Cover
Cover - shares | 3 Months Ended | |
Apr. 30, 2021 | Jun. 14, 2021 | |
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-Q | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 333-152444 | |
Document Period End Date | Apr. 30, 2021 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,584,413 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets Unaudited - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | |
Current Assets | |||
Cash and Cash Equivalents | $ 1,342,321 | $ 277,664 | [1] |
Share Subscriptions Receivable | 94,817 | 100,000 | [1] |
Inventory | 307,526 | 323,411 | [1] |
Prepaid Expenses | 11,609 | 11,859 | [1] |
Other Current Assets | 4,827 | 2,149 | [1] |
Total Current Assets | 1,761,100 | 715,083 | [1] |
Operating Lease Assets | 319,698 | 344,413 | [1] |
Property and Equipment, net of accumulated depreciation of $99,558, and $88,823 | 255,619 | 80,027 | [1] |
Total Assets | 2,336,417 | 1,139,523 | [1] |
Current Liabilities | |||
Accounts Payable | 865,586 | 869,765 | [1] |
Accrued Expenses | 560,934 | 1,382,839 | [1] |
Accrued Expenses - Related Party | 81,173 | 106,173 | [1] |
Customer Deposits | 268,932 | 188,385 | [1] |
Deferred Revenue | 981,830 | 687,766 | [1] |
Short-Term Debt | 446,404 | 716,142 | [1] |
Current Operating Lease Liability | 99,937 | 90,286 | [1] |
Short-Term Convertible Debt, net of debt discount of $180,789 and $309,317 | 340,711 | 336,683 | [1] |
Derivative Liabilities | 148,957 | 213,741 | [1] |
PPP Loan-current portion | 79,362 | 43,294 | [1] |
Current Portion - Long-Term Debt | 588,067 | 424,064 | [1] |
Total Current Liabilities | 4,461,893 | 5,059,138 | [1] |
Non-Current Lease Liability | 211,195 | 244,049 | [1] |
PPP Loan -long term portion | 130,085 | 166,153 | [1] |
Long-Term Debt | 1,018,990 | 890,373 | [1] |
Total Liabilities | 5,822,163 | 6,359,713 | [1] |
Commitments and Contingencies | [1] | ||
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 | [1] |
Stockholders' Deficit | |||
Common Stock, $0.000001 par value, 15,000,000 shares authorized, 2,574,413 and 1,427,163 shares issued, issuable and outstanding | 3 | 1 | [1] |
Additional Paid In Capital | 16,593,758 | 14,291,759 | [1] |
Accumulated Deficit | (20,949,534) | (20,381,977) | [1] |
Total Stockholders' Deficit | (4,355,746) | (6,090,190) | [1] |
Total Liabilities and Stockholders' Deficit | 2,336,417 | 1,139,523 | [1] |
Preferred Series A [Member] | |||
Stockholders' Deficit | |||
Preferred Stock | [1] | ||
Total Stockholders' Deficit | |||
Preferred Series B [Member] | |||
Stockholders' Deficit | |||
Preferred Stock | 20 | 20 | [1] |
Total Stockholders' Deficit | 20 | 20 | |
Preferred Series C [Member] | |||
Stockholders' Deficit | |||
Preferred Stock | 7 | 7 | [1] |
Total Stockholders' Deficit | $ 7 | $ 7 | |
[1] | Derived from audited information |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets Unaudited (Parenthetical) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 |
Net of accumulated depreciation | $ 99,558 | $ 88,823 |
Net of debt discount | $ 180,789 | $ 309,317 |
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 | 2,574,413 | 1,427,163 |
Common Stock, shares outstanding | 2,574,413 | 1,427,163 |
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 |
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 | 7,250 |
Preferred Stock, shares outstanding | 7,250 | 7,250 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 30, 2021 | Apr. 30, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 3,728,784 | $ 2,000,071 |
Cost of Revenue | 2,766,578 | 1,428,304 |
Gross Profit | 962,206 | 571,767 |
Operating Expenses: | ||
Depreciation | 10,735 | 6,647 |
Postage, Shipping and Freight | 193,187 | 113,138 |
Marketing and Advertising | 608,034 | 18,068 |
E Commerce Services, Commissions and Fees | 416,127 | 166,419 |
Operating lease cost and rent | 30,479 | 34,079 |
Personnel Costs | 297,493 | 266,735 |
General and Administrative | 648,509 | 175,642 |
Total Operating Expenses | 2,204,564 | 780,728 |
Net Operating Loss | (1,242,358) | (208,961) |
Other Income (Expense) | ||
Gain (Loss) on Derivatives | 4,187 | (74,780) |
Gain on Settlement of Debt | 914,049 | 2,172,646 |
Amortization of Debt Discount | (128,528) | (578,913) |
Interest Expense | (114,907) | (123,094) |
Total Other Income (Expense) | 674,801 | 1,395,859 |
Net Income (Loss) | $ (567,557) | $ 1,186,898 |
Basic Average Shares Outstanding (in shares) | 1,940,098 | 551,590 |
Basic Income (Loss) per Share (in dollars per share) | $ (0.29) | $ 2.15 |
Diluted Weighted Average Shares Outstanding (in shares) | 1,940,098 | 88,598,209 |
Diluted Income (Loss) per Share (in dollars per share) | $ (0.29) | $ 0.01 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Preferred Series A [Member] | Preferred Series B [Member] | Preferred Series C [Member] | Common Stock [Member] | Paid in Capital [Member] | Retained Earnings [Member] | Total | |
Balance at beginning at Jan. 31, 2020 | $ 20 | $ 7 | $ 1 | $ 13,449,336 | $ (21,569,153) | $ (8,119,789) | ||
Balance at beginning (in shares) at Jan. 31, 2020 | 20,000 | 6,750 | 538,464 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Conversion of Notes Payable to Common Stock | 3,399 | 3,399 | ||||||
Conversion of Notes Payable to Common Stock (in shares) | 82,361 | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of notes | 8,104 | 8,104 | ||||||
Exchange of Debt | 9,105 | 9,105 | ||||||
Exchange of Debt (in shares) | 250 | |||||||
Net Income (Loss) | 1,186,898 | 1,186,898 | ||||||
Balance at ending at Apr. 30, 2020 | $ 20 | $ 7 | $ 1 | 13,469,944 | (20,382,255) | (6,912,283) | ||
Balance at ending (in shares) at Apr. 30, 2020 | 20,000 | 7,000 | 620,825 | |||||
Balance at beginning at Jan. 31, 2021 | $ 20 | $ 7 | $ 1 | 14,291,759 | (20,381,977) | (6,090,190) | [1] | |
Balance at beginning (in shares) at Jan. 31, 2021 | 20,000 | 7,250 | 1,427,163 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common Stock Issued as Payment for Fees | 107,500 | 107,500 | ||||||
Common Stock Issued as Payment for Fees (in shares) | 50,000 | |||||||
Issuance of Common Stock as Part of REG A | $ 1 | 2,194,499 | 2,194,500 | |||||
Issuance of Common Stock as Part of REG A (in shares) | 1,097,250 | |||||||
Rounding | $ 1 | 1 | ||||||
Net Income (Loss) | (567,557) | (567,557) | ||||||
Balance at ending at Apr. 30, 2021 | $ 20 | $ 7 | $ 3 | $ 16,593,758 | $ (20,949,534) | $ (4,355,746) | ||
Balance at ending (in shares) at Apr. 30, 2021 | 20,000 | 7,250 | 2,574,413 | |||||
[1] | Derived from audited information |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | ||
Apr. 30, 2021 | Apr. 30, 2020 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net Income (Loss) | $ (567,557) | $ 1,186,898 | |
Adjustments to reconcile net loss to cash used by operating activities: | |||
Depreciation | 10,735 | 6,647 | |
(Gain) loss in Fair Value on Derivative Liabilities | (4,187) | 74,780 | |
Amortization of Debt Discount | 128,528 | 578,913 | |
Loan Penalties Capitalized to Loan and Accrued Interest | 28,000 | ||
Stock Based Payment of Consulting Fees | 107,500 | ||
Gain on Settlement of Debt | (914,049) | (2,172,646) | |
Change in Operating Assets and Liabilities: | |||
Decrease (Increase) in Inventory | 15,886 | (35,451) | |
Decrease in Prepaid Rent and Expenses | 1,762 | 3,156 | |
(increase) Decrease in Other Current Assets | (2,677) | (21,721) | |
Increase (Decrease) in Accounts Payable | (2,558) | 175,430 | |
Increase in Accrued Expenses | 28,548 | 151,078 | |
Decrease in Accrued Expenses -Related Party | (25,000) | ||
Increase in Customer Deposits | 80,547 | ||
Increase in Deferred Revenue | 294,064 | ||
CASH FLOWS (USED IN) OPERATING ACTIVITIES | (820,458) | (52,916) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of Property and Equipment | (35,000) | ||
CASH FLOWS (USED IN) INVESTING ACTIVITIES | (35,000) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from Issuance of Common Shares | 2,099,683 | ||
