Forward-Looking Statements
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements." These forward-looking statements
generally are identified by the words "believes," "project," "expects,"
"anticipates," "estimates," "intends," "strategy," "plan," "may," "will,"
"would," "will be," "will continue," "will likely result," and similar
expressions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. Our ability to
predict results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on our operations
and future prospects on a consolidated basis include but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.
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Results of Operations for the Years Ended July 31, 2021, and July 31, 2020
Revenues
We generated revenue of $-0- for the year ended July 31, 2021, as compared with
$-0- for the year ended July 31, 2020. All of our revenues were previously
generated from the operations of our operating subsidiary, KRG Logistics, Inc.,
a third-party freight logistics provider.
Our cost of revenues was $-0- for the fiscal year ended July 31, 2021, as
compared with $-0- for the fiscal year ended July 31, 2020.
Operating Expenses
Operating expenses decreased to $646,928 for the fiscal year ended July 31,
2021, as compared with $1,695,943 for the fiscal year ended July 31, 2020. Our
operating expenses for the year ended July 31, 2021, consisted mainly of
Consulting Fees of $190,625, professional fees of $303,110 and general and
administrative expenses of $50,141, and bad debt allowance of $87,036 due from a
related party. Our operating expenses for the year ended July 31, 2020,
consisted mainly of Consulting fees of $1,090,583 and professional fees of
$320,474 and general and administrative expenses of $96,161. Bad debt allowance
of $158,951 due from a related party.
Other Expenses
We had other expenses of $16,703,425 for the fiscal year ended July 31, 2021, as
compared with $556,228 for the year ended July 31, 2020. The increase was due to
a loss on the acquisition of Integrity Wellness, Inc. of $14,690,000.
Net Loss
Net loss for the year ended July 31, 2021, was $17,350,353 as compared with
$2,682,500 as compared with for the year ended July 31, 2020.
Liquidity and Capital Resources
As of July 31, 2021, we had total current assets of $45,007 and total assets in
the amount of $45,007, after the allowance for Bad Debt. Our total current
liabilities as of July 31, 2021, were $4,853,932. We had a working capital of
deficiency of $4,808,925 as of July 31, 2021, and $3,792,892 as of July 31,
2020.
Operating activities used $548,038 in cash for the year ended July 31, 2021, as
compared with $613,683 in cash for the year ended July 31, 2020. Our net loss of
$17,350,353 with Loss on Discontinued Operations of $0, Loss on Conversion of
Preferred Stock of $0 and Loss on derivative liabilities of $1,481,943.
We also intend to fund operations through sales and/or debt and/or equity
financing arrangements, which may be insufficient to fund expenditures or other
cash requirements. We plan to seek additional financing to secure funding for
operations. There can be no assurance that we will be successful in raising
additional funding. If we are not able to secure additional funding, the
implementation of our business plan will be impaired. There can be no assurance
that such additional financing will be available to us on acceptable terms or at
all.
Off Balance Sheet Arrangements
As of July 31, 2021, there were no off-balance sheet arrangements.
Going Concern
Our financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business. As of July 31, 2021, we have an accumulated
deficit of $(30,572,191). Our ability to continue as a going concern is
contingent upon the successful completion of additional financing arrangements
and our ability to achieve and maintain profitable operations. While we are
expanding our best efforts to achieve the above plans, there is no assurance
that any such activity will generate funds that will be available for
operations. These conditions raise substantial doubt about our ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
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Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most
"critical accounting polices" in the Management Discussion and Analysis. The SEC
indicated that a "critical accounting policy" is one which is both important to
the portrayal of a company's financial condition and results, and requires
management's most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain.
Our accounting policies are discussed in detail in the footnotes to our
financial statements included in this Annual Report on Form 10-K for the year
ended July 31, 2021, however we consider our critical accounting policies to be
those related to inventory, fair value of financial instruments, derivative
financial instruments and long-lived assets.
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