CANNAGIST : Amendment to Annual Report (Form 10-K/A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Ok/A

Modification No. 1

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal 12 months ended July 31, 2021
☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition interval from _________ to ________
Fee File Quantity: 000-55711

Cannagistics, Inc.

(Actual title of registrant as laid out in its constitution)

Delaware	86-3911779
(State or different jurisdiction of incorporation or group)	(IRS Employer Identification No.)
150 Motor Parkway Suite 401 Hauppauge, NY11788
(Tackle of principal government places of work)
631–787-8455
(Registrant’s phone quantity)
(Former title, former tackle and former fiscal 12 months, if modified since final report)

Point out by examine mark if the registrant is a widely known seasoned issuer, as outlined in Rule 405 of the Securities Act. Sure [ ] No[X]

Point out by examine mark if the registrant isn’t required to file studies pursuant to Part 13 or Part 15(d) of the Act. Sure [ ] No[X]

Point out by checkmark whether or not the registrant (1) has filed all studies required to be filed by Part 13 or 15(d) of the Securities Trade Act through the previous 12 months (or for such shorter interval that the registrant was required to file such studies), and (2) has been topic to such submitting necessities for the previous 90 days. Sure[ X ] No [ ]

Point out by examine mark whether or not the registrant has submitted electronically, each Interactive Knowledge File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of -this chapter) throughoutthe previous 12 months (or for such shorter interval that the registrant was required to submit and submit such information). Sure [ ] No☒

Point out by examine mark if disclosure of delinquent filers pursuant to Merchandise 405 of Regulation S-Ok (§ 229.405 of this chapter) isn’t contained herein, and won’t be contained, to one of the best of registrant’s data, in definitive proxy or data statements integrated by reference in Half III of this Type 10-Ok or any modification to this Type 10-Ok.

Sure [ ] No [ ]

Point out by examine mark whether or not the registrant is a big accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting firm, or an rising progress firm. See the definitions of “massive accelerated filer,” “accelerated filer,” “smaller reporting firm,” and “rising progress firm” in Rule 12b-2 of the Trade Act.

☐Massive accelerated Filer	☐Accelerated Filer
☒Non-accelerated Filer	☒Smaller reporting firm
	☐Rising progress firm

If an rising progress firm, point out by examine mark if the registrant has elected to not use the prolonged transition interval for complying with any new or revised monetary accounting requirements supplied pursuant to Part 13(a) of the Trade Act. [ ]

Point out by examine mark whether or not the registrant is a shell firm (as outlined in Rule 12b-2 of the Trade Act).

Sure [ ] No[X]

State the combination market worth of the voting and non-voting widespread fairness held by non-affiliates computed by reference to the value at which the widespread fairness was final bought, or the typical bid and requested value of such widespread fairness, as of the final enterprise day of the registrant’s most not too long ago accomplished fiscal 12 months: $690,313.

Point out the variety of shares excellent of every of the registrant’s courses of widespread inventory, as of the most recent practicable date: 219,468,674widespread shares as of October 28, 2021.

EXPLANATORY NOTE

Cannagistics, Inc., is submitting this Modification No.1 (this “Modification”) to its Annual Report on Type 10-Ok for the 12 months ended July 31, 2021 (the “Unique Type 10-Ok”), which was filed with the Securities and Trade Fee (the “SEC”) on October 29, 2021, and which reported on the years ended July 31, 2021 and 2020, to restate the monetary statements to mirror the accounting for the acquisition of The Integrity Wellness Group, Inc.

TABLE OF CONTENTS

		Web page
PART I
Merchandise 1.	Enterprise	3
Merchandise 1A.	Threat Elements	9
Merchandise 2.	Properties	22
Merchandise 3.	Authorized Proceedings	22
Merchandise 4.	Mine Security Disclosures	23
PART II
Merchandise 5.	Marketplace for Registrant’s Frequent Fairness and Associated Stockholder Issues and Issuer Purchases of Fairness Securities	24
Merchandise 6.	Chosen Monetary Knowledge	25
Merchandise 7.	Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations	25
Merchandise 7A.	Quantitative and Qualitative Disclosures About Market Threat	27
Merchandise 8.	Monetary Statements and Supplementary Knowledge	27
Merchandise 9.	Adjustments In and Disagreements with Accountants on Accounting and Monetary Disclosure	28
Merchandise 9A.	Controls and Procedures	28
Merchandise 9B.	Different Info	28
PART III
Merchandise 10.	Administrators, Government Officers and Company Governance	29
Merchandise 11.	Government Compensation	31
Merchandise 12.	Safety Possession of Sure Useful Homeowners and Administration and Associated Stockholder Issues	32
Merchandise 13.	Sure Relationships and Associated Transactions, and Director Independence	33
Merchandise 14.	Principal Accountant Charges and Companies	33

PART IV
Merchandise 15.	Displays, Monetary Assertion Schedules	34

PART I

Merchandise 1. Enterprise

Group and Description of Enterprise

Cannagistics, Inc. (Previously FIGO Ventures, Inc., previously Treasured Investments, Inc.) (‘The Firm’) was integrated below the legal guidelines of the State of Nevada on Could 26, 2004. The Firm was an Exploration Stage Firm with the principal enterprise being the acquisition and exploration of useful resource properties.

The Firm had allowed its constitution 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 charges. Its final identified officers and administrators mirrored within the data of the Secretary of State have been unresponsive or said they have been not concerned with the Firm. The purported substitute officers and administrators have been unresponsive.

On September 14, 2012, NPNC Administration, LLC filed a petition within the Eighth Judicial District Court docket in Clark County, Nevada and was appointed custodian of the Firm on January 15, 2012.

On October 24, 2012, the interim board approved the sale of 55,000,000 (2,200,000 break up adjusted) shares of widespread inventory for $6,000 to NPNC Administration, LLC, in a non-public placement transaction exempt from the Securities Act of 1933, as amended, pursuant to part 4(2) thereof and the foundations and rules promulgated there below.

On March 1, 2017, the Firm then entered right into a three way partnership settlement with Eddeb Administration (“Eddeb”). The aim of the three way partnership is to construct a fund for the aim of buying and selling in treasured gems, notably, coloured diamonds.

On November 16, 2017, the Firm entered into an Settlement of Merger and Plan of Reorganization (the “Merger Settlement”) with American Freight Xchange, Inc., a privately held New York company (“American Freight”), and Shipzooka Acquisition Corp. (“Shipzooka Sub”), a newly shaped wholly owned Nevada subsidiary of Treasured Investments, Inc. In reference to the closing of this merger transaction, Shipzooka Sub merged with and into American Freight (the “Merger”) on December 5, 2017, with the submitting of Articles of Merger with the Nevada Secretary of State and Certificates of Merger with the New York Division of Firms.

The transaction resulted within the Firm buying Subsidiary by the alternate of all the excellent shares of Subsidiary for 1,000,000 newly issued Collection C Most well-liked shares of inventory, $0.001 par worth (the “Most well-liked Inventory”) of Father or mother which have conversion and voting rights of 72.5 votes for every share, representing roughly 90.2% of the voting rights.

For accounting functions, the transaction was handled as a reverse merger because the acquired entity now varieties the premise for operations and the transaction resulted in a change in management, with the acquired firm electing to turn out to be the successor issuer for reporting functions. The accompanying monetary statements have been ready to mirror the property, liabilities and operations of American Freight Xchange, Inc. unique of Treasured Investments, Inc since all predecessor operations have been discontinued.

As a part of the transaction, quantities resulting from former officers have been forgiven, with the balances recorded as Contributed Capital. For fairness functions, accrued deficit proven are these American Freight Xchange, Inc. Shipzooka Acquisition Corp. is a dormant company.

On July 23, 2018, the Firm amended the title of its subsidiary, KRG Logistics, Inc., to Global3pl, Inc. (an Ontario company).

On September 4, 2018, the Firm integrated Cannagistics, Inc., within the province of Ontario, Canada. That is meant to be a potential new line of enterprise for the Firm however is dormant presently.

On April 17, 2019, we filed Articles of Merger with the Secretary of State of Nevada as a way to effectuate a merger with our wholly owned subsidiary, Cannagistics, Inc. Shareholder approval was not required below Part 92A.180 of the Nevada Revised Statutes. As a part of the merger, our board of administrators approved a change in our title to “Cannagistics, Inc.” and our Articles of Incorporation have been amended to mirror this title change.

On September 26, 2019, the Board of Administrators accepted the registered spinout of its Global3pl, Inc., (a New York company) (“Global3pl”) subsidiary. Global3pl is to be a logistics know-how supplier, together with the American Freight Xchange and UrbanX Platforms which have been below growth by the Firm.

The Board of Administrators additionally declared a inventory dividend for all shareholders, with a document date of October 10, 2019. For each 50 shares of widespread inventory of the Firm, all shareholders of document on the document date will obtain one share of widespread inventory in Global3pl. Global3pl will even file a registration assertion as a part of its increase of capital to finish the event of American Freight Xchange, a North American freight broker-driven 3pl community to deal with the administration of lengthy haul LTL (lower than truckload), and specialty freight (white glove) companies and Urbanx, a North American community of rush-messenger native trucking companies for ahead and reverse final mile supply (together with white glove service).

Nevertheless, the Firm has rigorously reconsidered its place with respect to the beforehand introduced and subsequently amended spin off of Global3pl, Inc., (a New York company). As a result of present state of affairs ensuing from the COVID-19 pandemic and particularly in mild of the event of the provision chain administration technique of the Firm, it has been decided that the finalization of the event of the Global3pl platform will likely be integral and function the “engine” for the provision chain administration of the Firm. Due to this fact, presently the “spin-off” has been indefinitely postponed till such time and it might make sense from a enterprise standpoint. The Firm has not issued any shares within the Global3pl, Inc (New York) subsidiary.

Efficient October 1, 2019, the Firm suspended operations of its subsidiary Global3pl, Inc., previously generally known as KRG Logistics, Inc., (an Ontario company), suspended future operations associated to the operations in Mississauga, Ontario. It’s within the means of gathering accounts receivables nonetheless due and dealing on a plan to pay its payables. It has entered into an settlement with 10451029 Canada Inc., d/b/a Dependable Logistics, for the project and of the property of Global3pl, Inc., (an Ontario Company). The transaction was accomplished on November 6, 2019. The Firm anticipates formally liquidating and dissolving the subsidiary within the subsequent fiscal Quarter. This can be a separate company from Global3pl, Inc. (A New York company).

On Could 6, 2021, the issuer (having been renamed, instantly previous to this Holding Firm Reorganization, from “Cannagistics, Inc.” to “World Transition Company”) accomplished a company reorganization (the “Holding Firm Reorganization”) pursuant to which World Transition Company, as beforehand constituted (the “Predecessor”) merged with an organization which turned a direct, wholly-owned subsidiary of a newly shaped Delaware Company, Cannagistics, Inc. (on this capability known as the “Holding Firm”), which turned the successor issuer. In different phrases, the Holding Firm is now the general public entity, albeit with the identical title as the unique situation or the Predecessor. The Holding Firm Reorganization was effected by a merger carried out pursuant to Delaware Common Company Legislation (the “DGCL”), which gives for the formation of a holding firm with out a vote of the stockholders of the constituent companies (such constituent companies being the Predecessor, as renamed to World Transition Company and the newly shaped Cannagistics, Inc.).

In accordance with the DGCL, Global3pl, Inc. (“Merger Sub”), one other newly shaped Delaware Company and, previous to the Holding Firm Reorganization, was an oblique, wholly owned subsidiary of the Holding Firm, merged with and into the Predecessor, with Merger Sub surviving the merger as a direct, wholly owned subsidiary of the Holding Firm (the “Merger”). The Merger was accomplished pursuant to the phrases of an Settlement and Plan of Merger among the many Predecessor, the Holding Firm and Merger Sub, dated Could 6, 2021 (the “Merger Settlement”).

As of the efficient time of the Merger and in reference to the Holding Firm Reorganization, all excellent shares of widespread inventory and most popular inventory of the Predecessor have been routinely transformed into equivalent shares of widespread inventory or most popular inventory, as relevant, of the Holding Firm on a one-for-one foundation, and the Predecessor’s current stockholders and different holders of fairness devices, turned stockholders and holders of fairness devices, as relevant, of the Holding Firm in the identical quantities and percentages as they have been within the Predecessor instantly previous to the Holding Firm Reorganization.

The manager officers and board of administrators of the Holding Firm are the identical as these of the Predecessor in impact instantly previous to the Holding Firm Reorganization.

For functions of Rule 12g-3(a), the Holding Firm is the successor issuer to the Predecessor, now as the only real shareholder of the Predecessor. Accordingly, upon consummation of the Merger, the Holding Firm’s widespread inventory was deemed to be registered below Part 12(b) of the Securities Trade Act of 1934, as amended, pursuant to Rule 12g-3(a) promulgated thereunder.

The beforehand executed Letter of Intent with Recommerce Group, Inc. has expired, though the Firm has continued discussions with Recommerce Group, Inc. a few potential enterprise mixture.

On July 1, 2021, we entered right into a Reorganization and Inventory Buy Settlement with Availa Bio, Inc. and Cannaworx Holdings, Inc. (now generally known as “The Integrity Wellness Group, Inc.” hereinafter “Integrity Wellness”) pursuant to which we acquired Integrity Wellness in alternate for 4,400,000 shares of the Firm’s Collection F Convertible Most well-liked Inventory. We additionally modified our state of incorporation to Delaware. A big majority of our operations at the moment are operated by means of Integrity Wellness which due to the transaction turned a completely owned subsidiary of the Firm. We anticipate to vary our title to The Integrity Wellness Group, Inc. topic to regulatory compliance.

Following our acquisition of Integrity Wellness, we shifted to our present marketing strategy and focus which is the event, advertising and marketing and sale of OTC, pharmaceutical, nutraceutical, beauty and well being and wellness merchandise with a give attention to merchandise infused with phytocannabinnoid, which we check with as “CBD.” We now have a portfolio of merchandise designed for the remedy of illnesses and signs and/or basic enchancment of well being and wellbeing by topical or oral administration. These product choices, that are described extra absolutely under, are designed to offer a wide range of remedies, advantages and makes use of together with ache reduction, anti-aging, hygiene, power, and immune system and biochemical assist. We even have merchandise designed for veterinary and agricultural makes use of. We’ve six patents and 15 patent purposes pending for our merchandise, in addition to numerous emblems. Our mission is to alleviate struggling and hostile penalties attributable to sure well being and organic circumstances and improve customers’ high quality of life.

On September 15, 2021, the Firm filed a Def14C Info Assertion. The Def14C Info Assertion set out the plan of the Firm to amend its title to The Integrity Wellness Group, Inc., or another comparable title, and to effectuate a reverse inventory break up of its widespread inventory of 1 (1) new share of widespread inventory for every forty (40) outdated shares of widespread inventory. The Firm is within the means of submitting with FINRA to make these modifications efficient.

Our Merchandise

Merchandise with Issued Patents

Immuniain ^TM (Immune Booster)

Some ImmunaZin Elements and Expectations

● Pepsin — the primary ingredient now well-known for speedy restoration. We take pepsin and break it down into fragmented particles which can be higher absorbed into the digestive tract. These pepsin fragments instantly modulate immune system exercise by inducing potent T-cell response leading to boosted immunity.

● Hemp seed oil helps stability wholesome levels of cholesterol, fights despair and anxiousness, improves eye well being, promotes mind well being, reduces metabolic syndrome, reduces irritation, fights autoimmune illness and psychological problems, reduces fatty liver, promotes bone and joint well being and improves sleep and pores and skin.

Irreversibly-inactivated pepsinogen fragments for modulating immune perform (Immune Booster- FDA Cleared)

ImmunaZin incorporates an FDA accepted NDI (New Dietary Ingredient), 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 supply system)

Patented Full Spectrum Phytocannabinoid supply with FDA accepted ache declare. The one and solely FDA-approved ache declare available in the market for an oral CBD product. Utilizing an FDA accepted monogram by together with menthol. As a result of this product incorporates CBD, we don’t at present market and promote this product presently.

We’ve Unique World-wide entry to Patent No. US 9839693 B2

Patent Issued: December 4, 2018

Patent Expires: December 8, 2037

Silverpro – our solely FDA accepted medical gadget for the remedy of ache.

Pending Patent Purposes

Veterinary Cannabinoid and Menthol Compositions and Strategies

Utility No. 16/419,392; Worldwide Utility PCT/US2019/048695

Cannabinoid and Menthol Compositions and Strategies

US Utility No. 16/419,336; Worldwide Utility PCT/US2019/048691

Skinny Movie Toothpaste Strip, European Utility

Product Title: KidzStrips®

Skinny Movie Toothpaste Strip, Eurasian Utility

Product Title: KidzStrips®

Fertilizer

Product Title: HydroSoil ®,

Water retaining Hemp enhanced fertilizer, water plant as soon as each two weeks

Inactivated Pepsin Fragment (IPF) and Full Spectrum Cannabidiol (CBD) Compositions and Strategies

Pores and skin Cream

Pertains to compositions and strategies for the prevention and remedy of pores and skin problems and for the rejuvenation of the pores and skin. Particularly, the appliance describes topical compositions and strategies of remedies comprising the mixed use of a number of cannabinoids and a number of hydroxy acids in an acceptable service. As a result of this product incorporates CBD, we don’t at present market and promote this product presently.

Different Merchandise

IcyEase

Adhesive Ice Pack for muscle/joint ache to chill floor and tackle ache.

Patent-pending, FDA ache declare in progress. IcyEase incorporates menthol, menthol is an accepted ache reduction ingredient within the FDA’s monograph for topical ache reduction

Slim-D

Urge for food-suppressant oral strip with 50 mg Hoodia & 10 mg Full Spectrum Phytocannabinoid. As a result of this product incorporates CBD, we don’t at present market and promote this product presently.

Power Lighting Strips

Excessive caffeine quick dissolving oral power strip with Matcha Inexperienced Tea and Hemp/Full Spectrum Phytocannabinoid. As a result of this product incorporates CBD, we don’t at present market and promote this product presently.

Micro Voltage Trans Derm C

patent software in progress for ache with distinctive and superior absorbing options resulting from wearer’s motion generated Micro Voltage

Silverpro – our solely FDA accepted medical gadget for the remedy of ache. Revolutionary know-how combining real silver yarn with low-static carbon fibers, to create the world’s most advanced-compression ache reduction cloth.

Analysis & Growth and Product Manufacturing

Our merchandise are produced utilizing third occasion producers who’re accountable for sourcing the uncooked supplies and substances and adhering to relevant specs and regulatory necessities together with the FDA’s good manufacturing practices (GMP) certification. We additionally use a few of these identical third events for analysis and growth and testing features as and when the necessity arises. We depend on a restricted variety of these producers to develop and produce our product choices.

The provision and manufacturing functionality of our producers relies on the uncooked materials provides and sources, in addition to different tasks on which our producers could also be engaged at a given time. Due to these contingencies, the lead instances on manufacturing and supply schedules can fluctuate, which can trigger us to fail to satisfy inside or contractual deadlines. As we develop, we hope to have the ability to precisely forecast and handle these processes to attempt to guarantee we’ve got enough stock readily available to satisfy demand. A major uncooked materials utilized within the manufacturing course of for our merchandise is CBD isolate which might solely be produced in sure states. Whereas we consider there are adequate sources for CBD isolate and different uncooked supplies mandatory to satisfy our manufacturing wants, shortages and delays can happen, which may hurt us by prolonging or suspending anticipated deliveries or growing manufacturing prices.

COVID-19

The COVID-19 pandemic has resulted in a world slowdown of financial exercise which is prone to proceed to cut back the long run demand for a broad number of items and companies, whereas additionally disrupting gross sales channels, advertising and marketing actions and provide chains for an unknown time period till the virus is absolutely contained. Provide chain disruptions have been more and more widespread because the pandemic started, and such disruptions might have an effect on us sooner or later.

Gross sales and Distribution

Our merchandise will likely be bought each on-line on our web site, and thru wholesale and retail institutions together with each brick and mortar shops and ecommerce platforms. We additionally intend to promote our merchandise partially utilizing a direct promoting mannequin wherein we contract with impartial contractors who’re compensated by commissions from their gross sales of our merchandise. We intend to dedicate substantial capital, together with a portion of the proceeds from this providing, to construct a gross sales pressure consisting of a mix of staff of the Firm and impartial contractors.

Deliberate Operations and Merchandise Beneath Growth

New and Deliberate Merchandise

Along with our developed merchandise, we’re additionally within the means of evaluating and creating new merchandise. Our potential to develop and launch these merchandise inside the timeframes meant or in any respect relies upon largely on the Firm receiving adequate proceeds. If we’re unable to lift a minimum of $ 2,500,000 the event, manufacturing and distribution of those merchandise could also be delayed or discontinued. Even with the required capital, deliberate or future tasks might not come to fruition. Under is a quick abstract of the tasks that are deliberate and/or below growth.

Partnership with Medizone Bio

We, by means of Integrity Wellness, have entered right into a Partnership Settlement with Medizone Bio, Inc., (“Medizone Bio”) which gives for a 50/50 partnership for the manufacturing of biodegradable face masks, and medical provides, corresponding to private protecting gear (PPE) and COVID-19 testing supplies. Beneath the Partnership Settlement, Integrity Wellness is to offer an preliminary funding of $300,000 in financing for Medizone Bio to fabricate the primary Medizone Bio merchandise buy order. This buy order has a worth of $1,200,000. Integrity Wellness has borrowed $300,000 from and issued a promissory observe to a 3rd occasion which is affiliated with Dr. Babak Ghalili, a director of the Firm, for the aim of funding the acquisition order. See “Associated Get together Transactions.” Integrity Wellness will present the partnership with financing, advertising and marketing, gross sales distribution in wholesale, retail and direct-to-consumer (e.g., QVC, HSN, Amazon, and many others.), financing for basic working capital and buy order financing, whereas Medizone Bio gives the partnership with a sequence of buy orders. The online income, if any, will likely be distributed between the companions in equal proportions.

Exosome Product Analysis and Growth

We’re within the early phases of creating a brand new enterprise which is able to give attention to a brand new line of merchandise utilizing naturally occurring nanosized compounds (roughly 30-150 nanometers in diameter), known as “exosomes,” that are derived from stem cells and trigger progress and regeneration by appearing as biologic messengers on the mobile stage of the human physique. Exosomes work by delivering chemical indicators to the cells they permeate, instigating the manufacturing of regenerative proteins and different compounds whereas additionally inhibiting damaging inflammatory cytokines. We intend to discover the potential use of exosome science to develop merchandise designed to serve regenerative and well being and wellness features corresponding to hair and pores and skin regeneration. Nevertheless, we’re nonetheless within the very early growth of this venture, and no assurances could be on condition that we can proceed with our deliberate exosome product operations as meant or in any respect. We don’t anticipate to personal or purchase mental property rights or take part instantly within the growth and manufacturing efforts for exosome merchandise, and as an alternative intend to license the mental property rights of third events as a way to market and promote the completed merchandise.

