Forward-Looking Statements
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements." These forward-looking statements
generally are identified by the words "believes," "project," "expects,"
"anticipates," "estimates," "intends," "strategy," "plan," "may," "will,"
"would," "will be," "will continue," "will likely result," and similar
expressions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. Our ability to
predict results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on our operations
and future prospects on a consolidated basis include but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.
Cannagistics, Inc. (Formerly FIGO Ventures, Inc., formerly Precious
Investments, Inc.) ('The Company') was incorporated under the laws of the State
of Nevada on May 26, 2004. The Company was an Exploration Stage Company with the
principal business being the acquisition and exploration of resource properties.
The Company had allowed its charter with the state of Nevada to be revoked by
the Secretary of State for failure to file the required annual lists and pay the
required annual fees. Its last known officers and directors reflected in the
records of the Secretary of State were unresponsive or stated they were no
longer involved with the Company. The purported replacement officers and
directors were unresponsive.
On September 14, 2012, NPNC Management, LLC filed a petition in the Eighth
Judicial District Court in Clark County, Nevada and was appointed custodian of
the Company on January 15, 2012.
On October 24, 2012, the interim board authorized the sale of 55,000,000
(2,200,000 split adjusted) shares of common stock for $6,000 to NPNC Management,
LLC, in a private placement transaction exempt from the Securities Act of 1933,
as amended, pursuant to section 4(2) thereof and the rules and regulations
promulgated there under.
On March 1, 2017, the Company then entered into a joint venture agreement with
Eddeb Management ("Eddeb"). The purpose of the joint venture is to build a fund
for the purpose of trading in precious gems, notably, colored diamonds.
On November 16, 2017, the Company entered into an Agreement of Merger and Plan
of Reorganization (the "Merger Agreement") with American Freight Xchange, Inc.,
a privately held New York corporation ("American Freight"), and Shipzooka
Acquisition Corp. ("Shipzooka Sub"), a newly formed wholly owned Nevada
subsidiary of Precious Investments, Inc. In connection with the closing of this
merger transaction, Shipzooka Sub merged with and into American Freight (the
"Merger") on December 5, 2017, with the filing of Articles of Merger with the
Nevada Secretary of State and Certificate of Merger with the New York Division
of Corporations.
The transaction resulted in the Company acquiring Subsidiary by the exchange of
all of the outstanding shares of Subsidiary for 1,000,000 newly issued Series C
Preferred shares of stock, $0.001 par value (the "Preferred Stock") of Parent
which have conversion and voting rights of 72.5 votes for each share,
representing approximately 90.2% of the voting rights.
For accounting purposes, the transaction was treated as a reverse merger since
the acquired entity now forms the basis for operations and the transaction
resulted in a change in control, with the acquired company electing to become
the successor issuer for reporting purposes. The accompanying financial
statements have been prepared to reflect the assets, liabilities and operations
of American Freight Xchange, Inc. exclusive of Precious Investments, Inc since
all predecessor operations were discontinued.
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As part of the transaction, amounts due to former officers were forgiven, with
the balances recorded as Contributed Capital. For equity purposes, accumulated
deficit shown are those American Freight Xchange, Inc. Shipzooka Acquisition
Corp. is a dormant corporation.
On July 23, 2018, the Company amended the name of its subsidiary, KRG Logistics,
Inc., to Global3pl, Inc. (an Ontario corporation).
On April 17, 2019, we filed Articles of Merger with the Secretary of State of
Nevada in order to effectuate a merger with our wholly owned subsidiary,
Cannagistics, Inc. Shareholder approval was not required under Section 92A.180
of the Nevada Revised Statutes. As part of the merger, our board of directors
authorized a change in our name to "Cannagistics, Inc." and our Articles of
Incorporation have been amended to reflect this name change.
On September 26, 2019, the Board of Directors approved the registered spinout of
its Global3pl, Inc., (a New York corporation) ("Global3pl") subsidiary.
Global3pl is to be a logistics technology provider, along with the American
Freight Xchange and UrbanX Platforms that have been under development by the
Company.
