Forward-Looking Statements


This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.





In this quarterly report, unless otherwise specified, our financial statements
are expressed in United States Dollars (US$) and are prepared in accordance with
United States generally accepted accounting principles. All references to
"common shares" refer to the common shares in our capital stock.

Unless expressly indicated or the context requires otherwise, the terms "Cryomass Technologies," the "Company," "we," "us," and "our" refer to Cryomass Technologies Inc., a Nevada corporation, and, where appropriate, its wholly owned subsidiaries.





General Overview



Cryomass Technologies Inc ("Cryomass Technologies" or the "Company") began as
Auto Tool Technologies Inc., which was incorporated under the laws of the State
of Nevada on May 10, 2011. The Company's name was changed to AFC Building
Technologies Inc. effective January 10, 2014. Effective April 26, 2018, the
Company changed its name to First Colombia Development Corp. Effective October
14, 2019, the Company changed its name to Redwood Green Corp. Effective
September 1, 2020, the Company changed its name to Andina Gold Corp. On July 15,
2021, the Company entered into a plan of merger with its wholly-owned
subsidiary, Cryomass Technologies Inc a Nevada corporation, for the purpose of
changing the name of the Company to Cryomass Technologies Inc. effective August
27, 2021. Our ticker symbol changed from AGOL to CRYM.

The Company's principal office is located at 1001 Bannock St., Suite 612, Denver, CO 80204, and our telephone number is 303-416-7208. The Company's website is www.cryomass.com.

The Company over its history has explored a number of different business opportunities.


On May 10, 2018, the Company acquired all the issued and outstanding share
capital of First Colombia Devco S.A.S. ("Devco") a Colombian company, and began
to establish various business ventures in Colombia in the agriculture and real
estate development, tourism, and infrastructure sectors before commencing to
phase them out in April 2019.



On July 1, 2019, the Company acquired 100% of the membership interests in
General Extract, LLC ("General Extract"), a Colorado limited liability company.
General Extract was founded in 2015 as an importer, distributor, broker and
postprocessor of hemp and hemp derivatives. The Company acquired all of the
issued and outstanding membership interests, including business plans and access
to contacts.



On July 15, 2019, the Company, through its wholly owned subsidiary Good
Acquisition Co., entered into a Membership Interest Purchase Agreement to
acquire cannabis-related intellectual property and other assets of Critical Mass
Industries LLC DBA Good Meds ("CMI" and/or "Good Meds"), a Colorado limited
liability company ("CMI Transaction"). CMI is licensed by the Marijuana
Enforcement Division of Colorado Department of Revenue to produce cannabis and
cannabis products under its six licenses. These licenses allow for cultivation,
manufacturing of infused products and retail distribution. At the time the
Company entered into the Membership Interest Purchase Agreement, Colorado law
prohibited public companies, including the Company, from owning cannabis
licenses. Therefore, CMI spun off certain assets acquired by the Company. Under
the terms of the Membership Interest Purchase Agreement, CMI retained the
cannabis license, inventory and accounts receivable (the "Cannabis License
Assets") and continued to operate the cannabis business related to those assets.
In consideration for the transfer of the acquired assets, the Company delivered
13,553,233 shares of the Company common stock, in addition to $1,999,770 in

cash
to CMI.



                                       21





Effective December 31, 2021, we entered into a restated and amended
administrative services agreement, terminated our license and marketing
agreements, and restated the asset purchase agreement with CMI and affiliates.
As a result of these agreements, we disposed of all CMI-related assets and
extinguished any and all related obligations. For clarity, we have no management
or operations decision-making right or responsibility, nor any access to future
economic benefits from operation of the assets. Therefore, upon commencing these
agreements, we determined that CMI no longer qualifies as a variable interest
entity ("VIE") as of December 31, 2021.



Good Meds, the operating unit of CMI, is based in Denver, CO, and operates in a
60,000-square-foot cultivation and processing facility. This facility produces
cannabis for sale as dry flower and biomass input for processing into
Marijuana-Infused Products ("MIP"), such as live resin, wax and budder. Good
Meds also owns and operates two medical cannabis dispensaries located in
Lakewood, CO and Englewood, CO. The business has been in operation since 2009.