SaaS Logistics Platform

Previous to the acquisition of Integrity Wellness, we have been within the means of creating a SaaS platform meant to allow customers to watch and handle quite a few facets of the provision chain as they get hold of uncooked supplies, develop and produce merchandise, and produce their merchandise to {the marketplace}. The meant focus of the platform and companies was on OTC, pharmaceutical, beauty, nutraceutical, hemp/CBD and well being and wellness merchandise. The event efforts thus far have been carried out primarily by Corengine, Inc., a third-party software program growth firm. Nevertheless, we’ve got but to develop and commercialize the platform, which has been delayed partially as a result of COVID-19 pandemic. The platform’s meant perform is to help customers with the monitoring, monitoring and administration of their respective manufacturing and distribution processes. The SaaS-based platform will likely be designed to completely combine the assorted elements of the provision chain, from acquiring uncooked supplies by means of product manufacturing and distribution and stock and shelf-life batch monitoring. We had beforehand introduced the spin-off of the enterprise which was subsequently suspended indefinitely resulting from COVID-19.

Out there Info

We file varied studies with the SEC, together with Annual Experiences on Type 10-Ok, Quarterly Experiences on Type 10-Q and Present Experiences on Type 8-Ok, which can be found by means of the SEC’s digital knowledge gathering, evaluation and retrieval system (“EDGAR”) by accessing the SEC’s house web page (http://www.sec.gov). The paperwork are additionally obtainable to be learn or copied on the SEC’s Public Reference Room situated at 100 F Avenue, NE, Washington, D.C., 20549. Info on the Public Reference Room could also be obtained by calling the SEC at 1-800-SEC-0330.

Merchandise 1A: Threat Elements

Dangers Associated to Our Securities

We’ve over $1,200,000 of convertible debt excellent, which we could also be unable to pay as and when due or in any respect, and the conversion of which might have a dilutive impact on our stockholders and will cut back the value of our Frequent Inventory.

As of October 28, 2021, we’ve got $1,200,000 of convertible debt excellent which convert into a complete of 120,000,000 shares of Frequent Inventory id transformed on the minimal value of $0.01 per share, along with the roughly 219,468,674 shares of Frequent Inventory presently excellent. Given our historical past of working losses and continued expenditures, which we anticipate to extend within the short-term as we try to determine and develop our operations by means of Integrity Wellness and its merchandise, we might face problem paying these obligations as and after they come due. Not one of the Notes totaling $1,200,000 are at present late. The convertible notes have maturity starting July 2022 by means of August 2022. The promissory notes documenting this indebtedness include conversion value triggers upon an occasion of default which entitle the holder to obtain extra shares of Frequent Inventory upon conversion throughout a unbroken default. Conversions of the convertible debt would due to this fact have a dilutive impact on our stockholders, whereas cost of the debt will additional add to our deficit, both of which may adversely have an effect on our stockholders. The Firm’s subsidiary has defaulted Convertible Notes totaling roughly $300,000.

As a result of we should not have adequate approved capital on a completely diluted foundation, the surplus excellent capital exposes us to legal responsibility, and we might want to enhance our approved capital or get hold of efficient waivers from by-product securityholders.

As of October 28, 2021, our approved capital consists of 500,000,000 shares of Frequent Inventory and 20,000,000 shares of Most well-liked Inventory. Of the approved Frequent Inventory, 219,468,674 shares are issued and excellent, 725,000,000 shares are reserved for issuance below pending conversions of our prior Collection D Convertible Most well-liked Inventory (the “Collection D”), a complete of 800,000,000 shares are reserved for issuance upon conversion of the excellent shares of Collection E Convertible Most well-liked Inventory (the “Collection E”) and Collection F Convertible Most well-liked Inventory (the “Collection F”), Presently there are not any shares are reserved for issuance upon conversion of excellent convertible indebtedness together with the Convertible Notes, and no shares are reserved for issuance upon train of excellent warrants. As such, our absolutely diluted capital construction is presently nicely above the quantity of Frequent Inventory we’re approved to situation. Due to this fact, till we both enhance our approved Frequent Inventory or get hold of waivers from the holders of the excellent by-product securities each and with respect to their rights to an enough reserve from which to obtain the shares of Frequent Inventory which underlie their respective securities, we’re uncovered to the chance of legal responsibility arising from the surplus absolutely diluted capitalization. Due to this fact, along with the dilutive impact any workout routines of the by-product securities would have, within the occasion we’re unable to acquire the requisite shareholder approval or waivers, or we’re delayed in these efforts, the Firm and your funding in us can be in danger.

Buying and selling in our Frequent Inventory might turn out to be topic to broad value and quantity fluctuations.

Our Frequent Inventory is at present quoted for public buying and selling on the OTC Pink Open Market. Presently, this market, locations a “shell threat” warning to buyers. Whereas the acquisition of Integrity Wellness and graduation of operations with respect to the associated CBD merchandise might take away the shell threat designation, the OTC Pink Open Market typically isn’t an lively market. Additional, our Frequent Inventory has solely traded sporadically. We intend to use to have our Frequent Inventory quoted on the OTCQB. Even when our Frequent Inventory begins buying and selling on the OTCQB, buyers needs to be conscious that the OTCQB isn’t as liquid as main nationwide securities exchanges.

The buying and selling value and quantity of our Frequent Inventory have traditionally been low and will turn out to be topic to broad fluctuations. Buying and selling costs of our Frequent Inventory might fluctuate in response to a number of components, a lot of that are past our management. The inventory market has typically seen excessive value and quantity fluctuations which have typically been unrelated or disproportionate to the working efficiency of corporations corresponding to ours with restricted enterprise operations or that not too long ago started working in a completely new trade.

These inventory market and trade components might adversely have an effect on the market value of our Frequent Inventory, no matter our working efficiency. Lastly, up to now, following intervals of volatility available in the market value of an organization’s securities, securities class-action litigation has typically been instituted. Such litigation, if instituted, may end in substantial prices for us and a diversion of administration’s consideration and assets.

As a result of our Frequent Inventory is topic to the “penny inventory” guidelines, brokers can not typically solicit the acquisition of our Frequent Inventory, which adversely impacts its liquidity and market value.

The SEC has adopted rules which typically outline “penny inventory” to be an fairness safety that has a market value of lower than $5.00 per share, topic to particular exemptions. The market value of our Frequent Inventory on the OTC Pink Open Market is presently lower than $5.00 per share and due to this fact we’re thought of a “penny inventory” firm in accordance with SEC guidelines. Additional, we don’t anticipate our inventory value to rise above $5.00 within the foreseeable future,. The “penny inventory” designation requires any broker-dealer promoting our securities to reveal sure data regarding the transaction, get hold of a written settlement from the purchaser and decide that the purchaser within reason appropriate to buy the securities. These guidelines restrict the power of broker-dealers to solicit purchases of our Frequent Inventory and due to this fact cut back the liquidity of the general public marketplace for our shares.

Furthermore, because of obvious regulatory strain from the SEC and the Monetary Trade Regulatory Authority (“FINRA”), a rising variety of broker-dealers decline to allow buyers to buy and promote or in any other case make it troublesome to promote shares of penny shares. The “penny inventory” designation might have a depressive impact upon our Frequent Inventory value.

So long as our and Collection E and Collection F Convertible Most well-liked Inventory is excellent and for 2 years after conversion, the holders will have the ability to successfully management our Firm no matter what number of shares of widespread inventory or different securities we situation.

We not too long ago filed a Certificates of Designation for 4,400,000 shares of Collection F Convertible Most well-liked Inventory (the “Collection F”) and a Certificates of Designation for 3,600,000 shares of Collection E Convertible Most well-liked Inventory (the “Collection E”). As at present drafted the Collection F Certificates of Designation provides the holders 44% of the fairness and voting energy. The Firm understands that the proper quantity to be held by the Collection F holders is 55% and intends to file an modification with approval of its Board as quickly as practicable. The intent was to offer the Collection F holders with 55% of the fairness and voting energy so long as they owned any Collection F shares, and for a two-year interval following conversion of all of the Collection F shares. This implies the holder can personal one share of Collection F and personal the best to acquire 0.00125% of the fairness and corresponding voting energy. The Collection E incorporates comparable provisions, besides that it’s non-voting, is entitled to 36% of the fairness and converts upon the sooner of the conversion of the Collection F and June 30, 2023.

The impact is that the Collection E and Collection F holders get the best to extra shares of widespread inventory at any time when we situation extra shares or different widespread inventory equivalents and regardless of how excessive the long run buy costs are. The Collection F holder is Regen, of whom Jim Morrison, our Chief Government Officer and director, was an officer and a director on the time the underlying buy settlement was negotiated and who accepted the Certificates of Designation as a director of Regen. Additional, the holders embody Rising Progress Advisors, Inc. an entity managed by Jim Zimbler, our officer and a former director who accepted the transaction as a director of the Firm. Whereas the Firm believes the issuances to Regen which turned our principal shareholder in reference to its acquisition and Rising Progress Advisors, Inc. have been truthful to the Firm, it’s potential our shareholders might problem the issuances. We intend to hunt shareholder approval of the disinterested shareholders.

If we’re required to pay a associated occasion $300,000 plus curiosity on a associated occasion observe, we may stop operations or in any other case be materially and adversely affected.

We not too long ago borrowed $300,000 from an organization wherein Dr. Babak Ghalili, a Cannagistics director, is the president. We issued the company a ten% demand observe payable upon demand. Despite the fact that Dr. Ghalili has a fiduciary obligation to us and will not breach his obligation of loyalty, that protecting governance provision is not going to apply, and the entity might demand cost at any time with out exposing Dr. Ghalili to legal responsibility. If we obtain a requirement to pay the observe, we should not have the funds to repay it and will stop operations or in any other case be required to have interaction in a poisonous and dilutive financing to pay the observe.

Dangers Associated to Our Enterprise and the CBD Merchandise and Trade

Due to our historical past of losses and lack of working capital and income, there’s substantial doubt about our potential to proceed as a going concern.

We’ve operated at a loss leading to an accrued deficit of $(15,612,191) as of July 31, 2021. A big proportion of our expenditures thus far have been on creating the SaaS platform which stays within the growth section and will by no means be accomplished. As an alternative, we’ve got not too long ago shifted our enterprise focus to a brand new trade of promoting CBD merchandise, which will not be adequate to generate income or overcome our liabilities which at the moment are over $5,691,709.

We’ve restricted working capital and haven’t generated income from our enterprise. We initially anticipate to incur losses within the growth of our enterprise, which casts substantial doubt on our potential to completely implement our marketing strategy. To proceed as a going concern, we might want to generate future worthwhile operations and/or get hold of the mandatory financing to satisfy our obligations and repay our liabilities arising from regular enterprise operations after they come due. Among the many liabilities we anticipate accruing within the early phases of our growth and operations are compensation for our administration group, prices associated creating, testing, producing and advertising and marketing our merchandise, compliance prices, prices associated to acquiring and defending our mental property rights and funds to third-party producers and different distributors and repair suppliers on which we rely. If we fail to lift adequate proceeds in financings, we might not turn out to be worthwhile or have the ability to proceed our enterprise as a going concern.

As a result of we’re extremely depending on the companies of our two senior officers, the lack of both and our incapacity to develop our administration group may hurt our enterprise.

Our success is essentially depending on the continued companies of Jim Morrison, our Chief Government Officer, and James Zimbler, our Vice President of Company Finance. The lack of the companies of both of Messrs. Morrison or Zimbler would depart us with out adequate or any government management, which may diminish our enterprise and progress alternatives. Moreover, every of those people has enterprise pursuits outdoors our firm, together with Mr. Zimbler as an proprietor and officer of Rising Progress Advisors, Inc. a consulting companies supplier with which the Firm contracts for administrative and strategic help. Accordingly, from time-to-time our administration might not commit their full time and a focus to our affairs, which may have a cloth hostile impact on our working outcomes, and there could be no assurance {that a} battle of curiosity is not going to come up from their different enterprise ventures such because the consulting companies association with Mr. Zimbler’s entity.

We will even have to construct an government administration group round our present officers and administrators, together with finding and hiring a Chief Monetary Officer and different government officers, which might be a time consuming and costly course of and divert administration’s consideration from different urgent issues regarding the Firm’s operations or progress. The marketplace for extremely certified personnel on this trade may be very aggressive and we could also be unable to draw such personnel in a well timed method, on favorable phrases or in any respect. If we’re unable to draw and retain the required personnel, our enterprise might be harmed.

The lack of Mr. Morrison or Mr. Zimbler would have a cloth hostile impact on us. We should not have key man insurance coverage on the lives of those people. Within the occasion both or each people terminate their employment, this would depart the Firm with out enough management which can have a cloth hostile impact upon us, your funding, and hamper the power of the Firm to proceed operations. If we fail to acquire the companies of further government administration or implement and execute an efficient contingency or succession plan for our present administration group, the lack of our administration would considerably disrupt our enterprise from which we might not have the ability to get well.

If we’re unable to develop and preserve our model and fame for our product choices, our enterprise and prospects might be materially harmed.

Our enterprise and prospects rely, partially, on creating after which sustaining and strengthening our model and fame within the markets we serve that are characterised by intense competitors and bigger, extra well-established CBD manufacturers and merchandise. If issues with our merchandise trigger our prospects to have a damaging expertise or failure or delay within the supply of our merchandise to our prospects, our model and fame might be diminished. If we fail to develop, promote and preserve our model and fame efficiently, our enterprise and prospects might be materially harmed.

As a result of we face intense competitors, we might not have the ability to enhance our market share which might materially and adversely have an effect on us.

Our trade is very aggressive. It’s potential that future rivals may enter our market, thereby inflicting us to lose market share and revenues or fail to develop our operations and market presence as meant or in any respect. As well as, most of our present rivals have considerably better monetary, technical, advertising and marketing and different assets than we do or might have extra expertise or benefits within the markets wherein we’ll compete that may permit them to supply decrease costs or increased high quality merchandise. If we don’t efficiently compete with these rivals, we may fail to develop a adequate market share to attain our targets and our future enterprise prospects might be materially adversely affected.

As a result of the sale of our merchandise entails the potential for product legal responsibility, we might incur important losses and bills in extra of our insurance coverage protection.

We face an inherent threat of publicity to product legal responsibility claims if the usage of our merchandise ends in, or is believed to have resulted in, sickness or harm. Our merchandise are designed for ingestible or topical use and orally and include combos of substances, and there’s little expertise with or data of the long-term results of those combos. As well as, interactions of those substances and merchandise with different merchandise, prescription medicines and over-the-counter remedies haven’t been absolutely explored or understood and will have unintended penalties. Future analysis or outcomes might result in the invention of unknown hostile unwanted effects from Hemp Oil which might hurt our enterprise.

Though the Firm believes all of its merchandise will likely be protected when taken as directed by the Firm, there’s little long-term analysis on the results of human consumption of sure of the brand new product substances or combos in concentrated kind that we use or might sooner or later use in creating our Hemp Oil merchandise. Any occasion of sickness or damaging unwanted effects of ingesting Hemp oil merchandise or making use of them topically on the pores and skin may have a cloth hostile impact on our enterprise and operations by, amongst different issues, exposing us to the chance of expensive litigation and/or governmental sanctions and dramatically lowering the demand for some or all of our merchandise.

Any product legal responsibility claims or associated developments from our merchandise or Hemp Oil on the whole might enhance our prices and adversely have an effect on our income, product demand and working outcomes. Furthermore, legal responsibility claims arising from a severe hostile occasion might enhance our prices by means of increased insurance coverage premiums and deductibles and will make it tougher to safe enough insurance coverage protection sooner or later. As well as, our product legal responsibility insurance coverage might fail to cowl future product legal responsibility claims, which, if adversely decided, may topic us to substantial financial damages.

If we fail to appropriately reply to altering shopper preferences and demand for brand spanking new merchandise, it may considerably hurt our buyer relationships and product gross sales and hurt our working outcomes and monetary situation.

Our enterprise is topic to altering shopper tendencies and preferences, particularly with respect to focused OTC, therapeutic, nutraceutical, cosmetics and well being and wellness merchandise. Our success will rely partially on our potential to anticipate and reply to those modifications, and we might not reply in a well timed or commercially acceptable method to such modifications. Moreover, the goal industries for our merchandise are characterised by speedy and frequent modifications in demand for merchandise and new product introductions and enhancements. Our failure to precisely predict these tendencies may negatively impression shopper opinion of our merchandise, which in flip may hurt our buyer relationships and product calls for and trigger the lack of gross sales. The success of our product choices relies upon upon numerous components, together with our potential to:

• Precisely anticipate shopper wants;
• Worth our merchandise competitively;
• Organize for the manufacturing and supply our merchandise in adequate volumes and in a well timed method; and
• Differentiate our merchandise from these of our rivals.

If we don’t meet these challenges, a few of our merchandise might be rendered out of date, which may negatively impression our working outcomes and monetary situation.

Hostile publicity related to our merchandise or substances, or these of our rivals or comparable companies, may adversely have an effect on our gross sales and income.

Hostile publicity regarding any precise or purported failure by us or our rivals to adjust to relevant legal guidelines and rules or regarding every other side of our enterprise or the CBD trade may have an hostile impact on the general public notion of us and our merchandise. This, in flip, may negatively have an effect on our potential to acquire financing, endorsers and entice distributors, retailers or customers for our merchandise, which might have a cloth hostile impact on our potential to generate gross sales and income.

Our distributors’ and prospects’ notion of the protection, utility and high quality of our merchandise and even comparable merchandise distributed by others could be considerably influenced by nationwide media consideration, publicized scientific analysis or findings, product legal responsibility claims and different publicity regarding our merchandise or comparable merchandise distributed by others. Hostile publicity, whether or not or not correct, that causes a perceived connection between the usage of our merchandise or any comparable merchandise and sickness or different hostile results, will possible diminish the general public’s notion of and in flip the demand for our merchandise. Claims that any merchandise are ineffective, inappropriately labeled or have inaccurate directions as to their use, may have a cloth hostile impact in the marketplace demand for our merchandise, together with lowering our gross sales and income, which might have a cloth hostile impact on our enterprise.

If we’re unable to acquire our merchandise in adequate portions or at outlined high quality specs, or if the third events we use are unable to take care of regulatory approvals for manufacturing services, we could also be unable to satisfy demand for our merchandise and lose time to market them and generate income.

Commercialization of our merchandise require entry to services to fabricate a adequate provide of our merchandise in compliance with relevant regulatory necessities. Due to our restricted capital and different assets, we should outsource the manufacturing of our merchandise, and whereas we’ve got manufacturing companions, to the extent we’d like or wish to enhance quantity or develop to new markets, or to switch present producers for any motive, we could also be unable to find viable third events and sources and negotiate acceptable phrases. Additional, the necessity for GMP licensed services and compliance with FDA guidelines and pointers to provide Hemp Oil merchandise corresponding to ours will increase the issue of producing efforts and the associated prices and will function to cut back our leverage once we cope with GMP-certified third events leading to unfavorable phrases.

We might face competitors for entry to 3rd occasion provide sources, growth or manufacturing companions and services corresponding to hemp growers and could also be topic to manufacturing delays if any of these third events give their different enterprise companions the next precedence than they offer to us. Even when we’re in a position to determine further or substitute third events, the delays and prices related to establishing and sustaining a relationship with such third events might have a cloth hostile impact on us. Additional, we lack management over manufacturing of our merchandise resulting from outsourcing, which exposes us to a better threat of legal responsibility, together with regulatory enforcement actions for alleged noncompliance with regulation and product legal responsibility claims. This might additionally end in decrease product high quality which may negatively impression demand for our choices or our aggressive benefit. Any of those challenges may forestall us from attaining our enterprise aims and hurt your funding in us.

If the market alternatives for our merchandise are much less profitable than anticipated, our potential to generate revenues could also be adversely affected and our enterprise might endure.

Our understanding, expectation and estimates of the marketplace for our present and future merchandise might show to be incorrect, and new take a look at outcomes or research, studies, legislative or regulatory developments or different components past our management might end result available in the market for our merchandise being decrease than anticipated on a regional, nationwide or international scale. The variety of people within the U.S. who’re prepared to buy our merchandise could also be decrease than anticipated, or expectations for repetitive purchases and consumption might show to be incorrect. These occurrences may materially adversely have an effect on our prospects and operational outcomes.

If we’re unable to determine relationships with third events to hold out gross sales, advertising and marketing, and distribution features or to create efficient advertising and marketing, gross sales, and distribution capabilities, we will likely be unable to market our merchandise efficiently.

Our enterprise technique consists of utilizing third events to market and promote our merchandise. There could be no assurance that we’ll efficiently have the ability to set up advertising and marketing, gross sales, or distribution relationships with a adequate variety of third events to satisfy our targets, that such relationships, if established, will likely be profitable, or that we’ll achieve success in gaining market acceptance for present or future merchandise. To the extent that we enter into any advertising and marketing, gross sales, or distribution preparations with third events, our product revenues per unit bought are anticipated to be decrease than if we marketed, bought, and distributed our merchandise instantly, and any revenues we obtain will rely on the efforts of such third events.

If we’re unable to determine such third-party advertising and marketing and gross sales relationships, we must set up and develop in-house advertising and marketing and gross sales capabilities. To market any merchandise instantly, we must construct a advertising and marketing, gross sales, and distribution pressure that has technical experience and will assist a distribution functionality. Competitors within the well being and wellness and CBD industries for technically proficient advertising and marketing, gross sales, and distribution personnel is intense, and attracting and retaining such personnel might considerably enhance our prices. There could be no assurance that we can set up inside advertising and marketing, gross sales, or distribution capabilities or that these capabilities will likely be adequate to satisfy our wants.

We face and will proceed to face enterprise disruption and associated dangers arising from the COVID-19 pandemic, which has had and will proceed to have a cloth hostile impact on our enterprise.

The event, manufacturing and sale of our merchandise has been and will proceed to be materially adversely affected by the COVID-19 pandemic. We are going to depend upon Hemp Oil gross sales in retail shops together with comfort shops along with on-line gross sales. Gross sales of our Hemp Oil merchandise may decline because of the pandemic, together with resulting from decreased demand attributable to financial hardship and uncertainty and manufacturing challenges attributable to provide shortages and the lockdowns. Whereas vaccinations starting in 2021 allowed for the partial reopening of the financial system, the current “Delta” and “Omicron” variant of the virus, in addition to decreased efficacy of vaccines over time and the likelihood that numerous individuals decline to get vaccinated or obtain booster pictures, creates inherent uncertainty as to the way forward for our enterprise, our trade and the financial system on the whole in mild of the pandemic.

We’re nonetheless assessing our enterprise plans and the impression COVID-19 might have on our potential to commercialize our merchandise, however there could be no assurance that this evaluation will allow us to keep away from or mitigate half or all of any impression from the unfold of COVID-19 or its penalties, together with macroeconomic downturns. The extent to which the COVID-19 pandemic and international efforts to include its unfold will impression our operations will rely upon future developments, which for a wide range of causes together with these described above are extremely unsure and can’t be predicted presently.

We’ve a restricted working historical past upon which buyers can consider our future prospects.

