Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 31, 2021 | May 07, 2021 | Jul. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | 4Less Group, Inc. | ||
Entity Central Index Key | 0001438901 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-31 | ||
Document Type | 10-K | ||
Entity Incorporation State Country Code | NV | ||
Entity File Number | 333-152444 | ||
Document Period End Date | Jan. 31, 2021 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 99,547 | ||
Entity Common Stock, Shares Outstanding | 2,470,913 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Current Assets | ||
Cash and Cash Equivalents | $ 277,664 | $ 162,124 |
Share proceeds receivable | 100,000 | |
Inventory | 323,411 | 371,896 |
Prepaid Expenses | 11,859 | 8,106 |
Other Current Assets | 2,149 | 1,059 |
Total Current Assets | 715,083 | 543,185 |
Operating Lease Assets | 344,413 | 483,193 |
Property and Equipment, net of accumulated depreciation of $88,823 and $64,091 | 80,027 | 114,509 |
Total Assets | 1,139,523 | 1,140,887 |
Current Liabilities | ||
Accounts Payable | 869,765 | 534,442 |
Accrued Expenses | 1,382,839 | 1,709,797 |
Accrued Expenses - Related Party | 106,173 | 155,750 |
Customer Deposits | 188,385 | |
Deferred Revenue | 687,766 | |
Short-Term Debt | 716,142 | 609,491 |
Current Operating Lease Liability | 90,286 | 101,984 |
Short-Term Convertible Debt, net of debt discount of $309,317 and $689,176 | 336,683 | 2,286,896 |
Derivative Liabilities | 213,741 | 2,611,125 |
PPP Loan-current portion | 43,294 | |
Current Portion - Long-Term Debt | 424,064 | 4,166 |
Total Current Liabilities | 5,059,138 | 8,013,651 |
Non-Current Lease Liability | 244,049 | 365,085 |
PPP Loan -long term portion | 166,153 | |
Long-Term Debt | 890,373 | 11,940 |
Total Liabilities | 6,359,713 | 8,390,676 |
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 |
Stockholders' Deficit | ||
Common Stock, $0.000001 par value, 15,000,000 shares authorized, 1,427,163 and 538,464 shares issued, issuable and outstanding | 1 | 1 |
Additional Paid In Capital | 14,291,759 | 13,449,336 |
Accumulated Deficit | (20,381,977) | (21,569,153) |
Total Stockholders' Deficit | (6,090,190) | (8,119,789) |
Total Liabilities and Stockholders' Deficit | 1,139,523 | 1,140,887 |
Preferred Series A [Member] | ||
Stockholders' Deficit | ||
Preferred Stock | ||
Total Stockholders' Deficit | ||
Preferred Series B [Member] | ||
Stockholders' Deficit | ||
Preferred Stock | 20 | 20 |
Total Stockholders' Deficit | 20 | 20 |
Preferred Series C [Member] | ||
Stockholders' Deficit | ||
Preferred Stock | 7 | 7 |
Total Stockholders' Deficit | $ 7 | $ 7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Net of accumulated depreciation | $ 88,823 | $ 64,091 |
Net of debt discount | $ 309,317 | $ 689,176 |
Common Stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common Stock, shares authorized | 15,000,000 | 15,000,000 |
Common Stock, shares issued | 1,427,163 | 538,464 |
Common Stock, shares outstanding | 1,427,163 | 538,464 |
Preferred Stock, par value (in dollars per share) | $ 0.001 | |
Preferred Stock, shares authorized | 20,000,000 | |
Preferred Series A [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 330,000 | 330,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Preferred Series B [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 20,000 | 20,000 |
Preferred Stock, shares issued | 20,000 | 20,000 |
Preferred Stock, shares outstanding | 20,000 | 20,000 |
Preferred Series C [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 7,250 | 7,250 |
Preferred Stock, shares issued | 7,250 | 6,750 |
Preferred Stock, shares outstanding | 7,250 | 6,750 |
Series D Preferred Stock [Member] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 870 | 870 |
Preferred Stock, shares issued | 870 | 870 |
Preferred Stock, shares outstanding | 870 | 870 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue, net | $ 8,171,355 | $ 8,186,214 |
Cost of Revenue | 6,710,727 | 6,275,189 |
Gross Profit | 1,460,628 | 1,911,025 |
Operating Expenses: | ||
Depreciation | 25,196 | 34,832 |
Postage, Shipping and Freight | 498,370 | 453,088 |
Marketing and Advertising | 112,531 | 204,945 |
E Commerce Services, Commissions and Fees | 887,274 | 763,182 |
Operating lease cost | 121,917 | 117,841 |
Personnel Costs | 1,128,652 | 1,274,894 |
General and Administrative | 828,522 | 915,507 |
Total Operating Expenses | 3,602,462 | 3,764,289 |
Net Operating Loss | (2,141,834) | (1,853,264) |
Other Income (Expense) | ||
Gain (loss) on Sale of Property and Equipment | 464 | 16,295 |
Gain (Loss) on Derivatives | (828,614) | (180,552) |
Gain on Settlement of Debt | 5,060,704 | 67,623 |
Amortization of Debt Discount | (335,004) | (800,159) |
Interest Expense | (568,540) | (1,129,789) |
Total Other Income (Expense) | 3,329,010 | (2,026,582) |
Net Income (Loss) | $ 1,187,176 | $ (3,879,846) |
Basic Weighted Average Shares Outstanding (in shares) | 1,084,324 | 86,542 |
Basic Income (Loss) per Share (in dollars per share) | $ 1.09 | $ (44.83) |
Diluted Weighted Average Shares Outstanding (in shares) | 6,070,030 | 86,542 |
Diluted Income (Loss) per Share (in dollars per share) | $ (0.37) | $ (44.83) |
Consolidated Statements of Shar
Consolidated Statements of Shareholder's Deficit - USD ($) | Common Stock [Member] | Paid in Capital [Member] | Retained Earnings [Member] | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Total |
Balance at Jan. 31, 2019 | $ 11,694,325 | $ (17,689,307) | $ 20 | $ 7 | $ (5,994,955) | ||
Balance, shares at Jan. 31, 2019 | 151 | 20,000 | 6,750 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Notes Payable to Common Stock | $ 1 | 992,443 | 992,444 | ||||
Conversion of Notes Payable to Common Stock, shares | 536,613 | ||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 755,253 | 755,253 | |||||
Legal costs of Reg A subscription | |||||||
Common Stock Adjustments for Reverse Splits | 7,315 | 7,315 | |||||
Common Stock Adjustments for Reverse Splits, shares | 1,700 | ||||||
Net (Loss) | (3,879,846) | (3,879,846) | |||||
Balance at Jan. 31, 2020 | $ 1 | 13,449,336 | (21,569,153) | $ 20 | $ 7 | (8,119,789) | |
Balance, shares at Jan. 31, 2020 | 538,464 | 20,000 | 6,750 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Conversion of Notes Payable and Accrued Interest to Common Stock | 44,736 | 44,736 | |||||
Conversion of Notes Payable and Accrued Interest to Common Stock, shares | 624,847 | ||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 20,185 | 20,185 | |||||
Issuance of Class C Shares In Exchange of Debt | 9,105 | 9,105 | |||||
Issuance of Class C Shares In Exchange of Debt (in shares) | 250 | ||||||
Issuance of Class C Shares to Repay Accrued Expenses Related Party | 11,177 | 11,177 | |||||
Issuance of Class C Shares to Repay Accrued Expenses Related Party (in shares) | 100 | ||||||
Issuance of Class C Shares as Part of Debt Settlement | 20,290 | 20,290 | |||||
Issuance of Class C Shares as Part of Debt Settlement (in shares) | 150 | ||||||
Issuance of Common Shares in Reg A Offering | 350,000 | 350,000 | |||||
Issuance of Common Shares in Reg A Offering (in shares) | 175,000 | ||||||
Issuance of Common Shares as fees for loans | 35,060 | 35,060 | |||||
Issuance of Common Shares as fees for loans (in shares) | 43,852 | ||||||
Issuance of 5500 Warrants for Broker's fees | 13,470 | 13,470 | |||||
Issuance of Common Shares to Repay Accrued Expenses Related Party | 18,900 | 18,900 | |||||
Issuance of Common Shares to Repay Accrued Expenses Related Party (in shares) | 45,000 | ||||||
Issuance of 950,000 Warrants as Part of Debt Settlement | 351,500 | 351,500 | |||||
Legal costs of Reg A subscription | (32,000) | (32,000) | |||||
Net (Loss) | 1,187,176 | 1,187,176 | |||||
Balance at Jan. 31, 2021 | $ 1 | $ 14,291,759 | $ (20,381,977) | $ 20 | $ 7 | $ (6,090,190) | |
Balance, shares at Jan. 31, 2021 | 1,427,163 | 20,000 | 7,250 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholder's Deficit (Parenthetical) | 12 Months Ended |
Jan. 31, 2021shares | |
Statement of Stockholders' Equity [Abstract] | |
Number of warrants issued | 950,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ 1,187,176 | $ (3,879,846) |
Adjustments to reconcile net loss to cash used by operating activities: | ||
Depreciation | 25,196 | 34,832 |
Loss (Gain ) in Fair Value on Derivative Liabilities | 828,614 | 180,552 |
Amortization of Debt Discount | 335,004 | 800,159 |
Interest Expense related to Derivative Liability in Excess of Fair Value | 96,981 | |
Loan Penalties Capitalized to Loan | 3,394 | 482,709 |
Original Issue Discount on Short-Term Convertible Notes Expensed to Interest | 55,000 | 73,675 |
Stock Based Payment of Broker's Fees | 13,470 | |
Gain on Settlement of Debt | (5,060,704) | (67,623) |
Gain on sale of Property | (464) | (16,295) |
Change in Operating Assets and Liabilities: | ||
Decrease (Increase) in Inventory | 48,484 | (78,515) |
Decrease (Increase) in Prepaid Rent and Expenses | 2,743 | 89,394 |
(increase) Decrease in Other Current Assets | (1,091) | 2,600 |
Increase in Accounts Payable | 344,175 | 301,907 |
Increase (Decrease) in Accrued Expenses - Related Party | (24,250) | |
Increase in Accrued Expenses | 483,031 | 849,409 |
Increase in Customer Deposits | 188,385 | |
Increase in Deferred Revenue | 687,766 | |
CASH FLOWS (USED IN) OPERATING ACTIVITIES | (859,821) | (1,154,311) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Property and Equipment | (16,742) | |
Disposal of Property and Equipment | 9,750 | 125,822 |
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES | 9,750 | 109,080 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Common Shares | 250,000 | |
Proceeds from Short Term Debt | 635,000 | 1,549,980 |
Payments on Short Term Debt | (471,920) | (1,320,001) |
Proceeds on PPP Loan | 209,447 | |
Payments on Long Term Debt | (3,837) | (40,275) |
Payments on Accrued Expenses -Related Party | (19,500) | |
Legal Costs of Reg A Subscription | (32,000) | |
Proceeds from Convertible Notes Payable | 432,750 | 958,250 |
Payments on Convertible Notes Payable | (34,329) | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 965,611 | 1,147,954 |
NET INCREASE IN CASH | 115,540 | 102,723 |
CASH AT BEGINNING OF PERIOD | 162,124 | 59,401 |
CASH AT END OF PERIOD | 277,664 | 162,124 |
Supplemental Disclosure of Cash Flows Information: | ||
Cash Paid for Interest | 74,244 | 89,934 |
Operating Lease Liability to Operating Lease Asset | 89,942 | |
Accrued Interest Transferred to Note Balances | 55,168 | |
Derivative Debt Discount | 264,487 | 1,077,844 |
Convertible Notes Interest and Derivatives Converted to Common Stock | 64,921 | 1,770,048 |
Stock Issued to Related Party in Payment of Accrued Expenses | 30,077 | |
Issuance of Common Shares for Subscription Receivable | 100,000 | |
Original Issue Discount | 52,000 | |
Allocated Value of Common Shares Issued As Fees for Loans | 35,060 | |
Operating Lease Asset to Operating Lease Liability | $ 39,494 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1 – Description of Business and Summary of Significant Accounting Policies Nature of Business – 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 Company 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. Significant Accounting Policies The Company’s management selects accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 financial statements. Basis of Presentation The Company prepares its financial statements on the accrual basis of accounting in conformity with U.S. GAAP. Principles of Consolidation The financial statements include the accounts of The 4LESS Group, Inc. as well as Auto Parts 4Less, Inc. (formerly The 4LESS Corp.) 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 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. Concentrations Cost of Goods Sold For the year ended January 31, 2021 the Company purchased approximately 57% of its inventory and items available for sale from third parties from three vendors. As of January 31, 2021, the net amount due to the vendors included in accounts payable was $599,072. For the year ended January 31, 2020, the Company purchased approximately 59% of its inventory and items available for sale from third parties from three third-party vendors. As of January 31, 2020, the net amount due to these vendors included in accounts payable was $369,592. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. Leases We adopted ASU No. 2016-02— Leases (Topic 842) In addition, 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. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $454,087 and $454,087 respectively, as of February 1, 2019. The standard did not materially impact our consolidated net earnings, retained earnings and had no impact on cash flows 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, 2021, 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 Level 2 Inputs Level 3 Inputs As of January 31, 2021 and 2020, the Company’s derivative liabilities were measured at fair value using Level 3 inputs. See Note 10. 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 January 31, 2021and January 31, 2020: January 31, 2021 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 213,741 $ — $ — $ 213,741 Totals $ 213,741 $ — $ — $ 213,741 January 31, 2020 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 2,611,125 $ — $ — $ 2,611,125 Totals $ 2,611,125 $ — $ — $ 2,611,125 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 10), the sensitivity required to change the liability by 1% as of January 31, 2021 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability. Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Disaggregation of Revenue: Channel Revenue The following table shows revenue split between proprietary and third party website revenue for the years ended January 31, 2021 and 2020: Change 2021 2020 $ % Proprietary website revenue $ 4,200,624 $ 3,246,351 $ 954,273 29% Third party website revenue 3,970,731 4,939,863 (969,132 ) (20% ) Total Revenue $ 8,171,355 $ 8,186,214 $ (14,859 ) 0% 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. Revenue is recorded net of provisions for discounts and promotion allowances, which are typically agreed to upfront with the customer and do not represent variable consideration. Discounts and promotional allowances vary the consideration the Company is entitled to in exchange for the sale of products to customers. The Company recognizes these discounts and promotional allowances in the same period that the revenue is recognized for products sales to customers. The amount of revenue recognized represents the amount that will not be subject to a significant future reversal of revenue. The customer pays the Company by credit card prior to delivery. The Company offers a 30 day satisfaction guaranteed return policy however the customer must pay for the return shipment. The return must be previously authorized, cannot be either damaged or previously installed and must be in saleable condition. In the Company’s experience this amount is immaterial and therefore no provision has been recorded on the Company’s books. Any defective merchandise falls under the manufacturer’s limited warranty and is subject to the manufacturer’s inspection. The manufacturer has the option to repair or replace the item. Stock-Based Compensation The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. Earnings (Loss) per Common Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact. Fair Value Measurement In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows. In 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. There were various other accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows. |