Beginning in March 2020, an evaluation of various strategic alternatives was
followed by the decision to sell the Colorado-based assets and refocus its
attention on unique opportunities for gold exploration in Colombia. In August
2020, the Company established a wholly owned Colombian subsidiary, Andina Gold
Colombia SAS for this purpose. In December 2020, due to the death of the top
geologist exploring opportunities on behalf of the Company, and the effects of
the ongoing Coronavirus pandemic, the Company determined that pursuit of gold
exploration in Colombia was no longer a practical alternative.



On June 22, 2021, the Company entered into an Asset Purchase Agreement with
Cryocann USA Corp, a California corporation ("Cryocann"), pursuant to which
Company acquired substantially all the assets of Cryocann. The aggregate
purchase price was $3,500,000 million in cash and 10,000,000 shares of Company
common stock As part of the Cryocann Acquisition, we retained both Cryocann
employees, who have expert knowledge of the industry, related participants,
customers and the acquired patented technology. Under their employment
agreements, each employee may receive compensation if specific performance
targets are met in association with our future operating performance when the
Cryocann technology enters the market. The technology and assets acquired from
Cryocann are operated from the Company's subsidiary, Cryomass LLC. The patented
cryo-mechanical technology is for the separation of plant materials in the
harvesting of hemp and cannabis, and potentially other high value crops such as
hops. We believe this technology will reduce processing costs and increases the
quality of extracted compounds. We are exploring the application of the
underlying technology to a broad range of industries that handle high-value
materials and that could benefit from our precision capture methods. We
anticipate that cannabis and hemp will be the first in a series of such
industries.



To develop and commercialize the technology, we contracted with an independent
engineering and manufacturing firm to refine the design of our cryo-mechanical
system for the handling of harvested hemp, cannabis and other high-value plants.
The system exploits CryoMass's U.S.-patented process for the controlled
application of liquid nitrogen to stabilize and separate the structural elements
of gross plant material. The device currently under development is scaled for
highway transportability and is being optimized for the low-cost collection of
fully intact hemp and cannabis trichomes. It can be used within minutes after
plants have been cut and can also efficiently capture trichomes from fresh
frozen or even dried plant parts, including trim. The device's through-put
capacity is expected to be approximately 600 kilograms of gross plant material
per hour. The advanced design for the equipment has been completed, and testing
of a prototype machine is currently underway. The engineering and manufacturing
firm has indicated that it has the capacity to build 10 to 15 such devices per
month. The first functional "beta" machine has been extensively field-tested and
we expect to deliver our first commercial unit to an operating partner's
facility by the end of the third quarter, with first revenues occurring no later
in the fourth quarter of 2022.



Management believes the CryoMass system will deliver a compelling combination of
cost and time savings while enhancing product quality and quantity for
largescale cultivators and processors of hemp and cannabis. The use of
a CryoMass system - which can be trucked to and operated on the fields of most
large hemp and cannabis growers or be permanently installed at a user's
processing facility - should eliminate many of the costs that come with
traditional practices, especially the labor, fuel and capital costs of drying
and curing hemp or cannabis that is grown for the extraction of end
products. With traditional practices, harvested plants are transported to a
specially constructed drying house and then treated for a week or longer under
controlled conditions of temperature and humidity. It's a costly method. With
our system, harvested plants are simply fed into the front end of
a CryoMass machine, and minutes later fully intact trichomes are collected at
the back end of the machine. With traditional practices and their seven-to-ten
days of handling and drying, a large share of a plant's valuable trichomes break
off and are lost. Then the remaining trichomes are damaged by long exposure to
oxygen and by the evaporation of their volatile terpenes. The CryoMass system,
on the other hand, stabilizes and collects fully intact trichomes at harvest,
leaving no opportunity for such wasteful loss. Field-captured trichomes are the
cleanest element of a hemp or cannabis plant because, unlike the rest of the
plant, trichomes do not readily take up heavy metals, pesticides or other common
soil contaminants. As a product for end-users, field-captured trichomes are
closest to being contaminant free. As feedstock for manufacturers of extracts
and oils, they are the key to the purest products possible.