Integrity Wellness was based in November 2020 as Cannaworx Holdings, Inc., and adjusted its title to The Integrity Wellness Group, Inc. in June 2021, and we due to this fact have a restricted working historical past upon which an analysis of its marketing strategy or efficiency and prospects could be made. The enterprise and prospects of the Firm

should be thought of within the mild of the potential issues, delays, uncertainties and issues encountered in reference to a enterprise which remains to be in its early phases in a comparatively new trade characterised by sudden change. The dangers embody, however aren’t restricted to, the likelihood that we fail to develop purposeful and scalable merchandise, or that though purposeful and scalable, our merchandise is not going to be economical to market as a way to turn out to be or stay worthwhile; that our rivals maintain proprietary rights precluding us from advertising and marketing such merchandise; that our rivals provide a superior or equal product or in any other case obtain or preserve better market acceptance than us; that we’re unable to improve or enhance our processes and merchandise to accommodate new options and develop our choices; or that we fail to obtain or preserve mandatory regulatory clearances and compliance for our merchandise and operations. With a view to develop our income, we should develop and enhance upon our model title recognition and aggressive benefits for our merchandise and develop into new markets. Even when we accomplish such progress, ensuing bills could also be better than estimated, which may cut back and even eradicate any income positive aspects for which such endeavors have been made. There are not any assurances that we will efficiently tackle these challenges. If we’re unsuccessful, our enterprise, monetary situation and working outcomes might be materially and adversely affected.

If the marketplace for Hemp Oil merchandise declines, it will materially and adversely have an effect on our enterprise

Following the passage of the 2018 Farm Invoice described under and elsewhere on this Submitting below the title “Authorities Rules,” our trade skilled an inflow of hemp farmers and producers which resulted in a saturated market. In consequence, the provision for CBD and associated merchandise has up to now exceeded demand. This pattern may pressure us to cut back our costs to stay aggressive or may end in decrease gross sales ranges than we’ve got skilled up to now, both of which might end in a decline in income or progress price and will materially adversely have an effect on our monetary situation and prospects.

Even when we meet our progress aims and/or enter into new markets as and when meant, we might face difficulties evaluating our present and future enterprise prospects, which might enhance the chance of your funding shedding worth.

Any future entry into new markets and/or progress in our shopper base might place a big pressure on our assets and enhance calls for on our government administration, personnel and operational programs, and our human, administrative and monetary assets could also be insufficient to satisfy these calls for. We may be unable to successfully handle any expanded operations or obtain deliberate progress on a well timed or worthwhile foundation, notably if the variety of prospects utilizing our merchandise considerably will increase inside a brief time period. If we’re unable to handle any operational growth successfully, we might expertise working inefficiencies, the standard of and marketplace for our merchandise may decline, and our enterprise and outcomes of operations might be materially adversely affected.

If we can not handle our progress successfully, our outcomes of operations can be materially and adversely affected.

We anticipate to expertise important progress following the July 2021 acquisition of Integrity Wellness and additional progress if we increase further capital. Companies which develop quickly typically have problem managing their progress whereas sustaining their compliance and high quality requirements. If we develop as quickly as anticipated, we might want to develop our administration by recruiting and using further government and key personnel able to offering the mandatory assist. There could be no assurance that administration, together with employees, will have the ability to successfully handle the Firm’s progress nor can there be any assurance that progress in our product choices, buyer base or contracts will translate to a rise in income or profitability. Any failure to satisfy the challenges related to speedy progress may materially and adversely have an effect on our enterprise and working outcomes.

Certainly one of Our Subsidiaries has a judgment of serious quantity.

In February 2021, the Supreme Court docket of the State of New York, County of Suffolk entered an order granting abstract judgment to Jeffrey Gates, the plaintiff, towards Cannagistics, Inc. (previously Treasured Investments, Inc.), a Nevada company, now referred to as Global3pl, Inc., a Delaware company, which is a subsidiary of the Firm, and James Zimbler, our Vice President of Operations and former director, towards the defendants, for a complete of $151,712. Because of our company reorganization below Part 251(g) of the Delaware Company Legislation, accomplished in Could 2021, such {that a} newly shaped company turned the general public firm and the predecessor issuer, with all its property and liabilities turned the subsidiary, the duty for this declare is now in stated subsidiary of the present holding firm. Based mostly on the reorganization, and whereas counting on recommendation of counsel, the mum or dad Firm doesn’t consider it’s chargeable for this judgment. Within the occasion the plaintiff seeks to carry the newly shaped mum or dad holding firm accountable, a courtroom might conclude that we’re liable, however our company restructuring in Delaware. If we’re discovered chargeable for the judgment, despite the fact that Delaware Legislation expressly gives in any other case, we might be pressured to pay such an quantity in obtainable money, if any, and to fulfill the stability by promoting our property which have been solely $45,007 as of July 31, 2021. Due to this fact, such a growth would have a cloth hostile impact on our enterprise and will pressure us to stop operations, wherein case your total funding may turn out to be nugatory.

Dangers Associated to Authorities Rules

Current or future governmental rules regarding Hemp Oil or CBD merchandise might hurt or forestall our potential to provide and/or promote our product choices.

Whereas the Firm has decided to not develop, market and distribute merchandise that include CBD presently aside from one CBD product in our portfolio, it’s potential that sooner or later we resolve to have extra of a give attention to CBD merchandise along with our present give attention to merchandise containing Hemp Oil.

Whereas a majority of state governments in the USA have legalized the rising, manufacturing, and use of cannabis-derived merchandise in some kind and topic to sure restrictions, hashish stays unlawful below federal regulation. As well as, in July 2017, the USA Drug Enforcement Company issued an announcement that sure CBD extractions fall inside the definition of marijuana and are due to this fact a Schedule I managed substance below the Managed Substances Act of 1970. Thus, the hashish trade, together with corporations which promote merchandise containing hemp or CBD, faces important uncertainty surrounding regulation by the federal authorities, which may declare supremacy over state regulatory regimes together with these with a “friendlier” view towards cannabis-derived merchandise. Whereas the federal authorities has for a number of years chosen to not intervene within the hashish enterprise carried out legally inside the states which have legislated such actions, there’s, nonetheless, potential that the federal authorities might at any time select to start imposing its legal guidelines towards the manufacture, possession, or use of cannabis-based merchandise corresponding to hemp or CBD. Equally, there’s the likelihood that the federal authorities might enact laws or guidelines that authorize the manufacturing, possession or use of these merchandise below particular pointers. Native, state and federal hashish legal guidelines and rules are broad in scope and topic to evolving interpretations. Additional, as regulators proceed to review and consider potential hostile well being penalties of cannabis-derived merchandise, rules might turn out to be extra restrictive on our operations. For instance, on September 14, 2021, the Facilities for Illness Management and Prevention issued a well being advisory stating, amongst different issues, that buyers needs to be conscious that merchandise labeled as hemp or CBD might include delta-8 THC, and on the identical day the FDA issued a shopper replace describing potential dangers and uncertainties surrounding delta-8 THC. These developments might be an indication of additional rules to come back which may have an effect on merchandise corresponding to ours. Within the occasion the federal authorities was to tighten its regulation of the trade, we might possible endure a cloth hostile impact on our enterprise, together with probably substantial losses, and our monetary situation and prospects can be diminished.

As a result of legal guidelines and rules affecting our trade are evolving, modifications to any regulation might materially have an effect on our CBD merchandise.

Along with the enactment of the Agriculture Enchancment Act of 2018 (the “Farm Invoice”), the Meals and Drug Administration (the “FDA”) launched an announcement in regards to the standing of CBD as a dietary complement, and the company’s actions within the quick time period with reference to CBD will information the trade. As an organization whose merchandise include CBD, we intend to satisfy all FDA pointers because the rules evolve. Any difficulties in compliance with future authorities regulation may enhance our working prices and adversely impression our outcomes of operations in future intervals.

As well as, because of the Farm Invoice’s passage, we anticipate that there will likely be a continuing evolution of legal guidelines and rules affecting the Hemp Oil/CBD trade which may have an effect on our operations. Native, state and federal hemp legal guidelines and rules could also be broad in scope and topic to altering interpretations. These modifications might require us to incur substantial prices related to authorized and compliance charges and finally require us to change our marketing strategy. Moreover, violations of those legal guidelines, or alleged violations, may disrupt our enterprise and end in a cloth hostile impact on our operations. As well as, we can not predict the character of any future legal guidelines, rules, interpretations or purposes, and it’s potential that rules could also be enacted sooner or later that will likely be instantly relevant to our enterprise.

Sudden modifications in federal and state regulation may trigger any of our merchandise containing hemp-derived CBD to be unlawful, or may in any other case prohibit, restrict or prohibit any of our merchandise containing CBD.

Our enterprise relies on the manufacturing and distribution of merchandise containing Hemp Oil. The Farm Invoice, which amended varied sections of the U.S. Code, and legalized the cultivation and sale of commercial hemp on the federal stage, topic to compliance with sure federal necessities and state regulation. There could be no assurance that the Farm Invoice is not going to be repealed or amended such that our merchandise containing Hemp Oil or hemp-derived CBD would as soon as once more be deemed unlawful below federal regulation.

The Farm Invoice delegates the authority to the states to manage and restrict the manufacturing and sale of hemp and hemp-derived merchandise inside their territories. Though many states have adopted legal guidelines and rules that permit for the manufacturing and sale of hemp and hemp-derived merchandise below sure circumstances, no assurance could be on condition that such state legal guidelines will not be repealed or amended such that our meant merchandise containing Hemp Oil or hemp-derived CBD would as soon as once more be deemed unlawful below the legal guidelines of a number of states now allowing such merchandise, which in flip would render such merchandise unlawful in these states below federal regulation even when the federal regulation is unchanged. Within the occasion of both repeal of federal or state legal guidelines and rules, or of amendments thereto which can be hostile to our merchandise, we could also be restricted or restricted with respect to these merchandise in these jurisdictions, which may adversely impression our meant marketing strategy with respect to such merchandise within the affected markets and on the whole.

Moreover, the FDA has indicated that sure merchandise containing CBD aren’t permissible below the Federal Meals, Drug, and Beauty Act (the “FDCA”), however the passage of the Farm Invoice. On December 20, 2018, after the Farm Invoice turned regulation, then FDA Commissioner Scott Gottlieb issued an announcement wherein he reiterated the FDA’s place that CBD merchandise which can be marketed with a declare of therapeutic profit should be accepted by the FDA for his or her meant use earlier than they might be distributed in interstate commerce and that the FDCA prohibits interstate distribution of meals merchandise containing CBD and advertising and marketing merchandise containing CBD as a dietary complement, no matter whether or not the substances are hemp-derived. Though we consider our current and deliberate CBD merchandise adjust to relevant federal and state legal guidelines and rules, authorized proceedings alleging violations of such legal guidelines may have a cloth hostile impact on our outcomes of operations and monetary situation. Sources of hemp-derived CBD rely on legality of cultivation, processing, advertising and marketing and gross sales of merchandise derived from these crops below state regulation.

Hemp-derived CBD can solely be legally produced in states which have legal guidelines and rules that permit for such manufacturing and that adjust to the Farm Invoice, other than state legal guidelines legalizing and regulating medical and leisure hashish or marijuana, which stays unlawful below federal regulation. Sudden modifications in federal and state regulation may trigger present CBD manufacturing strategies of our producers, or ensuing merchandise, to be unlawful or may in any other case prohibit, restrict or prohibit some or all of our merchandise within the occasion of repeal or modification of legal guidelines and rules which at the moment are comparatively favorable to the hashish/hemp trade in sure states, we might be required to find new suppliers in states with legal guidelines and rules that qualify below the Farm Invoice. If we have been to be unsuccessful in arranging new sources of provide of our uncooked supplies, or if our uncooked supplies have been to turn out to be legally unavailable, our meant marketing strategy with respect to such merchandise might be adversely impacted.

As a result of we and our distribution companions might solely promote and ship our merchandise containing hemp-derived CBD in states which have adopted legal guidelines and rules qualifying below the Farm Invoice, a discount within the variety of states having such qualifying legal guidelines and rules may restrict, prohibit or in any other case preclude the sale of merchandise containing CBD.

The interstate cargo of Hemp Oil merchandise from one state to a different is authorized solely the place each states have legal guidelines and rules that permit for the manufacturing and sale of such merchandise and that qualify below the Farm Invoice. Due to this fact, the advertising and marketing and sale of our merchandise is restricted by such components and is restricted to such states. Though we consider we might lawfully promote any of Hemp Oil merchandise in a majority of states, a repeal or hostile modification of legal guidelines and rules that at the moment are favorable to the distribution, advertising and marketing and sale of our merchandise may considerably restrict, prohibit or forestall us from producing income associated to our merchandise that include Hemp Oil. Moreover, any such hostile modifications or current laws in new markets we goal might stunt our progress and diminish our prospects. Any such repeal or hostile modification of legal guidelines and rules may have an hostile impression on our marketing strategy with respect to such merchandise.

Prices related to compliance with quite a few legal guidelines and rules and high quality requirements may adversely impression our monetary outcomes.

The manufacture, labeling and distribution of Hemp Oil merchandise is regulated by varied federal, state and native authorities companies. These governmental authorities regulate our merchandise and processes to make sure that the merchandise aren’t adulterated or misbranded. We’re topic to regulation by the federal authorities and different state and native companies because of our CBD merchandise. Along with the dangers related to the potential of authorities enforcement or personal litigation resulting from alleged noncompliance, our compliance prices related to our day-to-day operations are excessive and are anticipated to extend as we develop into new markets and/or develop and market new merchandise. For instance, our producers over which we’ve got very restricted management are accountable for the standard of our merchandise and the processes by which they’re made, together with the FDA’s GMP pointers. Compliance with rules imposed on the producers and repair suppliers we make the most of within the growth, manufacturing and distribution course of are expensive and end in diminished potential for revenue margins. Generally, compliance with these and different authorities necessities for product monitoring, high quality, labelling and distribution are expensive which can delay or cut back our income capabilities or restrict our profitability.

Our contract producers are topic to important regulation with respect to the manufacturing of merchandise, and the manufacturing services on which we rely might not proceed to satisfy regulatory necessities or have restricted capability.

We at present have relationships with a restricted variety of producers of our merchandise. Every such contractor might require licenses to fabricate such elements if such processes aren’t owned by the contractor or within the public area and we could also be unable to switch or sublicense the mental property rights we might have with respect to such actions.

All entities concerned within the preparation of therapeutics and comparable merchandise for business sale, together with our current contract producers for a few of our CBD and deliberate exosome product choices, are topic to intensive regulation. Elements of a completed product accepted for business sale should be manufactured in accordance with GMP. These rules govern manufacturing processes and procedures (together with document conserving) and the implementation and operation of high quality programs to manage and guarantee the standard of investigational merchandise and merchandise accepted on the market. Poor management of manufacturing processes can result in the introduction of adventitious brokers or different contaminants, or to inadvertent modifications within the properties or stability of our product candidates that will not be detectable in remaining product testing. Our producers should provide all mandatory documentation on a well timed foundation and might have to stick to the FDA’s good laboratory practices, along with GMP rules enforced by the FDA by means of its services inspection program. Our producers’ services and high quality programs additionally have to move a pre-approval inspection for compliance with the relevant rules as a situation of regulatory approval of our merchandise for commercialization.

As well as, the regulatory authorities might, at any time, audit or examine a producing facility concerned with the preparation of our merchandise or the related high quality programs for compliance with the rules relevant to the actions being carried out. If these services don’t move a pre-approval plant inspection, FDA approval of the merchandise is not going to be granted. Additional, if any such inspection or audit identifies a failure to adjust to relevant rules or if a violation of our product specs or relevant rules happens impartial of such an inspection or audit, we or the related regulatory authority might require remedial measures which may be expensive and/or time-consuming for us or a 3rd occasion to implement and which will embody the non permanent or everlasting suspension of growth, testing or business gross sales or the non permanent or everlasting closure of a facility. Any such remedial measures imposed upon us or third events with whom we contract may materially hurt our enterprise.

If we or any of our third-party producers fail to take care of regulatory compliance, the FDA can impose regulatory sanctions together with, amongst different issues, refusal to approve a pending software for a brand new product, or revocation of a pre-existing approval. Moreover, if provide, corresponding to resulting from uncooked materials shortages or FDA motion, from one accepted producer is interrupted, there might be a big disruption in business provide. Another producer would should be certified which may end in additional delay.

Any or all the foregoing components may trigger the delay of product growth, testing, regulatory submissions, required approvals or commercialization of our present or deliberate merchandise, trigger us to incur increased prices and forestall us from commercializing our merchandise efficiently.

Our merchandise or third events with whom we do enterprise might not adjust to well being, security and labelling requirements.

We should not have management over all the third events concerned within the distribution and sale of our merchandise and their compliance with authorities well being, security and labelling requirements. Even when our merchandise meet these requirements, they may in any other case turn out to be contaminated or fail, or the requirements might be modified in a fashion hostile to our operations or these of our enterprise companions. A failure to satisfy these requirements may happen in our operations or these of our distributors or suppliers. This might end in costly manufacturing interruptions, recollects, regulatory investigations and enforcement actions and legal responsibility claims. Furthermore, damaging publicity might be generated from false, unfounded or nominal legal responsibility claims or restricted recollects. Any of those failures or occurrences may negatively have an effect on our enterprise and monetary efficiency.

If we fail to adjust to U.S. legal guidelines associated to privateness, knowledge safety, and knowledge safety, it may adversely have an effect on our working outcomes and monetary situation.

We depend on a wide range of advertising and marketing strategies, together with social media advertising and marketing, focused on-line ads, and gross sales representatives], and we’re or might turn out to be topic to numerous legal guidelines and rules that govern such advertising and marketing and promoting practices. A wide range of federal and state legal guidelines and rules, together with these enforced by varied federal authorities companies such because the Federal Commerce Fee, Federal Communications Fee, and state and native companies, govern the gathering, use, retention, sharing, and safety of non-public knowledge, notably within the context of internet advertising, which we make the most of to draw new prospects.

The legislative and regulatory our bodies or self-regulatory organizations in varied jurisdictions inside the USA might develop present legal guidelines or rules, enact new legal guidelines or rules, or situation revised guidelines or steerage relating to privateness, knowledge safety, shopper safety, data safety, and internet advertising. California has enacted the California Shopper Privateness Act of 2018 (the “CCPA”), which turned operative on January 1, 2020, and its implementing rules took impact in August 2020. The CCPA requires corporations that course of private data on California residents to make new disclosures to customers about such corporations’ knowledge assortment, use, and sharing practices and inform customers of their private data rights corresponding to deletion rights, permits customers to choose out of sure knowledge sharing with third events, and gives a brand new explanation for motion for knowledge breaches. In November 2020, California enacted the California Privateness Rights Act of 2020 (the “CPRA”), which amends and expands the scope of the CCPA, whereas introducing new privateness protections that stretch past these included within the CCPA and its implementing rules. The CCPA, as amended and expanded by the CPRA, is likely one of the most prescriptive basic privateness legal guidelines in the USA and will result in comparable legal guidelines being enacted in different U.S. states or on the federal stage. For instance, the State of Nevada additionally handed a regulation efficient on October 1, 2019, that amends the state’s on-line privateness regulation to permit customers to submit requests to stop web sites and on-line service suppliers (“Operators”) from promoting personally identifiable data that Operators accumulate by means of an internet site or on-line service.

Additional, on March 2, 2021, the Governor of Virginia signed into regulation the Virginia Shopper Knowledge Safety Act (the “VCDPA”). The VCDPA creates shopper rights, much like the CCPA, but additionally imposes safety and evaluation necessities for companies. As well as, on July 7, 2021, Colorado, the state wherein we’re headquartered, enacted the Colorado Privateness Act (“CoCPA”), turning into the third complete shopper privateness regulation to be handed in the USA (after the CCPA and VCDPA). Though the CoCPA carefully resembles the VCDPA, each of which don’t include a non-public proper of motion and can as an alternative be enforced by the respective states’ Lawyer Common and district attorneys, the 2 differ in some ways and as soon as they turn out to be enforceable in 2023, we should adjust to every if our operations fall inside the scope of those newly enacted complete mandates. Nevada and Maine have additionally adopted comparable laws designed to guard the non-public data of customers and penalize corporations that fail to conform. Prior efforts undertaken to adjust to different current privacy-related legal guidelines have confirmed that these initiatives require time to rigorously plan, assess gaps in present compliance mechanisms, and implement new insurance policies, processes and remediation efforts.Moreover, the Federal Commerce Fee and state attorneys basic are decoding federal and state shopper safety legal guidelines to impose requirements for the web assortment, use, dissemination, and safety of knowledge. Every of those privateness, safety, and knowledge safety legal guidelines and rules, and every other such modifications or new legal guidelines or rules, may impose important limitations, require modifications to our enterprise mannequin or practices, or prohibit our use or storage of non-public data, which can enhance our compliance bills and make our enterprise extra expensive or much less environment friendly to conduct. As well as, any such modifications may compromise our potential to develop an enough advertising and marketing technique and pursue our progress technique successfully, which, in flip, may adversely have an effect on our enterprise, monetary situation, and outcomes of operations.

Whereas we intend to try to adjust to relevant legal guidelines and rules regarding privateness, knowledge safety, and knowledge safety, on condition that the scope, interpretation, and software of those legal guidelines and rules are sometimes unsure and could also be in battle throughout jurisdictions, it’s potential that these obligations could also be interpreted and utilized in a fashion that’s inconsistent from one jurisdiction to a different and will battle with different guidelines or our practices. Any failure or perceived failure by us or third occasion service suppliers to adjust to privateness or safety insurance policies or privacy-related authorized obligations, or any compromise of safety that ends in the unauthorized launch or switch of non-public knowledge, might end in governmental enforcement actions, litigation, or damaging publicity, and will have an hostile impact on our working outcomes and monetary situation.

As a result of change in the USA presidency in 2021, we anticipate elevated regulation in addition to uncertainty, which can adversely have an effect on our enterprise.

With the inauguration of President Biden, we anticipate that the FDA, the FTC and different companies which have an effect on our enterprise might enhance their regulatory efforts. On the senior administrative stage, new regulators with a regulatory zeal might tighten current rules and that strategy may be taken within the routine interactions between employees and our scientists and others. Elevated regulation and enforcement might result in elevated prices and additional delays in getting approvals, which can adversely have an effect on our enterprise.

Dangers Associated to Mental Property

If we can not get hold of or defend mental property rights associated to our merchandise, together with resulting from uncertainties surrounding our acquisition of Integrity Wellness and its purported product portfolio, we might not have the ability to compete successfully in our markets.

We intend to depend upon a mix of patents, commerce secret safety and confidentiality agreements to guard the mental property associated to our merchandise. Points with respect to patent possession and documentation for Regenand Integrity Wellness in reference to our acquisition of Integrity Wellness in July 2021, or with respect to different acquisitions or strategic transactions we might undertake sooner or later, might come up. For instance, a minimum of one patent license, for ImmuniZin, was held by Regen and was not assignable with out the patent holder’s consent, though the consent from Regen was subsequently obtained. In consequence any of those points ought to they come up, we might lack patent safety for a few of our merchandise, which might hinder our potential to market and promote these merchandise.

