derivative discount of $17,736 for the conversion feature, and transaction fees of $4,250. The discount is amortized over the term of the loan. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, the note becomes due and payable at 150%.
~~During the three and nine months ended October 31, 2022 and October 31, 2021 the Company added $600,000 and $28,000 in penalty interest to these loans, respectively.~~not paid by January 17, 2024.

As of ~~October~~July 31, ~~2022,~~2023, the Company had ~~$3,151,000~~$11,497,825 of ~~aggregate~~ convertible debt in default. The agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. The Company continues to accrue interest at the listed rates, and plans to seek their conversion or payoff within the next twelve months.
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NOTE 9 – DERIVATIVE LIABILITIES

As of ~~October~~July 31, ~~2022,~~2023, and January 31, ~~2022,~~2023, the Company had derivative liabilities of ~~$3,663,597~~$ 6,470,081 and ~~$1,263,442,~~$3,271,058, respectively. During the three months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021,~~2023, the Company recorded a loss of ~~$184,146~~$1,133,090 and a loss of ~~$76,444,~~$319,889, respectively, from the change in the fair value of derivative liabilities. During the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021,~~2022, the Company recorded a loss of ~~$841,772~~$2,139,790 and a loss of ~~$88,551,~~$657,626, respectively, from the change in the fair value of derivative liabilities. Any liabilities resulting from the warrants outstanding are immaterial.

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

The following table presents changes in Level 3 liabilities measured at fair value for the three months ended ~~October~~July 31, ~~2022.~~2023. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs.

Level 3
Derivatives
Balance, January 31, 2022 $ 1,263,442
Changes Due to Issuance of New Convertible Notes 1,577,922
Settlement Due to Repayment of Debt (19,539 )
Mark to Market Change in Derivatives 841,772
Balance, October31, 2022 $ 3,663,597
Level 3
Derivatives
Balance, January 31, 2023 $ 3,271,058
Changes Due to Issuance of New Convertible Notes 1,013,269
Changes due to Settlements of Convertible Notes 127,393
Changes due to Conversions of Notes Payable (81,429 )
Mark to Market Change in Derivatives 2,139,790
Balance, July 31, 2023 $ 6,470,081

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

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The fair value of the derivative liability is determined using the lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, the expected term, and the risk-free interest rate. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of ~~October~~July 31, ~~2022,~~2023, is as follows:

Embedded

Derivative Liability

As of
~~October~~
July 31, ~~2022~~2023
Strike price ~~5.20 – 5.55~~0.15 - 0.30
Contractual term (years) ~~0.25~~0.08 - ~~1.00~~0.97 years
Volatility (annual) ~~182.9%~~126.1% - ~~213.76~~243.3
Underlying fair market value ~~5.20~~0.30
Risk-free rate ~~7.11%~~9.61% - ~~8.46~~11.25
Dividend yield (per share) 0

NOTE 10 – STOCKHOLDERS’ DEFICIT

Preferred Stock:

The Series A Preferred Stock has an automatic forced conversion into common stock upon the completion of the repurchase or extinguishing of all “toxic” debt (notes having conversion features tied to the Company’s common stock), the extinguishing of all other existing dilutive debt or equity structures, and total recapitalization of the Company. As of both ~~October31, 2022,~~July 31, 2023, and January 31, ~~2022,~~2023 the Company had 0 shares of Series A Preferred issued and outstanding and 330,000 authorized with a par value of ~~$0.001~~$0.001 per share.

At both ~~October~~July 31, ~~2022,~~2023 and January 31, ~~2022,~~2023, there were 20,000 and 20,000 Series B preferred shares outstanding, respectively. The Series B Preferred Stock have voting rights equal to 51% of the total voting rights at any time. There are no conversion rights granted holders of Series B Preferred shares, they are not entitled to dividends, and the Company does not have the right of redemption. Currently, there are 20,000 Series B preferred shares authorized and issued of the Series B Preferred Stock with a par-value of ~~$0.001~~$0.001 per share.

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At both ~~October~~July 31, ~~2022,~~2023 and January 31, ~~2022,~~2023, there were 0 ~~and 7,250~~ Series C preferred shares outstanding, respectively. The Series C Preferred Stock have the right to convert into the common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The holders of Series C Preferred shares are not entitled to dividends, and the Company does not have the right of redemption. On February 1, 2022 the 7,250 Series C Preferred stockholders converted all of their outstanding shares for 905,110 shares of common stock. Currently, there are 0 Series C preferred shares authorized and issued with a par-value of ~~$0.001~~$0.001 per share.

At both ~~October~~July 31, ~~2022,~~2023 and January 31, ~~2022,~~2023, there were 870 Series D preferred shares authorized and outstanding, respectively which with a par value ~~$0.001.~~$0.001. All shares of Series D Preferred Stock will rank subordinate and junior to all shares of Series A, B and C of Preferred Stock of the Corporation and pari passu with any of the Corporation’s preferred stock hereafter created as to distributions of assets upon dissolution or winding up of the Corporation, whether voluntary or involuntary. These shares are non-voting, do not receive dividends and are redeemable according to the terms set out as follows:

OPTIONAL REDEMPTION.

(1)  At any time, either the Corporation or the holder may redeem for cash out of funds legally available therefor, any or all of the outstanding Series D Preferred Stock (“Optional Redemption”) at ~~$1,000~~$1,000 per share.
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(2)  Should the Corporation exercise the right of Optional Redemption it shall provide each holder of Preferred Stock with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). Any optional redemption pursuant to this Section VI shall be made ratably among holders in proportion to the Liquidation Value of Preferred Stock then outstanding and held by such holders. The Optional Redemption Notice shall state the Liquidation Value of Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the Corporation to the holders at the address of such holder appearing on the register of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holders, and (B) the holders will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption.

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

The Series D Preferred Stock is not entitled to any pre-emptive or subscription rights in respect of any securities of the Corporation.
Neither the Company nor any Series D preferred stockholders has given notice to exercise the redemption as of ~~October~~July 31, ~~2022,~~2023, on the date of the financial statements.
Because the holders of the Series D preferred stock have the right to demand cash redemption, the cumulative amount of the redemption feature is included in Temporary Equity as of ~~October~~July 31, ~~2022,~~2023, and January 31, ~~2022.~~2023.

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~~Table of Contents~~
Common Stock

The Company is authorized to issue 75,000,000 common shares at a par value of ~~$0.000001~~$0.000001 per share. These shares have full voting rights. The Company undertook a 10-1 reverse stock split on April 28, 2022. The share capital has been retrospectively adjusted accordingly to reflect these reverse stock splits. At ~~October~~July 31, ~~2022~~2023 and January 31, ~~2022~~2023 there were ~~1,823,708~~3,532,374 and ~~341,023~~1,917,982 shares outstanding and issuable, respectively. No dividends were paid in the three months ended ~~October~~July 31, ~~2022~~2023 or ~~2021.~~2022. The Company’s articles of incorporation include a provision that the Company is not allowed to issue fractional shares.

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The table below represent the common shares issued, issuable and outstanding at July 31, 2023 and January 31, 2023:
Common shares July 31, 2023 January 31, 2023
Issued 2,723,499 1,773,987
Shares to be cancelled (5,000 ) (5,000 )
Issuable 813,875 148,995
Issued, issuable and outstanding 3,532,374 1,917,982
The Company issued the following shares of common stock in the ~~nine~~six months ended ~~October~~July 31, ~~2022:~~2023:
Lenders converted $95,256 of principal, $7,965 of interest and $2,600 of fees all totaling $105,820 into 434,434 common shares.

The Company issued ~~905,110~~167,958 common shares ~~upon conversion~~at fair value of ~~7,250 Series C preferred shares.~~$122,109 to settle $196,958 in accrued expenses and recorded a gain on settlement of debt of $74,489.

The Company issued ~~555,641~~1,012,000 shares and warrants to acquire 1,913,855 common shares along with ~~warrants to purchase 948,333 common shares (see below) along with~~ debt for a relative fair value of ~~$2,427,336.~~$32,983 with an adjustment to paid -on capital and a corresponding adjustment to debt discount.

~~A lender exercised on a cash-free basis warrants to acquire 29,155 shares and received 20,000 shares.~~
~~The Company cancelled 741 common shares pursuant to an SEC enforcement action against a lender.~~
~~As part of the reverse split on April 28, 2022 the Company issued 2,675 shares to round up those shareholders for partial shares.~~
Options and Warrants:

The Company has 250,000 and ~~50,000~~250,000 options outstanding as of both ~~October~~July 31, ~~2022,~~2023, and or January 31, ~~2022.~~2023.

The Company recorded option and warrant expense of $0$0 and $0$0 for the six months ended ~~October31,~~July 31, 2023, and 2022, ~~and 2021,~~ respectively.
The Company cancelled the options to acquire 50,000 shares issued to the CEO on July 14, 2021 and issued new options on October11, 2022 to acquire 250,000 shares with a 5 year term and an exercise price of $4.00. The Company recorded stock-based compensation of $1,998,000 with a corresponding adjustment to paid-in capital. This amount is the incremental value between the new options of $2,497,500 and the revalued cancelled options if $499,500 which were determined by using the significant estimated determined below:
~~Expected volatility~~ ~~753 - 1,735%~~
~~Exercise price~~ ~~$4.00 - $15.00~~
~~Stock price~~ ~~$9.99~~
~~Expected life~~ ~~1.5 - 5 years~~
~~Risk-free interest rate~~ ~~3.05% - 3.07%~~
~~Dividend yield~~ 0%

For the ~~nine~~six months ended ~~October~~July 31, ~~2022~~ 2023 the Company issued ~~555,641 common shares and~~ warrants to purchase ~~948,333~~1,913,855 common shares along with debt to various lenders as well as warrants to acquire ~~135,000~~410,000 common shares as penalty interest. The table below provides the significant estimates used that resulted in the Company determining the relative fair value of the ~~555,641~~1,913,855 warrants (and 1,012,000 common shares ~~and 948,333 warrants~~mentioned above) at ~~$2,427,336,~~$32,983, which has been recorded as a debt discount and the ~~135,000~~410,000 warrants at ~~$798,450~~$112,520 which has been recorded as interest both with corresponding adjustments to paid-in capital.
Schedule of warrants fair value
Expected volatility ~~1,686~~588 - ~~2,227%~~2,224%
Exercise price $~~4.45~~0.15 - ~~$15.00~~$1.03
Stock price $~~0.95~~0.15 - ~~$11.99~~$1.10
Expected life 3 - 5 years
Risk-free interest rate ~~1.76%~~3.57% - ~~4.45%~~4.44%
Dividend yield 0%0%

For the six months ended July 31, 2022 the Company issued warrants to purchase 648,333 common shares along with debt to various lenders as well as warrants to acquire 90,000 common shares as penalty interest. The table below provides the significant estimates used that resulted in the Company determining the relative fair value of the 648,333 warrants at $1,859,430, which has been recorded as a debt discount and the 90,000 warrants at $595,200 which has been recorded as interest both with corresponding adjustments to paid-in capital.
Expected volatility 1,686 - 2,227%
Exercise price $5.12 - $15.00
Stock price $5.12 - $9.99
Expected life 3 - 5 years
Risk-free interest rate 1.76% - 3.13%
Dividend yield 0%
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The Company had the following fully vested warrants outstanding at ~~October 31,2022:~~July 31, 2023:

