10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended January 31, 2021
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to__________
Commission File Number: 000-55711

Cannagistics, Inc.

(Exact name of registrant as specified in its charter)

Nevada	90-0338080
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2110 5th Avenue Ronkonkoma, NY 11779
(Address of principal executive offices)
631-676-7230
(Registrant’s telephone number)
1200 Veterans Highway, Suite 310 Hauppauge, NY 11788 (Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

[ ] Yes [X] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 178,096,205 common shares as of March 15, 2021. 

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4:	Controls and Procedures	6
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	8
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3:	Defaults Upon Senior Securities	9
Item 4:	Mine Safety Disclosures	9
Item 5:	Other Information	9
Item 6:	Exhibits	9

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:

F-1	Consolidated Interim Balance Sheets as of January 31, 2021 (unaudited) and July 31, 2020 (audited);
F-2	Condensed Consolidated Interim Statements of Operations for the six months ended January 31, 2021 (unaudited) and 2020 (unaudited);
F-3	Condensed Consolidated Interim Statements of Cash Flows for the six months ended January 31, 2021 (unaudited) and 2020 (unaudited); and
F-4	Notes to Condensed Consolidated Interim Financial Statements. (unaudited)

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended January 31, 2020 are not necessarily indicative of the results that can be expected for the full year.

3

CANNAGISTICS, Inc.

GLOBAL3PL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	January 31, 2021			July 31, 2020
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	647		$	685
Right-to-use asset		0			23,033
Related party receivables, less allowance for doubtful accounts of $1,036,993		0			0
TOTAL CURRENT ASSETS		647			23,718
OTHER ASSETS:
Right-to-use asset, net of current portion		0			31,442
Security deposits		3,634			3,634
TOTAL OTHER ASSETS		3,634			35,076
TOTAL ASSETS	$	4,281		$	58,794
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	861,348		$	607,961
Lease liability, current portion		0			18,505
Promissory notes		170,000			170,000
Convertible notes payable, net of discount of $115,515 and $58,087 as of January 31, 2021 and July 31, 2020, respectively		2,419,713			2,426,254
Derivative liabilities		773,688			205,796
Common stock payable		0			24,998
Related party payables		443,359			388,094
TOTAL CURRENT LIABILITIES		4,668,108			3,841,608
LONG-TERM LIABILITIES
Lease liability, net of current portion		0			38,559
TOTAL LONG-TERM LIABILITIES		0			38,559
LIABILITIES OF DISCONTINUED OPERATIONS		837,778			839,646
TOTAL LIABILITIES		5,505,886			4,719,813
STOCKHOLDERS' DEFICIT:
Preferred Stock; $0.001 par value; 20,000,000 shares authorized, 10,000,000 and 8,000,000 shares issued and outstanding as of January 31, 2021  and July 31, 2020, respectively		10,000			10,000
Common stock; $0.001 par value; 500,000,000 and 250,000,000 shares authorized as of January 31, 2021 and July 31, 2020, respectively; 178,096,105 and 105,099,277 outstanding and issued as of January 31, 2021 and July 31, 2020, respectively		178,096			105,099
Additional paid-in capital		9,245,452			8,490,720
Treasury stock		(45,000	)		(45,000	)
Accumulated deficit		(14,890,153	)		(13,221,838	)
TOTAL STOCKHOLDERS' DEFICIT		(5,501,605	)		(4,661,019	)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT	$	4,281		$	58,794

See accompanying notes to the consolidated financial statements 

F-1

CANNAGISTICS, Inc.

GLOBAL3PL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2021

(UNAUDITED) 

	For The Three Months Ended						For The Six Months Ended
	January 31, 2021			January 31, 2020			January 31, 2021			January 31, 2020
Operating expenses
General and administrative expenses		42,476			(120,212	)		80,051			(20,439	)
Rent		3,025			292			10,511			16,126
Consulting		9,625			19,672			38,125			48,272
Professional fees		64,766			84,248			147,650			146,451
Total operating expenses		119,892			(16,000	)		276,337			190,410
Loss from operations		(119,892	)		16,000			(276,337	)		(190,410	)
Other income (expense)
Interest Income		21,759			21,759			43,518			43,518
Interest expense		(164,337	)		(95,723	)		(311,971	)		(199,847	)
Settlement Fees		—			—			(25,000	)		—
Loss on derivative liabilities		(241,835	)		—			(1,177,910	)		—
Change in fair value of derivative liabilities		122,167			—			79,385			—
Total other expense		(262,246	)		(73,964	)		(1,391,978	)		(156,329	)
Loss from continuing operations		(382,138	)		(57,964	)		(1,668,315	)		(346,739	)
Discontinued operations		—			(119,081	)		—			(119,081	)
Net loss		(382,138	)		(177,045	)		(1,668,315	)		(465,820	)
Net loss per common share: basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Basic and diluted weighted average common shares outstanding		160,806,048			93,117,423			131,902,229			93,117,423

See accompanying notes to the consolidated financial statements 

F-2

CANNAGISTICS, Inc.

GLOBAL3PL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED) 

	Common Stock				Preferred Stock C			Preferred Stock D
	Shares			Amount	Shares		Amount	Shares		Amount		Additional Paid-in Capital			Treasury Stock			Noncontrolling Interest		Accumulated Deficit			Total Stockholders' Deficit
Balance, 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 cash	2,000,000			2,000								73,000								—			75,000
Shares issued for  services	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 equity	(18,800	)		69								(69	)										—
Net loss																				(2,682,500	)		(2,682,500	)
Balance,  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 for conversion of convertible debt	70,497,100			70,497								732,234											802,731
Shares issued for settlement of payables	2,499,828			2,500								22,498											24,998
Net loss																				(1,668,315	)		(1,668,315	)
Balance,  January 31, 2021	178,096,205		$	178,096	—	$	—	10,000,000	$	10,000	$	9,245,452		$	(45,000	)	$	—	$	(14,890,153	)	$	(5,501,606	)

See accompanying notes to the consolidated financial statements 

F-3

CANNAGISTICS, Inc.

GLOBAL3PL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JANUARY 31, 2021

(UNAUDITED) 

	For The Six Months Ended
	January 31, 2021			January 31, 2020
Cash Flows from Operating Activities
Net loss	$	(1,668,315	)	$	(465,820	)
Loss from discontinued operations		—			119,081
Adjustments to reconcile net loss to net cash provided by operating activities:
Foreign currency adjustment		—			1,351
Settlement Fees on conversion of stock		13,000			—
Penalty on convertible note payable		25,000
Loss on derivative liabilites		513,750			—
Change in fair value of derivative liabilities		584,775			—
Amortization of debt discount		83,176			—
Accrued interest		—			199,847
Bad debt		—			41,538
Changes in assets and liabilities
Accounts receivable and other receivables		—			1,377
Prepaid expense		—			(5,268	)
Accounts payable and accrued expenses		253,387			(51,961	)
Net cash used in operating activities of continuing operations		(195,227	)		(278,936	)
Net cash used in operating activities discontinued operations		—			(119,081	)
Net cash used in operating activities	$	(195,227	)	$	(398,017	)
Cash Flows from Investing Activities
Sale of equipment					(10	)
(Increase) decrease in restricted cash		—			152,181
Net cash used in financing activities		—			152,171
Cash Flows from Financing Activities
Proceeds from convertible notes, net of amortization of $12,000		133,000			—
Proceeds from promissary notes		—			95,000
Proceeds from line of credit		—			276,321
Proceeds from loans		—			71,800
Proceeds from related parties		96,789			64,888
Payments on loans		—			(12,176	)
Payments on line of credit		—			(245,787	)
Payments to related parties		(34,600	)
Net cash provided by financing activities		195,189			250,046
Net increase in cash		(38	)		4,200
Cash, beginning of period		685			630
Cash, end of period		647			4,830
Supplemental disclosure of cash flow information
Cash paid for interest		—			—
Cash paid for tax		—			—
Non-cash investing and financing transactions
Original issuance discount on convertible notes payable	$	12,000		$	11,000
Conversion of notes payable, fees and derivative liabilities	$	802,731		$	—

See accompanying notes to the consolidated financial statements 

F-4

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Description of Business

Cannagistics, Inc. (Formerly FIGO Ventures, Inc., formerly Precious Investments, Inc.) (‘The Company’) was incorporated under the laws of the State of Nevada on May 26, 2004. The Company was an Exploration Stage Company with the principal business being the acquisition and exploration of resource properties.

The Company had allowed its charter with the state of Nevada to be revoked by the Secretary of State for failure to file the required annual lists and pay the required annual fees. Its last known officers and directors reflected in the records of the Secretary of State were unresponsive or stated they were no longer involved with the Company. The purported replacement officers and directors were unresponsive.

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

On October 24, 2012, the interim board authorized the sale of 55,000,000 (2,200,000 split adjusted) shares of common stock for $6,000 to NPNC Management, LLC, in a private placement transaction exempt from the Securities Act of 1933, as amended, pursuant to section 4(2) thereof and the rules and regulations promulgated there under.

On March 1, 2017, the Company then entered into a joint venture agreement with Eddeb Management (“Eddeb”). The purpose of the joint venture is to build a fund for the purpose of trading in precious gems, notably, colored diamonds.

 On November 16, 2017, the Company entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with American Freight Xchange, Inc., a privately held New York corporation (“American Freight”), and Shipzooka Acquisition Corp. (“Shipzooka Sub”), a newly formed wholly owned Nevada subsidiary of Precious Investments, Inc. In connection with the closing of this merger transaction, Shipzooka Sub merged with and into American Freight (the “Merger”) on December 5, 2017, with the filing of Articles of Merger with the Nevada Secretary of State and Certificate of Merger with the New York Division of Corporations.

The transaction resulted in the Company acquiring Subsidiary by the exchange of all of the outstanding shares of Subsidiary for 1,000,000 newly issued Series C Preferred shares of stock, $0.001 par value (the “Preferred Stock”) of Parent which have conversion and voting rights of 72.5 votes for each share, representing approximately 90.2% of the voting rights.

For accounting purposes, the transaction was treated as a reverse merger since the acquired entity now forms the basis for operations and the transaction resulted in a change in control, with the acquired company electing to become the successor issuer for reporting purposes. The accompanying financial statements have been prepared to reflect the assets, liabilities and operations of American Freight Xchange, Inc. exclusive of Precious Investments, Inc since all predecessor operations were discontinued.

As part of the transaction, amounts due to former officers were forgiven, with the balances recorded as Contributed Capital. For equity purposes, accumulated deficit shown are those American Freight Xchange, Inc. Shipzooka Acquisition Corp. is a dormant corporation.

On July 23, 2018 the Company amended the name of its subsidiary, KRG Logistics, Inc., to Global3pl, Inc. (an Ontario corporation).

F-5

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

On September 4, 2018 the Company incorporated Cannagistics, Inc., in the province of Ontario, Canada. This is intended to be a possible new line of business for the Company but is dormant at this time.

On April 17, 2019, we filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger with our wholly owned subsidiary, Cannagistics, Inc. Shareholder approval was not required under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, our board of directors authorized a change in our name to “Cannagistics, Inc.” and our Articles of Incorporation have been amended to reflect this name change.

On September 26, 2019, the Board of Directors approved the registered spinout of its Global3pl, Inc., (a New York corporation) (“Global3pl”) subsidiary. Global3pl is to be a logistics technology provider, along with the American Freight Xchange and UrbanX Platforms that have been under development by the Company.

The Board of Directors also declared a stock dividend for all shareholders, with a record date of October 10, 2019. For every 50 shares of common stock of the Company, all shareholders of record on the record date will receive one share of common stock in Global3pl. Global3pl will also file a registration statement as part of its raise of capital to complete the development of American Freight Xchange, a North American freight broker-driven 3pl network to handle the management of long haul LTL (less than truckload), and specialty freight (white glove) services and Urbanx, a North American network of rush-messenger local trucking services for forward and reverse last mile delivery (including white glove service).

However, the Company has carefully reconsidered its position with respect to the previously announced and subsequently amended spin off of Global3pl, Inc., (a New York corporation). Due to the current situation resulting from the COVID-19 pandemic and especially in light of the development of the supply chain management strategy of the Company, it has been determined that the finalization of the development of the Global3pl platform will be integral and serve as the “engine” for the supply chain management of the Company. Therefore, at this time the “spin-off” has been indefinitely postponed until such time and it may make sense from a business standpoint. The Company has not issued any shares in the Global3pl, Inc (New York) subsidiary.

