What changed in this filing

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Item 1A. Risk Factors

2022-04-15 compared with 2021-04-15 · 463 added, 456 removed, 105 unchanged (90% of the section changed)

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COVID-19 pandemic has caused us to modify our business practices (including employee travel, employee work locations, and cancellation

of physical participation in meetings, events and conferences), and we may take further actions as may be required by government

authorities or that we determine are in the best interests of our employees, customers and business partners.

There is no certainty

that such measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.

extent to which COVID-19 impacts our business, results of operations and financial condition will depend on future developments,

which are uncertain and cannot be predicted, including, but not limited to:

of physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities

or that we determine are in the best interests of our employees, customers and business partners.

There is no certainty that such measures

will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.

extent to which COVID-19 impacts our business, results of operations and financial condition will depend on future developments, which

are uncertain and cannot be predicted, including, but not limited to:

duration and scope of the pandemic;

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as to the impact or staff availability during and post the pandemic;

ability to provide our services, including as a result of our employees or our customers and suppliers working remotely and/or

closures of offices and facilities.

after the coronavirus outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result

of its global economic impact, including any recession that has occurred or may occur in the future.

ability to provide our services, including as a result of our employees or our customers and suppliers working remotely and/or closures

of offices and facilities.

after the coronavirus outbreak has subsided, we may continue to experience materially adverse impacts to our business as a result of

its global economic impact, including any recession that has occurred or may occur in the future.

Factors Associated with the Cannabis Industry

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is a Schedule-I controlled substance under the Controlled Substances Act and is illegal under federal law.

It remains illegal

under United States federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire with those

Additionally, 21 U.S.C.

856 makes it illegal to “knowingly open, lease, rent, use, or maintain any place, whether

permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.”

those states in which the use of marijuana has been authorized, its use remains a violation of federal law.

Since federal law

criminalizing the use of marijuana is not pre-empted by state laws that legalize its use, strict enforcement of federal law regarding

marijuana would likely result in the Company’s clients’

inability to proceed with their operations, which would adversely

affect demands for the Company’s products.

It remains illegal under United

States federal law to grow, cultivate, sell or possess marijuana for any purpose or to assist or conspire with those who do so.

Additionally,

856 makes it illegal to “knowingly open, lease, rent, use, or maintain any place, whether permanently or temporarily,

for the purpose of manufacturing, distributing, or using any controlled substance.”

Even in those states in which the use of marijuana

has been authorized, its use remains a violation of federal law.

Since federal law criminalizing the use of marijuana is not pre-empted

by state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in the Company’s

clients’

inability to proceed with their operations, which would adversely affect demands for the Company’s products.

Company’s operations are subject to various laws, regulations and guidelines relating to the manufacture, management, transportation,

storage and disposal of cannabis but also including laws and regulations relating to health and safety, the conduct of operations

and the protection of the environment.

Company both directly and indirectly engages in the medical and adult-use cannabis industry in the United States where local state

law permits such activities.

storage and disposal of cannabis but also including laws and regulations relating to health and safety, the conduct of operations and

the protection of the environment.

Company both directly and indirectly engages in the medical and adult-use cannabis industry in the United States where local state law

permits such activities.

Investors are cautioned that in the United States, cannabis is largely regulated at the state level.

To the Company’s knowledge, there are to date a total of 33 states, and the District of Columbia, that have now legalized

cannabis in some form, including California, Nevada, New York, Florida, Illinois and Arizona.

Notwithstanding the permissive regulatory

environment of cannabis at the state level, cannabis continues to be categorized as a controlled substance under the CSA and as

such, cultivation, distribution, sale and possession of cannabis violates federal law in the United States.

The inconsistency

between federal and state laws and regulations is a major risk factor and there can be no assurance that the federal government

will not seek to prosecute cases involving cannabis businesses that are otherwise compliant with state law.

Violations of any

federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements

arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including,

but not limited to, disgorgement of profits, cessation of business activities or divestiture.

This could have a material adverse

effect on the Company, including its reputation and ability to conduct business, its holding (directly or indirectly) of medical

and adult-use cannabis licenses in the United States, the listing of its securities on applicable exchanges, its financial position,

operating results, profitability or liquidity or the market price of our Common Stock.

Company believes the cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality

of the cannabis produced.

Consumer perception of the Company’s products can be significantly influenced by scientific research

or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis

There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention

or other research findings or publicity will be favorable to the medical cannabis market or any product, or consistent with earlier

publicity The Company and its wholly-owned subsidiaries face an inherent risk of exposure to product liability claims, regulatory

action and litigation if its products are alleged to have caused significant loss or injury.

Greater access to medical cannabis,

through home and designated growing and illegal dispensaries, may decrease the number of patients registering with the Company

and may cause registered patients to leave the Company and grow for themselves.

Any significant interruption or negative change

in the availability or economics of the supply chain for key inputs could materially impact the business, financial condition

and operating results of the Company and if the Company is unable to continually innovate and increase efficiencies, its ability

to attract new customers may be adversely affected.

The Company may become party to litigation, mediation and/or arbitration from

time to time in the ordinary course of business which could adversely affect its business

Company expects to derive a substantial portion of its revenues from the cannabis industry in certain states of the United States,

which industry is illegal under United States federal law.

Company is directly involved (through its subsidiaries) in the cannabis industry in the United States where local state laws permit

such activities.

Company’s knowledge, there are to date a total of 38 states, and the District of Columbia, that have now legalized cannabis

in some form, including California, Nevada, New York, Florida, Illinois and Arizona.

Notwithstanding the permissive regulatory environment

of cannabis at the state level, cannabis continues to be categorized as a controlled substance under the CSA and as such, cultivation,

distribution, sale and possession of cannabis violates federal law in the United States.

The inconsistency between federal and state

laws and regulations is a major risk factor and there can be no assurance that the federal government will not seek to prosecute cases

involving cannabis businesses that are otherwise compliant with state law.

Violations of any federal laws and regulations could result

in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either

the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of

business activities or divestiture.

This could have a material adverse effect on the Company, including its reputation and ability to

conduct business, its holding (directly or indirectly) of medical and adult-use cannabis licenses in the United States, the listing of

its securities on applicable exchanges, its financial position, operating results, profitability or liquidity or the market price of

our Common Stock.

Company believes the cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the

cannabis produced.

Consumer perception of the Company’s products can be significantly influenced by scientific research or findings,

regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis products.

be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings

or publicity will be favorable to the medical cannabis market or any product, or consistent with earlier publicity The Company and its

wholly owned subsidiaries face an inherent risk of exposure to product liability claims, regulatory action and litigation if its

products are alleged to have caused significant loss or injury.

Greater access to medical cannabis, through home and designated growing

and illegal dispensaries, may decrease the number of patients registering with the Company and may cause registered patients to leave

the Company and grow for themselves.

