Cover
Cover - shares | 9 Months Ended | |
Oct. 31, 2021 | Dec. 10, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 31, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --01-31 | |
Entity File Number | 333-152444 | |
Entity Registrant Name | THE 4LESS GROUP, INC. | |
Entity Central Index Key | 0001438901 | |
Entity Tax Identification Number | 90-1494749 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 106 W. Mayflower | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89030 | |
City Area Code | (702) | |
Local Phone Number | 267-6100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | FLES | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,410,235 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets(Unaudited) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Current Assets | ||
Cash and Cash Equivalents | $ 350,299 | $ 277,664 |
Share Subscriptions Receivable | 2,301 | 100,000 |
Inventory | 401,444 | 323,411 |
Prepaid Expenses | 10,848 | 11,859 |
Other Current Assets | 41,419 | 2,149 |
Total Current Assets | 806,311 | 715,083 |
Operating Lease Assets | 270,187 | 344,413 |
Deferred Offering Costs | 282,000 | |
Property and Equipment, net of accumulated depreciation of $109,468, and $88,823 | 234,338 | 80,027 |
Total Assets | 1,592,836 | 1,139,523 |
Current Liabilities | ||
Accounts Payable | 1,089,619 | 869,765 |
Accrued Liabilities | 646,964 | 1,382,839 |
Accrued Expenses – Related Party | 46,173 | 106,173 |
Customer Deposits | 220,776 | 188,385 |
Deferred Revenue | 241,292 | 687,766 |
Short-Term Debt | 3,132,568 | 716,142 |
Current Operating Lease Liability | 103,874 | 90,286 |
Short-Term Convertible Debt, net of debt discount of $354,526 and $309,317 | 594,774 | 336,683 |
Derivative Liabilities | 391,868 | 213,741 |
PPP Loan-current portion | 43,294 | |
Current Portion – Long-Term Debt | 25,076 | 424,064 |
Total Current Liabilities | 6,492,984 | 5,059,138 |
Non-Current Lease Liability | 160,770 | 244,049 |
PPP Loan -long term portion | 166,153 | |
Long-Term Debt | 125,286 | 890,373 |
Total Liabilities | 6,779,040 | 6,359,713 |
Commitments and Contingencies | ||
Series D Preferred Stock, $0.001 par value, 870 shares authorized, 870 and 870 shares issued and outstanding | 870,000 | 870,000 |
Stockholders’ Deficit | ||
Common Stock, $0.000001 par value, 15,000,000 shares authorized, 3,410,235 and 1,427,163 shares issued, issuable and outstanding | 3 | 1 |
Additional Paid In Capital | 19,212,123 | 14,291,759 |
Accumulated Deficit | (25,268,357) | (20,381,977) |
Total Stockholders’ Deficit | (6,056,204) | (6,090,190) |
Total Liabilities and Stockholders’ Deficit | 1,592,836 | 1,139,523 |
Series A Preferred Stock [Member] | ||
Stockholders’ Deficit | ||
Preferred Stock, Value, Issued | 0 | 0 |
Total Stockholders’ Deficit | ||
Series B Preferred Stock [Member] | ||
Stockholders’ Deficit | ||
Preferred Stock, Value, Issued | 20 | 20 |
Total Stockholders’ Deficit | 20 | 20 |
Series C Preferred Stock [Member] | ||
Stockholders’ Deficit | ||
Preferred Stock, Value, Issued | 7 | 7 |
Total Stockholders’ Deficit | $ 7 | $ 7 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets(Unaudited) (Parenthetical) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Net of accumulated depreciation | $ 109,468 | $ 88,823 |
Net of debt discount | $ 354,526 | $ 309,317 |
Common Stock, Par or Stated Value Per Share | $ 0.000001 | $ 0.000001 |
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares, Issued | 3,410,235 | 3,410,235 |
Common Stock, Shares, Outstanding | 1,427,163 | 1,427,163 |
Series D Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 870 | 870 |
Preferred Stock, Shares Issued | 870 | 870 |
Preferred Stock, Shares Outstanding | 870 | 870 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value 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 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value 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 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value 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 | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 3,114,062 | $ 2,334,826 | $ 9,429,519 | $ 7,262,106 |
Cost of Revenue | 2,274,564 | 1,861,130 | 6,975,126 | 5,291,026 |
Gross Profit | 839,498 | 473,696 | 2,454,393 | 1,971,080 |
Operating Expenses: | ||||
Depreciation | 12,479 | 6,299 | 35,930 | 18,897 |
Postage, Shipping and Freight | 94,356 | 113,702 | 430,105 | 378,595 |
Marketing and Advertising | 609,252 | 25,497 | 1,876,576 | 49,347 |
E Commerce Services, Commissions and Fees | 434,832 | 222,425 | 1,160,569 | 641,692 |
Operating lease cost | 30,478 | 23,279 | 91,437 | 91,437 |
Personnel Costs | 319,256 | 330,184 | 1,078,449 | 829,788 |
PPP loan forgiveness | (209,447) | (209,447) | ||
General and Administrative | 1,569,721 | 263,619 | 2,682,866 | 598,484 |
Total Operating Expenses | 2,860,927 | 985,005 | 7,146,485 | 2,608,240 |
Net Operating Income (Loss) | (2,021,429) | (511,309) | (4,692,092) | (637,160) |
Other Income (Expense) | ||||
Gain (Loss) on Sale of Property and Equipment | 20,345 | 464 | ||
Gain (Loss) on Derivatives | (76,444) | (939,873) | (88,551) | (507,674) |
Gain on Settlement of Debt | 41,249 | 2,845,742 | 1,004,615 | 5,018,388 |
Amortization of Debt Discount | (130,139) | (67,357) | (442,075) | (694,168) |
Interest Expense | (379,811) | (227,130) | (688,622) | (497,917) |
Total Other Income (Expense) | (545,145) | 1,611,382 | (194,288) | 3,319,093 |
Net Income (Loss) | $ (2,566,574) | $ 1,100,073 | $ (4,886,380) | $ 2,681,933 |
Basic Weighted Average Shares Outstanding; | 3,198,658 | 1,067,074 | 2,572,772 | 797,126 |
Basic Income (Loss) per Share | $ (0.80) | $ 1.03 | $ (1.90) | $ 3.36 |
Diluted Average Shares Outstanding; | 3,198,658 | 5,268,957 | 2,572,772 | 4,999,009 |
Diluted Income (Loss) per Share | $ (0.80) | $ (0.13) | $ (1.90) | $ (0.13) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Deficit - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Jan. 31, 2020 | $ 20 | $ 7 | $ 1 | $ 13,449,336 | $ (21,569,153) | $ (8,119,789) | |
Shares, Outstanding, Beginning Balance at Jan. 31, 2020 | 20,000 | 6,750 | 538,464 | ||||
Relative fair value of equity issued with debt | |||||||
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 (Loss) | 1,186,898 | 1,186,898 | |||||
Ending balance, value at Apr. 30, 2020 | $ 20 | $ 7 | $ 1 | 13,469,944 | (20,382,255) | (6,912,283) | |
Shares, Outstanding, Ending Balance at Apr. 30, 2020 | 0 | 20,000 | 7,000 | 620,825 | |||
Beginning balance, value at Jan. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,449,336 | (21,569,153) | (8,119,789) | |
Shares, Outstanding, Beginning Balance at Jan. 31, 2020 | 20,000 | 6,750 | 538,464 | ||||
Relative fair value of equity issued with debt | |||||||
Net (Loss) | 2,681,933 | ||||||
Ending balance, value at Oct. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,946,305 | (18,887,220) | (4,940,887) | |
Shares, Outstanding, Ending Balance at Oct. 31, 2020 | 0 | 20,000 | 7,250 | 1,181,644 | |||
Beginning balance, value at Apr. 30, 2020 | $ 20 | $ 7 | $ 1 | 13,469,944 | (20,382,255) | (6,912,283) | |
Shares, Outstanding, Beginning Balance at Apr. 30, 2020 | 0 | 20,000 | 7,000 | 620,825 | |||
Relative fair value of equity issued with debt | |||||||
Conversion of Notes Payable to Common Stock | 7,656 | 7,656 | |||||
Conversion of Notes Payable to Common Stock (in shares) | 284,147 | ||||||
Derivative Liability Reclassified as Equity Upon Conversion of Notes | 12,081 | 12,081 | |||||
Net (Loss) | 394,962 | 394,962 | |||||
[custom:SharesOutstanding1] | |||||||
Ending balance, value at Jul. 31, 2020 | 20 | 7 | $ 1 | 13,489,681 | (19,987,293) | (6,497,584) | |
Shares, Outstanding, Ending Balance at Jul. 31, 2020 | 904,972 | ||||||
Relative fair value of equity issued with debt | |||||||
Net (Loss) | 1,100,073 | 1,100,073 | |||||
Conversion of Notes Payable and Accrued Interest and Fees to Common Stock | 4,757 | 4,757 | |||||
Conversion of Notes Payable and Accrued Interest to Common Stock, shares | 211,987 | ||||||
Issuance of Shares as Commitment Fee for Loan | 50,000 | 50,000 | |||||
Issuance of shares as Commitment fee for Loan ( in Shares) | 19,685 | ||||||
Issuance of Shares to Repay Accrued Expense Related Party | 18,900 | 18,900 | |||||
Issuance ofShares to Repay Accrued Expenses Related Party (in shares) | 45,000 | ||||||
Issuance of Class C Shares as Part of Debt Settlement | 20,290 | 20,290 | |||||
Issuance of Class C Shares Repay Accrued Expense Related Party | 11,177 | 11,177 | |||||
Issuance of 950,000 Warrants as Part of Debt Settlement | 351,500 | 351,500 | |||||
Ending balance, value at Oct. 31, 2020 | $ 20 | $ 7 | $ 1 | 13,946,305 | (18,887,220) | (4,940,887) | |
Shares, Outstanding, Ending Balance at Oct. 31, 2020 | 0 | 20,000 | 7,250 | 1,181,644 | |||
Beginning balance, value at Jan. 31, 2021 | $ 20 | $ 7 | $ 1 | 14,291,759 | (20,381,977) | (6,090,190) | |
Shares, Outstanding, Beginning Balance at Jan. 31, 2021 | 20,000 | 7,250 | 1,427,163 | ||||
Relative fair value of equity issued with debt | |||||||
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 Subscription | $ 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 (Loss) | (567,557) | (567,557) | |||||
Ending balance, value at Apr. 30, 2021 | $ 20 | $ 7 | $ 3 | 16,593,758 | (20,949,534) | (4,355,746) | |
Shares, Outstanding, Ending Balance at Apr. 30, 2021 | 20,000 | 7,250 | 2,574,413 | ||||
Beginning balance, value at Jan. 31, 2021 | $ 20 | $ 7 | $ 1 | 14,291,759 | (20,381,977) | (6,090,190) | |
Shares, Outstanding, Beginning Balance at Jan. 31, 2021 | 20,000 | 7,250 | 1,427,163 | ||||
Relative fair value of equity issued with debt | |||||||
Net (Loss) | (4,886,380) | ||||||
Ending balance, value at Oct. 31, 2021 | $ 20 | $ 7 | $ 3 | 19,212,123 | (25,268,357) | (6,056,204) | |
Shares, Outstanding, Ending Balance at Oct. 31, 2021 | 20,000 | 7,250 | 3,410,235 | ||||
Beginning balance, value at Apr. 30, 2021 | $ 20 | $ 7 | $ 3 | 16,593,758 | (20,949,534) | (4,355,746) | |
Relative fair value of equity issued with debt | |||||||
Relative fair value of equity issued with debt (in shares) | 91,810 | ||||||
Issuance of warrants | 600,000 | 600,000 | |||||
Issuance of share | 104,750 | ||||||
Shares, Outstanding, Beginning Balance at Apr. 30, 2021 | 20,000 | 7,250 | 2,574,413 | ||||
Relative fair value of equity issued with debt | |||||||
Derivative Liability Reclassified as Equity Upon Conversion of Notes | 17,640 | 17,640 | |||||
Net (Loss) | (1,752,249) | (1,752,249) | |||||
Conversion of Notes Payable and Accrued Interest and Fees to Common Stock | 59,100 | 59,100 | |||||
Conversion of Notes Payable and Accrued Interest to Common Stock, shares | 30,000 | ||||||
Ending balance, value at Jul. 31, 2021 | $ 20 | $ 7 | $ 3 | 17,530,799 | (22,701,783) | (5,170,954) | |
Shares, Outstanding, Ending Balance at Jul. 31, 2021 | 2,800,973 | ||||||