                                       22






Because the trichomes collected with CryoMass technology represent only 10% or
so of a plant's weight and volume, they are cheaper to ship and store than gross
plant material. For the same reason and because trichomes are free of the waxes
and other unwanted materials found in the rest of the plant, processing
trichomes into oils and extracts can be far quicker, cheaper and easier than
processing gross plant material. Even trichomes captured from dried or frozen
plant parts deliver this cost-saving advantage to processors of oils and
extracts. The three-dimensional advantage achievable with the CryoMass system -
first-stage cost savings, product enhancement and downstream cost savings - can
as much as double a crop's wholesale value. And in some jurisdictions, users may
enjoy a reduction in excise taxes levied on cannabis and hemp harvests, which
typically are tied to the gross weight of hemp or cannabis that is removed

from
the field.



Production and processing of hemp and cannabis is a huge, worldwide industry. In
the U.S., for example, the wholesale value of the cannabis crop from just the 11
states permitting adult-use and medical cannabis exceeds $6 billion
annually. Growth in the U.S. and in the worldwide market is likely fed in part
by the growing acceptance of medicinal cannabis products and anticipated
legislative changes in various jurisdictions worldwide.



Several other high-value plants, including species that are important for health
and wellness products, wrap their valuable elements in trichomes. The technology
we are developing for hemp and cannabis may have profitable application to those
other species as well. We intend to find out.

In September 2021, we were granted an additional patent for our process from the Chinese Intellectual Property Office. We currently are taking steps to gain further protection for our intellectual property through the European Union Intellectual Property Office and several other international jurisdictions.


On November 17, 2021, we announced the completion of a $10.3 million equity
financing. The financing and the earlier conversion of substantially all the
company's debt into common stock left the Company with a strong balance sheet
and adequate resources for our planned business development. In connection with
the financing, 1,010,000 shares and 760,000 shares of CryoMass Technologies
common stock were purchased by CEO Christian Noël and Chairman of the Board
Delon Human, respectively, either individually or through entities controlled by
them.



Update on COVID-19



In December 2019, a novel strain of coronavirus was reported to have surfaced in
Wuhan, China, which has spread throughout the world, including the United
States. On January 30, 2020, the World Health Organization declared the outbreak
of COVID-19 a "Public Health Emergency of International Concern," and on March
11, 2020, it characterized the outbreak as a "pandemic". The impact of COVID-19
developments and uncertainty with respect to the economic effects of the
pandemic has introduced significant volatility in the financial markets.



To date, COVID-19 has surfaced in nearly all regions around the world and
resulted in travel restrictions, both domestic and international, closing of
borders and business slowdowns or shutdowns in affected areas. As a
result, COVID-19 has impacted the Company's business. Although deemed an
essential business during the pandemic, many dispensaries and cannabis
manufacturers have suspended or reduced operations on a temporary basis due to
matters associated with COVID-19. While activities resumed in full in 2022,
there are continued threats of short-notice, temporary restrictions that may
impact our business.




The COVID-19 pandemic and responses to this crisis, including actions taken by
federal, state and local governments, have had an impact on the operations of
the Company, including, without limitation, the following: reduced staffing due
to employee suspected conditions and social distancing measures; constraints on
productivity; management and staff non-essential business-related travel was
constrained due to stay-at-home orders; some employees have shifted to remote
work resulting in loss of productivity; consumers visiting dispensaries operated
under license impacted by stay-at-home orders. Management continues to monitor
the COVID-19 pandemic situation and federal, state and local recommendations and
will provide updates as appropriate.



                                       23





Our Current Business



Our business portfolio includes the accounts of Cryomass LLC (formerly known as
General Extract), which is controlled by the Company through its 100% ownership
interest. The Company dissolved its previously reported VIE relationship with
Critical Mass Industries Inc., such that we no longer report the VIE as
discontinued operations held for sale.



On June 23, 2021, the Company consummated purchase of assets of Cryocann USA
Corp through its wholly-owned subsidiary Cryomass LLC. We are currently
finalizing research and development work of our patented technology. We intend
to begin commercial-scale testing of the system prototype in the first half of
2022 and plan to target specific markets and industries to employ this
ground-breaking technology.



