What changed in this filing

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Item 1A. Risk Factors

2026-03-03 compared with 2025-03-21 · 845 added, 834 removed, 246 unchanged (87% of the section changed)

Risk Factors.

Investing in our Common

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the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis

of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision

to invest in our Common Stock.

of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a

decision to invest in our Common Stock.

The risks and uncertainties described below may not be the only ones we face.

If any of the risks actually

occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected.

In that event,

the market price of our Common Stock could decline, and you could lose part or all of your investment.

If any of the risks

actually occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected.

that event, the market price of our Common Stock could decline, and you could lose part or all of your investment.

Risks Relating to our Industry

The 2018 Farm Bill, which federally legalized hemp and hemp

products, was amended in a way that would severely restrict or prohibit the Company’s hemp-derived THC products.

The 2018 Farm Bill, which

is the legal basis for the Company’s entry into the hemp-derived THC product market, legally defined hemp as Cannabis Sativa L.

containing less than 0.3% delta-9-THC on a dry weight basis, effectively legalizing hemp in the United States.

The 2026 Appropriations

Act includes a provision (section 781) to amend the definition of hemp in the 2018 Farm Bill to effectively prohibit currently commercialized

hemp-derived THC products, including the Company’s products, although the change does not become effective until November 12, 2026.

Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain.

This creates significant

uncertainty for our business of selling hemp-derived THC products.

It is unclear, for example, if states that have expressly allowed

the commercialization of such products will continue to do so in spite of the changes to federal law.

If the 365-day grace period expires

without a legislative change, it will have a material adverse effect on the Company, including our business, financial condition, and

results of operations.

In that event, the market price of the Company’s common stock could decline.

States are passing their own laws regulating, restricting, or

prohibiting hemp-derived THC products, creating a difficult regulatory patchwork within which to operate.

State and local authorities

have been active over the last few years, implementing their own laws regulating the cultivation, manufacturing, testing, marketing,

and sale of both intoxicating and non-intoxicating hemp products.

Some states ban these products altogether.

Other state laws permit

hemp-derived THC products but impose new regulatory frameworks containing licensing and labeling requirements, age gates, amount and

potency restrictions, allowable types of products, and restrictions on where the products may be sold.

The varied state regulatory framework

for hemp products poses risks to manufacturing, marketing, selling, and shipping hemp-derived THC products around the country, whether

wholesale or direct to consumers via online or brick-and-mortar retail locations.

Additionally, hemp legislation is pending at the state

level around the country, creating additional risk to the sale and transport of products already produced under existing laws.

regulatory obstacles or compliance costs related to state laws may hinder the Company’s ability to successfully compete in some

markets for such products.

Further, states in which the Company currently sells its hemp-derived THC products could decide in the future

to ban these products altogether.

If these regulatory changes occur, the revenue streams we expect to receive from our businesses and

assets would be at risk and, as a result, such changes could have a material adverse effect on our business, financial condition, and

results of operations.

Hemp-derived THC products are not permitted

under the Federal Food, Drug, and Cosmetic Act.

The Food and Drug Administration (“FDA”)

has taken the position that ingestible products over which it has jurisdiction, including foods, beverages, and dietary supplements,

that contain cannabinoids such as THC, including hemp-derived THC, are not permitted under the Federal Food, Drug, and Cosmetic Act (“FDCA”).

The FDA has not evaluated THC as a food ingredient, and therefore does not consider it to be GRAS (Generally Recognized as Safe) for

use in foods, including beverages.

The FDA has also found that because THC is in certain drugs approved by the FDA, it is precluded from

use in foods/beverages or dietary supplements.

The FDA has articulated its intention to focus enforcement on products claiming to prevent,

diagnose, mitigate, treat, or cure diseases, and/or manufacturers who target products toward children.

The FDA has issued warnings about

products that resemble candy or other items appealing to children, emphasizing that such products could pose a risk of unintentional

ingestion and potential harm due to the presence of cannabinoids.

Thus far, such enforcement has been limited to sending warning letters

to a relatively small number of companies.

The FDA may decide in the future to increase enforcement activities, regardless of whether

a company makes health claims related to its products or markets to children, which could impact the Company’s offering of hemp-derived

THC beverages and materially impact operations and revenue.

The FDA could issue new regulations that prohibit or strictly

limit the sale of hemp-derived THC products.

The FDA has previously declined to issue regulations

for the manufacture and sale of hemp-derived THC products.

For example, in 2023, the FDA denied three citizen petitions asking the FDA

to conduct rulemaking to allow the marketing of CBD, another hemp-derived cannabinoid, as dietary supplements.

In conjunction with these

denials, the FDA has publicly stated that a new regulatory pathway should be created by Congress to regulate CBD and other cannabinoid

The 2026 Appropriations Act directs the FDA to create and maintain lists of allowable and prohibited cannabinoids and promulgate

other regulations further defining what items will qualify as a container for purposes of measuring cannabinoid content.

The FDA could

also decide to change or increase its enforcement of hemp products based on this new directive.

New FDA regulations could materially

and negatively impact the Company’s operations and revenue.

New FDA regulations could also require the Company to make financial

investments in additional compliance mechanisms which could impact our profitability and the market price for our Common Stock.

Other federal agencies may take enforcement actions against

companies selling hemp-derived THC products.

The Federal Trade Commission

(“FTC”) and FDA frequently collaborate on enforcement where their jurisdictions overlap, particularly in regulating the advertising,

labeling, and promotion of food, cosmetics, medical devices, and OTC (over-the-counter) drugs.

In the CBD market, the FTC has joined

the FDA in issuing warning letters to companies that lacked competent and reliable scientific evidence supporting their advertisements,

thereby violating the FTC Act, 15 U.S.C.

The FTC has also independently issued warning letters to CBD companies for

making exaggerated or misleading claims without sufficient scientific backing.

While FTC enforcement actions related to CBD were historically

limited to warnings, in December 2020, the agency initiated its first formal enforcement action against six CBD companies for allegedly

making unsupported health claims, leading to settlement agreements that required those companies to cease such claims and pay monetary

In 2023 and 2024, the FTC sent cease and desist letters to companies marketing hemp-derived THC products that it determined

appealed to children.

Although the Company does not intend to make any unsubstantiated claims regarding its products, the FTC may disagree

with our assessment of our claims.

The regulatory landscape and potential for future FTC enforcement actions could pose an ongoing risk

to the Company’s offering of hemp-derived THC products, especially if the Company’s products are targeted by the FTC, or

the FTC and FDA together, in the future for any reason.

Hemp-derived THC products are federally

illegal if they exceed 0.3% delta-9-THC on a dry weight basis.

Hemp-derived THC products

which exceed a delta-9-THC concentration of 0.3% on a dry weight basis are federally illegal under the Controlled Substances Act (the

Any failure by the Company

or our partners to keep the delta-9-THC in our hemp-derived THC products below 0.3% on a dry weight basis, either in the manufacturing

process or in the final product, could subject us to action by regulatory authorities and/or to lawsuits by consumers.

Certain hemp-derived

THC products may, over time, gradually increase their delta-9-THC or total THC concentration, and this may ultimately cause such products

to exceed the applicable concentration level, making such products illegal in certain jurisdictions.

In addition, the approval of medical

and recreational marijuana by many states has created a situation in which it may be difficult or impossible for regulators and courts

to determine whether the delta-9-THC levels reflected in consumers’ blood tests are the result of hemp-derived THC products or

marijuana products.

This may result in regulatory actions or lawsuits.

If any of these situations occur, we may be subject to regulatory

action or lawsuits that could have a material adverse effect on the Company.

The Company is subject to regulations that

could impact its ability to sell its product internationally.

The Company currently sells

certain of its products in Canada and may conduct sales in other international markets in the future.

Doing so would subject the Company

to the statutes, regulations, and international treaties of the countries where it operates or engages in trade.

Failure to adhere to

existing or evolving laws in any jurisdiction could materially impact the Company’s business.

There is also a risk that authorities

in these jurisdictions may determine that the Company was or is not in compliance with their laws.

If its past or present activities

are found to violate such laws, the Company could face enforcement actions, including civil or criminal penalties, fines, damages, operational

restrictions or restructuring, asset seizures, and the denial of regulatory approvals.

Third parties with whom we do business

may perceive themselves as being exposed to reputational, and even legal, risk because of their relationship with us due to our hemp-

and limited cannabis-related licensing activities and may, as a result, refuse to do business with us.

The third parties with whom

we do business may perceive that they are exposed to reputational, or possibly even legal, risk because of our hemp- or limited cannabis-related

business activities.

Any third-party service provider or customer could suspend or withdraw its business if it perceives that the potential

risks exceed the potential benefits of doing business with us.

Specifically, while we have banking relationships and believe that the

services we rely on can be procured from other institutions, we may, in the future, have difficulty maintaining existing or securing

new bank accounts or clearing services.

Our failure to establish or maintain business relationships could have a material adverse effect

on our business, financial condition, and results of operations.

We face competition from the illicit market as well as larger

competitors and licensed medical and adult-use cannabis dispensaries.

cannabis and hemp

industries are, and are expected to continue to be, competitive.

A number of other companies engage in, and may in the future engage

in, cannabis or hemp-related businesses, operate businesses in competition with us, and purchase businesses and assets or make investments

that we will also seek to purchase or make.

We face and expect to continue to face competition from state-licensed medical and adult-use

dispensaries as well as the illicit market.

Additionally, if the Attorney General reschedules cannabis to Schedule III, competition from

state-licensed cannabis companies could intensify as the industry becomes more normalized.

Large chain stores, manufacturers,

retailers, and beverage and other consumer products companies that also recognize the potential for financial success through acquisitions

and investment in the hemp-derived THC industry could strategically acquire competitors or invest in creating their own brands.

so, these larger competitors could produce and sell competing products at a lower price and establish a larger brand presence than we

We may lack the personnel, products, marketing, and distribution capabilities, and/or financial resources to compete effectively

against such larger competitors.

We also face competition

from the illicit market and illegal dispensaries and cultivation operations that are unlicensed, not regulated and that are selling cannabis

or hemp-derived products.

Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed

production and sale of cannabis or hemp-derived products could result in increased competition for us.

Additionally, illicit products

may be unsafe, and negative press caused by such products could impact the reputation of our products with consumers who may not distinguish

between responsible suppliers like the Company and illicit operators.

Any or all these events could have a material adverse effect on

our business, financial condition, and results of operations.

Inconsistent public opinion and perception of the cannabis and

hemp industries may hinder market growth and state regulation, which would adversely impact our growth plans and current operations and

result in an adverse effect on our business, financial condition, and results of operations.

Public opinion and support for cannabis and hemp-derived

THC products has traditionally been inconsistent and varies from state to state.

While public opinion and support has historically been

increasing in the U.S.

for legalizing cannabis and for continued access to hemp-derived THC products, opposition to legalization remains,

and the support could diminish.

Inconsistent public opinion and perception of cannabis and hemp hinder growth of the hemp industry, which

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

Consumer perception of our

products may be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention,

and other publicity regarding the consumption of cannabis and hemp-derived THC products.

There can be no assurance that future scientific

research and findings, regulatory proceedings, litigation, media attention, or other research findings or publicity will be favorable

to the cannabis or hemp markets or any particular product, or consistent with earlier publicity.

Future research reports, findings, regulatory

proceedings, litigation, media attention, or other publicity that is perceived as less favorable than, or questions earlier research

reports, findings, or publicity, could have a material adverse effect on the demand for our products.