GOING CONCERN AND FINANCIAL POS
GOING CONCERN AND FINANCIAL POSITION | 12 Months Ended |
Jan. 31, 2021 | |
Going Concern and Financial Position [Abstract] | |
GOING CONCERN AND FINANCIAL POSITION | NOTE 2 – GOING CONCERN AND FINANCIAL POSITION The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit of $20,381,977 as of January 31, 2021 and has a working capital deficit at January 31, 2021 of $4,344,055. As of January 31, 2021, the Company only had cash and cash equivalents of $277,664 and approximately $151,000 of short-term debt in default. The short-term debt agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. While the Company has continued to grow its revenues, at this time, the three months ended July 31, 2020 was only the first quarter the Company was able to achieve profitability from operations prior to interest and other expenses. While the Company believes it will continue to build on the results achieved in that quarter, 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. |
PROPERTY
PROPERTY | 12 Months Ended |
Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY | NOTE 3 – PROPERTY The Company capitalizes all property purchases over $1,000 and depreciates the assets on a straight-line basis over their useful lives of 3 years for computers and 7 years for all other assets. Property consists of the following at January 31, 2021 and 2020: 2021 2020 Office furniture, fixtures and equipment $ 85,413 $ 95,163 Shop equipment 43,004 43,004 Vehicles 40,433 40,433 Sub-total 168,850 178,600 Less: Accumulated depreciation (88,823 ) (64,091 ) Total Property $ 80,027 $ 114,509 Additions to fixed assets were $0 and $16,742 for the years ended January 31, 2021 and January 2020, respectively. Office equipment having a cost of $9,750 and a net book value of $9,286 was disposed of during the year ended January 31, 2021. Proceeds received of $9,750 and a gain on sale of property and equipment of $464 were recorded. During the year ended January 31, 2020 the company disposed of property having a cost of $144,662 and a net book value of $109,527 for proceeds of $125,822. The company recorded a gain on sale of property and equipment of $16,295. Depreciation expense was $25,196 and $34,832 for the twelve months ended January 31, 2021 and January 2020, respectively. |
LEASES
LEASES | 12 Months Ended |
Jan. 31, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 4 – LEASES We lease certain warehouses, vehicles 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 January 31, 2021 and January 31, 2020. Leases Classification January 31, 2021 January 31, 2020 Assets Operating Operating Lease Assets $ 344,413 $ 483,193 Liabilities Current Operating Current Operating Lease Liability $ 90,286 $ 101,984 Noncurrent Operating Noncurrent Operating Lease Liabilities 244,049 365,085 Total lease liabilities $ 334,335 $ 467,069 Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate of 8% based on the information available at commencement date in determining the present value of lease payments. We compare against loans we obtain to acquire physical assets and not loans we obtain for financing. The loans we obtain for financing are generally at significantly higher rates and we believe that physical space or vehicle rental agreements are in line with physical asset financing agreements. CAM charges were not included in operating lease expense and were expensed in general and administrative expenses as incurred. Effective February 29 ,2020 the Company and landlord terminated the September 2019 lease with an annual rent of $15,480, a 3 year term an 1 year renewal. There were no costs associated with the termination. The Company eliminated the operating lease asset and operating lease liability at termination which was $45,032. (see Note 13) Operating lease cost was $121,917 and $117,841 for both the twelve months ended January 31, 2021 and January 31, 2020, respectively. |
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS | 12 Months Ended |
Jan. 31, 2021 | |
Demand loan [Member] | |
CUSTOMER DEPOSITS | NOTE 5 – CUSTOMER DEPOSITS The Company receives payments from customers on orders prior to shipment. At January 31, 2021 the Company had received $188,385 (January 31, 2020- $0) in customer deposits for orders that were unfulfilled at January 31, 2021and canceled subsequent to year end. The orders were unfulfilled at January 31, 2021 because of supply chain issues due to supplier back-orders because of the Covid-19 pandemic. The deposits were returned to the customers subsequent to January 31, 2021. |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Jan. 31, 2021 | |
Deferred Revenue [Abstract] | |
DEFERRED REVENUE | NOTE 6 – DEFERRED REVENUE The Company receives payments from customers on orders prior to shipment. At January 31, 2021 the Company had received $687,766 (January 31, 2020- $0) in customer payments for orders that were unfulfilled at January 31, 2021 and delivered subsequent to year end. The orders were unfulfilled at January 31, 2021 because of supply chain issues due to supplier back-orders because of the Covid-19 pandemic. |
PPP LOAN
PPP LOAN | 12 Months Ended |
Jan. 31, 2021 | |
PPP Loan [Abstract] | |
PPP LOAN | NOTE 7 – PPP LOAN On May 2, 2020 the Company entered into a Paycheck Protection Promissory (PPP) Note Agreement whereby the lender would advance proceeds of $209,447 at a fixed rate of 1% per annum and a August 2, 2023 maturity. The loan is repayable in monthly instalments of $8,818 commencing September 2, 2021 and continuing on the second day of every month thereafter until maturity when any remaining principal and interest are due and payable. At January 31, 2021 the loan is classified as $43,294 current and $166,153 long-term. The Company used the proceeds of this loans for working capital and the Company intends to use these proceeds in a manner consistent with obtaining loan forgiveness. |
SHORT-TERM AND LONG-TERM DEBT
SHORT-TERM AND LONG-TERM DEBT | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM AND LONG-TERM DEBT | NOTE 8 – SHORT-TERM AND LONG-TERM DEBT The components of the Company’s short-term and long term debt as of January 31, 2021 and 2020 were as follows: January 31, 2021 January 31, 2020 Working Capital Note Payable - $ 200,000 dated October 25, 2019, repayment of 10% of all eBay sales proceeds until paid in full, minimum payment of $20,417, fees of $4,173 effective interest rate of 7% (4) (4) $ — $ 6,978 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 (2) 102,168 # 63,635 Loan dated October 14, 2019, repayable in average monthly installments of $11,200, maturing April 14, 2020, interest and fees $7,200, effective interest 35.50% per annum (4)(5) — 30,000 SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing April 7, 2021 (5) 161,227 * 371,963 Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023 (1) 12,269 # 16,106 Demand loan - $122,000 dated August 19, 2019 25% interest, 5% fee on outstanding balance (4)(6) — 122,000 Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 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 September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 * — Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. The notes matures when the Company receives proceeds through a financing event of $850,000 plus accrued interest on the note. (7) 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 . (8) 1,200,000 # — Promissory note -$50,000 dated August 31, 2020, maturing February 28, 2021, 10% interest payable at maturity 50,000 * — Total $ 2,030,579 $ 625,597 January 31, 2021 January 31, 2020 Short-Term Debt $ 716,142 $ 609,491 Current Portion of Long-Term Debt 424,064 4,166 Long-Term Debt 890,373 11,940 $ 2,030,579 $ 625,597 __________ * Short-term loans. # Long-term loans of $12,269 including current portion of $4,064. $102,168 including current portion of $0. $1,200,000 including current portion of $420,000. (1) Secured by equipment having a net book value of $15,293 and $12,379 at January 31, 2021 and 2020, respectively. (2) On November 10, 2020 the Company amended the agreement extending the maturity to June 30, 2022 from April 8, 2021 and changing monthly payments to $0 from $5,705 and interest rate from 13% to a $20,000 lump sum payable at maturity. (3) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (4) The Company has pledged a security interest on all assets of the Company. (5) The amounts due under the note are personally guaranteed by an officer or a director of the Company. (6) On February 26, 2020 the lender exchanged the $122,000 note along with $22,076 of accrued interest as part of a larger debt exchange transaction as described in Note 9. (7) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company has reached this milestone this loan is treated as current. This note is secured by all the assets of the Company. (8) Secured by all assets of the Company. Loan including accrued interest payable in 2 installments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022. The following are the minimum amounts due on the notes as of January 31, 2021: Year Ended Amount Jan 31, 2022 $ 1,140,206 Jan 31, 2023 886,165 Jan 31, 2024 4,208 Total $ 2,030,579 |
SHORT-TERM CONVERTIBLE DEBT
SHORT-TERM CONVERTIBLE DEBT | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM CONVERTIBLE DEBT | NOTE 9 – SHORT-TERM CONVERTIBLE DEBT The components of the Company’s convertible debt as of January 31, 2021 and 2020 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price January 31, 2021 January 31, 2020 Nov 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000 Jan 31, 2014* 12% 18% $2,400,000 16,000 16,000 Apr 24, 2020* (ii) Y 12% 24% (3) — 69,730 July 31, 2013* 12% 12% $1,440,000 5,000 5,000 Jan 31, 2014* 12% 12% $2,400,000 30,000 30,000 Dec 24, 2015* (v) 8% 24% (1) — 5,000 Feb 3, 2017* (ii)(iv) Y 8% 24% (4) — 2,500 Mar 3, 2017* (ii)(iv) 8% 24% (5) — — Mar 3, 2017* (ii)(iv) Y 8% 24% (5) — 33,000 Mar 24, 2017* (ii)(iv) Y 8% 24% (5) — 27,500 Apr 24, 2020* (ii)(iv)(vi) Y 12% 24% (3) — 517,787 July 8, 2015* (v) 8% 24% (1) — 5,500 Apr 24, 2020 (ii)(iv)(vi)X 8% 24% (3) — 4,500 Apr 24, 2020 X 8% 24% (3) — 23,297 Apr 24, 2020 X 8% 24% (3) — 7,703 Apr 24, 2020 X 8% 24% (3) — 26,500 July 19, 2016* (v) 8% 24% (1) — 5,000 Mar 23, 2019* (ii)(iv)(vi)X 15% 24% (3) — 4,444 Feb 20, 2019* (ix)X 10% 10% (6) — 343,047 Jun 6, 2019* (viii)X 12% 18% (7) — 43,577 Oct 24, 2019* (ii)(iv) Y 8% 24% (5) — 45,595 Nov 14, 2019* (ii)(iv) Y 8% 24% (5) — 86,625 Dec 14, 2019* (ii)(iv) Y 8% 24% (5) — 143,000 Dec 28, 2019* (i)(iv)(vi) Y 12% 18% (6) — 133,333 Jan 9, 2020* (ii)(iv) Y 8% 24% (2) — 68,750 March 1, 2020* (x)Z 10% 15% (8) — 40,939 March 14, 2020 (iv)(vi)X 15% 24% (9) — 44,967 April 3, 2020* (iv) Y 8% 24% (2) — 172,148 April 12, 2020* (xi) Y 10% 24% (3) — 185,130 May 13, 2020 (iv)(vi)X 15% 24% (9) — 55,000 May 14, 2020* (iv)(vi) Y 8% 24% (2) — 52,500 May 24, 2020 (iv)(vi)X 15% 24% (9) — 40,000 June 11, 2020 (iv)(vi)X 15% 24% (9) — 85,000 June 26, 2020* (iv)(vi) Y 15% 24% (9) — 76,000 July 11, 2020 (iv)(vii)X 15% 24% (9) — 60,000 Aug 29, 2020 (iv)(vii)X 15% 24% (9) — 45,000 Sep 16, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Sep 27, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Oct 24, 2020 (iv)(vii)X 15% 24% (9) — 122,000 Nov 7, 2020 (iv)(vii)X 15% 24% (10) — 42,000 Nov 22, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 55,000 Dec 10, 2020 (iv)(vii)X 15% 24% (9) — 55,000 Dec 23, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 30,000 Oct. 12, 2021 12% 16% (11) 230,000 — Nov.16, 2021 12% 16% (11) 100,000 — Nov.23, 2021 12% 16% (11) 165,000 — Sub-total 646,000 2,976,072 Debt Discount (309,317 ) (689,176 ) $ 336,683 $ 2,286,896 __________ (1) 52% of the lowest trading price for the fifteen trading days prior to conversion day. (2) 50% of the lowest trading price for the fifteen trading days prior to conversion day. (3) 50% of the lowest trading price for the twenty trading days prior to conversion day. (4) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.001. (5) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.005. (6) 60% of the lowest trading price for the twenty trading days prior to conversion day. (7) 52% of the lowest trading price for the twenty trading days prior to conversion day. (8) 55% of the lowest trading price for the twenty-five trading days prior to conversion day. (9) 50% of the lowest bid price for the twenty-five trading days prior to conversion day. (10) 45% of the lowest bid price for the fifteen trading days prior to conversion day. (11) closing bid price on the day preceding the conversion date. * In default. X On February 26, 2020 the Company exchanged convertible and short term notes and accrued interest for 250 Class C shares (transaction described further below). Y On August 28, 2020 the Company exchanged convertible notes and accrued interest for a $ 1,200,000 promissory note with a 2 year maturity bearing interest at 12%, 950,000 warrants with a 3 year maturity and an exercise price of $0.40 and 150 Class C preferred shares (transaction described further below). Z On August 25,2020 the Company settled a convertible note with principal of $ 40,938 for a $14,329 cash payment. On September 14, 2020 the Company settled $20,111 in accrued interest and default interest related to this note for a cash payment of $52,446 (transaction described further below). (i) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. If at any time while this Note is outstanding, an Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). These above contingencies have not occurred. (ii) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 40% instead of 50% while that “Chill” is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (iii) The share purchase agreements ancillary to the convertible note agreements do not allow the lender to engage in short sales. (iv) If the Company becomes delinquent or continues its delinquency in its periodic filings with the SEC after the 6-months anniversary of the note, then the holder is entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. (v) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 42% instead of 52% while that “Chill” is in effect. (vi) If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (vii) If the Company fails to maintain the share reserve at the 3x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (viii) If at any time while this Note is outstanding, an event of default occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). If at any time while this Note is outstanding, the Borrower’s Common Stock are not deliverable via DWAC, an additional 10% discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding. (ix) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price is less than $0.01 at any time, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000). In addition, the Conversion price shall be permanently