Issued To # Warrants Dated Expire Strike Price ^* Expired Exercised
Lender 95,000 08/28/2020 08/28/2023 $4.00 per share N N
Broker 250 10/11/2020 10/11/2025 $45.00 per share N N
Broker 300 11/25/2020 11/25/2025 $30.00 per share N N
Triton 30,000 07/27/2021 07/27/2024 $21.10 per share N N
Consultant 25,000 08/26/2021 08/26/2024 $15.00 per share N N
Lender 60,845 11/12/2021 11/12/2026 $15.00 per share N N
Lender 90,000 11/12/2021 11/12/2026 $15.00 per share N N
Lender 30,000 1/27/2022 1/27/2025 $15.00 per share N N
Lender 120,000 2/14/2022 2/14/2027 $15.00 per share N N
Lender 35,000 2/25/2022 2/25/2027 $15.00 per share N N
Lender 15,000 2/25/2022 2/25/2027 $15.00 per share N N
Lender 20,000 3/9/2022 3/9/2027 $15.00 per share N N
Lender 20,000 3/9/2022 3/9/2027 $15.00 per share N N
Lender 11,000 4/22/2022 4/22/2027 $15.00 per share N N
Lender 44,000 4/22/2022 4/22/2027 $15.00 per share N N
Lender 15,000 2/26/2022 2/26/2025 $5.40 per share N N
Lender 15,000 3/28/2022 3/28/2025 $7.50 per share N N
Lender 15,000 4/27/2022 4/27/2025 $6.99 per share N N
Lender 15,000 5/27/2022 5/27/2025 $5.12 per share N N
Lender 33,333 5/19/2022 5/19/2027 $15.00 per share N N
Lender 100,000 6/27/2022 6/27/2027 $15.00 per share N N
Lender 15,000 6/26/2022 6/26/2025 $5.12 per share N N
Lender 15,000 7/26/2022 7/26/2025 $5.12 per share N N
Lender 100,000 7/5/2022 7/5/2027 $15.00 per share N N
Lender 50,000 7/6/2022 7/6/2027 $15.00 per share N N
Lender 50,000 7/6/2022 7/6/2027 $15.00 per share N N
Lender 50,000 7/11/2022 7/11/2027 $15.00 per share N N
Lender 100,000 8/11/2022 8/11/2027 $15.00 per share N N
Lender 100,000 8/22/2022 8/22/2027 $15.00 per share N N
Lender 100,000 8/22/2022 8/22/2027 $15.00 per share N N
Lender 15,000 8/25/2022 8/25/2025 $5.10 per share N N
Lender 15,000 9/24/2022 9/24/2025 $4.00 per share N N
Lender 15,000 10/24/2022 10/24/2025 $3.30 per share N N
Lender 75,000 11/10/2022 11/10/2027 $15.00 per share N N
Lender 75,000 11/10/2022 11/10/2027 $15.00 per share N N
Lender 15,000 11/23/2022 11/23/2025 $2.20 per share N N
Lender 15,000 12/23/2022 12/23/2025 $3.30 per share N N
Lender 15,000 1/22/2023 1/22/2026 $3.30 per share N N
Lender 15,000 2/21/2023 2/21/2026 $1.03 per share N N
Lender 15,000 3/21/2023 1/22/2026 $1.00 per share N N
Lender 388,884 4/20/2023 4/20/2028 $1.00 per share N N
Lender 15,000 4/23/2023 1/22/2026 $0.20 per share N N
Lender 97,221 4/27/2023 4/27/2028 $0.25 per share N N
Lender 60,000 4/30/2023 4/30/2026 $0.15 per share N N
Lender 20,000 4/30/2023 4/30/2026 $0.15 per share N N
Lender 15,000 5/23/2023 5/23/2026 $0.35 per share N N
Lender 60,000 5/30/2023 5/30/2026 $0.25 per share N N
Lender 20,000 5/30/2023 5/30/2026 $0.25 per share N N
Lender 1,000,000 6/1/2023 On exercise $0.00001 per share N N
Lender 427,750 6/13/2023 6/13/2028 $0.25 per share N N
Lender 15,000 6/22/2023 6/22/2026 $0.33 per share N N
Lender 60,000 6/29/2023 6/29/2026 $0.25 per share N N
Lender 20,000 6/29/2023 6/29/2026 $0.25 per share N N
Lender 15,000 7/22/2023 7/22/2026 $0.30 per share N N
Lender 60,000 7/29/2023 7/29/2026 $0.30 per share N N
Lender 20,000 7/29/2023 7/29/2026 $0.30 per share N N

* The strike price is subject to price adjustments due to dilutive issuance clauses.

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The Company had the following fully vested options outstanding at ~~October~~July 31, ~~2022:~~2023:

Issued To # Options Dated Expire Strike Price Expired Exercised
T. Armes ~~50,000~~ ~~10/14/2021~~ ~~7/11/2022~~ ~~$15.00 per share~~ Y N
~~T. Armes~~ 250,000 7/11/2022 7/11/2027 $4.00 per share N N

The following table summarizes the activity of options and warrants issued and outstanding as of and for the three months ended ~~October~~July 31, ~~2022:~~2023:
Options Weighted Average
Exercise Price Warrants Weighted Average
Exercise Price
Outstanding at January 31, 2022 50,000 $ 15.00 360,550 $ 12.64
Granted 250,000 4.00 1,083,333 15.00
Exercised — — (29,155 ) 5.00
Forfeited and canceled (50,000 ) (15.00 ) — —
Outstanding at October 31, 2022 250,000 $ 4.00 1,414,728 $ 13.70
Options Weighted Average
Exercise Price Warrants Weighted Average
Exercise Price
Outstanding at January 31, 2023 250,000 $ 4.00 1,609,728 $ 13.49
Granted — — 2,323,855 0.27
Exercised — — — —
Forfeited and canceled — — — —
Outstanding at July 31, 2023 250,000 $ 4.00 3,933,583 $ 5.60

NOTE 11 – RELATED PARTY TRANSACTIONS

As of ~~October~~July 31, ~~2022~~2023 and January 31, ~~2021,~~2023, the Company had ~~$45,673~~$0 and ~~$46,173,~~$46,173, respectively of related party accrued expenses related to accrued compensation for employees and consultants. On May 17 ,2023 former director and CEO Tim Armes resigned (replaced by Christopher Davenport). At this time Mr. Armes exchanged his debt owed by the Company totaling $94,291 in exchange for the vehicle having a cost of $89,711 and a net book value of $61,953 sold for fair value proceeds of $65,000 and a gain on sale of property and equipment of $3,057 was recorded by the Company. In addition, the vehicle loan of $42,635 was also transferred to Mr. Armes. The company recorded a gain on settlement of debt of $71,926.

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~~Table~~As of ~~Contents~~July 31, 2023 the CEO has advanced the Company $224,572 (January 31, 2023 -$0) included in shareholder loans payable. These advances are non-interest bearing with no specified terms of repayment.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

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

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

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

Maturity of Lease Liabilities Operating
Leases
October 31 2023 $ 81,203
October 31, 2024 30,003
October 31, 2025 30,003
October 31, 2026 30,003
October 31, 2027 2,501
Total lease payments 173,713
Less: Interest (12,943 )
Present value of lease liabilities $ 160,770

Maturity of Lease Liabilities Operating
Leases
July 31, 2024 $ 30,003
July 31, 2025 30,003
July 31, 2026 30,003
July 31, 2027 10,002
Total lease payments 100,011
Less: Interest (3,803 )
Present value of lease liabilities $ 96,208

The Company had total operating lease and rent expense of ~~$29,219~~$30,106 and ~~$30,478~~$34,454 for the three months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021~~2022 respectively. The Company had total operating lease and rent expense of ~~$90,177~~$57,626 and ~~$91,437~~$68,073 for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021~~2022 respectively.

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NOTE 13 – EARNINGS (LOSS) PER SHARE

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

For the Three Months Ended
July 31,
2023 2022
Numerator:
Net income (loss) available to common shareholders $ (2,949,517 ) $ (5,502,926 )

Denominator:
Weighted average shares – basic 2,691,590 1,564,169

Net income (loss) per share – basic $ (3.52 ) $ (3.52 )

Effect of common stock equivalents

Add: interest expense on convertible debt 516,158 166,046
Add: amortization of debt discount 458,625 1,651,327
Less: gain on settlement of debt on convertible notes (19,212 ) (5,822 )
Add (Less): loss (gain) on change of derivative liabilities 1,133,090 319,889
Net income (loss) adjusted for common stock equivalents (860,856 ) (3,371,486 )
Dilutive effect of common stock equivalents:
Convertible notes and accrued interest — —
Convertible Class C Preferred shares — —
Warrants and options — —

Denominator:
Weighted average shares – diluted 2,691,590 1,564,169

Net income (loss) per share – diluted $ (3.52 ) $ (3.52 )
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The net income (loss) per common share amounts were determined as follows:

For the Three Months Ended For the Six Months Ended
October 31, July 31,
2022 2021 2023 2022
Numerator:
Net income (loss) available to common shareholders $ (4,131,691 ) $ (2,566,574 ) $ (5,820,807 ) $ (8,097,084 )

Denominator:
Weighted average shares – basic 1,805,316 319,866 2,564,071 1,454,787

Net income (loss) per share – basic $ (2.29 ) $ (8.02 ) $ (2.27 ) $ (5.57 )

Effect of common stock equivalents
Add: interest expense on convertible debt 166,046 19,247 992,586 278,788
Add: amortization of debt discount 1,932,722 130,139 1,087,328 2,376,607
Less: gain on settlement of debt on convertible notes (10,128 ) (41,249 )
Add: loss on settlement of debt on convertible notes 127,393 (9,411 )
Add (Less): loss (gain) on change of derivative liabilities 186,146 76,444 1,133,090 657,626
Net income (loss) adjusted for common stock equivalents (1,856,905 ) (2,381,993 ) (2,480,410 ) (4,793,474 )
Dilutive effect of common stock equivalents:
Convertible notes and accrued interest — — — —
Convertible Class C Preferred shares — — — —
Warrants and options — — — —

Denominator:
Weighted average shares – diluted 1,805,316 319,866 2,564,071 1,454,787

Net income (loss) per share – diluted $ (2.29 ) $ (8.02 ) $ (2.27 ) $ (5.57 )

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~~NOTE 13 – EARNINGS (LOSS) PER SHARE~~
~~The net income (loss) per common share amounts were determined as follows:~~

For the Nine Months Ended
October 31,
2022 2021
Numerator:
Net income (loss) available to common shareholders $ (12,228,775 ) $ (4,886,380 )

Denominator:
Weighted average shares – basic 1,576,024 257,577

Net income (loss) per share – basic $ (7.76 ) $ (18.97 )

Effect of common stock equivalents
Add: interest expense on convertible debt 278,788 35,237
Add: amortization of debt discount 4,309,329 442,075
Less: gain on settlement of debt on convertible notes (19,539 ) (1,004,615 )
Add (Less): loss (gain) on change of derivative liabilities 841,772 88,551
Net income (loss) adjusted for common stock equivalents (6,818,425 ) (5,325,132 )
Dilutive effect of common stock equivalents:
Convertible notes and accrued interest — —
Convertible Class C Preferred shares — —
Warrants and options — —

Denominator:
Weighted average shares – diluted 1,576,024 257,577

Net income (loss) per share – diluted $ (7.76 ) $ (18.97 )
The anti-dilutive shares of common stock equivalents for the three and ~~nine~~six months ended ~~October~~July 31, 2023 and July 31, 2022 ~~and October 31, 2021~~ were as follows:

For the Three and Nine Months Ended
October 31,
2022 2021

Convertible notes and accrued interest 7,093,733 94,564
Convertible Class C Preferred shares 4,796,352 896,892
Options 250,000 50,000
Warrants 1,414,728 150,550
Total 13,554,813 1,192,006
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For the Three and Six Months Ended
July 31,
2023 2022

Convertible notes and accrued interest 39,005,978 1,475,492
Options 250,000 250,000
Warrants 3,993,583 1,084,833
Total 43,249,561 2,810,325

NOTE 14 – SUBSEQUENT EVENTS

Subsequent to ~~October~~July 31, 2022 through to ~~December 26, 2022:~~September 14, 2023:

•   ~~a lender converted $25,000 in debt and $1,541 in interest into 6434 common shares~~
~~•   the Company issued 3,600 shares for marketing services of $18,000~~
•   On ~~November 11, 2022.~~September 7, 2023, the Company entered into a ~~new~~ convertible note for ~~$186,450~~$67,100 with a ~~six month~~September 7, 2024, maturity, interest rate of ~~12%~~10% along with ~~a warrant to purchase 75,000 common shares with a five year maturity and an exercise price of $15.00, and 27,120~~134,200 common shares. The Company ~~will receive $169,500 in cash proceeds in 3 monthly instalments of $56,500 each starting in November~~received $60,000 and recorded an original issue discount of ~~$16,950. The note is convertible at a 20% discount in the event~~$6,100 along with fees of ~~an uplisting to NASDAQ exchange as well as in any event of default.~~$1,000. The discount is amortized over the term of the loan. The note is ~~secured on all assets of the Company.~~
•   On November 11, 2022, the Company entered into a similar convertible note with another lender for $186,450 with a six month maturity, interest rate of 12% with a warrant to purchase 75,000 common shares with a five year maturity and an exercise price of $15.00, and 27,120 common shares. The Company will receive $169,500 in cash proceeds in 3 monthly instalments of $56,500 each starting in November and recorded an original issue discount of $16,950. The note is convertible at a ~~20% discount in the event~~price lower of ~~an uplisting~~$0.20 or 80% of closing market price prior to ~~NASDAQ exchange as well as in any event of default. The discount is amortized over the term of the loan. The note is secured on all assets of the Company.~~
•   On November 21, 2022, the Company entered into a new convertible note for $60,480 with a one year maturity and interest rate of 12%. The Company received $54,000 in cash proceeds and recorded an original issue discount of $16,950. The discount is amortized over the term of the loan. The loan and interest are repayable in 10 monthly instalments of $6,774 , starting January 5, 2023. The note is convertible in any event of default. conversion date. The note has certain default provisions such as failure to pay any principal or interest when due and failure to issue shares upon conversion. In the event of these or any other default provisions, ~~the note becomes due and payable at 150%.~~
~~•  On December 27, 2022, the Company entered into a promissory note for $22,000 maturing January 6, 2023. The loan bears no~~default interest ~~and~~ is ~~secured on all assets~~18%. Penalty shares of 16.67% of the ~~Company. The note~~outstanding loan balance is ~~also guaranteed by the CEO of the Company. The Company received $20,000 in cash proceeds and recorded an original issue discount of $2,000. The discount is expensed as interest. If~~due if the note is not ~~repaid at maturity there is an initial 15% penalty , followed~~paid by ~~a 1.5 % penalty for every subsequent default every seven day period thereafter.~~March 6, 2024.
•   Lenders converted $32,570 in debt, $1,038 in accrued interest and $520 in fees into 960,256 common shares.

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

FORWARD-LOOKING STATEMENTS

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

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

Company

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

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

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

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

Our Business

Like many small businesses, Christopher Davenport, the founder of Auto Parts 4Less (“4Less”) previously named The 4less Corp., the wholly owned subsidiary of Auto Parts 4Less Group, Inc., began selling auto parts on eBay and shipping those items out of his garage in 2013. What started out as a hobby, quickly grew into a fully functioning ecommerce aftermarket auto parts company that required a significant technical staff and facilities to support their growth. In June of 2015, they leased their first office.

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

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Starting in 2016 the company began investing to become their own ecommerce platform thereby allowing their auto parts to be direct listed across marketplace and social media sites. Technical achievements including CRM system, warehouse integration API, warehouse inventory software to name a few.
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In 2019, shortly after the share exchange with MedCareers Group, Inc., with technology upgrades in place, 4Less began successfully moving majority of sales from third party marketplaces direct to their proprietary ecommerce web site Liftkits4Less.com. By doing so the company saves 8%-10% in fees charged by the major marketplace’s such as e-Bay and Amazon as well as further building the 4less brand as a leading ecommerce site for auto parts.

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

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

The platform upgrade was completed in the 1^st quarter FYE 2023, with marketplace sales ~~expected to begin~~starting in 3the 2^rdnd quarter 2023.

On November 2, 2022 the Company announced that it had officially launched what is believed to be the industry’s first pure-play automotive parts-only marketplace, AutoParts4Less.com, with approximately 2 million parts listed from over 25 parts sellers. Additionally, with the slowdown of the economy including purchases of auto parts accessories such as lift kits, exclusively designed for trucks and SUV’s, the company decided to discontinue operations of their ecommerce website Liftkits4less.com in mid-November to focus entirely on growing their parts marketplace, AutoParts4Less.com. By doing so they also expect to reduce monthly operating costs to under 300k a month for the foreseeable future.
On April ~~28.~~28, 2022 the Company changed its name from The 4Less Group, Inc. to Auto Parts 4Less Group, Inc.

Competition

We directly compete for buyers to use our web sites over current e-commerce sites as well as sellers that utilize major marketplaces such as Amazon and eBay. However, we believe our specialty ecommerce website liftkits4less.com offers substantial value-added content including installation guides, install videos, high impact photos, order customization and live chat with a technical expert.
Additionally, we believe that our automotive parts marketplace AutoParts4less.com, with no known large challengers presently in the space outside of “all things to all people” online marketplaces Amazon and eBay, has the opportunity to quickly be branded when launched as the auto part’s industry premier marketplace just as sites like Etsy, Wayfair, Uber and Chewey’s have been able to successfully do in their industries.

Results of Operations For the ~~Nine~~Six Months Ended ~~October~~July 31, ~~2022 Compared~~2023 compared to the ~~Nine Months Ended October~~six months ended July 31, ~~2021~~2022

The following table shows our results of operations for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021.~~2022. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

Change Change
2022 2021 $ % 2023 2022 $ %
Total Revenues $ 4,089,037 $ 9,429,519 $ (5,340,482 ) (57% ) $ 195,420 $ 3,071,052 $ (2,875,632 ) (94% )
Gross Profit 792,491 2,454,393 (1,661,902 ) (68% ) 162,553 621,405 (458,852 ) (74% )
Total Operating Expenses 5,378,156 7,146,485 (1,768,329 ) (25% ) 981,396 4,368,251 (3,386,855 ) (78% )
Total Other Income (Expense) (7,643,110 ) (194,288 ) (7,448,822 ) (3,834% ) (5,001,965 ) (4,350,238 ) (651,727 ) (15% )
Net Income (Loss) $ (12,228,775 ) $ (4,886,380 ) $ (7,342,395 ) (150% ) $ (5,820,808 ) $ (8,097,084 ) $ 2,276,276 (28% )
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Revenue

The following table shows revenue split between proprietary and third-party website revenue for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021:~~2022:
Change
2022 2021 $ %
Proprietary website revenue $ 2,750,636 $ 6,339,478 $ (3,588,842 ) (57% )
Third party website revenue 1,338,401 3,090,041 (1,751,640 ) (57% )
Total Revenue $ 4,089,037 $ 9,429,519 $ (5,340,482 ) (57% )

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~~Table of Contents~~
Change
2023 2022 $ %
Proprietary website and marketplace revenues $ 118,017 $ 2,138,837 $ (2,020,820 ) (94% )
Third party website revenue 77,403 932,215 (854,812 ) (92% )
Total Revenue $ 195,420 $ 3,071,052 $ (2,875,632 ) (94% )

We had total revenue of ~~$4,089,037~~$195,420 for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, compared to ~~$9,425,519~~$3,071,052 for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022. Sales decreased by ~~$5,340,482 primarily due to present economic conditions reducing consumer demand as well as supply chain issues. In~~$2,875,632. For the ~~prior year’s quarter, sales were driven by high consumer demand as a result of economic stimulus packages provided during the pandemic and an aggressive marketing push by the Company. In current Q3~~six months ended July 31, 2023, the Company began ~~winding~~selling off its ~~website Liftkits4less in anticipation of~~inventory and transitioning its business to the November 2022 launch of its new automotive parts marketplace AutoParts4Less.com. The Company also recorded $66,153 in deferred revenue, which will be recognized as revenue next quarter and recognized $665,143 of deferred revenue recorded January 31, 2022. The deferred revenue represents orders paid by customers this period but delivered in the following period due to back orders and processing and delivery times. The Company also recorded $57,856 in customer deposits and recognized $530,900 recorded January 31, 2022. The customer deposits are orders paid by customers and canceled in the following period due to back orders or other reasons.newly developed autoplarts4less.com marketplace. For the ~~prior year period,~~six months ended July 31, 2023, marketplace revenues were $16,717 ($2022 - $0). There are no associated cost of sales with these revenues as they represent fees earned on sales. However, sales fell dramatically since the Company ~~recorded $241,292 in deferred revenue,~~is only concentrating on the new marketplace which ~~was recognized as revenue the next quarter~~is its future and recognized $687,766 of deferred revenue that was recorded January 31, 2021. For the nine months ended October 31, 2022, the Company also recorded $220,776 in customer deposits and recognized $188,385 recorded January 31, 2021.
~~Both proprietary website revenues and third party website revenues fell by 57% as the Company transitions from a seller of accessories to a pure-play automotive parts-only marketplace.~~continues cutting costs associated with its old business model.

Gross Profit

We had gross profit of ~~$792,491~~$162,553 for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, compared to gross profit of ~~$2,454,393~~$621,405 for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022. Gross profit decreased by ~~$1,661,902~~$458,852 as a result of the decreased revenues explained ~~above~~above. Gross profit % was 80% in 2023 compared to 20% in 2022. The reason for the increase in gross profit % was that the Company has no associated costs with the marketplace revenues , and also ~~due~~was able to ~~an increase~~realize higher margins on sales of inventory written down in cost because the Company had to purchase goods at higher product costs from distributers rather than the usual manufacturers for many of the new available products or some of the products that were not available from the usual manufacturers due to still existing supply chain issues. The 2022 gross profit was further reduced by a $143,000 provision on inventory which will be sold off in the coming quarter on transitioning to the new AutoParts4Less.com website.January 31, 2023.

