Cover
Cover - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Nov. 09, 2020 | |
Cover [Abstract] | ||
Document Type | 10-K/A | |
Amendment Flag | true | |
Amendment Description | Corrections | |
Document Period End Date | Jul. 31, 2020 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --07-31 | |
Entity File Number | 000-55711 | |
Entity Registrant Name | Cannagistics Inc. | |
Entity Central Index Key | 0001304741 | |
Entity Incorporation, State or Country Code | NV | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
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 Public Float | $ 32,599,277 | |
Entity Common Stock, Shares Outstanding | 158,789,105 |
Balance Sheets
Balance Sheets - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 685 | $ 630 |
Accounts and other receivables | 0 | 133,971 |
Right-to-use asset | 23,033 | |
Related party receivables, less allowance for doubtful accounts of $993,975 | 1,900 | |
TOTAL CURRENT ASSETS | 23,718 | 136,501 |
Right-to-use asset, net of current portion | 31,442 | 0 |
Security deposits | (3,634) | (3,634) |
TOTAL OTHER ASSETS | 35,076 | 3,634 |
ASSETS OF DISCONTINUED OPERATIONS | 0 | 587,787 |
TOTAL ASSETS | 58,794 | 727,922 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued liabilities | 582,936 | 380,614 |
Lease liability, current portion | 18,505 | |
Promissory notes | 170,000 | 165,000 |
Convertible notes payable, net of discount of $58,087 and $0, July 31, 2020 and 2019, respectively | 2,426,254 | 2,145,041 |
Derivative liabilities | 205,796 | 0 |
Common stock payable | 24,998 | |
Related party payables | 388,094 | 365,945 |
TOTAL CURRENT LIABILITIES | 3,816,610 | 3,056,600 |
LONG-TERM LIABILITIES | ||
Lease liability, net of current portion | 38,559 | 0 |
TOTAL LONG-TERM LIABILITIES | 38,559 | 0 |
LIABILITIES OF DISCONTINUED OPERATIONS | 864,644 | 772,051 |
TOTAL LIABILITIES | 4,719,813 | 3,828,651 |
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 July 31, 2020 and 2019, respectively | 10,000 | 8,000 |
Common stock; $0.001 par value; 250,000,000 shares authorized; 105,099,277 and 93,118,077 outstanding and issued as of July 31, 2020 and 2019, respectively | 105,099 | 93,030 |
Additional paid-in capital | 8,490,720 | 7,382,579 |
Treasury stock | (45,000) | (45,000) |
Accumulated deficit | (13,221,838) | (10,539,338) |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY | (4,661,019) | (3,100,729) |
TOTAL LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY | $ 58,794 | $ 727,922 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 105,099,277 | 93,118,077 |
Common stock, shares outstanding | 105,099,277 | 93,118,077 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares authorized | 20,000,000 | 10,000,000 |
Preferred Stock, shares issued | 10,000,000 | 8,000,000 |
Related party receivables , less allowance for doubful accounts | $ 993,975 | |
Convertible notes payable, net of discount | $ 58,087 | $ 0 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | ||
Cost of revenue | ||
Gross profit | ||
Operating expenses | ||
General and administrative expenses | 96,161 | 193,471 |
Bad debt | 158,951 | 1,055,783 |
Rent | 29,774 | 22,639 |
Consulting | 1,090,583 | 77,920 |
Professional fees | 320,474 | 5,060,881 |
Total operating expenses | 1,695,943 | 6,410,694 |
Loss from operations | (1,695,943) | (6,410,694) |
Interest Income | 87,037 | 88,471 |
Interest expense | (464,812) | (253,206) |
Gain/(Loss) on sale of asset | (55,832) | |
Loss on conversion of debt | (1,289,724) | |
Loss on conversion of stock | 99,000 | |
Loss on issuance of stock | (8,000) | |
Loss on derivative liabilities | (160,613) | |
Change in fair value of derivative liabilities | (37,992) | |
Total other expense | (556,228) | (1,561,459) |
Loss from continuing operations | (2,252,171) | (7,972,153) |
Discontinued operations, including loss on disposal | (430,329) | (472,593) |
Net loss | $ (2,682,500) | $ (8,444,746) |
Net loss per common share: basic and diluted | $ (0.02) | $ (0.31) |
Basic and diluted weighted average common shares outstanding | 98,213,338 | 26,008,484 |
Shareholders Equity
Shareholders Equity - 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, 2018 | 14,355,645 | 1,000,000 | ||||||
Beginning balance, amount at Jul. 31, 2018 | $ 14,267 | $ 1,000 | $ 1,270,568 | $ (45,000) | $ (2,113,694) | $ (872,859) | ||
Shares issued to settle convertible debt, shares | 6,261,778 | |||||||
Shares issued to settle convertible debt, amount | $ 6,262 | 25,898 | $ 32,160 | |||||
Shares issued for cash, shares | ||||||||
Shares issued for cash, amount | ||||||||
Shares issued to convert preferred to common, shares | 72,500,000 | (1,000,000) | ||||||
Shares issued to convert preferred to common, value | $ 72,500 | $ (1,000) | 27,500 | 99,000 | ||||
Acquisition adjustment to equity, shares | 654 | |||||||
Acquisition adjustment to equity, amount | $ 1 | 1 | ||||||
Shares issued for services, shares | 8,000,000 | |||||||
Shares issued for services, amount | $ 8,000 | 4,768,889 | 4,776,889 | |||||
Foreign currency adjustment | 19,102 | 19,102 | ||||||
Conversion of debt | 1,289,724 | 1,289,724 | ||||||
Net loss | (8,444,746) | (8,444,746) | ||||||
Ending balance, shares at Jul. 31, 2019 | 93,118,077 | 8,000,000 | ||||||
Ending balance, amount at Jul. 31, 2019 | $ 93,030 | $ 8,000 | 7,382,579 | 45,000 | (10,539,338) | $ (3,100,729) | ||
Shares issued to settle convertible debt, shares | 4,500,000 | 68,275 | ||||||