Any significant interruption or negative change in the availability or economics of the supply chain

for key inputs could materially impact the business, financial condition and operating results of the Company and if the Company is unable

to continually innovate and increase efficiencies, its ability to attract new customers may be adversely affected.

The Company may become

party to litigation, mediation and/or arbitration from time to time in the ordinary course of business which could adversely affect its

Company expects to derive a substantial portion of its revenues from the cannabis industry in certain states of the United States, which

industry is illegal under United States federal law.

Company is directly involved (through its subsidiaries) in the cannabis industry in the United States where local state laws permit such

The United States federal government regulates drugs through the Controlled Substances Act (21 U.S.C.

811), which places controlled substances, including cannabis, in a schedule.

places controlled substances, including cannabis, in a schedule.

Cannabis is classified as a Schedule I drug.

United States federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United

States, and a lack of accepted safety for the use of the drug under medical supervision.

The United States Food and Drug Administration

has not approved marijuana as a safe and effective drug for any indication.

Under United States federal

law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted

safety for the use of the drug under medical supervision.

The United States Food and Drug Administration has not approved marijuana as

a safe and effective drug for any indication.

the United States marijuana is largely regulated at the state level.

State laws regulating cannabis are in direct conflict with

the federal Controlled Substances Act, which makes cannabis use and possession federally illegal.

Although certain states authorize

medical or recreational cannabis production and distribution by licensed or registered entities, under U.S.

federal law, the possession,

use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under

The Supremacy Clause of the United States Constitution establishes that the United States Constitution and federal

laws made pursuant to it are paramount and in case of conflict between federal and state law, the federal law shall apply.

State laws regulating cannabis are in direct conflict with the federal

Controlled Substances Act, which makes cannabis use and possession federally illegal.

Although certain states authorize medical or recreational

cannabis production and distribution by licensed or registered entities, under U.S.

federal law, the possession, use, cultivation, and

transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts under federal law.

The Supremacy

Clause of the United States Constitution establishes that the United States Constitution and federal laws made pursuant to it are paramount

and in case of conflict between federal and state law, the federal law shall apply.

January 4, 2018, U.S.

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Department of Justice specific to cannabis enforcement in the United States.

federal prosecutors have been

given discretion in determining whether to prosecute cannabis related violations of U.S.

If the Department of Justice

policy was to aggressively pursue financiers or equity owners of cannabis-related business, and United States Attorneys followed

such Department of Justice policies through pursuing prosecutions, then the Company could face (i) seizure of its cash and other

assets used to support or derived from its cannabis subsidiaries, (ii) the arrest of its employees, directors, officers, managers

and investors, and charges of ancillary criminal violations of the CSA for aiding and abetting and conspiring to violate the CSA

by virtue of providing financial support to cannabis companies that service or provide goods to state-licensed or permitted cultivators,

processors, distributors, and/or retailers of cannabis, and/or (iii) barring employees, directors, officers, managers and investors

who are not U.S.

citizens from entry into the United States for life.

There is no guarantee that state laws legalizing and regulating

the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability

of state laws within their respective jurisdictions.

Unless and until the United States Congress amends the Controlled Substances

Act with respect to medical and/or adult-use cannabis (and as to the timing or scope of any such potential amendments there can

be no assurance), there is a risk that federal authorities may enforce current federal law.

If the federal government begins to

enforce federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing applicable

state laws are repealed or curtailed, the Company’s business, results of operations, financial condition and prospects would

be materially adversely affected.

yet unanticipated changes in federal and state law could cause any products that we intend to launch, containing hemp-derived

CBD oil to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD.

federal prosecutors have been given discretion

in determining whether to prosecute cannabis related violations of U.S.

If the Department of Justice policy was to aggressively

pursue financiers or equity owners of cannabis-related business, and United States Attorneys followed such Department of Justice policies

through pursuing prosecutions, then the Company could face (i) seizure of its cash and other assets used to support or derived from its

cannabis subsidiaries, (ii) the arrest of its employees, directors, officers, managers and investors, and charges of ancillary criminal

violations of the CSA for aiding and abetting and conspiring to violate the CSA by virtue of providing financial support to cannabis

companies that service or provide goods to state-licensed or permitted cultivators, processors, distributors, and/or retailers of cannabis,

and/or (iii) barring employees, directors, officers, managers and investors who are not U.S.

citizens from entry into the United States

There is no guarantee that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned,

or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions.

until the United States Congress amends the Controlled Substances Act with respect to medical and/or adult-use cannabis (and as to the

timing or scope of any such potential amendments there can be no assurance), there is a risk that federal authorities may enforce current

If the federal government begins to enforce federal laws relating to cannabis in states where the sale and use of cannabis

is currently legal, or if existing applicable state laws are repealed or curtailed, the Company’s business, results of operations,

financial condition and prospects would be materially adversely affected.

yet unanticipated changes in federal and state law could cause any products that we intend to launch, containing hemp-derived CBD oil

to be illegal, or could otherwise prohibit, limit or restrict any of our products containing CBD.

2014, when 7 U.S.

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 Agricultural Improvement

Act of 2018 on December 20, 2018 (the “2018 Farm Act “), which amended various sections of the U.S.

Code, thereby

removing hemp, defined as cannabis with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”),

and legalizing the cultivation and sale of 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.

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 Agricultural Improvement Act of 2018 on December

20, 2018 (the “2018 Farm Act “), which amended various sections of the U.S.

Code, thereby removing hemp, defined as cannabis

with less than 0.3% of THC, from Schedule 1 status under the Controlled Substances Act (“CSA”), and legalizing the cultivation

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

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

2018 Farm Bill also shifted regulatory authority from the Drug Enforcement Administration to the Department of Agriculture.

2018 Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over

CBD products.

The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived

products within their territories.

Although many states have adopted laws and regulations that allow for the production and sale

of hemp and hemp derived products under certain circumstances, no assurance can be given that such state laws may not be repealed

or amended such that our intended products containing hemp-derived CBD would once again be deemed illegal under the laws of one

or more states now permitting such products, which in turn would render such intended products illegal in those states under federal

law even if the federal law is unchanged.

In the event of either repeal of federal or of state laws and regulations, or of amendments

thereto that are adverse to our intended medical CBD products, we may be restricted or limited with respect to those products

that we may sell or distribute, which could adversely impact our intended business plan with respect to such intended products.

Farm Bill did not change the United States Food and Drug Administration’s (“FDA”) oversight authority over CBD products.

The 2018 Farm Act delegated the authority to the states to regulate and limit the production of hemp and hemp derived products within

their territories.

Although many states have adopted laws and regulations that allow for the production and sale of hemp and hemp derived

products under certain circumstances, no assurance can be given that such state laws may not be repealed or amended such that our intended

products containing hemp-derived CBD would once again be deemed illegal under the laws of one or more states now permitting such products,

which in turn would render such intended products illegal in those states under federal law even if the federal law is unchanged.

the event of either repeal of federal or of state laws and regulations, or of amendments thereto that are adverse to our intended medical

CBD products, we may be restricted or limited with respect to those products that we may sell or distribute, which could adversely impact

our intended business plan with respect to such intended products.