redefined to equal the lesser of (a) $0.001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. (x) In the event that shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 55% assuming no other adjustments are triggered hereunder). Additionally, if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date, and/or the Borrower shall cease to be subject to the reporting requirements of the exchange Act, an additional fifteen percent (15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 60% assuming no other adjustments are triggered hereunder). (xi) If the Borrower’s Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. The Company had accrued interest payable of $240,713 and $703,270 on the notes at January 31, 2021 and January 31, 2020, 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 years ended January 31, 2021 and 2020, the Company recorded amortization expense of $335,004 and $800,159, respectively. See more information in Note 8. During the years ended January 31, 2021 and 2020 the Company added $3,394 and $482,709 in penalty interest to the loans, respectively. On February 26, 2020 a lender exchanged $1,070,035 in convertible notes and $175,421 in accrued interest (as denoted by X in the above schedule) as well as $122,000 in short-term debt and $22,076 in accrued interest , and the associated derivative liability of $792,218 all totaling $2,181,750 in exchange for 250 Class C shares having a fair-value of $9,105. A gain of $1,745,994 was recorded. On August 28, 2020 a lender exchanged $1,692,690 in convertible notes and $571,454 in accrued interest (as denoted by Y in the above schedule) as well as the associated derivative liability of $2,635,974 all totaling $4,900,118 in exchange for a promissory note of $1,200,000 bearing interest at 12% and maturing August 28, 2022 , 950,000 Warrants with a 3 year maturity and an exercise price of $0.40 having a fair value of $351,500 and 150 Class C shares having a fair-value of $20,290. A gain of $3,278,327 was recorded. On August 25, 2020 a lender exchanged $40,939 in a convertible note (as denoted by Z in the above schedule), and the associated derivative liability of $31,320 all totaling $72,259 in exchange for a cash payment of $14,329. On September 14, 2020 the same lender exchanged $20,111 in accrued interest and default interest (from that note) for a cash payment of $52,446. A total gain of $25,595 on the two transactions was recorded. On October 12, 2020 the Company entered into a new convertible note for $250,000 with a one year maturity, interest rate of 12%, the Company received $210,250 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $132,613, and transaction fees of $14,750. The first year’s interest of $28,000 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $ 50,000 through the issuance of 19,685 shares. The Company recognized $14,916 as debt discount with a corresponding adjustment to paid-in capital. The discount is amortized over the term of the loan.$20,000 was repaid on this note as of January 31, 2021. On November 16, 2020 the Company entered into a new convertible note for $100,000 with a one year maturity, interest rate of 12%, the Company received $83,500 in cash proceeds, recorded an original issue discount of $12,000, a derivative discount of $49,730, and transaction fees of $4,500. The first year’s interest of $12,000 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $ 20,001 through the issuance of 6,667 shares. The Company recognized $6,526 as debt discount with a corresponding adjustment to paid-in capital. The discount is amortized over the term of the loan. On November 23, 2020 the Company entered into a new convertible note for $165,000 with a one year maturity, interest rate of 12%, the Company received $139,000 in cash proceeds, recorded an original issue discount of $15,000, a derivative discount of $82,144, and transaction fees of $11,000. The first year’s interest of $19,800 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $43,750 through the issuance of 17,500 shares. The Company recognized $13,618 as debt discount with a corresponding adjustment to paid-in capital. The discount is amortized over the term of the loan. During the year ended January 31, 2021, the Company converted a total of $24,803 of the convertible notes and $19,933 accrued interest into 624,847 common shares. As of January 31, 2021, the Company had $151,000 of aggregate 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. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended |
Jan. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 10 – DERIVATIVE LIABILITIES As of January 31, 2021 and January 31, 2020, the Company had derivative liabilities of $213,741 and $2,611,125, respectively. During the years ended January 31, 2021 and 2020 the Company recorded losses of $828,614 and $180,552, from the change in the fair value of derivative liabilities, respectively. 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 year ended January 31, 2021. 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 (in thousands). Level 3 Derivatives Balance, January 31, 2019 $ 2,041,260 Changes due to Issuance of New Convertible Notes 1,212,189 Reduction of derivative due to extinguishment or repayment (67,623 ) Changes due to Conversion of Notes Payable (755,253 ) Mark to Market Change in Derivatives 180,552 Balance, January 31, 2020 2,611,125 Changes due to Issuance of New Convertible Notes 264,487 Reduction of derivative due to extinguishment or repayment (3,470,300 ) Changes due to Conversion of Notes Payable (20,185 ) Mark to Market Change in Derivatives 828,614 Balance, January 31, 2021 $ 213,741 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. 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. 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 January 31, 2021 is as follows: Embedded Derivative Liability As of Strike price $ 1.75 - 4.30 Contractual term (years) 0.24 - 0.81 years Volatility (annual) 184.80% - 544.0% High yield cash rate 21.09% - 24.90% Underlying fair market value 3.62 Risk-free rate 0.05% - 0.13% Dividend yield (per share) 0% |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Jan. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 11 – STOCKHOLDERS’ DEFICIT Preferred Stock The Company is authorized to issue 20,000,000 shares of Preferred Stock, having a par value of $0.001 per share. Series A 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 January 31, 2021, and January 31, 2020 the Company had 0 shares of Series A Preferred issued and outstanding and 330,000 authorized with a par value of $0.001 per share. At both January 31, 2021 and January 31, 2020, respectively, there were 20,000 and 20,000 Series B preferred shares outstanding. The Series B Preferred Stock have voting rights equal to 66.7% 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 per share. At both January 31, 2021 and January 31, 2020, there were 7,250 and 6,750 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. Currently, there are 7,250 Series C preferred shares authorized and 7,250 shares issued with a par-value of $0.001 per share. On February 26, 2020 the Company issued 250 Class C preferred shares and on August 28, 2020 the Company issued another 150 Class C preferred shares in debt exchange transactions. On September 1, 2020 the Company issued 100 Class C preferred share at a fair value of $11,177 to repay Accrued Expenses- Related Party. At both January 31, 2021 and January 31, 2020, there were 870 Series D preferred shares authorized and outstanding, respectively which with a par value $.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 below: OPTIONAL REDEMPTION. (1) At any time, either the Corporation or the holder may redeem for cash out of funds legally available therefore, any or all of the outstanding Series D Preferred Stock (“Optional Redemption”) at $1,000 per share. (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 January 31, 2021 or by the date the financial statements were issued. 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 January 31, 2021 and 2020. Common Stock The Company is authorized to issue 15,000,000 common shares at a par value of $0.000001 per share. These shares have full voting rights. On June 4, 2020 the Company amended its articles decreasing authorized common shares from 20,000,000,000 to 1,000,000,000 and again on September 8, 2020 the Company further decreased authorized common shares to 15,000,000. On March 29, 2019 the Company undertook a 6000:1 reverse stock. On February 25, 2020, the Company undertook a 4000:1 reverse stock split. The share capital has been retrospectively adjusted accordingly to reflect these reverse stock splits. At January 31, 2021 and January 31, 2020 there were 1,427,163 and 538,464 shares outstanding and issuable , respectively. No dividends were paid in the years ended January 31, 2021 or 2020. The Company’s articles of incorporation include a provision that the Company is not allowed to issue fractional shares. As a result, as part of the reverse split described above, the Company issued an additional 1,699 shares in March 2020 and these shares were included in the shares outstanding as of January 31, 2020 as issuable. Included in the shares outstanding at January 31, 2021 are 71,200 issuable shares. The Company issued the following shares of common stock in the year ended January 31, 2021: Conversion of $24,803 notes payable, $19,933 accrued interest and $20,185 of derivative liability to 624,847 shares of common stock. The Company issued 175,000 shares for $350,000 as part of Regulation A filing. The company received $250,000 in cash proceeds with the remaining $100,000 recorded as share proceeds receivable. The Company issued 45,000 shares for fair value of $18,900 to repay accrued expenses related party. The Company issued 43,852 shares to various lenders for fees with a $35,060 charge to debt discount and a corresponding charge to paid-in capital. The Company issued the following shares of common stock in the year ended January 31, 2020: Conversion of $752,409 notes payable, $240,035 accrued interest, $27,850 in fees and $755,253 of derivative liability to 536,613 shares of common stock. An additional 1,700 shares are issuable on adjustments for rounding shareholdings as a result of the 4000:1 reverse stock split of February 25, 2020. Options and Warrants: The Company recorded option and warrant expense of $0 and $0 in the years ended January 31, 2021 and 2020, respectively. For the year ended January 31 ,2021 the Company issued the following warrants: ● a warrant to acquire 950,000 shares of stock as part of a debt settlement transaction. The Warrant gives the holder the right to cash settle the warrants if a fundamental transaction as defined in the warrants occurs. However, a member of management and shareholder of the Company who controls approximately 60% of all voting shares would decide if a fundamental transaction would occur. The Company currently is not considering any fundamental transactions. Based on the above the Company used a Black Scholes model to record the value of the warrant. The warrants having a fair value of $351,500 was included as part of the consideration in the above mentioned debt settlement transaction with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions in the Table A below: ● warrants to a broker to acquire 5,500 common shares for a fair value of $13,470 recorded as general and administrative expenses with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions in the Table A below: Table A Expected volatility 415.5% - 506.8% Exercise price $0.40 - $4.50 Stock price $0.37 - $2.70 Expected life 3 - 5 years Risk-free interest rate 0.19% - 0.39% Dividend yield 0% The Company issued no warrants in the year ended January 31, 2020. The Company had the following options and warrants outstanding at January 31, 2021: Issued To # Warrants Dated Expire Strike Price Expired Exercised Lender 950,000 08/28/2020 08/28/2023 $0.40 per share N N Broker 2,500 10/11/2020 10/11/2025 $4.50 per share N N Broker 3,000 11/25/2020 11/25/2025 $3.00 per share N N Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2019 — $ — 1.4 $ 225,520 Granted — — — — Exercised — — — — Forfeited and canceled — — — — Outstanding at January 31, 2020 — $ — 1.4 $ 225,520 Granted — — 955,500 0.42 Exercised — — — — Forfeited and canceled — — (1.4 ) (225,220 ) Outstanding at January 31, 2021 — $ — 955,500 $ $0.42 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 – INCOME TAXES The Company has adopted ASC 740-10, “ Income Taxes” The income tax expense (benefit) consisted of the following for the fiscal year ended January 31, 2021 and 2020: January 31, 2021 January 31, 2020 Total current $ — $ — Total deferred — — $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following is a reconciliation of the expected statutory federal income tax provision to the actual income tax benefit for the fiscal year ended January 31, 2021(in thousands): January 31, 2021 Federal statutory rate $ 255 Permanent timing differences (330 ) Effect of change in US Tax rates for deferral items — Other — Change in valuation allowance 75 $ — For the year ended January 31, 2021, the expected tax benefit is calculated at the 2019 statutory rate of 21%. For the year ended January 31, 2020, the expected tax benefit, temporary timing differences and long-term timing differences are calculated at the 21% statutory rate. Significant components of the Company’s deferred tax assets and liabilities were as follows for the fiscal year ended January 31, 2021 and 2020: January 31, 2021 January 31, 2020 Deferred tax assets: Net operating loss carryforwards $ 939,000 $ 874,000 Total deferred tax assets 939,000 874,000 Deferred tax liabilities: Depreciation — 10,000 Deferred revenue — — Total deferred tax liabilities — 10,000 Net deferred tax assets: Less valuation allowance (939,000 ) (864,000 ) Net deferred tax assets (liabilities) $ — $ — The Company has incurred losses since inception, therefore, the Company has no federal tax liability. Additionally there are limitations imposed by certain transactions which are deemed to be ownership changes which occurred in the Company on November 29, 2018. The net deferred tax asset generated by the loss carryforward has been fully reserved. The cumulative net operating loss carryforward was approximately $2,375,000 at January 31, 2021, $2,375,000 million at January 31, 2020that is available for carryforward for federal income tax purposes and begin to expire in 2039. Although the Company has tax loss carry-forwards, there is uncertainty as to utilization prior to their expiration. Accordingly, the future income tax asset amounts have been fully reserved by a valuation allowance. The Company has maintained a full valuation allowance against its deferred tax assets at January 31, 2021 and 2020. A valuation allowance is required to be recorded when it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Since the Company cannot be assured of realizing the net deferred tax asset, a full valuation allowance has been provided. The Company does not have any uncertain tax positions at January 31, 2021 and 2020 that would affect its effective tax rate. The Company does not anticipate a significant change in the amount of unrecognized tax benefits over the next twelve months. Because the Company is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. If and when applicable, the Company will recognize interest and penalties as part of income tax expense. During the fiscal year ended January 31, 2021 and 2020, the Company recognized no amounts related to tax interest or penalties related to uncertain tax positions. The Company is subject to taxation in the United States and various state jurisdictions. The Company currently has no years under examination by any jurisdiction. On November 29, 2018, the Company consummated a share exchange agreement whereby there was a change of control and any net operating losses up to the date of the transaction were forfeited. The Company’s tax returns for the years ended January 31, 2021, 2020, and 2019 are open for examination under Federal statute of limitations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES On June 1, 2015, the Company entered into a 36-month lease agreement for its 2,590 sf office facility with a minimum base rent of $2,720 per month. The Company paid base rent and their share of maintenance expense of $43,200 and $43,200 related to this lease for the periods ended January 31, 2021 and 2020, respectively. The lease is currently on a month to month basis since the lease has not been renewed and the Company records the payments as rent expense. This lease has been terminated December 31, 2020 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 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 per month. In September 2019 the Company entered into an operating lease for premises with an annual rent of $15,480, a three year term commencing September 1, 2019 to August 31, 2022 and a one year renewal option. On October 23, 2020 the Company and landlord terminated this lease effective February 29, 2020. There were no costs associated with the termination. The Company eliminated the operating lease asset and operating lease liability at termination which was $45,032. 