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Acquisition of Business

12 Months Ended

Jan. 31, 2019

6.	ACQUISITION OF BUSINESS

On August 1, 2018, the Company acquired 100% of the membership interests of 4P Therapeutics pursuant to an agreement dated April 5, 2018, for $2,250,000, consisting of 250,000 shares of common stock, valued at $1,850,000, and $400,000, and a royalty payable to the former owner of 4P Therapeutics, of 6% on all revenue generated by us from the abuse deterrent intellectual property that had been developed by 4P Therapeutics. The primary purpose of the acquisition is to complete the development and seek FDA approval on a number of transdermal pharmaceutical products under development by 4P Therapeutics. As a result of the acquisition of 4P Therapeutics, the Company has a pipeline of potential products. Acquisition costs, which were minimal, have been expensed as incurred in accordance with ASC 350.

Details of the net assets acquired are as follows:

	Fair Value Recognized
	On Acquisition
Equipment	$	160,065
Customer base		136,500
Intellectual Property		234,200
Goodwill		1,719,235
Net assets acquired		2,250,000
Satisfied by:
Common stock issued		(1,850,000	)
Cash outflows on acquisition	$	(400,000	)

The following unaudited pro forma condensed financial information presents the combined results of operations of the Company and 4P Therapeutics as if the acquisition occurred as of the beginning of each period presented. The unaudited pro forma condensed financial information is not intended to represent or be indicative of the consolidated results of operations of the Company that would have been reported had the acquisition occurred at the beginning of the period presented and should not be taken as being representation of the future consolidated results of operations of the Company.

	2019						2018
	As Reported			Pro Forma			As Reported			Pro Forma
Net revenue	$	245,285		$	577,149		$	-		$	568,005

Net loss		(3,331,240	)		(3,307,614	)		(2,671,496	)		(2,626,084	)

Loss per common share - basic and diluted	$	(0.16	)	$	(0.16	)	$	(0.14	)	$	(0.14	)

Since the date of acquisition, 4P Therapeutics had net revenues of $196,285 and incurred a net loss of $88,298.