Proceeds from Share Subscriptions Receivable | 100,000 | ||
Proceeds from Short Term Debt | 205,000 | ||
Payments on Short Term Debt | (128,075) | (124,716) | |
Payments on Long Term Debt | (1,993) | (1,249) | |
Payments on Convertible Notes Payable | (149,500) | ||
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 1,920,115 | 79,035 | |
NET INCREASE IN CASH | 1,064,657 | 26,119 | |
CASH AT BEGINNING OF PERIOD | 277,664 | [1] | 162,124 |
CASH AT END OF PERIOD | 1,342,321 | 188,243 | |
Supplemental Disclosure of Cash Flows Information: | |||
Cash Paid for Interest | 42,949 | 13,210 | |
Convertible Notes Interest and Derivatives Converted to Common Stock | 11,503 | ||
Short Term Debt and Interest Extinguished Through Issuance of Series C Preferred Stock | 144,076 | ||
Convertible Notes and Interest Extinguished Through Issuance of Series C Preferred Stock | 1,245,456 | ||
Issuance of Common Shares for Share Subscription Receivable | 94,817 | ||
Loans to acquire Fixed Assets | $ 151,327 | ||
[1] | Derived from audited information |
NATURE OF BUSINESS AND SIGNIFIC
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Apr. 30, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES 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 4LESS Group, Inc. is now a holding company operating through 4LESS and offers products including exhaust systems, suspension systems, wheels, tires, stereo systems, truck bed covers, and shocks. On December 30, 2019 4LESS changed its name to Auto Parts 4Less, Inc. Significant Accounting Policies: The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these condensed financial statements. Basis of Presentation: The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, 2021 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May 14, 2021. Principles of Consolidation: The condensed financial statements include the accounts of The 4LESS Group, Inc. as well as The Auto Parts 4Less, Inc., and JBJ Wholesale LLC. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. Use of Estimates: In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determine whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. The most significant estimates included in these consolidated financial statements are those associated with the assumptions used to value derivative liabilities. Reclassifications Certain amounts in the Company’s condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. Cash and Cash Equivalents: The Company considers all highly liquid instruments with a maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying amount of cash and cash equivalents approximates fair market value. Inventory Valuation Inventories are stated at the lower of cost or net realizable value. Inventories are valued on a first-in, first-out (FIFO) basis. Inventory is comprised of finished goods. Concentrations Cost of Goods Sold For the three months ended April 30, 2021 the Company purchased approximately 54% of its inventory and items available for sale from third parties from three vendors. As of April 30, 2021, the net amount due to the vendors included in accounts payable was $462,991. For the three months ended April 30, 2020, the Company purchased from three vendors approximately 53% of its inventory and items available for sale from third parties. As of April 30, 2020, the net amount due to these vendors included in accounts payable was $434,528. The Company believes there are numerous other suppliers that could be substituted should a 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, 2022, 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 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 April 30, 2021: April 30, 2021 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 148,957 $ — $ — $ 148,957 Totals $ 148,957 $ — $ — $ 148,957 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 April 30, 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 three months ended April 30, 2021 and 2020: Change 2021 2020 $ % Proprietary website revenue $ 2,123,101 1,109,106 $ 1,013,995 91% Third party website revenue 1,605,683 890,965 714,718 80% Total Revenue $ 3,728,784 $ 2,000,071 $ 1,728,713 86% The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and obtained the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product. Shipping and handling amounts paid by customers are primarily for online orders, and are included in revenue. Sales tax and other similar taxes are excluded from revenue. Stock-Based Compensation: The Company accounts for stock options at fair value. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. Earnings (Loss) Per Common Share: Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS give effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used to determine the number of shares assumed to be purchased from the exercise of stock options and/or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Basic loss per common share is computed based on the weighted average number of shares outstanding during the period. Diluted loss per share is computed in a manner similar to the basic loss per share, except the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of convertible debt and other such convertible instruments. Diluted loss per share contemplates a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. Recently Issued Accounting Standards: In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) which simplifies goodwill impairment testing by requiring that such periodic testing be performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The policy is effective for fiscal years, including interim periods, beginning after December 15, 2019. We adopted on February 1, 2020 and the adoption had no impact. Fair Value Measurement In 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 | 3 Months Ended |
Apr. 30, 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 $20,949,534 as of April 30, 2021 and has a working capital deficit at April 30, 2021 of $2,700,793. As of April 30, 2021, the Company only had cash and cash equivalents of $1,342,321 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 this 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 (a) grow the business through building up brand awareness and developing and launching a potentially much larger auto parts e-commerce web site, autoparts4less.com while (b) continuing 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 | 3 Months Ended |
Apr. 30, 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 April 30, 2021 and January 31, 2021: April 30, 2021 January 31, 2021 Office furniture, fixtures and equipment $ 85,413 $ 85,413 Shop equipment 43,004 43,004 Vehicles 226,760 40,433 Sub-total 355,177 168,850 Less: Accumulated depreciation (99,558 ) (88,823 ) Total Property $ 255,619 $ 80,027 Additions to fixed assets for the three months ended April 30, 2021 and were $186,327 with $35,000 paid in cash and $151,327 financed through vehicle loans. Additions to fixed assets were nil for the three months ended April 30, 2020. Depreciation expense was $10,735 and $6,647 for the three months ended April 30, 2021 and April 30, 2020, respectively. |
LEASES
LEASES | 3 Months Ended |
Apr. 30, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 4 – LEASES We lease certain warehouses and office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, we did not combine lease and non-lease components. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 17 years or more. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Below is a summary of our lease assets and liabilities at April 30, 2021 and January 31, 2021. Leases Classification April 30, 2021 January 31, 2021 Assets Operating Operating Lease Assets $ 319,698 $ 344,413 Liabilities Current Operating Current Operating Lease Liability $ 99,937 $ 90,286 Noncurrent Operating Noncurrent Operating Lease Liabilities 211,195 244,049 Total lease liabilities $ 311,132 $ 334,335 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. CAM charges were not included in operating lease expense and were expensed in general and administrative expenses as incurred. Operating lease cost and rent was $30,479 and $34,079 for the three months ended April 30, 2021 and April 30, 2020, respectively. |