To develop and commercialize the technology, we contracted with an independent
engineering and manufacturing firm to refine the design of our cryo-mechanical
system for the handling of harvested hemp, cannabis and other high-value plants.
The system exploits CryoMass's U.S.-patented process for the controlled
application of liquid nitrogen to stabilize and separate the structural elements
of gross plant material. The device currently under development is scaled for
highway transportability and is being optimized for the low-cost collection of
fully intact hemp and cannabis trichomes. It can be used within minutes after
plants have been cut and can also efficiently capture trichomes from fresh
frozen or even dried plant parts, including trim. The device's through-put
capacity is expected to be approximately hundreds of kilograms of gross plant
material per hour. The advanced design for the equipment has been completed,
and testing of a prototype machine is currently underway. The engineering and
manufacturing firm has indicated that it has the capacity to build 10 to 15

such
devices per month.



The first functional "beta" machine is expected to be fully field-tested during
mid-2022. In the same time-frame, we expect to commission the build of the first
production-run system and to deploy both machines in commercial scale operations
by the end of the third quarter, 2022, including revenue generation.



Management believes the CryoMass system will deliver a compelling combination of
cost and time savings while enhancing product quality and quantity for
largescale cultivators and processors of hemp and cannabis. The use of
a CryoMass system - which can be trucked to and operated on the fields of most
large hemp and cannabis growers or be permanently installed at a user's
processing facility - should eliminate many of the costs that come with
traditional practices, especially the labor, fuel and capital costs of drying
and curing hemp or cannabis that is grown for the extraction of end
products. With traditional practices, harvested plants are transported to a
specially constructed drying house and then treated for a week or longer under
controlled conditions of temperature and humidity. It's a costly method. With
our system, harvested plants are simply fed into the front end of
a CryoMass machine, and minutes later fully intact trichomes are collected at
the back end of the machine. With traditional practices and their seven-to-ten
days of handling and drying, a large share of a plant's valuable trichomes break
off and are lost. Then the remaining trichomes are damaged by long exposure to
oxygen and by the evaporation of their volatile terpenes. The CryoMass system,
on the other hand, stabilizes and collects fully intact trichomes at harvest,
leaving no opportunity for such wasteful loss. Field-captured trichomes are the
cleanest element of a hemp or cannabis plant because, unlike the rest of the
plant, trichomes do not readily take up heavy metals, pesticides or other common
soil contaminants. As a product for end-users, field-captured trichomes are
closest to being contaminant free. As feedstock for manufacturers of extracts
and oils, they are the key to the purest products possible.



Because the trichomes collected with CryoMass technology represent only 10% or
so of a plant's weight and volume, they are cheaper to ship and store than gross
plant material. For the same reason and because trichomes are free of the waxes
and other unwanted materials found in the rest of the plant, processing
trichomes into oils and extracts can be far quicker, cheaper and easier than
processing gross plant material. Even trichomes captured from dried or frozen
plant parts deliver this cost-saving advantage to processors of oils and
extracts. The three-dimensional advantage achievable with the CryoMass system -
first-stage cost savings, product enhancement and downstream cost savings - can
as much as double a crop's wholesale value. And in some jurisdictions, users may
enjoy a reduction in excise taxes levied on cannabis and hemp harvests, which
typically are tied to the gross weight of hemp or cannabis that is removed

from
the field.

Results of Operations for the Three Months Ended June 30, 2022 and 2021





Our operating results for the three months ended June 30, 2022 and 2021 are
summarized as follows:



                                             For the Three Months Ended
                                                      June 30,                            Change
                                                2022              2021           Dollars        Percentage

Net sales                                  $            -     $          -     $          -               0 %
Cost of goods sold, inclusive of
depreciation                                            -                -                -               0 %
Gross profit                                            -                -                -               0 %
Total operating expenses                        1,416,244        2,637,445       (1,194,905 )           -46 %
Loss from operations                           (1,416,244 )     (2,637,445 )      1,194,905             -46 %
Total other expenses                              (14,174 )       (370,880 )        356,706             -96 %
Net loss from continuing operations,
before taxes                                   (1,430,418 )     (3,008,325 )      1,551,611             -52 %
Income taxes                                            -                -                -               0 %

Net loss from continuing operations $ (1,430,418 ) $ (3,008,325 ) $ 1,551,611

             -52 %
Net income / (loss) from disc.
operations, net of tax                     $            -     $    238,686     $   (238,686 )          -100 %
Net loss                                   $   (1,430,418 )   $ (2,769,639 )   $  1,312,925             -48 %




