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.

Results of Operations for the Years Ended July 31, 2019 and 2018





Revenues

We generated revenue of $2,329,899 for the year ended July 31, 2019, as compared with $2,220,755 for the year ended July 31, 2018. All of our revenues were generated from the operations of our operating subsidiary, KRG Logistics, Inc., a third-party freight logistics provider.

Our cost of revenues was $2,150,398 for the fiscal year ended July 31, 2019 as compared with $2,040,280 for the fiscal year ended July 31, 2018.





Operating Expenses

Operating expenses increased to $2,293,899 for the fiscal year ended July 31, 2019, as compared with $866,475 for the year ended July 31, 2018. Our operating expenses for the year ended July 31, 2019, consisted mainly of Consulting fees of $77,920 and professional fees of $344,267 and general and administrative expenses of $285,185. Wages and Benefits of $493,045 and bad debt allowance of $1,055,783 due from a related party. Our operating expenses for the year ended July 31, 2018, consisted mainly of Consulting fees of $26,535 and professional fees of $369,551 and general and administrative expenses of $255,187 and Wages and Benefits of $196,776.





Other Expenses

We had other expenses of $(1,561,459) for the fiscal year ended July 31, 2019 as compared with $(1,125,501) for the year ended July 31, 2018.





Net Loss

Net loss for the year ended July 31, 2019 was ($3,675,857) as compared with $(1,811,501) for the year ended July 31, 2018.





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Liquidity and Capital Resources

As of July 31, 2019, we had total current assets of $517,811 and total assets in the amount of $727,922, after the allowance for Bad Debt. Our total current liabilities as of July 31, 2019 were $(3,828,651). We had total working capital of $(3,310,840) as of July 31, 2019 and $(779,700) as of July 31, 2018.

Operating activities used $(2,293,899) in cash for the year ended July 31, 2019, as compared with $(866,475) in cash for the year ended July 31, 2018. Our net loss of $(3,675,857) with Loss on Interest Expense of $(253,206), Loss on Conversion of Preferred Stock of $(99,000) and Loss on conversion of debt of $(1,289,724).

Pursuant to the Warrants described in Item 1, above, we anticipate that a portion of the additional capital needed may be raised from the exercise of said Warrants. However, there is no assurance that the Warrants will in fact be exercised.

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

Off Balance Sheet Arrangements

As of July 31, 2019, 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, 2019, we have an accumulated deficit of $(5,770,449). 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.





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, 2019, 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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