What changed in this filing

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Item 1A. Risk Factors

2023-04-03 compared with 2022-03-31 · 112 added, 119 removed, 736 unchanged (24% of the section changed)

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Although we will continue to expand our product line capabilities

in order to remain competitive, research and discoveries by others may make our processes, products or brands less attractive or even

to remain competitive, research and discoveries by others may make our processes, products, or brands less attractive or even obsolete.

could adversely affect our business.

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success of new product introductions depends on various factors, including, without limitation, the following:

sales and marketing efforts;

delivery of new products;

of raw materials;

allowance of the products;

acceptance of new products

Successful sales and marketing efforts;

Timely delivery of new products;

Availability of raw materials;

Pricing of raw materials;

Regulatory allowance of the products;

Customer acceptance of new products

yet unanticipated changes in federal and state law could cause any of our current products, as well as products that we intend to launch,

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Code §5940 became federal law as part

of the Agricultural Act of 2014 (the “ 2014 Farm Act ”), products containing oils derived from hemp, notwithstanding

a minimal or non-existing THC content, were classified as Schedule I illegal drugs.

The 2014 Farm Act expired on September 30, 2018,

and was thereafter replaced by the Farm Bill, which amended various sections of the U.S.

Code, thereby removing hemp, defined as cannabis

with less than 0.3% THC, from Schedule 1 status under the Controlled Substances Act, and legalizing the cultivation and sale of industrial-hemp

at the federal level, subject to compliance with certain federal requirements and state law, amongst other things.

THC is the psychoactive

component of plants in the cannabis family generally identified as marihuana or marijuana.

There is no assurance that the Farm Bill will

not be repealed or amended such that our products containing hemp-derived CBD would once again be deemed illegal under federal law.

of the Agricultural Act of 2014 (the “2014 Farm Act”), products containing oils derived from hemp, notwithstanding a minimal

or non-existing THC content, were classified as Schedule I illegal drugs.

The 2014 Farm Act expired on September 30, 2018, and was thereafter

replaced by the Farm Bill, which amended various sections of the U.S.

Code, thereby removing hemp, defined as cannabis with less than

0.3% THC, from Schedule 1 status under the Controlled Substances Act, and legalizing the cultivation and sale of industrial-hemp at the

federal level, subject to compliance with certain federal requirements and state law, amongst other things.

THC is the psychoactive component

of plants in the cannabis family generally identified as marihuana or marijuana.

There is no assurance that the Farm Bill will not be

repealed or amended such that our products containing hemp-derived CBD would once again be deemed illegal under federal law.

Farm Bill delegates the authority to the states to regulate and limit the production of hemp and hemp-derived products within their territories.

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have limited experience in completing regulatory filings and any delays in regulatory filings could materially affect our financial condition.

are currently initiating clinical trials of our CaniDermRX product candidates.

We have not, however, demonstrated the ability to obtain

marketing approvals, manufacture product candidates at a commercial scale, or conduct sales and marketing activities necessary for the

successful commercialization of a product.

Consequently, we have no historical basis as a company by which one can evaluate or predict

reliably our future success or viability.

are currently initiating clinical trials of our product candidates.

We have not, however, demonstrated the ability to obtain marketing

approvals, manufacture product candidates at a commercial scale, or conduct sales and marketing activities necessary for the successful

commercialization of a product.

Consequently, we have no historical basis as a company by which one can evaluate or predict reliably

our future success or viability.

Additionally,

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of these occurrences may harm our business, financial condition and prospects significantly.

regard to our lead product candidate, CaniDermRX, unforeseen side effects from CaniDermRX could arise either during clinical development

or, if approved, after CaniDermRX has been marketed.

This could cause regulatory approvals for, or market acceptance of, CaniDermRX harder

and costlier to obtain.

results of our planned or any future clinical trials may show that the side effects of CaniDermRX are unacceptable or intolerable, which

could interrupt, delay or halt clinical trials, and result in delay of, or failure to obtain, marketing approval from the FDA or EMA

and other regulatory authorities, or result in marketing approval from the FDA or EMA and other regulatory authorities with restrictive

label warnings.