The power of patents within the medical, pharmaceutical, therapeutic and associated fields entails complicated authorized and scientific questions and could be unsure. The patent purposes we personal or in-license, particularly ImmuniZin might fail to end in patents with claims that cowl the merchandise within the U.S. or in different nations. There isn’t any assurance that each one probably related prior artwork regarding our patents and patent purposes has been discovered; such prior artwork can invalidate a patent or forestall issuance of a patent primarily based on a pending patent software. Even when patents do efficiently situation, third events might problem their validity, enforceability or scope, which can trigger such patents to be narrowed or invalidated. Even when unchallenged, our patents and patent purposes might not adequately defend our mental property or forestall others from designing round our claims.

If the patent purposes we maintain or have in-licensed relating to our merchandise and processes fail to situation or if their breadth or power of safety is threatened, it may dissuade corporations from collaborating with us to develop product candidates and threaten our potential to commercialize merchandise. Patents might not situation and issued patents could also be discovered invalid and unenforceable or challenged by third events. Since patent purposes within the U.S. and most different nations are confidential for a interval after submitting, and a few stay so till issued, we can’t be sure that we have been the primary to invent a patent software associated to a product candidate. In sure conditions, if we and a number of third events have filed patent purposes within the U.S. and claiming the identical subject material, an administrative continuing could be initiated to find out which applicant is entitled to the patent on that subject material. Patents have a restricted lifespan. Within the U.S., the pure expiration of a patent is 20 years after it’s filed, though varied extensions could also be obtainable. The lifetime of a patent, and the safety it affords, is restricted. When the patent life has expired for a product, we’ll turn out to be weak to competitors from generic medicines and therapeutics making an attempt to duplicate that product. Additional, if we encounter delays in regulatory approvals, the time throughout which we can market and commercialize a product candidate below patent safety might be decreased.

Along with patent safety, we depend on commerce secret safety and confidentiality agreements to guard proprietary know-how that’s not patentable, processes for which patents are troublesome to implement and every other parts of our merchandise and growth and manufacturing processes that contain proprietary know-how, data or know-how not lined by patents. We plan to require every of our staff to conform to assign their innovations to us by means of an worker innovations or comparable settlement. As well as, as a basic observe, we intend to have our staff, consultants, advisors and any third events who’ve entry to our proprietary know-how, data or know-how enter into confidentiality agreements. Nonetheless, our commerce secrets and techniques and different confidential proprietary data could also be disclosed, and rivals might in any other case acquire entry to our commerce secrets and techniques or independently develop considerably equal data and strategies. As well as, in January 2018 the FDA as a part of its Transparency Initiative, launched a voluntary pilot program calling on biopharmaceutical analysis corporations to launch scientific examine studies summarizing scientific trial knowledge. Following the completion of this pilot program in March 2020, the FDA might contemplate making launch of scientific examine studies necessary and will contemplate making further data publicly obtainable on a routine foundation in response to considerations expressed by the educational neighborhood emphasised by the COVID-19 pandemic, together with data we might contemplate to be commerce secrets and techniques or different proprietary data. If the FDA takes these measures, we could also be pressured to reveal propriety details about our merchandise, analysis and processes, which may materially hurt our enterprise.

The legal guidelines of some overseas nations don’t defend proprietary rights to the identical extent or in the identical method because the legal guidelines of the USA. We might encounter important issues in defending and defending our mental property each in the USA and overseas. If we’re unable to stop materials disclosure of the non-patented mental property associated to our applied sciences to 3rd events, and there’s no assure we may have any such enforceable commerce secret safety, we might not have the ability to set up or preserve a aggressive benefit in our market, which may materially adversely have an effect on our enterprise, outcomes of operations and monetary situation.

If third-party mental property infringement claims are asserted towards us, it might forestall or delay our growth and commercialization efforts and have a cloth hostile impact on our enterprise and future prospects.

Our business success relies upon partially on our avoiding infringement on the patents and proprietary rights of third events. There’s substantial litigation, each inside and out of doors the USA, involving patent and different mental property rights within the biotechnology, pharmaceutical therapeutic and associated industries, together with patent infringement lawsuits, interferences, oppositions, and reexaminations and different post-grant proceedings earlier than the U.S. Patent and Trademark Workplace, and corresponding overseas patent places of work. Quite a few U.S. and overseas issued patents and pending patent purposes, that are owned by third events, exist within the fields wherein we and our companions are pursuing product candidates. Because the biotechnology, pharmaceutical, therapeutic and associated industries develop and extra patents are issued, the chance will increase that our product candidates could also be topic to claims of infringement of the patent rights of third events.

Third events might assert that we’re using their proprietary know-how with out authorization. There could also be third-party patents or patent purposes with claims to supplies, formulations, strategies of manufacture or strategies for remedy associated to the use or manufacture of our product candidates. As a result of patent purposes can take a few years to situation, there could also be patent purposes at present pending which will later end in patents that our product candidates might infringe upon. Third events might get hold of patents sooner or later and declare that use of our applied sciences infringes on these patents. If any third-party patents have been to be held by a courtroom of competent jurisdiction to cowl the manufacturing means of any of our product candidates, any molecules shaped through the manufacturing course of or any remaining product itself, the holders of any such patents might be able to block our potential to commercialize such product candidate until we obtained a license below the relevant patents, or till such patents expire. Equally, if any third-party patents have been to be held by a courtroom of competent jurisdiction to cowl facets of our formulations, processes for manufacture or strategies of use, together with mixture remedy, the holders of any such patents might be able to block our potential to develop and commercialize the relevant product candidate until we obtained a license or till such patent expires. In both case, such a license will not be obtainable on commercially cheap phrases or in any respect.

Events making mental property claims towards us might get hold of injunctive or different equitable reduction, which may block our potential to additional develop and commercialize a number of of our product candidates. Protection of those claims, no matter their advantage, entails substantial litigation expense and diversion of our administration’s consideration from our enterprise. If a declare of infringement towards us succeeds, we might must pay substantial damages, probably together with treble damages and attorneys’ charges for willful infringement, pay royalties, redesign our infringing merchandise or get hold of a number of licenses from third events, which can be unimaginable or require substantial time and financial expenditure.

Due to the prices concerned in defending patent litigation, we at present lack and will sooner or later lack the capital to defend our mental property rights.

The mental property behind our merchandise might embody unpublished know-how which depends on sure key people, in addition to current and pending mental property safety.

The commercialization of our merchandise is partially dependent upon know-how and commerce secrets and techniques held by sure people working with and for us. As a result of the experience runs deep in these few people, if one thing have been to occur to all or any of those people, the power to correctly manufacture our merchandise with out compromising high quality and efficiency might be diminished vastly. Additional, whereas our staff and contractors are topic to non-disclosure obligations, any misappropriation of confidential data together with commerce secrets and techniques and know-how may permit our rivals and others to beat any benefit we’ve got and cut back our market share and viability.

We might have to get hold of licenses to mental property rights from third events.

We might have to get hold of licenses from third events to promote merchandise as meant, notably to the extent we proceed with our deliberate operations promoting exosome merchandise. We might fail to acquire these licenses at an affordable price or on cheap phrases, if in any respect. In that occasion, we might be unable to promote such merchandise or generate income therefrom, which may hurt our enterprise. We can not present any assurances that third-party patents don’t exist that is perhaps enforced towards our merchandise or these of our collaborators, leading to both an injunction prohibiting our gross sales, or, with respect to our gross sales and different actions, an obligation on our half to pay royalties and/or different types of compensation to 3rd events

The licensing and acquisition of third-party mental property rights is a aggressive observe, and firms which may be extra established, or have better assets than we do, may be pursuing methods to license or purchase third-party mental property rights that we might contemplate mandatory or engaging as a way to develop and commercialize merchandise. Extra established corporations might have a aggressive benefit over us resulting from their bigger dimension and money assets or better analysis, growth, manufacturing and commercialization capabilities. We might not have the ability to efficiently full such negotiations and finally purchase the rights to the mental property surrounding merchandise that we might search to accumulate; wherein case our enterprise might be harmed.

We might sooner or later be concerned in lawsuits to guard or implement our patents or the patents of our licensors, which might be costly, time-consuming and unsuccessful.

Opponents might infringe on our patents or the patents of our licensors. To counter such infringement or unauthorized use, we could also be required to file infringement claims, or we could also be required to defend the validity or enforceability of such patents, which could be costly and time-consuming. In an infringement continuing, a courtroom might resolve that both a number of of our patents or our licensors’ patents isn’t legitimate or is unenforceable or might refuse to cease the opposite occasion from utilizing the know-how at situation as a result of our patents don’t cowl that know-how. An hostile end in any litigation or protection proceedings may put a number of of our patents susceptible to being invalidated or interpreted narrowly and will put our patent purposes susceptible to not issuing.

Interference proceedings provoked by third events or introduced by us could also be mandatory to find out the precedence of innovations relating to our patents or patent purposes or these of our companions or licensors. An unfavorable final result may require us to stop utilizing the associated know-how or to license rights to it from the prevailing occasion. Our enterprise might be harmed if the prevailing occasion doesn’t provide us a license on commercially cheap phrases. Our protection of litigation or interference proceedings might fail and, even when profitable, might trigger us to incur substantial prices and distract the eye of our administration and different staff. We might not have the ability to forestall, alone or with our licensors, misappropriation of our mental property rights, notably in nations the place the legal guidelines might not defend these rights as absolutely as in the USA.

Due to the substantial quantity of discovery required in mental property litigation, there’s a threat that a few of our confidential data might be compromised by disclosure throughout one of these litigation. There may be public bulletins of the outcomes of hearings, motions or different interim proceedings or developments. If securities analysts or buyers understand these outcomes to be damaging, it may have a cloth hostile impact on the value of our Frequent Inventory.

We could also be topic to claims that our staff, consultants, or impartial contractors have wrongfully used or disclosed confidential data of third events.

We could also be topic to claims asserting that we or our staff, consultants or impartial contractors have inadvertently or in any other case used or disclosed confidential data of our staff’ former employers or different third events. We may be topic to claims that former employers or different third events have an possession curiosity in our patents. Litigation could also be essential to defend towards these claims. There isn’t any assure of success in defending these claims, and if we succeed, litigation may trigger substantial price and be a distraction to our administration and different staff.

Dangers Associated to Our Deliberate Sale of Exosome Merchandise

We’ve but to enter into an settlement to develop or commercialize any exosome merchandise, and there could be no assurance that we’ll achieve success.

Our deliberate operations of promoting exosome merchandise haven’t commenced, and administration has solely simply started creating a marketing strategy for our entry into the regenerative well being market and sale of exosome merchandise. As such, buyers will face problem in evaluating that proposed side of our enterprise. The usage of exosomes is a comparatively new therapeutic strategy and no merchandise primarily based on exosomes have been accepted thus far within the U.S., the UK, or the European Union. The FDA imposes sturdy regulatory necessities, together with scientific trials and security testing, previous to commercialization. Additional, we’ll rely virtually solely on third events with respect to those efforts aside from gross sales which might solely start when the substantial growth and testing phases have been accomplished. As such it’s troublesome to precisely predict the developmental challenges we might face on this trade. Because of these components, it’s tougher for us to foretell the timeline and value of our deliberate operations with respect to exosome merchandise. We may deploy important capital and human assets on this endeavor and finally not get hold of rights to or promote any merchandise or in any other case achieve success. Delay or failure to acquire or sudden prices in acquiring commercialization of exosome merchandise may lower our potential to generate adequate income wherein case our enterprise and prospects could also be harmed.

As a result of the long run business success of our deliberate exosome merchandise gross sales efforts will rely upon gaining regulatory approval for such merchandise over which we may have no management, we can not generate income therefrom with out our collaborative companions acquiring approvals.

Our long-term success and era of income from the sale of exosome merchandise will rely on the profitable growth of such merchandise by our collaborative companions. Product growth may be very costly and entails a excessive diploma of threat. Solely a small variety of analysis and growth packages end result within the commercialization of a product. The method for acquiring regulatory approval to market product candidates is dear, normally takes a few years, and might fluctuate considerably primarily based on the sort, complexity, and novelty of the product candidates concerned. Our potential to generate revenues can be adversely affected if our collaborative efforts with third events are delayed or unable to efficiently develop the underlying merchandise. We can not assure that any advertising and marketing software for the exosome merchandise we search to promote will likely be accepted. If regulatory approval of those merchandise isn’t obtained or is considerably delayed, we can not generate income therefrom, and we might have to considerably curtail these operations, no matter our expenditures on this endeavor.

Detrimental developments within the subject of exosomes may harm public notion of the merchandise we search to promote.

Exosome therapeutics are novel and unproven, with no exosome therapeutic accepted thus far. Exosome therapeutics might not acquire the acceptance of the general public, medical or well being and wellness communities. Up to now, different efforts to leverage pure exosomes have typically demonstrated an incapacity to generate exosomes with predictable biologically lively properties or to fabricate exosomes at appropriate scale to distribute as meant. If any of the exosome merchandise is unable to efficiently goal a sure cell kind or pathway to offer the advantages for which it was designed and marketed, it might point out that we will be unable to deliver that product to market, together with resulting from hostile impression on the general public’s notion of the product and exosome therapeutics on the whole.

Any future damaging developments within the subject of exosomes and their use may additionally end in better governmental regulation, stricter labeling necessities and potential regulatory delays within the growth, testing or approvals of the merchandise we intend to ultimately promote.

Adjustments in exosome product manufacturing or formulation might end in further prices or delay, which may adversely have an effect on our enterprise, outcomes of operations and monetary situation.

As product candidates are developed by means of testing in the direction of approval and commercialization, it is not uncommon that varied facets of the event program, corresponding to manufacturing strategies or formulation, are altered alongside the best way in an effort to optimize processes and outcomes. Any of those modifications may trigger potential exosome merchandise to carry out in a different way and have an effect on the outcomes of ongoing or deliberate analysis and growth efforts carried out with the altered supplies. As well as, such modifications and every other comparable modifications sooner or later may require further testing, notification to or approval by the FDA or different regulatory authorities. This might delay completion of growth efforts, require additional testing or research, create the wanted for repetition of a number of steps within the course of, enhance associated prices, delay regulatory approval of our product candidates and/or jeopardize our potential to start product gross sales and generate income.

Merchandise 2. Properties

Our principal places of work are situated at 150 Motor Parkway, Suite 401. The lease is fir a 6-month time period at a base lease of $1,200 monthly, plus further charges for some companies. The Workplace is situated in a co-office location and is roughly 200 sq. toes and is at present adequate for the wants of the Firm.

Merchandise 3. Authorized Proceedings

I.

Our wholly owned subsidiary, previously Cannagistics, Inc., (a Nevada company), now referred to as Global3pl, Inc., (A Delaware company) is a celebration to a case titled William Prusin v. Treasured Investments Inc., and Kashif Khan. The litigation was commenced within the Ontario Superior Court docket of Justice (Industrial Checklist) on July 20, 2016. The litigation stems from a diamond buy settlement entered into on April 1, 2016, between Dr. William Prusin and Treasured Investments Inc. By advantage of the phrases of the settlement, Treasured Investments bought Dr. Prusin’s diamond portfolio, which was valued at $3.8 million (CDN) for the needs of the settlement. In alternate for the diamond portfolio, Dr. Prusin was supplied with 1,324,413 widespread shares of Treasured Investments.

Within the Assertion of Declare, the plaintiff is alleging a breach of the Ontario Securities Act and claims that paperwork supplied to him include unfaithful statements of fabric reality or omissions. The plaintiff has additionally alleged that Treasured Funding and Mr. Khan distributed securities in Ontario with out issuing a prospectus and acquiring the required prospectus exemption or a registration exemption. Within the different, the plaintiff has alleged that Mr. Khan made fraudulent misrepresentations which induced Dr. Prusin to enter into the diamond buy settlement. The fraudulent misrepresentation allegation entails the long run worth of Treasured Investments, Inc., shares, the timing by which Dr. Prusin needed to signal the diamond buy settlement, the involvement of Dundee Capital Markets, Mr. Khan’s funding in Treasured Investments, and the administration group at Treasured Investments. Given these allegations, the plaintiff claims that he’s entitled to acquire an order rescinding the diamond buy settlement.

The Firm and Mr. Khan deny all the plaintiff’s allegations. The Firm and Mr. Khan deny that any paperwork supplied to Dr. Prusin represent an “providing memorandum”, or that any prospectus was required below the Ontario Securities Act because the transaction falls inside the exemption set out in Nationwide Instrument 45-106. As well as, the defendants deny that any fraudulent misrepresentation was made to Dr. Prusin. The defendants have filed a counterclaim towards Dr. Prusin, alleging a breach of the diamond buy settlement.

The motion is at present dormant, though the plaintiff has retained new counsel. Present native Counsel for the Firm believes that will probably be finally profitable in defending the motion.

There was no motion on this matter in over a 12 months. Moreover, COVID-19 has prompted most, if not all Courts to postpone issues indefinitely. The Firm’s place with respect to the Plaintiff’s claims has not modified.

II.

KRG Logistics, Inc., now generally known as Global3pl, Inc., (an Ontario company), a now discontinued operational subsidiary of the Firm, was named because the defendant in an motion within the Ontario Superior Court docket of Justice by Ron Alvares, one of many authentic shareholders of KRG Logistics, Inc., when it was bought by the Firm in 2017. The motion is for breach of contract for monies due because of the Buy Settlement and for an quantity due from a shareholder mortgage claimed by Mr. Alvares to KRG Logistics on September 30, 2014. The Firm meant to defend towards the breach of contract declare as the quantity claimed to be due is wrong, primarily based on funds already made. It meant to additionally file counterclaims primarily based on intentional interference of contracts by Mr. Alvares and his son for stealing purchasers of the Firm and industrial sabotage of the Firm’s software program programs. With respect to the declare of an impressive shareholder mortgage it’s the place of the Firm that stated shareholder mortgage was by no means disclosed to the Firm on the time of the acquisition and primarily based on data obtainable, any such shareholder mortgage was paid off with the down cost supplied by the Firm for the acquisition of KRG Logistics, Inc.

Procedurally the plaintiff has named the mistaken events and Counsel in Ontario is ready for an amended criticism to file a solution and counterclaims.

There was no motion on this matter in over a 12 months. Within the interim, the subsidiary of the Firm has ceased operations. In consequence, there can be no materials impact on the Firm.

III.

On February 4, 2020, Jeffrey Gates commenced an motion within the Supreme Court docket of the State of New York, County of Suffolk towards the Firm and Mr. Zimbler for the non-payment of a Promissory Be aware, of which the stability of $135,000, plus curiosity. The Firm has retained Counsel to seem and defend the motion.

On account of present circumstances associated to COVID-19, the New York State Supreme Court docket has administratively adjourned considerably all issues indefinitely.

The Firm continues to have each intention of resolving this matter previous to the Court docket rendering a call.

The Firm is within the means of retaining Counsel in Ontario to deal with this matter.

Merchandise 4. Mine Security Disclosures

Not Relevant

PART II

Merchandise 5. Marketplace for Registrant’s Frequent Fairness and Associated Stockholder Issues and Issuer Purchases of Fairness Securities

Market Info

Our widespread inventory is quoted below the image “CNGT” on the OTCPink operated by OTC Markets Group, Inc. Presently, there isn’t any buying and selling marketplace for our securities. There isn’t any assurance {that a} common buying and selling market will develop, or if developed, that will probably be sustained. Due to this fact, a shareholder could also be unable to resell his securities in our firm.

The next desk units forth the vary of excessive and low bid quotations for our widespread inventory for every of the intervals indicated as reported by the OTCPink. These quotations mirror inter-dealer costs, with out retail mark-up, mark-down or fee and will not essentially characterize precise transactions.

Fiscal Yr Ending July 31, 2021
Quarter Ended		Excessive $		Low $
	July 31, 2021				0.0770				0.0106
	April 30, 2021				0.1019				0.0274
	January 31, 2021				0.0926				0.0056
	October 31, 2020				0.0420				0.0052

Fiscal Yr Ending July 31, 2020
Quarter Ended		Excessive $		Low $
	July 31, 2020				0.35				0.036
	April 30, 2020				0.32				0.13
	January 31, 2020				0.261				0.05
	October 31, 2019				0.33				0.261

On October 28, 2021, the final gross sales value per share of our widespread inventory on the OTCPink was $0.0091.

Penny Inventory

The SEC has adopted guidelines that regulate broker-dealer practices in reference to transactions in penny shares. Penny shares are typically fairness securities with a market value of lower than $5.00, aside from securities registered on sure nationwide securities exchanges or quoted on the NASDAQ system, supplied that present value and quantity data with respect to transactions in such securities is supplied by the alternate or system. The penny inventory guidelines require a broker-dealer, previous to a transaction in a penny inventory, to ship a standardized threat disclosure doc ready by the SEC, that: (a) incorporates an outline of the character and stage of threat available in the market for penny shares in each public choices and secondary buying and selling; (b) incorporates an outline of the dealer’s or seller’s duties to the client and of the rights and cures obtainable to the client with respect to a violation of such duties or different necessities of the securities legal guidelines; (c) incorporates a quick, clear, narrative description of a seller market, together with bid and ask costs for penny shares and the importance of the unfold between the bid and ask value; (d) incorporates a toll-free phone quantity for inquiries on disciplinary actions; (e) defines important phrases within the disclosure doc or within the conduct of buying and selling in penny shares; and (f) incorporates such different data and is in such kind, together with language, kind dimension and format, because the SEC shall require by rule or regulation.

The broker-dealer additionally should present, previous to effecting any transaction in a penny inventory, the client with (a) bid and provide quotations for the penny inventory; (b) the compensation of the broker-dealer and its salesperson within the transaction; (c) the variety of shares to which such bid and ask costs apply, or different comparable data regarding the depth and liquidity of the marketplace for such inventory; and (d) a month-to-month account assertion exhibiting the market worth of every penny inventory held within the buyer’s account.

As well as, the penny inventory guidelines require that previous to a transaction in a penny inventory not in any other case exempt from these guidelines, the broker-dealer should make a particular written dedication that the penny inventory is an acceptable funding for the purchaser and obtain the purchaser’s written acknowledgment of the receipt of a threat disclosure assertion, a written settlement as to transactions involving penny shares, and a signed and dated copy of a written suitability assertion.

These disclosure necessities might have the impact of lowering the buying and selling exercise for our widespread inventory. Due to this fact, stockholders might have problem promoting our securities.

Holders of Our Frequent Inventory

As of October 31, 2021, we had 219,468,674 widespread shares issued and excellent, held by roughly 182 shareholders of document, aside from these held in road title.

Dividends

There are not any restrictions in our articles of incorporation or bylaws that forestall us from declaring dividends. The Nevada Revised Statutes, nonetheless, do prohibit us from declaring dividends the place after giving impact to the distribution of the dividend:

1. we might not have the ability to pay our money owed as they turn out to be due within the ordinary course of enterprise, or;

2. our complete property can be lower than the sum of our complete liabilities plus the quantity that will be wanted to fulfill the rights of shareholders who’ve preferential rights superior to these receiving the distribution.