The Board of Directors also declared a stock dividend for all shareholders, with
a record date of October 10, 2019. For every 50 shares of common stock of the
Company, all shareholders of record on the record date will receive one share of
common stock in Global3pl. Global3pl will also file a registration statement as
part of its raise of capital to complete the development of American Freight
Xchange, a North American freight broker-driven 3pl network to handle the
management of long haul LTL (less than truckload), and specialty freight (white
glove) services and Urbanx, a North American network of rush-messenger local
trucking services for forward and reverse last mile delivery (including white
glove service).
However, the Company has carefully reconsidered its position with respect to the
previously announced and subsequently amended spin off of Global3pl, Inc., (a
New York corporation). Due to the current situation resulting from the COVID-19
pandemic and especially in light of the development of the supply chain
management strategy of the Company, it has been determined that the finalization
of the development of the Global3pl platform will be integral and serve as the
"engine" for the supply chain management of the Company. Therefore, at this time
the "spin-off" has been indefinitely postponed until such time and it may make
sense from a business standpoint. The Company has not issued any shares in the
Global3pl, Inc (New York) subsidiary.
Effective October 1, 2019, the Company suspended operations of its subsidiary
Global3pl, Inc., formerly known as KRG Logistics, Inc., (an Ontario
corporation), suspended future operations related to the operations in
Mississauga, Ontario. It is in the process of collecting accounts receivables
still due and working on a plan to pay its payables. It has entered into an
agreement with 10451029 Canada Inc., d/b/a Reliable Logistics, for the
assignment and of the assets of Global3pl, Inc., (an Ontario Corporation). The
transaction was completed on November 6, 2019. The Company anticipates formally
liquidating and dissolving the subsidiary in the next fiscal Quarter. This is a
separate corporation from Global3pl, Inc. (A New York corporation).
On May 6, 2021, the issuer (having been renamed, immediately prior to this
Holding Company Reorganization, from "Cannagistics, Inc." to "Global Transition
Corporation") completed a corporate reorganization (the "Holding Company
Reorganization") pursuant to which Global Transition Corporation, as previously
constituted (the "Predecessor") merged with a company which became a direct,
wholly-owned subsidiary of a newly formed Delaware Corporation, Cannagistics,
Inc. (in this capacity referred to as the "Holding Company"), which became the
successor issuer. In other words, the Holding Company is now the public entity,
albeit with the same name as the original issue or the Predecessor. The Holding
Company Reorganization was effected by a merger conducted pursuant to Delaware
General Corporation Law (the "DGCL"), which provides for the formation of a
holding company without a vote of the stockholders of the constituent
corporations (such constituent corporations being the Predecessor, as renamed to
Global Transition Corporation formerly Cannagistics, Inc. (formerly Precious
Investments, Inc.), a Nevada corporation, now called Global3pl, Inc., a Delaware
corporation, which is a subsidiary of the Company and the newly formed
Cannagistics, Inc a Delaware corporation).
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In accordance with the DGCL, Global3pl, Inc. ("Merger Sub"), another newly
formed Delaware Corporation and, prior to the Holding Company Reorganization,
was an indirect, wholly owned subsidiary of the Holding Company, merged with and
into the Predecessor, with Merger Sub surviving the merger as a direct, wholly
owned subsidiary of the Holding Company (the "Merger"). The Merger was completed
pursuant to the terms of an Agreement and Plan of Merger among the Predecessor,
the Holding Company and Merger Sub, dated May 6, 2021 (the "Merger Agreement").
As of the effective time of the Merger and in connection with the Holding
Company Reorganization, all outstanding shares of common stock and preferred
stock of the Predecessor were automatically converted into identical shares of
common stock or preferred stock, as applicable, of the Holding Company on a
one-for-one basis, and the Predecessor's existing stockholders and other holders
of equity instruments, became stockholders and holders of equity instruments, as
applicable, of the Holding Company in the same amounts and percentages as they
were in the Predecessor immediately prior to the Holding Company Reorganization.
The executive officers and board of directors of the Holding Company are the
same as those of the Predecessor in effect immediately prior to the Holding
Company Reorganization.