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 and will pay fees on lease termination of $395. On a straight-line basis these costs amount to $1,259 per month. Maturity of Lease Liabilities Operating January 31, 2022 $ 121,917 January 31, 2023 116,879 January 31, 2023 62,003 January 31, 2025 30,003 January 31, 2026 30,003 After January 31, 2026 25,004 Total lease payments 385,809 Less: Interest (51,474 ) Present value of lease liabilities $ 334,335 The Company had total rent expense and operating lease cost of $164,095 and $150,668 for the years ended January 31, 2021 and 2020, respectively. There is pending litigation initiated by the Company around the validity of a $100,000 note which the Company signed based upon representations of funding from the maker which were never received. The Company initiated litigation to dispute the note and the 1,692 shares that have been issued. There was no consideration for the issuance of the shares and the shares have been accounted for as if they were returned and cancelled although they have not been returned. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Jan. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 14 – EARNINGS (LOSS) PER SHARE The net income (loss) per common share amounts for the years ended January 31, 2021 and January 31, 2020 were determined as follows: For the Years Ended January 31, 2021 2020 Numerator: Net income (loss) available to common shareholders $ 1,187,176 $ (3,879,846 ) Denominator: Weighted average shares – basic 1,084,324 86,542 Net income (loss) per share – basic $ 1.09 $ (44.83 ) Effect of common stock equivalents Add: interest expense on convertible debt 259,086 454,765 Add: amortization of debt discount 326,238 800,149 Less: gain on settlement of debt on convertible notes (4,835,429 ) (67,623 ) Add (Less): loss (gain) on change of derivative liabilities 845,586 180,552 Net income (loss) adjusted for common stock equivalents (2,217,343 ) (2,512,003 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest 404,173 — Convertible Class C Preferred shares 3,631,533 — Warrants 950,000 — Denominator: Weighted average shares – diluted 6,070,030 86,542 Net income (loss) per share – diluted $ (0.37 ) $ (44.83 ) The anti-dilutive shares of common stock equivalents for the years ended January 31, 2021 and January 31, 2020 were as follows: For the Years Ended January 31, 2021 2020 Convertible notes and accrued interest — 16,355,950 Convertible Class C Preferred shares — 1,411,692 Warrants — 1 Total — 17,767,643 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jan. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS As of January 31, 2021 and 2020, the Company had $106,173 and $155,750, respectively, of related party accrued expenses related to accrued compensation for employees and consultants. During the year ended January 31, 2021 the Company issued 45,000 shares of common stock for a fair value of $18,900 and 100 Class C preferred share at a fair value of $11,177 to repay Accrued Expenses- Related Party. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jan. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Subsequent to January 31, 2020 through to May 14, 2021 the Company entered into the following transactions: ● The Company issued 993,750 shares at an offering price of $2.00 per share for gross proceeds of $ 1,987,500 as part of the recent REG A filing. ● In April 2021, accounts payable totaling $950,151 was settled for $96,700 . A gain on settlement of $853,451 was recorded at the time of settlement. ● In February 2021, the Company entered into an agreement with an investor relations company for services to be provided over the following 2 months for fees totaling $250,000 ● In February 2021 the Company entered into an agreement for marketing services in exchange for 50,000 shares issued in March 2021 having a fair value of $114,000. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business – 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 Company 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. |
Significant Accounting Policies | Significant Accounting Policies The Company’s management selects accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 financial statements. |
Basis of Presentation | Basis of Presentation The Company prepares its financial statements on the accrual basis of accounting in conformity with U.S. GAAP. |
Principles of Consolidation | Principles of Consolidation The financial statements include the accounts of The 4LESS Group, Inc. as well as Auto Parts 4Less, Inc. (formerly The 4LESS Corp.) and JBJ Wholesale LLC. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. |
Use of Estimates | Use of Estimates In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determine whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. The most significant estimates included in these consolidated financial statements are those associated with the assumptions used to value derivative liabilities. |
Reclassifications | Reclassifications Certain amounts in the Company’s consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying amount of cash and cash equivalents approximates fair market value. |
Inventory Valuation | Inventory Valuation Inventories are stated at the lower of cost or net realizable value. Inventories are valued on a first-in, first-out (FIFO) basis. Inventory is comprised of finished goods. |
Concentrations | Concentrations Cost of Goods Sold For the year ended January 31, 2021 the Company purchased approximately 57% of its inventory and items available for sale from third parties from three vendors. As of January 31, 2021, the net amount due to the vendors included in accounts payable was $599,072. For the year ended January 31, 2020, the Company purchased approximately 59% of its inventory and items available for sale from third parties from three third-party vendors. As of January 31, 2020, the net amount due to these vendors included in accounts payable was $369,592. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Leases | Leases We adopted ASU No. 2016-02— Leases (Topic 842) In addition, 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. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $454,087 and $454,087 respectively, as of February 1, 2019. The standard did not materially impact our consolidated net earnings, retained earnings and had no impact on cash flows |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized when items of income and expense are recognized in the financial statements in different periods than when recognized in the tax return. Deferred tax assets arise when expenses are recognized in the financial statements before the tax returns or when income items are recognized in the tax return prior to the financial statements. Deferred tax assets also arise when operating losses or tax credits are available to offset tax payments due in future years. Deferred tax liabilities arise when income items are recognized in the financial statements before the tax returns or when expenses are recognized in the tax return prior to the financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. ASC 740, Accounting for Income Taxes requires companies to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company’s gross deferred tax assets were revalued based on the reduction in the federal statutory tax rate from 35% 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, 2021, 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 | Fair Value of Financial Instruments The Company’s financial instruments consist of cash, accounts payable, advances and notes payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments. Derivatives are recorded at fair value at each period end. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs Level 2 Inputs Level 3 Inputs As of January 31, 2021 and 2020, the Company’s derivative liabilities were measured at fair value using Level 3 inputs. See Note 10. 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 January 31, 2021and January 31, 2020: January 31, 2021 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 213,741 $ — $ — $ 213,741 Totals $ 213,741 $ — $ — $ 213,741 January 31, 2020 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 2,611,125 $ — $ — $ 2,611,125 Totals $ 2,611,125 $ — $ — $ 2,611,125 |
Related Party Transactions | Related Party Transactions The Company has a verbal policy that includes procedures intended to ensure compliance with the related party provisions in common practice for public companies. For purposes of the policy, a “related party transaction” is a transaction in which the Company or any one of its subsidiaries participates and in which a related party has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Any transaction exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a director’s independence, must be approved by the CEO. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Guide to Ethical Conduct, must be approved by Board of Directors, following appropriate disclosure of all material aspects of the transaction. |
Derivative Liability | Derivative Liability The derivative liabilities are valued as a level 3 input under the fair value hierarchy for valuing financial instruments. The derivatives arise from convertible debt where the debt and accrued interest is convertible into common stock at variable conversion prices and reclassification of equity instrument to liability due to insufficient shares for issuance. As the price of the common stock varies, it triggers a gain or loss based upon the discount to market assuming the debt was converted at the balance sheet date. When evaluating the effect of the issuance of new equity-linked or equity-settled instruments on previously issued instruments, the Company uses first-in, first-out method (“FIFO”) where authorized and unused shares would first be used to satisfy the earliest issued equity-linked instruments. The fair value of the derivative liability is determined using a lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, historical stock price volatility, the expected term, and both high risk and the risk-free interest rate. The most sensitive inputs to the model are for expected time for the holder to convert or be repaid and the estimated historical volatility of the Company’s common stock. However, because the historical volatility of the Company’s common stock is so high (see Note 10), the sensitivity required to change the liability by 1% as of January 31, 2021 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Disaggregation of Revenue: Channel Revenue The following table shows revenue split between proprietary and third party website revenue for the years ended January 31, 2021 and 2020: Change 2021 2020 $ % Proprietary website revenue $ 4,200,624 $ 3,246,351 $ 954,273 29% Third party website revenue 3,970,731 4,939,863 (969,132 ) (20% ) Total Revenue $ 8,171,355 $ 8,186,214 $ (14,859 ) 0% 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. Revenue is recorded net of provisions for discounts and promotion allowances, which are typically agreed to upfront with the customer and do not represent variable consideration. Discounts and promotional allowances vary the consideration the Company is entitled to in exchange for the sale of products to customers. The Company recognizes these discounts and promotional allowances in the same period that the revenue is recognized for products sales to customers. The amount of revenue recognized represents the amount that will not be subject to a significant future reversal of revenue. The customer pays the Company by credit card prior to delivery. The Company offers a 30 day satisfaction guaranteed return policy however the customer must pay for the return shipment. The return must be previously authorized, cannot be either damaged or previously installed and must be in saleable condition. In the Company’s experience this amount is immaterial and therefore no provision has been recorded on the Company’s books. Any defective merchandise falls under the manufacturer’s limited warranty and is subject to the manufacturer’s inspection. The manufacturer has the option to repair or replace the item. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. |
Earnings (Loss) per Common Share | Earnings (Loss) per Common Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact. Fair Value Measurement In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvement to Nonemployee Share-Based Payment Accounting, which is part of the FASB’s simplification initiative to maintain or improve the usefulness of the information provided to the users of financial statements while reducing cost and complexity in financial reporting. This update provides consistency in the accounting for share-based payments to nonemployees with that of employees. The updated guidance had no impact on the Company’s consolidated financial position, results of operations or cash flows. In 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. 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. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of fair value of assets acquired and liabilities | 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 January 31, 2021and January 31, 2020: January 31, 2021 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 213,741 $ — $ — $ 213,741 Totals $ 213,741 $ — $ — $ 213,741 January 31, 2020 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 2,611,125 $ — $ — $ 2,611,125 Totals $ 2,611,125 $ — $ — $ 2,611,125 |