We’ve not declared any dividends and we don’t plan to declare any dividends within the foreseeable future.

Current Gross sales of Unregistered Securities

The data set forth under pertains to our issuances of securities with out registration below the Securities Act of 1933 through the reporting interval which weren’t beforehand included in a Quarterly Report on Type 10-Q or Present Report on Type 8-Ok.

None. All data is about forth on Type 8-Ok filed with the Securities and Trade Fee on July 16, 2021.

Securities Approved for Issuance below Fairness Compensation Plans

We’ve no fairness compensation packages thus far. We plan to undertake an incentive plan within the foreseeable future.

Merchandise 6. Chosen Monetary Knowledge

A smaller reporting firm isn’t required to offer the data required by this Merchandise.

Merchandise 7. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations

Ahead-Wanting Statements

Sure statements, aside from purely historic data, together with estimates, projections, statements regarding our enterprise plans, aims, and anticipated working outcomes, and the assumptions upon which these statements are primarily based, are “forward-looking statements.” These forward-looking statements typically are recognized by the phrases “believes,” “venture,” “expects,” “anticipates,” “estimates,” “intends,” “technique,” “plan,” “might,” “will,” “would,” “will likely be,” “will proceed,” “will possible end result,” and comparable expressions. Ahead-looking statements are primarily based on present expectations and assumptions which can be topic to dangers and uncertainties which can trigger precise outcomes to vary materially from the forward-looking statements. Our potential to foretell outcomes or the precise impact of future plans or methods is inherently unsure. Elements which may have a cloth hostile impact on our operations and future prospects on a consolidated foundation embody however aren’t restricted to: modifications in financial circumstances, legislative/regulatory modifications, availability of capital, rates of interest, competitors, and usually accepted accounting ideas. These dangers and uncertainties also needs to be thought of in evaluating forward-looking statements and undue reliance shouldn’t be positioned on such statements.

Outcomesof Operations for the Years Ended July 31, 2021, and July 31, 2020

Revenues

We generated income of $-0- for the 12 months ended July 31, 2021, as in contrast with $-0- for the 12 months ended July 31, 2020. All of our revenues have been beforehand generated from the operations of our working subsidiary, KRG Logistics, Inc., a third-party freight logistics supplier.

Our price of revenues was $-0- for the fiscal 12 months ended July 31, 2021, as in contrast with $-0- for the fiscal 12 months ended July 31, 2020.

Working Bills

Working bills decreased to $646,928 for the fiscal 12 months ended July 31, 2021, as in contrast with $1,695,943 for the fiscal 12 months ended July 31, 2020. Our working bills for the 12 months ended July 31, 2021, consisted primarily of Consulting Charges of $190,625, skilled charges of $303,110 and basic and administrative bills of $50,141, and dangerous debt allowance of $87,036 due from a associated occasion. Our working bills for the 12 months ended July 31, 2020, consisted primarily of Consulting charges of $1,090,583 {and professional} charges of $320,474 and basic and administrative bills of $96,161. Unhealthy debt allowance of $158,951 due from a associated occasion.

Different Bills

We had different bills of $16,703,425 for the fiscal 12 months ended July 31, 2021, as in contrast with $556,228 for the 12 months ended July 31, 2020. The rise was resulting from a loss on the acquisition of Integrity Wellness, Inc. of $14,690,000.

Internet Loss

Internet loss for the 12 months ended July 31, 2021, was $17,350,353 as in contrast with $2,682,500 as in contrast with for the 12 months ended July 31, 2020.

Liquidityand Capital Sources

As of July 31, 2021, we had complete present property of $45,007 and complete property within the quantity of $45,007, after the allowance for Unhealthy Debt. Our complete present liabilities as of July 31, 2021, have been $4,853,932. We had a working capital of deficiency of $4,808,925 as of July 31, 2021, and $3,792,892 as of July 31, 2020.

Working actions used $548,038 in money for the 12 months ended July 31, 2021, as in contrast with $613,683 in money for the 12 months ended July 31, 2020. Our web lack of $17,350,353 with Loss on Discontinued Operations of $0, Loss on Conversion of Most well-liked Inventory of $0 and Loss on by-product liabilities of $1,481,943.

We additionally intend to fund operations by means of gross sales and/or debt and/or fairness financing preparations, which can be inadequate to fund expenditures or different money necessities. We plan to hunt further financing to safe funding for operations. There could be no assurance that we’ll achieve success in elevating further funding. If we’re not in a position to safe further funding, the implementation of our marketing strategy will likely be impaired. There could be no assurance that such further financing will likely be obtainable to us on acceptable phrases or in any respect.

Off Steadiness Sheet Preparations

As of July 31, 2021, there have been no off-balance sheet preparations.

Going Concern

Our monetary statements have been ready in accordance with typically accepted accounting ideas relevant to a going concern, which contemplates the conclusion of property and the satisfaction of liabilities and commitments within the regular course of enterprise. As of July 31, 2021, we’ve got an accrued deficit of $(30,572,191). Our potential to proceed as a going concern is contingent upon the profitable completion of further financing preparations and our potential to attain and preserve worthwhile operations. Whereas we’re increasing our greatest efforts to attain the above plans, there isn’t any assurance that any such exercise will generate funds that will likely be obtainable for operations. These circumstances increase substantial doubt about our potential to proceed as a going concern. These monetary statements don’t embody any changes which may come up from this uncertainty.

Important Accounting Insurance policies

In December 2001, the SEC requested that each one registrants record their most “vital accounting polices” within the Administration Dialogue and Evaluation. The SEC indicated {that a} “vital accounting coverage” is one which is each vital to the portrayal of an organization’s monetary situation and outcomes, and requires administration’s most troublesome, subjective or complicated judgments, typically because of the necessity to make estimates in regards to the impact of issues which can be inherently unsure.

Our accounting insurance policies are mentioned intimately within the footnotes to our monetary statements included on this Annual Report on Type 10-Ok for the 12 months ended July 31, 2021, nonetheless we contemplate our vital accounting insurance policies to be these associated to stock, truthful worth of monetary devices, by-product monetary devices and long-lived property.

Merchandise 7A. Quantitative and Qualitative Disclosures About Market Threat

A smaller reporting firm isn’t required to offer the data required by this Merchandise.

Merchandise 8. Monetary Statements and Supplementary Knowledge

Index to Monetary Statements Required by Article 8 of Regulation S-X:

Audited Consolidated Monetary Statements:

F-1	Experiences of Impartial Registered Public Accounting Agency
F-2	Consolidated Steadiness Sheets as of July 31, 2021, and 2020
F-3	Consolidated Statements of Operations for the years ended July 31, 2021, and 2020
F-4	Consolidated Assertion of Stockholders’ Deficit for the years ended July 31, 2021, and 2020
F-5	Consolidated Statements of Money Flows for the years ended July 31, 2021, and 2020
F-6	Notes to Statements

Boyle CPA, LLC

Licensed Public Accountants & Consultants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and

Board of Administrators of Cannagistics, Inc.

Opinion on the Monetary Statements

We’ve audited the accompanying consolidated stability sheets of Cannagistics, Inc. (the “Firm”) as of July 31, 2021 and 2020, the associated consolidated statements of operations, stockholders’ deficit, and money flows for every of the two-years within the interval ended July 31, 2021, and the associated notes (collectively known as the “monetary statements”). In our opinion, the monetary statements current pretty, in all materials respects, the monetary place of the Firm as of July 31, 2021 and 2020, and the outcomes of its operations and its money flows for every of the 2 years within the interval ended July 31, 2021, in conformity with accounting ideas typically accepted in the USA of America.

Substantial Doubt In regards to the Firm’s Capacity to Proceed as a Going Concern

The accompanying monetary statements have been ready assuming that the Firm will proceed as a going concern. As mentioned in Be aware 3 to the monetary statements, the Firm’s lack of revenues, continued working losses and accrued deficit at July 31, 2021 increase substantial doubt about its potential to proceed as a going concern for a interval of 1 12 months from the issuance of the monetary statements. Administration’s plans are additionally described in Be aware 3. The monetary statements don’t embody changes which may end result from the end result of this uncertainty.

Restatement

See Be aware 11 as to Restatement.

Foundation of Opinion

These monetary statements are the duty of the Firm’s administration. Our duty is to precise an opinion on the Firm’s monetary statements primarily based on our audit. We’re a public accounting agency registered with the Public Firm Accounting Oversight Board (United States) (“PCAOB”) and are required to be impartial with respect to the Firm in accordance with U.S. federal securities legal guidelines and the relevant guidelines and rules of the Securities and Trade Fee and the PCAOB.

We carried out our audit in accordance with requirements of the Public Firm Accounting Oversight Board (United States). These requirements require that we plan and carry out the audit to acquire cheap assurance about whether or not the monetary statements are free of fabric misstatement, whether or not resulting from fraud or error. The Firm isn’t required to have, nor have been we engaged to carry out, an audit of its inside management over monetary reporting. As a part of our audit, we’re required to acquire an understanding of inside management over monetary reporting however not for the aim of expressing an opinion on the effectiveness of the Firm’s inside management over monetary reporting. Accordingly, we categorical no such opinion.

Our audit included performing procedures to evaluate the dangers of fabric misstatement of the monetary statements, whether or not resulting from error or fraud, and performing procedures that reply to these dangers. Such procedures included analyzing, on a take a look at foundation, proof relating to the quantities and disclosures within the monetary statements. Our audit additionally included evaluating the accounting ideas used and important estimates made by administration, in addition to evaluating the general presentation of the monetary statements. We consider that our audit gives an affordable foundation for our opinion.

Important Audit Issues

The vital audit issues communicated under are issues arising from the present interval audit of the monetary statements that have been communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures which can be materials to the monetary statements and (2) concerned our particularly difficult, subjective, or complicated judgments. The communication of vital audit issues doesn’t alter in any method our opinion on the monetary statements, taken as an entire, and we’re not, by speaking the vital audit issues under, offering separate opinions on the vital audit issues or on the accounts or disclosures to which they relate.

Accounting for Convertible Debentures

As described in Notes 2 and 6 to the monetary statements, the Firm had convertible debentures that required accounting issues and important estimates.

The Firm decided that variable conversion options issued in reference to sure convertible debentures required by-product legal responsibility classification. These variable conversion options have been initially measured at truthful worth and subsequently have been remeasured to truthful worth at every reporting interval. The Firm decided the truthful worth of the embedded derivatives utilizing the Black-Scholes-Merton possibility pricing mannequin.

We recognized the accounting issues and associated valuations, together with the associated truthful worth determinations of the embedded by-product liabilities of corresponding to a vital audit matter. The principal issues for our dedication have been: (1) the accounting consideration in figuring out the character of the assorted options (2) the analysis of the potential derivatives and potential bifurcation within the devices, and (3) issues associated to the dedication of the truthful worth of the assorted debt and fairness devices and the conversion options that embody valuation fashions and assumptions utilized by administration. Auditing these parts is particularly difficult and requires auditor judgement as a result of nature and extent of audit effort required to deal with these issues, together with the extent of specialised ability or data wanted.

Our audit procedures associated to administration’s conclusion on the analysis and associated valuation of embedded derivatives, included the next, amongst others: (1) evaluating the related phrases and circumstances of the assorted financings, (2) assessing the appropriateness of conclusions reached by the Firm with respect to the accounting for the convertible debt, and the evaluation and accounting for potential derivatives and (3) independently recomputing the valuations decided by Administration.

/s/ Boyle CPA, LLC

We’ve served because the Firm’s auditor since 2020

Purple Financial institution, NJ

November 3, 2021 (Besides as to Notes 11 and 12, that are January 28, 2022)

331 Newman Spring Street	P (732) 784-1582
Constructing 1, 4th Ground, Suite 143	F (732) 510-0665
Bayville, NJ 08721

CANNNAGISTICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		July 31, 2021		July 31, 2020
		(Audited)		(Audited)
			(Restated)
ASSETS
CURRENT ASSETS:
Money and money equivalents		$	30,007			$	685
Proper-to-use asset			–				23,033
Pay as you go bills			15,000				–
Associated occasion receivables, much less allowance for uncertain accounts of $1,080,511			–				–
TOTAL CURRENT ASSETS			45,007				23,718
OTHER ASSETS:
Proper-to-use asset, web of present portion			–				31,442
Safety deposits			–				3,634
TOTAL OTHER ASSETS			–				35,076
TOTAL ASSETS		$	45,007			$	58,794
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		$	1,058,606			$	582,963
Lease legal responsibility, present portion			–				18,505
Promissory notes			520,000				170,000
Convertible notes payable, web of low cost of $301,537and $58,087as of July 31, 2021 and 2020, respectively			2,329,996				2,426,254
By-product liabilities			529,171				205,796
Frequent inventory payable			–				24,998
Associated occasion payables			416,159				388,094
Liabilities of discontinued operations			837,778				864,644
TOTAL CURRENT LIABILITIES			5,691,710				4,681,254
LONG-TERM LIABILITIES
Lease legal responsibility, web of present portion			–				38,559
TOTAL LONG-TERM LIABILITIES			–				38,559
TOTAL LIABILITIES			5,691,710				4,719,813
STOCKHOLDERS’ DEFICIT:
Most well-liked Inventory; $0.001par worth; 20,000,000shares approved, 0and 10,000,000shares issued and excellent as of July 31, 2021 and 2020, respectively			–				10,000
Collection E Most well-liked Inventory; $0.001par worth; 3,600,000shares approved, 900,000and 0shares issued and excellent as of July 31, 2021 and 2020, respectively			900				–
Collection F Most well-liked Inventory; $0.001par worth; 4,400,000shares approved, 4,400,000and 0shares issued and excellent as of July 31, 2021 and 2020, respectively			4,400				–
Frequent inventory; $0.001par worth; 500,000,000and 250,000,000shares approved as of July 31, 2021 and July 31, 2020, respectively; 189,561,572and 105,099,277excellent and issued as of July 31, 2021 and 2020, respectively			189,561				105,099
Frequent inventory issuable			290,000				–
Further paid-in capital			24,485,627				8,490,720
Treasury inventory			(45,000	)			(45,000	)
Collected deficit			(30,572,191	)			(13,221,838	)
TOTAL STOCKHOLDERS’ DEFICIT			(5,646,703	)			(4,661,019	)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT		$	45,007			$	58,794

See accompanying notes to the consolidated monetary statements

CANNNAGISTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

		For The Yr Ended
		July 31, 2021		July 31, 2020
		(Restated)
Working bills
Common and administrative bills			50,141				96,161
Unhealthy debt			87,036				158,951
Hire			16,016				29,774
Consulting			190,625				1,090,583
Skilled charges			303,110				320,474
Complete working bills			646,928				1,695,943
Loss from operations			(646,928	)			(1,695,943	)
Different revenue (expense)
Curiosity Revenue			87,036				87,037
Curiosity expense			(760,576	)			(464,812	)
Achieve/(loss) on sale of asset			–				(55,832	)
Settlement Charges			(25,000	)			–
Loss on by-product liabilities			(1,481,943	)			(160,613	)
Change in truthful worth of by-product liabilities			437,058				37,992
Loss on acquisition			(14,960,000	)			–
Complete different expense			(16,703,425	)			(556,228	)
Loss from persevering with operations			(17,350,353	)			(2,252,171	)
Discontinued operations, together with loss on disposal			–				(430,329	)
Internet loss			(17,350,353	)			(2,682,500	)
Internet loss per widespread share: fundamental and diluted			(0.11	)			(0.02	)
Primary and diluted weighted common widespread shares excellent			151,200,965				98,213,338

See accompanying notes to the consolidated monetary statements

CANNAGISTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Restated

			Frequent Inventory				Frequent Inventory to be Issued				Most well-liked Inventory D				Most well-liked Inventory E				Most well-liked Inventory F
			Shares				Quantity				Shares				Quantity				Shares				Quantity				Shares				Quantity				Shares				Quantity				Further Paid-in Capital				Treasury Inventory				Non Controlling Curiosity				Collected Deficit				Complete Stockholders’ Deficit
Steadiness, July 31, 2019			93,118,077			$	93,030				–			$	–				8,000,000			$	8,000				–			$	–				–			$	–			$	7,382,579			$	(45,000	)		$	–			$	(10,539,338	)		$	(3,100,729	)
Shares issued to settle convertible debt			4,500,000				4,500				–				–				–				–				–				–				–				–				52,575				–				–				–				57,075
Shares issued for money			2,000,000				2,000				–				–				–				–				–				–				–				–				73,000				–				–				–				75,000
Shares issued for companies			2,500,000				2,500				–				–				2,000,000				2,000				–				–				–				–				955,635				–				–				–				960,135
Shares issued for settlement of payables			3,000,000				3,000				–				–				–				–				–				–				–				–				27,000				–				–				–				30,000
Adjustment to fairness			(18,800	)			69				–				–				–				–				–				–				–				–				(69	)			–				–				–				–
Internet loss			–				–				–				–				–				–				–				–				–				–				–				–				–				(2,682,500	)			(2,682,500	)
Steadiness, July 31, 2020			105,099,277			$	105,099				–			$	–				10,000,000			$	10,000				–			$	–				–			$	–			$	8,490,720			$	(45,000	)		$	–			$	(13,221,838	)		$	(4,661,019	)
Shares issued to settle convertible debt			81,962,467				81,962				–				–				–				–				–				–				–				–				1,297,709				–				–				–				1,379,671
Shares issued for settlement of payables			2,499,828				2,500				–				–				–				–				–				–				–				–				22,498				–				–				–				24,998
Acquisition of Integrity Wellness			–				–				290,000,000				290,000				(10,000,000	)			(10,000	)			900,000				900				4,400,000				4,400				14,674,700				–				–				–				14,960,000
Internet loss			–				–				–				–				–				–				–				–				–				–				–				–				–				(17,350,353	)			(17,350,353	)
Steadiness, July 31, 2021			189,561,572			$	189,561				290,000,000			$	290,000				–			$	–				900,000			$	900				4,400,000			$	4,400			$	24,485,627			$	(45,000	)		$	–			$	(30,572,191	)		$	(5,646,703	)

See accompanying notes to the consolidated monetary statements

CANNAGISTICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

		For The Yr Ended
		July 31, 2021		July 31, 2020
			Restated
Money Flows from Working Actions
Internet loss		$	(17,350,353	)		$	(2,682,500	)
Loss from discontinued operations			–				430,329
Changes to reconcile web loss to web money supplied by working actions:
International forex adjustment			–				–
Settlement Charges on conversion of inventory			13,000				–
Penalty on convertible observe payable			25,000				–
Loss on by-product liabilities			1,481,943				84,629
Change in truthful worth of by-product liabilities			(437,058	)			37,992
Amortization of debt low cost			258,176				52,413
Unhealthy debt			–				593,797
Inventory primarily based compensation			–				960,135
Loss on acquisition			14,960,000
Adjustments in property and liabilities
Accounts receivable and different receivables			–				498,766
Associated occasion receivables			–				1,900
Pay as you go expense			(15,000	)			16,515
Safety deposit			3,634				–
Accounts payable and accrued bills			472,643				(255,311	)
Accounts payable – associated events			39,977				22,149
Internet money utilized in working actions of continuous operations			(548,038	)			(239,186	)
Internet money utilized in working actions discontinued operations			–				(374,497	)
Internet money utilized in working actions		$	(548,038	)		$	(613,683	)
Money Flows from Investing Actions
Sale of kit			–				54,296
Sale of subsidiary			–				124,858
Internet money utilized in investing actions			–				179,154
Money Flows from Financing Actions
Proceeds from convertible notes, web of amortization of $12,000			384,305				324,050
Proceeds from promissory notes			175,000				7,500
Proceeds from line of credit score			–				276,321
Proceeds from inventory purchases							75,000
Proceeds from associated events			151,955				–
Funds on line of credit score			–				(245,787	)
Funds on promissory notes			–				(2,500	)
Funds on convertible notes			(10,000	)			–
Funds to associated events			(123,900	)			–
Internet money supplied by financing actions			577,360				434,584
Internet enhance in money			29,322				55
Money, starting of interval			685				630
Money, finish of interval			30,007				685
Supplemental disclosure of money movement data
Money paid for curiosity			–				–
Money paid for tax			–				–
Non-cash investing and financing transactions
Unique issuance low cost on convertible notes payable		$	187,000			$	–
Conversion of notes payable, charges and by-product liabilities		$	1,379,671			$	68,275
Conversion of widespread inventory payable		$	24,998			$	–

See accompanying notes to the consolidated monetary statements

CANNAGISTICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Group and Description of Enterprise

Cannagistics, Inc. (Previously FIGO Ventures, Inc., previously Treasured Investments, Inc.) (‘The Firm’) was integrated below the legal guidelines of the State of Nevada on Could 26, 2004. The Firm was an Exploration Stage Firm with the principal enterprise being the acquisition and exploration of useful resource properties.

The Firm had allowed its constitution 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 charges. Its final identified officers and administrators mirrored within the data of the Secretary of State have been unresponsive or said they have been not concerned with the Firm. The purported substitute officers and administrators have been unresponsive.

On September 14, 2012, NPNC Administration, LLC filed a petition within the Eighth Judicial District Court docket in Clark County, Nevada and was appointed custodian of the Firm on January 15, 2012.

On October 24, 2012, the interim board approved the sale of 55,000,000(2,200,000break up adjusted) shares of widespread inventory for $6,000to NPNC Administration, LLC, in a non-public placement transaction exempt from the Securities Act of 1933, as amended, pursuant to part 4(2) thereof and the foundations and rules promulgated there below.

On March 1, 2017, the Firm then entered right into a three way partnership settlement with Eddeb Administration (“Eddeb”). The aim of the three way partnership is to construct a fund for the aim of buying and selling in treasured gems, notably, coloured diamonds.

On November 16, 2017, the Firm entered into an Settlement of Merger and Plan of Reorganization (the “Merger Settlement”) with American Freight Xchange, Inc., a privately held New York company (“American Freight”), and Shipzooka Acquisition Corp. (“Shipzooka Sub”), a newly shaped wholly owned Nevada subsidiary of Treasured Investments, Inc. In reference to the closing of this merger transaction, Shipzooka Sub merged with and into American Freight (the “Merger”) on December 5, 2017, with the submitting of Articles of Merger with the Nevada Secretary of State and Certificates of Merger with the New York Division of Firms.

The transaction resulted within the Firm buying Subsidiary by the alternate of all the excellent shares of Subsidiary for 1,000,000newly issued Collection C Most well-liked shares of inventory, $0.001par worth (the “Most well-liked Inventory”) of Father or mother which have conversion and voting rights of 72.5 votes for every share, representing roughly 90.2% of the voting rights.

For accounting functions, the transaction was handled as a reverse merger because the acquired entity now varieties the premise for operations and the transaction resulted in a change in management, with the acquired firm electing to turn out to be the successor issuer for reporting functions. The accompanying monetary statements have been ready to mirror the property, liabilities and operations of American Freight Xchange, Inc. unique of Treasured Investments, Inc since all predecessor operations have been discontinued.