For purposes of Rule 12g-3(a), the Holding Company is the successor issuer to
the Predecessor, now as the sole shareholder of the Predecessor. Accordingly,
upon consummation of the Merger, the Holding Company's common stock was deemed
to be registered under Section 12(b) of the Securities Exchange Act of 1934, as
amended, pursuant to Rule 12g-3(a) promulgated thereunder.
The previously executed Letter of Intent with Recommerce Group, Inc. has
expired, although the Company has continued discussions with Recommerce Group,
Inc. about a potential business combination.
On July 1, 2021, we entered into a Reorganization and Stock Purchase Agreement
with Availa Bio, Inc. and Cannaworx Holdings, Inc. (now known as "The Integrity
Wellness Group, Inc." hereinafter "Integrity Wellness") pursuant to which we
acquired Integrity Wellness in exchange for 4,400,000 shares of the Company's
Series F Convertible Preferred Stock. We also changed our state of incorporation
to Delaware. A significant majority of our operations are now operated through
Integrity Wellness which because of the transaction became a wholly owned
subsidiary of the Company. We expect to change our name to The Integrity
Wellness Group, Inc. subject to regulatory compliance.
Following our acquisition of Integrity Wellness, we shifted to our current
business plan and focus which is the development, marketing and sale of OTC,
pharmaceutical, nutraceutical, cosmetic and health and wellness products with a
focus on products infused with phytocannabinnoid, which we refer to as "CBD." We
now have a portfolio of products designed for the treatment of ailments and
symptoms and/or general improvement of health and wellbeing by topical or oral
administration. These product offerings, which are described more fully below,
are designed to provide a variety of treatments, benefits and uses including
pain relief, anti-aging, hygiene, energy, and immune system and biochemical
support. We also have products designed for veterinary and agricultural uses. We
have six patents and 15 patent applications pending for our products, as well as
a number of trademarks. Our mission is to alleviate suffering and adverse
consequences caused by certain health and biological conditions and enhance
users' quality of life through the use of inventions and science including
through the use of CBD.
On September 15, 2021, the Company filed a Def14C Information Statement. The
Def14C Information Statement set out the plan of the Company to amend its name
to The Integrity Wellness Group, Inc., or some other similar name, and to
effectuate a reverse stock split of its common stock of one (1) new share of
common stock for each forty (40) old shares of common stock. The Company is in
the process of filing with FINRA to make these changes effective.
Through Integrity Wellness we currently have four developed products, the
majority of which we offer at retail prices ranging from approximately $30 to
$60 (excluding our veterinary and agricultural product offerings). Our currently
developed products are at the stage where they are ready for production,
awaiting funding for the final steps of production, such as sourcing the
manufacturing, procuring the necessary ingredients, determining the quantity of
each item for packaging, and setting up distribution channels. All these steps
require capital. Many distributors have already expressed interest once we have
begun production. We have received approval from the U.S. Food and Drug
Administration (the "FDA") for our Silverpro product's claim, and we currently
have no FDA applications in process for any of our other products, but may apply
at some point in the future, likely no earlier than the later part of 2022. We
anticipate that we may require FDA approval for our other products which are
under development to the extent they qualify as "drugs" under the FCPA. Further,
one of our products, namely Canagel may qualify for exemption from FDA
pre-approval in reliance in part upon FDA monograms indicating that the
ingredients contained in these products are permitted and/or approved by the FDA
for marketing and consumption. We believe most of our products described below
qualify as a potential "drug" under the FCPA and FDA rules, although other
definitions may also apply to some of our products. See "Government Regulations"
below.
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With respect to intellectual property rights, we have patents issued for six of
our products, and 15 patent applications pending, as indicated below. However,
we presently lack the capital to produce sufficient inventory and, accordingly,
will be reliant upon raising additional funds in this Offering to further
commercialize these products. If we are unable to raise sufficient funds in this
Offering or through other means, the production and distribution of these
products may be delayed or discontinued. See the risk titled "If we cannot
obtain or protect intellectual property rights related to our products,
including due to uncertainties surrounding our acquisition of Integrity Wellness
and its purported product portfolio, we may not be able to compete effectively
in our markets" for more information. The following is a brief description our
current products portfolio:
Products with Issued Patents
Immuniain TM (Immune Booster)
Some ImmunaZin Ingredients and Expectations
? Pepsin -- the main ingredient now famous for rapid recovery. We take pepsin
and break it down into fragmented particles that are better absorbed into the
digestive tract. These pepsin fragments directly modulate immune system activity
by inducing potent T-cell response resulting in boosted immunity.