Operating Expenses

The following table shows our operating expenses for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021:~~2022:

Change Change
Operating Expenses 2022 2021 $ %
2023 2022 $ %
Operating expenses
Depreciation $ 38,587 $ 35,930 2,657 7% $ 21,458 $ 25,844 $ (4,386 ) (17% )
Postage, Shipping and Freight 146,962 430,105 (283,143 ) (66% ) 13,551 114,949 (101,398 ) (88% )
Marketing and Advertising 671,348 1,876,576 (1,205,228 ) (64% ) 103,517 514,826 (411,309 ) (80% )
E Commerce Services, Commissions and Fees 1,076,787 1,160,569 (83,782 ) (7% ) 268,005 680,722 (412,717 ) (61% )
Operating lease cost 90,177 91,437 (1,260 ) (1% ) 47,002 60,958 (13,956 ) (23% )
Personnel Costs 505,253 1,078,449 (573,196 ) (53% ) 111,765 373,315 (261,550 ) (70% )
PPP Loan Forgiveness — (209,447 ) 209,447 —
General and Administrative 2,849,042 2,682,866 166,176 6% 416,098 2,597,637 (2,181,539 ) (84% )
Total Operating Expenses $ 5,378,156 $ 7,146,485 (1,768,329 ) (25% ) $ 981,396 $ 4,368,251 $ (3,386,855 ) (78% )

•   Depreciation increased by ~~$2,657~~$4,386 due to ~~asset additions at the end~~sale of ~~fiscal 2022, thus a higher asset value is being depreciated.~~vehicle in Q2 2023.

•   Postage shipping and freight decreased by ~~$283,143~~$101,398 due to lower sales.

•   Marketing and advertising decreased by ~~$1,205,228~~$411,309 due to ~~aggressive promotional efforts in the prior period to drive sales to our proprietary websites~~cost cutting and ~~build our brands. For the nine months ended October 31, 2022, the spending has resumed to usual levels and in Q32022 we reduced advertising in anticipation~~limiting spend on new ~~website launch in November.~~ marketplace.

•   E Commerce Services, Commissions and Fees decreased by ~~$83,782~~$412,717 due to lower sales.

•   Operating lease cost decreased by ~~$1,260.~~
~~•   PPP loan forgiveness~~$13,956 due to two fewer leases in ~~2021 was a non-recurring item.~~2023.

•   Personnel Costs decreased by ~~$573,196~~$261,550 mostly due to staff reductions as a result of lower ~~demand.~~
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~~Table of Contents~~demand and CEO not taking a salary in 2023.

•   General and Administrative ~~increased~~decreased by ~~$166,176 mainly~~$2,188,539 due to stock-based compensation of $1,998,000 on the CEO’s 250,000 options. This was partially reduced by reductions of 1,831,823 across all other general and administrative accounts as the Company focused on reducing its costs in a ~~declining market. Investor relations were lower as a result~~decreases of the ~~REG A subscription offering~~following: $1,998,000 in ~~the~~stock based compensation for warrants issued to former CEO in prior year, ~~and there was also a reduction~~$28,033 in professional fees due to ~~associated reporting~~lower legal and ~~business requirements~~accounting costs, $100,097 lower sub-contractors due to less outside work being needed for new marketplace compared to websites, $30,125 decreases in insurance costs due to lower health plan costs on fewer employees, with the remaining decrease to office and general expenses.
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Table of ~~the afore-mentioned REG A subscription from the prior year’s quarter.~~Contents

Other Income (Expense)

The following table shows our other income and expenses for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021:~~2022:

Change
Change 2023 2022 $ %
Other Income (Expense) 2022 2022 $ %
Gain (Loss) on Sale of Property and Equipment $ — $ 20,345 (20,345 ) — $ 3,057 $ — $ 3,057 —
Gain (Loss) on Derivatives (841,772 ) (88,551 ) (753,221 ) 851% (2,139,790 ) (657,626 ) (1,482,164 ) (225% )
Gain on Settlement of Debt 19,539 1,004,615 (985,076 ) (98% ) 37,382 9,411 27,971 297%
Amortization of Debt Discount (4,309,329 ) (442,075 ) (3,867,254 ) (875% ) (1,087,238 ) (2,376,607 ) 1,289,369 (54% )
Interest Expense (2,511,548 ) (688,622 ) (1,822,926 ) (265% ) (1,815,375 ) (1,325,416 ) (489,959 ) 37%
Total Other Income (Expense) $ (7,643,110 ) $ (194,288 ) (7,448,822 ) (3,834% ) $ (5,001,965 ) $ (4,350,238 ) $ (651,727 ) 15%

The changes above can be explained by the increase in convertible debt that started at the end of last fiscal year and continued for the ~~nine~~six months ended ~~October~~July 31, ~~2022.~~2023. Convertible debt increased from ~~$949,300~~$6,903,980 at ~~October~~July 31, ~~2021~~2022 to ~~$8,141,250~~$12,070,450 at ~~October~~July 31, ~~2022.~~2023. As a result all debt related items such as ~~amortization of debt discount and~~ interest expense increased significantly. Since amortization expense increases as the loans approach maturity, this explains why amortization was lower for the six months ended July 31, 2023 vs the prior year period. The current period has a lot of new debt whose amortization will increase as these loans approach maturity. The higher loss on derivatives in ~~2022~~2023 is a function of the market factors in the valuation of the derivative liability described in Note 9 ~~of the included financial statements~~ as well as the derivative discounts acquired with the new debt.

We had net loss of ~~$12,228,775~~$5,820,807 for the ~~nine~~six months ended ~~October~~July 31, ~~2022,~~2023, compared to net income of ~~$4,886,380~~$8,097,084 for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022. The ~~increase~~decrease in net loss was mainly due to the large ~~increase~~decrease in ~~other~~operating expenses ~~the lower sales and the increase~~with its significant decrease in stock-based ~~compensation as explained in the discussion above.~~compensation.

Results of Operations for the Three Months Ended ~~October~~July 31, ~~2022,~~2023, Compared to the Three Months Ended ~~October~~July 31, ~~2021~~2022

The following table shows our results of operations for the three months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021.~~2022. The historical results presented below are not necessarily indicative of the results that may be expected for any future period.

Change Change
2022 2021 $ % 2023 2022 $ %
Total Revenues $ 1,017,986 $ 3,114,062 $ (2,096,074 ) (67% ) $ 59,357 $ 1,341,122 $ (1,281,765 ) (96% )
Gross Profit 171,088 839,498 (668,410 ) (80% ) 39,814 359,478 (319,664 ) (89% )
Total Operating Expenses 1,009,907 2,860,927 (1,851,020 ) (65% ) 452,138 3,085,296 (2,633,158 ) (85% )
Total Other Income (Expense) (3,292,872 ) (545,145 ) (2,747,727 ) (504% ) (2,537,193 ) (2,777,108 ) 239,915 (9% )
Net Income (Loss) $ (4,131,691 ) $ (2,566,574 ) $ (1,565,117 ) (61% ) $ (2,949,517 ) $ (5,502,926 ) $ 2,553,409 (46% )

Revenue

The following table shows revenue split between proprietary and third-party website revenue for the three months ended ~~October~~July 31, 2022 and 2021:
Change
2022 2021 $ %
Proprietary website revenue $ 611,799 $ 2,392,668 $ (1,780,869 ) (74% )
Third party website revenue 406,187 721,394 (315,207 ) (44% )
Total Revenue $ 1,017,986 $ 3,114,062 $ (2,096,076 ) (67% )
Change
2023 2022 $ %
Proprietary website and marketplace revenues $ 11,183 $ 902,594 $ (891,410 ) (99% )
Third party website revenue 48,173 438,528 (390,355 ) (89% )
Total Revenue $ 59,357 $ 1,341,122 $ (1,281,765 ) (96% )

We had total revenue of ~~$1,017,986~~$59,437 for the three months ended ~~October~~July 31, ~~2022,~~2023, compared to ~~$3,114,062~~$1,341,222 for the six months ended July 31, 2022. Sales decreased by $1,281,765. For the six months ended July 31, 2023, the Company began selling off its inventory and transitioning its business to the newly developed autoplarts4less.com marketplace. For the three months ended ~~October~~July 31, ~~2021. Sales decreased by $2,096,074 primarily due to present economic conditions reducing consumer demand~~2023, marketplace revenues were $3,201 ($2022 - $0). There are no associated cost of sales with these revenues as ~~well as supply chain issues. In the prior year’s quarter,~~they represent fees earned on sales. However, sales ~~were driven by high consumer demand as a result of economic stimulus packages provided during the pandemic and an aggressive marketing push by the Company. In current Q3~~fell dramatically since the Company ~~began winding~~is only concentrating on the new marketplace which is its ~~website Liftkits4less in anticipation of the November 2022 launch of~~future and continues cutting costs associated with its ~~new automotive parts marketplace AutoParts4Less.com.~~old business model.

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Gross Profit

We had gross profit of ~~$171,088~~$39,814 for the three months ended ~~October~~July 31, ~~2022,~~2023, compared to gross profit of ~~$839,498~~$359,478 for the three months ended ~~October~~July 31, 2022. Gross profit decreased by ~~$668,411~~$319,664 as a result of the decreased revenues explained above. The 2022 gross profit was further reduced by a $143,000 provision on inventory which will be sold off in the coming quarter on transitioning to the new AutoParts4Less.com website.revenues.

Operating Expenses

The following table shows our operating expenses for the three months ended ~~October~~July 31, ~~2022~~2023 and ~~2021:~~2022:

Change Change
Operating Expenses 2022 2021 $ %
2023 2022 $ %
Operating expenses
Depreciation $ 12,743 $ 12,479 264 2% $ 9,040 $ 12,906 $ (3,866 ) (30% )
Postage, Shipping and Freight 32,013 94,356 (62,343 ) (66% ) 7,807 40,251 (32,444 ) (81% )
Marketing and Advertising 156,522 609,252 (452,730 ) (74% ) 28,628 240,399 (211,771 ) (88% )
E Commerce Services, Commissions and Fees 396,065 434,832 (38,767 ) (9% ) 87,076 350,025 (262,949 ) (75% )
Operating lease cost 29,219 30,478 (1,259 ) (4% ) 20,301 30,479 (10,178 ) (33% )
Personnel Costs 131,937 319,256 (187,319 ) (59% ) 30,281 168,016 (137,735 ) (82% )
PPP Loan Forgiveness — (209,447 ) 209,447 (100% )
General and Administrative 251,408 1,569,721 (1,318,313 ) (84% ) 269,005 2,243,220 (1,974,215 ) (88% )
Total Operating Expenses $ 1,009,907 $ 2,860,927 (1,851,020 ) (65% ) $ 452,138 $ 3,085,296 $ (2,633,158 ) (85% )

•   Depreciation ~~increased~~decreased by ~~$264.~~$3,866 due to sale of vehicle in Q2 2023.

•   Postage shipping and freight decreased by ~~$62,343~~$32,444 due to lower sales.

•   Marketing and advertising decreased by ~~$452,730~~$211,711 due to ~~aggressive promotional efforts in 2021 to drive sales to our proprietary websites~~cost cutting and ~~build our brands. For the quarter ended October 31, 2022 minimal advertising was done in anticipation~~limiting spend on new ~~website launch in November.~~ marketplace.

•   E Commerce Services, Commissions and Fees decreased by ~~$38,767~~$262,949 due to lower sales.

•   Operating lease cost decreased by ~~$1,259.~~$10,178 due to two fewer leases in 2023.

•   Personnel Costs decreased by ~~$187,319~~$137,735 due to staff reductions as a result of lower ~~demand.~~
~~•   PPP loan forgiveness~~demand and CEO not taking a salary in ~~Q3 2021 was a non-recurring item.~~2023.