Our dependence upon consumer perceptions

means that such adverse reports, whether or not accurate or with merit, could ultimately have a material adverse effect on our business,

results of operations, financial condition, and cash flows.

Further, adverse publicity reports or other media attention regarding the

safety, efficacy, and quality of hemp-derived THC products in general, or our products specifically, or associating the consumption of

cannabis or hemp-derived THC products with illness or other negative effects or events, could have a material adverse effect.

or alleged failure of quality control processes and procedures could result in negative consumer perception of our products or legal

claims against us.

Adverse publicity reports or other media attention could arise even if the adverse effects associated with such products

resulted from consumers’ failure to consume such products appropriately or as directed.

Hemp-derived THC products may be shown to have negative health

and/or safety impacts upon consumers.

The health and safety impacts

of hemp-derived THC products have not yet been established via traditional scientific and/or clinical studies.

The FDA appears to believe

that certain CBD products may have significant adverse health impacts upon human beings, especially in regard to potential liver toxicity

or liver damage.

If the FDA, scientific research and/or clinical studies ultimately demonstrate negative health and/or safety impacts

of cannabis or hemp-derived THC products on consumers, our business and the trading price of our Common Stock could be materially adversely

We face risks due to industry immaturity

or limited comparable, competitive, or established industry best practices.

Because the hemp-derived

THC industry is new, there are relatively few operators in the industry whose business models we can follow or build upon.

there is no or limited information about comparable companies available for potential investors to review in making a decision about

whether to invest in us.

Shareholders and investors

should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies, like

us, that are in their early stages.

For example, unanticipated expenses and problems or technical difficulties may occur, which may result

in material delays in the operation of our business.

We may fail to successfully address these risks and uncertainties or successfully

implement our operating strategies.

If we fail to do so, it could materially harm our business to the point of having to cease operations

and could impair the value of our Common Stock to the extent that investors may lose their entire investment.

The cannabis and hemp industries could

face strong opposition from other industries.

We believe that established

businesses in other industries may perceive strong economic interests in opposing the development of the cannabis and hemp industries.

Cannabis and hemp may be seen by companies in other industries as an attractive alternative to their products, such as alcohol, and as

an alternative to various commercial pharmaceuticals.

Many industries that could view the emerging cannabis and hemp industries as economic

threats are well established, with vast economic and federal and state lobbying resources.

It is reported that companies within these

industries may have played a role in the recent federal legislation to reverse the 2018 Farm Bill’s legalization of certain hemp

products, and it is possible these industries play similar roles in anti-cannabis efforts.

Any inroads these companies make in halting

or impeding legislative initiatives that would be beneficial to the cannabis and hemp industries could have a detrimental impact on some

of our customers and, in turn, on our operations.

Our business depends in part on our customers

obtaining and/or maintaining appropriate licensing.

Our business is partly dependent

on certain of our customers obtaining various licenses from various municipalities and state licensing agencies.

There can be no assurance

that any or all licenses necessary for our customers to operate their businesses will be obtained, retained, or renewed.

If a licensing

body were to determine that a customer of ours had violated applicable rules and regulations, there is a risk the license granted to

that customer could be revoked, which could adversely affect our revenue streams from such clients.

There can be no assurance that our

existing customers will be able to retain their licenses going forward, or that the Company would be able to acquire new customers to

sell its products in those markets.

We face risks related to our insurance

coverage and uninsurable risks.

Our business is subject

to a number of risks and hazards generally, including adverse environmental conditions, accidents, labor disputes, and changes in the

regulatory environment.

Such occurrences could result in damage to assets, personal injury or death, environmental damage, delays in

operations, monetary losses, and possible legal liability.

Although we intend to continue

to maintain insurance to protect against certain risks in such amounts as we consider to be reasonable, our insurance will not cover

all the potential risks associated with our operations.

We may also be unable to maintain insurance to cover these risks at economically

feasible premiums, particularly given changes to federal law under the 2026 Appropriations Act.

Insurance coverage may cease to be available

or may not be adequate to cover any resulting liability.

Moreover, insurance against certain hazards encountered in our operations may

not be generally available on acceptable terms.

We might also become subject to liability for pollution or other hazards which we may

not be insured against or which we may elect not to insure against because of premium costs or other reasons.

Losses from these events

may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations.

We participate in an evolving and volatile industry.

The hemp industry is still

new, and many aspects of the industry’s development and evolution cannot be accurately predicted.

While we have attempted to identify

many risks specific to the hemp industry, you should carefully consider that there are other risks that cannot be foreseen or are not

described in this report, which could materially and adversely affect our business and financial performance.

We expect that the hemp

and cannabis markets and our business will continue to evolve in ways that are difficult to predict.

Our long-term success may depend

on our ability to successfully adjust our strategy to meet the changing market dynamics.

If we are unable to successfully adapt to changes

in the hemp and cannabis industries, our operations could be adversely affected.

Banking regulations could limit access

to banking services.

Since the use of cannabis

is illegal under federal law, and hemp-derived THC may become illegal under the 2026 Appropriations Act, there may be a compelling argument

that banks cannot lawfully accept or deposit funds from businesses involved with cannabis, or, after November 12, 2026, hemp-derived

Consequently, businesses involved in the cannabis industry often have, and the hemp industry may have, trouble finding a bank willing

to accept their business.

The inability to open bank accounts may make it difficult for some of our customers or licensees to operate

and their reliance on cash can result in a heightened risk of theft, which could harm their businesses and, in turn, harm our business.

Although the proposal of the Secure and Fair Enforcement Regulation Banking Act, also referred to as the SAFER Banking Act, would allow

banks to work with cannabis businesses and prevent federal banking regulators from intervening or punishing those banks, the legislation

still requires the approval of the U.S.

House and Senate.

There can be no assurance that the SAFER Banking Act or any similar legislation

will become law in the U.S.

Risks Related to Our Business

We have a relatively short operating history,

which makes it difficult to evaluate our business and future prospects .

We have a relatively short

operating history, which makes it difficult to evaluate our business and future prospects.

We have been in existence since June 2016 and

much of our revenue growth occurred during 2021 and 2022, with a decrease of revenues noted in 2023 and 2024.

In addition, we have entered

into a new line of business following the acquisition of Señorita, which has a limited operating history and have discontinued

our Cultivation business.

We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing

companies in rapidly changing industries, including those related to:

We have a relatively short operating history, which makes it

difficult to evaluate our business and future prospects .

We have a relatively limited

operating history, which may make it difficult to evaluate our business and future prospects.

Although we were formed in June 2016, we

have since discontinued our cultivation and extraction operations and have recently entered new lines of business, including the development

and commercialization of hemp-derived THC products and the licensing of consumer packaged goods brands.

These newer business lines have

a limited operating history, which increases the uncertainty associated with assessing our performance and future results.

We have encountered,

and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including

those related to:

● market acceptance of our current and future products and services;

● changing regulatory environments and costs associated with compliance, particularly as related to our

operations in the cannabis- and hemp-related sectors;

● our ability to compete with other companies offering similar products and services;

● our ability to effectively market our products and services and attract new customers;

● the amount and timing of operating expenses, particularly sales and marketing expenses, related to the

maintenance and expansion of our business, operations, and infrastructure;

● changing regulatory environments and costs associated with compliance,

particularly as related to our operations in the cannabis- and hemp-related sectors;

● our ability to compete with other companies offering similar

products and services;

● our ability to effectively market our products and services

and attract new customers;

● the amount and timing of operating expenses, particularly sales

and marketing expenses, related to the maintenance and expansion of our business, operations, and infrastructure;

● our ability to control costs, including operating expenses;

● our ability to manage organic growth and growth fueled by acquisitions;

● public perception and acceptance of cannabis- and hemp-related products and services generally;

● public perception and acceptance of cannabis- and hemp-related

products and services generally;

● general economic conditions and events.

If we do not manage these

risks successfully, our business and financial performance will be adversely affected.

We may require additional financing to achieve

our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, may force us to delay, limit, reduce,

or terminate our product manufacturing and development, and other operations.

At December 31, 2024, we

had approximately $31.2 million of cash and cash equivalents.

Our operating plan may change because of factors currently unknown to us,

and we may need to seek additional funds sooner than planned.

Even if we are able to substantially increase revenue and reduce operational

expenditures, we may need to raise additional capital, either through borrowings, private offerings, public offerings, or some type of

business combination, such as a merger or buyout, and there can be no assurance that we will be successful in such pursuits.

if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us

to sell one or more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations.

These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in

our investors losing all of their investment in our company.

If we are able to raise additional

capital, we do not know what the terms of any such capital raising would be.

In addition, any future sale of our equity securities would

dilute the ownership and control of investors’ shares and could be at prices substantially below prices at which our shares currently

If we do not manage these risks successfully,

our business and financial performance will be adversely affected.

We may require additional

financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, may force

us to delay, limit, reduce, or terminate our product manufacturing and development, and other operations.

As of December 31, 2025, we had approximately $32.2 million of cash

and cash equivalents.

Our operating plan may change because of factors currently unknown to us, and we may need to seek additional funds

sooner than planned.

Even if we are able to substantially increase revenue and reduce operational expenditures, we may need to raise additional

capital, either through borrowings, private offerings, public offerings, or some type of business combination, such as a merger or buyout,

and there can be no assurance that we will be successful in such pursuits.

Accordingly, if we are unable to generate adequate cash from

operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or

a portion of our assets, enter into a business combination, or reduce or eliminate operations.

These possibilities, to the extent available,

may be on terms that result in significant dilution to our shareholders or that result in our investors losing all of their investment

in our company.

If we are able to raise

additional capital, we do not know what the terms of any such capital raising would be.

In addition, any future sale of our equity securities

would dilute the ownership and control of investors’ shares and could be at prices substantially below prices at which our shares

currently trade.

Our inability to raise capital could require us to significantly curtail or terminate our operations.

We may seek to increase our

cash reserves through the sale of additional equity or debt securities.

The sale of convertible debt securities or additional equity securities

could result in additional and potentially substantial dilution to our shareholders.

The incurrence of indebtedness would result in increased

debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity, and ability

We may seek to increase our cash reserves through

the sale of additional equity or debt securities.

The sale of convertible debt securities or additional equity securities could result

in additional and potentially substantial dilution to our shareholders.

The incurrence of indebtedness would result in increased debt

service obligations and could result in operating and financing covenants that would restrict our operations and liquidity, and ability

to pay dividends.

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funds on favorable terms could have a material adverse effect on our liquidity and financial condition.

We face exposure to fraudulent or illegal activity, and our

reputation may be negatively impacted by improper conduct by our business partners, employees or agents.

We face exposure to the

risk that employees, independent contractors, or consultants may engage in fraudulent or other illegal activities.

Misconduct by

these parties could be intentional, reckless and/or negligent conduct.

There may be disclosure of unauthorized activities that

violate government regulations, manufacturing standards, health care laws, abuse laws, and other financial reporting laws.

it may not always be possible for us to identify and deter misconduct by our employees and other third parties, and the precautions

taken by us to detect and prevent these activities may not always be effective.

As a result, we could face potential penalties and

Furthermore, we cannot provide assurance that

our internal controls and compliance systems will protect us from acts committed by our employees, agents, or contracted third parties

in violation of U.S.

federal or state or local laws.

Any misconduct or even allegations could damage our reputation and subject us to

civil or criminal investigations and shareholder lawsuits, could lead to substantial civil and criminal monetary and non-monetary penalties

or damages, and could cause us to incur significant legal and investigatory fees.

We face risks associated with strategic

acquisitions.