CaniDermRX receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by the use of

authorities may withdraw their approval of the product, which would force us to remove CaniDermRX from the market;

regard to our lead product candidates, unforeseen side effects could arise either during clinical development or, if approved, after

products have been marketed.

This could cause regulatory approvals for, or market acceptance of our products harder and costlier to obtain.

results of our planned or any future clinical trials may show that the side effects are unacceptable or intolerable, which could interrupt,

delay or halt clinical trials, and result in delay of, or failure to obtain, marketing approval from the FDA or EMA and other regulatory

authorities, or result in marketing approval from the FDA or EMA and other regulatory authorities with restrictive label warnings.

any product receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by the use of

the products:

authorities may withdraw their approval of the product, which would force us to remove products from the market;

authorities may require the addition of labeling statements, specific warnings, a contraindication, or field alerts to physicians

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reputation may suffer.

of these events could prevent us or our potential future collaborators from achieving or maintaining market acceptance of CaniDermRX

of these events could prevent us or our potential future collaborators from achieving or maintaining market acceptance of our products

and/or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant

revenues from the sale of CaniDermRX.

revenues from the sale of those products.

we experience delays or difficulties in the enrollment of subjects to our clinical trials, our receipt of necessary regulatory approvals

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In particular, because our planned clinical trials

of CaniDermRX are focused on indications with relatively small patient populations, our ability to enroll eligible patients may be limited

or may result in slower enrollment than we anticipate.

may be focused on indications with relatively small patient populations, our ability to enroll eligible patients may be limited or may

result in slower enrollment than we anticipate.

addition, we may experience enrollment delays related to increased or unforeseen regulatory, legal and logistical requirements at certain

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a sufficient supply of our product candidates.

We intend to utilize third parties to manufacture CaniSun, CaniSkin and CaniDermRX.

We intend to utilize third parties to manufacture our products.

the future we may become unable, for various reasons, to rely on our sources for the manufacture of our product candidates, either for

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maintaining a relationship with such manufacturer may have a material adverse effect on us.

we can begin to commercially manufacture CaniDermRX or any other product candidate, we must obtain regulatory approval of the manufacturing

facility and process.

Manufacturing of drugs for clinical and commercial purposes must comply with current Good Manufacturing Practices

requirements, commonly known as “cGMP.” The cGMP requirements govern quality control and documentation policies and procedures.

Complying with cGMP and non-U.S.

regulatory requirements will require that we expend time, money, and effort in production, recordkeeping,

and quality control to ensure that the product meets applicable specifications and other requirements.

we can begin to commercially manufacture any product candidate, we must obtain regulatory approval of the manufacturing facility and

Manufacturing of drugs for clinical and commercial purposes must comply with current Good Manufacturing Practices requirements,

commonly known as “cGMP.” The cGMP requirements govern quality control and documentation policies and procedures.

with cGMP and non-U.S.

regulatory requirements will require that we expend time, money, and effort in production, recordkeeping, and

quality control to ensure that the product meets applicable specifications and other requirements.

We, or our contracted manufacturing

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claims or liabilities.

the market opportunities for our current and potential future drug candidate s are smaller than we believe they are, our

ability to generate product revenues may be adversely affected and our business may suffer.

understanding of the number of people who suffer from dermatitis or eczema, whom CaniDermRX may have the potential to treat, is based

the market opportunities for our current and potential future drug candidates are smaller than we believe they are, our ability to generate

product revenues may be adversely affected and our business may suffer.

understanding of the number of people who suffer from dermatitis or eczema, whom our products may have the potential to treat, is based

upon estimates.

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or elsewhere may turn out to be lower than expected, may not be otherwise

amenable to CaniDermRX treatment, or treatment-amenable patients may become increasingly difficult to identify and access, all of which

would adversely affect our business prospects and financial condition.

In particular, the treatable population for CaniDermRX may further

be reduced if our estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from CaniDermRX.

amenable to treatment, or treatment-amenable patients may become increasingly difficult to identify and access, all of which would adversely

affect our business prospects and financial condition.