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS | 3 Months Ended |
Apr. 30, 2021 | |
Customer Deposits [Abstract] | |
CUSTOMER DEPOSITS | NOTE 5 – CUSTOMER DEPOSITS The Company receives payments from customers on orders prior to shipment. At April 30, 2021 the Company had received $268,932 (January 31, 2021- $188,385) in customer deposits for orders that were unfulfilled at April 30, 2021and canceled subsequent to year end. The orders were unfulfilled at April 30, 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 April 30, 2021. |
DEFERRED REVENUE
DEFERRED REVENUE | 3 Months Ended |
Apr. 30, 2021 | |
Deferred Revenue [Abstract] | |
DEFERRED REVENUE | NOTE 6 – DEFERRED REVENUE The Company receives payments from customers on orders prior to shipment. At April 30, 2021 the Company had received $981,830 (January 31, 2021- $687,766) in customer payments for orders that were unfulfilled at April 30, 2021 and delivered subsequent to April 30, 2021. The orders were unfulfilled at April 30, 2021 because of supply chain issues due to supplier back-orders because of the Covid-19 pandemic as well as processing and delivery timing. |
PPP LOAN
PPP LOAN | 3 Months Ended |
Apr. 30, 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 May 2, 2022 maturity. The loan is repayable in monthly installments 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 April 30, 2021 the loan is classified as $79,362 current and $130,085 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, which the Company is currently in the process of gathering the required information to file its forgiveness application and expects to have filed its application before the end of its second fiscal quarter. |
SHORT-TERM AND LONG-TERM DEBT
SHORT-TERM AND LONG-TERM DEBT | 3 Months Ended |
Apr. 30, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM AND LONG-TERM DEBT | NOTE 8 – SHORT-TERM AND LONG-TERM DEBT The components of the Company’s debt as of April 30, 2021 and January 31, 2021 were as follows: April 30, January 31, 2021 2021 Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2010 repayable June 30, 2022 with an additional interest payment of $20,000 (3) 102,168 # 102,168 SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing July 28, 2021 (2) 83,152 * 161,227 Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023 (1) 11,269 # 12,269 Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on April 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $94,316. 92,246 # Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $87,575. 59,711 # Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 5,000 * 5,000 Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance 2,500 * 2,500 Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company 12,415 * 12,415 Promissory note -$60,000 dated September 18, 2020 maturing September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 * 60,000 Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This notes matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note. (4) 425,000 * 425,000 Promissory note -$1,200,000 dated August 28, 2020,maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal. (5) 1,200,000 # 1,200,000 Promissory note -$50,000 dated August 31, 2020,maturing February 28, 2021, 10% interest payable accrued monthly payable at maturity Fully repaid at April 30, 2021 — * 50,000 Total $ 2,053,461 $ 2,030,579 30-Apr-21 31-Jan-21 Short-Term Debt $ 446,404 $ 716,142 Current Portion Of Long-Term Debt 588,067 424,064 Long-Term Debt 1,018,990 890,373 $ 2,053,461 $ 2,030,579 *Short-term loans #Long-term loans of $11,269 including current portion of $3,812 $102,168 including current portion of $0 $ 59,711 including current portion $8,077 $ 92,246 including current portion $14,515 $1,200,000 including current portion of $420,000 (1) Secured by equipment having a net book value of $11,650 (2) The amounts due under the note are personally guaranteed by an officer or a director of the Company. (3) 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) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects to enter into such a transaction within the calendar year this loan is treated as current. (5) Secured by all assets of the Company. Loan payable in 2 instalments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022 |
SHORT-TERM CONVERTIBLE DEBT
SHORT-TERM CONVERTIBLE DEBT | 3 Months Ended |
Apr. 30, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM CONVERTIBLE DEBT | NOTE 9 – SHORT-TERM CONVERTIBLE DEBT The components of the Company’s debt as of April 30, 2021 and January 31, 2021 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price April 30, 2021 January 31, 2021 Nov 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000 Jan 31, 2014* 12% 18% $2,400,000 16,000 16,000 July 31, 2013* 12% 12% $1,440,000 5,000 5,000 Jan 31, 2014* 12% 12% $2,400,000 30,000 30,000 Oct. 12, 2021 12% 16% (1) 130,000 230,000 Nov.16, 2021 12% 16% (1) 125,000 100,000 Nov.23, 2021 12% 16% (1) 115,500 165,000 Sub-total 521,500 646,000 Debt Discount (180,789 ) (309,317 ) $ 340,711 $ 336,683 * In default. (1) closing bid price on the day preceding the conversion date. The Company had accrued interest payable of $222,667 and $240,713 on the notes at April 31, 2021 and January 31, 2021, respectively. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that some instruments should be classified as liabilities due to there being a variable number of shares to be delivered upon settlement of the above conversion options. The instruments are measured at fair value at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. The fair value of the embedded conversion option resulted in a discount to the note on the debt modification date. For the three months ended April 30, 2021 and 2020, the Company recorded amortization of debt discount expense of $128,538 and $578,913, respectively. See more information in Note 10. During the three months ended April 30, 2021 and April 30, 2020 the Company added $28,000 and nil in penalty interest to the loan, respectively. As of April 30, 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 | 3 Months Ended |
Apr. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 10 – DERIVATIVE LIABILITIES As of April 30, 2021 and January 31, 2021, the Company had derivative liabilities of $148,957 and $213,741, respectively. During the three months ended April 30, 2021 and 2020, the Company recorded a gain of $4,187 and a loss of $74,780, respectively, from the change in the fair value of derivative liabilities. Any liabilities resulting from the warrants outstanding are immaterial. The derivative liabilities are valued as a level 3 input for valuing financial instruments. The following table presents changes in Level 3 liabilities measured at fair value for the three months ended April 30, 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. Level 3 Derivatives Balance, January 31, 2021 $ 213,741 Settlement due to Repayment of Debt (60,597 ) Mark to Market Change in Derivatives (4,187) Balance, April 30, 2021 $ 148,957 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 April 30, 2021 is as follows: Embedded Derivative Liability As of Strike price $ 2.10 - 4.30 Contractual term (years) 0.25 - 1.00 years Volatility (annual) 116.5% - 537.3 % High yield cash rate 24.90% - 29.42 % Underlying fair market value $ 2.10 Risk-free rate 0.07% - 0.17 % Dividend yield (per share) 0 % |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Apr. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 11 – STOCKHOLDERS’ DEFICIT Preferred Stock: The Series A Preferred Stock has an automatic forced conversion into common stock upon the completion of the repurchase or extinguishing of all “toxic” debt (notes having conversion features tied to the Company’s common stock), the extinguishing of all other existing dilutive debt or equity structures, and total recapitalization of the Company. As of both April 30, 2021, and January 31, 2021 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 April 30, 2021 and January 31, 2021, there were 20,000 and 20,000 Series B preferred shares outstanding, respectively. The Series B Preferred Stock have voting rights equal to 51% of the total voting rights at any time. There are no conversion rights granted holders of Series B Preferred shares, they are not entitled to dividends, and the Company does not have the right of redemption. Currently, there are 20,000 Series B preferred shares authorized and issued of the Series B Preferred Stock with a par-value of $0.001 per share. At both April 30, 2021 and January 31, 2021, there were 7,250 and 7,250 Series C preferred shares outstanding, respectively. The Series C Preferred Stock have the right to convert into the common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date. The holders of Series C Preferred shares are not entitled to dividends, and the Company does not have the right of redemption. Currently, there are 7,250 Series C preferred shares authorized and issued with a par-value of $0.001 per share. At both April 30, 2021 and January 31, 2021, 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 as follows: OPTIONAL REDEMPTION. (1) At any time, either the Corporation or the holder may redeem for cash out of funds legally available therefor, any or all of the outstanding Series D Preferred Stock (“Optional Redemption”) at $1,000 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 April 30, 2021 on the date of the financial statements. Because the holders of the Series D preferred stock have the right to demand cash redemption, the cumulative amount of the redemption feature is included in Temporary Equity as of April 30, 2021 and January 31, 2021. 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. The share capital has been retrospectively adjusted accordingly to reflect these reverse stock splits. At April 30, 2021 and January 31, 2021 there were 2,574,413 and 1,427,163 shares outstanding and issuable, respectively. No dividends were paid in the three months ended April 30, 2021 or 2020. The Company’s articles of incorporation include a provision that the Company is not allowed to issue fractional shares. The Company issued the following shares of common stock in the three months ended April 30, 2021: The Company issued 1,097,250 shares for $2,194,500 as part of Regulation A filing. The company received $2,099,683 in cash proceeds with the remaining $94,817 recorded as share proceeds receivable. Issuance of 50,000 shares with a fair value of $107,500 as payment for fees to a consultant. Options and Warrants: The Company has no options outstanding as of April 30, 2021 or January 31, 2021. The Company recorded option and warrant expense of $0 and $0 for the three months ended April 30, 2021 and 2020, respectively. The Company had the following fully vested warrants outstanding at April 30,2021: 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, 2021 — $ — 955,000 $ 0.42 Granted — — — — Exercised — — — — Forfeited and canceled — — — — Outstanding at April 30, 2021 — $ — 955,000 $ 0.42 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Apr. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS As of April 30, 2021 and January 31, 2021, the Company had $81,173 and $106,173, respectively of related party accrued expenses related to accrued compensation for employees and consultants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Apr. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES On August 30, 2016, the Company entered into a 60-month lease agreement for its 3,554 sf warehouse facility starting in December 2016 with a minimum base rent of $2,132 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 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 April 30 2022 $ 121,917 April 30, 2023 113,100 April 30, 2024 42,803 April 30, 2025 30,003 April 30, 2026 30,003 After April 30, 2026 17,503 Total lease payments 355,329 Less: Interest (44,197 ) Present value of lease liabilities $ 311,132 The Company had total operating lease and rent expense of $30,479 and $34,079 for the three months ended April 30, 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 | 3 Months Ended |
Apr. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 14 – EARNINGS (LOSS) PER SHARE The net income (loss) per common share amounts were determined as follows: For the Years Ended April 30, 2021 2020 Numerator: Net income (loss) available to common shareholders $ (567,557 ) $ 1,186,898 Denominator: Weighted average shares – basic 1,940,098 551,590 Net income (loss) per share – basic $ (0.29 ) $ 2.15 Effect of common stock equivalents Add: interest expense on convertible debt 34,652 103,540 Add: amortization of debt discount 128,528 — Add (Less): loss (gain) on change of derivative liabilities (4,187 ) — Net income (loss) adjusted for common stock equivalents (408,564 ) 1,290,438 Dilutive effect of common stock equivalents: Convertible notes and accrued interest — 86,413,848 Convertible Class C Preferred shares — 1,632,770 Warrants (1) — 1 Denominator: Weighted average shares – diluted 1,940,098 88,598,209 Net income (loss) per share – diluted $ (0.29 ) $ 0.01 The anti-dilutive shares of common stock equivalents for the three months ended April 30, 2021 and April 30, 2020 were as follows: For the Years Ended April 30, 2021 2020 Convertible notes and accrued interest 354,365 — Convertible Class C Preferred shares 6,770,706 — Warrants 955,500 — Total 8,080,571 — |
GAIN ON SETTLEMENT OF DEBT
GAIN ON SETTLEMENT OF DEBT | 3 Months Ended |
Apr. 30, 2021 | |
Debt Disclosure [Abstract] | |
GAIN ON SETTLEMENT OF DEBT | NOTE 15- GAIN ON SETTLEMENT OF DEBT For the three months ended April 30, 2021 the gain on settlement of debt of $914,049 consisted of a $853,452 gain that resulted from the settlement of accounts payable totaling $950,151 that was settled for $96,699, and a $60,597 gain that resulted from the reduction in the derivative liability due to cash repayments on convertible debt. For the three months ended April 30, 2020 the gain on settlement of debt of $2,172,646 consisted of a gain that resulted from the settlement of $1,070,035 in convertible notes, and $175,422 in accrued interest, 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 $2,181,751 in exchange for 250 Class C shares having a fair-value of $9,105. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Apr. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Subsequent to quarter year end up to June 8, 2021 a lender converted $18,750 in principal for 10,000 shares of common stock |
NATURE OF BUSINESS AND SIGNIF_2
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Apr. 30, 2021 | |
Accounting Policies [Abstract] | |
Business | 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 4LESS Group, Inc. is now a holding company operating through 4LESS and offers products including exhaust systems, suspension systems, wheels, tires, stereo systems, truck bed covers, and shocks. On December 30, 2019 4LESS changed its name to Auto Parts 4Less, Inc. |
Significant Accounting Policies | Significant Accounting Policies: The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these condensed financial statements. |
Basis of Presentation | Basis of Presentation: The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended January 31, 2021 and notes thereto contained in the Company’s Annual Report on Form 10-K filed on May 14, 2021. |
Principles of Consolidation | Principles of Consolidation: The condensed financial statements include the accounts of The 4LESS Group, Inc. as well as The Auto Parts 4Less, Inc., and JBJ Wholesale LLC. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. |
Use of Estimates | 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 condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. |
Cash and Cash Equivalents | 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 three months ended April 30, 2021 the Company purchased approximately 54% of its inventory and items available for sale from third parties from three vendors. As of April 30, 2021, the net amount due to the vendors included in accounts payable was $462,991. For the three months ended April 30, 2020, the Company purchased from three vendors approximately 53% of its inventory and items available for sale from third parties. As of April 30, 2020, the net amount due to these vendors included in accounts payable was $434,528. The Company believes there are numerous other suppliers that could be substituted should a 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, 2022, 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 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 April 30, 2021: April 30, 2021 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 148,957 $ — $ — $ 148,957 Totals $ 148,957 $ — $ — $ 148,957 |
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 April 30, 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 three months ended April 30, 2021 and 2020: Change 2021 2020 $ % Proprietary website revenue $ 2,123,101 1,109,106 $ 1,013,995 91% Third party website revenue 1,605,683 890,965 714,718 80% Total Revenue $ 3,728,784 $ 2,000,071 $ 1,728,713 86% The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and obtained the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product. Shipping and handling amounts paid by customers are primarily for online orders, and are included in revenue. Sales tax and other similar taxes are excluded from revenue. |
Stock-Based Compensation | 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. |
NATURE OF BUSINESS AND SIGNIF_3
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Apr. 30, 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 April 30, 2021: April 30, 2021 Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 148,957 $ — $ — $ 148,957 Totals $ 148,957 $ — $ — $ 148,957 |
Schedule of disaggregation of revenue | The following table shows revenue split between proprietary and third party website revenue for the three months ended April 30, 2021 and 2020: Change 2021 2020 $ % Proprietary website revenue $ 2,123,101 1,109,106 $ 1,013,995 91% Third party website revenue 1,605,683 890,965 714,718 80% Total Revenue $ 3,728,784 $ 2,000,071 $ 1,728,713 86% |
PROPERTY (Tables)
PROPERTY (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property | Property consists of the following at April 30, 2021 and January 31, 2021: April 30, 2021 January 31, 2021 Office furniture, fixtures and equipment $ 85,413 $ 85,413 Shop equipment 43,004 43,004 Vehicles 226,760 40,433 Sub-total 355,177 168,850 Less: Accumulated depreciation (99,558 ) (88,823 ) Total Property $ 255,619 $ 80,027 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Leases [Abstract] | |
Schedule of lease assets and liabilities | Below is a summary of our lease assets and liabilities at April 30, 2021 and January 31, 2021. Leases Classification April 30, 2021 January 31, 2021 Assets Operating Operating Lease Assets $ 319,698 $ 344,413 Liabilities Current Operating Current Operating Lease Liability $ 99,937 $ 90,286 Noncurrent Operating Noncurrent Operating Lease Liabilities 211,195 244,049 Total lease liabilities $ 311,132 $ 334,335 |
SHORT-TERM AND LONG-TERM DEBT (
SHORT-TERM AND LONG-TERM DEBT (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The components of the Company’s debt as of April 30, 2021 and January 31, 2021 were as follows: April 30, January 31, 2021 2021 Loan dated October 8, 2019, and revised February 29, 2020 and November 10, 2010 repayable June 30, 2022 with an additional interest payment of $20,000 (3) 102,168 # 102,168 SFS Funding Loan, original loan of $389,980 January 8, 2020, 24% interest, weekly payments of $6,006, maturing July 28, 2021 (2) 83,152 * 161,227 Forklift Note Payable, original note of $20,433 Sept 26, 2018, 6.23% interest, 60 monthly payments of $394.54 ending August 2023 (1) 11,269 # 12,269 Vehicle loan original loan of $93,239 February 16, 2021, 2.90 % interest. 72 monthly payments of $1,414 beginning on April 2, 2021 and ending on March 2, 2027. Secured by vehicle having net book value of $94,316. 92,246 # Vehicle loan original loan of $59,711 March 20,2021, 7.89% interest. 72 monthly payments of $1,048 beginning on May 4, 2021 and ending on April 4, 2027. Secured by vehicle having net book value of $87,575. 59,711 # Demand loan - $5,000 dated February 1, 2020, 15% interest, 5% fee on outstanding balance 5,000 * 5,000 Demand loan - $2,500, dated March 8, 2019, 25% interest, 5% fee on outstanding balance 2,500 * 2,500 Demand loan - $65,500 dated February 27, 2019, 25% interest, 5% fee on outstanding balance, Secured by the general assets of the Company 12,415 * 12,415 Promissory note -$60,000 dated September 18, 2020 maturing September 18, 2021, including $5,000 original issue discount, 15% compounded interest payable monthly 60,000 * 60,000 Promissory note -$425,000 dated August 28, 2020, including $50,000 original issue discount, 15% compounded interest payable monthly. This notes matures when the Company receives proceeds through a financing event of $825,000 plus accrued interest on the note. (4) 425,000 * 425,000 Promissory note -$1,200,000 dated August 28, 2020,maturing August 28, 2022, 12% interest payable monthly with the first six months interest deferred until the 6th month and added to principal. (5) 1,200,000 # 1,200,000 Promissory note -$50,000 dated August 31, 2020,maturing February 28, 2021, 10% interest payable accrued monthly payable at maturity Fully repaid at April 30, 2021 — * 50,000 Total $ 2,053,461 $ 2,030,579 30-Apr-21 31-Jan-21 Short-Term Debt $ 446,404 $ 716,142 Current Portion Of Long-Term Debt 588,067 424,064 Long-Term Debt 1,018,990 890,373 $ 2,053,461 $ 2,030,579 *Short-term loans #Long-term loans of $11,269 including current portion of $3,812 $102,168 including current portion of $0 $ 59,711 including current portion $8,077 $ 92,246 including current portion $14,515 $1,200,000 including current portion of $420,000 (1) Secured by equipment having a net book value of $11,650 (2) The amounts due under the note are personally guaranteed by an officer or a director of the Company. (3) 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) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects to enter into such a transaction within the calendar year this loan is treated as current. (5) Secured by all assets of the Company. Loan payable in 2 instalments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022 |
SHORT-TERM CONVERTIBLE DEBT (Ta
SHORT-TERM CONVERTIBLE DEBT (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of short term convertible debt | The components of the Company’s debt as of April 30, 2021 and January 31, 2021 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price April 30, 2021 January 31, 2021 Nov 4, 2013* 12% 12% $1,800,000 $ 100,000 $ 100,000 Jan 31, 2014* 12% 18% $2,400,000 16,000 16,000 July 31, 2013* 12% 12% $1,440,000 5,000 5,000 Jan 31, 2014* 12% 12% $2,400,000 30,000 30,000 Oct. 12, 2021 12% 16% (1) 130,000 230,000 Nov.16, 2021 12% 16% (1) 125,000 100,000 Nov.23, 2021 12% 16% (1) 115,500 165,000 Sub-total 521,500 646,000 Debt Discount (180,789 ) (309,317 ) $ 340,711 $ 336,683 * In default. (1) closing bid price on the day preceding the conversion date. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of changes in fair value of the derivative liability | The following table presents changes in Level 3 liabilities measured at fair value for the three months ended April 30, 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. Level 3 Derivatives Balance, January 31, 2021 $ 213,741 Settlement due to Repayment of Debt (60,597 ) Mark to Market Change in Derivatives (4,187) Balance, April 30, 2021 $ 148,957 |
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 April 30, 2021 is as follows: Embedded Derivative Liability As of Strike price $ 2.10 - 4.30 Contractual term (years) 0.25 - 1.00 years Volatility (annual) 116.5% - 537.3 % High yield cash rate 24.90% - 29.42 % Underlying fair market value $ 2.10 Risk-free rate 0.07% - 0.17 % Dividend yield (per share) 0 % |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Equity [Abstract] | |
Schedule of issued options and warrants outstanding | The Company had the following fully vested warrants outstanding at April 30,2021: 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, 2021 — $ — 955,000 $ 0.42 Granted — — — — Exercised — — — — Forfeited and canceled — — — — Outstanding at April 30, 2021 — $ — 955,000 $ 0.42 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease obligations | Maturity of Lease Liabilities Operating April 30 2022 $ 121,917 April 30, 2023 113,100 April 30, 2024 42,803 April 30, 2025 30,003 April 30, 2026 30,003 After April 30, 2026 17,503 Total lease payments 355,329 Less: Interest (44,197 ) Present value of lease liabilities $ 311,132 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Apr. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of net income (loss) | The net income (loss) per common share amounts were determined as follows: For the Years Ended April 30, 2021 2020 Numerator: Net income (loss) available to common shareholders $ (567,557 ) $ 1,186,898 Denominator: Weighted average shares – basic 1,940,098 551,590 Net income (loss) per share – basic $ (0.29 ) $ 2.15 Effect of common stock equivalents Add: interest expense on convertible debt 34,652 103,540 Add: amortization of debt discount 128,528 — Add (Less): loss (gain) on change of derivative liabilities (4,187 ) — Net income (loss) adjusted for common stock equivalents (408,564 ) 1,290,438 Dilutive effect of common stock equivalents: Convertible notes and accrued interest — 86,413,848 Convertible Class C Preferred shares — 1,632,770 Warrants (1) — 1 Denominator: Weighted average shares – diluted 1,940,098 88,598,209 Net income (loss) per share – diluted $ (0.29 ) $ 0.01 |
Schedule of diluted loss per share | The anti-dilutive shares of common stock equivalents for the three months ended April 30, 2021 and April 30, 2020 were as follows: For the Years Ended April 30, 2021 2020 Convertible notes and accrued interest 354,365 — Convertible Class C Preferred shares 6,770,706 — Warrants 955,500 — Total 8,080,571 — |
NATURE OF BUSINESS AND SIGNIF_4
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | |
Liabilities: | |||
Derivative Liabilities - embedded redemption feature | $ 148,957 | ||
Totals | 148,957 | $ 213,741 | [1] |
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 | 148,957 | $ 213,741 | |
Totals | $ 148,957 | ||
[1] | Derived from audited information |
NATURE OF BUSINESS AND SIGNIF_5
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | |
Apr. 30, 2021 | Apr. 30, 2020 | |
Total revenue | $ 3,728,784 | $ 2,000,071 |
Change in revenue | $ 1,728,713 | |
Percentage change in revenue | 86.00% | |
Proprietary Website Revenue [Member] | ||
Total revenue | $ 2,123,101 | 1,109,106 |
Change in revenue | $ 1,013,995 | |
Percentage change in revenue | 91.00% | |
Third Party Website Revenue [Member] | ||
Total revenue | $ 1,605,683 | $ 890,965 |
Change in revenue | $ 714,718 | |
Percentage change in revenue | 80.00% |
NATURE OF BUSINESS AND SIGNIF_6
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Nov. 29, 2018 | Apr. 30, 2021 | Apr. 30, 2020 | Feb. 02, 2019 | |
Date of incorporation | Dec. 5, 2007 | |||
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. | |||
Previous federal statutory rate | 35.00% | |||
Federal statutory tax rate | 21.00% | |||
Additional net lease asset | $ 454,087 | |||
Additional lease liabilities | $ 454,087 | |||
Percentage of inventory | 54.00% | 53.00% | ||
Accounts payable | $ 462,991 | $ 434,528 | ||
Warrant [Member] | ||||
Warrants to purchase common shares | 0 |
GOING CONCERN AND FINANCIAL P_2
GOING CONCERN AND FINANCIAL POSITION (Details Narrative) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | [1] | Apr. 30, 2020 | Jan. 31, 2020 |
Going Concern and Financial Position [Abstract] | |||||
Accumulated deficit | $ (20,949,534) | $ (20,381,977) | |||
Working capital deficit | 2,700,793 | ||||
Cash and cash equivalents | 1,342,321 | $ 277,664 | $ 188,243 | $ 162,124 | |
Short-term debt in default | $ 151,000 | ||||
[1] | Derived from audited information |
PROPERTY (Details)
PROPERTY (Details) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | |
Sub-total | $ 355,177 | $ 168,850 | |
Less: Accumulated depreciation | (99,558) | (88,823) | |
Total Property | 255,619 | 80,027 | [1] |
Office Furniture, Fixtures and Equipment [Member] | |||
Sub-total | 85,413 | 85,413 | |
Shop Equipment [Member] | |||
Sub-total | 43,004 | 43,004 | |
Vehicles [Member] | |||
Sub-total | $ 226,760 | $ 40,433 | |
[1] | Derived from audited information |
PROPERTY (Details Narrative)
PROPERTY (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 30, 2021 | Apr. 30, 2020 | |
Purchase property | $ 1,000 | |
Addition to fixed assets | 186,327 | $ 0 |
Cash | 35,000 | |
Financed through vehicle loans | 151,327 | |
Depreciation expense | $ 10,735 | $ 6,647 |
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 ($) | Apr. 30, 2021 | Jan. 31, 2021 | |
Assets | |||
Operating Lease Assets | $ 319,698 | $ 344,413 | [1] |
Current | |||
Current Operating Lease Liability | 99,937 | 90,286 | [1] |
Noncurrent | |||
Noncurrent Operating Lease Liabilities | 211,195 | 244,049 | [1] |
Total lease liabilities | $ 311,132 | $ 334,335 | |
[1] | Derived from audited information |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 30, 2021 | Apr. 30, 2020 | |
Leases [Abstract] | ||
Operating lease cost and rent | $ 30,479 | $ 34,079 |
Leases, description | 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, |
CUSTOMER DEPOSITS (Details Narr
CUSTOMER DEPOSITS (Details Narrative) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | |
Customer Deposits [Abstract] | |||
Customer deposits | $ 268,932 | $ 188,385 | [1] |
[1] | Derived from audited information |
DEFERRED REVENUE (Details Narra
DEFERRED REVENUE (Details Narrative - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | |
Deferred Revenue [Abstract] | |||
Deferred revenue | $ 981,830 | $ 687,766 | [1] |
[1] | Derived from audited information |
PPP LOAN (Details Narrative)
PPP LOAN (Details Narrative) - USD ($) | May 02, 2020 | Apr. 30, 2021 | Jan. 31, 2021 | [1] |
PPP Loan-current portion | $ 79,362 | $ 43,294 | ||
PPP Loan-Long term | $ 130,085 | $ 166,153 | ||
Paycheck Protection Promissory (PPP) [Member] | ||||
Proceeds from PPP Loan | $ 209,447 | |||
Maturity of loan | May 2, 2022 | |||
Monthly instalments | $ 8,818 | |||
Fixed rate per annum | 1.00% | |||
[1] | Derived from audited information |
SHORT-TERM AND LONG-TERM DEBT_2
SHORT-TERM AND LONG-TERM DEBT (Details) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | ||
Total | $ 2,053,461 | $ 2,030,579 | ||
Loan One [Member] | ||||
Debt | 102,168 | [1] | 102,168 | |
SFS Funding Loan [Member] | ||||
Debt | 83,152 | [2] | 161,227 | |
Forklift Note Payable [Member] | ||||
Debt | 11,269 | [1] | 12,269 | |
Vehicle Loan [Member] | ||||
Debt | [1] | 92,246 | ||
Vehicle Loan One [Member] | ||||
Debt | [1] | 59,711 | ||
Demand Loan [Member] | ||||
Debt | 5,000 | [2] | 5,000 | |
Demand Loan One [Member] | ||||
Debt | 2,500 | [2] | 2,500 | |
Demand Loan Two [Member] | ||||
Debt | 12,415 | [2] | 12,415 | |
Promissory Note [Member] | ||||
Debt | 60,000 | [2] | 60,000 | |
Promissory Note One [Member] | ||||
Debt | 425,000 | [2] | 425,000 | |
Promissory Note Two [Member] | ||||
Debt | 1,200,000 | [1] | 1,200,000 | |
Promissory Note Three [Member] | ||||
Debt | [2] | $ 50,000 | ||
[1] | Long-term loans of $11,269 including current portion of $3,812 $102,168 including current portion of $0 $ 59,711 including current portion $8,077 $ 92,246 including current portion $14,515 $1,200,000 including current portion of $420,000 | |||
[2] | Short-term loans |
SHORT-TERM AND LONG-TERM DEBT_3
SHORT-TERM AND LONG-TERM DEBT (Details 1) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 | Apr. 30, 2020 | |
Debt Disclosure [Abstract] | ||||
Short-Term Debt | $ 446,404 | $ 716,142 | [1] | $ 122,000 |
Current Portion of Long-Term Debt | 588,067 | 424,064 | ||
Long-Term Debt | 1,018,990 | 890,373 | ||
Total | $ 2,053,461 | $ 2,030,579 | ||
[1] | Derived from audited information |
SHORT-TERM AND LONG-TERM DEBT_4
SHORT-TERM AND LONG-TERM DEBT (Details Narrative) - USD ($) | Nov. 10, 2020 | Apr. 30, 2021 | Aug. 28, 2022 | Aug. 28, 2021 | Jan. 31, 2021 | Apr. 30, 2020 | ||
Accrued interest payable | $ 175,422 | $ 22,076 | ||||||
Short-term notes | 446,404 | $ 716,142 | [1] | $ 122,000 | ||||
Long-term loan, current | 588,067 | 424,064 | [1] | |||||
Long-term loan | 1,018,990 | $ 890,373 | ||||||
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 | $ 445,200 | ||||||
Debt issuance date | Aug. 28, 2020 | |||||||
Maturity date | Aug. 28, 2022 | |||||||
Percentage of debt instrument interest rate | 12.00% | |||||||
Description of payment terms | [2] | Interest payable monthly with the first six months interest deferred until the 6th month and added to principal. | ||||||
Promissory Note Two [Member] | Subsequent Event [Member] | ||||||||
Notes payable principal amount | $ 826,800 | |||||||
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 | [3] | 825,000 | ||||||
Promissory Note [Member] | ||||||||
Notes payable principal amount | $ 60,000 | |||||||
Maturity date | Sep. 18, 2021 | |||||||
Percentage of debt instrument interest rate | 15.00% | |||||||
Original issue discount | $ 5,000 | |||||||
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 | [4] | $ 20,000 | ||||||
Debt repayment date | Nov. 10, 2010 | |||||||
Debt revised date | Feb. 29, 2020 | |||||||
Loan One [Member] | Maximum [Member] | ||||||||
Debt instrument periodic payment | $ 5,705 | |||||||
SFS Funding Loan [Member] | ||||||||
Notes payable principal amount | $ 389,980 | |||||||
Debt issuance date | Jan. 8, 2020 | |||||||
Maturity date | [5] | Jul. 28, 2021 | ||||||
Note payable percentage | 24.00% | |||||||
Description of payment terms | Weekly | |||||||
Debt instrument periodic payment | $ 6,006 | |||||||
Forklift Note Payable [Member] | ||||||||
Notes payable principal amount | $ 20,433 | |||||||
Debt issuance date | Sep. 26, 2018 | |||||||
Maturity date | [6] | Aug. 31, 2023 | ||||||
Note payable percentage | 6.23% | |||||||
Description of payment terms | 60 monthly payments | |||||||
Debt instrument periodic payment | $ 394.54 | |||||||
Secured equipment net book value | 11,650 | |||||||
Vehicle Loan [Member] | ||||||||
Notes payable principal amount | $ 93,239 | |||||||
Debt issuance date | Feb. 16, 2021 | |||||||
Note payable percentage | 2.90% | |||||||
Description of payment terms | 72 monthly payments | |||||||
Debt instrument periodic payment | $ 1,414 | |||||||
Secured equipment net book value | 94,316 | |||||||
Vehicle Loan One [Member] | ||||||||
Notes payable principal amount | $ 59,711 | |||||||
Debt issuance date | Mar. 20, 2021 | |||||||
Note payable percentage | 7.89% | |||||||
Description of payment terms | 72 monthly payments | |||||||
Debt instrument periodic payment | $ 1,048 | |||||||
Secured equipment net book value | 87,575 | |||||||
Demand Loan [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 One [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 Two [Member] | ||||||||
Notes payable principal amount | $ 65,500 | |||||||
Note payable percentage | 25.00% | |||||||
Maturity date, description | 5% fee on outstanding balance | |||||||
Long-Term Loans [Member] | ||||||||
Long-term loan, current | $ 3,812 | |||||||
Long-term loan | 11,269 | |||||||
Long-Term Loans [Member] | ||||||||
Long-term loan, current | 0 | |||||||
Long-term loan | 102,168 | |||||||
Long-Term Loans [Member] | ||||||||
Long-term loan, current | 420,000 | |||||||
Long-term loan | 1,200,000 | |||||||
Long-Term Loans [Member] | ||||||||
Long-term loan, current | 8,077 | |||||||
Long-term loan | 59,711 | |||||||
Long-Term Loans [Member] | ||||||||
Long-term loan, current | 14,515 | |||||||
Long-term loan | $ 92,246 | |||||||
[1] | Derived from audited information | |||||||
[2] | Secured by all assets of the Company. Loan payable in 2 instalments, $445,200 payable August 28, 2021 and $826,800 payable August 28, 2022 | |||||||
[3] | Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects to enter into such a transaction within the calendar year this loan is treated as current. | |||||||
[4] | 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. | |||||||
[5] | The amounts due under the note are personally guaranteed by an officer or a director of the Company. | |||||||
[6] | Secured by equipment having a net book value of $11,650 |
SHORT-TERM CONVERTIBLE DEBT (De
SHORT-TERM CONVERTIBLE DEBT (Details) - USD ($) | 3 Months Ended | ||
Apr. 30, 2021 | Jan. 31, 2021 | ||
Sub-total | $ 521,500 | $ 646,000 | |
Debt Discount | (180,789) | (309,317) | |
Total | $ 340,711 | 336,683 | |
Debt Due on Nov 4, 2013 [Member] | |||
Maturity date | [1] | Nov. 4, 2013 | |
Interest rate | 12.00% | ||
Default interest rate | 12.00% | ||
Conversion price | $ 1,800,000 | ||
Sub-total | $ 100,000 | 100,000 | |
Debt Due On Jan 31, 2014 [Member] | |||
Maturity date | [1] | Jan. 31, 2014 | |
Interest rate | 12.00% | ||
Default interest rate | 18.00% | ||
Conversion price | $ 2,400,000 | ||
Sub-total | $ 16,000 | 16,000 | |
Debt Due On July 31, 2013 [Member] | |||
Maturity date | [1] | Jul. 31, 2013 | |
Interest rate | 12.00% | ||
Default interest rate | 12.00% | ||
Conversion price | $ 1,440,000 | ||
Sub-total | $ 5,000 | 5,000 | |
Debt Due on Jan 31, 2014 [Member] | |||
Maturity date | [1] | Jan. 31, 2014 | |
Interest rate | 12.00% | ||
Default interest rate | 12.00% | ||
Conversion price | $ 2,400,000 | ||
Sub-total | $ 30,000 | $ 30,000 | |
Debt Due on Oct. 12, 2021 [Member] | |||
Maturity date | Oct. 12, 2021 | ||
Interest rate | 12.00% | 12.00% | |
Default interest rate | 16.00% | ||
Conversion price | $ 130,000 | $ 230,000 | |
Debt Due on Oct. Nov.16, 2021 [Member] | |||
Maturity date | Nov. 16, 2021 | ||
Interest rate | 12.00% | 12.00% | |
Default interest rate | 16.00% | ||
Conversion price | $ 125,000 | $ 100,000 | |
Debt Due on Oct. Nov.23, 2021 [Member] | |||
Maturity date | Nov. 23, 2021 | ||
Interest rate | 12.00% | 12.00% | |
Default interest rate | 16.00% | ||
Conversion price | $ 115,500 | $ 165,000 | |
[1] | In default |
SHORT-TERM CONVERTIBLE DEBT (_2
SHORT-TERM CONVERTIBLE DEBT (Details Narrative) - USD ($) | 3 Months Ended | ||
Apr. 30, 2021 | Apr. 30, 2020 | Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Accrued interest payable | $ 222,667 | $ 240,713 | |
Converted Debt | 340,711 | $ 336,683 | |
Amortization expense | 128,538 | $ 578,913 | |
Aggregate debt in default | 151,000 | ||
Penalty interest to the loan | $ 28,000 | $ 0 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) | 3 Months Ended |
Apr. 30, 2021USD ($) | |
Balance, at ending | $ 792,218 |
Significant Unobservable Inputs (Level 3) [Member] | |
Balance, at begnning | 213,741 |
Settlement due to Repayment of Debt | (60,597) |
Mark to Market Change in Derivatives | (4,187) |
Balance, at ending | $ 148,957 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details 1) - Significant Unobservable Inputs (Level 3) [Member] | Apr. 30, 2021$ / shares |
Strike Price [Member] | Maximum [Member] | |
Derivative liability, measurement input | 4.30 |
Strike Price [Member] | Minimum [Member] | |
Derivative liability, measurement input | 2.10 |
Contractual Term (Years) [Member] | Maximum [Member] | |
Contractual term | 3 months |
Contractual Term (Years) [Member] | Minimum [Member] | |
Contractual term | 1 year |
Volatility [Member] | Maximum [Member] | |
Derivative liability, measurement input | 5.373 |
Volatility [Member] | Minimum [Member] | |
Derivative liability, measurement input | 1.165 |
High Yield Cash Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 0.2942 |
High Yield Cash Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 0.2490 |
Underlying Fair Market Value [Member] | |
Derivative liability, measurement input | 2.1 |
Risk-Free Rate [Member] | Maximum [Member] | |
Derivative liability, measurement input | 0.0017 |
Risk-Free Rate [Member] | Minimum [Member] | |
Derivative liability, measurement input | 0.0007 |
Dividend Yield [Member] | |
Derivative liability, measurement input | 0 |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Apr. 30, 2021 | Apr. 30, 2020 | Jan. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative liabilities | $ 148,957 | $ 213,741 | |
Gain (loss) fair value of derivative liabilities | $ 4,187 | $ (74,780) |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details ) | 3 Months Ended |
Apr. 30, 2021$ / sharesshares | |
Lender One [Member] | |
Issued To | Lender |
# Warrants | shares | 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 | shares | 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 | shares | 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 1) | 3 Months Ended |
Apr. 30, 2021$ / sharesshares | |
Warrant [Member] | |
Number of outstanding | |
Beginning balance | shares | 955,000 |
Granted | shares | |
Exercised | shares | |
Forfeited and canceled | shares | |
Ending balance | shares | 955,500 |
Weighted Average Exercise Price | |
Beginning balance | $ / shares | $ 0.42 |
Granted | $ / shares | |
Exercised | $ / shares | |
Forfeited and canceled | $ / shares | |
Ending balance | $ / shares | $ 0.42 |
Employee Stock Option [Member] | |
Number of outstanding | |
Granted | shares | |
Exercised | shares | |
Forfeited and canceled | shares | |
Ending balance | shares | |
Weighted Average Exercise Price | |
Granted | $ / shares | |
Exercised | $ / shares | |
Forfeited and canceled | $ / shares | |
Ending balance | $ / shares |
STOCKHOLDERS' DEFICIT (Detail_3
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | 3 Months Ended | ||
Apr. 30, 2021 | Apr. 30, 2020 | Jan. 31, 2021 | |
Common stock, par value | $ 0.000001 | $ 0.000001 | |
Common stock, shares issued | 2,574,413 | 1,427,163 | |
Common stock, shares outstanding | 2,574,413 | 1,427,163 | |
Common stock, shares authorized | 15,000,000 | 15,000,000 | |
Option and warrant expense | $ 0 | ||
Dividend paid | $ 0 | $ 0 | |
Number of shares issue for fees to a consultant | 50,000 | ||
Number of shares issue for fees to a consultant, value | $ 107,500 | ||
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 51% 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 | |
Preferred Series C [Member] | |||
Preferred stock, shares authorized | 7,250 | 7,250 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued | 7,250 | 7,250 | |
Preferred stock, shares outstanding | 7,250 | 7,250 | |
Conversion price | $ 2.63 | ||
Conversion of notes payable | $ 9,105 | ||
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 | |
Preferred stock voting rights, description | These shares are non-voting | ||
Optional redemption per share | $ 1,000 | ||
Common Stock [Member] | |||
Number of shares issued as part of Regulation A filing | 1,097,250 | ||
Value of shares issued as part of Regulation A filing | $ 2,194,500 | ||
Net proceeds of amount | 2,099,683 | ||
Remaining share proceeds receivable | $ 94,817 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Apr. 30, 2021 | Jan. 31, 2021 |
Related Party Transactions [Abstract] | ||
Accrued expenses related party | $ 81,173 | $ 106,173 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Apr. 30, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
April 30 2022 | $ 121,917 |
April 30 2023 | 113,100 |
April 30 2024 | 42,803 |
April 30 2025 | 30,003 |
April 30 2026 | 30,003 |
After April 30, 2026 | 17,503 |
Total lease payments | 355,329 |
Less: Interest | (44,197) |
Present value of lease liabilities | $ 311,132 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Narrtive) - USD ($) | Jul. 01, 2018 | Oct. 30, 2019 | Aug. 30, 2016 | Apr. 30, 2021 | Apr. 30, 2020 |
Rent expense | $ 30,479 | $ 34,079 | |||
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 | 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. | ||||
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. | ||||
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 $1,017 per month. |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2021 | Apr. 30, 2020 | |
Numerator: | ||
Net income (loss) available to common shareholders | $ (567,557) | $ 1,186,898 |
Denominator: | ||
Weighted average shares - basic | 1,940,098 | 551,590 |
Net income (loss) per share - basic | $ (0.29) | $ 2.15 |
Effect of common stock equivalents | ||
Add: interest expense on convertible debt | $ 34,652 | $ 103,540 |
Add: amortization of debt discount | 128,528 | 578,913 |
Add (Less): loss (gain) on change of derivative liabilities | (4,187) | |
Net income (loss) adjusted for common stock equivalents | (408,564) | 1,290,438 |
Dilutive effect of common stock equivalents: | ||
Convertible notes and accrued interest | $ 86,413,848 | |
Denominator: | ||
Weighted average shares - diluted | 1,940,098 | 88,598,209 |
Net income (loss) per share - diluted | $ (0.29) | $ 0.01 |
Warrant [Member] | ||
Dilutive effect of common stock equivalents: | ||
Convertible notes and accrued interest | $ 1 | |
Convertible Class C Preferred Shares [Member] | ||
Dilutive effect of common stock equivalents: | ||
Convertible notes and accrued interest | $ 1,632,770 |
EARNINGS (LOSS) PER SHARE (De_2
EARNINGS (LOSS) PER SHARE (Details 1) - shares | 3 Months Ended | |
Apr. 30, 2021 | Apr. 30, 2020 | |
Anti-dilutive shares | 8,080,571 | |
Warrant [Member] | ||
Anti-dilutive shares | 955,500 | |
Convertible Notes And Accrued Interest [Member] | ||
Anti-dilutive shares | 354,365 | |
Convertible Class C Preferred Shares [Member] | ||
Anti-dilutive shares | 6,770,706 |
GAIN ON SETTLEMENT OF DEBT (Det
GAIN ON SETTLEMENT OF DEBT (Details Narrative) - USD ($) | 3 Months Ended | |||
Apr. 30, 2021 | Apr. 30, 2020 | Jan. 31, 2021 | [1] | |
Gain on settlement of debt | $ 914,049 | $ 2,172,646 | ||
gain that resulted from the settlement of accounts payable | 96,699 | |||
Gain from settlement of convertible notes | 853,452 | 1,070,035 | ||
Accrued Interest | 175,422 | 22,076 | ||
short-term debt | 446,404 | 122,000 | $ 716,142 | |
Derivative liability | $ 792,218 | $ 60,597 | ||
Short term debt, description | The gain on settlement of debt of $914,049 consisted of a $853,452 gain that resulted from the settlement of accounts payable totaling $950,151 that was settled for $96,699, and a $60,597 gain that resulted from the reduction in the derivative liability due to cash repayments on convertible debt. | The gain on settlement of debt of $2,172,646 consisted of a gain that resulted from the settlement of $1,070,035 in convertible notes, and $175,422 in accrued interest, 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 $2,181,751 in exchange for 250 Class C shares having a fair-value of $9,105. | ||
Preferred Series C [Member] | ||||
Convertible notes payable | $ 9,105 | |||
Number of shares converted (in shares) | 250 | |||
Conversion of stock amount | $ 2,181,751 | |||
[1] | Derived from audited information |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jun. 08, 2021 | Apr. 30, 2021 | Jan. 31, 2021 |
Common stock, shares issued | 2,574,413 | 1,427,163 | |
Value of shares issued | $ 107,500 | ||
Subsequent Event [Member] | |||
Common stock, shares issued | 10,000 | ||
Value of shares issued | $ 18,750 |