Relative fair value of equity issued with debt | |||||||
[custom:ShareIssuancesNetOfIssuanceCostsInShares] | 521,000 | ||||||
Warrants Issued for Fees | 512,500 | 512,500 | |||||
Options Issued to Director and CEO | 585,000 | 585,000 | |||||
Additional Shares Issued as Part of Relative Fair Value for Debt | |||||||
Share Issuance for fees (inShares) | 13,011 | ||||||
Share Issuance for fees | 30,055 | 30,055 | |||||
Share Issuances, Net of Issuance Costs of $359,445 | 392,924 | 392,924 | |||||
Additional Shares Issued as Part of Relative Fair Value for Debt (in shares) | 15,480 | ||||||
Derivative Liability Reclassified as Equity Upon Conversion of Notes | 58,504 | 58,504 | |||||
Net (Loss) | (2,566,574) | (2,566,574) | |||||
Conversion of Notes Payable and Accrued Interest and Fees to Common Stock | 102,341 | 102,341 | |||||
Conversion of Notes Payable and Accrued Interest to Common Stock, shares | 59,771 | ||||||
Ending balance, value at Oct. 31, 2021 | $ 20 | $ 7 | $ 3 | $ 19,212,123 | $ (25,268,357) | $ (6,056,204) | |
Shares, Outstanding, Ending Balance at Oct. 31, 2021 | 20,000 | 7,250 | 3,410,235 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Changes in Stockholders' Deficit (Parenthetical) | 3 Months Ended |
Oct. 31, 2021USD ($)shares | |
Statement of Stockholders' Equity [Abstract] | |
Number of warrants issued | shares | 950,000 |
[custom:ShareIssuanceCost] | $ | $ 359,445 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ (4,886,380) | $ 2,681,933 |
Adjustments to reconcile net income (loss) to cash used by operating activities: | ||
Depreciation | 35,930 | 18,897 |
Reduction of Right of Use | 69,691 | |
Accretion of Lease | 21,746 | |
(Gain) loss in Fair Value on Derivative Liabilities | 88,551 | 507,674 |
Amortization of Debt Discount | 442,075 | 694,168 |
Original Issue Discount on Notes to Interest Expense | 69,750 | |
Loan Penalties Capitalized to Loan and Accrued Interest | 28,000 | 3,394 |
Stock Based Payment of Consulting Fees and Shares | 303,555 | 50,000 |
Stock Based Compensation on Options and Warrants | 1,097,500 | |
Gain on Sale of Property and Equipment | (20,345) | (464) |
PPP Loan Forgiveness | (209,447) | |
Gain on Settlement of Debt | (1,004,615) | (5,018,388) |
Change in Operating Assets and Liabilities: | ||
(Increase) Decrease in Inventory | (78,033) | 72,268 |
Decrease in Prepaid Rent and Expenses | 5,546 | 21,606 |
(Increase) Decrease in Other Current Assets | (39,270) | (2,853) |
Increase in Accounts Payable | 230,225 | 31,236 |
Increase in Accrued Expenses | 137,440 | 293,289 |
Operating Lease Payments | (91,437) | |
Decrease in Accrued Expenses -Related Party | (60,000) | |
Increase in Customer Deposits | 32,391 | |
Decrease in Deferred Revenue | (446,474) | |
CASH FLOWS (USED IN) OPERATING ACTIVITIES | (4,343,351) | (577,490) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds of Sales of Property and Equipment | 25,060 | 9,750 |
Purchase of Property and Equipment | (43,628) | |
CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES | (18,568) | 9,750 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Common Shares, Net of Issuance Costs | 3,037,625 | |
Proceeds from Short Term Debt | 1,568,472 | 635,000 |
Proceeds from Convertible Notes Payable | 699,525 | 210,250 |
Payments on Short Term Debt | (449,386) | (370,824) |
Proceeds from PPP Loan | 209,447 | |
Payments on Long Term Debt | (14,857) | (2,856) |
Payments on Convertible Notes Payable | (406,825) | (14,329) |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 4,434,554 | 666,688 |
NET INCREASE IN CASH | 72,635 | 98,948 |
CASH AT BEGINNING OF PERIOD | 277,664 | 162,124 |
CASH AT END OF PERIOD | 350,299 | 261,072 |
Supplemental Disclosure of Cash Flows Information: | ||
Cash Paid for Interest | 345,868 | 49,638 |
Convertible Notes Interest and Derivatives Converted to Common Stock | 237,085 | 35,997 |
Stock Issued to Related Party in Payment of Accrued Expenses | 30,077 | |
Operating Lease Asset to Operating Lease Liability | 39,494 | |
Fair Value of Instruments Issued With Debt | 487,284 | |
Issuance of Warrants to Deferred Offering Costs | 600,000 | |
Deferred Offering Costs Against Share Proceeds | 312,000 | |
Loans to acquire Fixed Assets | $ 151,327 |
NATURE OF BUSINESS AND SIGNIFIC
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Business: Nature of Business – December 5, 2007 On November 29, 2018, the Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date 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, options and warrants. 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 nine months ended October 31, 2021 the Company purchased approximately 58% 440,977 55 393,729 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. 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. 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 October 31, 2021 October 31, Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 391,868 $ — $ — $ 391,868 Totals $ 391,868 $ — $ — $ 391,868 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 October 31, 2021 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability. Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Disaggregation of Revenue: Channel Revenue The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2021 and 2020 Change 2021 2020 $ % Proprietary website revenue $ 6,339,478 3,704,215 $ 2,635,263 71 Third party website revenue 3,090,041 3,557,891 (467,850 ) ( 13 ) Total Revenue $ 9,429,519 $ 7,262,106 $ 2,167,413 30 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 | 9 Months Ended |
Oct. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [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 $ 25,268,357 5,686,673 350,299 1,836,000 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 | 9 Months Ended |
Oct. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY | NOTE 3 – PROPERTY The Company capitalizes all property purchases over $ 1,000 3 years 7 years Property consists of the following at October 31, 2021 and January 31, 2021 October 31, 2021 January 31, 2021 Office furniture, fixtures and equipment $ 94,042 $ 85,413 Shop equipment 43,004 43,004 Vehicles 206,760 40,433 Sub-total 343,806 168,850 Less: Accumulated depreciation (109,468 ) (88,823 ) Total Property $ 234,338 $ 80,027 Additions to fixed assets for the nine months ended October 31, 2021 and were $ 186,327 35,000 151,327 8,628 nil For the nine months ended October 31, 2021, vehicles having a cost of $20,000 and a net book value of $4,715 was disposed of. Proceeds received of $ 25,060 20,345 Office equipment having a cost of $ 9,750 9,286 464 Depreciation expense was $ 12,479 6,299 Depreciation expense was $ 35,930 18,897 |
LEASES
LEASES | 9 Months Ended |
Oct. 31, 2021 | |
Leases | |
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 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 Below is a summary of our lease assets and liabilities at October 31, 2021 and January 31, 2021 Leases Classification October 31, 2021 January 31, 2021 Assets Operating Operating Lease Assets $ 270,187 $ 344,413 Liabilities Current Operating Current Operating Lease Liability $ 103,874 $ 90,286 Noncurrent Operating Noncurrent Operating Lease Liabilities 160,770 244,049 Total lease liabilities $ 264,644 $ 334,335 Note: As most of our leases do not provide an implicit rate, we use our incremental borrowing rate of 8% 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 $ 30,478 23,279 Operating lease cost and rent was $ 91,437 91,437 |
CUSTOMER DEPOSITS
CUSTOMER DEPOSITS | 9 Months Ended |
Oct. 31, 2021 | |
Disclosure Customer Deposits Abstract | |
CUSTOMER DEPOSITS | NOTE 5 – CUSTOMER DEPOSITS The Company receives payments from customers on orders prior to shipment. At October 31, 2021 the Company had received $ 220,776 188,385 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Oct. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED REVENUE | NOTE 6 – DEFERRED REVENUE The Company receives payments from customers on orders prior to shipment. At October 31, 2021 the Company had received $ 241,292 687,766 |
PPP LOAN
PPP LOAN | 9 Months Ended |
Oct. 31, 2021 | |
Ppp Loan | |
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 1 May 2, 2022 8,818 |
SHORT-TERM AND LONG-TERM DEBT
SHORT-TERM AND LONG-TERM DEBT | 9 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM AND LONG-TERM DEBT | NOTE 8 – SHORT-TERM AND LONG-TERM DEBT The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: October 31, January 31, 2021 2021 Loan dated October 8, 2019 February 29, 2020 November 10, 2010 June 30, 2022 20,000 (3) $ 97,340 * $ 102,168 SFS Funding Loan, original loan of $ 389,980 January 8, 2020 24% weekly 6,006 July 28, 2021 (2) — * 161,227 Forklift Note Payable, original note of $ 20,433 Sept 26, 2018 6.23% 60 monthly payments 394 (1) 9,227 # 12,269 Vehicle loan original loan of $ 93,239 February 16, 2021 2.90 % 72 monthly payments 1,414 94,316 84,975 # — Vehicle loan original loan of $ 59,711 March 20,2021 7.89% 72 monthly payments 1,048 87,575 56,160 # — Working Capital Note Payable - $ 700,000 October 29, 2021 17,904 Oct 29, 2022 31 (2,4,7) 690,053 * — Working Capital Note Payable - $ 650,000 October 25, 2021 15,875 October 25, 2022 26 (2,4,8) 640,260 * — Demand loan - $ 5,000 February 1, 2020 15 5% fee on outstanding balance 5,000 * 5,000 Demand loan - $ 2,500 March 8, 2019 25 5% fee on outstanding balance 2,500 * 2,500 Demand loan - $ 65,500 February 27, 2019 25 5% fee on outstanding balance 12,415 * 12,415 Promissory note -$ 60,000 September 18, 2020 September 18, 2021 5,000 15 60,000 *^ 60,000 Promissory note -$ 425,000 August 28, 2020 50,000 15 825,000 (5) 425,000 *^ 425,000 Promissory note -$ 1,200,000 August 28, 2020 August 28, 2022 12 interest payable monthly with the first six months interest deferred until the 6th month and added to principal (6) 1,200,000 *^ 1,200,000 Promissory note -$ 50,000 August 31, 2020 February 28, 2021 10 — * 50,000 Total $ 3,282,930 $ 2,030,579 October 31, January 31, 2021 2021 Short-Term Debt $ 3,132,568 $ 716,142 Current Portion Of Long-Term Debt 25,076 424,064 Long-Term Debt 125,286 890,373 $ 3,282,930 $ 2,030,579 ____________________ ^ In default * Short-term loans # Long-term loans of $ 9,227 3,913 $ 56,160 7,730 $ 84,975 13,433 (1) Secured by equipment having a net book value of $10,242 (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 13 20,000 (4) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (5) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects has entered into such a transaction the loan has reached maturity and is treated as current. No notice has been issued by the lender. . (6) Secured by all assets of the Company. Loan payable in 2 instalments, $ 445,200 826,800 (7) This loan replaces $500,000 loan dated June 4, 2021, $ 422,009 253,491 26,500 (8) This loan replaces $500,000 loan dated June 4, 2021, $ 359,919 267,606 22,475 |
SHORT-TERM CONVERTIBLE DEBT
SHORT-TERM CONVERTIBLE DEBT | 9 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM CONVERTIBLE DEBT | NOTE 9 – SHORT-TERM CONVERTIBLE DEBT The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price October 31, 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) — 230,000 Nov. 16, 2021 12 16 (1) — 100,000 Nov. 23, 2021 12 16 (1) 33,000 165,000 July 7, 2022 12 16 (2) 231,000 — July 12, 2022 12 16 $2.00 355,000 — July 23, 2022 10 22 (2) 179,300 — Sub-total 949,300 646,000 Debt Discount (354,526 ) (309,317 ) $ 594,774 $ 336,683 ____________________ (a) In default (1) Closing bid price on the day preceding the conversion date. (2) Closing bid price on the day preceding the conversion date in the event of default. On July 7, 2021 the Company entered into a convertible note for $231,000 with a one year maturity, interest rate of 12%, the Company received $199,500 in cash proceeds, recorded an original issue discount of $21,000, a derivative discount of $39,261 related to a conversion feature, and transaction fees of $10,500. As part of the loan the Company issued 30,960 shares as a commitment fee and recognized $31,005 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital. On July 12, 2021 the Company entered into a convertible note for $355,000 with a one year maturity, interest rate of 12%, the Company received $300,025 in cash proceeds, recorded an original issue discount of $35,500, a derivative discount of $171,250 related to a conversion feature, and transaction fees of $19,475. As part of the loan the Company issued 60,850 shares as a commitment fee and recognized $28,795 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital On July 20, 2021 the Company entered into a new convertible note for $224,125 with a one year maturity, interest rate of 10%, the Company received $200,000 in cash proceeds, recorded an original issue discount of $20,375, a derivative discount of $106,364 related to a conversion feature, and transaction fees of $3,750. 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 nine months ended October 31, 2021 and 2020, the Company recorded amortization of debt discount expense of $ 442,075 694,168 130,139 67,357 During the nine months ended October 31, 2021, the Company converted a total of $ 125,000 27,691 7,500 89,771 During the nine months ended October 31, 2021 and October 31, 2020 the Company added $ 28,000 3,394 The Company had accrued interest payable of $ 223,298 240,713 As of October 31, 2021, the Company had $ 151,000 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended |
Oct. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | NOTE 10 – DERIVATIVE LIABILITIES As of October 31, 2021 and January 31, 2021, the Company had derivative liabilities of $ 391,868 213,741 76,444 939,873 88,551 507,764 The derivative liabilities are valued as a level 3 input for valuing financial instruments. The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2021. Level 3 Derivatives Balance, January 31, 2021 $ 213,741 Settlement due to Repayment of Debt (151,163 ) Changes due to Issuance of New Convertible Notes 316,883 Changes due to Conversion of Notes Payable (76,144 ) Mark to Market Change in Derivatives 88,551 Balance, October 31, 2021 $ 391,868 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 October 31, 2021 is as follows: Embedded Strike price $ 1.24 2.25 Contractual term (years) 0.25 0.72 Volatility (annual) 59.8 125.2 High yield cash rate 21.79 22.80 Underlying fair market value $ 1.24 Risk-free rate 0.28 0.33 Dividend yield (per share) 0 |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 9 Months Ended |
Oct. 31, 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 October 31, 2021, and January 31, 2021 the Company had 0 330,000 0.001 At both October 31, 2021 and January 31, 2021, there were 20,000 20,000 20,000 0.001 At both October 31, 2021 and January 31, 2021, there were 7,250 7,250 7,250 0.001 At both October 31, 2021 and January 31, 2021, there were 870 .001 These shares are non-voting 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 (2) Should the Corporation exercise the right of Optional Redemption it shall provide each holder of Preferred Stock with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). Any optional redemption pursuant to this Section VI shall be made ratably among holders in proportion to the Liquidation Value of Preferred Stock then outstanding and held by such holders. The Optional Redemption Notice shall state the Liquidation Value of Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the Corporation to the holders at the address of such holder appearing on the register of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holders, and (B) the holders will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption. (3) Should the holder exercise the right of Optional Redemption it shall provide the Corporation with at least 30 days’ notice of any proposed optional redemption pursuant this Section VI (an “Optional Redemption Notice”). The Optional Redemption Notice shall state the value of the Preferred Stock to be redeemed and the date on which the Optional Redemption is to occur (which shall not be less than thirty (30) or more than sixty (60) Business Days after the date of delivery of the Optional Redemption Notice) and shall be delivered by the holder to the Corporation at the address of the Corporation for the Preferred Stock. Within seven (7) business days after the date of delivery of the Optional Redemption Notice, each holder shall provide the Corporation with instructions as to the account to which payments associated with such Optional Redemption should be deposited. On the date of the Optional Redemption, provided for in the relevant Optional Redemption Notice, (A) the Corporation will deliver the redemption amount via wire transfer to the account designated by the holder, and (B) the holder will deliver the certificates relating to that number of shares of Preferred Stock being redeemed, duly executed for transfer or accompanied by executed stock powers, in either case, transferring that number of shares to be redeemed. Upon the occurrence of the wire transfer (or, in the absence of a holder designating an account to which funds should be transferred, delivery of a certified or bank cashier’s check in the amount due such holder in connection with such Optional Redemption to the address of such holder appearing on the register of the Corporation for the Preferred Stock), that number of shares of Preferred Stock redeemed pursuant to such Optional Redemption as represented by the previously issued certificates will be deemed no longer outstanding. Notwithstanding anything to the contrary in this Designation, each holder may continue to convert Preferred Stock in accordance with the terms hereof until the date such Preferred Stock is actually redeemed pursuant to an Optional Redemption. The Series D Preferred Stock is not entitled to any pre-emptive or subscription rights in respect of any securities of the Corporation. Neither the Company nor any Series D preferred stockholders has given notice to exercise the redemption as of October 31, 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 October 31, 2021 and January 31, 2021. Common Stock The Company is authorized to issue 15,000,000 0.000001 3,410,235 1,427,163 The Company issued the following shares of common stock in the nine months ended October 31, 2021: The Company issued 1,723,000 3,037,625 2,224,805 2,301 125,000 89,771 63,011 137,555 107,290 59,801 Options and Warrants: The Company has 500,000 nil The Company recorded option and warrant expense of $ 1,097,500 1,263,500 For the three and nine months ended October 31 ,2021 the Company issued the following warrants On July 27, 2021, the Company issued a warrant to Triton Funds LP (“Triton”) to acquire 300,000 shares of the Company’s common stock as part of the Common Stock Purchase Agreement with Triton which allows Triton to purchase shares of our common stock and which was included in the Registration Statement on Form S-1 the Company filed on August 5, 2021 and which went effective on August 18, 2021 (see Note 16). The table A below provides the significant estimates used that resulted in the Company determining the fair value of the warrant at $600,000, which has been recorded as a deferred offering cost. In the event that Triton requests purchases of the Company’s common stock that total less than $600,000, the deferred offering costs will be expenses as professional fees. Table A Expected volatility 2181 Exercise price $ 2.11 Stock price $ 2.00 Expected life 3 years Risk-free interest rate 0.37 Dividend yield 0 On August 26, 2021, the Company issued a warrant to consultant to acquire 250,000 shares of the Company’s common stock. The table B below provides the significant estimates used that resulted in the Company determining the fair value of the warrant at $512,500, which has been recorded as consulting fees. Table B Expected volatility 2174 Exercise price $ 1.50 Stock price $ 2.05 Expected life 3 years Risk-free interest rate 0.46 Dividend yield 0 For the three and nine months ended October 31, 2020, the Company issued a warrant to acquire 950,000 shares of stock as part of a debt settlement transaction describe in Note 7. The Warrant gives the holder the right to cash settle the warrants if a fundamental transaction as defined in the warrants occurs. However, a member of management and shareholder of the Company who controls approximately 60% of all voting shares would decide if a fundamental transaction would occur. The Company currently is not considering any fundamental transactions. Based on the above the Company used a Black Scholes model to record the value of the warrant. The warrants having a fair value of $351,500 with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions: Expected volatility 506.8 Exercise price $ 0.40 Stock price $ 0.37 Expected life 3 years Risk-free interest rate 0.19 Dividend yield 0 The Company had the following fully vested warrants outstanding at October 31, 2021 Issued To # Warrants Dated Expire Strike Price Expired Exercised Lender 950,000 08/28/2020 08/28/2023 $ 0.40 N N Broker 2,500 10/11/2020 10/11/2025 $ 4.50 N N Broker 3,000 11/25/2020 11/25/2025 $ 3.00 N N Triton 300,000 07/27/2021 07/27/2024 $ 2.11 N N Consultant 250,000 08/26/2021 08/26/2024 $ 1.50 N N For the three and nine months ended October 31, 2020, the Company issued a stock option to CEO and director T. Armes to acquire 500,000 shares of stock. The table below provides the significant estimates used that resulted in the Company determining the fair value of the option at $585,000, which has been recorded as stock based compensation Expected volatility 2644 Exercise price $ 1.50 Stock price $ 1.17 Expected life 2 years Risk-free interest rate 0.36 Dividend yield 0 The Company had the following fully vested options outstanding at October 31, 2021 Issued To # Options Dated Expire Strike Price Expired Exercised T. Armes 500,000 10/14/2021 10/14/2023 $ 1.50 N N Schedule of warrants outstanding Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2021 — $ — 955,500 $ 0.42 Granted 500,000 1.50 550,000 1.83 Exercised — — — — Forfeited and canceled — — — — Outstanding at October 31, 2021 500,000 $ 1.50 1,505,500 $ 0.58 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS As of October 31, 2021 and January 31, 2021, the Company had $ 46,173 106,173 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 31, 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 On October1, 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 In October 2019 t he Company entered into an operating lease for a vehicle with an annual cost of $ 9,067 Schedule of minimum lease obligations Maturity of Lease Liabilities Operating October 31 2022 $ 120,657 October 31, 2023 81,203 October 31, 2024 30,003 October 31, 2025 30,003 October 31, 2026 30,003 After October 31, 2026 2,501 Total lease payments 294,370 Less: Interest (29,726 ) Present value of lease liabilities $ 264,644 The Company had total operating lease and rent expense of $ 30,478 23,279 91,437 91,437 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 | 9 Months Ended |