In particular, the treatable population for our products may further be reduced

if our estimates of addressable populations are erroneous or sub-populations of patients do not derive benefit from those products.

we are unable to establish relationships with licensees or collaborators to carry out sales, marketing, and distribution functions or

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success of our non-OTC product candidates will depend on the acceptance of these products by physicians, payers, and patients.

non-OTC product candidate that we may develop, such as our current CaniSkin and CaniSun product lines, may not gain market acceptance

among physicians and patients.

Market acceptance of and demand for any non-OTC product that we may develop will depend on many factors,

including without limitation:

non-OTC product candidate that we may develop may not gain market acceptance among physicians and patients.

Market acceptance of and

demand for any non-OTC product that we may develop will depend on many factors, including without limitation:

superiority of the effectiveness and safety in the treatment of the disease indication compared to alternative treatments;

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adverse effect on our business plan.

supply chain and the development of our product candidates, including that of our subsidiaries, could be, and have been, disrupted and

materially adversely affected by the recent outbreak of COVID-19.

As a result of measures imposed by the governments in affected regions,

businesses and schools have been suspended due to quarantines intended to contain this outbreak.

We are still assessing our business

plans and the impact COVID-19 may have on our supply chain and ability to conduct our clinical trials, but there can be no assurance

that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns

in business sentiment generally.

The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations

will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity

and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.

Our subsidiary SRM, was materially adversely

affected by COVID-19 and its impact on the amusement park industry.

SRM’s sales to amusement parks materially decreased during

SRM’s revenue for the fiscal year ended December 31, 2019 was $7,046,073 and were reduced to $ 2,958,199 for the fiscal year

ended December 31, 2020 and further reduced to $2,693,131 for the year ended December 31, 2021, which was a result of the closing

of amusement and theme parks in 2020 as a result of the COVID-19 pandemic..

During the first quarter of 2021, SRM had no revenues due

to the closure of our customers theme parks.

may be unable to successfully integrate the operations of SRM and may not achieve the benefits anticipated as a result of the SRM acquisition .

November 30, 2020, we acquired SRM.

Achieving the anticipated benefits of the SRM acquisition will depend in part upon our ability to

integrate SRM in an efficient and effective manner.

The integration of a company that has previously operated independently may result

in significant challenges, and we may be unable to accomplish the integration smoothly or successfully.

The integration of an acquired

business may also require the dedication of significant management resources, which may temporarily distract management’s attention

from the day-to-day operations of the Company.

In addition, the process of integrating operations may cause an interruption of, or loss

of momentum in, the activities of one or more of our other subsidiaries’ businesses and the loss of key personnel from us or the

acquired businesses.

Our supply chain and the development

of our product candidates, including that of our subsidiaries, could be, and have been, disrupted and materially adversely affected by

the recent outbreak of COVID-19.

As a result of measures imposed by the governments in affected regions, businesses and schools have been

suspended due to quarantines intended to contain this outbreak.

We are still assessing our business plans and the impact COVID-19 may

have on our supply chain and ability to conduct our clinical trials, but there can be no assurance that this analysis will enable us to

avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally.

The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments,

which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the

actions taken to contain or treat the COVID-19 pandemic.

Our subsidiary SRM, was materially adversely affected by COVID-19 and its impact

on the amusement park industry.

SRM’s sales to amusement parks materially decreased during 2021 and 2020.

SRM’s revenue for

the fiscal year ended December 31, 2019 was $7,046,073 and were reduced to $2,958,199 for the fiscal year ended December 31, 2020 and

further reduced to $2,876,273 for the year ended December 31, 2021, which was a result of the closing of amusement and theme parks in

2020 as a result of the COVID-19 pandemic.

We generated $6,196,743 in revenues for the year ended December 31, 2022 compared to $2,876,273

revenues for the year ended December 31, 2021.

The large increase is due to the Company having more nominal-like operations during 2022.