Since our inception, we have

strategically acquired several businesses, and plan to continue to make strategic acquisitions, some of which may be material.

These acquisitions

may involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the

following, any of which could adversely affect our results of operations:

● any acquired business could under-perform relative to our expectations and the price that we paid for

it, or not perform in accordance with its anticipated timetable;

● we may incur or assume significant debt in connection with our acquisitions;

● acquisitions could cause our results of operations to differ from our own or the investment community’s

expectations in any given period, or over the long term;

● acquisitions could create demands on our management that they may be unable to effectively address, or

for which we may incur additional costs.

Additionally, following any

business acquisition, we could experience difficulty in integrating personnel, operations, financial and other systems, and in retaining

Since our inception, we have strategically acquired

several businesses, and we may continue to make strategic acquisitions, some of which may be material.

These acquisitions may involve

a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following,

any of which could adversely affect our results of operations:

● any acquired business could under-perform relative to our expectations

and the price that we paid for it, or not perform in accordance with its anticipated timetable;

● we may incur or assume significant debt in connection with our

acquisitions;

● acquisitions could cause our results of operations to differ

from our own or the investment community’s expectations in any given period, or over the long term;

● acquisitions could create demands on our management that they

may be unable to effectively address, or for which we may incur additional costs

Additionally, following

any business acquisition, we could experience difficulty in integrating personnel, operations, financial and other systems, and in retaining

key employees and customers.

We may record goodwill and

other intangible assets on our consolidated balance sheet in connection with our acquisitions.

If we are not able to realize the value

of these assets, we may be required to incur charges relating to the impairment of these assets, which could materially impact our results

of operations.

We may record goodwill, intangible assets or other assets on our consolidated balance sheet in connection with our acquisitions.

If we are not

able to realize the value of these assets, we may be required to incur charges relating to the impairment of these assets, which

could materially impact our results of operations.

There can be no assurance that our current

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in the future enter into, additional strategic alliances with third parties that we believe will complement or augment our existing business.

In particular, we currently rely on Green Thumb for significant legal, accounting and operational support through a shared services agreement.

Our ability to complete strategic alliances is dependent upon, and may be limited by, the availability of suitable candidates and capital.

In addition, strategic alliances could present unforeseen integration obstacles or costs, may not enhance our business and may involve

risks that could adversely affect us, including significant amounts of management time that may be diverted from operations in order to

pursue and complete such transactions or maintain such strategic alliances.

Future strategic alliances could result in the incurrence

of additional debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that

our existing strategic alliances will continue to achieve, the expected benefits to our business or that we will be able to consummate

future strategic alliances on satisfactory terms, if at all.

Termination of any strategic alliances, including our shared services agreement

with Green Thumb, could significantly disrupt our business.

Any of the foregoing could have a material adverse effect on our business,

financial condition and results of operations.

Past and potential future divestitures or

other transactions could adversely affect our costs, revenues, profitability and financial position.

In order to position our business

to take advantage of particular future growth opportunities and/or consolidate our more capable businesses, we have in the past and may

in the future pursue a strategy of focusing on one or more specialized facets of our products and services.

These actions may require

that we abandon or divest certain assets or businesses that no longer fit within our evolving strategic direction, as we did with the

sale of our cultivation business.

Abandoning or divesting certain assets or businesses may entail engaging in discussions, evaluating

opportunities and entering into agreements, potentially resulting in transactions involving significant risks and uncertainties that could

adversely affect our business, results of operations and financial condition.

We may not be able to find potential buyers on favorable

terms, we may experience disruption to our business and/or we may divert management attention from other business concerns, lose key employees

and possibly retain certain liabilities related to these potential transactions.

In particular, we currently have shared services agreements with Green Thumb for significant legal, accounting and operational support,

including sales and marketing support.

Our ability to complete strategic alliances is dependent upon, and may be limited by, the availability

of suitable candidates and capital.

In addition, strategic alliances could present unforeseen integration obstacles or costs, may not

enhance our business and may involve risks that could adversely affect us, including significant amounts of management time that may

be diverted from operations in order to pursue and complete such transactions or maintain such strategic alliances.

Future strategic

alliances could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that future

strategic alliances will achieve, or that our existing strategic alliances will continue to achieve, the expected benefits to our business

or that we will be able to consummate future strategic alliances on satisfactory terms, if at all.

Termination of any strategic alliances,

including our shared services agreement with Green Thumb, could significantly disrupt our business.

Any of the foregoing could have a

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

Past and potential future divestitures

or other transactions could adversely affect our costs, revenues, profitability and financial position.

In order to position our

business to take advantage of particular future growth opportunities and/or consolidate our more capable businesses, we have in the past

and may in the future pursue a strategy of focusing on one or more specialized facets of our products and services.

These actions may

require that we abandon or divest certain assets or businesses that no longer fit within our evolving strategic direction, as we did

with the sale of our cultivation business and exit of our extraction business.

Abandoning or divesting certain assets or businesses may

entail engaging in discussions, evaluating opportunities and entering into agreements, potentially resulting in transactions involving

significant risks and uncertainties that could adversely affect our business, results of operations and financial condition.

be able to find potential buyers on favorable terms, we may experience disruption to our business and/or we may divert management attention

from other business concerns, lose key employees and possibly retain certain liabilities related to these potential transactions.

We have substantial debt and other financial

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related covenants could harm our business, financial condition, and results of operations.

On November 5, 2024, we issued the Note to the Investor, a subsidiary

of Green Thumb for up to $20.0 million in original principal amount, of which $10.0 million has been loaned by the Investor to date.

Note is a secured obligation and ranks senior to all of our current indebtedness.

The Note will mature on November 5, 2025 and accrues

interest at a rate of 10% per annum.

The Note imposes certain

customary affirmative and negative covenants upon us, as well as covenants that restrict us and our subsidiaries from incurring any additional

indebtedness or suffering any liens, subject to specified exceptions, and restrict the declaration of any dividends or other distributions,

subject to specified exceptions.

If we are not in compliance with certain of these covenants, in addition to other actions

the Investor may require, the amounts outstanding under the Note may become immediately due and payable.

This immediate payment may negatively

impact our financial condition.

In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness

would likely harm our ability to incur additional indebtedness on acceptable terms.

Our cash flow and capital resources may be insufficient

to pay interest and principal on our debt in the future.

If that should occur, our capital raising or debt restructuring measures may

be unsuccessful or inadequate to meet our scheduled debt service obligations, which could cause us to default on our obligations and further

impair our liquidity.

Our ability to make scheduled payments on our debt and other financial obligations depends

on our financial and operating performance.

Our financial and operating performance will continue to be subject to prevailing economic

conditions and to financial, business, and other factors, some of which are beyond our control.

Failure within any applicable grace or

cure periods to make such payments, or comply with any covenant, would create a default under the Notes.

Our cash flow and existing capital

resources may be insufficient to repay our debt at maturity, in which case we would have to extend such maturity date, or otherwise repay,

refinance, and/or restructure the obligations under the Note, including with proceeds from the sale of assets, and additional equity or

debt capital.

If we are unsuccessful in obtaining such extension, or entering into such repayment, refinance, or restructure prior to

maturity, or any other default existed under the Note, the Investor could accelerate the indebtedness under the Note, foreclose against

its collateral, or seek other remedies, which would jeopardize our ability to continue our current operations.

From November 2024 through

August 2025, we issued multiple Notes of which $80.0 million in principal is outstanding as of December 31, 2025.

The Notes, which rank

on parity, are senior secured obligations.

The Notes impose certain customary affirmative and negative covenants upon us, including relating

to ranking and reservation of shares.

If an event of default under

the Notes occurs and is not waived, the holder can elect to accelerate all or a portion of the then-outstanding principal amount of the

applicable Notes, plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 14% from the

date of a default or event of default.

This immediate payment may negatively impact our financial condition.

In addition, any failure

to make scheduled payments of interest and principal on our outstanding indebtedness would likely harm our ability to incur additional

indebtedness on acceptable terms.

Our cash flow and capital resources may be insufficient to pay interest and principal on our debt in

If that should occur, our capital raising or debt restructuring measures may be unsuccessful or inadequate to meet our scheduled

debt service obligations, which could cause us to default on our obligations and further impair our liquidity.

Our ability to make scheduled payments on our debt and other financial

obligations depends on our financial and operating performance.

Our financial and operating performance will continue to be subject to

prevailing economic conditions and to financial, business, and other factors, some of which are beyond our control.

Failure within any

applicable grace or cure periods to make such payments, or comply with any covenant, would create a default under the Notes.

flow and existing capital resources may be insufficient to repay our debt at maturity, in which case we would have to extend such maturity

date, or otherwise repay, refinance, and/or restructure the obligations under the Notes, including with proceeds from the sale of assets,

and additional equity or debt capital.

If we are unsuccessful in obtaining such extension, or entering into such repayment, refinance,

or restructure prior to maturity, or any other default existed under the Notes, the holder could accelerate the indebtedness under the

Notes, foreclose against its collateral, or seek other remedies, which would jeopardize our ability to continue our current operations

and raise substantial doubt about the Company’s ability to continue as a going concern.

We are dependent on key inputs and suppliers;

and fluctuations in the cost or availability of materials we use in our products and supply chain could negatively affect our results.

Our business is dependent

on a number of key inputs and their related costs, including raw materials, parts and supplies.

Any significant interruption or negative

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

results of operations or prospects.

Some of these inputs may only be available from a single supplier or a limited group of suppliers,

or be sourced abroad.

If a sole source supplier was to go out of business, we might be unable to find a replacement for such source in

a timely manner, or at all.

If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to us

in the future.

Manufacturing delays or unexpected transportation delays, particularly from materials we source abroad, can also cause

us to incur significantly increased costs.

Any of these fluctuations may increase our cost of products and have an adverse effect on our

profit margins, results of operations and financial condition.

Any inability to secure required supplies and services, or to do so on

appropriate terms, could have a materially adverse impact on our business, prospects, revenue, results of operations and financial condition.

and fluctuations

in the cost or availability of materials we use in our products and supply chain could negatively affect our results.

Our business is dependent on a number of key

inputs and their related costs, including raw materials, parts and supplies.

Any significant interruption or negative change in the availability

or economics of the supply chain for key inputs could materially impact our business, financial condition, results of operations or prospects.

Some of these inputs may only be available from a single supplier or a limited group of suppliers, or be sourced abroad.

source supplier was to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all.

a limited source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future.

Manufacturing

delays or unexpected transportation delays, particularly from materials we source abroad, can also cause us to incur significantly increased

Any of these fluctuations may increase our cost of products and have an adverse effect on our profit margins, results of operations

and financial condition.

Any inability to secure required supplies and services, or to do so on appropriate terms, could have a materially

adverse impact on our business, prospects, revenue, results of operations and financial condition.

Our sales are difficult to forecast.

Market data for the industries in which we operate is limited and unreliable.

largely on our own market research to forecast sales, as detailed forecasts are not generally obtainable from other sources.

Additionally,

any market research and our projections of estimated total retail sales, demographics, demand and similar consumer research, are based

on assumptions from limited and unreliable market data and a rapidly evolving market.

A failure in the demand for our products to materialize

as a result of competition, technological change, failure of states to enforce regulations, state or federal adoption of new regulations

or enforcement of regulations previously not enforced, or other factors could have a material adverse effect on our business, results

of operations and financial condition.

Market data for the industries

in which we operate is limited and unreliable.

We must rely largely on our own market research to forecast sales, as detailed forecasts

are not generally obtainable from other sources.