•   General and Administrative decreased by ~~$1,338,313~~$1,974,215 mainly due to stock-based compensation of $1,998,000 on the ~~Company reducing its expenses in a declining market. Investor relations were lower as a result of the REG A subscription offering~~CEO’s 250,000 options issued in the prior ~~year and there~~year’s quarter. There was ~~also a reduction~~no stock based compensation in ~~professional fees due to associated reporting and business requirements of~~ the ~~afore-mentioned REG A subscription from the prior year’s quarter.~~three months ended July 31, 2023.

Other Income (Expense)

The following table shows our other income and expenses for the three months ended ~~October~~July 31, ~~2022,~~2023, and ~~2021:~~2022:

Change
Other Income (Expense) 2022 2022 $ %
Gain (Loss) on Derivatives $ (184,146 ) $ (76,444 ) (107,702 ) (141% )
Gain on Settlement of Debt 10,128 41,249 (31,121 ) (75% )
Amortization of Debt Discount (1,932,722 ) (130,139 ) (1,802,583 ) (1,385% )
Interest Expense (1,186,132 ) (379,811 ) (806,321 ) (212% )
Total Other Income (Expense) $ (3,292,872 ) $ (545,145 ) (2,747,727 ) (504% )
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Change
2023 2022 $ %
Other Income (Expense)
Gain (Loss) on Derivatives $ (1,133,090 ) $ (319,889 ) $ (813,201 ) 254%
Gain (Loss) on Disposal of Fixed Assets 3,057 — — —
Gain on Settlement of Debt 91,138 5,822 85,316 1465%
Amortization of Debt Discount (458,625 ) (1,651,327 ) 1,192,702 (72% )
Interest Expense (1,039,673 ) (811,714 ) (227,959 ) 28%
Total Other Income (Expense) $ (2,537,194 ) $ (2,777,108 ) $ 239,914 (9% )

The changes above can be explained by the increase in convertible debt ~~this quarter~~that started at the end of last fiscal year and continued for the three months ended ~~October~~July 31, ~~2022.~~2023. Convertible debt increased from ~~$949,300~~$6,903,980 at ~~October~~July 31, ~~2021~~2022 to ~~$8,141,250~~$12,070,450 at ~~October~~July 31, ~~2022. so accordingly there were large increases in~~2023. As a result all debt related items such as interest expense increased significantly. Since amortization expense ~~and interest expense.~~increases as the loans approach maturity, this explains why amortization was lower for the three months ended July 31, 2023 vs the prior year period. The current period has a lot of new debt whose amortization will increase as these loans approach maturity. The higher loss on derivatives in 2023 is a function of the market factors in the valuation of the derivative liability described in Note 9 as well as the ~~increase in~~ derivative ~~discount resulting from~~discounts acquired with the new ~~debt issuances.~~debt.
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Table of Contents

We had a net loss of ~~$4,131,691~~$2,949,517 for three months ended ~~October~~July 31, ~~2022,~~2023, compared to a net loss of ~~$2,566,574~~$5,502,926 for three months ended ~~October~~July 31, ~~2021.~~2022. The decrease in net ~~income~~loss was mainly due to the large ~~increase~~decrease in ~~other~~operating expenses ~~and the lower sales as explained~~with its significant decrease in ~~the discussion above.~~stock-based compensation.

Liquidity and Capital Resources

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

As of ~~October~~July 31, ~~2022,~~2023, we had a cash balance of ~~$46,026, net~~$37,195, inventory of ~~$142,251~~$30,909 and ~~$15,532,213~~$26,054,906 in current liabilities. At the current cash consumption rate, we will need to consider additional funding sources going forward. We are taking proactive measures to reduce operating expenses and drive growth in revenue.

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

Capital Resources

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

October 31, 2022 January 31, 2022 July 31, 2023 January 31, 2023
Current assets $ 252,543 $ 564,615 $ 87,635 $ 97,745
Current liabilities 15,532,213 8,890,462 26,054,906 20,768,832
Working capital (deficits) $ (15,279,670 ) $ (8,325,847 ) $ (25,967,271 ) $ (20,671,087 )

Net cash used in operations for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 was ~~$3,398,045~~$963,691 as compared to net cash used in operations of ~~$4,343,351~~$2,991,819 for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022. Net cash used in investing activities for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 was ~~$1,142~~$0 as compared to cash flows used in investing activities of ~~$18,568~~$1,142 for the same period in ~~2021.~~2022. Net cash provided by financing activities for the ~~nine~~six months ended ~~October~~July 31, ~~2022~~2023 was ~~$3,367,715~~$996,149 as compared to ~~$4.434,554~~$2,991,819 for the ~~nine~~six months ended ~~October~~July 31, ~~2021.~~2022.

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk.

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

ITEM 4. Controls and Procedures

(a)           Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Moving forward, we hope that our Chief Executive Officer and Principal Financial Officer will be able to devote the additional time and effort required so that our disclosure controls and procedures can become effective. Notwithstanding the assessment that our internal controls and procedures were not effective, we believe that our financial statements contained in this Quarterly Report for the quarter ended ~~October~~July 31, ~~2022~~2023 fairly present our financial position, results of operations and cash flows for the years and months covered thereby in all material respects.
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~~Table of Contents~~

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

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PART II OTHER INFORMATION
~~Item 1. Legal Proceedings~~
~~None~~
~~Item 1A. Risk Factors~~
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), we are not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

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

~~Recent Sales of Unregistered Securities~~Convertible Promissory Notes

~~None.~~On May 5, 2023, we issued a promissory note in the principal amount of $176,000 to Cove Funding LP.

~~Item 3. Default Upon Senior Securities~~On June 13, 2023, we issued a promissory note in the principal amount of $127,500 to Cove Funding LP.

~~None.~~On June 13, 2023, we issued a senior secured promissory note in the principal amount of $64,625 to Auctus Fund, LLC.

~~Item 4. Mine Safety Disclosures~~On July 17, 2023, we issued a promissory note in the principal amount of $127,500 to Cove Funding LP.

~~Not applicable.~~Common Stock

~~Item 5. Other Information~~On June 7, 2023, pursuant to an amendment to a convertible promissory note issued on July 5, 2022, we issued 100,000 shares of Common Stock to the lender.

~~None.~~On July 10, 2023, pursuant to the promissory note of May 5, 2023 issued to Cove Funding LP, we issued 130,000 shares of Common Stock to the lender, with another 222,000 shares to be issued.
Pursuant to the promissory note of June 13, 2023 issued to Cove Funding LP, there were 255,000 shares of Common Stock to be issued to the lender.
Pursuant to the promissory note of July 17, 2023 issued to Cove Funding LP, there were 255,000 shares of Common Stock to be issued to the lender.
Warrants
On June 1, 2023, pursuant to an amendment to a convertible promissory note issued on July 5, 2022, we issued warrants to purchase 1,000,000 shares of Common Stock to the lender.
On June 13, 2023, pursuant to the senior secured promissory note issued to Auctus Fund, LLC, we issued warrants to purchase 427,750 shares of Common Stock to the lender.
The sales of the securities above were made in reliance on Section 4(a)(2) under the Securities Act and were made without general solicitation or advertising. The securities offered have not been registered under the Securities Act, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act. There were no sales commissions paid in connection with the sales of these securities.

Item 6. Exhibits

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

- 3433 -
Table of Contents
SIGNATURES

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

Auto Parts 4Less Group, Inc.

By:  /s/ ~~Timothy Armes~~Christopher Davenport
~~Timothy Armes~~Christopher Davenport
~~Chairman (Director),~~ Chief Executive Officer ~~President, Secretary~~ and ~~Treasurer~~Chief Financial Officer
(Principal Executive Officer and Principal Financial and Accounting Officer)

Date: ~~January 6,~~September 19, 2023

- 3534 -
Table of Contents
EXHIBIT INDEX

Exhibit
~~Number~~
~~Description of Exhibit~~
Number
Exhibit Description
31.1
~~Certificate~~Rule 13a-14(a) Certification of ~~the~~ Principal Executive Officer and Principal ~~Financial~~Financial/Accounting Officer ~~pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~ *
32.1
~~32.1~~
~~Certificate~~Section 1350 Certification of ~~the~~ Principal Executive Officer and Principal ~~Financial~~Financial/Accounting Officer ~~pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~ *
101.INS
~~101.INS~~
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. **
101.SCH
~~101.SCH~~
Inline XBRL Taxonomy Extension Schema Document **
Document*
101.CAL
~~101.CAL~~
Inline XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF
~~101.DEF~~
Inline XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB
~~101.LAB~~
Inline XBRL Taxonomy Extension Label Linkbase Document **
101.PRE
~~101.PRE~~
Inline XBRL Taxonomy Extension Presentation Linkbase Document **
104
~~104~~
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) **
__________
*   Filed herewith.

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

- 3635 -

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

Title of ~~each class~~Each Class of Stock	Trading Symbol(s)	Name of each exchange on which registered
~~Common Stock~~N/A	~~FLES~~N/A	~~OTCQB~~N/A

PART I.	FINANCIAL INFORMATION	3

ITEM 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets (Unaudited)	3

	Condensed Consolidated Statements of Operations (Unaudited)	4

	Condensed Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited)	5 - 6

	Condensed Consolidated Statements of Cash Flows (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	38

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	27

ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	32

ITEM 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION

ITEM 2.	Unregistered Sales of Securities and Use of Proceeds	33

ITEM 6.	Exhibits	33

	~~Condensed Consolidated Balance Sheets (Unaudited)~~SIGNATURES	3

	~~Condensed Consolidated Statements of Operations (Unaudited)~~	4

	~~Condensed Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited)~~	~~5 - 6~~

	~~Condensed Consolidated Statements of Cash Flows (Unaudited)~~	7

	~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~	8

~~ITEM 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~	28

~~ITEM 3.~~	~~Quantitative and Qualitative Disclosure About Market Risk~~	33

~~ITEM 4.~~	~~Controls and Procedures~~	33

~~PART II.~~	~~OTHER INFORMATION~~	34

~~ITEM 1.~~	~~Legal Proceedings~~	34

~~ITEM 1A.~~	~~Risk Factors~~	34

~~ITEM 2.~~	~~Unregistered Sales of Securities and Use of Proceeds~~	34

~~ITEM 3.~~	~~Default Upon Senior Securities~~	34

~~ITEM 4.~~	~~Mine Safety Disclosures~~	34

~~ITEM 5.~~	~~Other Information~~	34

~~ITEM 6.~~	~~Exhibits~~	34

~~SIGNATURES~~		35


	October 31, 2022			January 31, 2022
	Unaudited			^(*)			July 31, 2023			January 31, 2023 ^*
Assets
Current Assets
Cash and Cash Equivalents	$	46,026		$	77,498		$	37,195		$	4,737
Inventory		142,251			432,583			30,909			50,000
Prepaid Expenses		8,018			16,065			12,435			8,019
Deferred Offering Costs		23,000			23,000
Other Current Assets		33,248			15,469			7,096			34,989
Total Current Assets		252,543			564,615			87,635			97,745
Operating Lease Assets		160,770			242,583			96,208			138,551
Property and Equipment, net of accumulated depreciation of $161,056, and $122,469		183,891			221,336
Property and Equipment, net of accumulated depreciation of $167,433 and $173,475								87,803			171,472