As a part of the transaction, quantities resulting from former officers have been forgiven, with the balances recorded as Contributed Capital. For fairness functions, accrued deficit proven are these American Freight Xchange, Inc. Shipzooka Acquisition Corp. is a dormant company.

On July 23, 2018, the Firm amended the title of its subsidiary, KRG Logistics, Inc., to Global3pl, Inc. (an Ontario company).

On September 4, 2018, the Firm integrated Cannagistics, Inc., within the province of Ontario, Canada. That is meant to be a potential new line of enterprise for the Firm however is dormant presently.

On April 17, 2019, we filed Articles of Merger with the Secretary of State of Nevada as a way to effectuate a merger with our wholly owned subsidiary, Cannagistics, Inc. Shareholder approval was not required below Part 92A.180 of the Nevada Revised Statutes. As a part of the merger, our board of administrators approved a change in our title to “Cannagistics, Inc.” and our Articles of Incorporation have been amended to mirror this title change.

On September 26, 2019, the Board of Administrators accepted the registered spinout of its Global3pl, Inc., (a New York company) (“Global3pl”) subsidiary. Global3pl is to be a logistics know-how supplier, together with the American Freight Xchange and UrbanX Platforms which have been below growth by the Firm.

The Board of Administrators additionally declared a inventory dividend for all shareholders, with a document date of October 10, 2019. For each 50 shares of widespread inventory of the Firm, all shareholders of document on the document date will obtain one share of widespread inventory in Global3pl. Global3pl will even file a registration assertion as a part of its increase of capital to finish the event of American Freight Xchange, a North American freight broker-driven 3pl community to deal with the administration of lengthy haul LTL (lower than truckload), and specialty freight (white glove) companies and Urbanx, a North American community of rush-messenger native trucking companies for ahead and reverse final mile supply (together with white glove service).

Nevertheless, the Firm has rigorously reconsidered its place with respect to the beforehand introduced and subsequently amended spin off of Global3pl, Inc., (a New York company). As a result of present state of affairs ensuing from the COVID-19 pandemic and particularly in mild of the event of the provision chain administration technique of the Firm, it has been decided that the finalization of the event of the Global3pl platform will likely be integral and function the “engine” for the provision chain administration of the Firm. Due to this fact, presently the “spin-off” has been indefinitely postponed till such time and it might make sense from a enterprise standpoint. The Firm has not issued any shares within the Global3pl, Inc (New York) subsidiary.

Efficient October 1, 2019, the Firm suspended operations of its subsidiary Global3pl, Inc., previously generally known as KRG Logistics, Inc., (an Ontario company), suspended future operations associated to the operations in Mississauga, Ontario. It’s within the means of gathering accounts receivables nonetheless due and dealing on a plan to pay its payables. It has entered into an settlement with 10451029 Canada Inc., d/b/a Dependable Logistics, for the project and of the property of Global3pl, Inc., (an Ontario Company). The transaction was accomplished on November 6, 2019. The Firm anticipates formally liquidating and dissolving the subsidiary within the subsequent fiscal Quarter. This can be a separate company from Global3pl, Inc. (A New York company).

On Could 6, 2021, the issuer (having been renamed, instantly previous to this Holding Firm Reorganization, from “Cannagistics, Inc.” to “World Transition Company”) accomplished a company reorganization (the “Holding Firm Reorganization”) pursuant to which World Transition Company, as beforehand constituted (the “Predecessor”) merged with an organization which turned a direct, wholly-owned subsidiary of a newly shaped Delaware Company, Cannagistics, Inc. (on this capability known as the “Holding Firm”), which turned the successor issuer. In different phrases, the Holding Firm is now the general public entity, albeit with the identical title as the unique situation or the Predecessor. The Holding Firm Reorganization was effected by a merger carried out pursuant to Delaware Common Company Legislation (the “DGCL”), which gives for the formation of a holding firm with out a vote of the stockholders of the constituent companies (such constituent companies being the Predecessor, as renamed to World Transition Company and the newly shaped Cannagistics, Inc.).

In accordance with the DGCL, Global3pl, Inc. (“Merger Sub”), one other newly shaped Delaware Company and, previous to the Holding Firm Reorganization, was an oblique, wholly owned subsidiary of the Holding Firm, merged with and into the Predecessor, with Merger Sub surviving the merger as a direct, wholly owned subsidiary of the Holding Firm (the “Merger”). The Merger was accomplished pursuant to the phrases of an Settlement and Plan of Merger among the many Predecessor, the Holding Firm and Merger Sub, dated Could 6, 2021 (the “Merger Settlement”).

As of the efficient time of the Merger and in reference to the Holding Firm Reorganization, all excellent shares of widespread inventory and most popular inventory of the Predecessor have been routinely transformed into equivalent shares of widespread inventory or most popular inventory, as relevant, of the Holding Firm on a one-for-one foundation, and the Predecessor’s current stockholders and different holders of fairness devices, turned stockholders and holders of fairness devices, as relevant, of the Holding Firm in the identical quantities and percentages as they have been within the Predecessor instantly previous to the Holding Firm Reorganization.

The manager officers and board of administrators of the Holding Firm are the identical as these of the Predecessor in impact instantly previous to the Holding Firm Reorganization.

For functions of Rule 12g-3(a), the Holding Firm is the successor issuer to the Predecessor, now as the only real shareholder of the Predecessor. Accordingly, upon consummation of the Merger, the Holding Firm’s widespread inventory was deemed to be registered below Part 12(b) of the Securities Trade Act of 1934, as amended, pursuant to Rule 12g-3(a) promulgated thereunder.

On Could 21, 2021, the Firm integrated Global3pl Logistical Applied sciences, Inc., (a Delaware company) On Could 21, 2021. It’s a wholly owned subsidiary of Cannagistics, Inc.

The beforehand executed Letter of Intent with Recommerce Group, Inc. has expired and has not been prolonged or renewed. The transaction by no means rose above the extent of potentiality and by no means progressed previous the theoretical dialogue section. No alternate of monetary data ever occurred.

On July 1, 2021, Cannagistics, Inc. (the “Firm”) entered right into a Reorganization and Inventory Buy Settlement (the “Settlement”) with Availa Bio, Inc. (“Availa”) and The Integrity Wellness Group, Inc., previously generally known as Cannaworx Holdings, Inc. (“Integrity Wellness”). Pursuant to the Settlement, the Firm bought 100% of the excellent capital inventory of Integrity Wellness from Availa in alternate for 4,400,000shares of the Firm’s Collection F Convertible Most well-liked Inventory (the “Collection F”).

The Settlement gives for sure post-closing actions to be taken by the Firm, together with (i) effecting a 1-for-100 reverse inventory break up of the Firm’s widespread inventory (later modified to be 1-for-40 reverse inventory break up), (ii) the Firm utilizing its finest efforts to consummate a $5,000,000 financing, a number of the proceeds of which for use to pay the Be aware as outlined under, (iii) the Firm effecting a reputation change, (iv) the officers and administrators of the Firm consisting of Rob Gietl, President and Director and James W. Zimbler, Vice-President and Director, and (v) the holders of the Firm’s 10,000,000 excellent shares of Collection D Convertible Most well-liked Inventory changing their shares into a complete of 745,000,000 shares of the Firm’s widespread inventory pursuant to conversion agreements with such holders.

In reference to the Settlement, the Firm borrowed $175,000from Cimarron Capital, Inc. (“Cimarron”) and issued Cimarron two separate Promissory Notes for $150,000and $200,000, respectively, each dated July 6, 2021 (the “Notes”). The Notes bears 0%curiosity and is payable upon the sooner of the closing of a securities providing or July 6, 2022.

As well as, pursuant to the Settlement the Firm, both instantly or by means of Integrity Wellness which because of the share alternate turned a completely owned subsidiary of the Firm, entered into the next employment and consulting agreements:

The Firm beforehand entered right into a Consulting Settlement with Rob Geitl dated July 1, 2020, for an preliminary time period of three years. Beneath this Consulting Settlement, Mr. Geitl will function the Chief Government Officer of the Firm and will likely be compensated as follows: (i) (A) for the primary 12 months of the preliminary time period, $15,000monthly, (B) for the second 12 months of the preliminary time period, $17,500monthly, and (C) for the third 12 months of the preliminary time period, $20,000monthly; and (ii) numerous shares of restricted widespread inventory equal to five% of the Firm’s issued and excellent widespread inventory, or 9,158,333 shares, with one-half of such shares vesting in 18 months and the opposite half vesting of such shares on the finish of the preliminary time period.

The Firm entered right into a Consulting Settlement with Rising Progress Advisors, Inc., wholly owned by James W. Zimbler, dated July 1, 2021, for an preliminary time period of three years. Beneath this Consulting Settlement, Rising Progress Advisors, Inc. will likely be compensated 12,500monthly and a Well being Insurance coverage Allowance of as much as $1,500monthly. The Settlement additionally gives that Rising Progress Advisors, Inc., shall obtain 900,000shares of Collection E Most well-liked Inventory in alternate for the cancellation of 6,000,000shares of Collection D Most well-liked Inventory within the title of Rising Progress Advisors, Inc.

The Firm entered right into a Consulting Settlement with Cimarron dated July 1, 2021, for an preliminary time period of 30 months. Beneath this Consulting Settlement, Cimarron will present the Firm sure strategic and enterprise growth companies in alternate for (i) 900,000shares of its Collection E Convertible Most well-liked Inventory (the “Collection E”), (ii) a month-to-month payment of $5,000, and (iii) 10%of the web proceeds of any enterprise generated for the Firm by Cimarron.

The Firm entered right into a Consulting Settlement with Leonard Tucker LLC (“LT LLC”) dated July 1, 2021, for an preliminary time period of 30 months. Beneath this Consulting Settlement, LT LLC will present the Firm with sure enterprise and compliance companies in alternate for (i) 1,800,000shares of its Collection E, (ii) a month-to-month payment of $12,500, and (iii) 10%of the web proceeds of any enterprise generated for the Firm by LT LLC.

The Settlement additionally incorporates customary indemnification obligations within the occasion of a cloth breach of any illustration, guarantee, settlement, or covenant contained within the Settlement.

Present Tasks in Growth

Integrity Wellness

Our Merchandise

Via Integrity Wellness we at present have roughly 20 developed merchandise, the vast majority of which we provide at retail costs starting from roughly $30 to $60 (excluding our veterinary and agricultural product choices). [Our current developed products are either backlogged, in the process of being produced or are ready for production.] We’ve obtained approval from the U.S. Meals and Drug Administration (the “FDA”) for 2 of our merchandise’ claims, and we’ve got FDA purposes in course of for 2 merchandise’ claims, as indicated under. We’ve patents issued for six of our merchandise, and 15 patent purposes pending, as indicated under. Nevertheless, we presently lack the capital to provide adequate stock and, accordingly, will likely be reliant upon elevating further funds on this providing to additional commercialize these merchandise If we’re unable to lift adequate funds on this providing or by means of different means, the manufacturing and distribution of those merchandise could also be delayed or discontinued. Additional, a number of the patent rights and licenses for the under merchandise are topic to uncertainty resulting from potential procedural and documentation points in reference to the July 2021 Integrity Wellness acquisition. See the chance titled “If we can not get hold of or defend mental property rights associated to our merchandise, together with resulting from uncertainties surrounding our acquisition of Integrity Wellness and its purported product portfolio, we might not have the ability to compete successfully in our markets” for extra data. The next is a quick description our present merchandise portfolio:

Merchandise with Issued Patents

Our Merchandise

Merchandise with Issued Patents

ImmunaZin ^TM (Immune Booster)

Some ImmunaZin Elements and Expectations

● Pepsin — the primary ingredient now well-known for speedy restoration. We take pepsin and break it down into fragmented particles which can be higher absorbed into the digestive tract. These pepsin fragments instantly modulate immune system exercise by inducing potent T-cell response leading to boosted immunity.

● Hemp seed oil helps stability wholesome levels of cholesterol, fights despair and anxiousness, improves eye well being, promotes mind well being, reduces metabolic syndrome, reduces irritation, fights autoimmune illness and psychological problems, reduces fatty liver, promotes bone and joint well being and improves sleep and pores and skin.

Irreversibly-inactivated pepsinogen fragments for modulating immune perform (Immune Booster- FDA Cleared)

ImmunaZin incorporates an FDA accepted NDI (New Dietary Ingredient), 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 supply system)

Patented Full Spectrum Phytocannabinoid supply with FDA accepted ache declare. The one and solely FDA-approved ache declare available in the market for an oral CBD product. Utilizing an fda accepted monogram by together with menthol. We’re not claiming the fda has accepted cbd

We’ve Unique World-wide entry to Patent No. US 9839693 B2

Patent Issued: December 4, 2018

Patent Expires: December 8, 2037

Silverpro – our solely FDA accepted medical gadget for the remedy of ache. Revolutionary know-how combining real silver yarn with low-static carbon fibers, to create the world’s most advanced-compression ache reduction cloth.

Pending Patent Purposes

Veterinary Cannabinoid and Menthol Compositions and Strategies

Utility No. 16/419,392; Worldwide Utility PCT/US2019/048695

Cannabinoid and Menthol Compositions and Strategies

US Utility No. 16/419,336; Worldwide Utility PCT/US2019/048691

Skinny Movie Toothpaste Strip, European Utility

Product Title: KidzStrips®

Skinny Movie Toothpaste Strip, Eurasian Utility

Product Title: KidzStrips®

Fertilizer

Product Title: HydroSoil ®,

Water retaining Hemp enhanced fertilizer, water plant as soon as each two weeks

Inactivated Pepsin Fragment (IPF) and Full Spectrum Cannabidiol (CBD) Compositions and Strategies

Pores and skin Cream

Pertains to compositions and strategies for the prevention and remedy of pores and skin problems and for the rejuvenation of the pores and skin. Particularly, the appliance describes topical compositions and strategies of remedies comprising the mixed use of a number of cannabinoids and a number of hydroxy acids in an acceptable service.

Different Merchandise

IcyEase

Adhesive Ice Pack for muscle/joint ache to chill floor and tackle ache.

Patent-pending, FDA ache declare in progress. IcyEase incorporates menthol, menthol is an accepted ache reduction ingredient within the FDA’s monograph for topical ache reduction

Slim-D

Urge for food-suppressant oral strip with 50 mg Hoodia & 10 mg Full Spectrum Phytocannabinoid

Power Lighting Strips

Excessive caffeine quick dissolving oral power strip with Matcha Inexperienced Tea and Hemp/Full Spectrum Phytocannabinoid

Micro Voltage Trans Derm C

patent software in progress for ache with distinctive and superior absorbing options resulting from wearer’s motion generated Micro Voltage

Global3PL Inc. (NY)

In the course of the previous 2 plus years, Global3PL Inc. (a New York Company) has consulted with logistics and know-how consultants to design and start the event of a best-of-breed, first-of-kind data know-how system. Up to now, about eighteen (18) months’ price of customized coding by our contractor has been accomplished with an expectation of an extra 2-3 months of labor nonetheless required for it to be prepared for testing. Upon completion, it’s meant that purchasers shall have the ability to login to the system to speak and transact enterprise with the Firm in real-time, because it pertains to facets of the shopper’s provide chain. This could embody the monitoring of inbound uncooked materials from varied distributors, the manufacturing schedule of completed items, stock monitoring of uncooked supplies and completed items, worldwide compliance documentation, and the contacting and monitoring of the transport of the completed items to their supply vacation spot(s). Although the Firm has excessive expectations for the performance of the brand new system, it doesn’t make any assurances that the system will likely be accomplished, shall work as deliberate if accomplished, nor be embraced by potential purchasers as meant.

Due to this fact Global3pl, Inc. (NY) was to be a logistics subsidiary serving the just-in-time stock & distribution trade, in addition to the particular and basic commodities sector of the North American freight trade. “Simply-in-time” is an trade phrase for supply a product or different merchandise to an finish person proper earlier than it’s wanted. It’s used instead of an finish person storing a big amount of stock. Shippers will have the ability to sync to our system for a real-time 360 views of their product shipments, together with, location updates, verification, and threat mitigation. The shopper will have the ability to Geolocation GPS monitoring of freight motion; create automated notifications with consolidated and automatic notifications, funds, and reporting. The Shipper interface will even permit prospects to push or submit freight orders. The software program system will even permit for lead-generation, knowledge evaluation, collaboration amongst shippers, Automated billing and collections, and automatic funds. The SAAS-based platform ecosystem will absolutely combine all facets of the Firm’s operations, from receiving uncooked supplies for purchasers, by means of product manufacturing, doc compliance, distribution, and shelf-life batch monitoring. It had been anticipated to be operational within the third or fourth quarter of 2020, nonetheless resulting from financial circumstances from the COVID-19 Pandemic, and the necessity for funding associated, to finish the method, we’ve got been delayed and hope to be operational by the tip of the second quarter of 2021.

The SaaS-based platform ecosystem will absolutely combine all facets of the Cannagistics operations, from receiving uncooked supplies for purchasers, by means of product manufacturing, doc compliance, distribution, and shelf-life batch monitoring. It’s meant to function with 4 separate manufacturers or identities, that being Global3pl, AFX (the acronym for American Freight Xchange) UrbanX and Cannagistics.

Our focused shopper markets (OTC, pharmaceutical, nutraceutical, cosmetics, and Hemp/CBD-related merchandise) are closely regulated, and extremely fragmented from state to state, and nation to nation. Each nation has their very own licensed product requirements, such because the FDA within the U.S. Goal shopper markets require batch product monitoring all through shelf life and GMP licensed requirements in manufacturing. There’s at present, we consider, an absence of seamless automation throughout the provision chain.

Our resolution affords a completely automated and scalable service for end-to-end data, manufacturing, gross sales, and monitoring. We consider the advantages achieved from our logistics companies for purchasers are as follows:

▪

Capacity to trace merchandise from ingredient stage all the best way to sale;

▪

Offers 24/7 visibility;

▪

Expands collaboration;

▪

Present a single level of entry:

▪

Incorporates massive knowledge and shopper conduct statistics;

▪

Will increase productiveness;

▪

Presents a subscription-based mannequin; and

▪

Able to supporting a number of shopper utilization.

Competitors

The World Provide Chain administration space has many alternative entities, all competing. Some are very massive. Nevertheless, our mannequin is considerably totally different from a lot of the suppliers already working.

To achieve success within the international provide chain administration space, an organization should be concerned in planning the perform of your entire course of, from begin to end, or finish to finish. We intend to pay attention our mannequin on the hashish, nutraceutical, pharmaceutical and beauty areas. We consider this makes our strategy distinctive and distinguishable presently.

There isn’t any assure {that a} bigger, extra absolutely funded, firm will decide to hunt to realize entry to the identical enterprise.

Mental Property

Our Global3pl SAAS Platform is a proprietary software program developed by the Firm. The SaaS-based platform ecosystem will absolutely combine all facets of the Cannagistics operations, from receiving uncooked supplies for purchasers, by means of product manufacturing, doc compliance, distribution, and shelf-life batch monitoring.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Ideas of consolidation

The consolidated monetary statements embody the accounts of Cannagistics, Inc. and its wholly owned subsidiaries American Freight Xchange, Inc and Global3pl, Inc. (Ontario), previously generally known as KRG Logistics, Inc. All important inter-company transactions and balances have been eradicated.

Foundation of Presentation

We’ve summarized our most important accounting insurance policies for the fiscal years ended July 31, 2020 and July 31, 2020

Use of Estimates

The preparation of monetary statements in conformity with typically accepted accounting ideas requires administration to make estimates and assumptions that have an effect on the reported quantities of property and liabilities and disclosure of contingent property and liabilities on the date the monetary statements and the reported quantity of revenues and bills through the reporting interval. Precise outcomes may differ from these estimates.

COVID-19 Pandemic Replace

In March 2020, the World Well being Group declared a world well being pandemic associated to the outbreak of a novel coronavirus. The COVID-19 pandemic adversely affected the corporate’s monetary efficiency within the third and fourth quarters of fiscal 12 months 2020 and will have an effect all through fiscal 12 months 2021. In response to the COVID-19 pandemic, authorities well being officers have really helpful and mandated precautions to mitigate the unfold of the virus, together with shelter-in-place orders, prohibitions on public gatherings and different comparable measures. In consequence, the corporate and sure of the corporate’s prospects and suppliers quickly closed places starting late within the second quarter of fiscal 12 months 2020, persevering with into the third quarter of fiscal 12 months 2020. There’s uncertainty across the length and breadth of the COVID-19 pandemic, in addition to the impression it’ll have on the corporate’s operations, provide chain and demand for its merchandise. In consequence, the last word impression on the corporate’s enterprise, monetary situation or working outcomes can’t be moderately estimated presently.

Revenue Taxes

The Firm accounts for revenue taxes below ASC 740 “Revenue Taxes,” which codified SFAS 109, “Accounting for Revenue Taxes” and FIN 48 “Accounting for Uncertainty in Revenue Taxes – an Interpretation of FASB Assertion No. 109.” Beneath the asset and legal responsibility methodology of ASC 740, deferred tax property and liabilities are acknowledged for the long run tax penalties attributable to variations between the monetary statements carrying quantities of current property and liabilities and their respective tax bases. Deferred tax property and liabilities are measured utilizing enacted tax charges anticipated to use to taxable revenue within the years wherein these non permanent variations are anticipated to be recovered or settled. Beneath ASC 740, the impact on deferred tax property and liabilities of a change in tax charges is acknowledged in revenue within the interval the enactment happens. A valuation allowance is supplied for sure deferred tax property whether it is extra possible than not that the Firm is not going to understand tax property by means of future operations.

By-product Monetary Devices

The Firm doesn’t use by-product devices to hedge exposures to money movement, market, or overseas forex dangers.

The Firm critiques the phrases of convertible loans, fairness devices and different financing preparations to find out whether or not there are embedded by-product devices, together with embedded conversion choices which can be required to be bifurcated and accounted for individually as a by-product monetary instrument. Additionally, in reference to the issuance of financing devices, the Firm might situation freestanding choices or warrants to staff and non-employees in reference to consulting or different companies. These choices or warrants might, relying on their phrases, be accounted for as by-product instrument liabilities, relatively than as fairness.

By-product monetary devices are initially measured at their truthful worth. For by-product monetary devices which can be accounted for as liabilities, the by-product instrument is initially recorded at truthful worth after which re-valued at every reporting date, with modifications within the truthful worth reported as prices or credit to revenue. To the extent that the preliminary truthful values of the freestanding and/or bifurcated by-product instrument liabilities exceed the whole proceeds obtained an

fast cost to revenue is acknowledged as a way to initially document the by-product instrument liabilities at their truthful worth.

The low cost from the face worth of the convertible debt devices ensuing from allocating some or all the proceeds to the by-product devices, along with the said price of curiosity on the instrument, is amortized over the lifetime of the instrument by means of periodic prices to revenue, utilizing the efficient curiosity methodology.