Additionally, any market research and our projections of estimated total retail sales,

demographics, demand and similar consumer research, are based on assumptions from limited and unreliable market data and a rapidly evolving

A failure in the demand for our products to materialize as a result of competition, technological change, failure of states to

enforce regulations, state or federal adoption of new regulations or enforcement of regulations previously not enforced, or other factors

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

We may be subject to growth-related risks.

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The products sold by our

Señorita business are co-manufactured by third parties.

We do not typically have any direct control over these third-party co-manufacturers.

These third-party co-manufacturers could experience quality control issues, equipment problems, data loss, and other events relating to

the products they produce that could impact the quality of those products.

Should the third-party co-manufacturers we rely upon not deliver

at standards we expect and desire, acceptance of our products could suffer, which would have an adverse effect on our business and financial

Further, we cannot be assured of entering into agreements with such third-party co-manufacturers on economically favorable

hemp-derived beverage business are co-manufactured by third parties.

We do not typically have any direct control over these third-party

co-manufacturers.

These third-party co-manufacturers could experience quality control issues, equipment problems, data loss, and other

events relating to the products they produce that could impact the quality of those products.

Should the third-party co-manufacturers

we rely upon not deliver at standards we expect and desire, acceptance of our products could suffer, which would have an adverse effect

on our business and financial performance.

Further, we cannot be assured of entering into agreements with such third-party co-manufacturers

on economically favorable terms.

We face an inherent risk of product liability

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the sale of our products involves 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 our products alone or in combination with other medications or

substances could occur.

Previously unknown adverse reactions resulting from human consumption of our products alone or in combination with other medications

or substances could occur.

We may be subject to various product liability claims, including, among others, that our products caused injury,

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As an agricultural product, the quality of hemp is inherently variable, and consumers may raise claims that our

quality control or labeling processes have not sufficiently ensured that our grown and manufactured processes are sufficient to meet expected

A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation

with our clients and consumers generally and could have a material adverse effect on our business, results of operations and financial

There can be no assurances that we 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,

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 our potential products.

quality control or labeling processes have not sufficiently ensured that our grown and manufactured processes are sufficient to meet

expected standards.

A product liability claim or regulatory action against us could result in increased costs, could adversely affect

our reputation with our clients and consumers generally and could have a material adverse effect on our business, results of operations

and financial condition.

There can be no assurances that we 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 our potential products.

Our products may be subject to product recalls.

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or inaccurate labeling disclosure.

If any of our products or products sold at our retail stores are recalled due to an alleged product

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

arise in connection with the recall.

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

margin, if at all.

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

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.

If any of our products are recalled due to an alleged product defect or for any other reason, we could

be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall.

may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin, if at all.

In addition, a

product recall may require significant management attention.

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 any of our brands were

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

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

demand for our products and could have a material adverse effect on the results of our operations and financial condition.

Additionally,

if any of our brands were subject to recall, our image and the image of that brand could be harmed.

A recall for any of the foregoing

reasons could lead to decreased demand for our products and could have a material adverse effect on the results of our operations and

financial condition.

Additionally, product recalls may lead to increased scrutiny of our operations by the FDA, or other regulatory agencies,

requiring further management attention and potential legal fees and other expenses.

The growth and success of our business depends

on the continued contributions of personnel employed by Green Thumb, as well as our ability to attract and retain qualified personnel .

product recalls may lead to increased scrutiny of our operations by the FDA, or other regulatory agencies, requiring further management

attention and potential legal fees and other expenses.

The growth and success of our business

are significantly affected by the continued contributions of personnel employed by Green Thumb, as well as our ability to attract and

retain qualified personnel .

Our growth and success are

dependent upon the continued contributions made by our Chairman of the Board and Interim Chief Executive Officer, Benjamin Kovler, and

by other individuals who are employees of Green Thumb and who provide services to us under a shared services agreement.

significantly affected by the continued contributions made by our Chairman of the Board and Interim Chief Executive Officer, Benjamin

Kovler, by our Chief Financial Officer, Brad Asher and by other individuals who are employees of Green Thumb and who provide services

to us under a shared services agreement.

We rely on Mr.

Kovler’s expertise in business operations and the cannabis and hemp industries when we are developing or acquiring new products

and services.

Kovler cannot serve us or is no longer willing to do so, or if Green Thumb no longer provides personnel support to

us under the shared services agreement, we may not be able to find alternatives in a timely manner or at all.

This may have a material

adverse effect on our business.

In addition, our growth and success will depend to a significant extent on our ability to identify, attract,

hire, train and retain qualified professional, creative, technical and managerial personnel.

Competition for experience and qualified

talent can be intense.

Kovler’s expertise in business operations and the cannabis and hemp industries

when we are developing or acquiring new products and services and on Mr.

Asher’s financial and reporting expertise.

Asher cannot serve us or are no longer willing to do so, or if Green Thumb no longer provides personnel support to us under the

shared services agreements, we may not be able to find alternatives in a timely manner or at all.

This may have a material adverse effect

on our business.

In addition, our growth and success will depend to a significant extent on our ability to identify, attract, hire, train

and retain qualified professional, creative, technical and managerial personnel.

Competition for experience and qualified talent can

We may not be successful in identifying, attracting, hiring, training and retaining such personnel in the future.

If we are unable to hire, assimilate and retain qualified personnel in the future, such inability could adversely affect our operations.

unable to hire, assimilate and retain qualified personnel in the future, such inability could adversely affect our operations.

We rely on third parties, including our

largest shareholder, to provide numerous capabilities that we depend upon on to operate, and a disruption of these systems could adversely

largest shareholder, to provide numerous capabilities that we depend upon to operate, and a disruption of these systems could adversely

affect our business.

We are dependent on vendors and third-party providers, including the services of the employees

of Green Thumb, our largest shareholder, under shared services agreements.

A serious disruption to any of these could significantly limit

our ability to serve our customers.

The failure of one or more such providers to provide the expected services, provide them on a timely

basis or provide them at the prices we expect, or otherwise meet our performance standards and expectations (including with respect to

data security, compliance and data privacy and protection laws) may adversely affect our business.

Further, if we found it necessary to

replace any such service provider, disruptions arising from the transition of functions to an alternative provider, or the costs developing

our own functions if we were unable to find an alternate provider, may have a material adverse effect on our results of operations or

We are dependent on

vendors and third-party providers, including the services of the employees of Green Thumb, our largest shareholder, under shared

services agreements.

A serious disruption to any of these could significantly limit our ability to serve our customers.

of one or more such providers to provide the expected services, provide them on a timely basis or provide them at the prices we

expect, or otherwise meet our performance standards and expectations (including with respect to data security, compliance and data

privacy and protection laws) may adversely affect our business.

Further, if we found it necessary to replace any such service

provider, disruptions arising from the transition of functions to an alternative provider, or the costs of developing our own

functions if we were unable to find an alternate provider, may have a material adverse effect on our results of operations or

financial condition.

Any disruption could cause adversely impact our results of operations and the trading price of our Common Stock.

Protecting and defending against intellectual

property claims may have a material adverse effect on our business .

Our ability to compete depends,

in part, upon the successful protection of our intellectual property relating to our Señorita product line and our extraction products.

We seek to protect our proprietary and intellectual property rights through patent applications, common law copyright and trademark laws,

nondisclosure agreements, and non-disclosure provisions within our licensing and distribution arrangements with reputable companies in

our target markets.

Enforcement of our intellectual property rights would be costly, and there can be no assurance that we will have the

resources to undertake all necessary action to protect our intellectual property rights or that we will be successful.

Any infringement

of our material intellectual property rights could require us to redirect resources to actions necessary to protect same and could distract

management from our underlying business operations.

An infringement of our material intellectual property rights and resulting actions

could adversely affect our operations.

It is possible that, for

any of our patents that may issue in the future, our competitors may design their products around our patented technologies.

we cannot assure shareholders that other parties will not challenge any patents granted to us, or that courts or regulatory agencies will

hold our patents to be valid, enforceable, and/or infringed.

We cannot guarantee shareholders that we will be successful in defending

challenges made against our patents and patent applications.

Any successful third-party challenge or challenges to our patents could result

in the unenforceability or invalidity of such patents, or such patents being interpreted narrowly and/or in a manner adverse to our interests.

Our ability to establish or maintain a technological or competitive advantage over our competitors and/or market entrants may be diminished

because of these uncertainties.

For these and other reasons, our intellectual property may not provide us with any competitive advantage.

To the extent our intellectual

property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct or

indirect competition.

If our intellectual property does not provide adequate coverage over our competitors’ products, our competitive

position could be adversely affected, as could our business.

Any disruption could adversely impact our results of operations and the trading price of our common

Our success depends in part upon our ability

to protect our core technology and intellectual property .

Our success depends in part

upon our ability to protect our core technology and intellectual property.

To establish and protect our proprietary rights, we rely on

a combination of trademark, copyright, patent, trade secret and unfair competition laws of the U.S.

and other countries, as well as contract

provisions, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention

assignment agreements, and other contractual rights, as well as procedures governing internet/domain name registrations.

However, there

can be no assurance that these measures will be successful in any given case.

We may be unable to prevent the misappropriation, infringement

or violation of our intellectual property rights, breach of any contractual obligations to us, or independent development of intellectual

property that is similar to ours, any of which could reduce or eliminate any competitive advantage we have developed, adversely affecting

our revenues or otherwise harming our business.

to protect our intellectual property and protecting and defending against intellectual property claims may have a material adverse effect

on our business

Our ability to compete depends,

in part, upon the successful protection of our intellectual property, including the core brands we own and license to related parties:

Señorita, RYTHM, incredibles, Beboe, Dogwalkers, Doctor Solomon’s, &Shine, and Good Green.

We seek to protect our intellectual

property rights through a combination of copyright and trademark laws, common law rights, trade secret and unfair competition laws, non-disclosure

agreements, confidentiality procedures, and other contractual rights, as well as procedures governing internet and domain name registrations.

However, there can be no assurance that these measures will be successful in any given case.

We may be unable to prevent the misappropriation,

infringement or violation of our intellectual property rights, breach of any contractual obligations to us, or independent development

of intellectual property that is similar to ours, any of which could reduce or eliminate any competitive advantage we have developed,

adversely affecting our revenues or otherwise harming our business.

We generally control access

to and use of our proprietary technology and other confidential information through the use of internal and external controls, including

to and use of our intellectual property and other confidential information through the use of internal and external controls, including

contractual protections with employees, contractors, customers, and partners, and our software is protected by U.S.

Despite efforts to protect

our proprietary rights through intellectual property laws, licenses, and confidentiality agreements, unauthorized parties may still copy

or otherwise obtain and use our technology.

Companies frequently enter into litigation based on allegations of infringement, misappropriation,

or violations of intellectual property rights or other laws.

From time to time, we may face allegations that we have infringed the trademarks,

copyrights, patents, trade secrets and other intellectual property rights of third parties, including competitors.

If it became necessary

for us to resort to litigation to protect these rights, any proceedings could be burdensome, costly and divert the attention of our personnel,

and we may not prevail.

Despite our efforts to protect

our proprietary rights through intellectual property laws, licenses and confidentiality arrangements, unauthorized parties may still

copy or otherwise obtain and use our trademarks, recipes or other intellectual property.

Companies frequently enter into litigation based

on allegations of infringement, misappropriation, or violations of intellectual property rights or other laws.

Enforcement of our intellectual

property rights would be costly, and there can be no assurance that we will have the resources to undertake all necessary action to protect

our intellectual property rights or that we will be successful.

Any infringement of our material intellectual property rights could require

us to redirect resources to actions necessary to protect same and could distract management from our underlying business operations.