Total Assets	$	597,204		$	1,028,534		$	271,646		$	407,768

Liabilities and Stockholders’ Deficit
Current Liabilities
Bank overdraft	$	—		$	11,055
Accounts Payable		1,317,984			1,228,039		$	1,319,764		$	1,378,637
Accrued Expenses		1,536,626			796,397			3,319,103			2,334,368
Accrued Expenses – Related Party		45,673			46,173			—			74,111
Customer Deposits		57,856			530,900			11,083			38,448
Deferred Revenue		66,153			665,143			1,399			66,153
Short-Term Debt		2,985,041			3,454,133			3,197,258			3,088,993
Current Operating Lease Liability		70,214			100,001			23,917			53,912
Short-Term Convertible Debt, net of debt discount of $2,374,330 and $2,131,034		5,766,920			647,966
Short-Term Convertible Debt, net of debt discount of $598,166 and $840,067								11,472,284			10,438,583
Derivative Liabilities		3,663,597			1,263,442			6,470,081			3,271,058
Shareholder Loans Payable		—			119,476			224,572			—
Current Portion – Long-Term Debt		22,149			27,737			15,445			24,569
Total Current Liabilities		15,532,213			8,890,462			26,054,906			20,768,832

Non-Current Lease Liability		90,556			138,551			72,291			84,639
Long-Term Debt		95,803			115,900			43,521			87,423

Total Liabilities		15,718,572			9,144,913			26,170,718			20,940,894

Commitments and Contingencies		—			—

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

Stockholders’ Deficit
Preferred Stock – Series A, $0.001 par value, 330,000 shares authorized, 0 and 0 shares issued and outstanding		—			—
Preferred Stock – Series B, $0.001 par value, 20,000 shares authorized, 20,000 and 20,000 shares issued and outstanding		20			20
Preferred Stock – Series C, $0.001 par value, 7,250 shares authorized, 0 and 7,250 shares issued and outstanding		—			7
Common Stock, $0.000001 par value, 75,000,000 shares authorized, 1,823,708 and 341,023 shares issued, issuable and outstanding		2			—
Preferred Stock – Series A, $0.001 par value, 330,000 shares authorized, 0 and 0 shares issued and outstanding								—			—
Preferred Stock – Series B, $0.001 par value, 20,000 shares authorized, 20,000 and 20,000 shares issued and outstanding								20			20
Preferred Stock – Series C, $0.001 par value, 7,250 shares authorized, 0 and 0 shares issued and outstanding								—			—
Common Stock, $0.000001 par value, 75,000,000 shares authorized, 3,532,374 and 1,917,982 shares issued, issuable and outstanding								4			2
Additional Paid In Capital		24,689,118			19,465,327			25,287,970			24,833,110
Accumulated Deficit		(40,680,508	)		(28,451,733	)		(52,057,066	)		(46,236,258	)
Total Stockholders’ Deficit		(15,991,368	)		(8,986,379	)		(26,769,072	)		(21,403,126	)

Total Liabilities and Stockholders’ Deficit	$	597,204		$	1,028,534		$	271,646		$	407,768


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	October 31, 2022			October 31, 2021			October 31, 2022			October 31, 2021			July 31, 2023			July 31, 2022			July 31, 2023			July 31, 2022

Revenue	$	1,017,986		$	3,114,062		$	4,089,037		$	9,429,519		$	59,357		$	1,341,122		$	195,420		$	3,071,052

Cost of Revenue		846,898			2,274,564			3,296,546			6,975,126			19,543			981,644			32,867			2,449,647

Gross Profit		171,088			839,498			792,491			2,454,393			39,814			359,478			162,553			621,405

Operating Expenses:
Depreciation		12,743			12,479			38,587			35,930			9,040			12,906			21,458			25,844
Postage, Shipping and Freight		32,013			94,356			146,962			430,105			7,807			40,251			13,551			114,949
Marketing and Advertising		156,522			609,252			671,348			1,876,576			28,628			240,399			103,517			514,826
E Commerce Services, Commissions and Fees		396,065			434,832			1,076,787			1,160,569			87,076			350,025			268,005			680,722
Operating lease cost		29,219			30,478			90,177			91,437			20,301			30,479			47,002			60,958
Personnel Costs		131,937			319,256			505,253			1,078,449			30,281			168,016			111,765			373,315
PPP Loan Forgiveness		—			(209,447	)		—			(209,447	)
General and Administrative		251,408			1,569,721			2,849,042			2,682,866			269,005			2,243,220			416,098			2,597,637
Total Operating Expenses		1,009,907			2,860,927			5,378,156			7,146,485			452,138			3,085,296			981,396			4,368,251

Net Operating Loss		(838,819	)		(2,021,429	)		(4,585,665	)		(4,692.092	)		(412,324	)		(2,725,818	)		(818,843	)		(3,746,846	)

Other Income (Expense)
Gain (Loss) on Sale of Property and Equipment		—			—			—			20,345			3,057			—			3,057			—
Gain (Loss) on Derivatives		(184,146	)		(76,444	)		(841,772	)		(88,551	)		(1,133,090	)		(319,889	)		(2,139,790	)		(657,626	)
Gain on Settlement of Debt		10,128			41,249			19,539			1,004,615			91,138			5,822			37,382			9,411
Amortization of Debt Discount		(1,932,722	)		(130,139	)		(4,309,329	)		(442,075	)		(458,625	)		(1,651,327	)		(1,087,238	)		(2,376,607	)
Interest Expense		(1,186,132	)		(379,811	)		(2,511,548	)		(688,622	)		(1,039,673	)		(811,714	)		(1,815,375	)		(1,325,416	)
Total Other Income (Expense)		(3,292,872	)		(545,145	)		(7,643,110	)		(194,288)			(2,537,193	)		(2,777,108	)		(5,001,964	)		(4,350,238	)

Net (Loss)	$	(4,131,691	)	$	(2,566,574	)	$	(12,228,775	)	$	(4,886,380	)
Net Income (Loss)													$	(2,949,517	)	$	(5,502,926	)	$	(5,820,807	)	$	(8,097,084	)

Basic Weighted Average Shares Outstanding;		1,805,316			319,866			1,576,024			257,277			2,691,590			1,564,169			2,564,071			1,454,787
Basic (Loss) per Share	$	(2.29	)	$	(8.02	)	$	(7.76	)	$	(18.99	)
Basic Income (Loss) per Share													$	(1.10	)	$	(3.52	)	$	(2.27	)	$	(5.57	)

Diluted Average Shares Outstanding;		1,805,316			319,866			1,576,024			257,277			2,691,590			1,564,169			2,564,071			1,454,787
Diluted (Loss) per Share	$	(2.29	)	$	(8.02	)	$	(7.76	)	$	(18.99	)
Diluted Income (Loss) per Share													$	(1.10	)	$	(3.52	)	$	(2.27	)	$	(5.57	)


	Preferred Series A			Preferred Series B			Preferred Series C			Common Stock			Paid in		Retained
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings			Total

Balance at January 31, 2021	—		—	20,000		20	7,250		7	142,716		—		14,291,760		(20,381,977	)		(6,090,190	)

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

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

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

Net (Loss)	—		—	—		—	—		—	—		—		—		(567,557	)		(567,557	)

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

Conversion of Notes Payable and Accrued Interest and Fees to Common Stock	—		—	—		—	—		—	3,000		—		59,100		—			59,100

Derivative Liability Reclassified as Equity Upon Conversion of Notes	—		—	—		—	—		—	—		—		17,640		—			17,640

Issuance of shares	—		—	—		—	—		—	10,475		—		200,500		—			200,500

Relative fair value of equity issued with debt	—		—	—		—	—		—	9,181		—		59,801		—			59,801

Issuance of warrants	—		—	—		—	—		—	—		—		600,000		—			600,000

Net (Loss)	—		—	—		—	—		—	—		—		—		(1,752,249	)		(1,752,249	)

Balance at July 31, 2021	—	$	—	20,000	$	20	7,250	$	7	280,097	$	—	$	17,530,802	$	(22,701,783	)	$	(5,170,954	)

Conversion of Notes Payable and Accrued Interest and Fees to Common Stock	—		—	—		—	—		—	5,977		—		102,341		—			102,341

Derivative Liability Reclassified as Equity Upon Conversion of Notes	—		—	—		—	—		—	—		—		58,504		—			58,504

Share Issuances, Net of Issuance Costs of $359,445	—		—	—		—	—		—	52,100		—		392,924		—			392,924

Share Issuance for fees	—		—	—		—	—		—	1,301		—		30,055		—			30,055

Additional Shares Issued as Part of Relative Fair Value for Debt	—		—	—		—	—		—	1,548		—		—		—			—

Options Issued to Director and CEO	—		—	—		—	—		—	—		—		585,000		—			585,000

Warrants Issued for Fees	—		—	—		—	—		—	—		—		512,500		—			512,500

Net (Loss)	—		—	—		—	—		—	—		—		—		(2,566,574	)		(2,566,574	)

Balance at October 31, 2021	—	$	—	20,000	$	20	7,250	$	7	341,023	$	—	$	19,212,126	$	(25,268,357	)	$	(6,056,204	)


	Preferred Series A			Preferred Series B			Preferred Series C					Common Stock			Paid in		Accumulated
	Shares	Amount		Shares	Amount		Shares		Amount			Shares	Amount		Capital		Deficit			Total

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

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

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

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

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

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

April 30, 2022	—	$	—	20,000	$	20	—		$	—		1,500,362	$	1	$	20,845,448	$	(31,045,891	)	$	(10,200,422	)

Relative Fair Value of Equity Issued with Debt	—		—	—		—	—			—		221,500		1		794,465		—			794,466

Exercise of warrants	—		—	—		—	—			—		10,000		—		—		—			—

Penalty Warrants Recorded as Interest	—		—	—		—	—			—		—		—		280,050		—			280,050

Stock Based Compensation	—		—	—		—	—			—		—		—		1,998,000		—			1,998,000

Rounding shares	—		—	—		—	—			—		2,587		—		—		—			—

Net (Loss)	—		—	—		—	—			—		—		—		—		(5,502,926	)		(5,502,926	)

July 31, 2022	—	$	—	20,000	$	20	—		$	—		1,734,449	$	2	$	23,917,963	$	(36,548,817	)	$	(12,630,832	)

Leases	Classification	October 31, 2022		January 31, 2022		Classification	July 31, 2023		January 31, 2023
Assets
Operating	Operating Lease Assets	$	160,770	$	242,583	Operating Lease Assets	$	96,208	$	138,551
Liabilities
Current
Operating	Current Operating Lease Liability	$	70,214	$	100,001	Current Operating Lease Liability	$	23,917	$	53,912
Noncurrent
Operating	Noncurrent Operating Lease Liabilities		90,556		138,551	Noncurrent Operating Lease Liabilities		72,291		84,639
Total lease liabilities		$	160,770	$	238,552		$	96,208	$	138,551


	October 31, 2022			January 31, 2022
Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2020 repayable June 30, 2022 with an additional interest payment of $20,000⁽³⁾	$	—	^*	$	97,340
Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023⁽¹⁾		4,947	^*		8,183
Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on July 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $72,977.		70,277	^#		81,346
Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $68,35.		47,675	^#		54,108
Working Capital Note Payable - $700,000, dated October 29, 2021, repayment of $17,904 per week until Oct 29, 2022, interest rate of approximately 31%^(2)(4)(7)		407,423	^{* ∞}		635,831
Working Capital Note Payable - $650,000, dated October 25, 2021, repayment of $15,875 per week until October 25, 2022, interest rate of approximately 26%^(2)(4)(8)		447,756	^{* ∞}		596,047
Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance		5,000	^*		5,000
Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance		2,500	^*		2,500
Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company		12,415	^*		12,415
Promissory note - $60,000 dated September 18, 2020 maturing April 30, 2022⁽¹⁰⁾, including $5,000 original issue discount, 15% compounded interest payable monthly		60,000	^{* ∞}		60,000
Promissory note - $425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This note matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note.⁽⁵⁾		425,000	^{* ∞}		425,000
Promissory note - $1,200,000 dated August 28, 2020, maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal.⁽⁶⁾		1,200,000	^{* ∞}		1,200,000
Promissory note - $420,000 dated December 27, 2021, including $20,000 original issue discount, maturing January 27, 2022, non-interest bearing⁽⁹⁾		420,000	^{* ∞}		420,000
Total	$	3,102,993		$	3,597,770

†	Loans totaling $3,062,305 in default.

