Notes to Financial Statements
October 31, 2019
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 principle 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 October
15, 2012.
In order to obtain basic operating capital
to pay for the reinstatement of the Company’s good standing with the Nevada Secretary of State, to bring the Company’s
account current with creditors essential for the reorganization of the Company, such as the transfer agent, and for basic general
corporate purposes, 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 October 24, 2012, NPNC Management, LLC appointed
Bryan Clark as director of the Company, to hold office until such time as the shareholders elected a board. The interim board,
consisting of Mr. Clark, further acted to appoint Mr. Clark as president, treasurer, and secretary of the Company, to act on behalf
of the Company, and to hold such offices until removed by any subsequent board elected by the shareholders.
On November 13, 2013, Bryan Clark tendered
his resignation from all positions as an Officer and Director of the Company and the Board appointed Anna Wlodarkiewicz as a Director,
President, Secretary and Treasurer of the Company.
On October 9, 2014, Ania Wlodarkiewicz tendered
her resignation from all positions as an Officer and Director of the Company and the Board appointed Nataliya Hearn as a Director,
President, Secretary and Treasurer of the Company.
On March 28, 2016, Nataliya Hearn resigned
as the Company’s Chief Executive Officer and Director. Mr. Kashif Khan is the Company’s sole officer and director.
The Company then completed an asset purchase
agreement dated August 10, 2015 where the Company acquired from Kashif Khan, its sole officer and director, colored diamonds with
a wholesale value of US$4 Million, which he was in control of, in exchange for issuing three secured demand convertible promissory
notes totaling US$4 Million.
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.
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
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.
The Company is both a less-than-truckload (“LTL”) and
a Third-Party Logistics (“3PL”) carrier, providing regional, inter-regional and national LTL and or 3PL services. These
include arranging for ground and air expedited transportation and consumer household pickup and delivery (“P&D”),
through a single integrated organization. In addition to our core LTL services, we offer a range of value-added services which
cover different areas, such as, truckload brokerage, supply chain consulting and warehousing and pick and ship services.
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 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 UrtbanX 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).
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
On September 18, 2019, the Company announced, with a press release,
the signing of a Letter of Intent (the “LOI”) with Unified Cannabis of Calgary, Canada (“Unified”) whereby
Unified will merge qualified assets into the Company in an all-stock transaction. The Company will then raise the capital necessary
to effectuate the merger of the assets and acquisition targets of Unified and for the explosive organic growth strategy of Cannagistics
and Unified, combined, thus creating the first CBD/Hemp/Cannabis International Vertically Optimized Company (CIVOC).
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).
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, 2019.
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, 2019. 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 October 31, 2019, and 2018 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.
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.
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
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.
Inventories
The Company does not hold any inventory as assets. All inventory
in operations is owned by the shipper.
Revenue Recognition
The Company recognizes revenue related to transaction from its third-party
logistics sales when (i) the seller’s price is substantially fixed, (ii) shipment has occurred causing the buyer to be obligated
to pay for product, (iii) the buyer has economic substance apart from the seller, and (iv) there is no significant obligation
for future performance to directly bring about the resale of the product by the buyer as required by ASC 605 – Revenue
Recognition. Cost of sales, rebates
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
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.
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.
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.
NOTE 3 – GOING CONCERN
Management does not expect existing cash as
of October 31, 2019 to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of
these October 31, 2019 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 October 31,
2019, the Company has incurred losses totaling $6,057,873 since inception, 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 – EQUIPMENT AND IMPROVEMENTS
Equipment and improvements are summarized
as follows:
|
|
October 31, 2019
|
|
October 31, 2018
|
Furniture and fixtures
|
|
$
|
76,956
|
|
|
$
|
76,930
|
Machinery and equipment
|
|
|
205,970
|
|
|
|
205,900
|
Transportation equipment
|
|
|
11,185
|
|
|
|
11,185
|
Building improvements
|
|
|
4,413
|
|
|
|
4,413
|
|
|
|
298,524
|
|
|
|
283,075
|
|
|
|
|
|
|
|
|
Less accumulated
depreciation and amortization
|
|
|
247,209
|
|
|
|
244,132
|
|
|
$
|
54,315
|
|
|
$
|
54,296
|
Depreciation and amortization expense:
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
$
|
8,806
|
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
NOTE 5 – PROMISSORY NOTES
Promissory notes payable as of October 31, 2019 and July 31, 2019 consisted of the
following:
Description
|
|
October
30, 2019
|
|
|
July
31, 2019
|
Note payable dated March
8, 2018, matures March 8, 2019, currently in default, bearing interest at 10% per annum.
|
|
$
|
30,000
|
|
|
$
|
30,000
|
Note payable dated July 20, 2018 matures October
1, 2019, bearing interest at 0% per annum. This Note is still outstanding
|
|
|
135,000
|
|
|
|
135,000
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
165,000
|
|
|
$
|
165,000
|
Less current portion of long-term debt
|
|
|
165,000
|
|
|
|
165,000
|
Total long-term debt
|
|
$
|
0
|
|
|
$
|
0
|
Interest expense for the three months ended
October 31, 2019 and 2018 was $4,285 and $498 respectively.
NOTE 6 - CONVERTIBLE DEBT
Convertible debt as of October 31, 2019 and October
31, 2018 consisted of the following:
Description
|
|
October 31, 2019
|
|
July 31, 2019
|
|
|
|
|
|
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
|
|
|
$
|
0
|
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
|
|
|
$
|
0
|
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
|
|
|
$
|
0
|
Convertible notes, net of discount
|
|
$
|
2,216,841
|
|
|
$
|
2,145,041
|
The Company recognized $0 of debt
discount accretion expense on the above notes. Interest expense related to these notes for the three months ended October 31,
2019 and 2018 was $92,016 and $25,352, respectively.
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
NOTE 7 - LINE OF CREDIT
The Company has a line of credit
with a maximum borrowing limit of $400,000, bearing an interest rate of prime plus 3.25% per annum and secured by a General Security
Agreement. As of October 31, 2019, and October 31, 2018, $267,037 and $232,024 were drawn on the line of credit, respectively.
Interest expense for the three months ended October 31, 2019 and 2018 was $5,227 and $4,324 respectively. Beginning February 1,
2019, the Company is required to maintain a cash collateral account in the amount of $200,000 in Canadian dollars. The Company
has invested in a Guaranteed Investment Certificate for a one-year term at an interest rate of .25%.
NOTE 8 – 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
$19,490 and $0 during the three months ended October 31, 2019 and 2018. As of the October 31, 2019 and October 31, 2018, there
were $375,344 and $365,945 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 three months
ended October 31, 2019 and 2018 consulting fees paid were $28,600 and $88,465 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 President 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 $26,062 and $21,475 for the three months ended October 31, 2019 and 2018, respectively,
has been recorded in the financial statements.
NOTE 9 – STOCKHOLDERS’
EQUITY (DEFICIT)
The Company is authorized to issue 250,000,000
shares of its $0.001 par value common stock and 10,000,000 shares of Preferred stock. As of October 31, 2019 and July 31, 2019,
there were 93,118,077 shares, of common stock outstanding. There were, also, 8,000,000 shares of Series D Preferred stock outstanding
as of October 31, 2019 and 1,000,000 shares of Series C Preferred stock outstanding as of October 31, 2018.
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.
On November 7, 2017, the Company designated
1,000,000 shares of Preferred Stock as Series C Preferred stock, par value $0.001 per share (the “Series C Preferred Stock”).
Each share of Series C Preferred Stock is convertible into 72.5 common shares and has voting rights based on this ratio. As of
October 31, 2018, there were 1,000,000 shares of Preferred C shares issued and outstanding. On May 15, 2019, the 1,000,000 shares
were converted to 72,500,000 shares of common stock.
On April 29, 2019, the Company designated 10,000,000
shares of Preferred Stock as Series D Preferred stock, par value $0.001 per share (the “Series C Preferred Stock”).
Each share of Series D Preferred Stock is convertible into 72.5 common shares and has voting rights based on this ratio. As of
October 31, 2019, there were 8,000,000 shares of Preferred D shares issued and outstanding.
Cannagistics, Inc., also known as Precious Investments Inc.
GLOBAL3PL INC and Subsidiaries
Notes to Financial Statements
October 31, 2019
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.
Operating Leases
The Company in February 2019 assumed a lease
agreement for a facility site and entered into a lease agreement for office space. The facility site lease has a term of twenty-three
months expiring on December 31, 2020 and the office space lease has a five-year term and begins April 1, 2019 and ends March 31,
2024.
Effective October 1, 2019, the Company suspended
operations of its subsidiary Global3pl, Inc., (an Ontario corporation, formerly known as KRG Logistics, Inc.), 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 has not yet been completed.
The Company on July 31, 2019 entered into a
lease agreement for additional office space. The lease has a commencement date of June 1, 2019 and has a lease term of five years
expiring on May 31, 2024.
Future minimum lease payments, as set forth
in the lease, are below:
Year
|
|
Amount
|
2019-2020
|
|
|
$
|
22,075
|
2020-2021
|
|
|
$
|
22,737
|
2021-2022
|
|
|
$
|
23,415
|
2022-2023
|
|
|
$
|
24,122
|
2023-2024
|
|
|
$
|
14,314
|
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:
Sanguine Group, LLC, has loaned the Company additional funds not
already included in the established promissory note. These funds are not yet reduced to a written agreement.
Garden State Holdings loaned the Company $55,000 on December 4,
2019. There is no written note at this time, but Garden State Holdings has committed to loan the Company up to $175,000.
Sanguine Group, LLC and Garden State Holdings are entities controlled
by the same person, who is an investor in the Company.
Emerging Growth Advisors, Inc., controlled by James W. Zimbler,
our President/Director has loaned the company a total of $35,777.24. There is no terms or written note.
The transaction regarding the transfer of the
assets of Global3pl, Inc. (Ontario formerly known as KRG Logistics, Inc., was executed on November 6, 2019. The Company anticipates
formally liquidating and dissolving the subsidiary in the next fiscal Quarter.