An infringement of our material intellectual property rights and resulting actions could adversely affect our operations.

Further, from time to time,

we may face allegations that we have infringed the trademarks, copyrights, patents, trade secrets and other intellectual property rights

of third parties, including competitors or that we have failed to protect our licensees from such infringement claims, resulting in indemnification.

If it became necessary for us to resort to litigation to protect these rights, any proceedings could be burdensome, costly and divert

the attention of our personnel, and we may not prevail.

In addition, any repeal or weakening of laws or enforcement in the U.S.

or internationally intended to protect

intellectual property rights could make it more difficult for us to adequately protect our intellectual property rights, negatively impacting

their value and increasing the cost of enforcing our rights.

or internationally

intended to protect intellectual property rights could make it more difficult for us to adequately protect our intellectual property

rights, negatively impacting their value and increasing the cost of enforcing our rights.

We have obtained and applied

trademark and service mark registrations and will continue to evaluate the registration of additional trademarks and service

marks or, as appropriate.

We cannot guarantee that any of our pending trademark applications will be approved by the applicable governmental

Moreover, even if the trademark applications are approved, third parties may seek to oppose or otherwise challenge these

registrations.

A failure to obtain registrations for our trademarks could limit and impede our marketing efforts.

We may need to enter into intellectual property

license agreements in the future, and if we are unable to obtain these licenses, our business could be harmed .

We may need or may choose

to obtain licenses and/or acquire intellectual property rights from third parties in connection with our current or future products and

We may fail to obtain any of these licenses or intellectual property rights on commercially reasonable terms.

Even if we are able

to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

In that event,

we may be required to expend significant time and resources to develop or license replacement technology.

If we are unable to do so, we

may be unable to develop or commercialize the affected products, which could materially harm our business and the third parties owning

such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation

on our part to pay royalties and/or other forms of compensation.

for certain U.S.

and state trademark and service mark registrations and will continue to evaluate the registration of additional trademarks

and service marks or, as appropriate.

We cannot guarantee that any of our pending trademark applications will be approved by the applicable

governmental authorities.

Specifically, the federal registrability of ingestible hemp-derived products is difficult to predict given

the evolving regulatory landscape for hemp and the USPTO’s reaction to the same.

Moreover, even if the trademark applications are

approved, third parties may seek to oppose or otherwise challenge these registrations.

A failure to obtain registrations for our trademarks

could dilute the value of our brands or limit and impede our marketing efforts.

We have licensed the intellectual property

for certain of our brands for use by state-licensed cannabis operators.

While we do not engage in any cannabis-(or “marijuana-”)

related activity under the Controlled Substances Act, changes in state regulations of cannabis, changes in U.S.

federal cannabis enforcement policy, or a failure of any licensee to comply with the terms of its license agreement or applicable state

and local laws and regulations could impair our Licensing Revenue we generate from any licensee and could also impair the value of our

We do not cultivate, distribute

or dispense marijuana as that term is defined by the CSA.

We have licensed the use of the intellectual property for certain of our brands

to be used in the cannabis industry under state law programs legalizing such activities through state-regulated licenses, although such

activities remain illegal under U.S.

While state regulation in certain U.S.

states may take a permissive approach to medical

and/or adult-use of cannabis, the CSA may still be enforced by U.S.

federal law enforcement officials against individuals and companies

operating in those states for activity that is legal under state law.

In exchange for Licensing Revenue, we license our brands to be

used by a state licensed licensee whose operations, while compliant with state laws, are not permitted under federal law.

federal policy on cannabis enforcement and strict enforcement of federal cannabis laws against any licensee could materially impair

the Licensing Revenue we receive, if the licensees’ ability to sell their products is materially impaired by such change.

also impair the value of the brands licensed to such licensees and our operating results and/or financial condition.

While our intellectual property

license agreements require that our licensees conduct their business activities in a manner compliant with the applicable state and local

laws, regulations and other requirements, we cannot guarantee that the licensees will do so.

As a result, federal, state or local government

authorities may seek to bring criminal, administrative or regulatory enforcement actions against licensee(s), which could have a material

adverse effect on our Licensing Revenue, which in turn could have an adverse effect on our operating results or financial condition.

Licensees in the cannabis

industry face challenges unique to that industry that can impact their financial health and long-term viability.

If licensees struggle

financially or do not remain viable, that can negatively impact our ability to generate Licensing Revenue.

As a licensor of brands to

cannabis operators, we are not responsible for licensees’ compliance with applicable laws or regulations.

Our intellectual property is subject to

repurchase rights, which, if exercised, could materially adversely affect our business.

Under the MC Brands and

VCP purchase agreements, Green Thumb or its affiliates may repurchase some or all of the assets we acquired from MC Brands and/or

VCP within five years of the respective transaction dates upon the occurrence of specified eligibility conditions, all of

which are outside the control of both the Company and Green Thumb.

The 2026 Appropriations Act includes an amendment to the

definition of hemp under the 2018 Farm Bill that, if implemented as enacted, could materially restrict the commercialization of

certain hemp-derived THC products beginning 365 days after enactment.

If the amendment becomes effective in its current form and is

not repealed, replaced, or otherwise modified prior to its effective date, one of the eligibility conditions under the MC Brands and

VCP purchase agreements that could permit the repurchase right to become exercisable would be satisfied.

However, the exercise of

the repurchase option remains solely within the discretion of Green Thumb and its affiliates.

The full eligibility conditions

are set forth in the MC Brands and VCP purchase agreements filed on May 22, 2025 and August 27, 2025, respectively.

Licensing Revenue represents, and is expected

to continue to represent, a significant portion of our total revenue.

If a repurchase option were exercised, we could lose a material

source of revenue, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

In such event, the market price of our common stock could decline.

The purchase agreements also grant Green Thumb or its affiliates certain

rights of first refusal and rights of first offer with respect to specified transactions.

Because we do not control licensees’

actions and we depend on licensees for a substantial portion of our earnings from operations, their conduct could harm our business.

We license to licensees in the cannabis industry

the rights to produce and market certain products sold with our trademarks, and we do not exercise any operational or financial control

over the licensees’ businesses.

If the quality, focus, image or distribution of our licensed brands diminish, consumer acceptance of and

demand for our brands could decline.

This could materially and adversely affect our business and results of operations.

Our Licensing

Revenue constitutes a substantial portion of our revenue.

A decrease in customer demand for any of our licensed brands could have a material

adverse effect on our operating results or financial condition.

In addition, our inability to replace any existing licensee, if necessary,

could adversely affect our revenues and results of operations.

Our ability to use our net operating losses

to offset future taxable income may be subject to certain limitations .

As of December 31, 2024, we had net operating loss (“NOL”)

carryforwards for federal and state income tax purposes which may be available to offset taxable income in future years.

Approximately

$0.7 million of federal NOLs will expire if not utilized by 2036 and approximately $193.0 million of federal NOLs carryforward indefinitely.

State net operating loss carryforwards in the amount of $115.8 million begin expiring in 2039 and approximately $12.8 million have an

indefinite life.

A lack of future taxable income would adversely affect our ability to utilize these NOLs before they expire.

The utilization

of our NOLs could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code (“IRC” or the “Code”)

of 1986, and similar state tax provisions due to ownership change limitations that may have occurred previously or that could occur in

In general, under Section 382, a corporation that undergoes an “ownership change” (as defined under Section 382

of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset its

future taxable income.

As of December 31, 2024, we have not conducted an analysis of an ownership change under Section 382.

To the extent

that a study is completed, and an ownership change is deemed to occur, in the past or future, our NOLs and any NOLs of companies that

we have acquired could be limited to offset any future taxable income.

There is also a risk that

due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise

be unavailable to reduce future income tax liabilities for federal and state income tax purposes.

For these reasons, we may not be able

to utilize a material portion of our NOLs, even if we attain profitability, which could result in increased future tax liability to us

and could adversely affect the results of our operations and overall financial condition.

The utilization of our net

operating loss (“NOL”) carryforwards is subject to limitations under Section 382 of the Internal Revenue Code (“IRC”

or the “Code”) of 1986, and similar state tax provisions due to ownership change limitations that may have occurred previously

or that could occur in the future.

In general, under Section 382, a corporation that undergoes an “ownership change” (as

defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change

NOLs to offset its future taxable income.

During the quarter ended

June 30, 2025, the Company completed an analysis of ownership changes.

The analysis identified multiple historical ownership changes

that significantly limit the utilization of federal NOLs through the date of the most recent change on November 5, 2024, subjecting them

to a minimal annual limitation.

The Company is in the process of conducting a similar analysis for state income tax purposes.

NOLs generated

after November 5, 2024 are not currently subject to this limitation and may be available to offset future taxable income, although any

future ownership changes could impose additional limitations.

The Company continues to maintain a full valuation allowance against its

deferred tax assets, including NOLs, due to the Section 382 limitations resulting from historical ownership changes and the uncertainty

surrounding the Company’s ability to generate sufficient taxable income to utilize the remaining NOLs before they expire.

that cannot be utilized due to limitations resulting from future ownership changes or a lack of future taxable income would adversely

affect our ability to reduce future tax liabilities using past losses.

Failure by our co-manufacturers to comply

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our supply of products and adversely affect our business.

If any of our suppliers or

co-manufacturers fail to comply with food safety, environmental, health and safety or other laws and regulations, or face allegations

If any of our suppliers

or co-manufacturers fail to comply with food safety, environmental, health and safety or other laws and regulations, or face allegations

of non-compliance, their operations may be disrupted, and our reputation could be harmed.

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financial condition.

The failure of any co-manufacturer to produce products that conform to our standards could adversely affect our reputation

in the marketplace and result in product recalls, product liability claims, government or third-party actions and economic loss.

Additionally,

actions we may take to mitigate the impact of any disruption or potential disruption in our supply of raw materials or finished inventory,

including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, financial

condition and results of operations.

The failure of any co-manufacturer to produce products that conform to our standards could adversely affect our

reputation in the marketplace and result in product recalls, product liability claims, government or third-party actions and economic

Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of raw materials

or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely

affect our business, financial condition and results of operations.

We may not be able to obtain or maintain

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hemp-derived products industry.

Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or accreditations

could result in restrictions on our ability to operate in the hemp-derived products industry, which could have a material adverse effect

on our business, financial condition or results of operations.

We are dependent on the popularity

of consumer acceptance of our brand portfolio.

Our ability to generate revenue

and be successful in the implementation of our business plan is dependent on consumer acceptance of and demand for our products.

of our products depends on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness,

Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or

accreditations could result in restrictions on our ability to operate in the hemp-derived products industry, which could have a material

adverse effect on our business, financial condition or results of operations.

We are dependent on the popularity of consumer

acceptance of our brand portfolio.

Our ability to generate

revenue and be successful in the implementation of our business plan is dependent on consumer acceptance of and demand for our products.

Acceptance of our products depends on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness,

safety and reliability.

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customer pressures and to maintain our market share, which could materially reduce our revenues.

We are and may continue to be subject to

constraints on marketing our products.

We are and may continue

to be subject to constraints on marketing our products.

States have enacted strict

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and operating results could be adversely affected.

Our business and asset portfolio are not

highly diversified by either industry or geographically.

If our business and assets underperform, our business, financial condition and

results of operations would be negatively impacted.

Our current business is focused on extraction solutions and hemp-derived THC beverages.

While we may purchase other assets and make investments not limited to the cannabis and hemp industries, we intend to maintain and continue

to acquire businesses, licenses and assets.