Effective October 1, 2019, the Company suspended operations of its subsidiary Global3pl, Inc., formerly known as KRG Logistics, Inc., (an Ontario corporation), suspended future operations related to the operations in Mississauga, Ontario. It is in the process of collecting accounts receivables still due and working on a plan to pay its payables. It has entered into an agreement with 10451029 Canada Inc., d/b/a Reliable Logistics, for the assignment and of the assets of Global3pl, Inc., (an Ontario Corporation). The transaction was completed on November 6, 2019. The Company anticipates formally liquidating and dissolving the subsidiary in the next fiscal Quarter. This is a separate corporation from Global3pl, Inc. (A New York corporation).

Current Projects in Development

Global3PL Inc. (NY)

During the past 24 months, Global3PL Inc. (a New York Corporation) has consulted with logistics and technology experts to design and begin the development of a best-of-breed, first-of-kind information technology system. To date, about eighteen (18) months’ worth of custom coding by our contractor has been completed with an expectation of an additional 2-3 months of work still required for it to be ready for testing. Upon completion, it is intended that clients shall be able to login to the system to communicate and transact business with the Company in real-time, as it relates to aspects of the client’s supply chain. This can include the tracking of inbound raw material from various vendors, the manufacturing schedule of finished goods, inventory tracking of raw materials and finished goods, international compliance documentation, and the contacting and tracking of the shipping of the finished goods to their delivery destination(s). Though the Company has high expectations for the functionality of the new system, it does not make any assurances that the system will be completed, shall work as planned if completed, nor be embraced by potential clients as intended.

Therefore Global3pl, Inc. (NY) will be a logistics subsidiary serving the just-in-time inventory & distribution industry, as well as the special and general commodities sector of the North American freight industry. “Just-in-time” is an industry word for delivery a product or other item to an end user right before it is needed. It is used in place of an end user storing a large quantity of inventory. Shippers will be able to sync to our system for a real-time 360 views of their product shipments, including, location updates, verification, and risk mitigation. The customer will be able to Geolocation GPS tracking of freight movement; create automated notifications with consolidated and

F-6

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

automated notifications, payments, and reporting. The Shipper interface will also allow customers to push or post freight orders. The software system will also allow for lead-generation, data analysis, collaboration among shippers, Automated billing and collections, and automated payments. The SAAS-based platform ecosystem will fully integrate all aspects of the Company’s operations, from receiving raw materials for clients, through product manufacturing, document compliance, distribution, and shelf-life batch tracking. It had been expected to be operational in the third or fourth quarter of 2020, however due to economic conditions from the COVID-19 Pandemic, and the need for funding related to this Offering, to complete the process, we have been delayed and hope to be operational by the end of the second quarter of 2021.

The SaaS-based platform ecosystem will fully integrate all aspects of the Cannagistics operations, from receiving raw materials for clients, through product manufacturing, document compliance, distribution, and shelf-life batch tracking. It is intended to operate with four separate brands or identities, that being Global3pl, AFX (the acronym for American Freight Xchange) UrbanX and Cannagistics.

Our targeted client markets (OTC, pharmaceutical, nutraceutical, cosmetics, and Hemp/CBD-related products) are heavily regulated, and highly fragmented from state to state, and country to country. Every country has their own certified product standards; such as the FDA in the U.S. Target client markets require batch product tracking throughout shelf life and GMP certified standards in manufacturing. There is currently, we believe, a lack of seamless automation across the supply chain.

Our solution offers a fully automated and scalable service for end to end information, manufacturing, sales, and tracking. We believe the benefits achieved from our logistics services for clients are as follows:

§ Ability to track products from ingredient stage all the way to sale;

§ Provides 24/7 visibility;

§ Expands collaboration;

§ Provide a single point of access:

§ Incorporates big data and client behavior statistics;

§ Reduces redundancy;

§ Increases productivity;

§ Offers a subscription based model; and

§ Capable of supporting multiple client usage.

GMP Certified Facilities

We have plans to develop a GMP certified biotech lab in Malta with a fundamental skill in initially the cosmetic and then potentially the medicinal, nutraceutical and cannabis/hemp/CBD industries. Our plan is to have this Malta lab cater to customers in the EU. We also plan to potentially have other facilities that will cover our target customers in the US, Canada and Columbia, potentially located in Baton Rouge, Toronto and Bogotá, respectively. 

If we are successful in fully developing such capabilities we intend to seek out and employ a team of a multidisciplinary professionals in the pharmaceutical, nutraceutical and over the counter industries, and utilize complex supply chain and logistics management, unique technology and intellectual property. Cannagistics’ Lab’s purpose is to add value and offer a progress proposal to the Malta medicinal cannabis industry, based on its interest to support, educate, take advantage of and focus on the development of potentially breakthrough medicinal cannabis products with different therapeutic uses in patients around the world to whom science and traditional medicine simply could not reach. Such products will be subject to testing and certification from various governmental agencies, which may be a difficult expensive and time-consuming process. Our vision and knowledge will potentially focus on GMP biopharmaceutical cannabis-based medicines, - with the highest standards starting from the raw material - for multiple applications in patients, using latest technology, ancestral knowledge, scientific studies, with an exceptional team of research and development following the strictest standards and good distribution practices for export and national use.

We have no manufacturing plant or GMP facilities at the present time. As we continue our search to find suitable facilities, we believe that we will need to have the following areas for the production process, which will implement the safety protocols required for the project to be developed.

F-7

§ Area of receipt: Area of the property that has been destined for the receipt of the raw material and supplies that arrives for the manufacturing process.

§ Raw material area: Warehouse equipped with the security measures required for the storage of the raw material.

§ Production and manufacturing area: Sector where the manufacturing process will be carried out in which the transforming plant will be in order to obtain the final product.

§ Reagents and supplies area: Warehouse equipped with the security measures required for the storage of reagents and supplies.

§ Solid waste area: Sector destined for the storage of solid waste produced during the manufacturing process.

§ Finished product area: Warehouse equipped with the security measures required for the storage of the finished product.

§ Dispatch area: Sector from where the process of dispatch and delivery of the finished product to its final recipient will take place

§ Administrative area: Sector of the factory where administrative, accounting and security activities will be developed.

Competition

The Global Supply Chain management area has many different entities, all competing. Some are very large. However, our model is significantly different from most of the providers already operating.

To be successful in the global supply chain management area, a company must be involved in planning the function of the entire process, from start to finish, or end to end. We intend to concentrate our model on the cannabis, nutraceutical, pharmaceutical and cosmetic areas. We believe this makes our approach unique and distinguishable at this time.

There is no guarantee that a larger, more fully funded, company will determine to seek to gain access to the same business.

Intellectual Property

Our Global3pl SAAS Platform is a proprietary software developed by the Company. The SaaS-based platform ecosystem will fully integrate all aspects of the Cannagistics operations, from receiving raw materials for clients, through product manufacturing, document compliance, distribution, and shelf-life batch tracking.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of Cannagistics, Inc. and its wholly owned subsidiaries American Freight Xchange, Inc and Global3pl, Inc. (Ontario), formerly known as KRG Logistics, Inc. All significant inter-company transactions and balances have been eliminated.

Basis of Presentation

We have summarized our most significant accounting policies for the fiscal period ended July 31, 2020.

Unaudited Consolidated Interim Financial Statements

These unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statement and should be read in conjunction with those annual financial statements filed on Form 10-K for the year ended July 31, 2020. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results for a full year or for any future period.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

F-8

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

COVID-19 Pandemic Update

In March 2020, the World Health Organization declared a global health pandemic related to the outbreak of a novel coronavirus. The COVID-19 pandemic adversely affected the company's financial performance in the third and fourth quarters of fiscal year 2020 and could have an impact throughout fiscal year 2021. In response to the COVID-19 pandemic, government health officials have recommended and mandated precautions to mitigate the spread of the virus, including shelter-in-place orders, prohibitions on public gatherings and other similar measures. As a result, the company and certain of the company's customers and suppliers temporarily closed locations beginning late in the second quarter of fiscal year 2020, continuing into the third quarter of fiscal year 2020. There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company's operations, supply chain and demand for its products. As a result, the ultimate impact on the company's business, financial condition or operating results cannot be reasonably estimated at this time. 

Income Taxes

The Company accounts for income taxes under ASC 740 "Income Taxes," which codified SFAS 109, "Accounting for Income Taxes" and FIN 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of convertible loans, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received an

immediate charge to income is recognized in order to initially record the derivative instrument liabilities at their fair value.

The discount from the face value of the convertible debt instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated rate of interest on the instrument, is amortized over the life of the instrument through periodic charges to income, using the effective interest method. 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the

F-9

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Fair value of financial instruments

The Company’s financial instruments consist of its liabilities. The carrying amount of payables and the loan payable – related party approximate fair value because of the short-term nature of these items. The promissory notes, and convertible notes payables are measured at amortized cost using the effective interest method, which approximates fair value due to the relationship between the interest rate on long-term debt and the Company’s incremental risk adjusted borrowing rate.

Fair value is defined under FASB ASC Topic 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for an asset or liability in an orderly transaction between participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The levels are as follows:

· Level 1 - Quoted prices in active markets for identical assets or liabilities

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data for substantially the full term of the assets or liabilities

· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities

The following is a listing of the Company’s liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of January 31, 2021 and July 31, 2020:

	January 31, 2021
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	773,688	$	773,688

	July 31, 2020
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	205,796	$	205,796

F-10

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of January 31, 2021, and 2020 the allowance for doubtful accounts was $0 and $0, respectively.

Revenue Recognition

The Company recognizes revenue related to transaction from its third-party logistics sales by performing the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Amounts invoiced or collected in advance of product delivery or providing services are recorded as unearned revenue or customer deposits. The company accrues for sales returns, bad debts, and other allowances based on its historical experience.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) which establishes revenue recognition standards. ASU 2014-09 was effective for annual reporting periods beginning after December 15,2017. We adopted ASU 2014-09 effective August 1, 2018. ASU 2014-09 has not had a significant effect on the Company’s financial position and results of operations.

Foreign Currency

FASB ASC Topic 830, Foreign Currency Matters (formerly FASB Statement No. 52, Foreign Currency Translation) provides accounting guidance for transactions denominated in a foreign currency, and for operations undertaken in a foreign currency environment. To prepare consolidated financial statements, an entity translates all functional currency financial statements into a single reporting currency. The same applies if an entity uses different currencies for reporting purposes and for its functional currency. The company reports its currency in US dollars.

Stock-Based Compensation

The Company measures expenses associated with all employee stock-based compensation awards using a fair-value method and record such expense in our consolidated financial statements on a straight-line basis over the requisite service period.

Leases

In February 2016, FASB issued ASU-2016-02 (Topic 842) “Leases”, provides accounting guidance for leases, recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018.

Recent Accounting Pronouncements

 In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments, including trade receivables, contract assets, and lease receivables. This standard will be effective for the Company beginning August 1, 2020. The Company does not believe that this standard will have a material impact on its’ consolidated financial statements.

F-11

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

NOTE 3 – GOING CONCERN

Management does not expect existing cash as of January 31, 2021 to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these January 31, 2021 financial statements. These financial statements have been prepared on a going concern basis which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of January 31, 2021, the Company has an accumulated deficit of $14,890,153, and has not yet generated material revenue from operations, and will require additional funds to maintain its operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through its existing financial resources and we may also raise additional capital through equity offerings, debt financings, collaborations and/or licensing arrangements. If adequate funds are not available on acceptable terms, we may be required to delay, reduce the scope of, or curtail, our operations. The accompanying consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 – DISCONTINUED OPERATIONS

 
On November 6, 2019, the Company discontinued its operations of subsidiary Global3pl, Inc., formerly known as KRG Logistics, Inc., (an Ontario corporation) and sold the assets of $54,296 for $10 dollars. As such, the assets of KRG Logistics, Inc. were removed from the accounts, and all remaining liabilities were classified as Discontinued Operations in the accompanying Balance Sheets. As of January 31, 2021, and July 31, 2020, the summaries of liabilities pertaining to discontinued operations were as follows:

		January 31,		July 31,
		2021		2020
Accounts payable	$		460,262	$	462,130
Royal Bank line of credit			289,242		289,242
Unearned revenue			14,833		14,833
Accrued liabilities			64,663		64,663
Custom duties & GST payable			6,019		6,019
HST			2,759		2,759
Liabilities of discontinued operations	$		837,778	$	839,646

F-12

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

NOTE 5 – PROMISSORY NOTES

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

Description	January 31, 2021		July 31, 2020
Note payable dated March 8, 2018, matured March 8, 2019, bearing interest at 10% per annum.	$	30,000	$	30,000
Note payable dated July 18, 2018, matured July 18, 2019, bearing interest at 8% per annum.	$	135,000	$	135,000
Note payable dated February 4, 2020, matured February 4, 2021, bearing interest at 18% per annum.	$	5,000	$	5,000
Total	$	170,000	$	170,000
Less current portion of long-term debt	$	170,000	$	170,000
Total long-term debt		—		—

Interest expense for the six months ended January 31, 2021 and 2020 was $7,410 and $8,570, respectively.

NOTE 6 - CONVERTIBLE DEBT

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

Description	January 31, 2021		July 31, 2020
Convertible note agreement dated November 1, 2013 in the amount of $30,000 payable and due on demand bearing interest at 12% per annum. Principal and accrued interest is convertible at $.002250 per share.	$	11,041	$	11,041
Convertible note agreement dated February 20, 2018 in the amount of $1,034,000 payable and due on demand bearing interest at 10% per annum. Principal and accrued interest is convertible at $.028712 per share.	$	1,034,000	$	1,034,000
Convertible note agreement dated March 13, 2019 in the amount of $800,000 payable and due on March 20, 2020 bearing interest at 24% per annum.	$	800,000	$	800,000
Convertible note agreement dated June 28, 2019 in the amount of $300,000 payable and due on June 28, 2020 bearing interest at 20% per annum.	$	300,000	$	300,000
Convertible note agreement dated August 6, 2019 in the amount of $31,500 payable and due on August 6, 2020 bearing interest at 20% per annum.	$	31,500	$	31,500
Convertible note agreement dated August 19, 2019 in the amount of $3,800 payable and due on August 19, 2020 bearing interest at 24% per annum.	$	3,800	$	3,800
Convertible note agreement dated September 4, 2019 in the amount of $36,500 payable and due on September 4, 2020 bearing interest at 20% per annum.	$	36,500	$	36,500
Convertible note agreement dated December 4, 2019 in the amount of $95,000 payable and due on December 4, 2020 bearing interest at 12% per annum.	$	95,000	$	95,000
Convertible note agreement dated February 10, 2020 in the amount of $15,000 payable at February 10, 2021 bearing interest at 12% per annum.	$	15,000	$	15,000
Convertible note agreement dated February 21, 2020 in the amount of $47,500 payable at February 21, 2021 bearing interest at 12% per annum.	$	47,500	$	47,500
Convertible note agreement dated February 28, 2020 in the amount of $67.500 payable at February 28, 2021 bearing interest at 12% per annum.	$	25,000	$	67,500
Convertible note agreement dated April 15, 2020 in the amount of $31,500 payable at April 15, 2021 bearing interest at 10% per annum, net of discount.	$	15,887	$	31,500
Convertible note agreement dated September 29, 2020 in the amount of $34.000 payable and due on September 29, 2021 bearing interest at 12% per annum.	$	34,000	$	—
Convertible note agreement dated October 9, 2020 in the amount of $33,000 payable and due on October 9, 2021 bearing interest at 12% per annum.	$	33,000	$	—
Convertible note agreement dated October 19, 2020 in the amount of $38.000 payable and due on October 19, 2021 bearing interest at 12% per annum.	$	38,000	$	—
Convertible note agreement dated December 2, 2020 in the amount of $35.500 payable and due on December 2, 2021 bearing interest at 12% per annum.	$	40,000	$	—
Convertible notes total:	$	2,535,228	$	2,475,341

F-13

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

The Company recognized $0 of debt discount accretion expense on the above notes. Interest expense related to these notes for the six months ended January 31, 2021 and 2020 was $203,303 and $187,218.

Derivative liabilities

Certain of the Company’s convertible notes are convertible into a variable number of shares of common stock for which there is not a floor to the number of common stock shares the Company might be required to issue. Based on the requirements of ASC 815 Derivatives and Hedging, the conversion feature represented an embedded derivative that is required to be bifurcated and accounted for as a separate derivative liability. The derivative liability is originally recorded at its estimated fair value and is required to be revalued at each conversion event and reporting period. Changes in the derivative liability fair value are reported in operating results each reporting period. The Company uses the Black-Scholes option pricing model for the valuation of its derivative liabilities as further discussed below. There are no material differences between using the Black-Scholes option pricing model for these estimates as compared to the Binomial Lattice model.

During the six months ended January 31, 2021, four new notes with a variable-rate conversion feature were issued. The Company valued the conversion features on the date of issuance resulting in initial liabilities totaling $609,750. Since the fair value of the derivative was in excess of the proceeds received, a full discount to the convertible notes payable and a day one loss on derivative liabilities of $478,250 was recorded during the six months ended January 31, 2021. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0029 to $0.0058, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.007 to $0.034, an expected dividend yield of 0%, expected volatilities ranging from 219%-279%, risk-free interest rate ranging from 0.12% to 0.15%, and expected terms of one year. 

As of July 31, 2020, the Company had existing derivative liabilities of $205,796 related to two convertible notes. During the six months ended January 31, 2021, $146,905 in principal and accrued interest of these convertible notes along with fees of $16,000 were converted into 70,497,100 shares of common stock. At each conversion date, the Company recalculated the value of the derivative liability associated with the convertible note recording a gain (loss) in connection with the change in fair market value. In addition, the pro-rata portion of the derivative liability as compared to the portion of the convertible note converted was reclassed to additional paid-in capital. During the six months ended January 31, 2021, the Company recorded $659,133 to additional paid-in capital for the relief of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0011 to $0.007, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.006 to $0.034, an expected dividend yield of 0%, expected volatility ranging from 215% to 278%, risk-free interest rates ranging from 0.12% to 0.15%, and expected terms ranging from 0.01 to 0.48 years.

On January 31, 2021, the derivative liabilities on these convertible notes were revalued at $1,126,981 resulting in a loss of $444,655 and $970,568 for the three and six months ended January 31, 2021 related to the change in fair value of the derivative liabilities, respectively. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0070 to $0.0104, the closing stock price of the Company's common stock on the date of valuation of $0.065, an expected dividend yield of 0%, expected volatility of 286%, risk-free interest rate of 0.13%, and an expected term ranging from 0.20 to 0.72 years.

The Company amortizes the discounts over the term of the convertible promissory notes using the straight-line method which is similar to the effective interest method. During the six months ended January 31, 2021, the Company amortized $91,636 to interest expense. As of January 31, 2021, discounts of $108,951 remained for which will be amortized through October 2021.

F-14

Cannagistics, Inc., and Subsidiaries

Notes to Financial Statements

January 31, 2021

NOTE 7 – RELATED PARTY TRANSACTIONS

A shareholder of the Company has paid certain expenses of the Company. These amounts are reflected as a loan payable to related party. The shareholder advanced $0 and $19,490 during the six months ended January 31, 2021 and 2020, respectively. As of January 31, 2021, and July 31, 2020, there were $443,359 and $388,094 due to related parties, and a shareholder, respectively.

The Company has consulting agreements with two of its shareholders to provide management and financial services that commenced on December 1, 2017. For the six months ended January 31, 2021 and 2020 consulting fees paid were $96,635 and $87,773 respectively. The consulting fees are included as part of professional fees on the Company’s consolidated statements of operations.

The Company on February 20, 2018 entered into a related party (that being Recommerce Group, Inc. and our former President and current Vice-President of Corporate Finance and a Director, is a principal in Recommerce Group, Inc.) note receivable in the amount of $1,034,000. The Company made an additional advance in the amount of $175,000 that is non-interest bearing. The note is payable and due on demand and bears interest at the rate of 10%. A total of $153,217 has been applied as payments against this Note. Interest expense in the amount of $45,318 and $52,125 for the six months ended January 31, 2021 and 2020, respectively, has been recorded in the financial statements.

NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT)

The Company is authorized to issue 500,000,000 shares of its $0.001 par value common stock and 20,000,000 shares of Preferred stock. As of January 31, 2021, and July 31, 2020, there were 178,096,105 shares, of common stock outstanding. There were 10,000,000 shares of Series D Preferred stock outstanding as of January 31, 2021 and 8,000,000 shares of Series D Preferred Stock outstanding as of July 31, 2020.

On November 1, 2017, we effected a one-for- four reverse stock split. All share and per share information has been retroactively adjusted to reflect the stock split.  

NOTE 9 – WARRANT

On April 15, 2020, the Company issued a five-year Common Stock Purchase Warrant in connection with a $31,500 convertible promissory note. The warrant is convertible into 437,500 shares of the Company’s common stock at $.12 per share.

On April 23, 2020, the Company issued a three-year Common Stock Purchase Warrant in connection with a $75,000 investment in the Company’s common stock. The warrant has a conversion price of $.15 per share of the Company’s common stock.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigations, Claims and Assessments

The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.

NOTE 11 – SUBSEQUENT EVENTS

Management of the Company has evaluated the subsequent events that have occurred through the date of the report and determined that the following subsequent events require disclosure:

On March 1, 2021, the Company announced that the offices of the Company have been relocated to 2110 5^th Avenue, Ronkonkoma,

New York, 11779. The Company is currently no being required to pay rent.

F-15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Overview

We plan to become a complete end-to-end supply chain management company focused on serving the pharmaceutical, OTC medical, nutraceutical, cosmetic, and CBD/Hemp-related (and other) product industries as a gateway for products to penetrate the USA, and potentially in the E.U., Colombia and Canada marketplace through GMP certified manufacturing facilities possibly in Baton Rouge, Malta, Bogotá, and Toronto. Currently, we have no GMP certified manufacturing facilities in these areas or anywhere and do not have any affiliation with any facilities. We are developing plans to source production, or to joint venture with existing facilities, or potentially to acquire or build GMP Certified facilities in those areas. These developing plans would include seeking out already existing facilities currently in operation, either already GMP Certified or willing to become GMP Certified, as well as preliminary discussions with potential joint venture partners. We are also in the preliminary planning stages regarding the possibility of obtaining the license to operate in Malta. While no specific plans have been finalized, the Company is continuing to pursue all options. Combining the production through these facilities and compliance services with our proprietary information and transactional SAAS (Software as a Service) platform (being developed by Corengine for our Global3PL, Inc. subsidiary), Cannagistics, Inc. plans to offers its clients the ability to manage, track and oversee their inventory, from raw materials to production to shipping to delivery, and review in real-time the shipping of their products in the supply chain from factory to customer in our logistics management platform.

Our plan to enter the industry as a supply chain management company is in the development stages. We own no properties, plants or equipment, we have no full or part time employees, other than our President and Vice President, and we have no revenues under our planned logistics operations. There is substantial doubt about our ability to continue as a going concern. Our ability to implement our plan is dependent on the finished development of our SAAS software platform, and the ability to raise the necessary funding and acceptance by customers.

With the execution of the Letter of Intent with Recommerce Group, Inc., on January 26, 2021, we plan to enter into the reverse logistics, reverse supply chain industry. Reverse Logistics or reverse supply chain logistics is essentially handling customer returns, from either damaged items previously delivered or purchased or items not wanted that have been purchased at a location and/or delivered to the customer. This can entail returns made directly to a “brick and mortar” location or directly from a consumer. We have entered a binding Letter of Intent for this potential acquisition. However, the closing is based upon completion of proper due diligence by the parties and agreement on definitive documents as well as the necessary funding being in place. The closing is to be targeted to take place on or about March 31, 2021. Pursuant to the Letter of Intent, both parties may extend the date of closing upon mutual agreement.

With the current situation related to the COVID-19 pandemic, our developmental plans to seek out existing GMP facilities have been delayed by the restrictions on travel domestically, and internationally and the difficulties in raising the necessary capital. Regardless, we have been able to conduct some due diligence in our search and we plan to conduct site visits and other due diligence once domestic travel is more practical and international travel is less restrictive. The Company believes as the ability to travel once again becomes possible, specifically including internationally travel, that our above plans can be better implemented in locating suitable facilities.

To serve the EU market, we would like to have a GMP facility in Malta that would focus on cosmetics, pharmaceutical, nutraceutical or “bioceutical” and medicinal products for our clients, and our plan would be to provide end to end tracking, manufacturing and testing. Our plan is to have this Malta lab cater to customers in the EU. We also plan to potentially have other facilities that will cover our target customers in the US, Canada and Columbia, potentially located in Baton Rouge, Toronto and Bogotá, respectively.

