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Stockholders’ Equity
 12 Months Ended
Jan. 31, 2023
Equity [Abstract]  
Stockholders’ Equity

Note 9 - Stockholders’ Equity

 

Preferred Stock and Series A Preferred Stock

 

The Company is authorized to issue 20,000,000 shares of preferred stock, $0.00001 par value per share. The Company has designated 120,000 shares of preferred stock as Series A Convertible Preferred stock. As of January 31, 2023 and 2022, no shares of Series A Convertible Preferred Stock are issued and outstanding.

 

Series B Preferred

 

The Company has designated 200,000 shares of preferred stock, $0.00001 par value per share, for each of the Series B Preferred. The holders of the Series B Preferred Stock shall be entitled to receive, upon liquidation, dissolution or winding up of the Company, the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares of Series B Preferred Stock if such shares had been converted to common stock immediately prior to such liquidation.

 

Holders of the Series B Preferred Stock are entitled to receive cumulative cash dividends at an annual rate of eight percent (8%). Holders of the Series B Preferred Stock shall have no voting rights. Each share of Series B Preferred Stock shall be convertible, at the option of the holder, into shares of common stock at a rate of 1 share of Series B Preferred Stock into 15 shares of common stock.

 

On September 13, 2022, the Company closed the first round of the Series B Preferred Stock offering with the sale of 47,200 shares, raising gross proceeds of $1,180,000.

 

On November 17, 2022, the Company held a final closing of its offering of Series B Preferred Stock, wherein it sold an additional 7,400 shares of Series B Preferred Stock for gross proceeds of $185,000. During the year ended January 31, 2023, the Company paid dividends of $34,070.

 

Restricted Stock Units

 

During the year ended January 31, 2023, the Company awarded the CEO a grant of 367,647 restricted stock units (“RSUs”) with a grant date fair value of $500,000. The RSUs will be expensed over the requisite service period. The terms of the RSUs include vesting provisions based solely on continued service. If the service criteria are satisfied, the RSUs will vest during September 2023, September 2024, September 2025 and September 2026. As of January 31, 2023, there were 367,647 unvested shares.

 

 

The following is a summary of the Company’s restricted stock units activity:

 

  

Restricted

Stock Units

  

Weighted Average

Exercise Price

 
Unvested – February 1, 2022   14,000   $2.83 
Granted   367,647   $1.36 
Vested   -   $- 
Forfeited   (14,000)  $2.83 
Outstanding – January 31, 2023   367,647   $1.36 

 

During the year ended January 31, 2023, the Company recognized share-based compensation related to restricted stock units of an aggregate of $50,428, which was recorded to general and admirative expense on the statement of operations, and unrecognized share-based compensation of $449,572.

 

For the year ended January 31, 2022, the Company recognized share-based compensation related to restricted stock units of an aggregate of $31,045, which was recorded to general and admirative expense on the statement of operations.

 

Options

 

The following is a summary of the Company’s option activity:

 

   Options  

Weighted Average

Exercise Price

 
Outstanding – February 1, 2022   669,000   $0.66 
Exercisable – February 1, 2022   666,500   $0.65 
Granted   150,000   $1.48 
Exercised   (130,000)  $1.00 
Outstanding – January 31, 2023   689,000   $0.77 
Exercisable – January 31, 2023   539,000   $0.57 

 

    Options Outstanding      Options Exercisable
Exercise Price  

Number

Outstanding

 

Weighted

Average

Remaining

Contractual

Life

(in years)

  

Weighted

Average

Exercise Price

  

Number

Exercisable

 

Weighted

Average

Exercise

Price

 
$ 0.39 – 1.48   689,000   2.32   $0.77   539,000  $0.57 

 

At January 31, 2023, the total intrinsic value of options outstanding and exercisable was $847,200 and $859,051, respectively.

 

During the year ended January 31, 2023, the members of the board of directors and the former CFO exercised 130,000 options at a weighted average exercise price of $1.00 per share in exchange for 57,093 shares of common stock. The Company received $26,250 for the exercise of these options.

 

During the year ended January 31, 2022, eight employees exercised a total of 200,000 options at an exercise price range of $0.49 to $1.38 per share for aggregate proceeds of $19,080.

 

For the years ended January 31, 2023 and 2022, the Company recognized share-based compensation related to options of an aggregate of $59,578 and $1,863, respectively, which is included in general and administrative expenses on the accompanying consolidated statements of operations. At January 31, 2023, there was unrecognized share-based compensation of $120,489.

 

 

Warrants

 

In conjunction with the Series B Preferred offering, the placement agent received one warrant for every $100 invested. The fair value of the warrants as of grant date was $16,520 and was valued using a Black-Scholes option pricing model using the following assumptions:

 Schedule of Warrants Fair Value Assumption  

  

September 13, 2022

 
Risk-free interest rate   3.58%
Expected life   5 years 
Expected volatility of underlying stock   82.52%
Dividends   0%

 

The following is a summary of the Company’s warrant activity:

 

   Warrants  

Weighted Average

Exercise Price

 
Outstanding – February 1, 2022   -   $- 
Exercisable – February 1, 2022   -   $- 
Granted   13,650   $2.25 
Exercised   -   $- 
Outstanding – January 31, 2023   13,650   $2.25 
Exercisable – January 31, 2023   13,650   $2.25 

 

    Warrants Outstanding      Warrants Exercisable
Exercise Price  

Number

Outstanding

 

Weighted

Average

Remaining

Contractual

Life

(in years)

  

Weighted

Average

Exercise

Price

  

Number

Exercisable

 

Weighted

Average

Exercise

Price

 
$2.25   13,650   4.62   $2.25   13,650  $2.25 

 

At January 31, 2023, the total intrinsic value of warrants outstanding and exercisable was $0.