*	Short-term ~~loans~~loans.

#	Long-term loans of ~~$47,675~~$58,966 including current portion ~~$8,317;~~ ~~$70,277 including current portion $13,832~~

∞	~~In default $2,960,179.~~of $15,445.

(1)	Secured by equipment having a net book value of ~~$7,285.~~$5,089.

(2)	The amounts due under the note are personally guaranteed by an officer or a director of the Company.

(3)	~~On November 10, 2020~~Secured by all the ~~Company amended~~assets of the ~~agreement extending the maturity to June~~Company. Penalty of 10% of principal amount and 60,000 3 year warrants with an exercise price based on based on previous day closing price on initial default and 2% of principal amount and 60,000 3 year warrants with an exercise price based on previous day closing price for every 30 2022 from April 8, 2021 and changing monthly payments to $0 from $5,705 and interest rate from 13% to a $20,000 lump sum payable at maturity. This loan and accrued interest are payable to a shareholder and were transferred to a convertible loan in August 2022.day default period thereafter.

(4)	The Company has pledged a security interest on all accounts receivable and banks accounts of the Company.

(5)	Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company has entered into such a transaction the loan has reached maturity and is treated as current. An extension was granted on December 13, 2021 amending the maturity date to April 30, ~~2022. The April 30,~~ 2022 ~~payment has not been made and the Company is working on another extension with the lender.~~

(6)	Secured by all assets of the Company. Loan payable in 2 instalments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022. On December 13, 2021 the parties amended the maturity date for the first instalment to be April 30, 2022 with the second instalment date unchanged. ~~The April 30, 2022 payment has not been made and the Company is working on another extension with the lender.~~

(7)	This loan replaces $500,000 loan dated June 4, 2021, ~~$422,009~~$422,009 proceeds were used to repay this loan, net cash received was $253,491 after payment of ~~$26,500~~$26,500 in fees.

(8)	This loan replaces $500,000 loan dated June 4, 2021, ~~$359,919~~$359,919 proceeds were used to repay this loan, net cash received was $267,606 after payment of ~~$22,475~~$22,475 in fees.

(9)	Penalty of 10% of principal amount and 30,000 3 year warrants with an exercise price of $15.00 on initial default and 2% of principal amount and 15,000 3 year warrants with an exercise price ~~of $15.00~~based on previous day closing price for every 30 day default period thereafter. Initial default ~~has been recorded at January 31, 2022 with an interest charge of $42,000~~ and another $276,000 which was the fair value of the warrants (see Note 11). The Company has defaulted on the February 26, 2022, through to July 26, 2022 and will issue an additional 15,000 warrants for each of those sixsubsequent defaults ~~for a total of 90,000 warrants. The Company has recorded $798,450 based on the fair value of the warrants and $75,600 for the 2% fee as interest expense~~ to October 31, ~~2022.~~2022 have been recorded.

(10)	Secured by all the assets of the Company and a personal guaranty from the CEO. Penalty of 15% of principal amount on initial default and 1.5% for every subsequent 7 day default period. The ~~April 30, 2022 payment~~loan has not been ~~made~~repaid.

(11)	Secured by all the assets of the Company. Penalty of 10% of principal amount and ~~the Company is working~~20,000 3 year warrants with an exercise price based on ~~another extension~~based on previous day closing price on initial default and 2% of principal amount and 20,000 3 year warrants with ~~the lender.~~an exercise price based on previous day closing price for every 30 day default period thereafter.

Year Ended	Amount
October 31, 2023	$	3,007,190
October 31, 2024		25,174
October 31, 2025		26,443
October 31, 2026		27,792
October 31, 2027		16,394
Total	$	3,102,993

Year Ended	Amount
July 31, 2024	$	3,212,703
July 31, 2025		15,905
July 31, 2026		16,379
July 31, 2027		11,237
Total	$	3,256,224

	Interest	Default Interest	Conversion	Outstanding Principal at
Maturity Date	Rate	Rate	Price ^(a)	October 31, 2022			January 31, 2022
Nov 4, 2013^*	12%	12%	$1,800,000	$	100,000		$	100,000
Jan 31, 2014^*	12%	18%	$2,400,000		16,000			16,000
July 31, 2013^*	12%	12%	$1,440,000		5,000			5,000
Jan 31, 2014^*	12%	12%	$2,400,000		30,000			30,000
Nov 12, 2022*	8%	12%	⁽¹⁾		3,000,000			2,400,000
Jan. 13, 2023	12%	22%	⁽²⁾		—			228,000
Aug. 11, 2022	10%	10%	⁽³⁾		—			—
Feb. 14, 2023	12%	20%	⁽⁴⁾		1,200,000			—
Feb 25, 2023	12%	20%	⁽⁴⁾		150,000			—
Feb. 25, 2023	12%	20%	⁽⁴⁾		350,000			—
Mar. 9 2023	12%	20%	⁽⁴⁾		200,000			—
Mar. 9, 2023	12%	20%	⁽⁴⁾		200,000			—
Apr. 22, 2023	12%	20%	⁽⁴⁾		440,000			—
Apr. 22, 2023	12%	20%	⁽⁴⁾		110,000			—
May 19,2023	12%	16%	⁽⁵⁾		400,000			—
Feb.11, 2023	12%	18%	⁽⁴⁾		275,000			—
Dec 27, 2022	12%	18%	⁽⁴⁾		275,000			—
Jan. 5, 2023	12%	18%	⁽⁴⁾		250,000			—
Jan.6 ,2023	12%	18%	⁽⁴⁾		125,000			—
Jan.6 ,2023	12%	18%	⁽⁴⁾		125,000			—
Jan.11 ,2023	12%	18%	⁽⁴⁾		138,890			—
Apr. 22, 2023	12%	18%	⁽⁴⁾		275,000			—
Apr. 22, 2023	12%	18%	⁽⁴⁾		275,000			—
Sept. 9, 2023	12%	22%	⁽⁶⁾		201,360			—
Sub-total					8,141,250			2,779,000
Debt Discount					(2,374,330	)		(2,131,034	)
				$	5,766,920		$	647,966

*	In default at filing date ~~$3,151,000~~
	$11,497,825.
(1)	lesser of $ 1.25 or 75 % of offering price if there is an uplisting to a national securities exchange.

(2)	~~75% of closing bid price on day preceding conversion date in event of default.~~

~~(3)~~	convertible at 20% discount of the offering price on ~~Company’s~~company’s uplist to ~~NASDAQ.~~NASDAQ and convertible upon default at conversion price lower of 75% of lowest trading price 20 days prior to conversion.
(3)	lesser of $ 0.25 or 75 % of offering price if there is an uplisting to a national securities exchange.
(4)	convertible upon default at conversion price lower of i) lowest price 20 days prior to Issuance ii) lowest price 20 days prior to conversion.

(5)	lesser of $ 5.00 or 75 % of offering price if there is an uplisting to a national securities exchange.

(6)	75% of lowest closing bid price ten days preceding conversion date in event of default.
(7)	lower of $0.20 or 20% discount on previous days close
(a)	Note all conversions are subject to dilutive issuance clauses where the conversion price will revert to the lowest transacted share price.
(b)	All debt issuances are subject to events of default which may trigger penalties. The Company was in default of non payment at maturity and therefore penalties resulted on some of the loans. Penalties totaling $90,928 were added to the principal of the loan with a corresponding adjustment to interest expense.
(i)	Penalty of 100% of the loan and accrued interest added to the principal and accrued interest, respectively.
(ii)	Penalty of 25% of the loan and accrued interest added to the principal and accrued interest, respectively.
(iii)	Penalty of 50% of the loan and accrued interest added to the principal and accrued interest, respectively.
(iv)	Penalty of 15,000 added to the principal of the loan.

	Level 3
	Derivatives
Balance, January 31, 2022	$	1,263,442
Changes Due to Issuance of New Convertible Notes		1,577,922
Settlement Due to Repayment of Debt		(19,539	)
Mark to Market Change in Derivatives		841,772
Balance, October31, 2022	$	3,663,597

	Level 3
	Derivatives
Balance, January 31, 2023	$	3,271,058
Changes Due to Issuance of New Convertible Notes		1,013,269
Changes due to Settlements of Convertible Notes		127,393
Changes due to Conversions of Notes Payable		(81,429	)
Mark to Market Change in Derivatives		2,139,790
Balance, July 31, 2023	$	6,470,081

		Embedded Derivative Liability As of ~~October~~ July 31, ~~2022~~2023
Strike price		~~5.20 – 5.55~~0.15 - 0.30
Contractual term (years)		~~0.25~~0.08 - ~~1.00~~0.97 years
Volatility (annual)		~~182.9%~~126.1% - ~~213.76~~243.3
Underlying fair market value		~~5.20~~0.30
Risk-free rate		~~7.11%~~9.61% - ~~8.46~~11.25
Dividend yield (per share)		0

Common shares	July 31, 2023			January 31, 2023
Issued		2,723,499			1,773,987
Shares to be cancelled		(5,000	)		(5,000	)
Issuable		813,875			148,995
Issued, issuable and outstanding		3,532,374			1,917,982

~~Expected volatility~~	~~753 - 1,735%~~
~~Exercise price~~	~~$4.00 - $15.00~~
~~Stock price~~	~~$9.99~~
~~Expected life~~	~~1.5 - 5 years~~
~~Risk-free interest rate~~	~~3.05% - 3.07%~~
~~Dividend yield~~	0%

Expected volatility	~~1,686~~588 - ~~2,227%~~2,224%
Exercise price	$~~4.45~~0.15 - ~~$15.00~~$1.03
Stock price	$~~0.95~~0.15 - ~~$11.99~~$1.10
Expected life	3 - 5 years
Risk-free interest rate	~~1.76%~~3.57% - ~~4.45%~~4.44%
Dividend yield	0%0%

Expected volatility	1,686 - 2,227%
Exercise price	$5.12 - $15.00
Stock price	$5.12 - $9.99
Expected life	3 - 5 years
Risk-free interest rate	1.76% - 3.13%
Dividend yield	0%