Additionally,

the FDA has indicated its view that certain types of products containing CBD may not be permissible under the United States Federal

Food, Drug and Cosmetic Act (“FDCA”).

The FDA’s position is related to its approval of Epidiolex, a marijuana-derived

prescription medicine to be available in the United States.

the FDA has indicated its view that certain types of products containing CBD may not be permissible under the United States Federal Food,

Drug and Cosmetic Act (“FDCA”).

The FDA’s position is related to its approval of Epidiolex, a marijuana-derived prescription

medicine to be available in the United States.

The active ingredient in Epidiolex is CBD.

On December 20, 2018, after

the passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position

that, among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic

benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate

commerce and that the FDCA prohibits introducing into interstate commerce food products containing added CBD, and marketing products

containing CBD as a dietary supplement, regardless of whether the substances are hemp-derived.

Although we believe our existing

and planned CBD product offerings comply with applicable federal and state laws and regulations, legal proceedings alleging violations

of such laws could have a material adverse effect on our business, financial condition and results of operations.

On December 20, 2018, after the passage of

the 2018 Farm Bill, FDA Commissioner Scott Gottlieb issued a statement in which he reiterated the FDA’s position that, among other

things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with

any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce and that

the FDCA prohibits introducing into interstate commerce food products containing added CBD, and marketing products containing CBD as

a dietary supplement, regardless of whether the substances are hemp-derived.

Although we believe our existing and planned CBD product

offerings comply with applicable federal and state laws and regulations, legal proceedings alleging violations of such laws could have

a material adverse effect on our business, financial condition and results of operations.

regulation could negatively affect the hemp industry, which would directly affect our financial condition.

FDA may seek expanded regulation of hemp under the FDCA.

Additionally, the FDA may issue rules and regulations, including certified

good manufacturing practices, or cGMPs, related to the growth, cultivation, harvesting and processing of hemp.

Clinical trials

may be needed to verify efficacy and safety.

It is also possible that the FDA would require that facilities where hemp is grown

In the event that some or all of these regulations

are imposed, we do not know what the impact would be on the hemp industry, including what costs, requirements and possible prohibitions

may be enforced.

If we or our partners are unable to comply with the regulations or registration as prescribed by the FDA, we

and or our partners (including C2M) may be unable to continue to operate their and our business in its current or planned form

of hemp-derived CBD depend upon legality of cultivation, processing, marketing and sales of products derived from those plants

under state law of the United States.

CBD can only be legally produced in states that have laws and regulations that allow for such production and that comply with

the 2018 Farm Act, apart from state laws legalizing and regulating medical and recreational cannabis or marijuana, which remains

illegal under federal law and regulations.

In addition, as described in the preceding risk factor, in the event of repeal or amendment

of laws and regulations which are now favorable to the cannabis/hemp industry in such states, we would be required to locate new

suppliers in states with laws and regulations that qualify under the 2018 Farm Act.

If we were to be unsuccessful in arranging

new sources of supply of our raw ingredients, or if our raw ingredients were to become legally unavailable, our intended business

plan with respect to such products could be adversely impacted.

our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations

qualifying under the 2018 Farm Act, a reduction in the number of states having such qualifying laws and regulations could limit,

restrict or otherwise preclude the sale of intended products containing hemp-derived CBD.

interstate shipment of hemp-derived CBD from one state to another is legal only where both states have laws and regulations that

allow for the production and sale of such products and that qualify under the 2018 Farm Act.

Therefore, the marketing and sale

of our intended products containing hemp-derived CBD is limited by such factors and is restricted to such states.

believe we may lawfully sell any of our finished products, including those containing CBD, in a majority of states, a repeal or

adverse amendment of laws and regulations that are now favorable to the distribution, marketing and sale of finished products

we intend to sell could significantly limit, restrict or prevent us from generating revenue related to our products that contain

hemp-derived CBD.

Any such repeal or adverse amendment of now favorable laws and regulations could have an adverse impact on our

business plan with respect to such products.

to recent expansion into the Cannabis industry, we may have a difficult time obtaining the various insurances that are desired

to operate our business, which may expose us to additional risk and financial liability .

Additionally, the FDA may issue rules and regulations, including certified good

manufacturing practices, or cGMPs, related to the growth, cultivation, harvesting and processing of hemp.

Clinical trials may be needed

to verify efficacy and safety.

It is also possible that the FDA would require that facilities where hemp is grown register with the FDA

and comply with certain federally prescribed regulations.

In the event that some or all of these regulations are imposed, we do not know

what the impact would be on the hemp industry, including what costs, requirements and possible prohibitions may be enforced.

our partners are unable to comply with the regulations or registration as prescribed by the FDA, we and or our partners (including C2M)

may be unable to continue to operate their and our business in its current or planned form or at all.

of hemp-derived CBD depend upon legality of cultivation, processing, marketing and sales of products derived from those plants under

state law of the United States.

CBD can only be legally produced in states that have laws and regulations that allow for such production and that comply with the 2018

Farm Act, apart from state laws legalizing and regulating medical and recreational cannabis or marijuana, which remains illegal under

federal law and regulations.

In addition, as described in the preceding risk factor, in the event of repeal or amendment of laws and

regulations which are now favorable to the cannabis/hemp industry in such states, we would be required to locate new suppliers in states

with laws and regulations that qualify under the 2018 Farm Act.

If we were to be unsuccessful in arranging new sources of supply of our

raw ingredients, or if our raw ingredients were to become legally unavailable, our intended business plan with respect to such products

could be adversely impacted.

our distributors may only sell and ship our products containing hemp-derived CBD in states that have adopted laws and regulations qualifying

under the 2018 Farm Act, a reduction in the number of states having such qualifying laws and regulations could limit, restrict or otherwise

preclude the sale of intended products containing hemp-derived CBD.

interstate shipment of hemp-derived CBD from one state to another is legal only where both states have laws and regulations that allow

for the production and sale of such products and that qualify under the 2018 Farm Act.

Therefore, the marketing and sale of our intended

products containing hemp-derived CBD is limited by such factors and is restricted to such states.

Although we believe we may lawfully

sell any of our finished products, including those containing CBD, in a majority of states, a repeal or adverse amendment of laws and

regulations that are now favorable to the distribution, marketing and sale of finished products we intend to sell could significantly

limit, restrict or prevent us from generating revenue related to our products that contain hemp-derived CBD.

Any such repeal or adverse

amendment of now favorable laws and regulations could have an adverse impact on our business plan with respect to such products.

to recent expansion into the Cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate

our business, which may expose us to additional risk and financial liability .

that is otherwise readily available, such as general liability, and directors and officer’s insurance, may become more difficult

for us to find, and more expensive, due to our intended launch of certain products containing Cannabis.