Schedule of disaggregation of Revenue | The following table shows revenue split between proprietary and third party website revenue for the years ended January 31, 2021 and 2020: Change 2021 2020 $ % Proprietary website revenue $ 4,200,624 $ 3,246,351 $ 954,273 29% Third party website revenue 3,970,731 4,939,863 (969,132 ) (20% ) Total Revenue $ 8,171,355 $ 8,186,214 $ (14,859 ) 0% |
PROPERTY (Tables)
PROPERTY (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property | Property consists of the following at January 31, 2021 and 2020: 2021 2020 Office furniture, fixtures and equipment $ 85,413 $ 95,163 Shop equipment 43,004 43,004 Vehicles 40,433 40,433 Sub-total 168,850 178,600 Less: Accumulated depreciation (88,823 ) (64,091 ) Total Property $ 80,027 $ 114,509 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Leases [Abstract] | |
Schedule of operating lease assets and liabilities | Below is a summary of our lease assets and liabilities at January 31, 2021 and January 31, 2020. Leases Classification January 31, 2021 January 31, 2020 Assets Operating Operating Lease Assets $ 344,413 $ 483,193 Liabilities Current Operating Current Operating Lease Liability $ 90,286 $ 101,984 Noncurrent Operating Noncurrent Operating Lease Liabilities 244,049 365,085 Total lease liabilities $ 334,335 $ 467,069 |
SHORT-TERM AND LONG-TERM DEBT (
SHORT-TERM AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The components of the Company’s short-term and long term debt as of January 31, 2021 and 2020 were as follows: January 31, 2021 January 31, 2020 Working Capital Note Payable - $ 200,000 dated October 25, 2019, repayment of 10% of all eBay sales proceeds until paid in full, minimum payment of $20,417, fees of $4,173 effective interest rate of 7% (4) (4) $ — $ 6,978 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 (2) 102,168 # 63,635 Loan dated October 14, 2019, repayable in average monthly installments of $11,200, maturing April 14, 2020, interest and fees $7,200, effective interest 35.50% per annum (4)(5) — 30,000 SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing April 7, 2021 (5) 161,227 * 371,963 Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023 (1) 12,269 # 16,106 Demand loan - $122,000 dated August 19, 2019 25% interest, 5% fee on outstanding balance (4)(6) — 122,000 Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 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 September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 * — Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. The notes matures when the Company receives proceeds through a financing event of $850,000 plus accrued interest on the note. (7) 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 . (8) 1,200,000 # — Promissory note -$50,000 dated August 31, 2020, maturing February 28, 2021, 10% interest payable at maturity 50,000 * — Total $ 2,030,579 $ 625,597 January 31, 2021 January 31, 2020 Short-Term Debt $ 716,142 $ 609,491 Current Portion of Long-Term Debt 424,064 4,166 Long-Term Debt 890,373 11,940 $ 2,030,579 $ 625,597 __________ * Short-term loans. # Long-term loans of $12,269 including current portion of $4,064. $102,168 including current portion of $0. $1,200,000 including current portion of $420,000. (1) Secured by equipment having a net book value of $15,293 and $12,379 at January 31, 2021 and 2020, respectively. (2) On November 10, 2020 the Company amended the agreement extending the maturity to June 30, 2022 from April 8, 2021 and changing monthly payments to $0 from $5,705 and interest rate from 13% to a $20,000 lump sum payable at maturity. (3) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (4) The Company has pledged a security interest on all assets of the Company. (5) The amounts due under the note are personally guaranteed by an officer or a director of the Company. (6) On February 26, 2020 the lender exchanged the $122,000 note along with $22,076 of accrued interest as part of a larger debt exchange transaction as described in Note 9. (7) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company has reached this milestone this loan is treated as current. This note is secured by all the assets of the Company. (8) Secured by all assets of the Company. Loan including accrued interest payable in 2 installments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022. |
Schedule of future minimum payments | The following are the minimum amounts due on the notes as of January 31, 2021: Year Ended Amount Jan 31, 2022 $ 1,140,206 Jan 31, 2023 886,165 Jan 31, 2024 4,208 Total $ 2,030,579 |
SHORT-TERM CONVERTIBLE DEBT (Ta
SHORT-TERM CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of short term convertible debt | The components of the Company’s convertible debt as of January 31, 2021 and 2020 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price January 31, 2021 January 31, 2020 Nov 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000 Jan 31, 2014* 12% 18% $2,400,000 16,000 16,000 Apr 24, 2020* (ii) Y 12% 24% (3) — 69,730 July 31, 2013* 12% 12% $1,440,000 5,000 5,000 Jan 31, 2014* 12% 12% $2,400,000 30,000 30,000 Dec 24, 2015* (v) 8% 24% (1) — 5,000 Feb 3, 2017* (ii)(iv) Y 8% 24% (4) — 2,500 Mar 3, 2017* (ii)(iv) 8% 24% (5) — — Mar 3, 2017* (ii)(iv) Y 8% 24% (5) — 33,000 Mar 24, 2017* (ii)(iv) Y 8% 24% (5) — 27,500 Apr 24, 2020* (ii)(iv)(vi) Y 12% 24% (3) — 517,787 July 8, 2015* (v) 8% 24% (1) — 5,500 Apr 24, 2020 (ii)(iv)(vi)X 8% 24% (3) — 4,500 Apr 24, 2020 X 8% 24% (3) — 23,297 Apr 24, 2020 X 8% 24% (3) — 7,703 Apr 24, 2020 X 8% 24% (3) — 26,500 July 19, 2016* (v) 8% 24% (1) — 5,000 Mar 23, 2019* (ii)(iv)(vi)X 15% 24% (3) — 4,444 Feb 20, 2019* (ix)X 10% 10% (6) — 343,047 Jun 6, 2019* (viii)X 12% 18% (7) — 43,577 Oct 24, 2019* (ii)(iv) Y 8% 24% (5) — 45,595 Nov 14, 2019* (ii)(iv) Y 8% 24% (5) — 86,625 Dec 14, 2019* (ii)(iv) Y 8% 24% (5) — 143,000 Dec 28, 2019* (i)(iv)(vi) Y 12% 18% (6) — 133,333 Jan 9, 2020* (ii)(iv) Y 8% 24% (2) — 68,750 March 1, 2020* (x)Z 10% 15% (8) — 40,939 March 14, 2020 (iv)(vi)X 15% 24% (9) — 44,967 April 3, 2020* (iv) Y 8% 24% (2) — 172,148 April 12, 2020* (xi) Y 10% 24% (3) — 185,130 May 13, 2020 (iv)(vi)X 15% 24% (9) — 55,000 May 14, 2020* (iv)(vi) Y 8% 24% (2) — 52,500 May 24, 2020 (iv)(vi)X 15% 24% (9) — 40,000 June 11, 2020 (iv)(vi)X 15% 24% (9) — 85,000 June 26, 2020* (iv)(vi) Y 15% 24% (9) — 76,000 July 11, 2020 (iv)(vii)X 15% 24% (9) — 60,000 Aug 29, 2020 (iv)(vii)X 15% 24% (9) — 45,000 Sep 16, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Sep 27, 2020 (iv)(vii)X 15% 24% (9) — 34,000 Oct 24, 2020 (iv)(vii)X 15% 24% (9) — 122,000 Nov 7, 2020 (iv)(vii)X 15% 24% (10) — 42,000 Nov 22, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 55,000 Dec 10, 2020 (iv)(vii)X 15% 24% (9) — 55,000 Dec 23, 2020 (ii)(iv)(vi) Y 8% 24% (2) — 30,000 Oct. 12, 2021 12% 16% (11) 230,000 — Nov.16, 2021 12% 16% (11) 100,000 — Nov.23, 2021 12% 16% (11) 165,000 — Sub-total 646,000 2,976,072 Debt Discount (309,317 ) (689,176 ) $ 336,683 $ 2,286,896 __________ (1) 52% of the lowest trading price for the fifteen trading days prior to conversion day. (2) 50% of the lowest trading price for the fifteen trading days prior to conversion day. (3) 50% of the lowest trading price for the twenty trading days prior to conversion day. (4) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.001. (5) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.005. (6) 60% of the lowest trading price for the twenty trading days prior to conversion day. (7) 52% of the lowest trading price for the twenty trading days prior to conversion day. (8) 55% of the lowest trading price for the twenty-five trading days prior to conversion day. (9) 50% of the lowest bid price for the twenty-five trading days prior to conversion day. (10) 45% of the lowest bid price for the fifteen trading days prior to conversion day. (11) closing bid price on the day preceding the conversion date. * In default. X On February 26, 2020 the Company exchanged convertible and short term notes and accrued interest for 250 Class C shares (transaction described further below). Y On August 28, 2020 the Company exchanged convertible notes and accrued interest for a $ 1,200,000 promissory note with a 2 year maturity bearing interest at 12%, 950,000 warrants with a 3 year maturity and an exercise price of $0.40 and 150 Class C preferred shares (transaction described further below). Z On August 25,2020 the Company settled a convertible note with principal of $ 40,938 for a $14,329 cash payment. On September 14, 2020 the Company settled $20,111 in accrued interest and default interest related to this note for a cash payment of $52,446 (transaction described further below). (i) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. If at any time while this Note is outstanding, an Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). These above contingencies have not occurred. (ii) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 40% instead of 50% while that “Chill” is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (iii) The share purchase agreements ancillary to the convertible note agreements do not allow the lender to engage in short sales. (iv) If the Company becomes delinquent or continues its delinquency in its periodic filings with the SEC after the 6-months anniversary of the note, then the holder is entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. (v) In the event the Company experiences a DTC ” Chill” on its shares, the conversion price shall be decreased to 42% instead of 52% while that “Chill” is in effect. (vi) If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (vii) If the Company fails to maintain the share reserve at the 3x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. (viii) If at any time while this Note is outstanding, an event of default occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). If at any time while this Note is outstanding, the Borrower’s Common Stock are not deliverable via DWAC, an additional 10% discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding. (ix) If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price is less than $0.01 at any time, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000). In addition, the Conversion price shall be permanently redefined to equal the lesser of (a) $0.001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. (x) In the event that shares of the Borrower’s Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 55% assuming no other adjustments are triggered hereunder). Additionally, if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date, and/or the Borrower shall cease to be subject to the reporting requirements of the exchange Act, an additional fifteen percent (15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 60% assuming no other adjustments are triggered hereunder). (xi) If the Borrower’s Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of changes in fair value of the derivative liability | 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 (in thousands). Level 3 Derivatives Balance, January 31, 2019 $ 2,041,260 Changes due to Issuance of New Convertible Notes 1,212,189 Reduction of derivative due to extinguishment or repayment (67,623 ) Changes due to Conversion of Notes Payable (755,253 ) Mark to Market Change in Derivatives 180,552 Balance, January 31, 2020 2,611,125 Changes due to Issuance of New Convertible Notes 264,487 Reduction of derivative due to extinguishment or repayment (3,470,300 ) Changes due to Conversion of Notes Payable (20,185 ) Mark to Market Change in Derivatives 828,614 Balance, January 31, 2021 $ 213,741 |
Schedule of derivative liability | 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 January 31, 2021 is as follows: Embedded Derivative Liability As of Strike price $ 1.75 - 4.30 Contractual term (years) 0.24 - 0.81 years Volatility (annual) 184.80% - 544.0% High yield cash rate 21.09% - 24.90% Underlying fair market value 3.62 Risk-free rate 0.05% - 0.13% Dividend yield (per share) 0% |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Equity [Abstract] | |
Schedule of warrants fair value | warrants to a broker to acquire 5,500 common shares for a fair value of $13,470 recorded as general and administrative expenses with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions in the Table A below: Table A Expected volatility 415.5% - 506.8% Exercise price $0.40 - $4.50 Stock price $0.37 - $2.70 Expected life 3 - 5 years Risk-free interest rate 0.19% - 0.39% Dividend yield 0% |
Schedule of issued options and warrants outstanding | The Company had the following options and warrants outstanding at January 31, 2021: Issued To # Warrants Dated Expire Strike Price Expired Exercised Lender 950,000 08/28/2020 08/28/2023 $0.40 per share N N Broker 2,500 10/11/2020 10/11/2025 $4.50 per share N N Broker 3,000 11/25/2020 11/25/2025 $3.00 per share N N |
Schedule of options and warrants outstanding | Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2019 — $ — 1.4 $ 225,520 Granted — — — — Exercised — — — — Forfeited and canceled — — — — Outstanding at January 31, 2020 — $ — 1.4 $ 225,520 Granted — — 955,500 0.42 Exercised — — — — Forfeited and canceled — — (1.4 ) (225,220 ) Outstanding at January 31, 2021 — $ — 955,500 $ $0.42 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefit) | The income tax expense (benefit) consisted of the following for the fiscal year ended January 31, 2021 and 2020: January 31, 2021 January 31, 2020 Total current $ — $ — Total deferred — — $ — $ — |
Schedule of statutory federal income tax provision | The following is a reconciliation of the expected statutory federal income tax provision to the actual income tax benefit for the fiscal year ended January 31, 2021(in thousands): January 31, 2021 Federal statutory rate $ 255 Permanent timing differences (330 ) Effect of change in US Tax rates for deferral items — Other — Change in valuation allowance 75 $ — |