Oct. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 14 – EARNINGS (LOSS) PER SHARE The net income (loss) For the Three Months Ended October 31, 2021 2020 Numerator: Net income (loss) available to common shareholders $ (2,566,574 ) $ 1,100,073 Denominator: Weighted average shares – basic 3,198,658 1,067,074 Net income (loss) per share – basic $ (0.80 ) $ 1.03 Effect of common stock equivalents Add: interest expense on convertible debt 19,247 44,110 Add: amortization of debt discount 130,139 67,357 Less: gain on settlement of debt on convertible notes (41,249 ) (2,845,742 ) Add (Less): loss (gain) on change of derivative liabilities 76,444 939,873 Net income (loss) adjusted for common stock equivalents (2,381,993 ) (694,329 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — 144,158 Convertible Class C Preferred shares — 3,107,724 Warrants (1) — 950,001 Denominator: Weighted average shares – diluted 3,198,658 5,268,957 Net income (loss) per share – diluted $ (0.80 ) $ (0.13 ) - 21 - The anti-dilutive shares of common stock equivalents For the Three Months Ended October 31, 2021 2020 Convertible notes and accrued interest 945,643 — Convertible Class C Preferred shares 8,968,918 — Warrants and options 2,005,500 — Total 11,920,061 — The net income (loss) per common share amounts were determined as follows: For the Nine Months Ended October 31, 2021 2020 Numerator: Net income (loss) available to common shareholders $ (4,886,380 ) $ 2,681,933 Denominator: Weighted average shares – basic 2,575,772 797,126 Net income (loss) per share – basic $ (1.90 ) $ 3.36 Effect of common stock equivalents Add: interest expense on convertible debt 35,237 253,691 Add: amortization of debt discount 442,075 694,168 Less: gain on settlement of debt on convertible notes (1,004,615 ) (4,793,113 ) Add (Less): loss (gain) on change of derivative liabilities 88,551 507,674 Net income (loss) adjusted for common stock equivalents (5,325,132 ) (655,647 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — 144,158 Convertible Class C Preferred shares — 3,107,724 Warrants — 950,001 Denominator: Weighted average shares – diluted 2,575,772 4,999,009 Net income (loss) per share – diluted $ (1.90 ) $ (0.13 ) The anti-dilutive shares of common stock equivalents for the nine months ended October 31, 2021 and October 31, 2020 were as follows: For the Nine Months Ended October 31, 2021 2020 Convertible notes and accrued interest 945,643 — Convertible Class C Preferred shares 8,968,918 — Warrants and options 2,005,500 — Total 11,920,061 — |
GAIN ON SETTLEMENT OF DEBT
GAIN ON SETTLEMENT OF DEBT | 9 Months Ended |
Oct. 31, 2021 | |
Gain On Settlement Of Debt | |
GAIN ON SETTLEMENT OF DEBT | NOTE 15 – GAIN ON SETTLEMENT OF DEBT For the three months ended October 31, 2021 the gain on settlement of debt of $ 41,249 2,845,742 For the nine months ended October 31, 2021 the gain on settlement of debt of $ 1,004,615 853,452 950,151 96,699 151,162 For the nine months ended October 31, 2020 the gain on settlement of debt of $ 5,018,388 - A $ 2,172,646 1,070,035 175,422 122,000 22,076 792,218 2,181,751 250 9,105 - A $ 2,820,147 1,692,690 571,454 2,177,794 4,441,938 150 20,290 - A $ 25,595 40,939 20,111 31,320 92,370 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Oct. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Subsequent to quarter year end up to December 10, 2021: On November 12, 2021 the Company entered into a new convertible note for $ 2,4000,000 8 1,966,000 recorded an original issue discount of $240,000 and transaction fees of $194,000. Six months after the issue date, the principal and interest are convertible into Common Stock of the Company at a conversion price of the lesser of $1.25 per share or 75% of the share price. Included are two warrants issued on November 12, 2021, each to acquire 900,000 common shares at an exercise price of $1.50 per share, (subject to adjustment as a result of dilutive issuances), and a 5 year maturity. The second warrant (to acquire 900,000 shares) is subject to cancellation by the Company should the note and accrued interest be repaid without default on or prior to maturity. The Company used a part of the proceeds from the note to repay three investor notes that originated in July totaling $894,480 On June 4, 2021 the Company’s shareholders consented to an amendment to the Articles of Incorporation of the Company wherein the name of the Company will be changed to “Auto Parts 4Less Group, Inc.”. The Company expects this name change to become effective, subject to FINRA approval, in the fourth quarter of fiscal 2022. |
NATURE OF BUSINESS AND SIGNIF_2
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
Business: | Business: Nature of Business – December 5, 2007 On November 29, 2018, the Company entered into a transaction (the “Share Exchange”), pursuant to which the Company acquired 100% of the issued and outstanding equity securities of The 4LESS Corp. (“4LESS”), in exchange for the issuance of (i) nineteen thousand (19,000) shares of Series B Preferred Stock, (ii) six thousand seven hundred fifty (6,750) shares of Series C Preferred Stock, and (iii) 870 shares of Series D Preferred Stock. The Series C Preferred Shares have a right to convert into common stock of the Company by multiplying the number of issued and outstanding shares of common stock by 2.63 on the conversion date 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, options and warrants. |
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 nine months ended October 31, 2021 the Company purchased approximately 58% 440,977 55 393,729 |
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. |
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. |
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 October 31, 2021 October 31, Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 391,868 $ — $ — $ 391,868 Totals $ 391,868 $ — $ — $ 391,868 |
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 October 31, 2021 is greater than 25% change in historical volatility as of that date. The other inputs, such as risk free rate, high yield cash rate and stock price all have a sensitivity for a 1% change in the input variable results in a significantly less than 1% change in the calculated derivative liability. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation Because the Company’s sales agreements generally have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations. Disaggregation of Revenue: Channel Revenue The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2021 and 2020 Change 2021 2020 $ % Proprietary website revenue $ 6,339,478 3,704,215 $ 2,635,263 71 Third party website revenue 3,090,041 3,557,891 (467,850 ) ( 13 ) Total Revenue $ 9,429,519 $ 7,262,106 $ 2,167,413 30 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) | 9 Months Ended |
Oct. 31, 2021 | |
Accounting Policies [Abstract] | |
The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2021 | The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2021 October 31, Quoted Prices in Significant Significant Liabilities: Derivative Liabilities – embedded redemption feature $ 391,868 $ — $ — $ 391,868 Totals $ 391,868 $ — $ — $ 391,868 |
The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2021 and 2020 | The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2021 and 2020 Change 2021 2020 $ % Proprietary website revenue $ 6,339,478 3,704,215 $ 2,635,263 71 Third party website revenue 3,090,041 3,557,891 (467,850 ) ( 13 ) Total Revenue $ 9,429,519 $ 7,262,106 $ 2,167,413 30 |
PROPERTY (Tables)
PROPERTY (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property consists of the following at October 31, 2021 and January 31, 2021 | The Company capitalizes all property purchases over $ 1,000 3 years 7 years Property consists of the following at October 31, 2021 and January 31, 2021 October 31, 2021 January 31, 2021 Office furniture, fixtures and equipment $ 94,042 $ 85,413 Shop equipment 43,004 43,004 Vehicles 206,760 40,433 Sub-total 343,806 168,850 Less: Accumulated depreciation (109,468 ) (88,823 ) Total Property $ 234,338 $ 80,027 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Leases | |
Below is a summary of our lease assets and liabilities at October 31, 2021 and January 31, 2021 | Below is a summary of our lease assets and liabilities at October 31, 2021 and January 31, 2021 Leases Classification October 31, 2021 January 31, 2021 Assets Operating Operating Lease Assets $ 270,187 $ 344,413 Liabilities Current Operating Current Operating Lease Liability $ 103,874 $ 90,286 Noncurrent Operating Noncurrent Operating Lease Liabilities 160,770 244,049 Total lease liabilities $ 264,644 $ 334,335 |
SHORT-TERM AND LONG-TERM DEBT (