Thus, we have, and are expected to have, limited industry diversity as to asset type and revenue

Additionally, our hemp-derived beverage business is geographically concentrated in the states in which such products are permitted,

and new federal, state or local regulations, interpretations, or enforcement actions could limit our ability to manufacture and sell hemp-derived

This lack of industry and geographic diversification increases the risk associated with the revenue stream we expect to receive

from our businesses and assets and, as a result, could have a material adverse effect on our business, financial condition and results

of operations.

Our business and asset

portfolio are not highly diversified by either industry or geographically.

If our business and assets underperform, our business, financial

condition and results of operations would be negatively impacted.

Our current business is

focused on hemp-derived THC products and licensing our intellectual property consumer packaged goods brands.

Thus, we have, and are expected

to have, limited industry diversity as to asset type and revenue generation.

Additionally, our hemp-derived THC business is geographically

concentrated in the states in which such products are permitted, and new federal, state or local regulations, interpretations, or enforcement

actions could limit our ability to manufacture and sell hemp-derived THC products.

Our Licensing Revenue is currently limited to Green

Thumb for use in their state-licensed cannabis operations.

This lack of industry and geographic diversification increases the risk associated

with the revenue stream we expect to receive from our businesses and assets and, as a result, could have a material adverse effect on

our business, financial condition and results of operations.

We face risks related to our products.

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revenue, results of operation and financial condition.

Hemp-derived products that

exceed the limits in the Farm Bill are federally illegal.

Any products we may produce or license that are intended to be Farm Bill compliant

but exceed the limits of psychoactive material allowable under the Farm Bill could subject us to action by regulatory authorities and/or

to lawsuits by consumers, which may have a material adverse effect on us and the trading price of our Common Stock.

Risks Relating to our Industry

The 2018 Farm Bill, which federally legalized

hemp and hemp products, could be amended to severely restrict or prohibit the Company’s hemp-derived THC products.

The 2018 Farm Bill, which

has been extended through September 30, 2025 without modification, legally defined hemp as Cannabis Sativa L.

containing less than 0.3%

delta-9 THC on a dry weight basis, effectively legalizing hemp in the United States.

The 2018 Farm Bill is the legal basis for the Company’s

entry into the hemp-derived THC product market.

Legislators have proposed various amendments to the 2018 Farm Bill in the past that would

restrict the production and sale these products, none of which have passed.

The provisions of the 2018 Farm Bill governing hemp must be

renewed by Congress and are subject to amendment during this reauthorization process.

On November 16, 2023, former President Biden signed

into law H.R.

6363 (the Further Continuing Appropriations and Other Extensions Act, 2024) which extended the 2018 Farm Bill through September

While the 2018 Farm Bill expired on September 30, 2024, Congress passed H.R.

9747 on September 25, 2024, which extended federal

spending for some of these programs through December 30, 2024.

On December 21, 2024, former President Biden signed H.R.

10545 (the American

Relief Act), which further extends the 2018 Farm Bill through September 30, 2025, after which it is set to expire.

Proposed amendments

to the 2018 Farm Bill prior to its expiration could restrict or prohibit altogether the manufacturing and sale of hemp-derived products

sold by the Company which would be likely to have a material adverse effect on us and the trading price of our Common Stock.

States are passing their own laws regulating, restricting or

prohibiting hemp-derived products, creating a difficult regulatory patchwork within which to operate.

State and local authorities

have been active over the last few years implementing their own laws regulating the cultivation, manufacturing, testing, marketing, and

sale of both intoxicating and non-intoxicating hemp products.

Some states ban these products altogether.

Other state laws permit hemp-derived

products but impose new regulatory frameworks containing licensing and labeling requirements, age gates, amount and potency restrictions,

allowable types of products, and restricting where the products may be sold.

The varied state regulatory framework for hemp products poses

risks to manufacturing, marketing, selling, and shipping hemp-derived products around the country, whether wholesale or direct to consumers

via online or brick and mortar retail locations.

Additionally, hemp legislation is pending at the state level around the country, creating

additional risk to the sale and transport of products already produced under existing laws.

Unforeseen regulatory obstacles or compliance

costs related to state laws may hinder the Company’s ability to successfully compete in some markets for such products.

states in which the Company currently sells its hemp-derived products could decide in the future to ban these products altogether.

these regulatory changes occurred, the revenue streams we expect to receive from our businesses and assets would be at risk and, as a

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

Hemp-derived THC products are not permitted under the FDCA.

The Food and Drug Administration (“FDA”)

has taken the position that ingestible products over which it has jurisdiction, including foods, beverages, and dietary supplements, that

contain cannabinoids such as THC, including hemp-derived delta-9 THC, are not permitted under the Federal Food, Drug, and Cosmetic Act

The FDA has not evaluated THC, and therefore does not consider it to be GRAS (Generally Recognized as Safe) for

use in foods, including beverages.

The FDA has also found that because THC is in certain drugs approved by FDA, it cannot be used in foods/beverages

or dietary supplements.

Accordingly, per the FDA, foods/beverages and dietary supplements containing hemp-derived THC do not comply with

FDA enforcement of its position has thus far been minimal and limited to sending warning letters to a relatively small number

of companies, primarily those claiming to prevent, diagnose, mitigate, treat, or cure diseases, or who target toward children.

has issued warnings about products that resemble candy or other items appealing to children, emphasizing that such products could pose

a risk of unintentional ingestion and potential harm due to the presence of cannabinoids.

The FDA may decide in the future to increase

enforcement activities, regardless of whether a company has made health claims related to its products or markets to children, which could

impact the Company’s offering of hemp-derived THC beverages and materially impact operations and revenue.

The FDA could issue new regulations that prohibit or strictly

limit the sale of hemp-derived products.

The FDA has previously declined to issue regulations

for the manufacture and sale of hemp-derived products.

For example, in 2023, the FDA denied three citizen petitions asking the FDA to

conduct rulemaking to allow the marketing of CBD, another hemp-derived cannabinoid, as dietary supplements.

In conjunction with these

denials, the FDA has publicly stated that a new regulatory pathway should be created by Congress to regulate CBD and other cannabinoid

The FDA could nevertheless decide to regulate hemp products in the future.

New FDA regulations could materially and negatively

impact operations and revenue.

New FDA regulations could also require financial investment in additional compliance mechanisms which could

impact our profitability and the market price for our Common Stock.

Other federal agencies may take enforcement actions against companies

selling hemp-derived products.

The Federal Trade Commission (“FTC”)

and FDA frequently collaborate on enforcement where their jurisdictions overlap, particularly in regulating the advertising, labeling,

and promotion of food, cosmetics, medical devices, and OTC drugs.

In the CBD market, the FTC has joined the FDA in issuing warning letters

to companies whose advertisements lacked competent and reliable scientific evidence, thereby violating the FTC Act, 15 U.S.C.

The FTC has also independently issued warning letters to CBD companies for making exaggerated or misleading claims without sufficient

scientific backing.

While FTC enforcement actions related to CBD were historically limited to warnings, in December 2020, the agency initiated

its first formal enforcement action against six CBD companies for allegedly making unsupported health claims, leading to settlement agreements

that required them to cease such claims and pay monetary judgments.

In 2023 and 2024, the FTC sent cease and desist letters to companies

marketing hemp-derived THC products that appealed to children.

The regulatory landscape and potential for future FTC enforcement actions

could pose an ongoing risk to the Company’s offering of hemp-derived THC products.

In addition, while the Drug Enforcement Agency

(“DEA”) has opined that delta-9 THC complies with the Farm Bill, there is no guarantee that it will maintain this position

in the future.

Hemp-derived products are federally illegal if they exceed 0.3%

delta-9-THC on a dry weight basis.

Hemp-derived products which exceed a delta-9 THC

concentration of 0.3% on a dry weight basis are federally illegal under the Controlled Substances Act (the “CSA”).

classifies cannabis as an illegal Schedule I drug, meaning it is considered to have a high potential for abuse and no accepted medical

Any failure to keep the delta-9-THC in hemp-derived

products below 0.3% on a dry weight basis could subject us to action by regulatory authorities and/or to lawsuits by consumers.

the approval of medical and recreational marijuana by many states has created a situation in which it may be difficult or impossible for

regulators and courts to determine whether the delta-9-THC levels reflected in consumers’ blood tests are the result of hemp-derived

products or marijuana products.

This may result in regulatory actions or lawsuits.

Certain hemp-derived products may, over time, gradually

increase their delta-9-THC or total THC concentration, and this may ultimately cause such products to exceed the applicable concentration

level, making such products illegal in certain jurisdictions.

If any of these situations occur, the Company may be subject to regulatory

action or lawsuits that could have a material adverse effect on the Company.

The Company is subject to regulations that could impact its ability

to sell its product internationally.

The Company currently sells its products in Canada

and may conduct sales in other international markets in the future.

Doing so would subject the Company to the laws, regulations, and international

treaties of the countries where it operates or engages in trade.

Failure to adhere to existing or evolving regulations in any jurisdiction

could materially impact the Company’s business.

There is also a risk that authorities in these jurisdictions may determine that

the Company was or is not in compliance with local laws.

If its past or present activities are found to violate such regulations, the

Company could face enforcement actions, including civil or criminal penalties, fines, damages, operational restrictions or restructuring,

asset seizures, and the denial of regulatory approvals.

Third parties with whom we do business

may perceive themselves as being exposed to reputational risk because of their relationship with us due to our cannabis and hemp-related

business activities and may as a result, refuse to do business with us.

The third parties with whom we do business may perceive that they are exposed to reputational

risk because of our cannabis and/or hemp-related business activities.

Any third-party service provider could suspend or withdraw its services

if it perceives that the potential risks exceed the potential benefits of providing such services to us.

Specifically, while we have banking

relationships and believe that the services can be procured from other institutions, we may, in the future, have difficulty maintaining

existing or securing new bank accounts or clearing services.

Our failure to establish or maintain business relationships could have a

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

We face competition from the illicit market

as well as larger competitors and licensed medical and adult use cannabis dispensaries.

cannabis industry

is, and is expected to continue to be, competitive.

A number of other companies engage in, and may in the future engage in, cannabis-related

businesses, operate businesses in competition with us and purchase businesses and assets or make investments that we will also seek to

purchase or make.

We face and expect to continue to face competition from state-licensed medical and adult-use dispensaries.

Large chain stores, manufacturers,

retailers, beverage and other consumer products companies that also recognize the potential for financial success through acquisitions

and investment in the hemp-derived beverage industry could strategically acquire competitors or invest in creating their own brands.

doing so, these larger competitors could produce and sell competing products at a lower price and establish a larger brand presence.

may not have the personnel, products, marketing and distribution capabilities, and/or financial resources to compete effectively against

such larger competitors.

We also face competition

from the illicit market and illegal dispensaries and cultivation operations that are unlicensed, not regulated and that are selling cannabis

or hemp products.

Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed production

and sale of cannabis or hemp products could result in increased competition for us.

Any or all these events could have a material adverse

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

Inconsistent public opinion and perception

of the cannabis and hemp industries may hinder market growth and state regulation, which would adversely impact our growth plans and current

operations and result in an adverse effect on our business, financial condition and results of operations.

Public opinion and support

for cannabis and hemp-derived products has traditionally been inconsistent and varies from state to state.

While public opinion and support

appears to be rising generally in the U.S.

for legalizing cannabis and loosening limitations of hemp-derived products, it remains a controversial

issue subject to differing opinions surrounding the level of legalization.

Inconsistent public opinion and perception of cannabis and

hemp hinders growth of the cannabis and hemp industries, which could have a material adverse effect on our business plans, financial condition

and results of operations.