                                       24

Our operating results for the three months ended June 30, 2022 and 2021, relating to our former variable interest entity, CMI, are classified as discontinued operations above and summarized as follows:





                                                  For the Three Months Ended
                                                           June 30,                            Change
                                                    2022               2021           Dollars        Percentage
Net sales                                       $          -       $  1,617,647     $ (1,617,647 )          -100 %
Cost of goods sold, inclusive of depreciation              -          1,006,958       (1,006,958 )          -100 %
Gross profit                                               -            610,689         (610,689 )          -100 %
Total operating expenses                                   -            351,464         (351,464 )          -100 %
Gain / (loss) from operations                              -            259,225         (259,225 )          -100 %
Total other expenses                                       -            (20,539 )         20,539            -100 %
Net income / (loss), before taxes                          -            238,686         (238,686 )          -100 %
Income taxes                                               -                  -                -               0 %
Net income / (loss)                             $          -       $    238,686     $   (238,686 )          -100 %

Net Sales and Cost of Goods Sold





There were no net sales related to continuing operations for the three months
ended June 30, 2022 and 2021. CMI had no net sales for the three months ended
June 30, 2022. CMI net sales were $1,617,647 for the three months ended June 30,
2021, of which $1,123,396 was related to medical retail, $512,282 was related to
medical wholesale, $0 was related to recreational wholesale and $(18,031) was
related to other revenues. The overall decrease in CMI net sales for the three
months ended June 30, 2022 compared to the three months ended June 30, 2021 was
$1,617,647, or 100%, which is which is attributable to the Company's disposal of
its discontinued operations as of December 31, 2021.



There were no cost of goods sold related to continuing operations for the three
months ended June 30, 2022 and 2021, respectively. CMI had no cost of goods sold
for the three months ended June 30, 2022. CMI's cost of goods sold were
$1,006,958 for the three months ended June 30, 2021, representing a decrease of
$1,006,958 or 100%. This decrease is attributable to the Company's disposal of
its discontinued operations as of December 31, 2021.



Operating Expenses



Operating expenses encompass personnel costs, general and administrative
expenses, and legal and professional fees. Total operating expenses were
$1,416,244 for the three months ended June 30, 2022 as compared to $2,637,445
for the three months ended June 30, 2021. The decrease of $1,221,201, or 46%,
was primarily attributable to the following changes in operating expenses of:

? General and administrative expenses - $1,740,905 decrease

? Legal and professional fees - $456,168 increase


The decrease of $1,740,905, or 88%, in general and administrative expenses is
primarily due to the fact that the Company incurred significant stock
compensation costs during the three months ending June 30, 2021 related to new
CEO Christian Noel's employment agreement and stock options granted for the
CryoCann transaction.. The increase of $456,168, or 197%, in legal and
professional fees is primarily due to the fact that the Company incurred a
number of large expenses for its primary investor relations consultant.



CMI operating expenses encompass personnel costs, general and administrative,
legal and professional fees, and amortization expense. Total operating expenses
for CMI were $0 and $351,464 for the three months ending June 30, 2022 and 2021,
respectively, representing a decrease of $351,464, or 100%. This decrease was
attributable to the Company's disposal of its discontinued operations as of
December 31, 2021.



Other Expense



Other expense for the three months ending June 30, 2022 consisted of $35,235
interest expense and $21,061 gain on foreign exchange. Other expense for the
three months ending June 30, 2021 consisted of $359,648 interest expense and
$11,232 loss on foreign exchange. The decrease in interest expense was a result
of fully converting $4,900,000 of notes payable into common shares during Q4
2021. The loss on foreign exchange relates to a payable agreement with Cryomass
LLC's supplier.

CMI had no other expense for the three months ending June 30, 2022. CMI's other expense during the three months ending June 30, 2021 consisted of $20,539 interest expense, which primarily relates to the related party note.





Net Loss



For the foregoing reasons, we had a net loss of $1,430,418 for the three months
ending June 30, 2022, or $0.01 net loss per common share - basic and diluted,
compared to a net loss of $2,769,639 for the three months ending June 30, 2021,
or $0.02 net loss per common share - basic and diluted.