SHORT-TERM AND LONG-TERM DEBT (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: | The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: October 31, January 31, 2021 2021 Loan dated October 8, 2019 February 29, 2020 November 10, 2010 June 30, 2022 20,000 (3) $ 97,340 * $ 102,168 SFS Funding Loan, original loan of $ 389,980 January 8, 2020 24% weekly 6,006 July 28, 2021 (2) — * 161,227 Forklift Note Payable, original note of $ 20,433 Sept 26, 2018 6.23% 60 monthly payments 394 (1) 9,227 # 12,269 Vehicle loan original loan of $ 93,239 February 16, 2021 2.90 % 72 monthly payments 1,414 94,316 84,975 # — Vehicle loan original loan of $ 59,711 March 20,2021 7.89% 72 monthly payments 1,048 87,575 56,160 # — Working Capital Note Payable - $ 700,000 October 29, 2021 17,904 Oct 29, 2022 31 (2,4,7) 690,053 * — Working Capital Note Payable - $ 650,000 October 25, 2021 15,875 October 25, 2022 26 (2,4,8) 640,260 * — Demand loan - $ 5,000 February 1, 2020 15 5% fee on outstanding balance 5,000 * 5,000 Demand loan - $ 2,500 March 8, 2019 25 5% fee on outstanding balance 2,500 * 2,500 Demand loan - $ 65,500 February 27, 2019 25 5% fee on outstanding balance 12,415 * 12,415 Promissory note -$ 60,000 September 18, 2020 September 18, 2021 5,000 15 60,000 *^ 60,000 Promissory note -$ 425,000 August 28, 2020 50,000 15 825,000 (5) 425,000 *^ 425,000 Promissory note -$ 1,200,000 August 28, 2020 August 28, 2022 12 interest payable monthly with the first six months interest deferred until the 6th month and added to principal (6) 1,200,000 *^ 1,200,000 Promissory note -$ 50,000 August 31, 2020 February 28, 2021 10 — * 50,000 Total $ 3,282,930 $ 2,030,579 October 31, January 31, 2021 2021 Short-Term Debt $ 3,132,568 $ 716,142 Current Portion Of Long-Term Debt 25,076 424,064 Long-Term Debt 125,286 890,373 $ 3,282,930 $ 2,030,579 ____________________ ^ In default * Short-term loans # Long-term loans of $ 9,227 3,913 $ 56,160 7,730 $ 84,975 13,433 (1) Secured by equipment having a net book value of $10,242 (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 13 20,000 (4) The Company has pledged a security interest on all accounts receivable and banks accounts of the Company. (5) Financing event would be a sale or issuance of assets, debt, shares or any means of raising capital. As the Company expects has entered into such a transaction the loan has reached maturity and is treated as current. No notice has been issued by the lender. . (6) Secured by all assets of the Company. Loan payable in 2 instalments, $ 445,200 826,800 (7) This loan replaces $500,000 loan dated June 4, 2021, $ 422,009 253,491 26,500 (8) This loan replaces $500,000 loan dated June 4, 2021, $ 359,919 267,606 22,475 |
SHORT-TERM CONVERTIBLE DEBT (Ta
SHORT-TERM CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: | The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: Interest Default Interest Conversion Outstanding Principal at Maturity Date Rate Rate Price October 31, 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) — 230,000 Nov. 16, 2021 12 16 (1) — 100,000 Nov. 23, 2021 12 16 (1) 33,000 165,000 July 7, 2022 12 16 (2) 231,000 — July 12, 2022 12 16 $2.00 355,000 — July 23, 2022 10 22 (2) 179,300 — Sub-total 949,300 646,000 Debt Discount (354,526 ) (309,317 ) $ 594,774 $ 336,683 ____________________ (a) In default (1) Closing bid price on the day preceding the conversion date. (2) Closing bid price on the day preceding the conversion date in the event of default. |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2021. | The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2021. Level 3 Derivatives Balance, January 31, 2021 $ 213,741 Settlement due to Repayment of Debt (151,163 ) Changes due to Issuance of New Convertible Notes 316,883 Changes due to Conversion of Notes Payable (76,144 ) Mark to Market Change in Derivatives 88,551 Balance, October 31, 2021 $ 391,868 |
A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of October 31, 2021 is as follows: | The fair value of the derivative liability is determined using the lattice model, is re-measured on the Company’s reporting dates, and is affected by changes in inputs to that model including our stock price, expected stock price volatility, the expected term, and the risk-free interest rate. A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of October 31, 2021 is as follows: Embedded Strike price $ 1.24 2.25 Contractual term (years) 0.25 0.72 Volatility (annual) 59.8 125.2 High yield cash rate 21.79 22.80 Underlying fair market value $ 1.24 Risk-free rate 0.28 0.33 Dividend yield (per share) 0 |
STOCKHOLDERS_ DEFICIT (Tables)
STOCKHOLDERS’ DEFICIT (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Equity [Abstract] | |
For the three and nine months ended October 31 ,2021 the Company issued the following warrants | For the three and nine months ended October 31 ,2021 the Company issued the following warrants On July 27, 2021, the Company issued a warrant to Triton Funds LP (“Triton”) to acquire 300,000 shares of the Company’s common stock as part of the Common Stock Purchase Agreement with Triton which allows Triton to purchase shares of our common stock and which was included in the Registration Statement on Form S-1 the Company filed on August 5, 2021 and which went effective on August 18, 2021 (see Note 16). The table A below provides the significant estimates used that resulted in the Company determining the fair value of the warrant at $600,000, which has been recorded as a deferred offering cost. In the event that Triton requests purchases of the Company’s common stock that total less than $600,000, the deferred offering costs will be expenses as professional fees. Table A Expected volatility 2181 Exercise price $ 2.11 Stock price $ 2.00 Expected life 3 years Risk-free interest rate 0.37 Dividend yield 0 On August 26, 2021, the Company issued a warrant to consultant to acquire 250,000 shares of the Company’s common stock. The table B below provides the significant estimates used that resulted in the Company determining the fair value of the warrant at $512,500, which has been recorded as consulting fees. Table B Expected volatility 2174 Exercise price $ 1.50 Stock price $ 2.05 Expected life 3 years Risk-free interest rate 0.46 Dividend yield 0 For the three and nine months ended October 31, 2020, the Company issued a warrant to acquire 950,000 shares of stock as part of a debt settlement transaction describe in Note 7. The Warrant gives the holder the right to cash settle the warrants if a fundamental transaction as defined in the warrants occurs. However, a member of management and shareholder of the Company who controls approximately 60% of all voting shares would decide if a fundamental transaction would occur. The Company currently is not considering any fundamental transactions. Based on the above the Company used a Black Scholes model to record the value of the warrant. The warrants having a fair value of $351,500 with a corresponding increase in additional paid-in capital valued using the Black-Scholes option pricing model according to the following assumptions: Expected volatility 506.8 Exercise price $ 0.40 Stock price $ 0.37 Expected life 3 years Risk-free interest rate 0.19 Dividend yield 0 |
The Company had the following fully vested warrants outstanding at October 31, 2021 | The Company had the following fully vested warrants outstanding at October 31, 2021 Issued To # Warrants Dated Expire Strike Price Expired Exercised Lender 950,000 08/28/2020 08/28/2023 $ 0.40 N N Broker 2,500 10/11/2020 10/11/2025 $ 4.50 N N Broker 3,000 11/25/2020 11/25/2025 $ 3.00 N N Triton 300,000 07/27/2021 07/27/2024 $ 2.11 N N Consultant 250,000 08/26/2021 08/26/2024 $ 1.50 N N |
For the three and nine months ended October 31, 2020, the Company issued a stock option to CEO and director T. Armes to acquire 500,000 shares of stock. The table below provides the significant estimates used that resulted in the Company determining the fair value of the option at $585,000, which has been recorded as stock based compensation | For the three and nine months ended October 31, 2020, the Company issued a stock option to CEO and director T. Armes to acquire 500,000 shares of stock. The table below provides the significant estimates used that resulted in the Company determining the fair value of the option at $585,000, which has been recorded as stock based compensation Expected volatility 2644 Exercise price $ 1.50 Stock price $ 1.17 Expected life 2 years Risk-free interest rate 0.36 Dividend yield 0 |
The Company had the following fully vested options outstanding at October 31, 2021 | The Company had the following fully vested options outstanding at October 31, 2021 Issued To # Options Dated Expire Strike Price Expired Exercised T. Armes 500,000 10/14/2021 10/14/2023 $ 1.50 N N |
Schedule of warrants outstanding | Schedule of warrants outstanding Options Weighted Average Warrants Weighted Average Outstanding at January 31, 2021 — $ — 955,500 $ 0.42 Granted 500,000 1.50 550,000 1.83 Exercised — — — — Forfeited and canceled — — — — Outstanding at October 31, 2021 500,000 $ 1.50 1,505,500 $ 0.58 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease obligations | Schedule of minimum lease obligations Maturity of Lease Liabilities Operating October 31 2022 $ 120,657 October 31, 2023 81,203 October 31, 2024 30,003 October 31, 2025 30,003 October 31, 2026 30,003 After October 31, 2026 2,501 Total lease payments 294,370 Less: Interest (29,726 ) Present value of lease liabilities $ 264,644 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Oct. 31, 2021 | |
Earnings Per Share [Abstract] | |
The net income (loss) | The net income (loss) For the Three Months Ended October 31, 2021 2020 Numerator: Net income (loss) available to common shareholders $ (2,566,574 ) $ 1,100,073 Denominator: Weighted average shares – basic 3,198,658 1,067,074 Net income (loss) per share – basic $ (0.80 ) $ 1.03 Effect of common stock equivalents Add: interest expense on convertible debt 19,247 44,110 Add: amortization of debt discount 130,139 67,357 Less: gain on settlement of debt on convertible notes (41,249 ) (2,845,742 ) Add (Less): loss (gain) on change of derivative liabilities 76,444 939,873 Net income (loss) adjusted for common stock equivalents (2,381,993 ) (694,329 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — 144,158 Convertible Class C Preferred shares — 3,107,724 Warrants (1) — 950,001 Denominator: Weighted average shares – diluted 3,198,658 5,268,957 Net income (loss) per share – diluted $ (0.80 ) $ (0.13 ) |
The anti-dilutive shares of common stock equivalents | The anti-dilutive shares of common stock equivalents For the Three Months Ended October 31, 2021 2020 Convertible notes and accrued interest 945,643 — Convertible Class C Preferred shares 8,968,918 — Warrants and options 2,005,500 — Total 11,920,061 — |
The net income (loss) per common share amounts were determined as follows: | The net income (loss) per common share amounts were determined as follows: For the Nine Months Ended October 31, 2021 2020 Numerator: Net income (loss) available to common shareholders $ (4,886,380 ) $ 2,681,933 Denominator: Weighted average shares – basic 2,575,772 797,126 Net income (loss) per share – basic $ (1.90 ) $ 3.36 Effect of common stock equivalents Add: interest expense on convertible debt 35,237 253,691 Add: amortization of debt discount 442,075 694,168 Less: gain on settlement of debt on convertible notes (1,004,615 ) (4,793,113 ) Add (Less): loss (gain) on change of derivative liabilities 88,551 507,674 Net income (loss) adjusted for common stock equivalents (5,325,132 ) (655,647 ) Dilutive effect of common stock equivalents: Convertible notes and accrued interest — 144,158 Convertible Class C Preferred shares — 3,107,724 Warrants — 950,001 Denominator: Weighted average shares – diluted 2,575,772 4,999,009 Net income (loss) per share – diluted $ (1.90 ) $ (0.13 ) |