There are no guarantees

that we will be able to find such insurances in the future, or that the cost will be affordable to us.

If we are forced to go

without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose

us to additional risk and financial liabilities.

There are no guarantees that

we will be able to find such insurances in the future, or that the cost will be affordable to us.

If we are forced to go without such

insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk

and financial liabilities.

products may not meet health and safety standards or could become contaminated.

have adopted various quality, environmental, health and safety standards.

We do not have control over all of the third parties

involved in the manufacturing of our products and their compliance with government health and safety standards.

Even if our products

meet these standards, they could otherwise become contaminated.

A failure to meet these standards or contamination could occur

in our operations or those of our manufacturers, distributors or suppliers.

This could result in expensive production interruptions,

recalls and liability claims.

Moreover, negative publicity could be generated from false, unfounded or nominal liability claims

or limited recalls.

Any of these failures or occurrences could negatively affect our business and financial performance.

We do not have control over all of the third parties involved

in the manufacturing of our products and their compliance with government health and safety standards.

Even if our products meet these

standards, they could otherwise become contaminated.

A failure to meet these standards or contamination could occur in our operations

or those of our manufacturers, distributors or suppliers.

This could result in expensive production interruptions, recalls and liability

Moreover, negative publicity could be generated from false, unfounded or nominal liability claims or limited recalls.

these failures or occurrences could negatively affect our business and financial performance.

sale of our products involves product liability and related risks that could expose us to significant insurance and loss expenses.

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in, illness or injury.

Our products contain combinations of ingredients, and there is little long-term experience with the effect

of these combinations.

In addition, interactions of these products with other products, prescription medicines and over-the-counter

drugs have not been fully explored or understood and may have unintended consequences.

While our third-party manufacturers perform

tests in connection with the formulations of our products, these tests are not designed to evaluate the inherent safety of our

Our products contain combinations of ingredients, and there is little long-term experience with the effect of

these combinations.

In addition, interactions of these products with other products, prescription medicines and over-the-counter drugs

have not been fully explored or understood and may have unintended consequences.

While our third-party manufacturers perform tests in

connection with the formulations of our products, these tests are not designed to evaluate the inherent safety of our products.

product liability claim may increase our costs and adversely affect our revenue and operating income.

Moreover, liability claims

arising from a serious adverse event may increase our costs through higher insurance premiums and deductibles and may make it

more difficult to secure adequate insurance coverage in the future.

In addition, our product liability insurance may fail to cover

future product liability claims, which, if adversely determined, could subject us to substantial monetary damages.

Moreover, liability claims arising

from a serious adverse event may increase our costs through higher insurance premiums and deductibles and may make it more difficult

to secure adequate insurance coverage in the future.

In addition, our product liability insurance may fail to cover future product liability

claims, which, if adversely determined, could subject us to substantial monetary damages.

between legal Cannabis and illegal Cannabis.

is risk that confusion or uncertainty surrounding our products with regulated cannabis could occur on the state or federal level

and impact us.

We may have difficulty with establishing banking relationships, working with investment banks and brokers who would

be willing to offer and sell our securities or accept deposits from shareholders, and auditors willing to certify our financial

statements if we are confused with businesses that are in the cannabis business.

Any of these additional factors, should they

occur, could also affect our business, prospects, assets or results of operation could have a material adverse effect on the business,

prospects, results of operations or financial condition of the Company.

is risk that confusion or uncertainty surrounding our products with regulated cannabis could occur on the state or federal level and

We may have difficulty with establishing banking relationships, working with investment banks and brokers who would be willing

to offer and sell our securities or accept deposits from shareholders, and auditors willing to certify our financial statements if we

are confused with businesses that are in the cannabis business.

Any of these additional factors, should they occur, could also affect

our business, prospects, assets or results of operation could have a material adverse effect on the business, prospects, results of operations

or financial condition of the Company.

state regulatory uncertainty.

rulemaking process for cannabis operators at the state level in any state will be ongoing and result in frequent changes.

result, a compliance program is essential to manage regulatory risk.

All operating policies and procedures implemented in the

operation will be compliance-based and derived from the state regulatory structure governing ancillary cannabis businesses and

their relationships to state-licensed or permitted cannabis operators, if any.

Notwithstanding the Company’s efforts, regulatory

compliance and the process of obtaining regulatory approvals can be costly and time-consuming.

No assurance can be given that

the Company will receive the requisite licenses, permits or cards to operate its businesses.

a compliance program is essential to manage regulatory risk.

All operating policies and procedures implemented in the operation will

be compliance-based and derived from the state regulatory structure governing ancillary cannabis businesses and their relationships to

state-licensed or permitted cannabis operators, if any.

Notwithstanding the Company’s efforts, regulatory compliance and the process

of obtaining regulatory approvals can be costly and time-consuming.

No assurance can be given that the Company will receive the requisite

licenses, permits or cards to operate its businesses.

addition, local laws and ordinances could restrict the Company’s business activity.

Although legal under the laws of the

states in which the Company’s business will operate, local governments have the ability to limit, restrict, and ban cannabis

businesses from operating within their jurisdiction.

Land use, zoning, local ordinances, and similar laws could be adopted or

changed, and have a material adverse effect on the Company’s business.

Although legal under the laws of the states

in which the Company’s business will operate, local governments have the ability to limit, restrict, and ban cannabis businesses

from operating within their jurisdiction.

Land use, zoning, local ordinances, and similar laws could be adopted or changed, and have

a material adverse effect on the Company’s business.

Company is aware that multiple states are considering special taxes or fees on businesses in the marijuana industry.

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yet unknown risk at this time that other states are in the process of reviewing such additional fees and taxation.

have a material adverse effect upon the Company’s business, results of operations, financial condition or prospects.

This could have a

material adverse effect upon the Company’s business, results of operations, financial condition or prospects.

is no assurance that the Company will obtain and retain any relevant licenses.

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Failure by the Company to comply with the requirements

of licenses or any failure to maintain licenses would have a material adverse impact on the business, financial condition and

operating results of the Company.

Should any state in which the Company considers a license important not grant, extend or renew

such license or should it renew such license on different terms, or should it decide to grant more than the anticipated number

of licenses, the business, financial condition and results of the operation of the Company could be materially adversely affected.

of licenses or any failure to maintain licenses would have a material adverse impact on the business, financial condition and operating

results of the Company.

Should any state in which the Company considers a license important not grant, extend or renew such license or

should it renew such license on different terms, or should it decide to grant more than the anticipated number of licenses, the business,

financial condition and results of the operation of the Company could be materially adversely affected.

The cannabis laws and regulations

of states in which we operate limit the granting and number of licenses granted for dispensaries and cultivation and production facilities.