? Hemp seed oil helps balance healthy cholesterol levels, fights depression and
anxiety, improves eye health, promotes brain health, reduces metabolic syndrome,
reduces inflammation, fights autoimmune disease and mental disorders, reduces
fatty liver, promotes bone and joint health and improves sleep and skin.
Irreversibly-inactivated pepsinogen fragments for modulating immune function
(Immune Booster- FDA Cleared)
ImmunaZin contains an FDA approved New Dietary Ingredient (NDI), and the NDI #
is 1140
Patent No. US 8,309,072
Patent Issued: November 13, 2012
Patent Expires: June 18, 2029
Canagel ® - (Anhydrous Hydrogel Composition and delivery system)
Patented Full Spectrum Phytocannabinoid delivery with FDA approved pain claim.
The one and only FDA-approved pain claim in the market for an oral CBD product.
Using an FDA approved monogram by including menthol. Because this product
contains CBD, we do not currently market and sell this product at this time.
We have Exclusive World-wide access to Patent No. US 9839693 B2
Patent Issued: December 4, 2018
Patent Expires: December 8, 2037
Pending Patent Applications
Veterinary Cannabinoid and Menthol Compositions and Methods
Application No. 16/419,392; International Application PCT/US2019/048695
Cannabinoid and Menthol Compositions and Methods
US Application No. 16/419,336; International Application PCT/US2019/048691
Thin Film Toothpaste Strip, European Application
Product Name: KidzStrips ®
Thin Film Toothpaste Strip, Eurasian Application
Product Name: KidzStrips ®
Fertilizer
Product Name: HydroSoil ®,
Water retaining Hemp enhanced fertilizer, water plant once every two weeks
Inactivated Pepsin Fragment (IPF) and Full Spectrum Cannabidiol (CBD)
Compositions and Methods
Skin Cream
Relates to compositions and methods for the prevention and treatment of skin
disorders and for the rejuvenation of the skin. In particular, the application
describes topical compositions and methods of treatments comprising the combined
use of one or more cannabinoids and one or more hydroxy acids in a suitable
carrier. Because this product contains CBD, we do not currently market and sell
this product at this time.
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Other Products
IcyEase
Adhesive Ice Pack for muscle/joint pain to cool surface and address pain.
Patent-pending, FDA pain claim in progress. IcyEase contains menthol, menthol is
an approved pain relief ingredient in the FDA's monograph for topical pain
relief
Slim-D
Appetite-suppressant oral strip with 50 mg Hoodia & 10 mg Full Spectrum
Phytocannabinoid. Because this product contains CBD, we do not currently market
and sell this product at this time.
Energy Lighting Strips
High caffeine fast dissolving oral energy strip with Matcha Green Tea and
Hemp/Full Spectrum Phytocannabinoid. Because this product contains CBD, we do
not currently market and sell this product at this time.
Micro Voltage Trans Derm C
patent application in progress for pain with unique and superior absorbing
features due to wearer's movement generated Micro Voltage
Silverpro - our only FDA approved medical device for the treatment of pain.
Revolutionary technology combining genuine silver yarn with low-static carbon
fibers, to create the world's most advanced-compression pain relief fabric.
Research & Development and Product Manufacturing
Our products are produced using third party manufacturers who are responsible
for sourcing the raw materials and ingredients and adhering to applicable
specifications and regulatory requirements including the FDA's good
manufacturing practices (GMP) certification. We also use some of these same
third parties for research and development and testing functions as and when the
need arises. We rely on a limited number of these manufacturers to develop and
produce our product offerings.