The anti-dilutive shares of common stock equivalents for the nine months ended October 31, 2021 and October 31, 2020 were as follows: | The anti-dilutive shares of common stock equivalents for the nine months ended October 31, 2021 and October 31, 2020 were as follows: For the Nine Months Ended October 31, 2021 2020 Convertible notes and accrued interest 945,643 — Convertible Class C Preferred shares 8,968,918 — Warrants and options 2,005,500 — Total 11,920,061 — |
The following table sets forth,
The following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of October 31, 2021 (Details) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Liabilities: | ||
Derivative Liabilities – embedded redemption feature | $ 391,868 | |
Totals | 391,868 | $ 213,741 |
Fair Value, Inputs, Level 1 [Member] | ||
Liabilities: | ||
Derivative Liabilities – embedded redemption feature | ||
Totals | ||
Fair Value, Inputs, Level 2 [Member] | ||
Liabilities: | ||
Derivative Liabilities – embedded redemption feature | ||
Totals | ||
Fair Value, Inputs, Level 3 [Member] | ||
Liabilities: | ||
Derivative Liabilities – embedded redemption feature | 391,868 | $ 213,741 |
Totals | $ 391,868 |
The following table shows reven
The following table shows revenue split between proprietary and third party website revenue for the nine months ended October 31, 2021 and 2020 (Details) - USD ($) | 9 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Product Information [Line Items] | ||
Total revenue | $ 9,429,519 | $ 7,262,106 |
Change in revenue | $ 2,167,413 | |
Percentage change in revenue | 30.00% | |
Proprietary Website Revenue [Member] | ||
Product Information [Line Items] | ||
Total revenue | $ 6,339,478 | 3,704,215 |
Change in revenue | $ 2,635,263 | |
Percentage change in revenue | 71.00% | |
Third Party Website Revenue [Member] | ||
Product Information [Line Items] | ||
Total revenue | $ 3,090,041 | $ 3,557,891 |
Change in revenue | $ (467,850) | |
Percentage change in revenue | 13.00% |
NATURE OF BUSINESS AND SIGNIF_4
NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Nov. 29, 2018 | Oct. 31, 2021 | Oct. 31, 2020 | |
Accounting Policies [Abstract] | |||
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 | ||
Percentage of inventory | 58.00% | 55.00% | |
Accounts payable | $ 440,977 | $ 393,729 |
GOING CONCERN AND FINANCIAL P_2
GOING CONCERN AND FINANCIAL POSITION (Details Narrative) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (25,268,357) | $ (20,381,977) |
Working capital deficit | 5,686,673 | |
Cash and cash equivalents | 350,299 | |
Short-term debt in default | $ 1,836,000 |
Property consists of the follow
Property consists of the following at October 31, 2021 and January 31, 2021 (Details) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Sub-total | $ 343,806 | $ 168,850 |
Less: Accumulated depreciation | (109,468) | (88,823) |
Total Property | 234,338 | 80,027 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-total | 94,042 | 85,413 |
Shopequipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-total | 43,004 | 43,004 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-total | $ 206,760 | $ 40,433 |
PROPERTY (Details Narrative)
PROPERTY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||||||
Addition to fixed assets | $ 186,327 | $ 0 | $ 186,327 | $ 0 | $ 186,327 | $ 0 |
Cash | 35,000 | 35,000 | 35,000 | |||
Financed through vehicle loans | 151,327 | |||||
Gain (Loss) on Sale of Property and Equipment | 20,345 | 464 | ||||
Depreciation expense | 12,479 | $ 6,299 | 35,930 | $ 18,897 | 35,930 | 18,897 |
Shopequipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Addition to fixed assets | $ 8,628 | $ 8,628 | 8,628 | |||
Office Equipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Proceeds received | $ 25,060 | |||||
Cost | 9,750 | |||||
Net book value | $ 9,286 |
Below is a summary of our lease
Below is a summary of our lease assets and liabilities at October 31, 2021 and January 31, 2021 (Details) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Assets | ||
Operating | $ 270,187 | $ 344,413 |
Current | ||
Operating | 103,874 | 90,286 |
Noncurrent | ||
Operating | 160,770 | 244,049 |
Total lease liabilities | $ 264,644 | $ 334,335 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Leases | ||||
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 | |||
Description of renewal lease term | one to 17 years or more | |||
Incremental borrowing rate | 8.00% | |||
Operating lease cost and rent | $ 30,478 | $ 23,279 | $ 91,437 | $ 91,437 |
CUSTOMER DEPOSITS (Details Narr
CUSTOMER DEPOSITS (Details Narrative) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Disclosure Customer Deposits Abstract | ||
Customer deposits | $ 220,776 | $ 188,385 |
DEFERRED REVENUE (Details Narra
DEFERRED REVENUE (Details Narrative) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue | $ 241,292 | $ 687,766 |
PPP LOAN (Details Narrative)
PPP LOAN (Details Narrative) - Paycheck Protection Promissory [Member] | May 02, 2020USD ($) | May 02, 2020USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Proceeds from PPP Loan | $ 209,447 | |
Fixed rate per annum | 1.00% | 1.00% |
Maturity of loan | May 2, 2022 | May 2, 2022 |
Monthly instalments | $ 8,818 |
The components of the Company_s
The components of the Company’s debt as of October 31, 2021 and January 31, 2021 were as follows: (Details) - USD ($) | Jun. 04, 2021 | Nov. 10, 2020 | Oct. 31, 2021 | Aug. 28, 2022 | Aug. 28, 2021 | Jan. 31, 2021 | Jul. 31, 2020 |
Short-term Debt [Line Items] | |||||||
Debt | $ 3,282,930 | $ 2,030,579 | |||||
Accrued interest payable | 175,422 | $ 22,076 | |||||
Short-Term Debt | 3,132,568 | 716,142 | |||||
Current Portion Of Long-Term Debt | 25,076 | 424,064 | |||||
Long-term loan | 125,286 | 890,373 | |||||
3,282,930 | 2,030,579 | ||||||
Long-term loan, current | 25,076 | 424,064 | |||||
Sub-total | 949,300 | 646,000 | |||||
Debt Discount | (354,526) | (309,317) | |||||
Total | $ 594,774 | 336,683 | |||||
Debt One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Nov. 4, 2013 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 12.00% | ||||||
Conversion price | $ 1,800,000 | ||||||
Sub-total | $ 100,000 | 100,000 | |||||
Debt Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Jan. 31, 2014 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 18.00% | ||||||
Conversion price | $ 2,400,000 | ||||||
Sub-total | $ 16,000 | 16,000 | |||||
Debt Four [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Jul. 31, 2013 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 12.00% | ||||||
Conversion price | $ 1,440,000 | ||||||
Sub-total | $ 5,000 | 5,000 | |||||
Debt Five [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Jan. 31, 2014 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 12.00% | ||||||
Conversion price | $ 2,400,000 | ||||||
Sub-total | $ 30,000 | 30,000 | |||||
Debt Six [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Oct. 12, 2021 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 16.00% | ||||||
Sub-total | 230,000 | ||||||
Debt 1 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Nov. 16, 2021 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 16.00% | ||||||
Sub-total | 100,000 | ||||||
Debt 2 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Nov. 23, 2021 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 16.00% | ||||||
Sub-total | $ 33,000 | 165,000 | |||||
Debt 3 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Jul. 7, 2022 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 16.00% | ||||||
Sub-total | $ 231,000 | ||||||
Debt 4 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Jul. 12, 2022 | ||||||
Interest rate | 12.00% | ||||||
Default interest rate | 16.00% | ||||||
Sub-total | $ 355,000 | ||||||
Debt 5 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Maturity date | Jul. 23, 2022 | ||||||
Interest rate | 10.00% | ||||||
Default interest rate | 22.00% | ||||||
Sub-total | $ 179,300 | ||||||
Loan One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Oct. 8, 2019 | ||||||
Debt revised date | Feb. 29, 2020 | ||||||
Debt repayment date | Nov. 10, 2010 | ||||||
Maturity date | Jun. 30, 2022 | ||||||
Debt instrument periodic payment | $ 20,000 | ||||||
Debt | $ 97,340 | 102,168 | |||||
Percentage of debt instrument interest rate | 13.00% | ||||||
Lump sum payable amount | $ 20,000 | ||||||
Loan One [Member] | Maximum [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt instrument periodic payment | $ 5,705 | ||||||
S F S Funding Loan 1 [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Jan. 8, 2020 | ||||||
Maturity date | Jul. 28, 2021 | ||||||
Debt instrument periodic payment | $ 6,006 | ||||||
Debt | 161,227 | ||||||
Notes payable principal amount | $ 389,980 | ||||||
Interest rate | 24.00% | ||||||
Description of payment terms | weekly | ||||||
Forklift Note Payable [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Sep. 26, 2018 | ||||||
Debt instrument periodic payment | $ 394 | ||||||
Debt | 9,227 | 12,269 | |||||
Notes payable principal amount | $ 20,433 | ||||||
Interest rate | 6.23% | ||||||
Description of payment terms | 60 monthly payments | ||||||
Vehicle Loan [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Feb. 16, 2021 | ||||||
Debt instrument periodic payment | $ 1,414 | ||||||
Debt | 84,975 | ||||||
Notes payable principal amount | $ 93,239 | ||||||
Interest rate | 2.90% | ||||||
Description of payment terms | 72 monthly payments | ||||||
Secured equipment net book value | $ 94,316 | ||||||
Vehicle Loan One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Mar. 20, 2021 | ||||||
Debt instrument periodic payment | $ 1,048 | ||||||
Debt | 56,160 | ||||||
Notes payable principal amount | $ 59,711 | ||||||
Interest rate | 7.89% | ||||||
Description of payment terms | 72 monthly payments | ||||||
Secured equipment net book value | $ 87,575 | ||||||
Working Capital Note Payable [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Oct. 29, 2021 | ||||||
Maturity date | Oct. 29, 2022 | ||||||
Debt instrument periodic payment | $ 17,904 | ||||||
Debt | 690,053 | ||||||
Notes payable principal amount | $ 700,000 | ||||||
Interest rate | 31.00% | ||||||
Working Capital Note Payable One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Oct. 25, 2021 | ||||||
Maturity date | Oct. 25, 2022 | ||||||
Debt instrument periodic payment | $ 15,875 | ||||||
Debt | 640,260 | ||||||
Notes payable principal amount | $ 650,000 | ||||||
Interest rate | 26.00% | ||||||
Demand Loan [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Feb. 1, 2020 | ||||||
Debt | $ 5,000 | 5,000 | |||||
Notes payable principal amount | $ 5,000 | ||||||
Interest rate | 15.00% | ||||||
Debt Instrument, Maturity Date, Description | 5% fee on outstanding balance | ||||||
Demand Loan One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Mar. 8, 2019 | ||||||
Debt | $ 2,500 | 2,500 | |||||
Notes payable principal amount | $ 2,500 | ||||||
Interest rate | 25.00% | ||||||
Debt Instrument, Maturity Date, Description | 5% fee on outstanding balance | ||||||
Demand Loan Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Feb. 27, 2019 | ||||||
Debt | $ 12,415 | 12,415 | |||||
Notes payable principal amount | $ 65,500 | ||||||
Interest rate | 25.00% | ||||||
Debt Instrument, Maturity Date, Description | 5% fee on outstanding balance | ||||||
Promissory Note [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Sep. 18, 2020 | ||||||
Maturity date | Sep. 18, 2021 | ||||||
Debt | $ 60,000 | 60,000 | |||||
Notes payable principal amount | 60,000 | ||||||
Original issue discount | $ 5,000 | ||||||
Percentage of debt instrument interest rate | 15.00% | ||||||
Promissory Note One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Aug. 28, 2020 | ||||||
Debt | $ 425,000 | 425,000 | |||||
Notes payable principal amount | 425,000 | ||||||
Original issue discount | $ 50,000 | ||||||
Percentage of debt instrument interest rate | 15.00% | ||||||
Accrued interest payable | $ 825,000 | ||||||
Promissory Note Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Aug. 28, 2020 | ||||||
Maturity date | Aug. 28, 2022 | ||||||
Debt | $ 1,200,000 | 1,200,000 | |||||
Notes payable principal amount | $ 1,200,000 | ||||||
Description of payment terms | interest payable monthly with the first six months interest deferred until the 6th month and added to principal | ||||||
Percentage of debt instrument interest rate | 12.00% | ||||||
Promissory Note Two [Member] | Subsequent Event [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Notes payable principal amount | $ 826,800 | $ 445,200 | |||||
Promissory Note Three [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Debt issuance date | Aug. 31, 2020 | ||||||
Maturity date | Feb. 28, 2021 | ||||||
Debt | $ 50,000 | ||||||
Notes payable principal amount | $ 50,000 | ||||||
Percentage of debt instrument interest rate | 10.00% | ||||||
Long Term Loans [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Long-term loan | $ 3,913 | ||||||
Long-term loan, current | 9,227 | ||||||
Long Term Loans One [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Long-term loan | 7,730 | ||||||
Long-term loan, current | 56,160 | ||||||
Long Term Loans Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Long-term loan | 13,433 | ||||||
Long-term loan, current | $ 84,975 | ||||||
Loan Two [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Net proceeds | $ 422,009 | ||||||
Net cash received | 253,491 | ||||||
Payment fees | 26,500 | ||||||
Loan Four [Member] | |||||||
Short-term Debt [Line Items] | |||||||
Net proceeds | 359,919 | ||||||
Net cash received | 267,606 | ||||||
Payment fees | $ 22,475 |
SHORT-TERM CONVERTIBLE DEBT (De
SHORT-TERM CONVERTIBLE DEBT (Details Narrative) - USD ($) | Jul. 20, 2021 | Jul. 12, 2021 | Jul. 08, 2021 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Jan. 31, 2021 |
Short-term Debt [Line Items] | ||||||||
Amortization of debt discount expense | $ 130,139 | $ 67,357 | $ 442,075 | $ 694,168 | ||||
Accrued interest payable | 223,298 | 223,298 | $ 240,713 | |||||
Penalty interest to the loan | 28,000 | $ 3,394 | ||||||
Aggregate debt in default | 1,836,000 | 1,836,000 | ||||||
Common Stock [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Principal amount | 125,000 | 125,000 | ||||||
Accrued interest payable | $ 27,691 | 27,691 | ||||||
Convertible fees | $ 7,500 | |||||||
Number of shares converted (in shares) | 89,771 | |||||||
Promissory Convertible Notes [Member] | ||||||||
Short-term Debt [Line Items] | ||||||||
Convertible debt, description | the Company entered into a new convertible note for $224,125 with a one year maturity, interest rate of 10%, the Company received $200,000 in cash proceeds, recorded an original issue discount of $20,375, a derivative discount of $106,364 related to a conversion feature, and transaction fees of $3,750. | the Company entered into a convertible note for $355,000 with a one year maturity, interest rate of 12%, the Company received $300,025 in cash proceeds, recorded an original issue discount of $35,500, a derivative discount of $171,250 related to a conversion feature, and transaction fees of $19,475. As part of the loan the Company issued 60,850 shares as a commitment fee and recognized $28,795 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital | the Company entered into a convertible note for $231,000 with a one year maturity, interest rate of 12%, the Company received $199,500 in cash proceeds, recorded an original issue discount of $21,000, a derivative discount of $39,261 related to a conversion feature, and transaction fees of $10,500. As part of the loan the Company issued 30,960 shares as a commitment fee and recognized $31,005 based on a relative fair value calculation as debt discount with a corresponding adjustment to paid-in capital. |
The following table presents ch
The following table presents changes in Level 3 liabilities measured at fair value for the three months ended October 31, 2021. (Details) | 9 Months Ended |
Oct. 31, 2021USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Changes due to Conversion of Notes Payable | $ (76,144) |
Balance, October 31, 2021 | 391,868 |
Fair Value, Inputs, Level 3 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Balance, January 31, 2021 | 213,741 |
Settlement due to Repayment of Debt | (151,163) |
Changes due to Issuance of New Convertible Notes | 316,883 |
Mark to Market Change in Derivatives | 88,551 |
Balance, October 31, 2021 | $ 391,868 |
A summary of the weighted avera
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 Oct (Details) - Fair Value, Inputs, Level 3 [Member] | Oct. 31, 2021$ / shares |
Measurement Input, Share Price [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 1.24 |
Measurement Input, Share Price [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 2.25 |
Measurement Input, Expected Term [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Contractual term | 3 months |
Measurement Input, Expected Term [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Contractual term | 8 months 19 days |
Measurement Input, Price Volatility [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.598 |
Measurement Input, Price Volatility [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 1.252 |
Increase (Decrease) in Accrued Expenses - Related Party | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.2179 |
Increase (Decrease) in Accrued Expenses - Related Party | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.2280 |
Working capital deficit | |
Derivative [Line Items] | |
Derivative liability, measurement input | 1.24 |
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0028 |
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0.0033 |
Amortization of debt discount | |
Derivative [Line Items] | |
Derivative liability, measurement input | 0 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Jan. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative liabilities | $ 391,868 | $ 391,868 | $ 213,741 | ||
Gain (loss) fair value of derivative liabilities | $ 76,444 | $ 939,873 | $ 88,551 | $ 507,764 |
For the three and nine months e
For the three and nine months ended October 31 ,2021 the Company issued the following warrants (Details) - $ / shares | 1 Months Ended | 9 Months Ended | ||
Aug. 26, 2021 | Aug. 26, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Equity [Abstract] | ||||
Expected volatility | 2174.00% | 2181.00% | 506.80% | |
Exercise price | $ 1.50 | $ 2.11 | $ 0.40 | |
Stock price | $ 2.05 | $ 2 | $ 0.37 | |
Expected life | 3 years | 3 years | 3 years | |
Risk-free interest rate | 0.46% | 0.19% | 0.37% | |
Dividend yield | 0.00% | 0.00% | 0.00% |
The Company had the following f
The Company had the following fully vested warrants outstanding at October 31, 2021 (Details) | 9 Months Ended |
Oct. 31, 2021$ / sharesshares | |
Lender One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Lender |
# Warrants | shares | 950,000 |
Dated | Aug. 28, 2020 |
Expire | Aug. 28, 2023 |
Strike Price | $ / shares | $ 0.40 |
Broker One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Broker |
# Warrants | shares | 2,500 |
Dated | Oct. 11, 2020 |
Expire | Oct. 11, 2025 |
Strike Price | $ / shares | $ 4.50 |
Broken Two [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Broker |
# Warrants | shares | 3,000 |
Dated | Nov. 25, 2020 |
Expire | Nov. 25, 2025 |
Strike Price | $ / shares | $ 3 |
Triton One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Triton |
# Warrants | shares | 300,000 |
Dated | Jul. 27, 2021 |
Expire | Jul. 27, 2024 |
Strike Price | $ / shares | $ 2.11 |
Consultant One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | Consultant |
# Warrants | shares | 250,000 |
Dated | Aug. 26, 2021 |
Expire | Aug. 26, 2024 |
Strike Price | $ / shares | $ 1.50 |
For the three and nine months_2
For the three and nine months ended October 31, 2020, the Company issued a stock option to CEO and director T. Armes to acquire 500,000 shares of stock. The table below provides the significant estimates used that resulted in the Company determining the f (Details) - $ / shares | 1 Months Ended | 9 Months Ended | ||
Aug. 26, 2021 | Aug. 26, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Offsetting Assets [Line Items] | ||||
Expected volatility | 2174.00% | 2181.00% | 506.80% | |
Exercise price | $ 1.50 | $ 2.11 | $ 0.40 | |
Stock price | $ 2.05 | $ 2 | $ 0.37 | |
Expected life | 3 years | 3 years | 3 years | |
Risk-free interest rate | 0.46% | 0.19% | 0.37% | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Equity Option [Member] | ||||
Offsetting Assets [Line Items] | ||||
Expected volatility | 2644.00% | |||
Exercise price | $ 1.50 | |||
Stock price | $ 1.17 | |||
Expected life | 2 years | |||
Risk-free interest rate | 0.36% | |||
Dividend yield | 0.00% |
The Company had the following_2
The Company had the following fully vested options outstanding at October 31, 2021 (Details) | 9 Months Ended |
Oct. 31, 2021$ / sharesshares | |
T Ames One [Member] | |
Line of Credit Facility [Line Items] | |
Issued To | T. Armes |
Lender One [Member] | |
Line of Credit Facility [Line Items] | |
# Options | shares | 500,000 |
Dated | Oct. 14, 2021 |
Expire | Oct. 14, 2023 |
Strike Price | $ / shares | $ 1.50 |
Schedule of warrants outstandin
Schedule of warrants outstanding (Details) - Warrant [Member] | 9 Months Ended |