The number of licenses by category, and issuance of individual licenses, may be limited, delayed, denied or otherwise unissued.

separate treatment of individual licenses as well as license categories, along with limits set on the number of licenses granted in each

of these operating categories, can result in market and supply chain risks including, for example, mismatch between cultivation and production

facilities and dispensaries relating to availability and production of cannabis products.

This can result in, among other things, market,

pricing and supply risks, which may have a material effect on the Company’s business, financial condition and operations.

Company is subject to restricted access to banking.

the manufacture, distribution, and dispensation of cannabis remains illegal under the CSA, banks and other financial institutions

providing services to cannabis-related businesses risk violation of federal anti-money laundering statutes (18 U.S.C.

1956 and 1957), the unlicensed money-remitter statute (18 U.S.C.

the manufacture, distribution, and dispensation of cannabis remains illegal under the CSA, banks and other financial institutions providing

services to cannabis-related businesses risk violation of federal anti-money laundering statutes (18 U.S.C.

1956 and 1957),

the unlicensed money-remitter statute (18 U.S.C.

1960) and the U.S.

Bank Secrecy Act.

These statutes can

impose criminal liability for engaging in certain financial and monetary transactions with the proceeds of a “specified

unlawful activity”

such as distributing controlled substances which are illegal under federal law, including cannabis, and

for failing to identify or report financial transactions that involve the proceeds of cannabis-related violations of the CSA.

These statutes can impose criminal liability

for engaging in certain financial and monetary transactions with the proceeds of a “specified unlawful activity”

distributing controlled substances which are illegal under federal law, including cannabis, and for failing to identify or report financial

transactions that involve the proceeds of cannabis-related violations of the CSA.

February 2014, the Financial Crimes Enforcement Network (“FinCEN”) bureau of the U.S.

Treasury Department issued guidance

(which is not law) with respect to financial institutions providing banking services to cannabis business, including burdensome

due diligence expectations and reporting requirements.

This guidance does not provide any safe harbors or legal defenses from

examination or regulatory or criminal enforcement actions by the Department of Justice, FinCEN or other federal regulators.

most banks and other financial institutions in the United States do not appear to be comfortable providing banking services to

cannabis-related businesses, or relying on this guidance, which can be amended or revoked at any time by the Trump Administration.

In addition to the foregoing, banks may refuse to process debit card payments and credit card companies generally refuse to process

credit card payments for cannabis-related businesses.

As a result, the Company may have limited or no access to banking or other

financial services in the United States.

In addition, federal money laundering statutes and Bank Secrecy Act regulations discourage

financial institutions from working with any organization that sells a controlled substance, regardless of whether the state it

resides in permits cannabis sales.

The inability or limitation in the Company’s ability to open or maintain bank accounts,

obtain other banking services and/or accept credit card and debit card payments may make it difficult for the Company to operate

and conduct its business as planned or to operate efficiently.

(which is not law) with respect to financial institutions providing banking services to cannabis business, including burdensome due diligence

expectations and reporting requirements.

This guidance does not provide any safe harbors or legal defenses from examination or regulatory

or criminal enforcement actions by the Department of Justice, FinCEN or other federal regulators.

Thus, most banks and other financial

institutions in the United States do not appear to be comfortable providing banking services to cannabis-related businesses, or relying

on this guidance, which can be amended or revoked at any time by the Trump Administration.

In addition to the foregoing, banks may refuse

to process debit card payments and credit card companies generally refuse to process credit card payments for cannabis-related businesses.

As a result, the Company may have limited or no access to banking or other financial services in the United States.

In addition, federal

money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with any organization that

sells a controlled substance, regardless of whether the state it resides in permits cannabis sales.

The inability or limitation in the

Company’s ability to open or maintain bank accounts, obtain other banking services and/or accept credit card and debit card payments

may make it difficult for the Company to operate and conduct its business as planned or to operate efficiently.

March 18, 2021, the Secure and Fair Enforcement Banking Act (the “SAFE Banking Act”) was reintroduced in the House of Representatives.

On March 23, 2021, the bill was reintroduced in the Senate as well.

The House previously passed the SAFE Banking Act in September 2019,

but the measure stalled in the Senate.

Most recently, on February 4, 2022, the House approved the America COMPETES Act of 2022, which

includes the provisions of the SAFE Banking Act.

The America COMPETES Act now advances to the Senate for consideration.

As written, the

SAFE Banking Act would allow financial institutions to provide their services to state-legal cannabis clients and ancillary businesses

serving state-legal cannabis businesses without fear of federal sanctions.

There is no guarantee the SAFE Banking Act will become law

in its current form, if at all.

Company is subject to constraints on marketing products.

development of the Company’s business and operating results may be hindered by applicable restrictions on sales and marketing

activities imposed by government regulatory bodies.

The regulatory environment in the United States limits the Company’s

ability to compete for market share in a manner similar to other industries.

If the Company is unable to effectively market its

products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed

through increased selling prices for its products, the Company’s sales and operating results could be adversely affected.

development of the Company’s business and operating results may be hindered by applicable restrictions on sales and marketing activities

imposed by government regulatory bodies.

The regulatory environment in the United States limits the Company’s ability to compete

for market share in a manner similar to other industries.

If the Company is unable to effectively market its products and compete for

market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices

for its products, the Company’s sales and operating results could be adversely affected.

Company is subject to unfavorable tax treatment of cannabis businesses.

Section 280E (“Section 280E”) of the United States Internal Revenue Code of 1986, as amended (the “U.S.

Code”), “no deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying

on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking

in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal

law or the law of any State in which such trade or business is conducted.”

Tax Code”),

“no deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business

if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances

(within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State

in which such trade or business is conducted.”

This provision has been applied by the U.S.

Revenue Service to cannabis operations, prohibiting them from deducting expenses directly associated with the sale of cannabis.

Section 280E therefore has a significant impact on the retail side of cannabis, but a lesser impact on cultivation and manufacturing

A result of Section 280E is that an otherwise profitable business may, in fact, operate at a loss, after taking into

account its U.S.

Internal Revenue Service to cannabis

operations, prohibiting them from deducting expenses directly associated with the sale of cannabis.

Section 280E therefore has a significant

impact on the retail side of cannabis, but a lesser impact on cultivation and manufacturing operations.

A result of Section 280E is that

an otherwise profitable business may, in fact, operate at a loss, after taking into account its U.S.

income tax expenses.

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the cannabis industry remains illegal under U.S.

federal law, any property owned by participants in the cannabis industry which

are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by

law enforcement and subsequent civil asset forfeiture.

Even if the owner of the property were never charged with a crime, the

property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it

could be subject to forfeiture.

federal law, any property owned by participants in the cannabis industry which are either

used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement

and subsequent civil asset forfeiture.

Even if the owner of the property were never charged with a crime, the property in question could

still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture.

Company is subject to proceeds of crime statutes.