The classification of by-product devices, together with whether or not such devices needs to be recorded as liabilities or as fairness, is reassessed on the finish of every reporting interval. If reclassification is required, the truthful worth of the by-product instrument, as of the dedication date, is reclassified. Any earlier prices or credit to revenue for modifications within the truthful worth of the by-product devices aren’t reversed. By-product instrument liabilities are labeled within the stability sheet as present or non-current primarily based on whether or not or not net-cash settlement of the by-product instrument might be required inside twelve months of the stability sheet date.

Truthful worth of monetary devices

The Firm’s monetary devices include its liabilities. The carrying quantity of payables and the mortgage payable – associated occasion approximate truthful worth due to the short-term nature of these things. The promissory notes, and convertible notes payables are measured at amortized price utilizing the efficient curiosity methodology, which approximates truthful worth as a result of relationship between the rate of interest on long-term debt and the Firm’s incremental threat adjusted borrowing price.

Truthful worth is outlined below FASB ASC Subject 820 because the alternate value that will be obtained for an asset or paid to switch a legal responsibility (an exit value) within the principal or probably the most advantageous marketplace for an asset or legal responsibility in an orderly transaction between contributors on the measurement date. Valuation strategies used to measure truthful worth should maximize the usage of observable inputs and reduce the usage of unobservable inputs. The usual describes a good worth hierarchy primarily based on the degrees of inputs, of which the primary two are thought of observable and the final unobservable, which may be used to measure truthful worth. The degrees are as follows:

•

Stage 1 – Quoted costs in lively markets for equivalent property or liabilities

•

Stage 2 – Inputs aside from Stage 1 which can be observable, both instantly or not directly, corresponding to quoted costs for comparable property or liabilities; quoted costs in markets that aren’t lively; or different inputs which can be observable or corroborated by observable market knowledge for considerably the total time period of the property or liabilities

•

Stage 3 – Unobservable inputs which can be supported by little or no market exercise and which can be important to the worth of the property or liabilities

The next is an inventory of the Firm’s liabilities required to be measured at truthful worth on a recurring foundation and the place they’re labeled inside the truthful worth hierarchy as of July 31, 2021, and July 31, 2020:

		July 31, 2021
		Stage 1		Stage 2		Stage 3		Complete
By-product liabilities		$	–			$	–			$	529,171			$	529,171

		July 31, 2020
		Stage 1		Stage 2		Stage 3		Complete
By-product liabilities		$	–			$	–			$	205,796			$	205,796

Accounts receivable and allowance for uncertain accounts

Accounts receivables are said on the quantity administration expects to gather. The Firm typically doesn’t require collateral to assist buyer receivables. The Firm gives an allowance for uncertain accounts primarily based upon a evaluate of the excellent accounts receivable, historic assortment data and current financial circumstances. As of July 31, 2021, and 2020 the allowance for uncertain accounts was $0and $0, respectively.

Income Recognition

The Firm acknowledges income associated to transaction from its third-party logistics gross sales by performing the next 5 steps: (i) determine the contract(s) with a buyer, (ii) determine the efficiency obligations within the contract, (iii) decide the transaction value, (i) allocate the transaction value to the efficiency obligations within the contract, and (v) acknowledge income when (or as) the entity satisfies a efficiency obligation. The Firm applies the five-step mannequin to preparations that meet the definition of a contract below Subject 606, together with when it’s possible that the entity will accumulate the consideration it’s entitled to in alternate for the products or companies it transfers to the client. At contract inception, as soon as the contract is decided to be inside the scope of Subject 606, the Firm evaluates the products or companies promised inside every contract associated efficiency obligation and assesses whether or not every promised good or service is distinct. The Firm acknowledges as income, the quantity of the transaction value that’s allotted to the respective efficiency obligation when (or as) the efficiency obligation is glad. Quantities invoiced or collected prematurely of product supply or offering companies are recorded as unearned income or buyer deposits. The corporate accrues for gross sales returns, dangerous money owed, and different allowances primarily based on its historic expertise.

International Forex

FASB ASC Subject 830, International Forex Issues (previously FASB Assertion No. 52, International Forex Translation) gives accounting steerage for transactions denominated in a overseas forex, and for operations undertaken in a overseas forex setting. To arrange consolidated monetary statements, an entity interprets all purposeful forex monetary statements right into a single reporting forex. The identical applies if an entity makes use of totally different currencies for reporting functions and for its purposeful forex. The corporate studies its forex in US {dollars}.

Inventory-Based mostly Compensation

The Firm measures bills related to all worker stock-based compensation awards utilizing a fair-value methodology and document such expense in our consolidated monetary statements on a straight-line foundation over the requisite service interval.

Leases

In February 2016, FASB issued ASU-2016-02 (Subject 842) “Leases”, gives accounting steerage for leases, recognizing lease property and lease liabilities on the stability sheet and disclosing key details about leasing preparations. ASU 2016-02 is efficient for annual reporting intervals starting after December 15, 2018. Efficient August 1, 2019, the Firm carried out ASU 2016-02 below the modified retrospective methodology. In consequence, the Firm acknowledged proper of use property of $54,475and lease liabilities of $57,064. In the course of the 12 months ended July 31, 2021, the Firm terminated its’ current lease and entered a brand new lease on a month-to-month foundation. As such, the Firm not has a proper of use asset or lease legal responsibility at July 31, 2021.

Current Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Monetary Devices (Subject 326): Measurement of Credit score Losses on Monetary Devices, which modifies the measurement of anticipated credit score losses of sure monetary devices, together with commerce receivables, contract property, and lease receivables. This normal will likely be efficient for the Firm starting August 1, 2020. The Firm doesn’t consider that this normal may have a cloth impression on its’ consolidated monetary statements.

NOTE 3 – GOING CONCERN

Administration doesn’t anticipate current money as of July 31, 2021, to be adequate to fund the Firm’s operations for a minimum of twelve months from the issuance date of those July 31, 2021, monetary statements. These monetary statements have been ready on a going concern foundation which assumes the Firm will proceed to understand its property and discharge its liabilities within the regular course of enterprise. As of July 31, 2021, the Firm has an accrued deficit of $30,572,191, and has not but generated materials income from operations, and would require further funds to take care of its operations. These components increase substantial doubt relating to the Firm’s potential to proceed as a going concern inside one 12 months after the consolidated monetary statements are issued. The Firm’s potential to proceed as a going concern depends upon its potential to generate future worthwhile operations and acquire the mandatory financing to satisfy its obligations and repay its liabilities arising from regular enterprise operations after they turn out to be due. The Firm intends to finance working prices over the subsequent twelve months by means of its current monetary assets and we may increase further capital by means of fairness choices, debt financings, collaborations and/or licensing preparations. If enough funds aren’t obtainable on acceptable phrases, we could also be required to delay, cut back the scope of, or curtail, our operations. The accompanying consolidated monetary statements don’t embody any changes to the recoverability and classification of recorded asset quantities and classification of liabilities that is perhaps mandatory ought to the Firm be unable to proceed as a going concern.

NOTE 4 – DISCONTINUED OPERATIONS

On November 6, 2019, the Firm discontinued its operations of subsidiary Global3pl, Inc., previously generally known as KRG Logistics, Inc., (an Ontario company) and bought the property of $54,296for $10{dollars}. As such, the property of KRG Logistics, Inc. have been faraway from the accounts, and all remaining liabilities have been labeled as Discontinued Operations within the accompanying Steadiness Sheets. As of July 31, 2021, and July 31, 2020, the summaries of liabilities pertaining to discontinued operations have been as follows:

		July 31,		July 31,
		2021		2020
Accounts payable		$	460,262			$	478,128
Royal Financial institution line of credit score			289,242				289,242
Unearned income			14,833				14,833
Accrued liabilities			64,663				64,663
Customized duties & GST payable			6,019				6,019
HST			2,759				2,759
Liabilities of discontinued operations		$	837,778			$	864,644

NOTE 5 – PROMISSORY NOTES

Promissory notes payable as of July 31, 2021, and July 31, 2020, consisted of the next:

Description		July 31, 2021		July 31, 2020
Be aware payable dated March 8, 2018, matured March 8, 2019, bearing curiosity at 10%each year.		$	30,000			$	30,000
Be aware payable dated July 18, 2018, matured July 18, 2019, bearing curiosity at 8%each year.		$	135,000			$	135,000
Be aware payable dated February 4, 2020, matured February 4, 2021, bearing curiosity at 18%each year.		$	5,000			$	5,000
Be aware payable dated June 6, 2021, matured June 6, 2022, bearing curiosity at 0%each year.		$	200,000			$	0
Be aware payable dated June 6, 2021, matured June 6, 2022, bearing curiosity at 0%each year.		$	150,000			$	0
Complete		$	520,000			$	170,000
Much less present portion of long-term debt		$	520,000			$	170,000
Complete long-term debt			–				–

Curiosity expense for the 12 months ended July 31, 2021, and 2020 was $14,700and $17,350, respectively.

NOTE 6 – CONVERTIBLE DEBT

Convertible debt as of July 31, 2021, and July 31, 2020, consisted of the next:

Description		July 31, 2021		July 31, 2020
Convertible observe settlement dated November 1, 2013, within the quantity of $30,000payable and due on demand bearing curiosity at 12%each year. Principal and accrued curiosity is convertible at $.002250per share.		$	11,041			$	11,041
Convertible observe settlement dated February 20, 2018, within the quantity of $1,034,000payable and due on demand bearing curiosity at 10%each year. Principal and accrued curiosity is convertible at $.028712per share.		$	1,034,000			$	1,034,000
Convertible observe settlement dated March 13, 2019, within the quantity of $800,000payable and due on March 20, 2020, bearing curiosity at 24%each year.		$	800,000			$	800,000
Convertible observe settlement dated June 28, 2019, within the quantity of $300,000payable and due on June 28, 2020, bearing curiosity at 20%each year.		$	300,000			$	300,000
Convertible observe settlement dated August 6, 2019, within the quantity of $31,500payable and due on August 6, 2020, bearing curiosity at 20%each year.		$	31,500			$	31,500
Convertible observe settlement dated August 19, 2019, within the quantity of $3,800payable and due on August 19, 2020, bearing curiosity at 24%each year.		$	3,800			$	3,800
Convertible observe settlement dated September 4, 2019, within the quantity of $36,500payable and due on September 4, 2020, bearing curiosity at 20%each year.		$	36,500			$	36,500
Convertible observe settlement dated December 4, 2019, within the quantity of $95,000payable and due on December 4, 2020, bearing curiosity at 12%each year.		$	147,500			$	95,000
Convertible observe settlement dated February 10, 2020, within the quantity of $15,000payable at February 10, 2021, bearing curiosity at 12%each year.		$	–			$	15,000
Convertible observe settlement dated February 21, 2020 within the quantity of $47,500payable and due on February 28, 2021bearing curiosity at 12% each year.		$	–				47,500
Convertible observe settlement dated February 28, 2020, within the quantity of $67,500payable at February 28, 2021, bearing curiosity at 12%each year.		$	–			$	67,500
Convertible observe settlement dated April 15, 2020, within the quantity of $31,500payable at April 15, 2021, bearing curiosity at 10%each year, web of low cost.		$	15,887			$	33,500
Convertible observe settlement dated December 2, 2020, within the quantity of $40.000payable and due on December 2, 2021, bearing curiosity at 12%each year.		$	40,000			$	–
Convertible observe settlement dated April 6, 2021, within the quantity of $53,000payable and due on April 6, 2022, bearing curiosity at 12%each year.		$	53,000			$	–
Convertible observe settlement dated April 7, 2021, within the quantity of $111,555payable and due on April 7, 2022, bearing curiosity at 10%each year.		$	111,555			$	–
Convertible observe settlement dated April 12, 2021, within the quantity of $43.000payable and due on April 12, 2022, bearing curiosity at 12%each year.		$	43,000			$	–
Convertible observe settlement dated April 20, 2021, within the quantity of $43,750payable and due on April 20, 2022, bearing curiosity at 12%each year.		$	43,750			$	–
Convertible notes complete:		$	2,671,533			$	2,475,341

The Firm acknowledged $0of debt low cost accretion expense on the above notes. Curiosity expense associated to those notes for the 12 months ended July 31, 2021, and 2020 was $403,150and $384,649.

By-product liabilities

Sure of the Firm’s convertible notes are convertible right into a variable variety of shares of widespread inventory for which there’s not a flooring to the variety of widespread shares the Firm is perhaps required to situation. Based mostly on the necessities of ASC 815 Derivatives and Hedging, the conversion characteristic represented an embedded by-product that’s required to be bifurcated and accounted for as a separate by-product legal responsibility. The by-product legal responsibility is initially recorded at its estimated truthful worth and is required to be revalued at every conversion occasion and reporting interval. Adjustments within the by-product legal responsibility truthful worth are reported in working outcomes every reporting interval. The Firm makes use of the Black-Scholes possibility pricing mannequin for the valuation of its by-product liabilities as additional mentioned under. There are not any materials variations between utilizing the Black-Scholes possibility pricing mannequin for these estimates as in comparison with the Binomial Lattice mannequin.

In the course of the 12 months ended July 31, 2021, seven new notes with a variable-rate conversion characteristic have been issued. The Firm valued the conversion options on the date of issuance leading to preliminary liabilities totaling $866,327. For the reason that truthful worth of the by-product was in extra of the proceeds obtained, a full low cost to the convertible notes payable and a day one loss on by-product liabilities of $608,327was recorded through the 12 months ended July 31, 2021. The Firm valued the conversion characteristic utilizing the Black-Scholes possibility pricing mannequin with the next assumptions: conversion costs starting from $0.0029 to $0.0058, the closing inventory value of the Firm’s widespread inventory on the dates of valuation starting from $0.007 to $0.034, an anticipated dividend yield of 0%, anticipated volatilities starting from 219%-279%, risk-free rate of interest starting from 0.12% to 0.15%, and anticipated phrases starting from 9 months to 1 12 months. As of July 31, 2020, the Firm had current by-product liabilities of $205,796associated to 2 convertible notes. In the course of the 12 months ended July 31, 2021, roughly $280,000in principal and accrued curiosity of the excellent convertible notes together with charges of $19,000have been transformed into 81,962,467shares of widespread inventory. At every conversion date, the Firm recalculated the worth of the by-product legal responsibility related to the convertible observe recording a acquire (loss) in reference to the change in truthful market worth. As well as, the pro-rata portion of the by-product legal responsibility as in comparison with the portion of the convertible observe transformed was reclassed to further paid-in capital. In the course of the 12 months ended July 31, 2021, the Firm recorded $980,010to further paid-in capital for the reduction of the by-product liabilities. The by-product liabilities have been revalued utilizing the Black-Scholes possibility pricing mannequin with the next assumptions: conversion costs starting from $0.0011 to $0.007, the closing inventory value of the Firm’s widespread inventory on the dates of valuation starting from $0.006 to $0.034, an anticipated dividend yield of 0%, anticipated volatility starting from 215% to 278%, risk-free rates of interest starting from 0.12% to 0.15%, and anticipated phrases starting from 0.01 to 0.48 years.On July 31, 2021, the by-product liabilities on these convertible notes have been revalued at $529,171leading to a lack of $437,058for the 12 months ended July 31, 2021, associated to the change in truthful worth of the by-product liabilities. The by-product liabilities have been revalued utilizing the Black-Scholes possibility pricing mannequin with the next assumptions: conversion costs starting from $0.0061 to $0.0064, the closing inventory value of the Firm’s widespread inventory on the date of valuation of $0.023, an anticipated dividend yield of 0%, anticipated volatility of 296%, risk-free rate of interest of 0.07%, and an anticipated time period starting from 0.50 to 0.72 years. The Firm amortizes the reductions over the time period of the convertible promissory notes utilizing the straight-line methodology which is analogous to the efficient curiosity methodology. In the course of the 12 months ended July 31, 2021, the Firm amortized $325,355to curiosity expense. As of July 31, 2021, reductions of $301,537remained for which will likely be amortized by means of July 2022.

NOTE 7 – RELATED PARTY TRANSACTIONS

A shareholder of the Firm has paid sure bills of the Firm. These quantities are mirrored as a mortgage payable to associated occasion. The shareholder superior $3,065and $45,269through the 12 months ended July 31, 2021, and 2020, respectively. As of July 31, 2021, and July 31, 2020, there have been $416,159and $388,094resulting from associated events, and a shareholder, respectively.

The Firm has consulting agreements with two of its shareholders to offer administration and monetary companies that commenced on December 1, 2017. For the 12 months ended July 31, 2021, and 2020 consulting charges paid have been $285,157and $130,437respectively. The consulting charges are included as a part of skilled charges on the Firm’s consolidated statements of operations.

The Firm on February 20, 2018, entered right into a associated occasion (that being Recommerce Group, Inc. and our former President and present Vice-President of Company Finance and a Director, is a principal in Recommerce Group, Inc.) observe receivable within the quantity of $1,034,000. The Firm made an extra advance within the quantity of $175,000that’s non-interest bearing. The observe is payable and due on demand and bears curiosity on the price of 10%. A complete of $153,217has been utilized as funds towards this Be aware. Curiosity expense within the quantity of $87,036and $87,037for the 12 months ended July 31, 2021, and 2020, respectively, has been recorded within the monetary statements.

On January 18, 2022, the Firm entered right into a Partnership Settlement with Medizone Bio, an entity with principal places of work in Naples, Florida. Dr. Babak Ghalili, a director of the Firm, is President of Medizone Bio. The Partnership Settlement gives for a 50/50 partnership for the manufacturing of biodegradable face masks, and medical provides, corresponding to private protecting gear (PPE) and COVID-19 testing supplies. Beneath the Partnership Settlement, Integrity Wellness is to offer an preliminary funding of $300,000 in financing for Medizone Bio to fabricate the primary Medizone Bio merchandise buy order. This buy order has a worth of $1,200,000. The Firm has borrowed the cash for this function as described under. Integrity Wellness will present the partnership with financing, advertising and marketing, gross sales distribution in wholesale, retail and direct-to-consumer (e.g., QVC, HSN, Amazon, and many others.), financing for basic working capital and buy order financing, whereas Medizone Bio gives the partnership with a sequence of buy orders. The online income, if any, will likely be distributed between the companions in equal proportions.

Integrity Wellness has issued a Promissory Be aware within the principal quantity of $300,000 to 7X Enterprises, Inc. (“7X”) in alternate for 7X advancing $300,000to Integrity Wellness for the acquisition order financing for the preliminary buy order of Medizone Bio. The Promissory Be aware bears curiosity at a price of 10%each year and is due upon demand from the holder. Dr. Babak Ghalili, a director of the Firm, is President of 7X.

NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT)

The Firm is allowed to situation 500,000,000shares of its $0.001par worth widespread inventory and 20,000,000shares of Most well-liked inventory. As of July 31, 2021, and July 31, 2020, there have been 189,561,572and 105,099,277shares of widespread inventory excellent, respectively. There have been 900,000shares of Collection E Most well-liked inventory and 4,400,000shares of Collection F Most well-liked inventory excellent as of July 31, 2021. There have been 10,000,000shares of Collection D Most well-liked inventory excellent as of July 31, 2020. The Firm had 290,000,000 shares of widespread inventory issuable at July 31, 2021.

Collection E Most well-liked Inventory

The Firm has 3,600,000 of Collection E convertible most popular inventory approved. Every share is non-voting and convertible into 100 shares of widespread inventory. Every share is handled pari passu with widespread inventory, adjusted for conversion, in relation to dividends and liquidation preferences.

The holders of the Collection E convertible most popular inventory shall have anti-dilution rights through the two-year interval after the Collection E convertible most popular transformed into shares of Frequent Inventory at its then efficient conversion price. The anti-dilution rights shall be pro-rata to the holder’s possession of the Collection E convertible most popular inventory. The Firm agrees to guarantee that the holders of the Collection E convertible most popular inventory shall have and preserve always, full Ratchet anti-dilution safety rights as to the whole variety of issued and excellent shares of widespread inventory and most popular inventory of the Firm infrequently, on the price of 36%,calculated on a completely diluted foundation.

Collection F Most well-liked Inventory

The Firm has 4,400,000 of Collection F convertible most popular inventory approved. Every share is non-voting and convertible into 100 shares of widespread inventory. Every share is handled pari passu with widespread inventory, adjusted for conversion, in relation to dividends and liquidation preferences.

The holders of the Collection F convertible most popular inventory shall have anti-dilution rights through the two-year interval after the Collection F convertible most popular transformed into shares of Frequent Inventory at its then efficient conversion price. The anti-dilution rights shall be pro-rata to the holder’s possession of the Collection F convertible most popular inventory. The Firm agrees to guarantee that the holders of the Collection E convertible most popular inventory shall have and preserve always, full Ratchet anti-dilution safety rights as to the whole variety of issued and excellent shares of widespread inventory and most popular inventory of the Firm infrequently, on the price of 44%,calculated on a completely diluted foundation.

On November 1, 2017, we effected a one-for-four reverse inventory break up. All share and per share data has been retroactively adjusted to mirror the inventory break up.

NOTE 9 – WARRANT

On April 15, 2020, the Firm issued a 5 12 monthsFrequent Inventory Buy Warrant in reference to a $31,500convertible promissory observe. The warrant is convertible into 437,500shares of the Firm’s widespread inventory at $.12per share.

On April 23, 2020, the Firm issued a three 12 monthsFrequent Inventory Buy Warrant in reference to a $75,000funding within the Firm’s widespread inventory. The warrant has a conversion value of $.15per share of the Firm’s widespread inventory.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigations, Claims and Assessments

The Firm might turn out to be concerned in varied lawsuits and authorized proceedings, which come up within the unusual course of enterprise. Nevertheless, litigation is topic to inherent uncertainties, and an hostile end in these or different issues might come up which will hurt its enterprise. The Firm is at present not conscious of any such authorized proceedings or claims that they consider may have, individually or within the combination, a cloth hostile impact on its enterprise, monetary situation or working outcomes.

On February 2, 2021, the Supreme Court docket of the State of New York, County of Suffolk entered an order granting abstract judgment to Jeffrey Gates, the plaintiff, towards Cannagistics, Inc., a Nevada company, which is a subsidiary of the Firm, and James Zimbler, our Vice President of Operations and former director, the defendants (Index No. 602019/2020), for $151,712.

The Firm has been made conscious of potential litigation from a creditor of the Firm, Sanguine Group, LLC and Backyard State Holdings LLC, that are managed by the identical particular person. Whereas the Firm doesn’t have precise discover of such potential litigation, the Firm was made conscious of the assertion from the Sanguine Group, LLC, in a separate litigation involving Availa Bio, Inc., the now controlling shareholder of the Firm, and a celebration unrelated to the Firm.