Schedule of deferred tax asset | Significant components of the Company’s deferred tax assets and liabilities were as follows for the fiscal year ended January 31, 2021 and 2020: January 31, 2021 January 31, 2020 Deferred tax assets: Net operating loss carryforwards $ 939,000 $ 874,000 Total deferred tax assets 939,000 874,000 Deferred tax liabilities: Depreciation — 10,000 Deferred revenue — — Total deferred tax liabilities — 10,000 Net deferred tax assets: Less valuation allowance (939,000 ) (864,000 ) Net deferred tax assets (liabilities) $ — $ — |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease obligations | On a straight-line basis these costs amount to $1,259 per month. Maturity of Lease Liabilities Operating January 31, 2022 $ 121,917 January 31, 2023 116,879 January 31, 2023 62,003 January 31, 2025 30,003 January 31, 2026 30,003 After January 31, 2026 25,004 Total lease payments 385,809 Less: Interest (51,474 ) Present value of lease liabilities $ 334,335 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of net income (loss) | The net income (loss) per common share amounts for the years ended January 31, 2021 and January 31, 2020 were determined as follows: For the Years Ended January 31, 2021 2020 Numerator: Net income (loss) available to common shareholders $ 1,187,176 $ (3,879,846 ) Denominator: Weighted average shares – basic 1,084,324 86,542 Net income (loss) per share – basic $ 1.09 $ (44.83 ) Effect of common stock equivalents Add: interest expense on convertible debt 259,086 454,765 Add: amortization of debt discount 326,238 800,149 Less: gain on settlement of debt on convertible notes (4,835,429 ) (67,623 ) Add (Less): loss (gain) on change of derivative liabilities 845,586 180,552 Net income (loss) adjusted for common stock equivalents (2,217,343 ) (2,512,003 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest 404,173 — Convertible Class C Preferred shares 3,631,533 — Warrants 950,000 — Denominator: Weighted average shares – diluted 6,070,030 86,542 Net income (loss) per share – diluted $ (0.37 ) $ (44.83 ) |
Schedule of diluted loss per share | The anti-dilutive shares of common stock equivalents for the years ended January 31, 2021 and January 31, 2020 were as follows: For the Years Ended January 31, 2021 2020 Convertible notes and accrued interest — 16,355,950 Convertible Class C Preferred shares — 1,411,692 Warrants — 1 Total — 17,767,643 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2019 |
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | $ 213,741 | $ 2,611,125 | |
Totals | 213,741 | 2,611,125 | |
Quoted Prices in Active Markets For Identical Assets (Level 1) [Member] | |||
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | |||
Totals | |||
Significant Other Observable Inputs (Level 2) [Member] | |||
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | |||
Totals | |||
Significant Unobservable Inputs (Level 3) [Member] | |||
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | 213,741 | 2,611,125 | $ 2,041,260 |
Totals | $ 213,741 | $ 2,611,125 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Revenue | $ 8,171,355 | $ 8,186,214 |
Change in revenue | $ (14,859) | |
Percentage change in revenue | 0.00% | |
Proprietary Website Revenue [Member] | ||
Revenue | $ 4,200,624 | 3,246,351 |
Change in revenue | $ 954,273 | |
Percentage change in revenue | 29.00% | |
Third Party Website Revenue [Member] | ||
Revenue | $ 3,970,731 | $ 4,939,863 |
Change in revenue | $ (969,132) | |
Percentage change in revenue | (20.00%) |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 29, 2018 | Jan. 31, 2021 | Jan. 31, 2020 | |
Business acquisition transaction of equity securities, description | The Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. | ||
Old federal statutory tax rate | 35.00% | ||
Federal statutory tax rate | 21.00% | ||
Net lease assets and lease liabilities | $ 454,087 | $ 454,087 | |
Percentage of change in liability | 1.00% | ||
Percentage of change in historical volatility | 25.00% | ||
Description of other inputs, sensitivity | 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. | ||
Third Parties From Three Vendors [Member] | |||
Accounts payable | $ 599,072 | $ 369,592 | |
Percentage of inventory | 57.00% | 59.00% |
GOING CONCERN AND FINANCIAL P_2
GOING CONCERN AND FINANCIAL POSITION (Details Narrative) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 | Jan. 31, 2019 |
Going Concern and Financial Position [Abstract] | |||
Accumulated deficit | $ (20,381,977) | $ (21,569,153) | |
Working capital deficit | 4,344,055 | ||
Cash and cash equivalents | 277,664 | $ 162,124 | $ 59,401 |
Short-term debt in default | $ 151,000 |
PROPERTY (Details)
PROPERTY (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Sub-total | $ 168,850 | $ 178,600 |
Less: Accumulated depreciation | (88,823) | (64,091) |
Total Property | 80,027 | 114,509 |
Office Furniture, Fixtures and Equipment [Member] | ||
Sub-total | 85,413 | 95,163 |
Shop Equipment [Member] | ||
Sub-total | 43,004 | 43,004 |
Vehicles [Member] | ||
Sub-total | $ 40,433 | $ 40,433 |
PROPERTY (Details Narrative)
PROPERTY (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Purchase property | $ 1,000 | |
Purchase of Property and Equipment | $ 16,742 | |
Depreciation expense | 25,196 | 34,832 |
Gain on sale of property and equipment | 464 | 16,295 |
Office Equipment [Member] | ||
Cost | 9,750 | 144,662 |
Net book value | 9,286 | 109,527 |
Proceeds received | 9,750 | 125,822 |
Gain on sale of property and equipment | $ 464 | $ 16,295 |
Computer [Member] | ||
Property for their estimated useful lives | 3 years | |
Other Assets [Member] | ||
Property for their estimated useful lives | 7 years |
LEASES (Details)
LEASES (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Assets | ||
Operating Lease Assets | $ 344,413 | $ 483,193 |
Current | ||
Current Operating Lease Liability | 90,286 | 101,984 |
Noncurrent | ||
Noncurrent Operating Lease Liabilities | 244,049 | 365,085 |
Total lease liabilities | $ 334,335 | $ 467,069 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Oct. 23, 2020 | Sep. 30, 2019 | Jan. 31, 2021 | Jan. 31, 2020 |
Leases [Abstract] | ||||
Operating lease cost | $ 121,917 | $ 117,841 | ||
Annual rent | $ 15,480 | $ 164,095 | $ 150,668 | |
Leases, description | The Company and landlord terminated this lease effective February 29, 2020. | A three year term commencing September 1, 2019 to August 31, 2022 and a one year renewal option. | 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. | |
Incremental borrowing rate | 8.00% | |||
Description of renewal lease term | One to 17 years or more, | |||
Termination lease amount | $ 45,032 |
CUSTOMER DEPOSITS (Details Narr
CUSTOMER DEPOSITS (Details Narrative) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Demand loan [Member] | ||
Customer deposits | $ 188,385 |
DEFERRED REVENUE (Details Narra
DEFERRED REVENUE (Details Narrative - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
March 24, 2017 [Member] | ||
Deferred revenue | $ 687,766 |
PPP LOAN (Details Narrative)
PPP LOAN (Details Narrative) - USD ($) | May 02, 2020 | Jan. 31, 2021 |
PPP Loan-current portion | $ 43,294 | |
PPP Loan-Long term | 166,153 | |
Paycheck Protection Promissory (PPP) [Member] | ||
Proceeds from PPP Loan | $ 209,447 | |
Maturity of loan | Aug. 2, 2023 | |
Monthly instalments | $ 8,818 | |
PPP Loan-current portion | 43,294 | |
PPP Loan-Long term | $ 166,153 | |
Fixed rate per annum | 1.00% |
SHORT-TERM AND LONG-TERM DEBT_2
SHORT-TERM AND LONG-TERM DEBT (Details) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 | |
Total | $ 2,030,579 | $ 625,597 | |
Loan One [Member] | |||
Debt | 102,168 | [1] | 63,635 |
Loan Two [Member] | |||
Debt | 30,000 | ||
SFS Funding Loan [Member] | |||
Debt | 161,227 | [2] | 371,963 |
Forklift Note Payable [Member] | |||
Debt | 12,269 | [1] | 16,106 |
Demand Loan [Member] | |||
Debt | 122,000 | ||
Demand Loan One [Member] | |||
Debt | 5,000 | [2] | |
Demand Loan Two [Member] | |||
Debt | 2,500 | [2] | 2,500 |
Demand Loan Three [Member] | |||
Debt | 12,415 | [2] | 12,415 |
Working Capital Note Payable One [Member] | |||
Debt | 6,978 | ||
Promissory Note [Member] | |||
Debt | 60,000 | [2] | |
Promissory Note One [Member] | |||
Debt | 425,000 | [2] | |
Promissory Note Two [Member] | |||
Debt | 1,200,000 | [1] | |
Promissory Note Three [Member] | |||
Debt | $ 50,000 | [2] | |
[1] | Long-term loans of $12,269 including current portion of $4,064. $102,168 including current portion of $0. $1,200,000 including current portion of $420,000. | ||
[2] | Short-term loans. |
SHORT-TERM AND LONG-TERM DEBT_3
SHORT-TERM AND LONG-TERM DEBT (Details 1) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Debt Disclosure [Abstract] | ||
Short-Term Debt | $ 716,142 | $ 609,491 |
Current Portion of Long-Term Debt | 424,064 | 4,166 |
Long-Term Debt | 890,373 | 11,940 |
Total | $ 2,030,579 | $ 625,597 |
SHORT-TERM AND LONG-TERM DEBT_4
SHORT-TERM AND LONG-TERM DEBT (Details 2) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Minimum amount due on note | $ 2,030,579 | $ 625,597 |
Promissory Note Due on Jan 31, 2022 [Member] | ||
Minimum amount due on note | 1,140,206 | |
Promissory Note Due on Jan 31, 2023 [Member] | ||
Minimum amount due on note | 886,165 | |
Promissory Note Due on Jan 31, 2024 [Member] | ||
Minimum amount due on note | $ 4,208 |
SHORT-TERM AND LONG-TERM DEBT_5
SHORT-TERM AND LONG-TERM DEBT (Details Narrative) - USD ($) | Nov. 10, 2020 | Feb. 26, 2020 | Jan. 31, 2021 | Jan. 31, 2020 |
Short-term notes | $ 716,142 | $ 609,491 | ||
Long-term loan, current | 424,064 | 4,166 | ||
Long-term loan | 890,373 | 11,940 | ||
Promissory Note Three [Member] | ||||
Notes payable principal amount | $ 50,000 | |||
Debt issuance date | Aug. 31, 2020 | |||
Maturity date | Feb. 28, 2021 | |||
Percentage of debt instrument interest rate | 10.00% | |||
Promissory Note Two [Member] | ||||
Notes payable principal amount | $ 1,200,000 | |||
Debt issuance date | Aug. 28, 2020 | |||
Maturity date | Aug. 28, 2022 | |||
Percentage of debt instrument interest rate | 12.00% | |||
Description of payment terms | Interest payable monthly with the first six months interest deferred until the 6th month and added to principal. | |||
Promissory Note One [Member] | ||||
Notes payable principal amount | $ 425,000 | |||
Debt issuance date | Aug. 28, 2020 | |||
Percentage of debt instrument interest rate | 15.00% | |||
Original issue discount | $ 50,000 | |||
Accrued interest payable | 825,000 | |||
Promissory Note [Member] | ||||
Notes payable principal amount | $ 60,000 | |||
Percentage of debt instrument interest rate | 15.00% | |||
Original issue discount | $ 5,000 | |||
Working Capital Note Payable One [Member] | ||||
Notes payable principal amount | $ 200,000 | |||
Debt issuance date | Oct. 25, 2019 | |||
Maturity date | Jan. 25, 2020 | |||
Note payable percentage | 10.00% | |||
Percentage of debt instrument interest rate | 7.00% | |||
Debt fees | $ 4,173 | |||
Debt instrument periodic payment | $ 20,417 | |||
Debt repayment date | Feb. 5, 2020 | |||
Loan One [Member] | ||||
Debt issuance date | Oct. 8, 2019 | |||
Maturity date | Jun. 30, 2022 | |||
Percentage of debt instrument interest rate | 13.00% | |||
Lump sum payable amount | $ 20,000 | |||
Debt instrument periodic payment | $ 20,000 | |||
Debt repayment date | Feb. 29, 2020 | |||
Debt revised date | Nov. 10, 2010 | |||
Loan One [Member] | Minimum [Member] | ||||
Debt instrument periodic payment | 0 | |||
Loan One [Member] | Maximum [Member] | ||||
Debt instrument periodic payment | $ 5,705 | |||
Loan Two [Member] | ||||
Debt issuance date | Oct. 14, 2019 | |||
Maturity date | Apr. 14, 2020 | |||
Percentage of debt instrument interest rate | 35.50% | |||
Debt fees | $ 7,200 | |||
Debt instrument periodic payment | 11,200 | |||
SFS Funding Loan [Member] | ||||
Notes payable principal amount | $ 389,980 | |||
Debt issuance date | Jan. 8, 2020 | |||
Maturity date | Apr. 7, 2021 | |||
Note payable percentage | 24.00% | |||
Description of payment terms | Weekly | |||
Debt instrument periodic payment | $ 6,006 | |||
Secured equipment net book value | $ 12,379 | |||
Forklift Note Payable [Member] | ||||
Notes payable principal amount | $ 20,433 | |||
Debt issuance date | Sep. 26, 2018 | |||
Maturity date | Aug. 31, 2023 | |||
Note payable percentage | 6.23% | |||
Description of payment terms | 60 monthly payments | |||
Debt instrument periodic payment | $ 395 | |||
Secured equipment net book value | 15,293 | |||
Demand Loan [Member] | ||||
Notes payable principal amount | $ 122,000 | |||
Debt issuance date | Aug. 19, 2019 | |||
Note payable percentage | 25.00% | |||
Maturity date, description | 5% fee on outstanding balance | |||
Demand Loan [Member] | Preferred Series C [Member] | ||||
Notes payable principal amount | $ 122,000 | |||
Exchange amount | $ 22,076 | |||
Demand Loan One [Member] | ||||
Notes payable principal amount | $ 5,000 | |||
Debt issuance date | Feb. 1, 2020 | |||
Note payable percentage | 15.00% | |||
Maturity date, description | 5% fee on outstanding balance | |||
Demand Loan Two [Member] | ||||
Notes payable principal amount | $ 2,500 | |||
Debt issuance date | Mar. 8, 2019 | |||
Note payable percentage | 25.00% | |||
Maturity date, description | 5% fee on outstanding balance | |||
Demand Loan Three [Member] | ||||
Notes payable principal amount | $ 65,500 | |||
Note payable percentage | 25.00% | |||
Maturity date, description | !-SYNTAX- | |||
Loan Payable [Member] | ||||
Description of payment terms | Loan including accrued interest payable in 2 installments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022. | |||
Long-Term Loans [Member] | ||||
Long-term loan, current | $ 4,064 | |||
Long-term loan | 12,269 | |||
Long-Term Loans [Member] | ||||
Long-term loan, current | 0 | |||
Long-term loan | 102,168 | |||
Long-Term Loans [Member] | ||||
Long-term loan, current | 1,200,000 | |||
Long-term loan | $ 420,000 |
SHORT-TERM CONVERTIBLE DEBT (De
SHORT-TERM CONVERTIBLE DEBT (Details) - USD ($) | 12 Months Ended | |||
Jan. 31, 2021 | Jan. 31, 2020 | |||
Sub-total | $ 646,000 | $ 2,976,072 | ||
Debt Discount | (309,317) | (689,176) | ||
Total | $ 336,683 | 2,286,896 | ||
Debt Due On Nov 23, 2021 [Member] | ||||
Maturity date | Nov. 23, 2021 | |||
Interest rate | 12.00% | |||
Default interest rate | 16.00% | |||
Sub-total | $ 165,000 | |||
Debt Due On Nov 16, 2021 [Member] | ||||
Maturity date | Nov. 16, 2021 | |||
Interest rate | 12.00% | |||
Default interest rate | 16.00% | |||
Sub-total | $ 100,000 | |||
Debt Due On Oct. 12, 2021 [Member] | ||||
Maturity date | Oct. 12, 2021 | |||
Interest rate | [1] | 12.00% | ||
Default interest rate | [1] | 16.00% | ||
Sub-total | [1] | $ 230,000 | ||
Debt Due on Nov 4, 2013 [Member] | ||||
Maturity date | [2] | Nov. 4, 2013 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 12.00% | ||
Conversion price | $ 1,800,000 | |||
Sub-total | $ 100,000 | 100,000 | ||
Debt Due On Jan 31, 2014 [Member] | ||||
Maturity date | [2] | Jan. 31, 2014 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 18.00% | ||
Conversion price | $ 2,400,000 | |||
Sub-total | $ 16,000 | 16,000 | ||
Debt Due on Apr 24, 2020 [Member] | ||||
Maturity date | [2],[3],[4] | Apr. 24, 2020 | ||
Interest rate | [3] | 12.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3] | 69,730 | ||
Debt Due On July 31, 2013 [Member] | ||||
Maturity date | [2] | Jul. 31, 2013 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 12.00% | ||
Conversion price | $ 1,440,000 | |||
Sub-total | $ 5,000 | 5,000 | ||
Debt Due on Jan 31, 2014 [Member] | ||||
Maturity date | [2] | Jan. 31, 2014 | ||
Interest rate | 12.00% | |||
Default interest rate | [2] | 12.00% | ||
Conversion price | $ 2,400,000 | |||
Sub-total | $ 30,000 | 30,000 | ||
Debt Due On Dec 24, 2015 [Member] | ||||
Maturity date | [2],[5] | Dec. 24, 2015 | ||
Interest rate | [5] | 8.00% | ||
Default interest rate | [2],[5] | 24.00% | ||
Sub-total | [5] | 5,000 | ||
Debt Due On Feb 3, 2017 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Feb. 3, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 2,500 | ||
Debt Due On Mar 3, 2017 [Member] | ||||
Maturity date | [2],[3],[6] | Mar. 3, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[6] | 24.00% | ||
Sub-total | [3],[6] | |||
Debt Due On Mar 3, 2017 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Mar. 3, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 33,000 | ||
Debt Due On Mar 24, 2017 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Mar. 24, 2017 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 27,500 | ||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [2],[3],[4],[6],[7] | Apr. 24, 2020 | ||
Interest rate | [3],[6],[7] | 12.00% | ||
Default interest rate | [2],[3],[4],[6],[7] | 24.00% | ||
Sub-total | [3],[6],[7] | 517,787 | ||
Debt Due On July 8, 2015 [Member] | ||||
Maturity date | [2],[5] | Jul. 8, 2015 | ||
Interest rate | [5] | 8.00% | ||
Default interest rate | [2],[5] | 24.00% | ||
Sub-total | [5] | 5,500 | ||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [3],[6],[7],[8] | Apr. 24, 2020 | ||
Interest rate | [3],[6],[7] | 8.00% | ||
Default interest rate | [3],[6],[7],[8] | 24.00% | ||
Sub-total | [3],[6],[7] | 4,500 | ||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [8] | Apr. 24, 2020 | ||
Interest rate | 8.00% | |||
Default interest rate | [8] | 24.00% | ||
Sub-total | 23,297 | |||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [8] | Apr. 24, 2020 | ||
Interest rate | 8.00% | |||
Default interest rate | [8] | 24.00% | ||
Sub-total | 7,703 | |||
Debt Due On Apr 24, 2020 [Member] | ||||
Maturity date | [8] | Apr. 24, 2020 | ||
Interest rate | 8.00% | |||
Default interest rate | [8] | 24.00% | ||
Sub-total | 26,500 | |||
Debt Due On July 19, 2016 [Member] | ||||
Maturity date | [2],[5] | Jul. 19, 2016 | ||
Interest rate | 8.00% | |||
Default interest rate | [2],[5] | 24.00% | ||
Sub-total | 5,000 | |||
Debt Due On Mar 23, 2019 [Member] | ||||
Maturity date | [2],[3],[6],[7],[8] | Mar. 23, 2019 | ||
Interest rate | [3],[6],[7] | 15.00% | ||
Default interest rate | [2],[3],[6],[7],[8] | 24.00% | ||
Sub-total | [3],[6],[7] | 4,444 | ||
Debt Due On Feb 20, 2019 [Member] | ||||
Maturity date | [2],[8],[9] | Feb. 20, 2019 | ||
Interest rate | [9] | 10.00% | ||
Default interest rate | [2],[8],[9] | 10.00% | ||
Sub-total | [9] | 343,047 | ||
Debt Due On Jun 6, 2019 [Member] | ||||
Maturity date | [2],[8],[10] | Jun. 6, 2019 | ||
Interest rate | [10] | 12.00% | ||
Default interest rate | [2],[8],[10] | 18.00% | ||
Sub-total | [10] | 43,577 | ||
Debt Due On Oct 24, 2019 [Member] | ||||
Maturity date | [2],[3],[4] | Oct. 24, 2019 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3],[6] | 45,595 | ||
Debt Due On Nov 14, 2019 [Member] | ||||
Maturity date | [2],[3],[4] | Nov. 14, 2019 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3],[6] | 86,625 | ||
Debt Due On Dec 14, 2019 [Member] | ||||
Maturity date | [2],[3],[4],[6] | Dec. 14, 2019 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4],[6] | 24.00% | ||
Sub-total | [3],[6] | 143,000 | ||
Debt Due On Dec 28, 2019 [Member] | ||||
Maturity date | [2],[4],[6],[7],[11] | Dec. 28, 2019 | ||
Interest rate | [6],[7],[11] | 12.00% | ||
Default interest rate | [2],[4],[6],[7],[11] | 18.00% | ||
Sub-total | [6],[7],[11] | 133,333 | ||
Debt Due On Jan 9, 2020 [Member] | ||||
Maturity date | [2],[3],[4] | Jan. 9, 2020 | ||
Interest rate | [3],[6] | 8.00% | ||
Default interest rate | [2],[3],[4] | 24.00% | ||
Sub-total | [3],[6] | 68,750 | ||
Debt Due On March 1, 2020 [Member] | ||||
Maturity date | [2],[12],[13] | Mar. 1, 2020 | ||
Interest rate | [12] | 10.00% | ||
Default interest rate | [2],[12],[13] | 15.00% | ||
Sub-total | [12] | 40,939 | ||
Debt Due On March 14, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | Mar. 14, 2020 | ||
Interest rate | [6] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6] | 44,967 | [7] | |
Debt Due On April 3, 2020 [Member] | ||||
Maturity date | [2],[4] | Apr. 3, 2020 | ||
Interest rate | [6] | 8.00% | ||
Default interest rate | [2],[4] | 24.00% | ||
Sub-total | [6] | 172,148 | ||
Debt Due On April 12, 2020 [Member] | ||||
Maturity date | [2],[4],[14] | Apr. 12, 2020 | ||
Interest rate | 10.00% | |||
Default interest rate | [2],[4],[14] | 24.00% | ||
Sub-total | 185,130 | |||
Debt Due On May 13, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | May 13, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6],[7] | 55,000 | ||
Debt Due On May 14, 2020 [Member] | ||||
Maturity date | [2],[4],[6],[7] | May 14, 2020 | ||
Interest rate | [6],[7] | 8.00% | ||
Default interest rate | [2],[4],[6],[7] | 24.00% | ||
Sub-total | [6],[7] | 52,500 | ||
Debt Due On May 24, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | May 24, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6],[7] | 40,000 | ||
Debt Due On June 11, 2020 [Member] | ||||
Maturity date | [6],[7],[8] | Jun. 11, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [6],[7],[8] | 24.00% | ||
Sub-total | [6],[7] | 85,000 | ||
Debt Due On June 26, 2020 [Member] | ||||
Maturity date | [2],[4],[6],[7] | Jun. 26, 2020 | ||
Interest rate | [6],[7] | 15.00% | ||
Default interest rate | [2],[4],[6],[7] | 24.00% | ||
Sub-total | [6],[7] | 76,000 | ||
Debt Due On July 11, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Jul. 11, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 60,000 | ||
Debt Due On Aug 29, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Aug. 29, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 45,000 | ||
Debt Due On Sep 16, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Sep. 16, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 34,000 | ||
Debt Due On Sep 27, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Sep. 27, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 34,000 | ||
Debt Due On Oct 24, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Oct. 24, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 122,000 | ||
Debt Due On Nov 7, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Nov. 7, 2020 | ||
Interest rate | [6],[15] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6],[15] | 42,000 | ||
Debt Due On Nov 22, 2020 [Member] | ||||
Maturity date | [4],[6],[7] | Nov. 22, 2020 | ||
Interest rate | [6],[15] | 8.00% | ||
Default interest rate | [4],[6],[7] | 24.00% | ||
Sub-total | [6],[15] | 55,000 | [7] | |
Debt Due On Dec 10, 2020 [Member] | ||||
Maturity date | [6],[8],[15] | Dec. 10, 2020 | ||
Interest rate | [6] | 15.00% | ||
Default interest rate | [6],[8],[15] | 24.00% | ||
Sub-total | [6] | 55,000 | ||
Debt Due On Dec 23, 2020 [Member] | ||||
Maturity date | [3],[4],[6],[7] | Dec. 23, 2020 | ||
Interest rate | [6],[7] | 8.00% | ||
Default interest rate | [3],[4],[6],[7] | 24.00% | ||
Sub-total | [3],[6],[7] | $ 30,000 | [15] | |
[1] | closing price on the day preceding the conversion date. | |||
[2] | In default | |||
[3] | In the event the Company experiences a DTC "Chill" on its shares, the conversion price shall be decreased to 40% instead of 50% while that "Chill" is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. | |||
[4] | On August 28, 2020 the Company exchanged convertible notes and accrued interest for a $ 1,200,000 promissory note with a 2 year maturity bearing interest at 12%, 950,000 warrants with a 3 year maturity and an exercise price of $0.40 and 150 Class C preferred shares (transaction described further below). | |||
[5] | In the event the Company experiences a DTC "Chill" on its shares, the conversion price shall be decreased to 42% instead of 52% while that "Chill" is in effect. | |||
[6] | If the Company becomes delinquent or continues its delinquency in its periodic filings with the SEC after the 6-months anniversary of the note, then the holder is entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. | |||
[7] | If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10% | |||
[8] | On February 26, 2020 the company exchanged convertible and short term notes and accrued interest for 250 Class C shares (transaction described further below). | |||
[9] | If the Company fails to maintain its status as "DTC Eligible'' for any reason, or, if the effective Conversion Price is less than $0.01 at any time, the Principal Amount of the Note shall increase by ten thousand dollars ($10,000). In addition, the Conversion price shall be permanently redefined to equal the lesser of (a) $0.001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. | |||
[10] | If at any time while this Note is outstanding, an event of default occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). If at any time while this Note is outstanding, the Borrower's Common Stock are not deliverable via DWAC, an additional 10% discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding. | |||
[11] | If the Company fails to maintain its status as "DTC Eligible" for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder's and Company's expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. If at any time while this Note is outstanding, an Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). These above contingencies have not occurred | |||
[12] | In the event that shares of the Borrower's Common Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional ten percent (10%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 55% assuming no other adjustments are triggered hereunder). Additionally, if the Borrower fails to comply with the reporting requirements of the Exchange Act (including but not limited to becoming late or delinquent in its filings, even if the Borrower subsequently cures such delinquency) at any time while after the Issue Date, and/or the Borrower shall cease to be subject to the reporting requirements of the exchange Act, an additional fifteen percent (15%) discount shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 60% assuming no other adjustments are triggered hereunder). | |||
[13] | On August 25,2020 the Company settled a convertible note with principal of $ 40,938 for a $14,329 cash payment. On September 14, 2020 the Company settled $20,111 in accrued interest and default interest related to this note for a cash payment of $52,446 (transaction described further below). | |||
[14] | If the Borrower's Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events), then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. | |||
[15] | If the Company fails to maintain the share reserve at the 3x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. |
SHORT-TERM CONVERTIBLE DEBT (_2
SHORT-TERM CONVERTIBLE DEBT (Details Narrative) - USD ($) | Nov. 23, 2020 | Nov. 16, 2020 | Oct. 12, 2020 | Aug. 28, 2020 | Aug. 28, 2020 | Aug. 25, 2020 | Aug. 25, 2020 | Sep. 14, 2020 | Feb. 26, 2020 | Sep. 01, 2020 | Jan. 31, 2021 | Jan. 31, 2020 |
Accrued interest payable | $ 20,111 | $ 240,713 | $ 703,270 | |||||||||
Debt cash payment | $ 52,446 | |||||||||||
Debt loan penalties | 3,394 | 482,709 | ||||||||||
Amortization of debt discount | 20,000 | |||||||||||
Amortization expense | $ 335,004 | 800,159 | ||||||||||
Short term debt, description | If the Company fails to maintain its status as “DTC Eligible” for any reason, or, if the effective Conversion Price as calculated in Section 4(a) is less than $0.0001 at any time (regardless of whether or not a Conversion Notice has been submitted to the Company), the Principal Amount of the Note shall increase by ten thousand dollars ($10,000) (under Holder’s and Company’s expectation that any Principal Amount increase will tack back to the Issuance Date). In addition, the Conversion Price shall be permanently redefined to equal the lesser of (a) $0.00001 or (b) 50% of the lowest traded price during the twenty five (25) consecutive Trading Days immediately preceding the applicable Conversion Date on which the Holder elects to convert all or part of this Note, subject to adjustment as provided in this Note. | |||||||||||
Description of short term debt default | Event of Default (as defined herein) occurs, then an additional discount of 15% shall be factored into the Variable Conversion Price until this Note is no longer outstanding (resulting in a discount rate of 65% assuming no other adjustments are triggered hereunder). | |||||||||||
Convertible notes payable | $ 24,803 | $ 752,409 | ||||||||||
Number of shares issued (in shares) | 45,000 | |||||||||||
Aggregate debt in default | $ 151,000 | |||||||||||
Number of warrant issued | 950,000 | |||||||||||
Warrant [Member] | ||||||||||||
Number of shares converted (in shares) | 950,000 | |||||||||||
Warrant maturity date | 3 years | 3 years | ||||||||||
Excercised price of warrant | $ 0.40 | $ 0.40 | ||||||||||
Preferred Series C [Member] | ||||||||||||
Convertible debt, description | On February 26, 2020 a lender exchanged $1,070,035 in convertible notes and $175,421 in accrued interest (as denoted by X in the above schedule) as well as $122,000 in short-term debt and $22,076 in accrued interest , and the associated derivative liability of $792,218 all totaling $2,181,750 in exchange for 250 Class C shares having a fair-value of $9,105. A gain of $1,745,994 was recorded. | |||||||||||
Number of shares converted (in shares) | 250 | |||||||||||
Number of shares issued (in shares) | 100 | |||||||||||
Class C Preferred Shares [Member] | ||||||||||||
Number of shares converted (in shares) | 150 | |||||||||||
Promissory Convertible Notes [Member] | ||||||||||||
Principal amount | $ 40,938 | $ 40,938 | ||||||||||
Maturity term | 2 years | |||||||||||
Debt cash payment | $ 14,329 | |||||||||||
Default interest rate | 12.00% | |||||||||||
Convertible debt, description | On November 23, 2020 the Company entered into a new convertible note for $165,000 with a one year maturity, interest rate of 12%, the Company received $139,000 in cash proceeds, recorded an original issue discount of $15,000, a derivative discount of $82,144, and transaction fees of $11,000. The first year’s interest of $19,800 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $43,750 through the issuance of 17,500 shares. The Company recognized $13,618 as debt discount with a corresponding adjustment to paid-in capital. | On November 16, 2020 the Company entered into a new convertible note for $100,000 with a one year maturity, interest rate of 12%, the Company received $83,500 in cash proceeds, recorded an original issue discount of $12,000, a derivative discount of $49,730, and transaction fees of $4,500. The first year’s interest of $12,000 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $ 20,001 through the issuance of 6,667 shares. The Company recognized $6,526 as debt discount with a corresponding adjustment to paid-in capital. | On October 12, 2020 the Company entered into a new convertible note for $250,000 with a one year maturity, interest rate of 12%, the Company received $210,250 in cash proceeds, recorded an original issue discount of $25,000, a derivative discount of $132,613, and transaction fees of $14,750. The first year’s interest of $28,000 is guaranteed and has been accrued. As part of the loan the Company paid a commitment fee of $ 50,000 through the issuance of 19,685 shares. | |||||||||
Number of shares converted (in shares) | 1,200,000 | |||||||||||
Promissory Convertible Notes [Member] | Lender [Member] | ||||||||||||
