In my opinion, CNGT has a goal of a 1 for 40 RS. CNGT is in debt and the proceeds from the RS and subsequent sale of 100M shares will be an estimated $5M to be used to pay off a debt CNGT holds to several creditors. I do not see much left for the common shareholders.
Looks like Emergent Health Corp. ("Emergent") (OTC PINK:EMGE) is the one to follow if anyone thinks following Morrison is of value or if the patented products owned by CNGT are worth an effort to invest in EMGE.
I'll continue to watch on the sidelines. I sold my position of CNGT and was waiting to re-enter if it settled back to to the $.0021 range. At this point I am not sure what CNGT is, does not seem to viable at this point. This one was just a dice roll for me, I left playing the PINKS some time ago. This kind of crap is why I got away from pinkies.
https://disclosurequest.com/form/cannagistics-inc./0001663577-22-000257/offering-circular
USE OF PROCEEDS
We estimate that the net proceeds to us from this Offering, after deducting the estimated Offering fees and expenses estimated at $75,000, will be approximately $4,925,000, assuming the maximum number of shares are sold. However, there is no minimum number of shares that must be sold by us, and we may raise substantially less than what is needed to meet our working capital needs, pay off outstanding indebtedness and achieve our business objectives as described elsewhere in this Offering Circular.
Recent Borrowings
The Company intends to use a portion of the proceeds to repay outstanding indebtedness, including from the recent borrowings described below as well as the indebtedness reflected in our Financial Statements included in this Offering Circular.
In connection with the July 1, 2021, acquisition of Integrity Wellness, the Company borrowed $175,000 from Cimarron Capital, Inc. (“Cimarron”) and issued Cimarron two separate Promissory Notes for $150,000 and $200,000, respectively, both dated July 6, 2021. Each Note bears 0% interest and is payable upon the earlier of the Company raising capital in a securities offering (which includes this Offering) or July 6, 2022.
On August 5, 2021, the Company issued FirstFire Global Opportunities Fund LLC, a Delaware limited liability company an Original Issue Discount $500,000 Promissory Note with a net amount of $250,000 from August 6, 2021. The Note bears 0% interest and is payable August 5, 2022, unless converted into shares of Common Stock by the Holder at the conversion price of $0.01 per share.
On August 10, 2021, the Company issued GS Capital Partners LLC, a New York limited liability company an Original Issue Discount $150,000 Promissory Note, with a net amount of $75,000, from August 11, 2021. The Note bears 0% interest and is payable August 10, 2022, unless converted into shares of Common Stock by the Holder at the conversion price of $0.01 per share.
On August 25, 2021, the Company issued GW Holdings Group LLC, a New York limited liability company an Original Issue Discount $200,000 Promissory Note, with a net amount of $150,000, from August 23, 2021. The Note bears 0% interest and is payable August 23, 2022, unless converted into shares of Common Stock by the Holder at the conversion price of $0.01 per share.
The following table represents management’s best estimate of the uses of the net proceeds received from the sale of Common Stock assuming the sale of, respectively, 100%, 75%, 50% and 25% of the shares of Common Stock offered for sale in this Offering.
100% 75% 50% 25%
Repayment of Notes (1) $ 1,200,000 $ 1,200,000 $ 1,200,000 $ 1,175,000
Salary and Related Compensation $ 200,000 $ 200,000 $ 200,000 $ 0
Acquisition of Inventory $ 500,000 $ 500,000 $ 475,000 $ 0
Marketing Expenses $ 1,000,000 $ 1,000,000 $ 475,000 $ 0
Working Capital $ 2,025,000 $ 775,000 $ 75,000 $ 0
Expenses of the Offering $ 75,000 S 75,000 $ 75,000 $ 75,000
Total $ 5,000,000 $ 3,750,000 $ 2,500,000 $ 1,250,000
(1) We may use up to $1,200,000 of the net proceeds received from this Offering for the payment of outstanding Convertible Notes.
If we sell all or substantially all of the $5,000,000 of shares of Common Stock we are offering, we expect that the net proceeds from this Offering, together with our existing cash and cash equivalents and anticipated revenues we collect will enable us to fund our operating expenses and capital expenditure requirements for the next 12 months. The expected use of net proceeds from this Offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors we may not be able to anticipate. As a result, our management will retain broad discretion over the allocation of the net proceeds from this Offering.
If we do not sell all of the shares of Common Stock offered, we may seek additional financing from other sources in order to support the intended use of proceeds indicated above, which could entail entering any or a combination of equity and debt offerings. If we need to and are unable to raise additional funds, we may be required to delay, limit, or cease operations. We can provide no assurance that additional financing would be available to us when desired or needed and, if available, on terms acceptable to us. Even if we obtain the required financing outside of this Offering, the effective could be highly dilutive and/or have other adverse consequences on our stockholders.
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Table of Contents
BUSINESS
The following description of our business contains forward-looking statements relating to future events or our future financial or operating performance that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors described in “Risk Factors” beginning on page 4.
Overview
We were originally incorporated under the laws of the State of Nevada under the name “Precious Investments, Inc.” in 2004. From inception the Company was engaged in the acquisition and exploration of resource properties. In 2012, after our charter was revoked by the Nevada Secretary of State for failure to file annual reports and pay related fees, we entered into the custodianship of NPNC Management, LLC. In 2017, under the name Precious Investments, Inc., we commenced operations as a trader of precious gems. From November 2017 until 2020, our business focus was third-party logistics and reverse logistics in the transportation field and the development of an integrated SaaS platform designed to assist prospective clients in the transportation filed. In October 2020 we ceased operations of the third-party logistics and reverse logistics part of our business and focused on the development of an integrated software-as-a-service (SaaS) platform designed to assist prospective clients in the transportation field and additionally to integrate the over-the-counter medicine (OTC), pharmaceutical, nutraceutical, cosmetic, hemp, health and wellness product industries with all aspects of supply chain logistics and support.
On July 1, 2021, we entered into a Reorganization and Stock Purchase Agreement with Regen and Integrity Wellness pursuant to which we acquired Integrity Wellness in exchange for 4,400,000 shares of the Company’s Series F Convertible Preferred Stock. We also changed our state of incorporation to Delaware. A significant majority of our operations are now operated through Integrity Wellness which because of the transaction became a wholly owned subsidiary of the Company. We expect to change our name to The Integrity Wellness Group, Inc. subject to regulatory compliance.
Following our acquisition of Integrity Wellness, we shifted to our current business plan and focus which is the development, marketing and sale of OTC, pharmaceutical, nutraceutical, cosmetic and health and wellness products with a focus on products infused with Hemp Oil. We now have a portfolio of products designed for the treatment of ailments and symptoms and/or general improvement of health and wellbeing by topical or oral administration. These product offerings, which are described more fully below, are designed to provide a variety of treatments, benefits and uses including pain relief, anti-aging, hygiene, energy, and immune system and biochemical support. We also have products designed for veterinary and agricultural uses. We have six patents and 15 patent applications pending for our products, as well as various trademarks. Our mission is to alleviate suffering and adverse consequences caused by certain health and biological conditions and enhance users’ quality of life through the use of inventions and science including through the use of Hemp Oil and potentially, in the future, CBD.
As of the date of this Offering Circular, due to heightened regulatory restrictions with respect to CBD, we are focused on products containing Hemp Oil rather than CBD. Hemp Oil is derived from cannabis seeds whereas CBD is taken from the leaves and stems of cannabis and contains a higher concentration of tetrahydrocannabinol, or THC, which is the compound that produces a psychoactive effect from consumption of cannabis and certain cannabis-derived products. Generally speaking, Hemp Oil is currently subject to more lenient regulatory restrictions than CBD. See “Government Regulations” below for more information.
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