Shares issued to settle convertible debt, amount | $ 4,500 | 52,575 | $ 57,075 | |||||
Shares issued for cash, shares | 2,000,000 | |||||||
Shares issued for cash, amount | $ 2,000 | 72,000 | 75,000 | |||||
Shares issued to convert preferred to common, shares | ||||||||
Shares issued to convert preferred to common, value | ||||||||
Acquisition adjustment to equity, shares | (18,800) | |||||||
Acquisition adjustment to equity, amount | $ 69 | (69) | ||||||
Shares issued for services, shares | 2,500,000 | 2,000,000 | ||||||
Shares issued for services, amount | $ 2,500 | $ 2,000 | 955,635 | 960,135 | ||||
Foreign currency adjustment | ||||||||
Conversion of debt | ||||||||
Net loss | (2,682,500) | (2,682,500) | ||||||
Ending balance, shares at Jul. 31, 2020 | 100,599,277 | 10,000,000 | ||||||
Ending balance, amount at Jul. 31, 2020 | $ 100,599 | $ 10,000 | $ 8,490,720 | $ (45,000) | $ (13,221,838) | $ (4,661,019) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (2,682,500) | $ (8,444,895) |
Loss from discontinued operations | 430,329 | 472,593 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Foreign currency adjustment | 19,102 | |
Stock based compensation | 960,135 | 4,776,889 |
Accrued interest | ||
Depreciation expense | 8,806 | |
Bad debt | 593,797 | 1,055,783 |
Gain/(Loss) on conversion of debt | 1,299,594 | |
Loss on disposal of discontinued assets | 55,832 | |
Loss on conversion of stock | (99,000) | |
Loss on derivative liabilities | 84,629 | |
Change in fair value of derivative liabilities | 37,992 | |
Amortization of debt discount | 52,413 | |
Changes in assets and liabilities | ||
Accounts receivable and other receivables | 498,766 | 62,780 |
Related party receivables | 1,900 | |
Prepaid expense | 16,515 | (5,361) |
Accounts payable and accrued expenses | (255,311) | 63,878 |
Accounts payable - related parties | 22,149 | 110,989 |
Net cash used in operating activities of continuing operations | (239,186) | (480,693) |
Net cash used in operating activities discontinued operations | (374,497) | (472,593) |
Net cash used in operating activities | (613,683) | (953,286) |
Purchase of equipment | 17,972 | |
Sale of equipment | 54,296 | |
Sale of subsidiary | 124,858 | |
(Increase) decrease in restricted cash | (152,181) | |
(Increase) decrease in security deposits | 33,077 | |
Net cash used in investing activities | 179,154 | (137,076) |
Cash Flows from Financing Activities | ||
Proceeds from promissory notes | 7,500 | 6,100 |
Proceeds from convertible notes | 324,050 | 1,116,881 |
Proceeds from line of credit | 276,321 | |
Proceeds from stock purchase | 75,000 | |
Payments on promissory notes | 2,500 | 40,000 |
Payments on line of credit | 245,787 | 6,227 |
Net cash provided by financing activities | 434,584 | 1,076,754 |
Net increase in cash | 55 | (13,608) |
Cash, beginning of period | 630 | 14,238 |
Cash, end of period | 685 | 630 |
Cash paid for interest | 52,322 | |
Cash paid for tax | ||
Non-cash investing and financing transactions | ||
Acquisition adjustment to equity | ||
Shares issued to settle convertible debt | 68,275 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Jul. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization | 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 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Principals | 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 year ended July 31, 2020. 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 July 31, 2020 and July 31, 2019: July 31,2020 Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 205,796 $ 205,796 July 31,2019 Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ — $ — 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 July 31, 2020, and 2019 the allowance for doubtful accounts was $0. 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. Effective August 1, 2019, the Company implemented ASU 2016-02 under the modified retrospective method. As a result, the Company recognized right of use assets of $54,475 and lease liabilities of $57,064. Recent Accounting Pronouncements Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments | |
Derivative Liabilities | July 31,2020 Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 205,796 $ 205,796 | July 31,2019 Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ — $ — |
Going Concern
Going Concern | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Going Concern | NOTE 3 – GOING CONCERN Management does not expect existing cash as of July 31, 2020 to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these July 31, 2020 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 July 31, 2020, the Company has incurred losses totaling $13,221,838 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. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Discontinued Operations | 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. The transactions resulted in a loss of $430,329 as reported on the income statement as of July 31, 2020. 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 July 31, 2020, and July 31, 2019, the summaries of liabilities pertaining to discontinued operations were as follows: July 31, July 31, 2020 2019 Accounts receivable, net — 359,256 CAD prepaid expenses & deposits — 16,515 Restricted cash — 152,181 Due from related company — 5,539 Equipment — 54,296 Assets of discontinued operations $ — $ 587,787 July 31, July 31, 2020 2019 Accounts payable $ 487,128 $ 432,505 Royal Bank line of credit 289,242 258,708 Unearned revenue 14,833 16,299 Accrued liabilities 64,663 64,641 Custom duties & GST payable 6,019 — HST 2,759 (102) Liabilities of discontinued operations $ 864,644 $ 772,051 |
Promissory Notes
Promissory Notes | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Promissory Notes | NOTE 5 – PROMISSORY NOTES Promissory notes payable as of July 31, 2020 and 2019 consisted of the following: Description July 31, 2020 July 31, 2019 Note payable dated January 15, 2014, matured January 15, 2015 bearing interest at 12% per annum. $ — $ 3,000 Note payable dated February 14, 2014 matured February 14, 2015, bearing interest at 12% per annum. $ — $ 3,750 Note payable dated April 1, 2014 matured April 1, 2015, bearing interest at 12% per annum. $ — $ 4,700 Note payable dated January 30, 2014, matured January 30, 2015, bearing interest at 12% per annum. $ — $ 5,000 Note payable dated March 8, 2018, matured March 8, 2019, bearing interest at 10% per annum. $ 30,000 $ 23,900 Note payable dated July 18, 2018, matured July 18, 2019, bearing interest at 0% per annum. This note is still outstanding $ 135,000 $ 175,000 Note payable dated February 4, 2020, matured March 108, 2020, bearing interest at 18% per annum. $ 5,000 $ — Less current portion of long-term debt $ 170,000 $ 215,350 Total long-term debt — — Interest expense for the year ended July 31, 2020 and 2019 was $17,350 and $18,644, respectively. |
Convertible Debt
Convertible Debt | 12 Months Ended |
Jul. 31, 2020 | |
Convertible Subordinated Debt [Abstract] | |
Convertible Debt | NOTE 6 - CONVERTIBLE DEBT Convertible debt as of July 31, 2020 and July 31, 2019 consisted of the following: Description July 31, 2020 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 $ — 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 $ — 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 $ — 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 $ — Convertible note agreement dated February 10, 2020 in the amount of $15,000 payable and due on February 10, 2021 bearing interest at 12% per annum. $ 15,000 $ — Convertible note agreement dated February 21, 2020 in the amount of $47,500 payable and due on February 28, 2021 bearing interest at 12% per annum. $ 47,500 $ — Convertible note agreement dated February 28, 2020 in the amount of $67.500 payable and due on November 28, 2020 bearing interest at 8% per annum. $ 67,500 $ — Convertible note agreement dated April 15, 2020 in the amount of $95,000 payable and due on April 15, 2021 bearing interest at 10% per annum, net of discount. $ 31,500 $ — Convertible notes, net of discount $ 2,475,341 $ 2,145,041 The Company recognized $0 of debt discount accretion expense on the above notes. Interest expense related to these notes for the year ended July 31, 2020 and 2019 was $384,649 and $163,668. 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. For the two notes with a variable-rate conversion feature issued during the year ended July 31, 2020, the Company valued the conversion features on the date of issuance resulting in initial liabilities totaling $167,804. 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 $84,629 was recorded during the year ended July 31, 2020. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0275 to $0.0325, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.050 to $0.059, an expected dividend yield of 0%, expected volatilities ranging from 254%-277%, risk-free interest rate ranging from 0.19% to 0.97%, and expected terms ranging from 0.75 to one year. On July 31, 2020, the derivative liabilities on these two convertible notes were revalued at $205,796 resulting in a loss of $37,992 for the year ended July 31, 2020 related to the change in fair value of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0088 to $0.0110, the closing stock price of the Company's common stock on the date of valuation of $0.023, an expected dividend yield of 0%, expected volatility of 230, risk-free interest rate of 0.11%, and an expected term ranging from 0.33 to 0.71 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 year ended July 31, 2020, the Company amortized $52,414 to interest expense. As of September 30, 2020, discounts of $57,586 remained for which will be amortized through September 2021. |
Line of Credit (Discontinued)
Line of Credit (Discontinued) | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 7 - LINE OF CREDIT (Discontinued) 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 July 31, 2020, and July 31, 2019, $0 and $258,708 were drawn on the line of credit, respectively. Interest expense for the year ended July 31, 2020, and 2019 was $0 and $13,554 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%. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jul. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 $45,269 and $35,777 during the year ended July 31, 2020 and 2019, respectively. As of July 31, 2020, and 2019, there were $388,094 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 year ended July 31, 2020 and 2019 consulting fees paid were $130,447 and $169,719 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 income in the amount of $87,037 and $64,695 for the year ended July 31, 2020 and 2019, respectively, has been recorded in the financial statements . |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Jul. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 9 – STOCKHOLDERS’ DEFICIT The Company is authorized to issue 500,000,000 shares of its $0.001 par value common stock and 10,000,000 shares of Preferred stock. As of July 31, 2020, and July 31, 2019, there were 100,599,277 and 93,118,077 shares, respectively of common stock outstanding. There were 10,000,000 shares of Series D Preferred stock outstanding as of July 31, 2020, and 8,000,000 shares of Series D Preferred Stock outstanding as of July 31, 2019. 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 January 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 D Preferred Stock”). Each share of Series D Preferred Stock is convertible into 72.5 common shares and has voting rights based on this ratio. There were 10,000,000 shares of Series D Preferred stock outstanding as of July 31, 2020 and 8,000,000 shares of Series D Preferred Stock outstanding as of July 31, 2019. On May 6, 2020, the Company filed an Offering Statement under Regulation A on form 1-A for a Tier II Offering of 43,000,000 shares . |
Warrant
Warrant | 12 Months Ended |
Jul. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Warrant | NOTE 10 – 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 and expires in three years from issuance . |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 – INCOME TAXES The Company is subject to United States federal and state income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: July 31, 2020 2019 Income at statutory rate $ 563,325 $ 1,773,397 Change in valuation allowance (563,325 ) (1,773,397) $ — $ — The significant components of deferred income tax assets and liabilities at July 31, 2020 and 2019 are as follows: July 31, 2020 2019 Net operating loss carryforward $ 2,776,586 $ 2,213,261 Valuation allowance (2,776,586 ) (2,213,261) $ — $ — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 – 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 2020-2021 $ 22,569 2021-2022 $ 23,365 2022-2023 $ 20,449 Total $ 66,383 The Company adopted ASC 842 effective August 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company’s weighted-average remaining lease term relating to its operating leases is 2.75 years, with a weighted-average discount rate of 10%. |
Restatement
Restatement | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement | NOTE 13 – RESTATEMENT The consolidated financial statements for the year ended July 31, 2019 have been restated to correct the valuation of shares issued for services. On April 29, 2019, the Company issued 8,000,000 shares of Series D Preferred Stock to its Chief Executive Officer. Each share of Series D Preferred Stock is convertible into 72.5 shares of common stock. Subsequently, effective July 1, 2020, our former Chief Executive Officer transferred a total of 2,000,000 shares of Series D Preferred Stock to our new CEO, with a total of 6,000,000 remaining with the former CEO. The issuance of these Series D Preferred Stock were previously recorded at par value. The Company has restated its July 31 2019 consolidated financial statements to record these Series D Preferred Stock at their fair value. As the Series D Preferred Stock is convertible to common stock, the Company determined the fair value by determining the dilutive effect of the Series D Preferred Stock as if converted to common stock when issued issuance. If converted, the Series D Preferred Stock would represent 97.58% of the capitalization of the Company when issued. The Company determined the capitalization of the Company to be $4,895,356, based upon the closing price of $0.341 per share, with the 97.58% attributable to the Series D Preferred Stock to be $4,776,889. The Company previously recorded the value of the Series D Preferred Stock at $8,000, resulting in a difference of $4,768,889. The following summarizes the impact of the restatement: As As Reported Restatement Restated Operating expenses $ 2,293,899 $ 4,768,889 $ 7,062,788 Loss from operations (2,114,398 ) (4,768,889 ) (6,883,287 ) Net loss (3,675,857 ) (4,768,889 ) (8,444,746 ) The restatement did not impact the Company’s assets, liabilities or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – 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 a total of $152,500, as follows: December 4, 2019 $55,000 January 21, 2020 $25,000 January 29, 2020 $15,000 February 21, 2020 $10,000 February 21, 2020 $47,000 There is no written note between the Company and Garden State Holdings at this time, however the total loan amount commitment was 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 $32,400. There is no terms or written note. In August of 2020, the Company issued 2,499,828 to a lender to finalize the settlement of $54,998 in debt, of which $30,000 was previously settled during the year ended July 31, 2020 Subsequent to July 31, 2020, the Company issued 51,190,000 shares of common stock for the conversion of convertible debt. On May 6, 2020, the Company filed an Offering Statement under Regulation A on form 1-A for a Tier II Offering of 43,000,000 shares. That offering is still pending with the Securities and Exchange Commission. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 2020 | |
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 year ended July 31, 2020. |
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 July 31, 2020, and 2019 the allowance for doubtful accounts was $0. |
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. |