Consumer perception of our

products may be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and

other publicity regarding the consumption of cannabis and hemp-derived products.

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 cannabis

or hemp markets or any particular product, or consistent with earlier publicity.

Future research reports, findings, regulatory proceedings,

litigation, media attention or other publicity that is perceived as less favorable than, or questions earlier research reports, findings

or publicity could have a material adverse effect on the demand for our products.

Our dependence upon consumer perceptions means that

such adverse reports, whether or not accurate or with merit, could ultimately have a material adverse effect on our business, results

of operations, financial condition and cash flows.

Further, adverse publicity reports or other media attention regarding the safety, efficacy

and quality of cannabis or hemp-derived products in general, or our products specifically, or associating the consumption of cannabis

or hemp-derived products with illness or other negative effects or events, could have such a material adverse effect.

A failure or alleged

failure of quality control processes and procedures could result in negative consumer perception of our products or legal claims against

Adverse publicity reports or other media attention could arise even if the adverse effects associated with such products resulted

from consumers’ failure to consume such products appropriately or as directed.

Hemp-derived products may be shown to have

negative health and/or safety impacts upon consumers

The health and safety impacts of hemp-derived products have not yet

been established via traditional scientific and/or clinical studies.

The FDA appears to believe that certain hemp-derived products may

have significant adverse health impacts upon human beings, especially in regard to potential liver toxicity or liver damage.

scientific research and/or clinical studies ultimately demonstrate negative health and/or safety impacts of hemp-derived products upon

consumers, then our business and the trading price of our Common Stock may be materially adversely affected.

We face exposure to fraudulent or illegal

activity, and our reputation may be negatively impacted by improper conduct by our business partners, employees or agents.

We face exposure to the risk

that employees, independent contractors or consultants may engage in fraudulent or other illegal activities.

Misconduct by these parties

could be intentional, reckless and/or negligent conduct.

There may be disclosure of unauthorized activities that violate government regulations,

manufacturing standards, healthcare laws, abuse laws and other financial reporting laws.

Further, it may not always be possible for us

to identify and deter misconduct by our employees and other third parties, and the precautions taken by us to detect and prevent these

activities may not always be effective.

As a result, we could face potential penalties and litigation.

Furthermore, we cannot provide

assurance that our internal controls and compliance systems will protect us from acts committed by our employees, agents or business partners,

including Green Thumb, in violation of U.S.

federal or state or local laws.

Any improper acts or allegations could damage our reputation

and subject us to civil or criminal investigations and related shareholder lawsuits, could lead to substantial civic and criminal monetary

and non-monetary penalties and could cause us to incur significant legal and investigatory fees.

We face risks due to industry immaturity

or limited comparable, competitive or established industry best practices.

As a relatively new industry,

there are relatively few operators in the hemp-derived beverage industry whose business models we can follow or build upon.

there is no or limited information about comparable companies available for potential investors to review in making a decision about whether

to invest in us.

Shareholders and investors should consider, among other factors, our prospects for success

in light of the risks and uncertainties encountered by companies, like us, that are in their early stages.

For example, unanticipated

expenses and problems or technical difficulties may occur, which may result in material delays in the operation of our business.

fail to successfully address these risks and uncertainties or successfully implement our operating strategies.

If we fail to do so, it

could materially harm our business to the point of having to cease operations and could impair the value of our Common Stock to the extent

that investors may lose their entire investment.

The cannabis and hemp industries could face

strong opposition from other industries

We believe that established

businesses in other industries may have a strong economic interest in opposing the development of the cannabis and hemp industries.

and hemp may be seen by companies in other industries as an attractive alternative to their products, including alcohol, and as an alternative

to various commercial pharmaceuticals.

Many industries that could view the emerging cannabis and hemp industries as economic threats are

well established, with vast economic and federal and state lobbying resources.

It is possible that companies within these industries could

use their resources to attempt to slow or reverse legislation legalizing cannabis and hemp, and to create negative public perception of

legalization of cannabis and hemp.

Any inroads these companies make in halting or impeding legislative initiatives that would be beneficial

to the cannabis and hemp industries could have a detrimental impact on some of our customers and, in turn, on our operations.

Our business depends in part on client licensing

Our business is partly dependent

on certain of our customers obtaining various licenses from various municipalities and state licensing agencies.

There can be no assurance

that any or all licenses necessary for our customers to operate their businesses will be obtained, retained, or renewed.

If a licensing

body were to determine that a customer of ours had violated applicable rules and regulations, there is a risk the license granted to that

customer could be revoked, which could adversely affect our operations.

There can be no assurance that our existing customers will be

able to retain their licenses going forward, or that new licenses will be granted to existing and new market entrants.

Banking regulations could limit access to

banking services

Since the use of cannabis

is illegal under federal law, there is a compelling argument that banks cannot lawfully accept or deposit funds from businesses involved

with cannabis.

Consequently, businesses involved in the cannabis industry often have trouble finding a bank willing to accept their business.

The inability to open bank accounts may make it difficult for some of our customers to operate and their reliance on cash can result in

a heightened risk of theft, which could harm their businesses and, in turn, harm our business.

Although the proposal of the Secure and

Fair Enforcement Regulation Banking Act, also referred to as the SAFER Banking Act, would allow banks to work with cannabis businesses

and prevent federal banking regulators from intervening or punishing those banks, the legislation still requires the approval of the U.S.

House and Senate.

There can be no assurance that the SAFER Banking Act or any similar legislation will become law in the U.S.

Additionally,

most courts have denied cannabis-related businesses bankruptcy protection, thus making it very difficult for lenders to recoup their investments,

which may limit the willingness of banks to lend to our customers and to us.

We face risks related to our insurance coverage

and uninsurable risks.

Our business is subject to

a number of risks and hazards generally, including adverse environmental conditions, accidents, labor disputes, and changes in the regulatory

Such occurrences could result in damage to assets, personal injury or death, environmental damage, delays in operations,

monetary losses and possible legal liability.

Although we intend to continue

to maintain insurance to protect against certain risks in such amounts as we consider to be reasonable, our insurance will not cover all

the potential risks associated with our operations.

We may also be unable to maintain insurance to cover these risks at economically feasible

Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability.

Moreover, insurance

against certain hazards encountered in our operations may not be generally available on acceptable terms.

We might also become subject

to liability for pollution or other hazards which we may not be insured against or which we may elect not to insure against because of

premium costs or other reasons.

Losses from these events may cause us to incur significant costs that could have a material adverse effect

upon our financial performance and results of operations.

We participate in an evolving industry

The cannabis and hemp industries

are not yet well-developed, and many aspects of these industries’ development and evolution cannot be accurately predicted.

we have attempted to identify many risks specific to the cannabis and hemp industries, you should carefully consider that there are other

risks that cannot be foreseen or are not described in this report, which could materially and adversely affect our business and financial

We expect that the cannabis and hemp markets and our business will evolve in ways that are difficult to predict.

Our long-term

success may depend on our ability to successfully adjust our strategy to meet the changing market dynamics.

If we are unable to successfully

adapt to changes in the cannabis and hemp industries, our operations could be adversely affected.

Risks Related to Ownership of our Common Stock

Concentration of ownership may prevent new

investors from influencing significant corporate decisions .

Our executive

officers, directors and their affiliates beneficially own, in the aggregate, approximately 36% of our outstanding shares of Common Stock.

In particular, Green Thumb beneficially owns approximately 34% of our outstanding shares of Common Stock.

As a result, Green Thumb exercises

a significant level of control over all matters requiring stockholder approval, including the election of directors, amendment of our

articles of incorporation and approval of significant corporate transactions.

Moreover, our bylaws permit stockholders to act by written

This control could have the effect of delaying or preventing a change of control of our company or changes in management and

will make the approval of certain transactions difficult or impossible without the support of these stockholders.

Conversely, this concentrated

control could allow Green Thumb to consummate such transactions that many other shareholders do not support.

Concentration of ownership may prevent

new investors from influencing significant corporate decisions .

Green Thumb beneficially

owns approximately 33% of our outstanding shares of common stock and has the right to acquire more through the exercise of warrants and

conversion of notes.

As a result, Green Thumb may have the ability to significantly influence matters requiring stockholder approval,

including the election of directors, amendment of our articles of incorporation and approval of significant corporate transactions.

addition, our bylaws permit stockholders to act by written consent.

Accordingly, this concentration of ownership may have the effect

of delaying or preventing or influencing a change of control of our company or changes in management and may make it more difficult to

approve certain transactions without the support of Green Thumb.

Conversely, this ownership concentration may allow Green Thumb to influence

the outcome of transactions that other shareholders do not support.

A large number of shares eligible for public

sale could depress the market price of our common stock .

We have filed a registration statement to register the shares of Common

Stock underlying outstanding options and shares reserved for future issuance under our equity compensation plans.

Upon effectiveness of

that registration statement, subject to the satisfaction of applicable exercise periods and subject to our insider trading policy, the

shares of Common Stock issued upon exercise of outstanding options will be available for immediate resale in the U.S.

We have filed registration

statements to register the shares of common stock underlying outstanding options and shares reserved for future issuance under our equity

compensation plans.

Upon effectiveness of those registration statement, subject to the satisfaction of applicable exercise periods and

subject to our insider trading policy, the shares of common stock issued upon exercise of outstanding options will be available for immediate

resale in the U.S.

in the open market.

Sales of our Common Stock as restrictions end or pursuant to registration

rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

sales also could cause our stock price to fall and make it more difficult for you to sell shares of our Common Stock.

Sales of our common stock

as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a

time and at a price that we deem appropriate.

These sales also could cause our stock price to fall and make it more difficult for you

to sell shares of our common stock.

Our failure to meet the continued listing

requirements of Nasdaq could result in a de-listing of our common stock.

If we fail to satisfy the rules and continued listing requirements of Nasdaq, such as the

requires relating to corporate governance, shareholder approval, shareholders’ equity or our minimum closing bid price, Nasdaq will

take steps to delist our common stock.

Such a de-listing would likely have a negative effect on the price of our common stock and would

impair stockholders’ ability to sell or purchase our common stock when they wish to do so, as well as adversely affect our ability

to issue additional securities and obtain additional financing in the future.

In the past, we have received deficiency letters relating

to our minimum bid price, committee composition, and shareholders’ equity.

While we have regained compliance with those requirements,

there can be no assurance that we will remain in compliance or that Nasdaq will interpret shareholder approval requirements consistent

with our interpretations.

If we fail to satisfy the

rules and continued listing requirements of Nasdaq, such as the requirements relating to corporate governance, shareholder approval,

shareholders’ equity or our minimum closing bid price, Nasdaq will take steps to delist our common stock.

Such a de-listing would

likely have a negative effect on the price of our common stock and would impair stockholders’ ability to sell or purchase our common

stock when they wish to do so, as well as adversely affect our ability to issue additional securities and obtain additional financing

in the future.

In the past, we have received deficiency letters relating to our minimum bid price, committee composition, and shareholders’

While we have regained compliance with those requirements, there can be no assurance that we will remain in compliance or that

Nasdaq will interpret shareholder approval requirements consistent with our interpretations.

The exercise of all or any number of outstanding

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Investors could be subject to increased dilution upon the exercise of our warrants.

A total of 7.6 million warrants were issued and outstanding as of March 17, 2025.

A total of approximately 10.9 million warrants were issued and outstanding as of March 3, 2026.

Investors may experience

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These provisions include:

● the inability of stockholders to call special meetings;

● the ability of our board of directors to designate the terms of and issue new series of preferred stock

without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used

to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer,

likely preventing acquisitions that have not been approved by our board of directors.

inability of stockholders to call special meetings;

ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which

could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known

as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that

have not been approved by our board of directors.