NOTE 11 – RESTATEMENT

The consolidated monetary statements for the 12 months ended July 31, 2021 have been restated to appropriate the accounting for the acquisition of The Integrity Wellness Group, Inc. Pursuant to the Settlement, the Firm bought 100% of the excellent capital inventory of Integrity Wellness from Availa in alternate for 4,400,000 shares of the Firm’s Collection F Convertible Most well-liked Inventory (the “Collection F”). Every share of Collection F Most well-liked Inventory is convertible into 100 shares of widespread inventory. The Firm has restated its’ July 31 2021 consolidated monetary statements to document the acquisition of The Integrity Wellness Group, Inc. using the truthful worth of the Collection F Most well-liked Inventory. Because the Collection F Most well-liked Inventory is convertible to widespread inventory, the Firm decided the truthful worth by figuring out the as if conversion value of the widespread inventory upon acquisition. As The Integrity Wellness Group, Inc. had no operations or property aside from a portfolio of not absolutely developed merchandise, the Firm has acknowledged the worth of the Collection E Most well-liked Inventory as an expense within the restated Assertion of Operations. The next summarizes the impression of the restatement:

		Reported		Restatement		Restated
Internet loss		$	(2,390,353	)		$	(14,960,000	)		$	(17,350,353	)

The restatement didn’t impression the Firm’s monetary place or money flows.

NOTE 12 – SUBSEQUENT EVENTS

Administration of the Firm has evaluated the following occasions which have occurred by means of the date of the report and decided that the next subsequent occasions require disclosure:

On August 5, 2021, the Firm issued FirstFire World Alternatives Fund LLC, a Delaware restricted legal responsibility firm an Unique Subject Low cost $500,000Promissory Be aware with a web quantity of $250,000from August 6, 2021. The Be aware bears 0%curiosity and is payable August 5, 2022, until transformed into shares of widespread inventory by the Holder on the conversion value of $0.01per share.

On August 10, 2021, the Firm issued GS Capital Companions LLC, a New York restricted legal responsibility firm an Unique Subject Low cost $150,000Promissory Be aware, with a web quantity of $75,000, from August 11, 2021. The Be aware bears 0%curiosity and is payable August 10, 2022, until transformed into shares of widespread inventory by the Holder on the conversion value of $0.01per share.

On August 25, 2021, the Firm issued GW Holdings Group LLC, a New York restricted legal responsibility firm an Unique Subject Low cost $200,000Promissory Be aware, with a web quantity of $100,000, from August 23, 2021. The Be aware bears 0%curiosity and is payable August 23, 2022, until transformed into shares of widespread inventory by the Holder on the conversion value of $0.01per share.

Efficient September 1, 2021, the Firm leased workplace area by means of Regus at Hauppauge Middle, 150 Motor Parkway, Suite 401, Hauppauge, NY 11788. The time period is for 6 months at a base lease of $1,200. The area is adequate for the Firm wants.

The Firm has been made conscious of potential litigation from a creditor of the Firm, Sanguine Group, LLC and Backyard State Holdings LLC, that are managed by the identical particular person. Whereas the Firm doesn’t have precise discover of such potential litigation, the Firm was made conscious of the assertion from the Sanguine Group, LLC, in a separate litigation involving Availa Bio, Inc., the now controlling shareholder of the Firm, and a celebration unrelated to the Firm.

On September 15, 2021, the Firm filed a Def14C Info Assertion. The Def14C Info Assertion set out the plan of the Firm to amend its title to The Integrity Wellness Group, Inc., or another comparable title, and to effectuate a reverse inventory break up of its widespread inventory of 1 (1) new share of widespread inventory for every forty (40) outdated shares of widespread inventory.

On October 26, 2021, the Firm issued Rising Capital Methods, Ltd., a New York company, owned and managed by James W. Zimbler, our VP and a Director, an Unique Subject Low cost $168,000Promissory Be aware, with a web quantity of $84,000, from funds superior to the Firm and its subsidiary The Integrity Wellness Group, Inc., on October 12, 2021. August 23, 2021. The Be aware bears 0%curiosity and is payable in six months or if the Firm raises a minimal of $1,000,000in debt or fairness. Rising Capital Methods, Ltd. has the best below the Be aware to assign the quantity due into shares of a professional providing below Regulation A on the providing value, or at $0.01per shares if the shares are issued below Regulation D.

On November 24, 2021, the Firm filed a Type 1-A Providing Assertion with the Securities and Trade Fee for the providing of as much as $5,000,000 price of widespread inventory primarily based on a preliminary rage of $0.05to $0.20per share.

On December 6, 2021, Rob Gietl resigned as President and CEO and Director of the Firm. Jim Morrison was appointed as President and CEO of the Firm in his place.

On January 18, 2022, the Firm, by means of its subsidiary, The Integrity Wellness Group, Inc., (“Integrity Wellness”) entered right into a Joint Enterprise/Partnership Settlement (“Settlement”) with Medizone Bio, Inc., (“Medizone Bio”) of Richmond Hill, Ontario, Canada. The Settlement gives for a 50/50 partnership for the manufacturing of biodegradable face masks, and medical provides, corresponding to private protecting gear (PPE) and COVID-19 testing supplies. Beneath the Settlement, Integrity Wellness is to offer an preliminary funding of $300,000in financing for Medizone Bio to fabricate the primary Medizone Bio merchandise buy order. Integrity Wellness has issued a Promissory Be aware within the principal quantity of $300,000to 7X Enterprises, Inc. (“7X”) in alternate for 7X advancing $300,000to Integrity Wellness for the acquisition order financing for the preliminary buy order of Medizone Bio. The Promissory Be aware bears curiosity at a price of 10% each year and is due upon demand from the holder.

Merchandise 9. Adjustments in and Disagreements with Accountants on Accounting and Monetary Disclosure

None

Merchandise 9A. Controls and Procedures

As required by Rule 13a-15 below the Securities Trade Act of 1934, we’ve got carried out an analysis of the effectiveness of our disclosure controls and procedures as of the tip of the interval lined by this annual report, being July 31, 2021. This analysis was carried out below the supervision and with the participation of our administration, together with our Chief Government Officer/Chief Monetary Officer.

Disclosure controls and procedures are controls and different procedures which can be designed to make sure that data required to be disclosed in our studies filed or submitted below the Securities Trade Act of 1934 is recorded, processed, summarized and reported, inside the time intervals specified within the Securities and Trade Fee’s guidelines and varieties. Disclosure controls and procedures embody controls and procedures designed to make sure that data required to be disclosed in our firm’s studies filed below the Securities Trade Act of 1934 is accrued and communicated to administration, together with our Chief Government Officer/Chief Monetary Officer, to permit well timed choices relating to required disclosure.

Based mostly upon that analysis, together with our Chief Government Officer/Chief Monetary Officer, we’ve got concluded that our disclosure controls and procedures have been ineffective as of the tip of the interval lined by this annual report.

Administration’s Annual Report on Inner Management over Financing Reporting

Our administration is accountable for establishing and sustaining enough inside management over monetary reporting (as outlined in Rule 13a-15(f) below the Securities Trade Act of 1934). Administration has assessed the effectiveness of our inside management over monetary reporting as of July 31, 2021, primarily based on standards established in Inner Management-Built-in Framework issued by the Committee of Sponsoring Organizations of the Treadway Fee. Because of this evaluation, administration concluded that, as of July 31, 2021, our inside management over monetary reporting was not efficient. Our administration recognized the next materials weaknesses in our inside management over monetary reporting, that are indicative of many small corporations with small employees: (i) insufficient segregation of duties and efficient threat evaluation; and (ii) inadequate written insurance policies and procedures for accounting and monetary reporting with respect to the necessities and software of each US GAAP and SEC pointers.

We plan to take steps to reinforce and enhance the design of our inside management over monetary reporting. In the course of the interval lined by this annual report on Type 10-Ok, we’ve got not been in a position to remediate the fabric weaknesses recognized above. To remediate such weaknesses, we had hoped to implement the next modifications throughout our fiscal 12 months ending July 31, 2021: (i) appoint further certified personnel to deal with insufficient segregation of duties and ineffective threat administration; and (ii) undertake adequate written insurance policies and procedures for accounting and monetary reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing further financing to cowl the prices of implementing the modifications required. If we’re unsuccessful in securing such funds, remediation efforts could also be adversely affected in a cloth method. In December 2021 we appointed new members to the Board of Administrators and hope to take further remedial actions sooner or later.

This annual report doesn’t embody an attestation report of our registered public accounting agency relating to inside management over monetary reporting. Administration’s report was not topic to attestation by our registered public accounting agency pursuant to an exemption for non-accelerated filers set forth in Part 989G of the Dodd-Frank Wall Avenue Reform and Shopper Safety Act.

Merchandise 9B. Different Info

None

PART III

Merchandise 10. Administrators, Government Officers and Company Governance

The next data units forth the title, age, and place of our present director and government officer as of the date of this Annual Report.

Title	Age	Place(s) and Workplace(s) Held
Jim Morrison	62	President/CEO and Director
Dr. Babak Ghalili	56	Vice President and Director

Set forth under is a quick description of the background and enterprise expertise of our present government officer and director.

Jim Morrison was beforehand President of L’Oréal for 9 years, he acquired Redken and Matrix and led a top-line progress common above 20%. As CEO, he headed the primary celebrity-driven video purchasing app in partnership with SPRINT; Graham Webb, some of the profitable startups in hair care; and Horny Hair Ideas for 4 years. He has served as President/CEO and a Director of Regen Biowellness, Inc., (previously Availa Bio, Inc.), since Could 2020, a well being and wellness product supplier.

Dr. Babak “Bobby” Ghalili, DMD, is likely one of the foremost periodontal and reconstructive dental surgeons within the subject, he’s an Affiliate Professor of Periodontal Surgical procedure at New York College and the College of Medication and Dentistry of New Jersey. Dr. Ghalili is a graduate of Brandeis College, Tufts College, and UMDMJ, and writer of 21 patents (6 awarded patents and 15 patent pending).

Administrators

Our bylaws authorize at least one (1) and greater than 13 (13) administrators. We at present have two (2) administrators.

Time period of Workplace

Our administrators are appointed for a one-year time period to carry workplace till the subsequent annual basic assembly of our shareholders or till faraway from workplace in accordance with our bylaws. Our officers are appointed by our board of administrators and maintain workplace till eliminated by the board.

Household Relationships

There are not any household relationships between or among the many administrators, government officers or individuals nominated or chosen by us to turn out to be administrators or government officers.

Involvement in Sure Authorized Proceedings

To one of the best of our data, through the previous 5 years, not one of the following occurred with respect to a gift or former director, government officer, or worker: (1) any chapter petition filed by or towards any enterprise of which such particular person was a basic accomplice or government officer both on the time of the chapter or inside two years previous to that point; (2) any conviction in a legal continuing or being topic to a pending legal continuing (excluding site visitors violations and different minor offenses); (3) being topic to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any courtroom of competent jurisdiction, completely or quickly enjoining, barring, suspending or in any other case limiting his or her involvement in any kind of enterprise, securities or banking actions; and (4) being discovered by a courtroom of competent jurisdiction (in a civil motion), the SEC or the Commodities Futures Buying and selling Fee to have violated a federal or state securities or commodities regulation, and the judgment has not been reversed, suspended or vacated.

Audit Committee

We should not have a individually designated standing audit committee. Your complete board of administrators performs the features of an audit committee, however no written constitution governs the actions of the board of administrators when performing the features of that will typically be carried out by an audit committee. The board of administrators approves the collection of our impartial accountants and meets and interacts with the impartial accountants to debate points associated to monetary reporting. As well as, the board of administrators critiques the scope and outcomes of the audit with the impartial accountants, critiques with administration and the impartial accountants our annual working outcomes, considers the adequacy of our inside accounting procedures and considers different auditing and accounting issues together with charges to be paid to the impartial auditor and the efficiency of the impartial auditor.

We should not have an audit committee monetary skilled due to the dimensions of our firm and our board of administrators presently. We consider that we don’t require an audit committee monetary skilled presently as a result of we retain outdoors consultants who possess these attributes as wanted.

For the fiscal 12 months ending July 31, 2021, the board of administrators:

• Reviewed and mentioned the audited monetary statements with administration, and

• Reviewed and mentioned the written disclosures and the letter from our impartial auditors on the issues regarding the auditor’s independence.

Based mostly upon the board of administrators’ evaluate and dialogue of the issues above, the board of administrators approved inclusion of the audited monetary statements for the 12 months ended July 31, 2018, to be included on this Annual Report on Type 10-Ok and filed with the Securities and Trade Fee.

Code of Ethics

The Firm has not but adopted a Code of Ethics as outlined by relevant guidelines of the SEC. The Firm anticipates that it’s going to undertake a Code of Ethics when acceptable because it hires further staff and obtains further officers and administrators.

Merchandise 11. Government Compensation

The desk under summarizes all compensation awarded to, earned by, or paid to our former or present government officers for the fiscal years ended July 31, 2021, 2020 and 2019.

The desk under summarizes all compensation awarded to, earned by, or paid to every named government officer for our final two accomplished fiscal years for all companies rendered to us.

SUMMARY COMPENSATION TABLE

Title and Principal Place	Fiscal Yr	Wage ($)	Bonus ($)	Inventory Awards ($)	Choice Awards ($)	Non-Fairness Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Incomes ($)	All Different Compensation ($)	Complete ($)
Rob Gietl, Chairman and President/CEO	2021	30,000	0	0	0	0	0	0	30,000
	2020	90,000 (1)	0	367,485 (2)(4)	0	0	0	0	457,485
	2019	–	0	0	0	0	0	0	0
James W. Zimbler, Vice President and Director	2021	92,657	0	0	0	0	0	0	92,657
	2020	90,000	0	29,500,000 (3)(4)	0	0	0	0	29,741,133
	2019	151,133	0	0	0	0	0	0	0

* Inventory Award was 8,000,000 Collection D Most well-liked Shares

(1) Based mostly on the remaining 6 months of Calendar 12 months 2020

(2) Inventory award, grant date of July 1, 2020, of two,000,000 shares of Collection D Most well-liked Inventory is the results of a switch from Rising Progress Advisors, Inc., holding of 8,000,000 shares of Collection D Most well-liked Inventory.

(3) Preliminary inventory award, grant date of April 29, 2019, was 8,000,000 Collection D Most well-liked Shares within the title of Rising Progress Advisors, Inc. A complete of two,000,000 shares was transferred to Rob Gietl as a part of his settlement to turn out to be President/CEO and Chairman of the Firm, due to this fact compensation quantity is decreased by $367,485.

(4) The valuation of the inventory grant of Collection D Most well-liked Inventory relies on an evaluation of FASB ASC 718-10 and FASB ASC 505-50 as is extra absolutely described in Footnote 10 to the July 31, 2019, year-end monetary states integrated herein.

Narrative to Summery Compensation Desk

On October 1, 2018, we entered into an employment settlement with James W. Zimbler (“Zimbler”) to be our Chief Government Officer (the “Zimbler Settlement”). Efficient with the appointment of Rob Gietl as President/CEO and Chairman of the Board of Administrators, the Employment Settlement was outmoded by a consulting Settlement dated July 1, 2020, with a time period of three years. The Consulting Settlement has the next materials phrases. A consulting payment of $15,000 is payable monthly for the primary 12 months growing by $2,500 per 12 months for the subsequent two years. Marketing consultant can also be entitled to an extra cost of as much as $1,500 monthly to cowl the price of Well being Insurance coverage. Marketing consultant can also be to be reimbursed for cheap bills carried out on behalf of the Firm.

The next is a abstract of the fabric phrases of the Gietl Settlement.

	▪	The time period commences on July 1, 2020 and is for a interval of three (3) years, until terminated earlier as supplied therein.
	▪	Gietl’s preliminary month-to-month Base Wage is $15,000, with a rise of $2,500 annually for the time period of the Settlement.
	▪	Gietl is entitled to take part in any Bonus or Government Compensation Plan established by the Firm.
	▪	Upon termination of Gietl’s employment, he could also be entitled to obtain sure post-termination severance advantages relying upon whether or not such termination is by the Firm with out Trigger, in relation to a Change of Management, a resignation by Gietl for Good Motive, or by motive of Gietl’s dying or incapacity (as such phrases are outlined within the Gietl Settlement).

Merchandise 12. Safety Possession of Sure Useful Homeowners and Administration and Associated Stockholder Issues

The next desk units forth, as of November 12, 2020, sure data as to shares of our widespread inventory owned by (i) every particular person identified by us to beneficially personal greater than 5% of our excellent widespread inventory, (ii) every of our administrators, and (iii) all of our government officers and administrators as a gaggle. Until in any other case said, the tackle for every helpful proprietor is at 150 Motor Parkway, Suite 401, Hauppauge, NY 11788.

		Frequent Inventory			Collection D Most well-liked Inventory
Title and Tackle of Useful Proprietor		Variety of Shares Owned (1)			% of Class (2)			Variety of Shares Owned (1)			% of Class (2)
James Zimbler (3)		398,750,000(6)					80%				6,000,000				80%
Rob Gietl (4)		145,000,000					58%				2,000,000				20%
All Administrators and Government Officers as a Group (2 individuals)		580,000,000					85%				8,000.000				80%
5% Holders
Strong Bridge Investments, Inc. (5)		145,000,000					58%				2,000,000				20%

(1)	Until in any other case indicated, every particular person or entity named within the desk has sole voting energy and funding energy (or shares that energy with that particular person’s partner) with respect to all shares of voting inventory listed as owned by that particular person or entity.
(2)	Pursuant to Guidelines 13d-3 and 13d-5 of the Trade Act, helpful possession consists of any shares as to which a shareholder has sole or shared voting energy or funding energy, and likewise any shares which the shareholder has the best to accumulate inside 60 days, together with upon train of widespread shares buy choices or warrants. The % of sophistication of widespread inventory relies on 105,099,277 shares of widespread inventory excellent as of August 26, 2020. The % of Collection D Most well-liked Inventory relies on 10,000,000 shares of Collection D Inventory excellent as of August 26, 2020.
(3)	Mr. Zimbler, although Rising Progress Advisors, Inc., is the holder of 6,000,000 shares of Collection D most popular inventory, which may be transformed into 435,000,000 shares of widespread inventory.
(4)	Mr. Gietl is the holder of two,000,000 shares of Collection D most popular inventory which may be transformed into 145,000,000 shares of widespread inventory. The quantity listed consists of the whole quantity of widespread inventory if the Collection D Most well-liked have been transformed, though the Collection D Most well-liked incorporates voting rights equal to the conversion complete.
(5)	Carlos Defex and Veronica Defex are the helpful homeowners and management individuals for Strong Bridge Investments, Inc. are the holder of two,000,000 shares of Collection D most popular inventory which may be transformed into 145,000,000 shares of widespread inventory. The quantity listed consists of the whole quantity of widespread inventory if the Collection D Most well-liked have been transformed, though the Collection D Most well-liked incorporates voting rights equal to the conversion complete.
(6)	Rising Progress Advisors, Inc., transferred a complete of 36,250,000 shares of widespread inventory to The Sanguine Group, LLC management particular person is Robert duPurton. The shares have been transferred pursuant to an settlement as a part of a Promissory Be aware, dated March 19, 2019, between the Firm and The Sanguine Group, LLC, whereby Rising Progress Advisors, Inc, agreed to grant The Sanguine Group, LLC 500,000 shares of the then issued and excellent Collection C Most well-liked Inventory, which Collection C Most well-liked Shares have been transformed into widespread inventory on Could 15, 2019. The quantity listed consists of the whole quantity of widespread inventory if the Collection D Most well-liked have been transformed, though the Collection D Most well-liked incorporates voting rights equal to the conversion complete.

Merchandise 13. Sure Relationships and Associated Transactions, and Director Independence

Apart from that which follows and in “Government Compensation,” none of our administrators or government officers, nor any proposed nominee for election as a director, nor any one who beneficially owns, instantly or not directly, shares carrying greater than 5% of the voting rights connected to all of our excellent shares, nor any members of the fast household (together with partner, dad and mom, kids, siblings, and in-laws) of any of the foregoing individuals has any materials curiosity, direct or oblique, in any transaction for the final two fiscal years or in any presently proposed transaction which, in both case, has or will materially have an effect on us.

On January 18, 2022, the Firm entered right into a Partnership Settlement with Medizone Bio, an entity with principal places of work in Naples, Florida. Dr. Babak Ghalili, a director of the Firm, is President of Medizone Bio. The Partnership Settlement gives for a 50/50 partnership for the manufacturing of biodegradable face masks, and medical provides, corresponding to private protecting gear (PPE) and COVID-19 testing supplies. Beneath the Partnership Settlement, Integrity Wellness is to offer an preliminary funding of $300,000 in financing for Medizone Bio to fabricate the primary Medizone Bio merchandise buy order. This buy order has a worth of $1,200,000. The Firm has borrowed the cash for this function as described under. Integrity Wellness will present the partnership with financing, advertising and marketing, gross sales distribution in wholesale, retail and direct-to-consumer (e.g., QVC, HSN, Amazon, and many others.), financing for basic working capital and buy order financing, whereas Medizone Bio gives the partnership with a sequence of buy orders. The online income, if any, will likely be distributed between the companions in equal proportions.

Integrity Wellness has issued a Promissory Be aware within the principal quantity of $300,000 to 7X Enterprises, Inc. (“7X”) in alternate for 7X advancing $300,000 to Integrity Wellness for the acquisition order financing for the preliminary buy order of Medizone Bio. The Promissory Be aware bears curiosity at a price of 10% each year and is due upon demand from the holder. Dr. Babak Ghalili, a director of the Firm, is President of 7X.

Merchandise 14. Principal Accounting Charges and Companies

Under is the desk of Audit Charges (quantities in US$) billed by our auditor in reference to the audit of the Firm’s annual monetary statements for the years ended:

Monetary Statements for the Fiscal Yr Ended July 31		Audit Companies		Audit Associated Charges		Tax Charges		Different Charges
2020			$	50.000			$			$	0		$	0
2021			$	50,000*			$			$	0		$	0

* Estimated

PART IV

Merchandise 15. Displays, Monetary Statements Schedules

(a) Monetary Statements and Schedules

The next monetary statements and schedules listed under are included on this Type 10-Ok.

Monetary Statements (See Merchandise 8)

(b) Displays

Exhibit Quantity Description

31.1 Certification of Chief Government Officer pursuant to Securities Trade Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Part 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Monetary Officer pursuant to Securities Trade Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Part 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Government Officer and Chief Monetary Officer pursuant to 18 U.S.C. Part 1350, as adopted pursuant to Part 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the necessities of Part 13 or 15(d) of the Trade Act of 1934, the registrant has duly prompted this report back to be signed on its behalf by the undersigned, thereunto duly approved.

	Cannagistics, Inc.
By:	Jim Morrison
	Jim Morrison President, Chief Government Officer, Principal Government Officer, Chief Monetary Officer, Principal Monetary Officer, Principal Accounting Officer and Director
	January 28, 2022

By:	/s/ Dr. Babak Ghalili
	Dr. Babak Ghalili
	Director
	January 28, 2022

Pursuant to the necessities of the Securities Trade Act of 1934, this report has been signed under by the next individuals on behalf of the registrant and within the capacities and on the dates indicated.

	Cannagistics, Inc.
By:	Jim Morrison
	Jim Morrison President, Chief Government Officer, Principal Government Officer, Chief Monetary Officer, Principal Monetary Officer, Principal Accounting Officer and Director
	January 28, 2022

By:	/s/ Dr. Babak Ghalili
	Dr. Babak Ghalili
	Director
	January 28, 2022