4

Initially, the products we intend to focus on are skin care and anti-aging creams and other over the counter products, and subsequently would be seeking to add products with potentially hemp-based application. Our services would include the production, under their requirements, distribution and handling of orders as a third-party.

We have discussed the plan to create the Malta facility and other facilities with potential customers for products manufactured at these facilities. We have received positive feedback on the initiative and commitments from at least two clients to which we plan to sell products.

Our principal executive offices are located at 2480 Stanfield Road, Unit B, Mississauga, Ontario L4Y 1S2, and our Executive Office is located at 1200 Veterans Highway, Suite 310, Hauppauge, NY 11788. Our telephone number is 631-676-7230.

Results of Operation for Six Months Ended January 31, 2021 and 2020

Revenues

No revenue was generated for the six months ended January 31, 2021 and January 31, 2020.

Our cost of revenues was $0 for the three months ended January 31, 2021, as compared with cost of revenue of $0 for the same period ended January 31, 2020.

Operating Expenses

Total operating expenses increased $135,892 for the six months ended January 31, 2021 from $(16,000) at January 31, 2020 to $119,892 at January 31, 2021. This increase was mainly due mainly to an increase in General and administration expenses.

Operating expenses for the six months ended January 31, 2021 consisted of general and administrative expenses of $80,051, professional fees of $147,650, rent of $10,511, and consulting fees of $38,125. Our operating expenses for the six months ended January 31, 2020 consisted of general and administrative expenses of $(20,439), professional fees of $146,451, rent of $16,126, and consulting fees of $48,272.

Other Income and Expenses

We had interest income of $43,518 for the six months ended January 31, 2021, and $43,518 for the six months ended January 31, 2020. We had interest expense of $311,971 for the six months ended January 31, 2021 as compared to $199,847 for the six months ended January 31, 2020. We had Settlement Fees of $25,000 for the six months ended January 31, 2021 as compared to $0.0 for the six months ended January 31, 2020. We had a Loss on derivative liabilities of $1,177,910 for the six months ended January 31, 2021 as compared to $0.0 for the six months ended January 31, 2020. We had a Change in fair value of derivative labilities of $79,385 for the six months ended January 31, 2021 as compared to $0.0 for six months ended January 31, 2020.

Loss from Discontinued Operations

Net loss from discontinued operations for the six months ended January 31, 2021 was $0.0 compared $119,081 for the six months ended January 31, 2020.

Net Loss

Net loss for the six months ended January 31, 2021 was $1,668,315 compared to net loss of $465,820 for the six months ended January 31, 2020.

Liquidity and Capital Resources

As of January 31, 2021, we had total current assets of $647 and total current liabilities of $4,668,108 as of January 31, 2021. We had a negative working capital of $4,667,461 as of January 31, 2021.

We intend to fund operations through sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Off Balance Sheet Arrangements

As of January 31, 2021, there were no off-balance sheet arrangements.

5

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our accounting policies are discussed in detail in the footnotes to our financial statements included in our Annual Report on Form 10-K for the year ended July 31, 2020, however we consider our critical accounting policies to be those related to inventory, fair value of financial instruments, derivative financial instruments and long-lived assets.

Going Concern

As of January 31, 2021, we had an accumulated deficit of $14,890,153. Our ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations. While we are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial doubt about our ability to continue as a going concern.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operation, financial position or cash flow

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of January31, 2018, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of January 31, 2021, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

6

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude that, as of January 31, 2021, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending January31, 2018. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3. Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended January 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

7

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

I.

We are a party to a case titled William Prusin v. Precious Investments Inc., and Kashif Khan. The litigation was commenced in the Ontario Superior Court of Justice (Commercial List) on July 20, 2016. The litigation stems from a diamond purchase agreement entered into on April 1, 2016 between Dr. William Prusin and Precious Investments Inc. By virtue of the terms of the agreement, Precious Investments purchased Dr. Prusin’s diamond portfolio, which was valued at $3.8 million (CDN) for the purposes of the agreement. In exchange for the diamond portfolio, Dr. Prusin was provided with 1,324,413 common shares of Precious Investments.

In the Statement of Claim, the plaintiff is alleging a breach of the Ontario Securities Act and claims that documents provided to him contain untrue statements of material fact or omissions. The plaintiff has also alleged that Precious Investment and Mr. Khan distributed securities in Ontario without issuing a prospectus and obtaining the required prospectus exemption or a registration exemption. In the alternative, the plaintiff has alleged that Mr. Khan made fraudulent misrepresentations which induced Dr. Prusin to enter into the diamond purchase agreement. The fraudulent misrepresentation allegation involves the future value of Precious shares, the timing by which Dr. Prusin had to sign the diamond purchase agreement, the involvement of Dundee Capital Markets, Mr. Khan’s investment in Precious Investments, and the management team at Precious Investments. Given these allegations, the plaintiff claims that he is entitled to obtain an order rescinding the diamond purchase agreement.

The Company and Mr. Khan deny all of the plaintiff’s allegations. The Company and Mr. Khan deny that any documents provided to Dr. Prusin constitute an “offering memorandum”, or that any prospectus was required under the Ontario Securities Act since the transaction falls within the exemption set out in National Instrument 45-106. In addition, the defendants deny that any fraudulent misrepresentation was made to Dr. Prusin. The defendants have filed a counter-claim against Dr. Prusin, alleging a breach of the diamond purchase agreement.

The action is currently dormant, although the plaintiff has retained new counsel. Current local Counsel for the Company believes that it will be ultimately successful in defending the action.

There has been no action on this matter in over a year. Furthermore, COVID-19 has caused most, if not all Courts to postpone matters indefinitely. The Company’s position with respect to the Plaintiff’s claims has not changed.

II.

KRG Logistics, Inc., now known as Global3pl, Inc., (an Ontario corporation), a now discontinued operational subsidiary of the Company, was named as the defendant in an action in the Ontario Superior Court of Justice by Ron Alvares, one of the original shareholders of KRG Logistics, Inc., when it was purchased by the Company in 2017. The action is for breach of contract for monies due as a result of the Purchase Agreement and for an amount due from a shareholder loan claimed by Mr. Alvares to KRG Logistics on September 30, 2014. The Company intended to defend against the breach of contract claim as the amount claimed to be due is incorrect, based on payments already made. It intended to also file counterclaims based on intentional interference of contracts by Mr. Alvares and his son for stealing clients of the Company and industrial sabotage of the Company’s software systems. With respect to the claim of an outstanding shareholder loan it is the position of the Company that said shareholder loan was never disclosed to the Company at the time of the purchase and based on information available, any such shareholder loan was paid off with the down payment provided by the Company for the purchase of KRG Logistics, Inc.

Procedurally the plaintiff has named the wrong parties and Counsel in Ontario is waiting for an amended complaint to file an answer and counterclaims.

There has been no action on this matter in over a year. In the interim, the subsidiary of the Company has ceased operations. As a result, there would be no material effect on the Company.

8

III.

On February 4, 2020, Jeffrey Gates commenced an action in the Supreme Court of the State of New York, County of Suffolk against the Company and Mr. Zimbler for the non-payment of a Promissory Note, of which the balance of $135,000, plus interest. The Company has retained Counsel to appear and defend the action.

Due to current conditions related to COVID-19, the New York State Supreme Court has administratively adjourned substantially all matters indefinitely.

The Company continues to have every intention of resolving this matter prior to the Court rendering a decision.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The information set forth below relates to our issuances of securities without registration under the Securities Act of 1933 during the reporting period which were not previously included in a Quarterly Report on Form 10-Q.

On November 16, 2020, the Company issued 6,000,000 shares of its common stock at $0.0011 for the conversion of notes payable.

On November 23, 2020, the Company issued 8,000,000 shares of its common stock at $0.0018 for the conversion of notes payable.

On December 2, 2020, the Company established NOVI Biosciences, Inc. (a New York corporation as a new wholly owned subsidiary).

On December 4, 2020, the Company issued 5,307,100 shares of its common stock at $0.0022 for the conversion of notes payable.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2021 formatted in Extensible Business Reporting Language (XBRL).
	**Provided herewith

9

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Cannagistics Inc.
Date:	March 22, 2021
By:	/s/ Rob Gietl
	Rob Gietl
Title:	President, Chief Executive Officer, and Director

10

EX-31.1

CERTIFICATIONS

I, Rob Gietl, certify that;

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended January 31, 2021 of Cannagistics Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 22, 2021

/s/ Rob Gietl

By: Rob Gietl

Title: Chief Executive Officer

EX-31.2

CERTIFICATIONS

I, Rob Gietl, certify that;

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended January 31, 2020 of Cannagistics Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 22, 2021

/s/Rob Gietl

By: Rob Gietl

Title: Chief Financial Officer

EX-32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cannagistics Inc. (the “Company”) on Form 10-Q for the quarter ended January 31, 2021 filed with the Securities and Exchange Commission (the “Report”), I, Rob Gietl Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.

By:	/s/ Rob Gietl
Name:	Rob Gietl
Title:	Principal Executive Officer, Principal Financial Officer and Director
Date:	March 22, 2021

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XML

Cover - shares	6 Months Ended
	Jan. 31, 2021	Mar. 15, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2021
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--07-31
Entity Registrant Name	Cannagistics Inc.
Entity Central Index Key	0001304741
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		178,096,205

XML

Consolidated Balance Sheets - USD ($)	Jan. 31, 2021	Jul. 31, 2020
CURRENT ASSETS:
Cash and cash equivalents	$ 647	$ 685
Right-to-use asset	0	23,033
Related party receivables, less allowance for doubtful accounts of $1,036,993	0	0
TOTAL CURRENT ASSETS	647	23,718
Right-to-use asset, net of current portion	0	31,442
Security deposits	(3,634)	(3,634)
TOTAL OTHER ASSETS	3,634	35,076
TOTAL ASSETS	4,281	58,794
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	861,348	607,961
Lease liability, current portion	0	18,505
Promissory notes	170,000	170,000
Convertible notes payable, net of discount of $115,515 and $58,087 as of January 31, 2021 and July 31, 2020, respectively	2,419,713	2,426,254
Derivative liabilities	773,688	205,796
Common stock payable	0	24,998
Related party payables	443,359	388,094
TOTAL CURRENT LIABILITIES	4,668,108	3,841,608
LONG-TERM LIABILITIES
Lease liability, net of current portion	0	38,559
TOTAL LONG-TERM LIABILITIES	0	38,559
LIABILITIES OF DISCONTINUED OPERATIONS	837,778	839,646
TOTAL LIABILITIES	5,505,886	4,719,813
STOCKHOLDERS' DEFICIT:
Preferred Stock; $0.001 par value; 20,000,000 shares authorized, 10,000,000 and 8,000,000 shares issued and outstanding as of January 31, 2021 and July 31, 2020, respectively	10,000	10,000
Common stock; $0.001 par value; 500,000,000 and 250,000,000 shares authorized as of January 31, 2021 and July 31, 2020, respectively; 178,096,105 and 105,099,277 outstanding and issued as of January 31, 2021 and July 31, 2020, respectively	178,096	105,099
Additional paid-in capital	9,245,452	8,490,720
Treasury stock	(45,000)	(45,000)
Accumulated deficit	(14,890,153)	(13,221,838)
TOTAL STOCKHOLDERS' DEFICIT	(5,501,605)	(4,661,019)
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT	$ 4,281	$ 58,794

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jan. 31, 2021	Jul. 31, 2020
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	250,000,000
Common stock, shares issued	178,096,105	105,099,277
Common stock, shares outstanding	178,096,105	105,099,277
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, Shares authorized	20,000,000	20,000,000
Preferred Stock, shares issued	10,000,000	8,000,000
Related party receivables , less allowance for doubful accounts	$ 1,036,993
Convertible notes payable, net of discount	$ 115,515	$ 58,087

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020
Operating expenses
General and administrative expenses	$ 42,476	$ 120,212	$ 80,051	$ 20,439
Rent	3,025	292	10,511	16,126
Consulting	9,625	19,672	38,125	48,272
Professional fees	64,766	84,248	147,650	146,451
Total operating expenses	119,892	(16,000)	276,337	190,410
Loss from operations	(119,892)	16,000	(276,337)	(190,410)
Interest Income	21,759	21,759	43,518	43,518
Interest expense	(164,337)	(95,723)	(311,971)	(199,847)
Settlement Fees			(25,000)
Loss on derivative liabilities	(241,835)		(1,177,910)
Change in fair value of derivative liabilities	122,167		79,385
Total other expense	(262,246)	(73,964)	(1,391,978)	(156,329)
Loss from continuing operations	(382,138)	(57,964)	(1,668,315)	(346,739)
Discontinued operations		(119,081)		(119,081)
Net loss	$ (382,138)	$ (177,045)	$ (1,668,315)	$ (465,820)
Net loss per common share: basic and diluted	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.00)
Basic and diluted weighted average common shares outstanding	160,806,048	93,117,423	131,902,229	93,117,423

XML

Consolidated Shareholders Equity (Unaudited) - USD ($)	Common Stock	Preferred Stock C	Preferred Stock D	Additional Paid-In Capital	Treasury Stock	Noncontrolling Interest	Accumulated Deficit	Total
Beginning balance, shares at Jul. 31, 2019	93,118,077		8,000,000
Beginning balance, value at Jul. 31, 2019	$ 93,030		$ 8,000	$ 7,382,579	$ (45,000)		$ (10,539,338)	$ (3,100,729)
Shares issued for conversion of convertible debt, shares	4,500,000
Shares issued for conversion of convertible debt, value	$ 4,500			52,575				57,075
Shares issued for cash, shares	2,000,000
Shares issued for cash, value	$ 2,000			73,000				75,000
Shares issued for services, shares	2,500,000		2,000,000
Shares issued for services, value	$ 2,500		$ 2,000	955,635				960,135
Shares issued for settlement of payables, shares	3,000,000
Shares issued for settlement of payables, value	$ 3,000			27,000				30,000
Adjustment to equity, shares	(18,800)
Adjustment to equity, value	$ 69			(69)
Net loss							(2,682,500)	(2,682,500)
Ending balance, shares at Jul. 31, 2020	105,099,277		10,000,000
Ending balance, value at Jul. 31, 2020	$ 105,099		$ 10,000	8,490,720	(45,000)		(13,221,838)	(4,661,019)
Shares issued for conversion of convertible debt, shares	70,497,100
Shares issued for conversion of convertible debt, value	$ 70,497			732,234				802,731
Shares issued for cash, shares
Shares issued for cash, value
Shares issued for services, shares
Shares issued for services, value
Shares issued for settlement of payables, shares	2,499,828
Shares issued for settlement of payables, value	$ 2,500			22,498				24,998
Adjustment to equity, shares
Adjustment to equity, value
Net loss							(1,668,315)	(1,668,315)
Ending balance, shares at Jan. 31, 2021	178,096,205		10,000,000
Ending balance, value at Jan. 31, 2021	$ 178,096		$ 10,000	$ 9,245,452	$ (45,000)		$ (14,890,153)	$ (5,501,605)

XML

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Cash Flows from Operating Activities
Net loss	$ (1,668,315)	$ (465,820)
Loss from discontinued operations		119,081
Adjustments to reconcile net loss to net cash provided by operating activities:
Foreign currency adjustment		1,351
Settlement Fees on conversion of stock	13,000
Penalty on convertible note payable	25,000
Loss on derivative liabilites	513,750
Change in fair value of derivative liabilities	584,775
Amortization of debt discount	83,176
Accrued interest		199,847
Bad debt		41,538
Changes in assets and liabilities
Accounts receivable and other receivables		1,377
Prepaid expense		(5,268)
Accounts payable and accrued expenses	253,387	(51,961)
Net cash used in operating activities of continuing operations	(195,227)	(278,936)
Net cash used in operating activities discontinued operations		(119,081)
Net cash used in operating activities	(195,227)	(398,017)
Cash Flows from Investing Activities
Sale of equipment		(10)
(Increase) decrease in restricted cash		152,181
Net cash used in investing activities		152,171
Cash Flows from Financing Activities
Proceeds from convertible notes, net of amortization of $12,000	133,000
Proceeds from promissory notes		95,000
Proceeds from line of credit		276,321
Proceeds from loans		71,800
Proceeds from related parties	96,789	64,888
Payments on loans		(12,176)
Payments on line of credit		245,787
Payments to related parties	34,600
Net cash provided by financing activities	195,189	250,046
Net increase in cash	(38)	4,200
Cash, beginning of period	685	630
Cash, end of period	647	4,830
Cash paid for interest
Cash paid for tax
Non-cash investing and financing transactions
Original issuance discount on convertible notes payable	12,000	11,000
Conversion of notes payable, fees and derivative liabilities	$ 802,731

XML

Consolidated Statements of Cash Flows (Parenthetical) - USD ($)	6 Months Ended
	Jan. 31, 2021	Jan. 31, 2020
Statement of Cash Flows [Abstract]
Convertible notes, amoritzation	$ 12,000

XML

Organization and Description of Business

6 Months Ended

Jan. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Organization

Organization and Description of Business

Cannagistics, Inc. (Formerly FIGO Ventures, Inc., formerly Precious Investments, Inc.) (‘The Company’) was incorporated under the laws of the State of Nevada on May 26, 2004. The Company was an Exploration Stage Company with the principal business being the acquisition and exploration of resource properties.

The Company had allowed its charter with the state of Nevada to be revoked by the Secretary of State for failure to file the required annual lists and pay the required annual fees. Its last known officers and directors reflected in the records of the Secretary of State were unresponsive or stated they were no longer involved with the Company. The purported replacement officers and directors were unresponsive.

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

On October 24, 2012, the interim board authorized the sale of 55,000,000 (2,200,000 split adjusted) shares of common stock for $6,000 to NPNC Management, LLC, in a private placement transaction exempt from the Securities Act of 1933, as amended, pursuant to section 4(2) thereof and the rules and regulations promulgated there under.

On March 1, 2017, the Company then entered into a joint venture agreement with Eddeb Management (“Eddeb”). The purpose of the joint venture is to build a fund for the purpose of trading in precious gems, notably, colored diamonds.

 On November 16, 2017, the Company entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with American Freight Xchange, Inc., a privately held New York corporation (“American Freight”), and Shipzooka Acquisition Corp. (“Shipzooka Sub”), a newly formed wholly owned Nevada subsidiary of Precious Investments, Inc. In connection with the closing of this merger transaction, Shipzooka Sub merged with and into American Freight (the “Merger”) on December 5, 2017, with the filing of Articles of Merger with the Nevada Secretary of State and Certificate of Merger with the New York Division of Corporations.

The transaction resulted in the Company acquiring Subsidiary by the exchange of all of the outstanding shares of Subsidiary for 1,000,000 newly issued Series C Preferred shares of stock, $0.001 par value (the “Preferred Stock”) of Parent which have conversion and voting rights of 72.5 votes for each share, representing approximately 90.2% of the voting rights.

For accounting purposes, the transaction was treated as a reverse merger since the acquired entity now forms the basis for operations and the transaction resulted in a change in control, with the acquired company electing to become the successor issuer for reporting purposes. The accompanying financial statements have been prepared to reflect the assets, liabilities and operations of American Freight Xchange, Inc. exclusive of Precious Investments, Inc since all predecessor operations were discontinued.

As part of the transaction, amounts due to former officers were forgiven, with the balances recorded as Contributed Capital. For equity purposes, accumulated deficit shown are those American Freight Xchange, Inc. Shipzooka Acquisition Corp. is a dormant corporation.

On July 23, 2018 the Company amended the name of its subsidiary, KRG Logistics, Inc., to Global3pl, Inc. (an Ontario corporation).

On September 4, 2018 the Company incorporated Cannagistics, Inc., in the province of Ontario, Canada. This is intended to be a possible new line of business for the Company but is dormant at this time.

On April 17, 2019, we filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger with our wholly owned subsidiary, Cannagistics, Inc. Shareholder approval was not required under Section 92A.180 of the Nevada Revised Statutes. As part of the merger, our board of directors authorized a change in our name to “Cannagistics, Inc.” and our Articles of Incorporation have been amended to reflect this name change.

On September 26, 2019, the Board of Directors approved the registered spinout of its Global3pl, Inc., (a New York corporation) (“Global3pl”) subsidiary. Global3pl is to be a logistics technology provider, along with the American Freight Xchange and UrbanX Platforms that have been under development by the Company.

The Board of Directors also declared a stock dividend for all shareholders, with a record date of October 10, 2019. For every 50 shares of common stock of the Company, all shareholders of record on the record date will receive one share of common stock in Global3pl. Global3pl will also file a registration statement as part of its raise of capital to complete the development of American Freight Xchange, a North American freight broker-driven 3pl network to handle the management of long haul LTL (less than truckload), and specialty freight (white glove) services and Urbanx, a North American network of rush-messenger local trucking services for forward and reverse last mile delivery (including white glove service).

However, the Company has carefully reconsidered its position with respect to the previously announced and subsequently amended spin off of Global3pl, Inc., (a New York corporation). Due to the current situation resulting from the COVID-19 pandemic and especially in light of the development of the supply chain management strategy of the Company, it has been determined that the finalization of the development of the Global3pl platform will be integral and serve as the “engine” for the supply chain management of the Company. Therefore, at this time the “spin-off” has been indefinitely postponed until such time and it may make sense from a business standpoint. The Company has not issued any shares in the Global3pl, Inc (New York) subsidiary.

Effective October 1, 2019, the Company suspended operations of its subsidiary Global3pl, Inc., formerly known as KRG Logistics, Inc., (an Ontario corporation), suspended future operations related to the operations in Mississauga, Ontario. It is in the process of collecting accounts receivables still due and working on a plan to pay its payables. It has entered into an agreement with 10451029 Canada Inc., d/b/a Reliable Logistics, for the assignment and of the assets of Global3pl, Inc., (an Ontario Corporation). The transaction was completed on November 6, 2019. The Company anticipates formally liquidating and dissolving the subsidiary in the next fiscal Quarter. This is a separate corporation from Global3pl, Inc. (A New York corporation).

Current Projects in Development

Global3PL Inc. (NY)

During the past 24 months, Global3PL Inc. (a New York Corporation) has consulted with logistics and technology experts to design and begin the development of a best-of-breed, first-of-kind information technology system. To date, about eighteen (18) months’ worth of custom coding by our contractor has been completed with an expectation of an additional 2-3 months of work still required for it to be ready for testing. Upon completion, it is intended that clients shall be able to login to the system to communicate and transact business with the Company in real-time, as it relates to aspects of the client’s supply chain. This can include the tracking of inbound raw material from various vendors, the manufacturing schedule of finished goods, inventory tracking of raw materials and finished goods, international compliance documentation, and the contacting and tracking of the shipping of the finished goods to their delivery destination(s). Though the Company has high expectations for the functionality of the new system, it does not make any assurances that the system will be completed, shall work as planned if completed, nor be embraced by potential clients as intended.

Therefore Global3pl, Inc. (NY) will be a logistics subsidiary serving the just-in-time inventory & distribution industry, as well as the special and general commodities sector of the North American freight industry. “Just-in-time” is an industry word for delivery a product or other item to an end user right before it is needed. It is used in place of an end user storing a large quantity of inventory. Shippers will be able to sync to our system for a real-time 360 views of their product shipments, including, location updates, verification, and risk mitigation. The customer will be able to Geolocation GPS tracking of freight movement; create automated notifications with consolidated and

automated notifications, payments, and reporting. The Shipper interface will also allow customers to push or post freight orders. The software system will also allow for lead-generation, data analysis, collaboration among shippers, Automated billing and collections, and automated payments. The SAAS-based platform ecosystem will fully integrate all aspects of the Company’s operations, from receiving raw materials for clients, through product manufacturing, document compliance, distribution, and shelf-life batch tracking. It had been expected to be operational in the third or fourth quarter of 2020, however due to economic conditions from the COVID-19 Pandemic, and the need for funding related to this Offering, to complete the process, we have been delayed and hope to be operational by the end of the second quarter of 2021.

The SaaS-based platform ecosystem will fully integrate all aspects of the Cannagistics operations, from receiving raw materials for clients, through product manufacturing, document compliance, distribution, and shelf-life batch tracking. It is intended to operate with four separate brands or identities, that being Global3pl, AFX (the acronym for American Freight Xchange) UrbanX and Cannagistics.

Our targeted client markets (OTC, pharmaceutical, nutraceutical, cosmetics, and Hemp/CBD-related products) are heavily regulated, and highly fragmented from state to state, and country to country. Every country has their own certified product standards; such as the FDA in the U.S. Target client markets require batch product tracking throughout shelf life and GMP certified standards in manufacturing. There is currently, we believe, a lack of seamless automation across the supply chain.

Our solution offers a fully automated and scalable service for end to end information, manufacturing, sales, and tracking. We believe the benefits achieved from our logistics services for clients are as follows:

§ Ability to track products from ingredient stage all the way to sale;

§ Provides 24/7 visibility;

§ Expands collaboration;

§ Provide a single point of access:

§ Incorporates big data and client behavior statistics;

§ Reduces redundancy;

§ Increases productivity;

§ Offers a subscription based model; and

§ Capable of supporting multiple client usage.

GMP Certified Facilities

We have plans to develop a GMP certified biotech lab in Malta with a fundamental skill in initially the cosmetic and then potentially the medicinal, nutraceutical and cannabis/hemp/CBD industries. Our plan is to have this Malta lab cater to customers in the EU. We also plan to potentially have other facilities that will cover our target customers in the US, Canada and Columbia, potentially located in Baton Rouge, Toronto and Bogotá, respectively. 

If we are successful in fully developing such capabilities we intend to seek out and employ a team of a multidisciplinary professionals in the pharmaceutical, nutraceutical and over the counter industries, and utilize complex supply chain and logistics management, unique technology and intellectual property. Cannagistics’ Lab’s purpose is to add value and offer a progress proposal to the Malta medicinal cannabis industry, based on its interest to support, educate, take advantage of and focus on the development of potentially breakthrough medicinal cannabis products with different therapeutic uses in patients around the world to whom science and traditional medicine simply could not reach. Such products will be subject to testing and certification from various governmental agencies, which may be a difficult expensive and time-consuming process. Our vision and knowledge will potentially focus on GMP biopharmaceutical cannabis-based medicines, - with the highest standards starting from the raw material - for multiple applications in patients, using latest technology, ancestral knowledge, scientific studies, with an exceptional team of research and development following the strictest standards and good distribution practices for export and national use.

We have no manufacturing plant or GMP facilities at the present time. As we continue our search to find suitable facilities, we believe that we will need to have the following areas for the production process, which will implement the safety protocols required for the project to be developed.

§ Area of receipt: Area of the property that has been destined for the receipt of the raw material and supplies that arrives for the manufacturing process.

§ Raw material area: Warehouse equipped with the security measures required for the storage of the raw material.

§ Production and manufacturing area: Sector where the manufacturing process will be carried out in which the transforming plant will be in order to obtain the final product.

§ Reagents and supplies area: Warehouse equipped with the security measures required for the storage of reagents and supplies.

§ Solid waste area: Sector destined for the storage of solid waste produced during the manufacturing process.

§ Finished product area: Warehouse equipped with the security measures required for the storage of the finished product.

§ Dispatch area: Sector from where the process of dispatch and delivery of the finished product to its final recipient will take place

§ Administrative area: Sector of the factory where administrative, accounting and security activities will be developed.

Competition

The Global Supply Chain management area has many different entities, all competing. Some are very large. However, our model is significantly different from most of the providers already operating.

To be successful in the global supply chain management area, a company must be involved in planning the function of the entire process, from start to finish, or end to end. We intend to concentrate our model on the cannabis, nutraceutical, pharmaceutical and cosmetic areas. We believe this makes our approach unique and distinguishable at this time.

There is no guarantee that a larger, more fully funded, company will determine to seek to gain access to the same business.

Intellectual Property

Our Global3pl SAAS Platform is a proprietary software developed by the Company. The SaaS-based platform ecosystem will fully integrate all aspects of the Cannagistics operations, from receiving raw materials for clients, through product manufacturing, document compliance, distribution, and shelf-life batch tracking.

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Summary of Significant Accounting Policies

6 Months Ended

Jan. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Principals

Principles of consolidation

The consolidated financial statements include the accounts of Cannagistics, Inc. and its wholly owned subsidiaries American Freight Xchange, Inc and Global3pl, Inc. (Ontario), formerly known as KRG Logistics, Inc. All significant inter-company transactions and balances have been eliminated.

Basis of Presentation

We have summarized our most significant accounting policies for the fiscal period ended July 31, 2020.

Unaudited Consolidated Interim Financial Statements

These unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statement and should be read in conjunction with those annual financial statements filed on Form 10-K for the year ended July 31, 2020. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results for a full year or for any future period.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

COVID-19 Pandemic Update

In March 2020, the World Health Organization declared a global health pandemic related to the outbreak of a novel coronavirus. The COVID-19 pandemic adversely affected the company's financial performance in the third and fourth quarters of fiscal year 2020 and could have an impact throughout fiscal year 2021. In response to the COVID-19 pandemic, government health officials have recommended and mandated precautions to mitigate the spread of the virus, including shelter-in-place orders, prohibitions on public gatherings and other similar measures. As a result, the company and certain of the company's customers and suppliers temporarily closed locations beginning late in the second quarter of fiscal year 2020, continuing into the third quarter of fiscal year 2020. There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company's operations, supply chain and demand for its products. As a result, the ultimate impact on the company's business, financial condition or operating results cannot be reasonably estimated at this time. 

Income Taxes

The Company accounts for income taxes under ASC 740 "Income Taxes," which codified SFAS 109, "Accounting for Income Taxes" and FIN 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of convertible loans, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received an

immediate charge to income is recognized in order to initially record the derivative instrument liabilities at their fair value.

The discount from the face value of the convertible debt instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated rate of interest on the instrument, is amortized over the life of the instrument through periodic charges to income, using the effective interest method. 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the

fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Fair value of financial instruments

The Company’s financial instruments consist of its liabilities. The carrying amount of payables and the loan payable – related party approximate fair value because of the short-term nature of these items. The promissory notes, and convertible notes payables are measured at amortized cost using the effective interest method, which approximates fair value due to the relationship between the interest rate on long-term debt and the Company’s incremental risk adjusted borrowing rate.

Fair value is defined under FASB ASC Topic 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for an asset or liability in an orderly transaction between participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The levels are as follows:

· Level 1 - Quoted prices in active markets for identical assets or liabilities

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data for substantially the full term of the assets or liabilities

· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities

The following is a listing of the Company’s liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of January 31, 2021 and July 31, 2020:

	January 31, 2021
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	773,688	$	773,688

	July 31, 2020
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	205,796	$	205,796

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of January 31, 2021, and 2020 the allowance for doubtful accounts was $0 and $0, respectively.

Revenue Recognition

The Company recognizes revenue related to transaction from its third-party logistics sales by performing the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Amounts invoiced or collected in advance of product delivery or providing services are recorded as unearned revenue or customer deposits. The company accrues for sales returns, bad debts, and other allowances based on its historical experience.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) which establishes revenue recognition standards. ASU 2014-09 was effective for annual reporting periods beginning after December 15,2017. We adopted ASU 2014-09 effective August 1, 2018. ASU 2014-09 has not had a significant effect on the Company’s financial position and results of operations.

Foreign Currency

FASB ASC Topic 830, Foreign Currency Matters (formerly FASB Statement No. 52, Foreign Currency Translation) provides accounting guidance for transactions denominated in a foreign currency, and for operations undertaken in a foreign currency environment. To prepare consolidated financial statements, an entity translates all functional currency financial statements into a single reporting currency. The same applies if an entity uses different currencies for reporting purposes and for its functional currency. The company reports its currency in US dollars.

Stock-Based Compensation

The Company measures expenses associated with all employee stock-based compensation awards using a fair-value method and record such expense in our consolidated financial statements on a straight-line basis over the requisite service period.

Leases

In February 2016, FASB issued ASU-2016-02 (Topic 842) “Leases”, provides accounting guidance for leases, recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018.

Recent Accounting Pronouncements

 In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments, including trade receivables, contract assets, and lease receivables. This standard will be effective for the Company beginning August 1, 2020. The Company does not believe that this standard will have a material impact on its’ consolidated financial statements.

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Going Concern

6 Months Ended

Jan. 31, 2021

Accounting Policies [Abstract]

Going Concern

Management does not expect existing cash as of January 31, 2021 to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these January 31, 2021 financial statements. These financial statements have been prepared on a going concern basis which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of January 31, 2021, the Company has an accumulated deficit of $14,890,153, and has not yet generated material revenue from operations, and will require additional funds to maintain its operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the consolidated financial statements are issued. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through its existing financial resources and we may also raise additional capital through equity offerings, debt financings, collaborations and/or licensing arrangements. If adequate funds are not available on acceptable terms, we may be required to delay, reduce the scope of, or curtail, our operations. The accompanying consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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Discontinued Operations

6 Months Ended

Jan. 31, 2021

Accounting Policies [Abstract]

Discontinued Operations

On November 6, 2019, the Company discontinued its operations of subsidiary Global3pl, Inc., formerly known as KRG Logistics, Inc., (an Ontario corporation) and sold the assets of $54,296 for $10 dollars. As such, the assets of KRG Logistics, Inc. were removed from the accounts, and all remaining liabilities were classified as Discontinued Operations in the accompanying Balance Sheets. As of January 31, 2021, and July 31, 2020, the summaries of liabilities pertaining to discontinued operations were as follows:

		January 31,		July 31,
		2021		2020
Accounts payable	$		460,262	$	462,130
Royal Bank line of credit			289,242		289,242
Unearned revenue			14,833		14,833
Accrued liabilities			64,663		64,663
Custom duties & GST payable			6,019		6,019
HST			2,759		2,759
Liabilities of discontinued operations	$		837,778	$	839,646

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Promissory Notes

6 Months Ended

Jan. 31, 2021

Debt Disclosure [Abstract]

Promissory Notes

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

Description	January 31, 2021		July 31, 2020
Note payable dated March 8, 2018, matured March 8, 2019, bearing interest at 10% per annum.	$	30,000	$	30,000
Note payable dated July 18, 2018, matured July 18, 2019, bearing interest at 8% per annum.	$	135,000	$	135,000
Note payable dated February 4, 2020, matured February 4, 2021, bearing interest at 18% per annum.	$	5,000	$	5,000
Total	$	170,000	$	170,000
Less current portion of long-term debt	$	170,000	$	170,000
Total long-term debt		—		—

Interest expense for the six months ended January 31, 2021 and 2020 was $7,410 and $8,570, respectively.

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Convertible Debt

6 Months Ended

Jan. 31, 2021

Convertible Debt [Abstract]

Convertible Debt

Description	January 31, 2021		July 31, 2020
Convertible note agreement dated November 1, 2013 in the amount of $30,000 payable and due on demand bearing interest at 12% per annum. Principal and accrued interest is convertible at $.002250 per share.	$	11,041	$	11,041
Convertible note agreement dated February 20, 2018 in the amount of $1,034,000 payable and due on demand bearing interest at 10% per annum. Principal and accrued interest is convertible at $.028712 per share.	$	1,034,000	$	1,034,000
Convertible note agreement dated March 13, 2019 in the amount of $800,000 payable and due on March 20, 2020 bearing interest at 24% per annum.	$	800,000	$	800,000
Convertible note agreement dated June 28, 2019 in the amount of $300,000 payable and due on June 28, 2020 bearing interest at 20% per annum.	$	300,000	$	300,000
Convertible note agreement dated August 6, 2019 in the amount of $31,500 payable and due on August 6, 2020 bearing interest at 20% per annum.	$	31,500	$	31,500
Convertible note agreement dated August 19, 2019 in the amount of $3,800 payable and due on August 19, 2020 bearing interest at 24% per annum.	$	3,800	$	3,800
Convertible note agreement dated September 4, 2019 in the amount of $36,500 payable and due on September 4, 2020 bearing interest at 20% per annum.	$	36,500	$	36,500
Convertible note agreement dated December 4, 2019 in the amount of $95,000 payable and due on December 4, 2020 bearing interest at 12% per annum.	$	95,000	$	95,000
Convertible note agreement dated February 10, 2020 in the amount of $15,000 payable at February 10, 2021 bearing interest at 12% per annum.	$	15,000	$	15,000
Convertible note agreement dated February 21, 2020 in the amount of $47,500 payable at February 21, 2021 bearing interest at 12% per annum.	$	47,500	$	47,500
Convertible note agreement dated February 28, 2020 in the amount of $67.500 payable at February 28, 2021 bearing interest at 12% per annum.	$	25,000	$	67,500
Convertible note agreement dated April 15, 2020 in the amount of $31,500 payable at April 15, 2021 bearing interest at 10% per annum, net of discount.	$	15,887	$	31,500
Convertible note agreement dated September 29, 2020 in the amount of $34.000 payable and due on September 29, 2021 bearing interest at 12% per annum.	$	34,000	$	—
Convertible note agreement dated October 9, 2020 in the amount of $33,000 payable and due on October 9, 2021 bearing interest at 12% per annum.	$	33,000	$	—
Convertible note agreement dated October 19, 2020 in the amount of $38.000 payable and due on October 19, 2021 bearing interest at 12% per annum.	$	38,000	$	—
Convertible note agreement dated December 2, 2020 in the amount of $35.500 payable and due on December 2, 2021 bearing interest at 12% per annum.	$	40,000	$	—
Convertible notes total:	$	2,535,228	$	2,475,341

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Related Party Transactions

6 Months Ended

Jan. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

A shareholder of the Company has paid certain expenses of the Company. These amounts are reflected as a loan payable to related party. The shareholder advanced $0 and $19,490 during the six months ended January 31, 2021 and 2020, respectively. As of January 31, 2021, and July 31, 2020, there were $443,359 and $388,094 due to related parties, and a shareholder, respectively.

The Company has consulting agreements with two of its shareholders to provide management and financial services that commenced on December 1, 2017. For the six months ended January 31, 2021 and 2020 consulting fees paid were $96,635 and $87,773 respectively. The consulting fees are included as part of professional fees on the Company’s consolidated statements of operations.

The Company on February 20, 2018 entered into a related party (that being Recommerce Group, Inc. and our former President and current Vice-President of Corporate Finance and a Director, is a principal in Recommerce Group, Inc.) note receivable in the amount of $1,034,000. The Company made an additional advance in the amount of $175,000 that is non-interest bearing. The note is payable and due on demand and bears interest at the rate of 10%. A total of $153,217 has been applied as payments against this Note. Interest expense in the amount of $45,318 and $52,125 for the six months ended January 31, 2021 and 2020, respectively, has been recorded in the financial statements.

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Stockholders' Equity (Deficit)

6 Months Ended

Jan. 31, 2021

Equity [Abstract]

Stockholders' Equity

The Company is authorized to issue 500,000,000 shares of its $0.001 par value common stock and 20,000,000 shares of Preferred stock. As of January 31, 2021, and July 31, 2020, there were 178,096,105 shares, of common stock outstanding. There were 10,000,000 shares of Series D Preferred stock outstanding as of January 31, 2021 and 8,000,000 shares of Series D Preferred Stock outstanding as of July 31, 2020.

On November 1, 2017, we effected a one-for- four reverse stock split. All share and per share information has been retroactively adjusted to reflect the stock split.  

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Warrant

6 Months Ended

Jan. 31, 2021

Other Liabilities Disclosure [Abstract]

Warrant

On April 15, 2020, the Company issued a five-year Common Stock Purchase Warrant in connection with a $31,500 convertible promissory note. The warrant is convertible into 437,500 shares of the Company’s common stock at $.12 per share.

On April 23, 2020, the Company issued a three-year Common Stock Purchase Warrant in connection with a $75,000 investment in the Company’s common stock. The warrant has a conversion price of $.15 per share of the Company’s common stock.

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Commitments and Contingencies

6 Months Ended

Jan. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Litigations, Claims and Assessments

The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.

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Subsequent Events

6 Months Ended

Jan. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

Management of the Company has evaluated the subsequent events that have occurred through the date of the report and determined that the following subsequent events require disclosure:

On March 1, 2021, the Company announced that the offices of the Company have been relocated to 2110 5^th Avenue, Ronkonkoma,

New York, 11779. The Company is currently no being required to pay rent.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jan. 31, 2021

Accounting Policies [Abstract]

Principles of consolidation

The consolidated financial statements include the accounts of Cannagistics, Inc. and its wholly owned subsidiaries American Freight Xchange, Inc and Global3pl, Inc. (Ontario), formerly known as KRG Logistics, Inc. All significant inter-company transactions and balances have been eliminated.

Basis of presentation

We have summarized our most significant accounting policies for the fiscal period ended July 31, 2020.

Unaudited Consolidated Interim Financial Statements

These unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statement and should be read in conjunction with those annual financial statements filed on Form 10-K for the year ended July 31, 2020. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results for a full year or for any future period.

Accounts Receivable and allowance for doubtful accounts

Accounts receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. As of January 31, 2021, and 2020 the allowance for doubtful accounts was $0 and $0, respectively.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

COVID-19 Pandemic Update

In March 2020, the World Health Organization declared a global health pandemic related to the outbreak of a novel coronavirus. The COVID-19 pandemic adversely affected the company's financial performance in the third and fourth quarters of fiscal year 2020 and could have an impact throughout fiscal year 2021. In response to the COVID-19 pandemic, government health officials have recommended and mandated precautions to mitigate the spread of the virus, including shelter-in-place orders, prohibitions on public gatherings and other similar measures. As a result, the company and certain of the company's customers and suppliers temporarily closed locations beginning late in the second quarter of fiscal year 2020, continuing into the third quarter of fiscal year 2020. There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company's operations, supply chain and demand for its products. As a result, the ultimate impact on the company's business, financial condition or operating results cannot be reasonably estimated at this time. 

Income taxes

The Company accounts for income taxes under ASC 740 "Income Taxes," which codified SFAS 109, "Accounting for Income Taxes" and FIN 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of convertible loans, equity instruments and other financing arrangements to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received an

immediate charge to income is recognized in order to initially record the derivative instrument liabilities at their fair value.

The discount from the face value of the convertible debt instruments resulting from allocating some or all of the proceeds to the derivative instruments, together with the stated rate of interest on the instrument, is amortized over the life of the instrument through periodic charges to income, using the effective interest method. 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the

fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

Fair value of financial instruments

The Company’s financial instruments consist of its liabilities. The carrying amount of payables and the loan payable – related party approximate fair value because of the short-term nature of these items. The promissory notes, and convertible notes payables are measured at amortized cost using the effective interest method, which approximates fair value due to the relationship between the interest rate on long-term debt and the Company’s incremental risk adjusted borrowing rate.

Fair value is defined under FASB ASC Topic 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for an asset or liability in an orderly transaction between participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The levels are as follows:

· Level 1 - Quoted prices in active markets for identical assets or liabilities

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data for substantially the full term of the assets or liabilities

· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities

The following is a listing of the Company’s liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of January 31, 2021 and July 31, 2020:

	January 31, 2021
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	773,688	$	773,688

	July 31, 2020
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	205,796	$	205,796

Foreign currency

FASB ASC Topic 830, Foreign Currency Matters (formerly FASB Statement No. 52, Foreign Currency Translation) provides accounting guidance for transactions denominated in a foreign currency, and for operations undertaken in a foreign currency environment. To prepare consolidated financial statements, an entity translates all functional currency financial statements into a single reporting currency. The same applies if an entity uses different currencies for reporting purposes and for its functional currency. The company reports its currency in US dollars.

Stock-Based Compensation

The Company measures expenses associated with all employee stock-based compensation awards using a fair-value method and record such expense in our consolidated financial statements on a straight-line basis over the requisite service period.

Revenue recognition

The Company recognizes revenue related to transaction from its third-party logistics sales by performing the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Amounts invoiced or collected in advance of product delivery or providing services are recorded as unearned revenue or customer deposits. The company accrues for sales returns, bad debts, and other allowances based on its historical experience.

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (Topic 606) which establishes revenue recognition standards. ASU 2014-09 was effective for annual reporting periods beginning after December 15,2017. We adopted ASU 2014-09 effective August 1, 2018. ASU 2014-09 has not had a significant effect on the Company’s financial position and results of operations.

Leases

In February 2016, FASB issued ASU-2016-02 (Topic 842) “Leases”, provides accounting guidance for leases, recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018.

Recent Accounting Pronouncements

 In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments, including trade receivables, contract assets, and lease receivables. This standard will be effective for the Company beginning August 1, 2020. The Company does not believe that this standard will have a material impact on its’ consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

12 Months Ended

Jan. 31, 2021

Jul. 31, 2020

Accounting Policies [Abstract]

Derivative Liabilities

	January 31, 2021
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	773,688	$	773,688

	July 31, 2020
	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	—	$	—	$	205,796	$	205,796

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Discontinued Operations (Tables)

6 Months Ended

Jan. 31, 2021

Accounting Policies [Abstract]

Liabilities of discontinued operations

		January 31,		July 31,
		2021		2020
Accounts payable	$		460,262	$	462,130
Royal Bank line of credit			289,242		289,242
Unearned revenue			14,833		14,833
Accrued liabilities			64,663		64,663
Custom duties & GST payable			6,019		6,019
HST			2,759		2,759
Liabilities of discontinued operations	$		837,778	$	839,646

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Promissory Notes (Tables)

6 Months Ended

Jan. 31, 2021

Debt Disclosure [Abstract]

Schedule of Promissory Notes

Description	January 31, 2021		July 31, 2020
Note payable dated March 8, 2018, matured March 8, 2019, bearing interest at 10% per annum.	$	30,000	$	30,000
Note payable dated July 18, 2018, matured July 18, 2019, bearing interest at 8% per annum.	$	135,000	$	135,000
Note payable dated February 4, 2020, matured February 4, 2021, bearing interest at 18% per annum.	$	5,000	$	5,000
Total	$	170,000	$	170,000
Less current portion of long-term debt	$	170,000	$	170,000
Total long-term debt		—		—

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Convertible Debt (Tables)

6 Months Ended

Jan. 31, 2021

Convertible Subordinated Debt [Abstract]

Summary of Convertible Debt

Description	January 31, 2021		July 31, 2020
Convertible note agreement dated November 1, 2013 in the amount of $30,000 payable and due on demand bearing interest at 12% per annum. Principal and accrued interest is convertible at $.002250 per share.	$	11,041	$	11,041
Convertible note agreement dated February 20, 2018 in the amount of $1,034,000 payable and due on demand bearing interest at 10% per annum. Principal and accrued interest is convertible at $.028712 per share.	$	1,034,000	$	1,034,000
Convertible note agreement dated March 13, 2019 in the amount of $800,000 payable and due on March 20, 2020 bearing interest at 24% per annum.	$	800,000	$	800,000
Convertible note agreement dated June 28, 2019 in the amount of $300,000 payable and due on June 28, 2020 bearing interest at 20% per annum.	$	300,000	$	300,000
Convertible note agreement dated August 6, 2019 in the amount of $31,500 payable and due on August 6, 2020 bearing interest at 20% per annum.	$	31,500	$	31,500
Convertible note agreement dated August 19, 2019 in the amount of $3,800 payable and due on August 19, 2020 bearing interest at 24% per annum.	$	3,800	$	3,800
Convertible note agreement dated September 4, 2019 in the amount of $36,500 payable and due on September 4, 2020 bearing interest at 20% per annum.	$	36,500	$	36,500
Convertible note agreement dated December 4, 2019 in the amount of $95,000 payable and due on December 4, 2020 bearing interest at 12% per annum.	$	95,000	$	95,000
Convertible note agreement dated February 10, 2020 in the amount of $15,000 payable at February 10, 2021 bearing interest at 12% per annum.	$	15,000	$	15,000
Convertible note agreement dated February 21, 2020 in the amount of $47,500 payable at February 21, 2021 bearing interest at 12% per annum.	$	47,500	$	47,500
Convertible note agreement dated February 28, 2020 in the amount of $67.500 payable at February 28, 2021 bearing interest at 12% per annum.	$	25,000	$	67,500
Convertible note agreement dated April 15, 2020 in the amount of $31,500 payable at April 15, 2021 bearing interest at 10% per annum, net of discount.	$	15,887	$	31,500
Convertible note agreement dated September 29, 2020 in the amount of $34.000 payable and due on September 29, 2021 bearing interest at 12% per annum.	$	34,000	$	—
Convertible note agreement dated October 9, 2020 in the amount of $33,000 payable and due on October 9, 2021 bearing interest at 12% per annum.	$	33,000	$	—
Convertible note agreement dated October 19, 2020 in the amount of $38.000 payable and due on October 19, 2021 bearing interest at 12% per annum.	$	38,000	$	—
Convertible note agreement dated December 2, 2020 in the amount of $35.500 payable and due on December 2, 2021 bearing interest at 12% per annum.	$	40,000	$	—
Convertible notes total:	$	2,535,228	$	2,475,341

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Organization and Description of Business (Details Narrative) - USD ($)		2 Months Ended	6 Months Ended	12 Months Ended
	Oct. 24, 2012	Nov. 16, 2017	Jan. 31, 2021	Jul. 31, 2020
Class of Stock [Line Items]
Sale of stock during period, Value				$ 75,000
Preferred stock issued			10,000,000	8,000,000
Preferred stock issued, par value			$ 0.001	$ 0.001
Asset Management Company [Member]
Class of Stock [Line Items]
Sale of stock during period, Shares	55,000,000
Stock splits	2,200,000
Sale of stock during period, Value	$ 6,000
Merger [Member]
Class of Stock [Line Items]
Preferred stock issued		1,000,000
Preferred stock issued, par value		$ 0.001
Conversion rights of preferred stock issued		conversion and voting rights of 72.5 votes for each share, representing approximately 90.2% of the voting rights

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Summary of Significant Accounting Policies (Details) - USD ($)	Jan. 31, 2021	Jul. 31, 2020
Class of Stock [Line Items]
Derivative liabilities	$ 773,688	$ 205,796
Level 1
Class of Stock [Line Items]
Derivative liabilities
Level 2
Class of Stock [Line Items]
Derivative liabilities
Level 3
Class of Stock [Line Items]
Derivative liabilities	$ 773,688	$ 205,796

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Summary of Significant Accounting Policies (Details Narrative) - USD ($)	Jan. 31, 2021	Jan. 31, 2020
Accounting Policies [Abstract]
Allowance for doubtful accounts	$ 0	$ 0

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Going Concern (Details Narrative)	Jan. 31, 2021 USD ($)
Going Concern [Abstract]
Accumulated deficit	$ (14,890,153)

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Discontinued Operations - Liabilities of Discontinued Operations (Details) - USD ($)	Jan. 31, 2021	Jul. 31, 2020	Jan. 31, 2020
Accrued liabilities	$ 861,348	$ 607,961
Assets of Discontinued Operations
Accounts payable, net	460,262		$ 462,130
Rotal bank line of credit	289,242		289,242
Unearned revenue	14,833		14,833
Accrued liabilities	64,663		64,663
Custom duties and GST payable	6,019		6,019
HST	2,759		2,759
Liabilities of discontinued operations	$ 837,778		$ 839,646

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Discontinued Operations (Details Narrativel)	Nov. 06, 2019 USD ($)
Accounting Policies [Abstract]
Sale of assets, value of assets sold	$ 54,296
Sale of assets, sale price	$ 10

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Promissory Notes (Details Narrative) - USD ($)	6 Months Ended
	Jan. 31, 2021	Jan. 31, 2020	Feb. 04, 2020	Jul. 18, 2018	Mar. 08, 2018
Short-term Debt [Line Items]
Interest Expense	$ 141,000	$ 857,000
Promissory Notes Five [Member]
Short-term Debt [Line Items]
Notes payable, issuance date	Mar. 08, 2018
Notes payable, maturity date	Mar. 08, 2019
Notes payable, rate of interest					10.00%
Promissory Notes Six [Member]
Short-term Debt [Line Items]
Notes payable, issuance date	Jul. 18, 2018
Notes payable, maturity date	Jul. 18, 2019
Notes payable, rate of interest				8.00%
Promissory Notes Seven [Member]
Short-term Debt [Line Items]
Notes payable, issuance date	Feb. 04, 2020
Notes payable, maturity date	Feb. 04, 2021
Notes payable, rate of interest			18.00%

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Convertible Debt (Details) - USD ($)	Jan. 31, 2021	Jul. 31, 2020	Jan. 31, 2020	Feb. 20, 2018
Short-term Debt [Line Items]
Convertible notes				$ 1,034,000
Convertible notes, net of discount	$ 2,535,228		$ 2,475,341
Convertible Debt One[Member]
Short-term Debt [Line Items]
Convertible notes	11,041	$ 11,041
Convertible Debt Two [Member]
Short-term Debt [Line Items]
Convertible notes	1,034,000	1,034,000
Convertible Debt Three[Member]
Short-term Debt [Line Items]
Convertible notes	800,000	800,000
Convertible Debt Four [Member]
Short-term Debt [Line Items]
Convertible notes	300,000	300,000
Convertible Debt Five [Member]
Short-term Debt [Line Items]
Convertible notes	31,500	31,500
Convertible Debt Six [Member]
Short-term Debt [Line Items]
Convertible notes	3,800	3,800
Convertible Debt Seven [Member]
Short-term Debt [Line Items]
Convertible notes	36,500	36,500
Convertible Debt Eight [Member]
Short-term Debt [Line Items]
Convertible notes	95,000	95,000
Convertible Debt Nine [Member]
Short-term Debt [Line Items]
Convertible notes	15,000	15,000
Convertible Debt Ten [Member]
Short-term Debt [Line Items]
Convertible notes	47,500	47,500
Convertible Debt Eleven [Member]
Short-term Debt [Line Items]
Convertible notes	21,341	67,500
Convertible Debt Twelve [Member]
Short-term Debt [Line Items]
Convertible notes	15,887	31,500
Convertible Debt Thirteen [Member]
Short-term Debt [Line Items]
Convertible notes	34,000
Convertible Debt Fourteen [Member]
Short-term Debt [Line Items]
Convertible notes	33,000
Convertible Debt Fifteen [Member]
Short-term Debt [Line Items]
Convertible notes	38,000
Convertible Debt Sixteen [Member]
Short-term Debt [Line Items]
Convertible notes	$ 40,000

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Convertible Debt (Details Narrative) - USD ($)							1 Months Ended								6 Months Ended
	Oct. 09, 2020	Feb. 10, 2020	Dec. 04, 2019	Sep. 04, 2019	Aug. 06, 2019	Mar. 13, 2019	Dec. 02, 2020	Oct. 19, 2020	Sep. 29, 2020	Apr. 15, 2020	Feb. 28, 2020	Feb. 21, 2020	Aug. 19, 2019	Jun. 28, 2019	Jan. 31, 2021	Jan. 31, 2020
Short-term Debt [Line Items]
Interest Expense															$ 203,303	$ 187,218
Debt discount accretion expense															0
Convertible Debt Two [Member]
Short-term Debt [Line Items]
Convertible debt															$ 1,034,000
Convertible note, rate of interest															10.00%
Convertible notes, conversion price															$ 0.028712
Convertible Debt Three[Member]
Short-term Debt [Line Items]
Convertible debt															$ 800,000
Convertible note, maturity date						Mar. 20, 2020
Convertible note, rate of interest															24.00%
Convertible Debt Four [Member]
Short-term Debt [Line Items]
Convertible debt															$ 300,000
Convertible note, maturity date														Jun. 28, 2020
Convertible note, rate of interest															20.00%
Convertible Debt Five [Member]
Short-term Debt [Line Items]
Convertible debt					$ 31,500
Convertible note, maturity date					Aug. 06, 2100
Convertible note, rate of interest					20.00%
Convertible Debt Six [Member]
Short-term Debt [Line Items]
Convertible debt													$ 3,800
Convertible note, maturity date													Aug. 19, 2020
Convertible note, rate of interest													24.00%
Convertible Debt Seven [Member]
Short-term Debt [Line Items]
Convertible debt				$ 36,500
Convertible note, maturity date				Sep. 04, 2020
Convertible note, rate of interest				20.00%
Convertible Debt Eight [Member]
Short-term Debt [Line Items]
Convertible debt			$ 95,000
Convertible note, maturity date			Dec. 04, 2020
Convertible note, rate of interest			12.00%
Convertible Debt Nine [Member]
Short-term Debt [Line Items]
Convertible debt		$ 15,000
Convertible note, maturity date		Feb. 10, 2021
Convertible note, rate of interest		12.00%
Convertible Debt Ten [Member]
Short-term Debt [Line Items]
Convertible debt												$ 47,500
Convertible note, maturity date												Feb. 21, 2021
Convertible note, rate of interest												12.00%
Convertible Debt Eleven [Member]
Short-term Debt [Line Items]
Convertible debt											$ 67,500
Convertible note, maturity date											Feb. 28, 2021
Convertible note, rate of interest											12.00%
Convertible Debt Twelve [Member]
Short-term Debt [Line Items]
Convertible debt										$ 95,000
Convertible note, maturity date										Apr. 15, 2021
Convertible note, rate of interest										10.00%
Convertible Debt Thirteen [Member]
Short-term Debt [Line Items]
Convertible debt									$ 34,000
Convertible note, maturity date									Sep. 29, 2021
Convertible note, rate of interest									12.00%
Convertible Debt Fourteen [Member]
Short-term Debt [Line Items]
Convertible debt	$ 33,000
Convertible note, maturity date	Oct. 09, 2021
Convertible note, rate of interest	12.00%
Convertible Debt Fifteen [Member]
Short-term Debt [Line Items]
Convertible debt								$ 38,000
Convertible note, maturity date								Oct. 19, 2021
Convertible note, rate of interest								12.00%
Convertible Debt Sixteen [Member]
Short-term Debt [Line Items]
Convertible debt							$ 35,500
Convertible note, maturity date							Dec. 02, 2021
Convertible note, rate of interest							12.00%
Convertible Debt One[Member]
Short-term Debt [Line Items]
Convertible debt															$ 30,000
Convertible note, rate of interest															12.00%
Convertible notes, conversion price															$ 0.002250

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Convertible Debt - Derivative Liabilities (Details Narrative)	3 Months Ended	6 Months Ended
	Jan. 31, 2021 USD ($)	Jan. 31, 2021 USD ($) shares
Short-term Debt [Line Items]
Amortized interest expense		$ 91,636
Discounts	$ 108,951	108,951
Initial Valuation of Four Variable Notes
Short-term Debt [Line Items]
Liability of convertible note		609,750
Loss on derivative liability		$ 478,250
Valuation of conversion feature, details		The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0029 to $0.0058, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.007 to $0.034, an expected dividend yield of 0%, expected volatilities ranging from 219%-279%, risk-free interest rate ranging from 0.12% to 0.15%, and expected terms of one year.
Amortized interest expense		$ 40,224
Initial Valuation of Two Variable Notes
Short-term Debt [Line Items]
Liability of convertible note		205,796
Principal and interest converted		146,905
Fees converted		$ 16,000
Shares of common stock issued on conversion | shares		70,497,100
Additional paid-in capital for relief of derivative liabilities		$ 659,133
Valuation of conversion feature, details		The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0011 to $0.007, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.006 to $0.034, an expected dividend yield of 0%, expected volatility ranging from 215% to 278%, risk-free interest rates ranging from 0.12% to 0.15%, and expected terms ranging from 0.01 to 0.48 years.
Subsequent Valuation of Two Variable Notes
Short-term Debt [Line Items]
Liability of convertible note		$ 1,126,981
Loss on derivative liability	$ 444,655	$ 970,568
Valuation of conversion feature, details		The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0070 to $0.0104, the closing stock price of the Company's common stock on the date of valuation of $0.065, an expected dividend yield of 0%, expected volatility of 286%, risk-free interest rate of 0.13%, and an expected term ranging from 0.20 to 0.72 years.

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Related Party Transactions (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 20, 2018	Jan. 31, 2021	Jan. 31, 2020	Jan. 31, 2021	Jan. 31, 2020	Jul. 31, 2020
Shareholder advances as loan payable to related party				$ 0	$ 19,490
Due to Related Parties		$ 443,359	$ 388,094	443,359	388,094	$ 388,094
Professional Fees		$ 64,766	$ 84,248	147,650	146,451
Convertible notes	$ 1,034,000
Advances on note payable				$ 96,789	64,888
Convertible note, interest rate				10.00%
Interest expense				$ 45,318	52,125
Payments received				153,217
Advance on Note Payable
Advances on note payable	$ 175,000
Consulting
Professional Fees				$ 96,635	$ 87,773

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Stockholders' Deficit (Details) - $ / shares	Jan. 31, 2021	Jul. 31, 2020	Jan. 31, 2020	Apr. 29, 2019
Common stock, shares authorized	500,000,000	250,000,000
Common stock, shares outstanding	178,096,105	105,099,277
Preferred Stock, Shares authorized	20,000,000	20,000,000
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred shares issued and outstanding	10,000,000	8,000,000
Series D Preferred Stock
Preferred Stock, Shares authorized	10,000,000			10,000,000
Preferred Stock, par value	$ 0.001			$ 0.001
Preferred shares issued and outstanding	10,000,000		8,000,000

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Warrant (Details Narrative) - USD ($)	Apr. 23, 2020	Apr. 15, 2020
Warrant 1
Convertible promissory note		$ 31,500
Conversion, shares		437,500
Conversion, price per share		$ 0.12
Common stock purchase warrant term		5 years
Warrant 2
Convertible promissory note	$ 75,000
Conversion, price per share	$ 0.15
Common stock purchase warrant term	3 years