Oct. 31, 2021$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Beginning balance | shares | 955,500 |
Beginning balance | $ / shares | $ 0.42 |
Options Granted | shares | 500,000 |
Weighted Average Exercise Price Granted | $ / shares | $ 1.50 |
Warrant Granted | shares | 550,000 |
Weighted Average Exercise Price Granted | $ / shares | $ 1.83 |
Ending balance | shares | 500,000 |
Ending balance | $ / shares | $ 1.50 |
Ending balance | shares | 1,505,500 |
Ending balance | $ / shares | $ 0.58 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Jul. 31, 2021 | Oct. 31, 2021 | Oct. 31, 2020 | Jan. 31, 2021 | |
Class of Stock [Line Items] | |||||
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 | 15,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.000001 | $ 0.000001 | $ 0.000001 | ||
Common Stock, Shares, Outstanding | 1,427,163 | 1,427,163 | 1,427,163 | ||
[custom:ChargeToDebtDiscount] | $ 125,000 | ||||
[custom:LendersForFees] | 89,771 | ||||
[custom:NumberOfSharesIssueForFeesToConsultant] | 63,011 | ||||
[custom:NumberOfSharesIssueForFeesToConsultantValue] | $ 137,555 | ||||
[custom:CommitmentFee] | 107,290 | ||||
[custom:CommitmentFeeValue] | $ 59,801 | ||||
Number of shares outstanding | 500,000 | 500,000 | 0 | ||
Option and warrant expense | $ 1,097,500 | $ 1,263,500 | |||
Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
[custom:NumberOfSharesIssuedAsPartOfRegulationFiling] | 1,723,000 | ||||
[custom:ValueOfSharesIssuedAsPartOfRegulationFiling] | $ 3,037,625 | ||||
Proceeds from Debt, Net of Issuance Costs | $ 2,224,805 | ||||
[custom:RemainingShareProceedsReceivable] | 2,301 | ||||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Outstanding | 0 | 0 | 0 | ||
Preferred Stock, Shares Authorized | 330,000 | 330,000 | 330,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series B Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Outstanding | 20,000 | 20,000 | 20,000 | ||
Preferred Stock, Shares Authorized | 20,000 | 20,000 | 20,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Outstanding | 7,250 | 7,250 | 7,250 | ||
Preferred Stock, Shares Authorized | 7,250 | 7,250 | 7,250 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series D Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Outstanding | 870 | 870 | 870 | ||
Preferred Stock, Shares Authorized | 870 | 870 | 870 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred Stock, Voting Rights | These shares are non-voting | ||||
Preferred Stock, Redemption Price Per Share | $ 1,000 | $ 1,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 31, 2021 | Jan. 31, 2021 |
Related Party Transactions [Abstract] | ||
Accrued Expenses Related Party | $ 46,173 | $ 106,173 |
Schedule of minimum lease oblig
Schedule of minimum lease obligations (Details) | Oct. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
October 31 2022 | $ 120,657 |
October 31, 2023 | 81,203 |
October 31, 2024 | 30,003 |
October 31, 2025 | 30,003 |
October 31, 2026 | 30,003 |
After October 31, 2026 | 2,501 |
Total lease payments | 294,370 |
Less: Interest | (29,726) |
Present value of lease liabilities | $ 264,644 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Oct. 01, 2018 | Aug. 30, 2016 | Oct. 31, 2019 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 |
Lessee, Lease, Description [Line Items] | |||||||
Operating Lease, Cost | $ 30,478 | $ 23,279 | $ 91,437 | $ 91,437 | |||
Loss Contingency, Allegations | 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. | ||||||
Warehouse Lease Facility One [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lessee, 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. This lease is with a shareholder. | ||||||
Operating Leases, Rent Expense, Net | $ 2,132 | ||||||
Warehouse Lease Facility Two [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lessee, 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. | ||||||
Operating Leases, Rent Expense, Net | $ 6,400 | ||||||
Vehicles [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Lessee, Operating Lease, Description | he 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. | ||||||
Operating Leases, Rent Expense, Net | $ 9,067 |
The net income (loss) (Details)
The net income (loss) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Numerator: | ||||
Net income (loss) available to common shareholders | $ (2,566,574) | $ 1,100,073 | $ (4,886,380) | $ 2,681,933 |
Denominator: | ||||
Weighted average shares – basic | 3,198,658 | 1,067,074 | 2,572,772 | 797,126 |
Effect of common stock equivalents | ||||
Add: interest expense on convertible debt | $ 19,247 | $ 44,110 | $ 35,237 | $ 253,691 |
Add: amortization of debt discount | 130,139 | 67,357 | 442,075 | 694,168 |
Less: gain on settlement of debt on convertible notes | (41,249) | (2,845,742) | (1,004,615) | (4,793,113) |
Add (Less): loss (gain) on change of derivative liabilities | 76,444 | 939,873 | 88,551 | 507,674 |
Net income (loss) adjusted for common stock equivalents | (2,381,993) | (694,329) | (5,325,132) | (655,647) |
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 144,158 | $ 144,158 | ||
Denominator: | ||||
Weighted average shares – diluted | 3,198,658 | 5,268,957 | ||
Net income (loss) per share – diluted | $ (0.80) | $ (0.13) | $ (1.90) | $ (0.13) |
Warrant [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 950,001 | $ 950,001 | ||
Convertible Class C Preferred Shares [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 3,107,724 | $ 3,107,724 |
The anti-dilutive shares of com
The anti-dilutive shares of common stock equivalents (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,920,061 | 11,920,061 | ||
Warrant And Option[Member] | ||||
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,005,500 | 2,005,500 | ||
Convertible Notes And Accrued Interest [Member] | ||||
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 945,643 | 945,643 | ||
Convertible Class C Preferred Shares [Member] | ||||
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,968,918 | 8,968,918 |
The net income (loss) per commo
The net income (loss) per common share amounts were determined as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Numerator: | ||||
Net income (loss) available to common shareholders | $ (2,566,574) | $ 1,100,073 | $ (4,886,380) | $ 2,681,933 |
Effect of common stock equivalents | ||||
Add: interest expense on convertible debt | 19,247 | 44,110 | 35,237 | 253,691 |
Add: amortization of debt discount | 130,139 | 67,357 | 442,075 | 694,168 |
Less: gain on settlement of debt on convertible notes | (41,249) | (2,845,742) | (1,004,615) | (4,793,113) |
Add (Less): loss (gain) on change of derivative liabilities | 76,444 | 939,873 | 88,551 | 507,674 |
Net income (loss) adjusted for common stock equivalents | (2,381,993) | (694,329) | (5,325,132) | (655,647) |
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 144,158 | $ 144,158 | ||
Denominator: | ||||
Weighted average shares – diluted | 2,575,772 | 4,999,009 | ||
Net income (loss) per share – diluted | $ (0.80) | $ (0.13) | $ (1.90) | $ (0.13) |
Warrant [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 950,001 | $ 950,001 | ||
Convertible Class C Preferred Shares [Member] | ||||
Dilutive effect of common stock equivalents: | ||||
Convertible notes and accrued interest | $ 3,107,724 | $ 3,107,724 |
The anti-dilutive shares of c_2
The anti-dilutive shares of common stock equivalents for the nine months ended October 31, 2021 and October 31, 2020 were as follows: (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | |
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 11,920,061 | 11,920,061 | ||
Warrant And Option[Member] | ||||
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,005,500 | 2,005,500 | ||
Convertible Notes And Accrued Interest [Member] | ||||
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 945,643 | 945,643 | ||
Convertible Class C Preferred Shares [Member] | ||||
Short-term Debt [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,968,918 | 8,968,918 |
GAIN ON SETTLEMENT OF DEBT (Det
GAIN ON SETTLEMENT OF DEBT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 10 Months Ended | ||||
Oct. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2020 | Jan. 31, 2021 | |
Gain (Loss) on Extinguishment of Debt | $ 41,249 | $ 2,845,742 | $ 1,004,615 | $ 5,018,388 | |||
[custom:GainFromSettlementOfConvertibleNotes] | 853,452 | 1,070,035 | |||||
Accounts payable | 950,151 | 950,151 | |||||
[custom:GainThatResultedFromSettlementOfAccountsPayable] | 96,699 | 151,162 | |||||
Interest Payable | 175,422 | $ 22,076 | 175,422 | ||||
Short-term Debt | 3,132,568 | 3,132,568 | $ 716,142 | ||||
Derivative Liability | 792,218 | 792,218 | |||||
Short-term Debt, Description | 250 | ||||||
Promissory Note [Member] | |||||||
Gain (Loss) on Extinguishment of Debt | 2,820,147 | ||||||
[custom:GainFromSettlementOfConvertibleNotes] | 1,692,690 | ||||||
Interest Payable | 571,454 | 571,454 | $ 571,454 | ||||
Derivative Liability | 2,177,794 | 2,177,794 | 2,177,794 | ||||
Conversion of Stock, Amount Issued | $ 4,441,938 | ||||||
Short-term Debt, Description | 150 | ||||||
Convertible Notes Payable | 20,290 | $ 20,290 | 20,290 | ||||
Promissory Note 1 [Member] | |||||||
Gain (Loss) on Extinguishment of Debt | 25,595 | ||||||
[custom:GainFromSettlementOfConvertibleNotes] | 40,939 | ||||||
Interest Payable | 20,111 | 20,111 | 20,111 | ||||
Short-term Debt | $ 31,320 | 31,320 | 31,320 | ||||
Conversion of Stock, Amount Issued | $ 92,370 | ||||||
Series C Preferred Stock [Member] | |||||||
Gain (Loss) on Extinguishment of Debt | $ 2,172,646 | ||||||
Conversion of Stock, Amount Issued | 2,181,751 | ||||||
Convertible Notes Payable | $ 9,105 | $ 9,105 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Nov. 12, 2021 | Oct. 31, 2021 | Oct. 31, 2020 |
Subsequent Event [Line Items] | |||
Proceeds from Issuance of Common Stock | $ 3,037,625 | ||
Convertible Debt [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Face amount | $ 24,000,000 | ||
Investment Interest Rate | 8.00% | ||
Proceeds from Issuance of Common Stock | $ 1,966,000 | ||
Debt Description | recorded an original issue discount of $240,000 and transaction fees of $194,000. Six months after the issue date, the principal and interest are convertible into Common Stock of the Company at a conversion price of the lesser of $1.25 per share or 75% of the share price. Included are two warrants issued on November 12, 2021, each to acquire 900,000 common shares at an exercise price of $1.50 per share, (subject to adjustment as a result of dilutive issuances), and a 5 year maturity. The second warrant (to acquire 900,000 shares) is subject to cancellation by the Company should the note and accrued interest be repaid without default on or prior to maturity. The Company used a part of the proceeds from the note to repay three investor notes that originated in July totaling $894,480 |