Issued To	# Warrants	Dated	Expire	Strike Price ^*	Expired	Exercised
Lender	95,000	08/28/2020	08/28/2023	$4.00 per share	N	N
Broker	250	10/11/2020	10/11/2025	$45.00 per share	N	N
Broker	300	11/25/2020	11/25/2025	$30.00 per share	N	N
Triton	30,000	07/27/2021	07/27/2024	$21.10 per share	N	N
Consultant	25,000	08/26/2021	08/26/2024	$15.00 per share	N	N
Lender	60,845	11/12/2021	11/12/2026	$15.00 per share	N	N
Lender	90,000	11/12/2021	11/12/2026	$15.00 per share	N	N
Lender	30,000	1/27/2022	1/27/2025	$15.00 per share	N	N
Lender	120,000	2/14/2022	2/14/2027	$15.00 per share	N	N
Lender	35,000	2/25/2022	2/25/2027	$15.00 per share	N	N
Lender	15,000	2/25/2022	2/25/2027	$15.00 per share	N	N
Lender	20,000	3/9/2022	3/9/2027	$15.00 per share	N	N
Lender	20,000	3/9/2022	3/9/2027	$15.00 per share	N	N
Lender	11,000	4/22/2022	4/22/2027	$15.00 per share	N	N
Lender	44,000	4/22/2022	4/22/2027	$15.00 per share	N	N
Lender	15,000	2/26/2022	2/26/2025	$5.40 per share	N	N
Lender	15,000	3/28/2022	3/28/2025	$7.50 per share	N	N
Lender	15,000	4/27/2022	4/27/2025	$6.99 per share	N	N
Lender	15,000	5/27/2022	5/27/2025	$5.12 per share	N	N
Lender	33,333	5/19/2022	5/19/2027	$15.00 per share	N	N
Lender	100,000	6/27/2022	6/27/2027	$15.00 per share	N	N
Lender	15,000	6/26/2022	6/26/2025	$5.12 per share	N	N
Lender	15,000	7/26/2022	7/26/2025	$5.12 per share	N	N
Lender	100,000	7/5/2022	7/5/2027	$15.00 per share	N	N
Lender	50,000	7/6/2022	7/6/2027	$15.00 per share	N	N
Lender	50,000	7/6/2022	7/6/2027	$15.00 per share	N	N
Lender	50,000	7/11/2022	7/11/2027	$15.00 per share	N	N
Lender	100,000	8/11/2022	8/11/2027	$15.00 per share	N	N
Lender	100,000	8/22/2022	8/22/2027	$15.00 per share	N	N
Lender	100,000	8/22/2022	8/22/2027	$15.00 per share	N	N
Lender	15,000	8/25/2022	8/25/2025	$5.10 per share	N	N
Lender	15,000	9/24/2022	9/24/2025	$4.00 per share	N	N
Lender	15,000	10/24/2022	10/24/2025	$3.30 per share	N	N
Lender	75,000	11/10/2022	11/10/2027	$15.00 per share	N	N
Lender	75,000	11/10/2022	11/10/2027	$15.00 per share	N	N
Lender	15,000	11/23/2022	11/23/2025	$2.20 per share	N	N
Lender	15,000	12/23/2022	12/23/2025	$3.30 per share	N	N
Lender	15,000	1/22/2023	1/22/2026	$3.30 per share	N	N
Lender	15,000	2/21/2023	2/21/2026	$1.03 per share	N	N
Lender	15,000	3/21/2023	1/22/2026	$1.00 per share	N	N
Lender	388,884	4/20/2023	4/20/2028	$1.00 per share	N	N
Lender	15,000	4/23/2023	1/22/2026	$0.20 per share	N	N
Lender	97,221	4/27/2023	4/27/2028	$0.25 per share	N	N
Lender	60,000	4/30/2023	4/30/2026	$0.15 per share	N	N
Lender	20,000	4/30/2023	4/30/2026	$0.15 per share	N	N
Lender	15,000	5/23/2023	5/23/2026	$0.35 per share	N	N
Lender	60,000	5/30/2023	5/30/2026	$0.25 per share	N	N
Lender	20,000	5/30/2023	5/30/2026	$0.25 per share	N	N
Lender	1,000,000	6/1/2023	On exercise	$0.00001 per share	N	N
Lender	427,750	6/13/2023	6/13/2028	$0.25 per share	N	N
Lender	15,000	6/22/2023	6/22/2026	$0.33 per share	N	N
Lender	60,000	6/29/2023	6/29/2026	$0.25 per share	N	N
Lender	20,000	6/29/2023	6/29/2026	$0.25 per share	N	N
Lender	15,000	7/22/2023	7/22/2026	$0.30 per share	N	N
Lender	60,000	7/29/2023	7/29/2026	$0.30 per share	N	N
Lender	20,000	7/29/2023	7/29/2026	$0.30 per share	N	N

Issued To	# Options	Dated	Expire	Strike Price	Expired	Exercised
T. Armes	~~50,000~~	~~10/14/2021~~	~~7/11/2022~~	~~$15.00 per share~~	Y	N
~~T. Armes~~	250,000	7/11/2022	7/11/2027	$4.00 per share	N	N

	Options		Weighted Average Exercise Price			Warrants		Weighted Average Exercise Price
Outstanding at January 31, 2022	50,000		$	15.00		360,550		$	12.64
Granted	250,000			4.00		1,083,333			15.00
Exercised	—			—		(29,155	)		5.00
Forfeited and canceled	(50,000	)		(15.00	)	—			—
Outstanding at October 31, 2022	250,000		$	4.00		1,414,728		$	13.70


Maturity of Lease Liabilities	Operating Leases
October 31 2023	$	81,203
October 31, 2024		30,003
October 31, 2025		30,003
October 31, 2026		30,003
October 31, 2027		2,501
Total lease payments		173,713
Less: Interest		(12,943	)
Present value of lease liabilities	$	160,770


	For the Three Months Ended
	July 31,
	2023			2022
Numerator:
Net income (loss) available to common shareholders	$	(2,949,517	)	$	(5,502,926	)

Denominator:
Weighted average shares – basic		2,691,590			1,564,169

Net income (loss) per share – basic	$	(3.52	)	$	(3.52	)

Effect of common stock equivalents
Add: interest expense on convertible debt		516,158			166,046
Add: amortization of debt discount		458,625			1,651,327
Less: gain on settlement of debt on convertible notes		(19,212	)		(5,822	)
Add (Less): loss (gain) on change of derivative liabilities		1,133,090			319,889
Net income (loss) adjusted for common stock equivalents		(860,856	)		(3,371,486	)
Dilutive effect of common stock equivalents:
Convertible notes and accrued interest		—			—
Convertible Class C Preferred shares		—			—
Warrants and options		—			—

Denominator:
Weighted average shares – diluted		2,691,590			1,564,169

Net income (loss) per share – diluted	$	(3.52	)	$	(3.52	)


	For the Three Months Ended						For the Six Months Ended
	October 31,						July 31,
	2022			2021			2023			2022
Numerator:
Net income (loss) available to common shareholders	$	(4,131,691	)	$	(2,566,574	)	$	(5,820,807	)	$	(8,097,084	)

Denominator:
Weighted average shares – basic		1,805,316			319,866			2,564,071			1,454,787

Net income (loss) per share – basic	$	(2.29	)	$	(8.02	)	$	(2.27	)	$	(5.57	)

Effect of common stock equivalents
Add: interest expense on convertible debt		166,046			19,247			992,586			278,788
Add: amortization of debt discount		1,932,722			130,139			1,087,328			2,376,607
Less: gain on settlement of debt on convertible notes		(10,128	)		(41,249	)
Add: loss on settlement of debt on convertible notes								127,393			(9,411	)
Add (Less): loss (gain) on change of derivative liabilities		186,146			76,444			1,133,090			657,626
Net income (loss) adjusted for common stock equivalents		(1,856,905	)		(2,381,993	)		(2,480,410	)		(4,793,474	)
Dilutive effect of common stock equivalents:
Convertible notes and accrued interest		—			—			—			—
Convertible Class C Preferred shares		—			—			—			—
Warrants and options		—			—			—			—

Denominator:
Weighted average shares – diluted		1,805,316			319,866			2,564,071			1,454,787

Net income (loss) per share – diluted	$	(2.29	)	$	(8.02	)	$	(2.27	)	$	(5.57	)


	For the Nine Months Ended
	October 31,
	2022			2021
Numerator:
Net income (loss) available to common shareholders	$	(12,228,775	)	$	(4,886,380	)

Denominator:
Weighted average shares – basic		1,576,024			257,577

Net income (loss) per share – basic	$	(7.76	)	$	(18.97	)

Effect of common stock equivalents
Add: interest expense on convertible debt		278,788			35,237
Add: amortization of debt discount		4,309,329			442,075
Less: gain on settlement of debt on convertible notes		(19,539	)		(1,004,615	)
Add (Less): loss (gain) on change of derivative liabilities		841,772			88,551
Net income (loss) adjusted for common stock equivalents		(6,818,425	)		(5,325,132	)
Dilutive effect of common stock equivalents:
Convertible notes and accrued interest		—			—
Convertible Class C Preferred shares		—			—
Warrants and options		—			—

Denominator:
Weighted average shares – diluted		1,576,024			257,577

Net income (loss) per share – diluted	$	(7.76	)	$	(18.97	)

	For the Three and Nine Months Ended
	October 31,
	2022		2021

Convertible notes and accrued interest		7,093,733		94,564
Convertible Class C Preferred shares		4,796,352		896,892
Options		250,000		50,000
Warrants		1,414,728		150,550
Total		13,554,813		1,192,006

	For the Three and Six Months Ended
	July 31,
	2023		2022

Convertible notes and accrued interest		39,005,978		1,475,492
Options		250,000		250,000
Warrants		3,993,583		1,084,833
Total		43,249,561		2,810,325

						Change									Change
Operating Expenses	2022		2021			$			%
											2023		2022		$			%
Operating expenses
Depreciation	$	38,587	$	35,930			2,657		7%		$	21,458	$	25,844	$	(4,386	)	(17%	)
Postage, Shipping and Freight		146,962		430,105			(283,143	)	(66%	)		13,551		114,949		(101,398	)	(88%	)
Marketing and Advertising		671,348		1,876,576			(1,205,228	)	(64%	)		103,517		514,826		(411,309	)	(80%	)
E Commerce Services, Commissions and Fees		1,076,787		1,160,569			(83,782	)	(7%	)		268,005		680,722		(412,717	)	(61%	)
Operating lease cost		90,177		91,437			(1,260	)	(1%	)		47,002		60,958		(13,956	)	(23%	)
Personnel Costs		505,253		1,078,449			(573,196	)	(53%	)		111,765		373,315		(261,550	)	(70%	)
PPP Loan Forgiveness		—		(209,447	)		209,447		—
General and Administrative		2,849,042		2,682,866			166,176		6%			416,098		2,597,637		(2,181,539	)	(84%	)
Total Operating Expenses	$	5,378,156	$	7,146,485			(1,768,329	)	(25%	)	$	981,396	$	4,368,251	$	(3,386,855	)	(78%	)

Exhibit ~~Number~~		~~Description of Exhibit~~
Number		Exhibit Description
31.1		~~Certificate~~Rule 13a-14(a) Certification of ~~the~~ Principal Executive Officer and Principal ~~Financial~~Financial/Accounting Officer ~~pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~ *
32.1
~~32.1~~		~~Certificate~~Section 1350 Certification of ~~the~~ Principal Executive Officer and Principal ~~Financial~~Financial/Accounting Officer ~~pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~ *
101.INS
~~101.INS~~		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. **
101.SCH
~~101.SCH~~		Inline XBRL Taxonomy Extension Schema Document ** Document*
101.CAL
~~101.CAL~~		Inline XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF
~~101.DEF~~		Inline XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB
~~101.LAB~~		Inline XBRL Taxonomy Extension Label Linkbase Document **
101.PRE
~~101.PRE~~		Inline XBRL Taxonomy Extension Presentation Linkbase Document **
104
~~104~~		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) **