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 July 31, 2020 and July 31, 2019: July 31,2020 Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ 205,796 $ 205,796 July 31,2019 Level 1 Level 2 Level 3 Total Derivative liabilities $ — $ — $ — $ — |
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. |
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. |
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. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Assets of discontinued operations | July 31, July 31, 2020 2019 Accounts receivable, net — 359,256 CAD prepaid expenses & deposits — 16,515 Restricted cash — 152,181 Due from related company — 5,539 Equipment — 54,296 Assets of discontinued operations $ — $ 587,787 |
Liabilities of discontinued operations | July 31, July 31, 2020 2019 Accounts payable $ 487,128 $ 432,505 Royal Bank line of credit 289,242 258,708 Unearned revenue 14,833 16,299 Accrued liabilities 64,663 64,641 Custom duties & GST payable 6,019 — HST 2,759 (102) Liabilities of discontinued operations $ 864,644 $ 772,051 |
Promissory Notes (Tables)
Promissory Notes (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Promissory Notes | Description July 31, 2020 July 31, 2019 Note payable dated January 15, 2014, matured January 15, 2015 bearing interest at 12% per annum. $ — $ 3,000 Note payable dated February 14, 2014 matured February 14, 2015, bearing interest at 12% per annum. $ — $ 3,750 Note payable dated April 1, 2014 matured April 1, 2015, bearing interest at 12% per annum. $ — $ 4,700 Note payable dated January 30, 2014, matured January 30, 2015, bearing interest at 12% per annum. $ — $ 5,000 Note payable dated March 8, 2018, matured March 8, 2019, bearing interest at 10% per annum. $ 30,000 $ 23,900 Note payable dated July 18, 2018, matured July 18, 2019, bearing interest at 0% per annum. This note is still outstanding $ 135,000 $ 175,000 Note payable dated February 4, 2020, matured March 108, 2020, bearing interest at 18% per annum. $ 5,000 $ — Less current portion of long-term debt $ 170,000 $ 215,350 Total long-term debt — — |
Convertible Debt (Tables)
Convertible Debt (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Convertible Subordinated Debt [Abstract] | |
Summary of Convertible Debt | NOTE 6 - CONVERTIBLE DEBT Convertible debt as of July 31, 2020 and July 31, 2019 consisted of the following: Description July 31, 2020 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 $ — 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 $ — 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 $ — 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 $ — Convertible note agreement dated February 10, 2020 in the amount of $15,000 payable and due on February 10, 2021 bearing interest at 12% per annum. $ 15,000 $ — Convertible note agreement dated February 21, 2020 in the amount of $47,500 payable and due on February 28, 2021 bearing interest at 12% per annum. $ 47,500 $ — Convertible note agreement dated February 28, 2020 in the amount of $67.500 payable and due on November 28, 2020 bearing interest at 8% per annum. $ 67,500 $ — Convertible note agreement dated April 15, 2020 in the amount of $95,000 payable and due on April 15, 2021 bearing interest at 10% per annum, net of discount. $ 31,500 $ — Convertible notes, net of discount $ 2,475,341 $ 2,145,041 The Company recognized $0 of debt discount accretion expense on the above notes. Interest expense related to these notes for the year ended July 31, 2020 and 2019 was $384,649 and $163,668. 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. For the two notes with a variable-rate conversion feature issued during the year ended July 31, 2020, the Company valued the conversion features on the date of issuance resulting in initial liabilities totaling $167,804. 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 $84,629 was recorded during the year ended July 31, 2020. The Company valued the conversion feature using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0275 to $0.0325, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.050 to $0.059, an expected dividend yield of 0%, expected volatilities ranging from 254%-277%, risk-free interest rate ranging from 0.19% to 0.97%, and expected terms ranging from 0.75 to one year. On July 31, 2020, the derivative liabilities on these two convertible notes were revalued at $205,796 resulting in a loss of $37,992 for the year ended July 31, 2020 related to the change in fair value of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following assumptions: conversion prices ranging from $0.0088 to $0.0110, the closing stock price of the Company's common stock on the date of valuation of $0.023, an expected dividend yield of 0%, expected volatility of 230, risk-free interest rate of 0.11%, and an expected term ranging from 0.33 to 0.71 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 year ended July 31, 2020, the Company amortized $52,414 to interest expense. As of September 30, 2020, discounts of $57,586 remained for which will be amortized through September 2021. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income tax rate reconciliation | July 31, 2020 2019 Income at statutory rate $ 563,325 $ 1,773,397 Change in valuation allowance (563,325 ) (1,773,397) $ — $ — |
Deferred income tax and liablitilies | July 31, 2020 2019 Net operating loss carryforward $ 2,776,586 $ 2,213,261 Valuation allowance (2,776,586 ) (2,213,261) $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Office Lease Payments | Year Amount 2020-2021 $ 22,569 2021-2022 $ 23,365 2022-2023 $ 20,449 Total $ 66,383 |
Restatement (Tables)
Restatement (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Restated Accounting | As As Reported Restatement Restated Operating expenses $ 2,293,899 $ 4,768,889 $ 7,062,788 Loss from operations (2,114,398 ) (4,768,889 ) (6,883,287 ) Net loss (3,675,857 ) (4,768,889 ) (8,444,746 ) |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) | Oct. 24, 2012 | Nov. 16, 2017 | Jul. 31, 2020 | Jul. 31, 2019 |
Class of Stock [Line Items] | ||||
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 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 311,498 | $ 0 |
Right-of-use assets | 54,475 | |
Lease liabilities | $ 57,064 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) | Jul. 31, 2020USD ($) |
Going Concern [Abstract] | |
Accumulated deficit | $ (13,221,838) |
Discontinued Operations - Asset
Discontinued Operations - Assets of Discontinued Operations (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Assets of discontinued operations | $ 0 | $ 587,787 |
Assets of Discontinued Operations | ||
Accounts receivable, net | 359,256 | |
CAD prepaid expenses & deposits | 16,515 | |
Restricted cash | 152,181 | |
Due from related company | 5,539 | |
Equipment | 54,296 | |
Assets of discontinued operations | $ 587,787 |
Discontinued Operations - Liabi
Discontinued Operations - Liabilities of Discontinued Operations (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Liabilities of discontinued operations | $ 864,644 | $ 772,051 |
Liabilities of Discontinued Operations | ||
Accounts payable | 487,128 | 432,505 |
Royal Bank line of credit | 289,242 | 258,708 |
Unearned revenue | 14,833 | 16,299 |
Accrued liabilities | 64,663 | 64,641 |
Custom duties & GST payable | 6,019 | |
HST | 2,759 | (102) |
Liabilities of discontinued operations | $ 864,644 | $ 722,051 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrativel) - USD ($) | Nov. 06, 2019 | Jul. 31, 2020 | Jul. 31, 2019 |
Accounting Policies [Abstract] | |||
Sale of assets, value of assets sold | $ 54,296 | ||
Sale of assets, sale price | $ 10 | ||
Discontinued operations, including loss on disposal | $ (430,329) | $ (472,593) |
Promissory Notes (Details)
Promissory Notes (Details) - USD ($) | Jul. 31, 2020 | Apr. 30, 2020 | Jul. 31, 2019 |
Short-term Debt [Line Items] | |||
Notes payable | $ 170,000 | $ 165,000 | |
Notes payable, total | $ 170,000 | 215,350 | |
Current portion long-term debt | 170,000 | 215,350 | |
Total long-term debt | $ 0 | 0 | |
Promissory Notes One [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 3,000 | ||
Promissory Notes Two [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 3,750 | ||
Promissory Notes Three [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 4,700 | ||
Promissory Notes Four [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 5,000 | ||
Promissory Notes Five [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 30,000 | 23,900 | |
Promissory Notes Six [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | 135,000 | 175,000 | |
Promissory Notes Seven [Member] | |||
Short-term Debt [Line Items] | |||
Notes payable | $ 5,000 |
Promissory Notes (Details Narra
Promissory Notes (Details Narrative) - USD ($) | 12 Months Ended | ||||||||
Jul. 31, 2020 | Jul. 31, 2019 | Feb. 04, 2020 | Jul. 18, 2018 | Mar. 08, 2018 | Apr. 01, 2014 | Feb. 14, 2014 | Jan. 30, 2014 | Jan. 15, 2014 | |
Short-term Debt [Line Items] | |||||||||
Interest Expense | $ 1,735,000 | $ 1,864,400 | |||||||
Promissory Notes One [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Notes payable, issuance date | Jan. 15, 2014 | ||||||||
Notes payable, maturity date | Jan. 15, 2015 | ||||||||
Notes payable, rate of interest | 12.00% | ||||||||
Promissory Notes Two [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Notes payable, issuance date | Feb. 14, 2014 | ||||||||
Notes payable, maturity date | Feb. 14, 2015 | ||||||||
Notes payable, rate of interest | 12.00% | ||||||||
Promissory Notes Three [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Notes payable, issuance date | Apr. 1, 2014 | ||||||||
Notes payable, maturity date | Apr. 1, 2015 | ||||||||
Notes payable, rate of interest | 12.00% | ||||||||
Promissory Notes Four [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Notes payable, issuance date | Jan. 30, 2014 | ||||||||
Notes payable, maturity date | Jan. 30, 2015 | ||||||||
Notes payable, rate of interest | 12.00% | ||||||||
Promissory Notes Five [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Notes payable, issuance date | Mar. 8, 2018 | ||||||||
Notes payable, maturity date | Mar. 8, 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 | 0.00% | ||||||||
Promissory Notes Seven [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Notes payable, issuance date | Feb. 4, 2020 | ||||||||
Notes payable, maturity date | Mar. 10, 2020 | ||||||||
Notes payable, rate of interest | 18.00% |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 | Jun. 28, 2019 | Mar. 13, 2019 | Feb. 20, 2018 | Nov. 01, 2013 |
Short-term Debt [Line Items] | ||||||
Convertible notes | $ 1,034,000 | |||||
Convertible notes, net of discount | $ 2,475,341 | $ 2,145,041 | ||||
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 | 8,000,000 | $ 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 | |||||
Convertible Debt Six [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | 3,800 | |||||
Convertible Debt Seven [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | 36,500 | |||||
Convertible Debt Eight [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | 95,000 | |||||
Convertible Debt Nine [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | 15,000 | |||||
Convertible Debt Ten [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | 47,500 | |||||
Convertible Debt Eleven [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | 67,500 | |||||
Convertible Debt Twelve [Member] | ||||||
Short-term Debt [Line Items] | ||||||
Convertible notes | $ 31,500 |
Convertible Debt (Details Narra
Convertible Debt (Details Narrative) - USD ($) | Feb. 10, 2020 | Dec. 04, 2019 | Sep. 04, 2019 | Aug. 06, 2019 | Mar. 13, 2019 | Apr. 15, 2020 | Feb. 28, 2020 | Feb. 21, 2020 | Aug. 19, 2019 | Jun. 28, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Feb. 20, 2018 | Nov. 01, 2013 |
Short-term Debt [Line Items] | ||||||||||||||
Interest Expense | $ 384,649 | $ 163,668 | ||||||||||||
Debt discount accretion expense | $ 0 | $ 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. 6, 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. 4, 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. 4, 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 | 8.00% | |||||||||||||
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 One[Member] | ||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||
Convertible debt | $ 30,000 | |||||||||||||
Convertible note, rate of interest | 12.00% | |||||||||||||
Convertible notes, conversion price | $ 0.002250 |
Convertible Debt - Derivative L
Convertible Debt - Derivative Liabilities (Details Narrative) | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Short-term Debt [Line Items] | |
Discounts | $ 57,586 |
Initial Valuation of Two Variable Notes | |
Short-term Debt [Line Items] | |
Liability of convertible note | 167,804 |
Loss on derivative liability | $ 84,629 |
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 $0.0275 to $0.0325, the closing stock price of the Company's common stock on the dates of valuation ranging from $0.050 to $0.059, an expected dividend yield of 0%, expected volatilities ranging from 254%-277%, risk-free interest rate ranging from 0.19% to 0.97%, and expected terms ranging from 0.75 to one year. |
Amortized interest expense | $ 52,414 |
Subsequent Valuation of Two Variable Notes | |
Short-term Debt [Line Items] | |
Liability of convertible note | 205,796 |
Loss on derivative liability | $ 37,992 |
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 $0.0088 to $0.0110, the closing stock price of the Company's common stock on the date of valuation of $0.023, an expected dividend yield of 0%, expected volatility of 230, risk-free interest rate of 0.11%, and an expected term ranging from 0.33 to 0.71 years. |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | 12 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Feb. 01, 2019 | |
Maximum Borrowing Limit | $ 400,000 | ||
Interest Rate of Prime | 3.25% | ||
Drawn on line of credit | $ 0 | $ 258,708 | |
Interest Expense | $ 0 | $ 13,554 | |
Gauranteed Investment Certificate | |||
Cash collateral, required to maintain | $ 200,000 | ||
Guaranteed investment certificate, interest rate | 0.25% | ||
Guaranteed investment term | 1 year |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Feb. 20, 2018 | |
Shareholder advances as loan payable to related party | $ 45,269 | $ 35,777 | |
Due to Related Parties | 388,094 | 365,945 | |
Professional Fees | 320,474 | 5,060,881 | |
Convertible notes | $ 1,034,000 | ||
Advances on note payable | $ 175,000 | ||
Convertible note, interest rate | 10.00% | ||
Interest expense | $ 87,037 | 64,695 | |
Payments received | 153,217 | ||
Consulting | |||
Professional Fees | $ 130,447 | $ 169,719 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) | May 15, 2019USD ($)shares | Nov. 01, 2017 | Jul. 31, 2020$ / sharesshares | May 06, 2020shares | Jul. 31, 2019$ / sharesshares | Apr. 29, 2019$ / sharesshares | Nov. 07, 2017$ / sharesshares |
Common stock, shares authorized | 250,000,000 | 250,000,000 | |||||
Common stock, shares outstanding | 105,099,277 | 93,118,077 | |||||
Preferred Stock, Shares authorized | 20,000,000 | 10,000,000 | |||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Preferred shares issued and outstanding | 10,000,000 | 8,000,000 | |||||
Reverse stock split | 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. | ||||||
Reverse stock split ratio | 0.25 | ||||||
Series C Preferred Stock | |||||||
Preferred Stock, Shares authorized | 1,000,000 | ||||||
Preferred Stock, par value | $ / shares | $ 0.001 | ||||||
Preferred shares issued and outstanding | 1,000,000 | ||||||
Conversion rate | Each share of Series C Preferred Stock is convertible into 72.5 common shares and has voting rights based on this ratio. | ||||||
Common stock, resulting from conversion | 72,500,000 | ||||||
Series C Preferred Stock | |||||||
Preferred shares converted to common stock | $ | $ 1,000,000 | ||||||
Series D Preferred Stock | |||||||
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 | |||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Preferred shares issued and outstanding | 8,000,000 | ||||||
Conversion rate | Each share of Series D Preferred Stock is convertible into 72.5 shares of common stock. Subsequently, effective July 1, 2020, our former Chief Executive Officer transferred a total of 2,000,000 shares of Series D Preferred Stock to our new CEO, with a total of 6,000,000 remaining with the former CEO. The issuance of these Series D Preferred Stock were previously recorded at par value. The Company has restated its’ July 31 2019 consolidated financial statements to record these Series D Preferred Stock at their fair value. As the Series D Preferred Stock is convertible to common stock, the Company determined the fair value by determining the dilutive effect of the Series D Preferred Stock as if converted to common stock when issued issuance. If converted, the Series D Preferred Stock would represent 97.58% of the capitalization of the Company when issued. The Company determined the capitalization of the Company to be $4,895,356, based upon the closing price of $0.341 per share, with the 97.58% attributable to the Series D Preferred Stock to be $4,776,889. The Company previously recorded the value of the Series D Preferred Stock at $8,000, resulting in a difference of $4,768,889. The following summarizes the impact of the restatement: | ||||||
Regulation A Offering | |||||||
Offering, amount of shares | 43,000,000 |
Warrant (Details Narrative)
Warrant (Details Narrative) - USD ($) | 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 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Expected income tax at statutory rate | $ 563,325 | $ 1,773,397 |
Change in valuation allowance | (563,325) | (1,773,397) |
Provision for income taxes |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Jul. 31, 2020 | Jul. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryover | $ 2,776,586 | $ 2,213,261 |
Valuation allowance | (2,779,586) | (2,213,261) |
Net deferred tax benefit |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Jul. 31, 2020 | |
Income Taxes (Textual) | |
Tax rate | 21.00% |
Commitments and Contingecies (D
Commitments and Contingecies (Details) - USD ($) | 12 Months Ended | |||
Jul. 31, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||||
Future Lease Payments | $ 20,449 | $ 23,365 | $ 22,569 | |
Total future lease payments | $ 66,383 | |||
Weighted-average remaining lease term | 2 years 9 months | |||
Weighted-average discount rate | 10.00% |
Commitments and Contingecies _2
Commitments and Contingecies (Details Narrative) | 12 Months Ended | |
Jul. 31, 2020 | Jun. 01, 2019 | |
Accounting Policies [Abstract] | ||
Facility site lease term | 23 months | |
Expiration date of facility site lease | Dec. 31, 2020 | |
Office space lease term | 5 years | |
Expiration of office space lease term | Mar. 31, 2024 | |
Additional office space lease term | 5 years | |
Expiration of additional office space lease term | Mar. 31, 2024 |
Restatement - (Details)
Restatement - (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Operating expenses | $ 1,695,943 | $ 6,410,694 |
Loss from operations | (2,252,171) | (7,972,153) |
Net loss | $ (2,682,500) | (8,444,746) |
As Reported | ||
Operating expenses | 2,293,899 | |
Loss from operations | (2,114,398) | |
Net loss | (3,675,857) | |
Restatement | ||
Operating expenses | 4,768,889 | |
Loss from operations | (4,768,889) | |
Net loss | (4,768,889) | |
As Restated | ||
Operating expenses | 7,062,788 | |
Loss from operations | (6,883,287) | |
Net loss | $ (8,444,746) |
Restatement (Details Narrative)
Restatement (Details Narrative) - shares | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Preferred shares issued and outstanding | 10,000,000 | 8,000,000 |
Series D Preferred Stock | ||
Preferred shares issued and outstanding | 8,000,000 | |
Conversion rate | Each share of Series D Preferred Stock is convertible into 72.5 shares of common stock. Subsequently, effective July 1, 2020, our former Chief Executive Officer transferred a total of 2,000,000 shares of Series D Preferred Stock to our new CEO, with a total of 6,000,000 remaining with the former CEO. The issuance of these Series D Preferred Stock were previously recorded at par value. The Company has restated its’ July 31 2019 consolidated financial statements to record these Series D Preferred Stock at their fair value. As the Series D Preferred Stock is convertible to common stock, the Company determined the fair value by determining the dilutive effect of the Series D Preferred Stock as if converted to common stock when issued issuance. If converted, the Series D Preferred Stock would represent 97.58% of the capitalization of the Company when issued. The Company determined the capitalization of the Company to be $4,895,356, based upon the closing price of $0.341 per share, with the 97.58% attributable to the Series D Preferred Stock to be $4,776,889. The Company previously recorded the value of the Series D Preferred Stock at $8,000, resulting in a difference of $4,768,889. The following summarizes the impact of the restatement: |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 04, 2019 | Feb. 21, 2020 | Jan. 29, 2020 | Jan. 21, 2020 | Jul. 31, 2020 |
Loan, cash received | $ 152,500 | ||||
Emerging Growth Advisors | |||||
Loan, cash received | $ 32,400 | ||||
Garden State Holdings Loan | |||||
Loan, cash received | $ 55,000 | ||||
Garden State Holdings Loan Two | |||||
Loan, cash received | $ 25,000 | ||||
Garden State Holdings Loan Three | |||||
Loan, cash received | $ 15,000 | ||||
Garden State Holdings Loan Four | |||||
Loan, cash received | $ 10,000 | ||||
Garden State Holdings Loan Five | |||||
Loan, cash received | $ 47,000 |