Company will be subject to a variety of laws and regulations domestically and in the United States that involve money laundering,

financial recordkeeping and proceeds of crime, including the Currency and Foreign Transactions Reporting Act of 1970 (commonly

known as the Bank Secrecy Act), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools

Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), as amended and the rules and regulations thereunder

and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the

United States

the event that any of the Company’s license agreements, or any proceeds thereof, in the United States were found to be in

violation of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more

of the statutes noted above or any other applicable legislation.

This could be materially adverse to the Company and, among other

things, could restrict or otherwise jeopardize the ability of the Company to declare or pay dividends.

Company will be subject to a variety of laws and regulations domestically and in the United States that involve money laundering, financial

recordkeeping and proceeds of crime, including the Currency and Foreign Transactions Reporting Act of 1970 (commonly known as the Bank

Secrecy Act), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and

Obstruct Terrorism Act of 2001 (USA PATRIOT Act), as amended and the rules and regulations thereunder and any related or similar rules,

regulations or guidelines, issued, administered or enforced by governmental authorities in the United States

the event that any of the Company’s license agreements, or any proceeds thereof, in the United States were found to be in violation

of money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of the statutes

noted above or any other applicable legislation.

This could be materially adverse to the Company and, among other things, could restrict

or otherwise jeopardize the ability of the Company to declare or pay dividends.

Company is subject to product liability.

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to have caused significant loss or injury.

In addition, the sale of the Company’s products would involve the risk of injury

to consumers due to tampering by unauthorized third parties or product contamination.

Previously unknown adverse reactions resulting

from human consumption of the Company’s products alone or in combination with other medications or substances could occur.

The Company may be subject to various product liability claims, including, among others, that the Company’s products caused

injury or illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects

or interactions with other substances.

A product liability claim or regulatory action against the Company could result in increased

costs, could adversely affect the Company’s reputation with its clients and consumers generally, and could have a material

adverse effect on the business, results of operations and financial condition of the Company.

There can be no assurances that

the Company will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against

potential liabilities.

Such insurance is expensive and may not be available in the future on acceptable terms, or at all.

inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability

claims could prevent or inhibit the commercialization of the Company’s potential products.

In addition, the sale of the Company’s products would involve the risk of injury to

consumers due to tampering by unauthorized third parties or product contamination.

Previously unknown adverse reactions resulting from

human consumption of the Company’s products alone or in combination with other medications or substances could occur.

may be subject to various product liability claims, including, among others, that the Company’s products caused injury or illness

or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with

other substances.

A product liability claim or regulatory action against the Company could result in increased costs, could adversely

affect the Company’s reputation with its clients and consumers generally, and could have a material adverse effect on the business,

results of operations and financial condition of the Company.

There can be no assurances that the Company will be able to obtain or maintain

product liability insurance on acceptable terms or with adequate coverage against potential liabilities.

Such insurance is expensive

and may not be available in the future on acceptable terms, or at all.

The inability to obtain sufficient insurance coverage on reasonable

terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of the Company’s

potential products.

Company is subject to product recalls.

Manufacturers

and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including

product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety

and inadequate or inaccurate labeling disclosure.

If any of the Company’s products are recalled due to an alleged product

defect or for any other reason, the Company could be required to incur the unexpected expense of the recall and any legal proceedings

that might arise in connection with the recall.

The Company may lose a significant amount of sales and may not be able to replace

those sales at an acceptable margin or at all.

and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product

defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate

or inaccurate labeling disclosure.

If any of the Company’s products are recalled due to an alleged product defect or for any other

reason, the Company could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection

with the recall.

The Company may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin

In addition, a product recall may require significant management attention.

the Company has detailed procedures in place for testing its products, there can be no assurance that any quality, potency or

contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits.

Additionally,

if one of the Company’s significant brands were subject to recall, the image of that brand and the Company could be harmed.

A recall for any of the foregoing reasons could lead to decreased demand for the Company’s products and could have a material

adverse effect on the results of operations and financial condition of the Company.

Additionally, product recalls may lead to

increased scrutiny of the Company’s operations by the U.S.

Food and Drug Administration, or other regulatory agencies, requiring

further management attention and potential legal fees and other expenses.

substance legislation differs between countries and legislation in certain countries may restrict or limit our ability to sell

hemp-based consumer products.

countries are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control

of narcotic substances, including cannabis extracts.

Countries may interpret and implement their treaty obligations in a way that

creates a legal obstacle to our obtaining regulatory approval for our hemp-based consumer products in those countries.

These countries

may not be willing or able to amend or otherwise modify their laws and regulations to permit our hemp-based consumer products

to be marketed or achieving such amendments to the laws and regulations may take a prolonged period of time.

In the case of countries

with similar obstacles, we would be unable to market our hemp-based consumer products in countries in the near future or perhaps

at all if the laws and regulations in those countries do not change.

of properties located in close proximity to our properties may assert claims against us regarding the use of the property as a

marijuana dispensary or marijuana cultivation and processing facility, which if successful, could materially and adversely affect

our business.

Although the Company has detailed procedures in

place for testing its products, there can be no assurance that any quality, potency or contamination problems will be detected in time

to avoid unforeseen product recalls, regulatory action or lawsuits.

Additionally, if one of the Company’s significant brands were

subject to recall, the image of that brand and the Company could be harmed.

A recall for any of the foregoing reasons could lead to decreased

demand for the Company’s products and could have a material adverse effect on the results of operations and financial condition

of the Company.

Additionally, product recalls may lead to increased scrutiny of the Company’s operations by the U.S.

Food and Drug

Administration, or other regulatory agencies, requiring further management attention and potential legal fees and other expenses.

substance legislation differs between countries and legislation in certain countries may restrict or limit our ability to sell hemp-based

consumer products.

countries are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control of narcotic

substances, including cannabis extracts.

Countries may interpret and implement their treaty obligations in a way that creates a legal

obstacle to our obtaining regulatory approval for our hemp-based consumer products in those countries.

These countries may not be willing

or able to amend or otherwise modify their laws and regulations to permit our hemp-based consumer products to be marketed or achieving

such amendments to the laws and regulations may take a prolonged period of time.

In the case of countries with similar obstacles, we

would be unable to market our hemp-based consumer products in countries in the near future or perhaps at all if the laws and regulations

in those countries do not change.

of properties located in close proximity to our properties may assert claims against us regarding the use of the property as a marijuana

dispensary or marijuana cultivation and processing facility, which if successful, could materially and adversely affect our business.

of properties located in close proximity to our properties may assert claims against us regarding the use of our properties, including

assertions that the use of the property constitutes a nuisance that diminishes the market value of such owner’s nearby property.

Such property owners may also attempt to assert such a claim in federal court as a civil matter under the Racketeer Influenced

and Corrupt Organizations Act.