The availability and production capability of our manufacturers depends on the
raw material supplies and sources, as well as other projects on which our
manufacturers may be engaged at a given time. Because of these contingencies,
the lead times on production and delivery schedules can fluctuate, which may
cause us to fail to meet internal or contractual deadlines. As we grow, we hope
to be able to accurately forecast and manage these processes to try and ensure
we have adequate inventory on hand to meet demand. A primary raw material
utilized in the production process for our products is Hemp Oil isolate from
cannabis which can only be produced in certain states. While we believe there
are sufficient sources for Hemp Oil isolate from cannabis and other raw
materials necessary to meet our production needs, shortages and delays can
occur, which could harm us by prolonging or suspending expected deliveries or
increasing production costs.
COVID-19
The COVID-19 pandemic has resulted in a global slowdown of economic activity
which is likely to continue to reduce the future demand for a broad variety of
goods and services, while also disrupting sales channels, marketing activities
and supply chains for an unknown period of time until the virus is fully
contained. Supply chain disruptions have been increasingly common since the
pandemic began, and such disruptions may affect us in the future.
Sales and Distribution
Our products will be sold both online on our website, and through wholesale and
retail establishments including both brick and mortar stores and ecommerce
platforms. We also intend to sell our products in part using a direct selling
model in which we contract with independent contractors who are compensated by
commissions from their sales of our products. We intend to dedicate substantial
capital, including a portion of the proceeds from this offering, to build a
sales force consisting of a combination of employees of the Company and
independent contractors.
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Planned Operations and Products Under Development
New and Planned Products
In addition to our developed products, we are also in the process of evaluating
and developing new products. Our ability to develop and launch these products
within the timeframes intended or at all depends in large part on the Company
receiving sufficient proceeds from this Offering. Our Interim Financial
statements do not show any research and development expenses, as all costs
associated with any new products are included in the compensation paid to
Independent Contractors. If we are unable to raise at least $2,500,000 in this
Offering or through other means, the development, production and distribution of
these products may be delayed or discontinued. Even with the required capital,
planned or future projects may not come to fruition. Below is a brief summary of
the projects which are planned and/or under development.
Partnership with Medizone Bio
We, through Integrity Wellness, have entered into a Partnership Agreement with
Medizone Bio, Inc., ("Medizone Bio") which provides for a 50/50 partnership for
the production of biodegradable face masks, and medical supplies, such as
personal protective equipment (PPE) and COVID-19 testing materials. The
President and Control Person of Medizone, Bio, Inc., is Dr. Ghalili, a Director
of our Company. Under the Partnership Agreement, Integrity Wellness is to
provide an initial funding of $300,000 in financing for Medizone Bio to
manufacture the first Medizone Bio products purchase order. This $300,000 was
advanced to Medizone Bio, Inc., by Dr. Ghalili, but at the request of Dr,
Ghalili is in fact an obligation of the Company. The Company executed a
Promissory Note to that effect. This purchase order has a value of $1,200,000.
See "Related Party Transactions." Integrity Wellness will provide the
partnership with financing, marketing, sales distribution in wholesale, retail
and direct-to-consumer (e.g., QVC, HSN, Amazon, etc.), financing for general
working capital and purchase order financing, while Medizone Bio provides the
partnership with a series of purchase orders. The net profits, if any, will be
distributed between the partners in equal proportions.
Exosome Product Research and Development
We are in the early stages of developing a new business which will focus on a
new line of products using naturally occurring nanosized compounds
(approximately 30-150 nanometers in diameter), referred to as "exosomes," which
are derived from stem cells and cause growth and regeneration by acting as
biologic messengers at the cellular level of the human body. Exosomes work by
delivering chemical signals to the cells they permeate, instigating the
production of regenerative proteins and other compounds while also inhibiting
destructive inflammatory cytokines. We will not manufacture the exosome
products, but rather we intend to distribute exosome products manufactured by
FDA-certified manufacturing facilities. The exosome products are being developed
for skin care and topical use only. The products are being developed by
Independent Contractors of the Company, specifically 7X Enterprises, Inc.,
(controlled by Dr. Ghalili, one of our Directors) and John Borja, as part of the
compensation paid to them by the Company. There is no specific timeline or
milestone for any of the potentially new products being developed by them. As
part of their efforts, we are working with exosome manufacturers to further
research and develop these products, which includes developing a plan to file
any necessary applications and documentation with the FDA to obtain FDA
approval, if required, and intend to have such application submitted in 2022.
These applications, once we make the determination to proceed, will be developed
by the Company internally. We intend to explore the potential use of exosome
science to develop products designed to serve regenerative and health and
wellness functions such as hair and skin regeneration. However, we are still in
the very early development of this project, and no assurances can be given that
we will be able to proceed with our planned exosome product operations as
intended or at all. We do not expect to own or acquire intellectual property
rights or participate directly in the development and manufacturing efforts for
exosome products, and instead intend to license the intellectual property rights
of third parties in order to market and sell the finished products.
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SaaS Logistics Platform
Prior to the acquisition of Integrity Wellness, we were in the process of
developing a SaaS platform intended to enable users to monitor and manage
numerous aspects of the supply chain as they obtain raw materials, develop and
produce products, and bring their products to the marketplace. The intended
focus of the platform and services was on OTC, pharmaceutical, cosmetic,
nutraceutical, hemp/CBD and health and wellness products. The development
efforts to date have been conducted primarily by Corengine, Inc., a third-party
software development company. However, we have yet to develop and commercialize
the platform, which has been delayed in part due to the COVID-19 pandemic. The
platform's intended function is to assist users with the tracking, monitoring
and management of their respective manufacturing and distribution processes. The
SaaS-based platform will be designed to fully integrate the various components
of the supply chain, from obtaining raw materials through product manufacturing
and distribution and inventory and shelf-life batch tracking. We had previously
announced the spin-off of the business which was subsequently suspended
indefinitely due to COVID-19.
Our principal executive offices are located at 150 Motor Parkway, Suite 401,
Hauppauge, NY 11787. Our telephone number is 631-787-8455.
Parent Holding Company Reorganization
On May 6, 2021, the issuer (having been renamed, immediately prior to this
Holding Company Reorganization, from "Cannagistics, Inc." to "Global Transition
Corporation") completed a corporate reorganization (the "Holding Company
Reorganization") pursuant to which Global Transition Corporation, as previously
constituted (the "Predecessor") merged with a company which became a direct,
wholly-owned subsidiary of a newly formed Delaware Corporation, Cannagistics,
Inc. (in this capacity referred to as the "Holding Company"), which became the
successor issuer. In other words, the Holding Company is now the public entity,
albeit with the same name as the original issue or the Predecessor. The Holding
Company Reorganization was effected by a merger conducted pursuant to Delaware
General Corporation Law (the "DGCL"), which provides for the formation of a
holding company without a vote of the stockholders of the constituent
corporations (such constituent corporations being the Predecessor, as renamed to
Global Transition Corporation and the newly formed Cannagistics, Inc.).
In accordance with the DGCL, Global3pl, Inc. ("Merger Sub"), another newly
formed Delaware Corporation and, prior to the Holding Company Reorganization,
was an indirect, wholly owned subsidiary of the Holding Company, merged with and
into the Predecessor, with Merger Sub surviving the merger as a direct, wholly
owned subsidiary of the Holding Company (the "Merger"). The Merger was completed
pursuant to the terms of an Agreement and Plan of Merger among the Predecessor,
the Holding Company and Merger Sub, dated May 6, 2021 (the "Merger Agreement").
As of the effective time of the Merger and in connection with the Holding
Company Reorganization, all outstanding shares of common stock and preferred
stock of the Predecessor were automatically converted into identical shares of
common stock or preferred stock, as applicable, of the Holding Company on a
one-for-one basis, and the Predecessor's existing stockholders and other holders
of equity instruments, became stockholders and holders of equity instruments, as
applicable, of the Holding Company in the same amounts and percentages as they
were in the Predecessor immediately prior to the Holding Company Reorganization.
The executive officers and board of directors of the Holding Company are the
same as those of the Predecessor in effect immediately prior to the Holding
Company Reorganization.
For purposes of Rule 12g-3(a), the Holding Company is the successor issuer to
the Predecessor, now as the sole shareholder of the Predecessor. Accordingly,
upon consummation of the Merger, the Holding Company's common stock was deemed
to be registered under Section 12(b) of the Securities Exchange Act of 1934, as
amended, pursuant to Rule 12g-3(a) promulgated thereunder.
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Results of Operation for Three months Ended April 30, 2022, and 2021
Revenues
No revenue was generated for the nine months ended April 30, 2022, and 2021.
Our cost of revenues was $0 for the nine months ended April 30, 2022, as
compared with cost of revenue of $0 for the same period ended April 30, 2021.
Operating Expenses
Total operating expenses increased by $795,314 for the nine months ended April
30, 2022, from $1,071,651 at April 30, 2022 and $276,337 at April 30, 2021. This
increase was mainly due mainly to an increase in Consulting Fees and
Professional fees.
Operating expenses for the nine months ended April 30, 2022, consisted of
general and administrative expenses of $55,417, bad debt of $65,277, rent of
$12,813, consulting fees of $698.979, and professional fees of $239,165. The
increase in Consulting Fees is a result of the acquisition of Integrity Wellness
and the obligations for the payments of the Independent Contractors working on
the development of the Intellectual Property acquired in the acquisition,
including 7X Enterprises, Inc., and John Borja. Operating expenses for the nine
months ended April 30, 2021, consisted of general and administrative expenses of
$36,533, bad debt of $43,518, rent of $10,511, consulting fees of $38,125, and
professional fees of $147,650.
Other Income and Expenses
Total other income and expenses for the nine months ended April 30, 2022
amounted to a total other expenses of $709,286, and $1,290,094 at April 30,
2021. The decrease of 580,808 in expenses was mainly due to the change in fair
value of derivative liabilities. We had interest income of $65,277 for the nine
months ended April 30, 2022, and $65,277 for the nine months ended April 30,
2021. We had interest expense of $1,010,892 for the nine months ended April 30,
2022, as compared to $311,971 for the nine months ended April 30, 2021. We had
settlement fees of $48,000 for the nine months ended April 30, 2022, as compared
to $25,000 for the nine months ended April 30, 2021. We had a gain on derivative
liabilities of $123,822 for the nine months ended April 30, 2022, as compared to
a loss on derivative liabilities of $1,177,910 for the nine months ended April
30, 2021. We had a gain in fair value of derivative liabilities of $160,507 for
the nine months ended April 30, 2022, as compared to a gain of $79,385 for nine
months ended April 30, 2021.
Net Loss
Net loss for the nine months ended April 30, 2022, was $1,780,937 compared to
net loss of $1,668,315 for the nine months ended April 30, 2021
Liquidity and Capital Resources
As of April 30, 2022, we had total current assets of $81,604 and total current
liabilities of $6,705,749 as of April 30, 2022. We had a negative working
capital of $6,624,145 as of April 30, 2022.
We intend to fund operations through sales and debt and/or equity financing
arrangements, which may be insufficient to fund expenditures or other cash
requirements. We plan to seek additional financing in a private equity offering
to secure funding for operations. There can be no assurance that we will be
successful in raising additional funding. If we are not able to secure
additional funding, the implementation of our business plan will be impaired.
There can be no assurance that such additional financing will be available to us
on acceptable terms or at all.
Off Balance Sheet Arrangements
As of April 30, 2022, there were no off-balance sheet arrangements.
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Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most
"critical accounting polices" in the Management Discussion and Analysis. The SEC
indicated that a "critical accounting policy" is one which is both important to
the portrayal of a company's financial condition and results, and requires
management's most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain.
Our accounting policies are discussed in detail in the footnotes to our
financial statements included in our Annual Report on Form 10-K for the year
ended July 31, 2020, however we consider our critical accounting policies to be
those related to inventory, fair value of financial instruments, derivative
financial instruments and long-lived assets
Going Concern
As of April 30, 2022, we had an accumulated deficit of $32,353,128. Our ability
to continue as a going concern is contingent upon the successful completion of
additional financing arrangements and our ability to achieve and maintain
profitable operations. While we are expanding our best efforts to achieve the
above plans, there is no assurance that any such activity will generate funds
that will be available for operations. These conditions raise substantial doubt
about our ability to continue as a going concern.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to
have a significant impact on our results of operation, financial position or
cash flow
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