The existence of the forgoing

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We are an “emerging growth company,”

as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act, and we cannot be certain

if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our Common Stock

less attractive to investors.

We are an “emerging

growth company,” as defined in the JOBS Act.

For as long as we continue to be an emerging growth company, we may take advantage

of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies,

including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced

disclosure obligations regarding executive compensation in this report and our periodic reports and proxy statements and (3) exemptions

from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute

payments not previously approved.

In addition, as an emerging growth company, we are only required to provide two years of audited consolidated

financial statements and two years of selected financial data in this report.

We could be an emerging growth company for up to five years,

although circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates

exceeds $700 million as of any March 31 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal

year before that time, after which, in each case, we would no longer be an emerging growth company as of the following December 31 or,

if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging

growth company immediately.

as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act, and we cannot be

certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our Common

Stock less attractive to investors.

We are an “emerging growth company,”

as defined in the JOBS Act.

For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various

reporting requirements that are applicable to other public companies that are not emerging growth companies, including (1) not being

required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations

regarding executive compensation in this report and our periodic reports and proxy statements and (3) exemptions from the requirements

of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously

In addition, as an emerging growth company, we are only required to provide two years of audited consolidated financial statements

and two years of selected financial data in this report.

We could be an emerging growth company for up to five years, although circumstances

could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700 million

as of any March 31 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that

time, after which, in each case, we would no longer be an emerging growth company as of the following December 31 or, if we issue more

than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company

Additionally, we are a “smaller

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disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements.

remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of Common Stock held

by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed

remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of Common Stock

held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed

fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.

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public companies difficult or impossible.

After we are no longer an

“emerging growth company,” we expect to incur additional management time and cost to comply with the more stringent reporting

requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor

attestation requirements of Section 404 of the Sarbanes-Oxley Act.

We cannot predict or estimate the amount of additional costs we may

incur or the timing of such costs.

After we are no longer a

“smaller reporting company,” or “emerging growth company” we expect to incur additional management time and cost

to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated

filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

We cannot predict or

estimate the amount of additional costs we may incur or the timing of such costs.

We have not and do not expect to declare

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be effective, which may adversely affect investor confidence in our company and, as a result, the value of our Common Stock .

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act,

to annually furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting.

This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

We may not be able to remediate

the material weaknesses that we have identified to date or any future material weaknesses, or to complete our evaluation, testing and

any required remediation in a timely fashion.

During the evaluation and testing process, if we identify one or more material weaknesses

in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.

If we are unable

to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the

effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which

would have a material adverse effect on the price of our Common Stock.

We have identified

material weaknesses in our internal control over financial reporting.

If we are unable to remediate these material weaknesses, or if we

experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may

not be able to accurately or timely requirements applicable to public companies, which may adversely affect investor confidence in us,

and, as a result, the market price of our Common Stock.

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with

Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose

any changes and material weaknesses identified through such evaluation in those internal controls.

A material weakness is a deficiency,

or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material

misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.

As described elsewhere in

this Report, we have identified the following material weaknesses:

● lack of technical expertise

● segregation of duties

● accounting for complex financial transactions

As a result of these material

weaknesses, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024.

To respond to these material

weaknesses, we have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of our

We are required, pursuant

to Section 404 of the Sarbanes-Oxley Act, to annually furnish a report by management on, among other things, the effectiveness of our

internal control over financial reporting.

Our plans currently include rebuilding the internal finance function and engagement of external

financial consultants.

The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these

initiatives will ultimately have the intended effects.

Any failure to maintain internal

control could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis.

If our consolidated financial statements are not accurate, investors may not have a complete understanding of our operations and financial

In either case, there could result a material adverse effect on our business.

Ineffective internal controls could also cause

investors to lose confidence in our reported financial information which could have a negative effect on the trading price of our stock.

We can give no assurance

that the measures we have taken and plan to take in the future will remediate the material weaknesses identified or that any additional

material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate

internal control over financial reporting or circumvention of these controls.

In addition, even if we are successful in strengthening

our controls and procedures, in the future those controls, and procedures may not be adequate to prevent or identify irregularities or

errors or to facilitate the fair presentation of our consolidated financial statements.

This assessment includes disclosure of any material weaknesses identified by our management

in our internal control over financial reporting.

If we identify one or more material weaknesses in our internal control over financial

reporting, we will be unable to assert that our internal controls are effective.

If we are unable to assert that our internal control

over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls,

we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect

on the price of our Common Stock.

General Risk Factors

Increases in costs, disruption of supply

or shortage of raw materials could harm our business .

Increases in costs, disruption of supply or shortage of raw

materials could harm our business .

We may experience increases

in the cost or a sustained interruption in the supply or shortage of raw materials.

Any such an increase or supply interruption could

materially negatively impact our business, prospects, financial condition and operating results.

We use various raw materials in our business

including agricultural products that are subject to supply shortages resulting from, among other factors, weather conditions and tariffs.

The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely

affect our business and operating results.

Substantial increases in the prices for our raw materials increase our operating costs and

could reduce our margins if we cannot recoup the increased costs through increased prices for our products and services.

Litigation may adversely affect our

business, financial condition and results of operations .

Any such increase or supply interruption could materially

negatively impact our business, prospects, financial condition and operating results.

We use various raw materials in our business including

agricultural products that are subject to supply shortages resulting from, among other factors, weather conditions and tariffs.

for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely affect our

business and operating results.

Substantial increases in the prices for our raw materials increase our operating costs and could reduce

our margins if we cannot recoup the increased costs through increased prices for our products and services.

Litigation may adversely affect our business, financial

condition and results of operations .

From time to time in the

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and our ability to recover such amounts through indemnification may be limited.

Due to our manufacturing and sale of our products, may

also be subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product

Due to our manufacturing and sale of our products, we

may also be subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product

defects, among other litigation.

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to fully compensate us for one or more of such claims or continue to be available on terms acceptable to us.

A claim brought against us

that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting

A claim brought against

us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting

in a reduction in the trading price of our stock.

An active, liquid, and orderly trading market

for our Common Stock may not develop, the price of our stock may be volatile, and you could lose all or part of your investment .

An active, liquid, and orderly trading

market for our Common Stock may not develop, the price of our stock may be volatile, and you could lose all or part of your investment .

The trading price of our

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● whether we achieve our anticipated corporate objectives;

● actual or anticipated fluctuations in our quarterly or annual operating results;

● actual or anticipated fluctuations in our quarterly or annual

operating results;

● changes in our financial or operational estimates or projections;

● our ability to implement our operational plans;

● changes in the economic performance or market valuations of companies similar to ours;

● changes in the economic performance or market valuations of

companies similar to ours;

● general economic or political conditions in the U.S.

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management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating

As a public company, we incur

significant legal, accounting, and other expenses that we did not incur as a private company, including costs associated with public company

reporting and corporate governance requirements.

These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley

Act, as well as rules implemented by the Securities and Exchange Commission, or (“SEC”), and Nasdaq.

We expect complying with

these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming

The increased costs associated

with operating as a public company will decrease our net income or increase our net loss and may require us to reduce costs in other areas

of our business or increase the prices of our products or services.

Additionally, if these requirements divert our management’s

attention from other business concerns, they could have a material adverse effect on our business, financial condition, and operating

As a public company, we also

expect that it may be more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required

to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

As a public company, we

incur significant legal, accounting, and other expenses, including costs associated with public company reporting and corporate governance

requirements.

These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules

implemented by the Securities and Exchange Commission, or (“SEC”), and Nasdaq.

We expect complying with these rules and regulations

will substantially increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and

may place undue strain on our personnel, systems and resources, which could adversely affect our business, financial condition and results

of operations.

As a public company, we

also expect that it may be more difficult and more expensive for us to obtain director and officer liability insurance, and we may be

required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive

Data privacy and security concerns relating

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We may be unable to anticipate or detect attacks or vulnerabilities or implement adequate preventative measures.

and security issues could also compromise trade secrets and other sensitive information, harming our business.

As a result, we may suffer

significant legal, reputational, or financial exposure, which could harm our business, financial condition, and operating results.

If our shares of Common Stock become subject

to the penny stock rules, it would become more difficult to trade our shares .

Attacks and security issues could also compromise trade secrets and other sensitive information, harming our business.

As a result, we

may suffer significant legal, reputational, or financial exposure, which could harm our business, financial condition, and operating

If our shares of Common Stock become subject to the penny stock

rules, it would become more difficult to trade our shares .

The SEC has adopted rules

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Penny stocks are generally equity securities with

a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain

automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided

by the exchange or system.

If we do not retain a listing on Nasdaq and if the price of our Common Stock is less than $5.00, our Common

Stock will be deemed a penny stock.

The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise

exempt from those rules, to deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock

rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make

a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s

a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on

certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities

is provided by the exchange or system.

If we do not retain a listing on Nasdaq and if the price of our Common Stock is less than $5.00,

our Common Stock will be deemed a penny stock.

The penny stock rules require a broker-dealer, before a transaction in a penny stock not

otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information.

the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer

must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s

written acknowledgment of the receipt of a risk disclosure statement;

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trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares.

The financial and operational projections

that we may make from time to time are subject to inherent risks .

The financial and operational projections that we may make from

time to time are subject to inherent risks .

The projections that our

management may provide from time to time (including, but not limited to, those relating to potential peak sales amounts, production, and

supply dates, and other financial or operational matters) reflect numerous assumptions made by management, including assumptions with

respect to our specific as well as general business, economic, market and financial conditions and other matters, all of which are difficult

to predict and many of which are beyond our control.

Accordingly, there is a risk that the assumptions made in preparing the projections,

or the projections themselves, will prove inaccurate.

There will be differences between actual and projected results, and actual results

may be materially different from those contained in the projections.

The inclusion of the projections in this report should not be regarded

as an indication that we or our management or representatives considered or consider the projections to be a reliable prediction of future

events, and the projections should not be relied upon as such.

management may provide from time to time (including, but not limited to, those relating to potential peak sales amounts, production,

and supply dates, and other financial or operational matters) reflect numerous assumptions made by management, including assumptions

with respect to our specific as well as general business, economic, market and financial conditions and other matters, all of which are

difficult to predict and many of which are beyond our control.

Accordingly, there is a risk that the assumptions made in preparing the

projections, or the projections themselves, will prove inaccurate.

There will be differences between actual and projected results, and

actual results may be materially different from those contained in the projections.

The inclusion of the projections in this report should

not be regarded as an indication that we or our management or representatives considered or consider the projections to be a reliable

prediction of future events, and the projections should not be relied upon as such.

If securities or industry analysts do not

publish research or reports about us, our business, or our market, or if they change their recommendations regarding

our stock adversely, our stock price and trading volume could decline .

publish research or reports about us, our business, or our market, or if they change their recommendations regarding our stock adversely,

our stock price and trading volume could decline .

The trading market for our

Common Stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our

market or our competitors.

If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide

more favorable relative recommendations about our competitors, our stock price would likely decline.

If any analyst who may cover us were

to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which

in turn could cause our stock price or trading volume to decline.

Common Stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business,

our market or our competitors.

If any of the analysts who may cover us change their recommendation regarding our stock adversely, or

provide more favorable relative recommendations about our competitors, our stock price would likely decline.

If any analyst who may cover

us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets,

which in turn could cause our stock price or trading volume to decline.

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