If a property owner were to assert such a claim against us, we may be required to devote significant

resources and costs to defending ourselves against such a claim, and if a property owner were to be successful on such a claim,

our tenants may be unable to continue to operate their business in its current form at the property, which could materially adversely

impact the tenant’s business and the value of our property, our business and financial results and the trading price of

our securities.

and regulations affecting the regulated cannabis and marijuana industry are constantly changing, which could materially adversely

affect our operations, and we cannot predict the impact that future regulations may have on us.

state and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require

us to incur substantial costs associated with compliance or alter our business plan.

In addition, violations of these laws, or

allegations of such violations, could disrupt our business and result in a material adverse effect on its operations.

it is possible that regulations may be enacted in the future that will be directly applicable to our proposed business.

predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional

governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.

Such property owners may also attempt to assert such a claim in federal court as a civil matter under the Racketeer Influenced and Corrupt

Organizations Act.

If a property owner were to assert such a claim against us, we may be required to devote significant resources and

costs to defending ourselves against such a claim, and if a property owner were to be successful on such a claim, our tenants may be

unable to continue to operate their business in its current form at the property, which could materially adversely impact the tenant’s

business and the value of our property, our business and financial results and the trading price of our securities.

and regulations affecting the regulated cannabis and marijuana industry are constantly changing, which could materially adversely affect

our operations, and we cannot predict the impact that future regulations may have on us.

state and federal marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to

incur substantial costs associated with compliance or alter our business plan.

In addition, violations of these laws, or allegations

of such violations, could disrupt our business and result in a material adverse effect on its operations.

In addition, it is possible

that regulations may be enacted in the future that will be directly applicable to our proposed business.

We cannot predict the nature

of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations

or administrative policies and procedures, when and if promulgated, could have on our business.

Relating to Our Securities

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on the OTCQB.

We do not currently have a consistent active trading

There can be no assurance that a consistent active and liquid trading market will develop or, if developed, that it will

be sustained.

We do not currently have a consistent active trading market.

There can be no assurance that a consistent active and liquid trading market will develop or, if developed, that it will be sustained.

securities are thinly traded.

Accordingly, it may be difficult to sell shares of our common stock without significantly depressing

the value of the stock.

Unless we are successful in developing continued investor interest in our stock, sales of our stock could

continue to result in major fluctuations in the price of the stock.

Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the

value of the stock.

Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue

to result in major fluctuations in the price of the stock.

price of our common stock is volatile, which may cause investment losses for our stockholders.

market price of our common stock has been and is likely in the future to be volatile.

Our common stock price may fluctuate in

response to factors such as:

Our common stock price may fluctuate in response

to factors such as:

Announcements

by us regarding liquidity, significant acquisitions, equity investments and divestitures,

strategic relationships, addition or loss of significant customers and contracts, capital

expenditure commitments and litigation;

of convertible or equity securities and related warrants for general or merger and acquisition

or repayment of debt, accounts payable or convertible debt for general or merger and

acquisition purposes;

by us regarding liquidity, significant acquisitions, equity investments and divestitures, strategic relationships, addition or loss

of significant customers and contracts, capital expenditure commitments and litigation;

of convertible or equity securities and related warrants for general or merger and acquisition purposes;

or repayment of debt, accounts payable or convertible debt for general or merger and acquisition purposes;

of a significant number of shares of our common stock by stockholders;

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or departures of key personnel.

broad market and industry factors may have a material adverse effect on the market price of our common stock, regardless of our

actual operating performance.

These factors could have a material adverse effect on our business, financial condition and results

of operations.

broad market and industry factors may have a material adverse effect on the market price of our common stock, regardless of our actual

operating performance.

These factors could have a material adverse effect on our business, financial condition and results of operations.

of our securities may be restricted by virtue of state securities “blue sky”

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These restrictions may make it difficult or impossible to sell shares in those states.

of our common stock may be restricted under the securities or securities regulations laws promulgated by various states and foreign

jurisdictions, commonly referred to as “blue sky”

Absent compliance with such individual state laws, our common

stock may not be traded in such jurisdictions.

Because the securities held by many of our stockholders have not been registered

for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them should be

aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of

purchasers to purchase the securities.

These restrictions may prohibit the secondary trading of our common stock.

Investors should

consider the secondary market for our securities to be a limited one.

Without cannabis banking

laws in place, the ability to clear restricted stock is difficult.

of our common stock may be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions,

commonly referred to as “blue sky”

Absent compliance with such individual state laws, our common stock may not be traded

in such jurisdictions.

Because the securities held by many of our stockholders have not been registered for resale under the blue sky

laws of any state, the holders of such shares and persons who desire to purchase them should be aware that there may be significant state

blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities.

These restrictions

may prohibit the secondary trading of our common stock.

Investors should consider the secondary market for our securities to be a limited

The restricted access to cannabis banking makes it more difficult for cannabis investors to clear their stock from a Transfer Agent

(“TA”) to their brokerage of choice.

We can provide no assurances to investors of our stock that they will have the ability

to move their restricted stock from the TA to their brokerage until federal banking laws are enacted.

sale of a significant number of our shares of common stock could depress the price of our common stock.

or issuances of a large number of shares of common stock in the public market or the perception that sales may occur could cause

the market price of our common stock to decline.

Significant shares of common stock are held by our principal stockholders, other

company insiders and other large stockholders.

or issuances of a large number of shares of common stock in the public market or the perception that sales may occur could cause the

market price of our common stock to decline.

Significant shares of common stock are held by our principal stockholders, other company

insiders and other large stockholders.

As “affiliates”

of Resonate, as defined under Securities and Exchange

Commission Rule 144 under the Securities Act of 1933, our principal stockholders, other of our insiders and other large stockholders

may only sell their shares of common stock in the public market pursuant to an effective registration statement or in compliance

with Rule 144.

of Resonate, as defined under Securities and Exchange Commission Rule

144 under the Securities Act of 1933, our principal stockholders, other of our insiders and other large stockholders may only sell their

shares of common stock in the public market pursuant to an effective registration statement or in compliance with Rule 144.

issuance of additional shares of common stock and/or preferred stock could dilute existing stockholders.

We have and may issue

preferred stock that could have rights that are preferential to the rights of common stock that could discourage potentially beneficially

transactions to our common stockholders.

We have and may issue preferred

stock that could have rights that are preferential to the rights of common stock that could discourage potentially beneficially transactions

to our common stockholders.

to our Articles of Incorporation, we currently have authorized 200,000,000 shares of common stock and 10,000,000 shares of preferred

To the extent that common shares are available for issuance, subject to compliance with applicable stock exchange listing

rules, our board of directors has the ability to issue additional shares of common stock in the future for such consideration

as the board of directors may consider sufficient.

The issuance of any additional securities could, among other things, result

in substantial dilution of the percentage ownership of our stockholders at the time of issuance, result in substantial dilution

of our earnings per share and adversely affect the prevailing market price for our common stock.

issuance of additional shares of preferred stock could result in a class of outstanding securities that would have preferences

with respect to voting rights and dividends and in liquidation over our common stock and could, upon conversion or otherwise,

have all of the rights of our common stock.

To the extent that common shares are available for issuance, subject to compliance with applicable stock exchange listing rules,

our board of directors has the ability to issue additional shares of common stock in the future for such consideration as the board of

directors may consider sufficient.

The issuance of any additional securities could, among other things, result in substantial dilution

of the percentage ownership of our stockholders at the time of issuance, result in substantial dilution of our earnings per share and

adversely affect the prevailing market price for our common stock.

issuance of additional shares of preferred stock could result in a class of outstanding securities that would have preferences with respect

to voting rights and dividends and in liquidation over our common stock and could, upon conversion or otherwise, have all of the rights

of our common stock.

Our Board of Directors’

authority to issue preferred stock could discourage

potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise

by making these attempts more difficult or costly to achieve.

The issuance of preferred stock could impair the voting, dividend

and liquidation rights of common stockholders without their approval.

authority to issue preferred stock could discourage potential takeover attempts or

could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult

or costly to achieve.

The issuance of preferred stock could impair the voting, dividend and liquidation rights of common stockholders

without their approval.

capital raises may dilute our existing stockholders’

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we raise additional capital by issuing equity securities, our existing stockholders’

percentage ownership will be reduced,

and these stockholders may experience substantial dilution.

We may also issue equity securities that provide for rights, preferences

and privileges senior to those of our common stock.

If we raise additional funds by issuing debt securities, these debt securities

would have rights senior to those of our common stock and the terms of the debt securities issued could impose significant restrictions

on our operations, including liens on our assets.

If we raise additional funds through collaborations and licensing arrangements,

we may be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are

not favorable to us.

percentage ownership will be reduced, and

these stockholders may experience substantial dilution.

We may also issue equity securities that provide for rights, preferences and

privileges senior to those of our common stock.

If we raise additional funds by issuing debt securities, these debt securities would

have rights senior to those of our common stock and the terms of the debt securities issued could impose significant restrictions on

our operations, including liens on our assets.

If we raise additional funds through collaborations and licensing arrangements, we may

be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are not favorable

do not anticipate paying any cash dividends on our capital stock in the foreseeable future.

have never declared or paid cash dividends on our capital stock.

We currently intend to retain all of our future earnings, if

any, to finance the growth and development of our business, and we do not anticipate paying any cash dividends on our capital

stock in the foreseeable future.

We currently intend to retain all of our future earnings, if any, to

finance the growth and development of our business, and we do not anticipate paying any cash dividends on our capital stock in the foreseeable

In addition, the terms of any future debt agreements may preclude us from paying dividends.

a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

As a result, capital appreciation,

if any, of our common stock will be your sole source of gain for the foreseeable future.

Anti-takeover

provisions may limit the ability of another party to acquire our company, which could cause our stock price to decline.

Articles of Incorporation, as amended, our bylaws and Nevada law contain provisions that could discourage, delay or prevent a

third party from acquiring our company, even if doing so may be beneficial to our stockholders.

In addition, these provisions

could limit the price investors would be willing to pay in the future for shares of our common stock.

Articles of Incorporation allow for our board to create new series of preferred stock without further approval by our stockholders,

which could adversely affect the rights of the holders of our common stock;

our outstanding Preferred Stock contains provisions

that restrict our ability to take certain actions without the consent of a certain percentage of Preferred Stock then outstanding.

Articles of Incorporation, as amended, our bylaws and Nevada law contain provisions that could discourage, delay or prevent a third party

from acquiring our company, even if doing so may be beneficial to our stockholders.

In addition, these provisions could limit the price

investors would be willing to pay in the future for shares of our common stock.

Articles of Incorporation allow for our board to create new series of preferred stock without further approval by our stockholders, which

could adversely affect the rights of the holders of our common stock;

our outstanding Preferred Stock contains provisions that restrict

our ability to take certain actions without the consent of a certain percentage of Preferred Stock then outstanding.

Board of Directors has the authority to fix and determine the relative rights and preferences of preferred stock.

Directors also has the authority to issue preferred stock without further stockholder approval.

As a result, our Board of Directors

could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon

liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right

to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

In addition, our Board

of Directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or

that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution

to our existing stockholders.

in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against

our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors

or officers in any such actions.

of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or

officer, except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by

the Nevada Revised Statutes.

Specifically, Section 78.138 of the Nevada Revised Statutes provides that a director or officer is

not individually liable to the company or its shareholders or creditors for any damages as a result of any act or failure to act

in his or her capacity as a director or officer unless it is proven that (1) the director’s or officer’s act or failure

to act constituted a breach of his or her fiduciary duties as a director or officer and (2) his or her breach of those duties

involved intentional misconduct, fraud or a knowing violation of law.

This provision is intended to afford directors and officers

protection against and to limit their potential liability for monetary damages resulting from suits alleging a breach of the duty

of care by a director or officer.

Accordingly, you may be unable to prevail in a legal action against our directors or officers

even if they have breached their fiduciary duty of care.

In addition, our Bylaws allow us to indemnify our directors and officers

from and against any and all costs, charges and expenses resulting from their acting in such capacities with us.

This means that

if you were able to enforce an action against our directors or officers, in all likelihood, we would be required to pay any expenses

they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required to pay.

Accordingly, our

indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition,

results of operations and cash flows, and adversely affect prevailing market prices for our common stock.

Our Board of Directors

also has the authority to issue preferred stock without further stockholder approval.

As a result, our Board of Directors could authorize

the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right

to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares,

together with a premium, prior to the redemption of our common stock.

In addition, our Board of Directors could authorize the issuance

of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which

could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

in the Nevada Revised Statutes and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors

or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in

any such actions.

of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer,

except in limited circumstances, pursuant to provisions in the Nevada Revised Statutes and our Bylaws as authorized by the Nevada Revised

Specifically, Section 78.138 of the Nevada Revised Statutes provides that a director or officer is not individually liable

to the company or its shareholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a

director or officer unless it is proven that (1) the director’s or officer’s act or failure to act constituted a breach of

his or her fiduciary duties as a director or officer and (2) his or her breach of those duties involved intentional misconduct, fraud

or a knowing violation of law.

This provision is intended to afford directors and officers protection against and to limit their potential

liability for monetary damages resulting from suits alleging a breach of the duty of care by a director or officer.

Accordingly, you

may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty of care.

In addition, our Bylaws allow us to indemnify our directors and officers from and against any and all costs, charges and expenses resulting

from their acting in such capacities with us.

This means that if you were able to enforce an action against our directors or officers,

in all likelihood, we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they

otherwise would be required to pay.

Accordingly, our indemnification obligations could divert needed financial resources and may adversely

affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our

common stock.

Unresolved Staff comments

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