In 2021 and 2020, Covid had a negative impact on the revenues of the Company with the closure of amusement and theme parks which were

not fully open until the end of 2021.

disasters and other events beyond our control could materially adversely affect us.

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accountant has indicated doubt about our ability to continue as a going concern.

of March 31, 2021, the Company had $3,007,792 in cash, accumulated deficit of $9,470,164 and cash flow used in operations of $1,254,376.

The Company has incurred and expects to continue to incur significant costs in pursuit of its expansion and development plans.

conditions raise doubt about the Company’s ability to continue as a going concern and accordingly our auditors have included a

going concern opinion in our annual report.

Management has taken certain action and continues to implement changes designed to improve

the Company’s financial results and operating cash flows.

The actions involve certain cost-saving initiatives and growing strategies,

including (a) engage in very limited activities without incurring any liabilities that must be satisfied in cash;

and (b) offer noncash

consideration and seek for equity lines as a means of financing its operations.

Additionally, the Company’s plan includes certain

scheduled research and development activities and related clinical trials which may be deferred as needed.

If the Company is unable to

obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating

losses it may incur, it may substantially curtail its operations or seek other business opportunities through strategic alliances, acquisitions

or other arrangements that may dilute the interests of existing stockholders.

As of December 31, 2022, the Company

had $1,931,068 in cash, accumulated deficit of $50,597,674 and cash flow used in operations of $6,395,942.

The Company has incurred and

expects to continue to incur significant costs in pursuit of its expansion and development plans.

These conditions raise doubt about the

Company’s ability to continue as a going concern and accordingly our auditors have included a going concern opinion in our annual

Management has taken certain action and continues to implement changes designed to improve the Company’s financial results

and operating cash flows.

The actions involve certain cost-saving initiatives and growing strategies, including (a) engage in very limited

activities without incurring any liabilities that must be satisfied in cash;

and (b) offer noncash consideration and seek for equity lines

as a means of financing its operations.

Additionally, the Company’s plan includes certain scheduled research and development activities

and related clinical trials which may be deferred as needed.

If the Company is unable to obtain revenue producing contracts or financing

or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail

its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the

interests of existing stockholders.

additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our

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These requirements may place a strain on our systems and resources.

Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition.

Act requires that we file annual, quarterly and current reports with respect to our business and financial condition.

The Sarbanes-Oxley

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to effect certain corporate actions.

officers and directors are the beneficial owners of approximately 45% our outstanding voting securities.

As a result, they possess significant

influence over our elections and votes.

As a result, their ownership and control may have the effect of facilitating and expediting a

future change in control, merger, consolidation, takeover or other business combination, or encouraging a potential acquirer to make

a tender offer.

Their ownership and control may also have the effect of delaying, impeding, or preventing a future change in control,

merger, consolidation, takeover or other business combination, or discouraging a potential acquirer from making a tender offer.

December 31, 2022, our officers and directors are the beneficial owners of approximately 18% our issued and outstanding voting securities.

As a result, they possess significant influence over our elections and votes.

As a result, their ownership and control may have the effect

of facilitating and expediting a future change in control, merger, consolidation, takeover or other business combination, or encouraging

a potential acquirer to make a tender offer.

Their ownership and control may also have the effect of delaying, impeding, or preventing

a future change in control, merger, consolidation, takeover or other business combination, or discouraging a potential acquirer from

making a tender offer.

securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.

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broker-dealers who recommend such securities to persons other than institutional accredited investors must:

a special written suitability determination for the purchaser;

the purchaser’s prior written agreement to the transaction;

the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks”

and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies;

a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure

document before a transaction in a “penny stock” can be completed.

Make a special written suitability determination for the purchaser;

Receive the purchaser’s prior written agreement to the

Provide the purchaser with risk disclosure documents which

identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks”

as well as a purchaser’s legal remedies;

Obtain a signed and dated acknowledgment from the purchaser

demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock”

can be completed.

our common stock is not currently subject to these rules, it were to become subject to such rules, broker-dealers may find it difficult

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors