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.
Overview
We plan to become a complete end-to-end supply chain management company focused
on serving the pharmaceutical, OTC medical, nutraceutical, cosmetic, and
CBD/Hemp-related (and other) product industries as a gateway for products to
penetrate the USA, and potentially in the E.U., Colombia and Canada marketplace
through GMP certified manufacturing facilities possibly in Baton Rouge, Malta,
Bogotá, and Toronto. Currently, we have no GMP certified manufacturing
facilities in these areas or anywhere and do not have any affiliation with any
facilities. We are developing plans to source production, or to joint venture
with existing facilities, or potentially to acquire or build GMP Certified
facilities in those areas. These developing plans would include seeking out
already existing facilities currently in operation, either already GMP Certified
or willing to become GMP Certified, as well as preliminary discussions with
potential joint venture partners. We are also in the preliminary planning stages
regarding the possibility of obtaining the license to operate in Malta. While no
specific plans have been finalized, the Company is continuing to pursue all
options. Combining the production through these facilities and compliance
services with our proprietary information and transactional SAAS (Software as a
Service) platform (being developed by Corengine for our Global3PL, Inc.
subsidiary), Cannagistics, Inc. plans to offers its clients the ability to
manage, track and oversee their inventory, from raw materials to production to
shipping to delivery, and review in real-time the shipping of their products in
the supply chain from factory to customer in our logistics management platform.
Our plan to enter the industry as a supply chain management company is in the
development stages. We own no properties, plants or equipment, we have no full
or part time employees, other than our President and Vice President, and we have
no revenues under our planned logistics operations. There is substantial doubt
about our ability to continue as a going concern. Our ability to implement our
plan is dependent on the finished development of our SAAS software platform, and
the ability to raise the necessary funding and acceptance by customers.
With the execution of the Letter of Intent with Recommerce Group, Inc., on
January 26, 2021, we plan to enter into the reverse logistics, reverse supply
chain industry. Reverse Logistics or reverse supply chain logistics is
essentially handling customer returns, from either damaged items previously
delivered or purchased or items not wanted that have been purchased at a
location and/or delivered to the customer. This can entail returns made directly
to a "brick and mortar" location or directly from a consumer. We have entered a
binding Letter of Intent for this potential acquisition. However, the closing is
based upon completion of proper due diligence by the parties and agreement on
definitive documents as well as the necessary funding being in place. The
closing is to be targeted to take place on or about March 31, 2021. Pursuant to
the Letter of Intent, both parties may extend the date of closing upon mutual
agreement.
With the current situation related to the COVID-19 pandemic, our developmental
plans to seek out existing GMP facilities have been delayed by the restrictions
on travel domestically, and internationally and the difficulties in raising the
necessary capital. Regardless, we have been able to conduct some due diligence
in our search and we plan to conduct site visits and other due diligence once
domestic travel is more practical and international travel is less restrictive.
The Company believes as the ability to travel once again becomes possible,
specifically including internationally travel, that our above plans can be
better implemented in locating suitable facilities.
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To serve the EU market, we would like to have a GMP facility in Malta that would
focus on cosmetics, pharmaceutical, nutraceutical or "bioceutical" and medicinal
products for our clients, and our plan would be to provide end to end tracking,
manufacturing and testing. Our plan is to have this Malta lab cater to customers
in the EU. We also plan to potentially have other facilities that will cover our
target customers in the US, Canada and Columbia, potentially located in Baton
Rouge, Toronto and Bogotá, respectively.
Initially, the products we intend to focus on are skin care and anti-aging
creams and other over the counter products, and subsequently would be seeking to
add products with potentially hemp-based application. Our services would include
the production, under their requirements, distribution and handling of orders as
a third-party.
We have discussed the plan to create the Malta facility and other facilities
with potential customers for products manufactured at these facilities. We have
received positive feedback on the initiative and commitments from at least two
clients to which we plan to sell products.
Our principal executive offices are located at 2480 Stanfield Road, Unit B,
Mississauga, Ontario L4Y 1S2, and our Executive Office is located at 1200
Veterans Highway, Suite 310, Hauppauge, NY 11788. Our telephone number is
631-676-7230.
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 and Nine Months Ended April 30, 2021 and 2020
Revenues
No revenue was generated for the nine months ended April 30, 2021 and April 30,
2020.
Our cost of revenues was $0 for the nine months ended April 30, 2021, as
compared with cost of revenue of $0 for the same period ended April 30, 2020.
Operating Expenses
Total operating expenses decreased to $157,028 for the three months ended April
30, 2021, from $1876,032 at April 30, 2020. This decrease was mainly due mainly
to a decrease in Professional fees.
Operating expenses for the nine months ended April 30, 2021, consisted of
general and administrative expenses of $112,502, professional fees of $220,356,
rent of $12,382, and consulting fees of $88,125. Our operating expenses for the
nine months ended April 30, 2020, consisted of general and administrative
expenses of $(25,741), professional fees of $271,483, rent of $23,394, and
consulting fees of $107,947.
Other Income and Expenses
We had interest income of $65,277 for the nine months ended April 30, 2021, and
$65,277 for the nine months ended April 30, 2020. We had interest expense of
$421,014 for the nine months ended April 30, 2021 as compared to $305,249 for
the nine months ended April 30, 2020. We had Settlement Fees of $25,000 for the
nine months ended April 30, 2021, as compared to $0.00 for the nine months ended
April 30, 2020. We had a Loss on Derivative Liabilities of $33,589 for the nine
months ended April 30, 2021, as compared to $0.00 for the April 30 months ended
April 30, 2020. We had a Change in fair value of derivative labilities of
$942,946 for the nine months ended April 30, 2021, as compared to $0.0 for nine
months ended April 30, 2020.
Loss from Discontinued Operations
Net loss from discontinued operations for the nine months ended April 30, 2021,
was $0.00 compared $173,377 for the nine months ended April 30, 2020.
Net Loss
Net loss for the nine months ended April 30, 2021 was $1,723,459 compared to net
loss of $790,432 for the nine months ended April 30, 2020.
Liquidity and Capital Resources
As of April 30, 2021, we had total current assets of $33,177 and total current
liabilities of $4,381,614 as of April, 2021. We had a negative working capital
of $4,348,437 as of April 30, 2021.
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.
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Off Balance Sheet Arrangements
As of April 30, 2021, there were no off-balance sheet arrangements.
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, 2021, we had an accumulated deficit of $14,945,297. 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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