Convertible debt, description | On August 28, 2020 a lender exchanged $1,692,690 in convertible notes and $571,454 in accrued interest (as denoted by Y in the above schedule) as well as the associated derivative liability of $2,635,974 all totaling $4,900,118 in exchange for a promissory note of $1,200,000 bearing interest at 12% and maturing August 28, 2022 , 950,000 Warrants with a 3 year maturity and an exercise price of $0.40 having a fair value of $351,500 and 150 Class C shares having a fair-value of $20,290. A gain of $3,278,327 was recorded. | On August 25, 2020 a lender exchanged $40,939 in a convertible note (as denoted by Z in the above schedule), and the associated derivative liability of $31,320 all totaling $72,259 in exchange for a cash payment of $14,329. On September 14, 2020 the same lender exchanged $20,111 in accrued interest and default interest (from that note) for a cash payment of $52,446. A total gain of $25,595 on the two transactions was recorded. | ||||||||||
Common Stock [Member] | ||||||||||||
Principal amount | $ 24,803 | |||||||||||
Accrued interest payable | $ 19,933 | |||||||||||
Number of shares converted (in shares) | 624,847 | |||||||||||
Number of shares issued (in shares) | 175,000 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Balance, at begnning | $ 2,611,125 | |
Changes due to Conversion of Notes Payable | 20,185 | $ 755,253 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Balance, at begnning | 2,611,125 | 2,041,260 |
Changes due to Issuance of New Convertible Notes | 264,487 | 1,212,189 |
Reduction of derivative due to extinguishment or repayment | (3,470,300) | (67,623) |
Changes due to Conversion of Notes Payable | (20,185) | (755,253) |
Mark to Market Change in Derivatives | 828,614 | 180,552 |
Balance, at ending | $ 213,741 | $ 2,611,125 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details 1) - Significant Unobservable Inputs (Level 3) [Member] | Jan. 31, 2021Number |
Strike Price [Member] | Maximum [Member] | |
Derivative liability, measurement input | 1.75 |
Strike Price [Member] | Minimum [Member] | |
Derivative liability, measurement input | 4.30 |
Contractual Term (Years) [Member] | Maximum [Member] | |
Contractual term | 2 months 26 days |
Contractual Term (Years) [Member] | Minimum [Member] | |
Contractual term | 9 months 22 days |
Volatility [Member] | Maximum [Member] | |
Derivative liability, measurement input | 544 |
Volatility [Member] | Minimum [Member] | |
Derivative liability, measurement input | 184.80 |
High Yield Cash Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 24.90 |
High Yield Cash Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 21.09 |
Underlying Fair Market Value [Member] | |
Derivative liability, measurement input | 3.62 |
Risk-Free Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 0.13 |
Risk-Free Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 0.05 |
Dividend Yield [Member] | |
Derivative liability, measurement input | 0 |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liabilities | $ 213,741 | $ 2,611,125 |
Gain loss fair value of derivative liabilities | $ 828,614 | $ 180,552 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) | 12 Months Ended |
Jan. 31, 2021$ / shares | |
Dividend yield | 0.00% |
Minimum [Member] | |
Expected volatility | 415.50% |
Exercise price | $ 0.40 |
Stock price | $ 0.37 |
Expected life | 3 years |
Risk-free interest rate | 0.19% |
Maximum [Member] | |
Expected volatility | 506.80% |
Exercise price | $ 4.50 |
Stock price | $ 2.70 |
Expected life | 5 years |
Risk-free interest rate | 0.39% |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) | 12 Months Ended |
Jan. 31, 2021$ / sharesshares | |
# Warrants | 950,000 |
Lender One [Member] | |
Issued To | Lender |
# Warrants | 950,000 |
Dated | Aug. 28, 2020 |
Expire | Aug. 28, 2023 |
Strike Price | $ / shares | $ 0.40 |
Expired | N |
Exercised | N |
Broker One [Member] | |
Issued To | Broker |
# Warrants | 2,500 |
Dated | Oct. 11, 2020 |
Expire | Oct. 11, 2025 |
Strike Price | $ / shares | $ 4.50 |
Expired | N |
Exercised | N |
Broker Two [Member] | |
Issued To | Broker |
# Warrants | 3,000 |
Dated | Nov. 25, 2020 |
Expire | Nov. 25, 2025 |
Strike Price | $ / shares | $ 3 |
Expired | N |
Exercised | N |
STOCKHOLDERS' DEFICIT (Detail_2
STOCKHOLDERS' DEFICIT (Details 2) - $ / shares | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Warrant [Member] | ||
Number of outstanding | ||
Beginning balance | 1.4 | 1.4 |
Granted | 955,500 | |
Exercised | ||
Forfeited and canceled | (1.4) | |
Ending balance | 955,500 | 1.4 |
Weighted Average Exercise Price | ||
Beginning balance | $ 225,520 | $ 225,520 |
Granted | 0.42 | |
Exercised | ||
Forfeited and canceled | (225,220) | |
Ending balance | $ 0.42 | $ 225,520 |
Employee Stock Option [Member] | ||
Number of outstanding | ||
Beginning balance | ||
Granted | ||
Exercised | ||
Forfeited and canceled | ||
Ending balance | ||
Weighted Average Exercise Price | ||
Beginning balance | ||
Granted | ||
Exercised | ||
Forfeited and canceled | ||
Ending balance |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2020 | Feb. 25, 2020 | Mar. 29, 2019 | Sep. 01, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | Sep. 08, 2020 | Aug. 28, 2020 | Jun. 04, 2020 | Feb. 26, 2020 | |
Preferred stock, shares authorized | 20,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | |||||||||
Description of voting rights | Company who controls approximately 60% of all voting shares | |||||||||
Common stock, par value | $ 0.000001 | $ 0.000001 | ||||||||
Common stock, shares issued | 1,427,163 | 538,464 | ||||||||
Common stock, shares outstanding | 1,427,163 | 538,464 | ||||||||
Common stock, shares authorized | 15,000,000 | 15,000,000 | 15,000,000 | 20,000,000,000 | ||||||
Number of warrant issued | 950,000 | |||||||||
Option and warrant expense | $ 351,500 | $ 0 | ||||||||
Conversion of notes payable | 24,803 | 752,409 | ||||||||
Accrued Interest to common tock | $ 19,933 | $ 240,035 | ||||||||
Conversion of common stock | 624,847 | 536,613 | ||||||||
Conversion fees | $ 27,850 | |||||||||
Derivative liabilty | $ 20,185 | 755,253 | ||||||||
Description of reverse stock split | 4000:1 reverse stock split | 6000:1 reverse stock | ||||||||
Additional number of common stock issued | 1,699 | 71,200 | ||||||||
Number of shares issued | 45,000 | |||||||||
Additional number of shares issued | 1,700 | |||||||||
Value of shares issued | $ 18,900 | |||||||||
General and administrative expenses | $ 828,522 | $ 915,507 | ||||||||
Preferred Series C [Member] | ||||||||||
Preferred stock, shares authorized | 7,250 | 7,250 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 100 | 7,250 | 6,750 | 150 | ||||||
Preferred stock, shares outstanding | 7,250 | 6,750 | ||||||||
Conversion price | $ 2.63 | $ 2.63 | ||||||||
Accrued expenses - related party | $ 11,177 | |||||||||
Number of shares issued | 100 | |||||||||
Value of shares issued | $ 11,177 | |||||||||
Preferred Series B [Member] | ||||||||||
Preferred stock, shares authorized | 20,000 | 20,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 20,000 | 20,000 | ||||||||
Preferred stock, shares outstanding | 20,000 | 20,000 | ||||||||
Preferred stock voting rights, description | The Series B Preferred Stock have voting rights equal to 66.7% of the total voting rights at any time. | |||||||||
Preferred Series A [Member] | ||||||||||
Preferred stock, shares authorized | 330,000 | 330,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||
Series D Preferred Stock [Member] | ||||||||||
Preferred stock, shares authorized | 870 | 870 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares issued | 870 | 870 | ||||||||
Preferred stock, shares outstanding | 870 | 870 | ||||||||
Optional redemption per share | $ 1,000 | |||||||||
Convertible Notes [Member] | ||||||||||
Number of shares issued | 19,685 | |||||||||
Value of shares issued | $ 50,000 | |||||||||
Demand Loan [Member] | Preferred Series C [Member] | ||||||||||
Preferred stock, shares issued | 250 | |||||||||
Chief Executive Officer [Member] | ||||||||||
Number of shares issued | 45,000 | |||||||||
Value of shares issued | $ 18,900 | |||||||||
Common Stock [Member] | ||||||||||
Number of shares issued | 175,000 | |||||||||
Value of shares issued | $ 350,000 | |||||||||
Net proceeds of amount | 250,000 | |||||||||
Remaining share proceeds receivable | $ 100,000 | |||||||||
Lenders for fees (in shares) | 43,852 | |||||||||
Charge to debt discount | $ 35,060 | |||||||||
Warrant [Member] | ||||||||||
Value of shares issued | 5,500 | |||||||||
General and administrative expenses | $ 13,470 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Total current | ||
Total deferred | ||
Income tax expense (benefit) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | $ 255 | |
Permanent timing differences | (330) | |
Effect of change in US Tax rates for deferral items | ||
Other | ||
Change in valuation allowance | 75 | |
Income tax expense (benefit) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Jan. 31, 2021 | Jan. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 939,000 | $ 874,000 |
Total deferred tax assets | 939,000 | 874,000 |
Deferred tax liabilities: | ||
Depreciation | 10,000 | |
Deferred revenue | ||
Total deferred tax liabilities | 10,000 | |
Net deferred tax assets: | ||
Less valuation allowance | (939,000) | (864,000) |
Net deferred tax assets (liabilities) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
cumulative net operating loss carryforward | $ 2,375,000 | $ 2,375,000 |
Corporate federal tax rate | 21.00% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Jan. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
January 31, 2022 | $ 121,917 |
January 31, 2023 | 116,879 |
January 31, 2023 | 62,003 |
January 31, 2025 | 30,003 |
January 31, 2026 | 30,003 |
After January 31, 2026 | 25,004 |
Total lease payments | 385,809 |
Less: Interest | (51,474) |
Present value of lease liabilities | $ 334,335 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrtive) - USD ($) | Oct. 23, 2020 | Jul. 01, 2018 | Jun. 01, 2015 | Oct. 30, 2019 | Sep. 30, 2019 | Aug. 30, 2016 | Jan. 31, 2021 | Jan. 31, 2020 |
Rent expense | $ 15,480 | $ 164,095 | $ 150,668 | |||||
Operating lease description | The Company eliminated the operating lease asset and operating lease liability at termination which was $45,032 | |||||||
Litigation description | There is pending litigation initiated by the Company around the validity of a $100,000 note which the Company signed based upon representations of funding from the maker which were never received. The Company initiated litigation to dispute the note and the 1,692 shares that have been issued. There was no consideration for the issuance of the shares and the shares have been accounted for as if they were returned and cancelled although they have not been returned. | |||||||
Leases, description | The Company and landlord terminated this lease effective February 29, 2020. | A three year term commencing September 1, 2019 to August 31, 2022 and a one year renewal option. | 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. | |||||
Warehouse Facility Three [Member] | ||||||||
Operating leases, rent expense | $ 6,400 | |||||||
Operating lease description | The Company entered into a 60-month lease agreement with its minority shareholder for its 8,800 sf warehouse facility with a minimum base rent of $6,400 per month. | |||||||
Warehouse Facility One [Member] | ||||||||
Operating leases, rent expense | $ 2,720 | |||||||
Lease maintenance expense | $ 43,200 | $ 43,200 | ||||||
Operating lease description | The Company entered into a 36-month lease agreement for its 2,590 sf office facility with a minimum base rent of $2,720 per month. | |||||||
Vehicles [Member] | ||||||||
Operating leases, rent expense | $ 9,067 | |||||||
Operating lease description | The Company entered into an operating lease for a vehicle with an annual cost of $9,067 and a three year term. The company paid initial fees of $17,744 and will pay fees on lease termination of $395. On a straight-line basis these costs amount to $1,259 per month. | |||||||
Premises [Member] | ||||||||
Operating leases, rent expense | $ 15,480 | |||||||
Operating lease description | The Company entered into an operating lease for premises with an annual rent of $15,480, a three year term commencing September 1, 2019 to August 31, 2022 and a one year renewal option. | |||||||
Warehouse Facility Two [Member] | ||||||||
Operating leases, rent expense | $ 2,132 | |||||||
Operating lease description | The Company entered into a 60-month lease agreement for its 3,554 sf warehouse facility starting in December 2016 with a minimum base rent of $2,132 and estimated monthly CAM charges of $1,017 per month. |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Numerator: | ||
Net income (loss) available to common shareholders | $ 1,187,176 | $ (3,879,846) |
Denominator: | ||
Weighted average shares - basic | 1,084,324 | 86,542 |
Net income (loss) per share - basic | $ 1.09 | $ (44.83) |
Effect of common stock equivalents | ||
Add: interest expense on convertible debt | $ 259,086 | $ 454,765 |
Add: amortization of debt discount | 335,004 | 800,159 |
Less: gain on settlement of debt on convertible notes | (4,835,429) | (67,623) |
Add (Less): loss (gain) on change of derivative liabilities | 845,586 | 180,552 |
Net income (loss) adjusted for common stock equivalents | (2,217,343) | (2,512,003) |
Dilutive effect of common stock equivalents: | ||
Convertible notes and accrued interest | $ 404,173 | |
Denominator: | ||
Weighted average shares - diluted | 6,070,030 | 86,542 |
Net income (loss) per share - diluted | $ (0.37) | $ (44.83) |
Warrant [Member] | ||
Dilutive effect of common stock equivalents: | ||
Convertible notes and accrued interest | $ 950,000 | |
Convertible Class C Preferred Shares [Member] | ||
Dilutive effect of common stock equivalents: | ||
Convertible notes and accrued interest | $ 3,631,533 |
EARNINGS (LOSS) PER SHARE (De_2
EARNINGS (LOSS) PER SHARE (Details 1) - shares | 12 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Anti-dilutive shares | 17,767,643 | |
Warrant [Member] | ||
Anti-dilutive shares | 1 | |
Convertible Class C Preferred Shares [Member] | ||
Anti-dilutive shares | 1,411,692 | |
Convertible Notes And Accrued Interest [Member] | ||
Anti-dilutive shares | 16,355,950 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 01, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | |
Accrued expenses related party | $ 106,173 | $ 155,750 | |
Number of shares issued | 45,000 | ||
Value of shares issued | $ 18,900 | ||
Preferred Series C [Member] | |||
Number of shares issued | 100 | ||
Value of shares issued | $ 11,177 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 30, 2021 | Feb. 28, 2021 | May 31, 2021 | Jan. 31, 2021 | Jan. 31, 2020 |
Number of shares issued | 45,000 | ||||
Value of shares issued | $ 18,900 | ||||
Gross proceeds from issuance of shares | $ 250,000 | ||||
Subsequent Event [Member] | |||||
Accounts payable | $ 950,151 | ||||
Settlement amount of accounts payable | 96,700 | ||||
Investor relations services fees | $ 250,000 | ||||
Gain on settlement | $ 853,451 | ||||
Number of shares issued | 993,750 | ||||
Offering price (in dollars per share) | $ 2 | ||||
Gross proceeds from issuance of shares | $ 1,987,500 | ||||
Number of shares issued for marketing services | 50,000 | ||||
Value of shares issued for marketing services | $ 114,000 |