                                       25

Results of Operations for the Six Months Ended June 30, 2022 and 2021





Our operating results for the six months ended June 30, 2022 and 2021 are
summarized as follows:



                                             For the Six Months Ended
                                                     June 30,                          Change
                                               2022             2021          Dollars       Percentage

Net sales                                  $          -     $          -     $        -               0 %
Cost of goods sold, inclusive of
depreciation                                          -                -              -               0 %
Gross profit                                          -                -                              0 %
Total operating expenses                      3,544,034        3,633,149   

    (89,115 )            -2 %
Loss from operations                         (3,544,034 )     (3,633,149 )       89,115              -2 %
Total other expenses                            (38,689 )       (538,719 )      500,030             -93 %
Net loss from continuing operations,
before taxes                                 (3,582,723 )     (4,171,868 )      589,145             -14 %
Income taxes                                          -                -              -               0 %
Net loss from continuing operations        $ (3,582,723 )   $ (4,171,868 )   $  589,145             -14 %
Net income from discontinued operations,
net of tax                                 $          -     $    355,302     $ (355,302 )          -100 %
Net loss                                   $ (3,582,723 )   $ (3,816,566 )   $  233,843              -6 %




Our operating results for the six months ended June 30, 2022 and 2021, relating
to our former variable interest entity, CMI, are included above and summarized
as follows:



                                                  For the six Months Ended
                                                          June 30,                           Change
                                                   2022              2021           Dollars        Percentage
Net sales                                       $         -       $ 3,313,572     $ (3,313,572 )          -100 %
Cost of goods sold, inclusive of depreciation             -         2,125,693       (2,125,693 )          -100 %
Gross profit                                              -         1,187,879       (1,187,879 )          -100 %
Total operating expenses                                  -           782,774          782,774            -100 %
Gain / (loss) from operations                             -           405,105          405,105            -100 %
Total other expenses                                      -           (49,803 )        (49,803 )          -100 %
Net income, before taxes                                  -           355,302         (355,302 )          -100 %
Income taxes                                              -                 -                -               0 %
Net income                                      $         -       $   355,302     $   (355,302 )          -100 %

Net Sales and Cost of Goods Sold


There were no net sales related to continuing operations for the six months
ended June 30, 2022 and 2021. CMI contributed no net sales for the six months
ended June 30, 2022. CMI net sales were $3,313,572 for the six months ended June
30, 2021, of which $2,253,900 was related to medical retail, $1,068,592 was
related to medical wholesale, $9,010 was related to recreational wholesale, and
$(17,930) was related to other revenues. The overall decrease in CMI net sales
for the six months ended June 30, 2022 compared to the six months ended June 30,
2021 was $3,313,572, or 100%.



There were no cost of goods sold related to continuing operations for the six
months ended June 30, 2022 and 2021. CMI contributed no cost of goods sold for
the six months ended June 30, 2022. CMI's cost of goods sold were $2,125,693 for
the six months ended June 30, 2021, representing a decrease of $2,125,693 or
100%. This decrease is attributable to the Company's disposal of its
discontinued operations as of December 31, 2021.



Operating Expenses

Operating expenses encompass personnel costs, general and administrative expenses, and legal and professional fees. Total operating expenses were $3,544,034 for the six months ended June 30, 2022 as compared to $3,633,149 for the six months ended June 30, 2021. The decrease of $89,115, or 2%, was primarily attributable to the following:

? General and administrative expenses - $1,842,026 decrease

? Legal and professional fees - $1,688,905 increase


The $1,842,026, or 78%, decrease in general and administrative expenses is
primarily due to the fact that the Company incurred additional stock-based
compensation expense during the six months ending June 30, 2021 related to new
CEO Christian Noel's employment agreement and stock options granted for the
Cryocann Acquisition. The 1,688,905, or 369%, increase in legal and professional
fees primarily resulted from the fact that the Company incurred a number of
large expenses for its primary investor relations consultant.



                                       26





CMI operating expenses encompass personnel costs, general and administrative,
legal and professional fees, and amortization expense. Total operating expenses
for CMI were $0 and $782,774, respectively, for the six months ended June 30,
2022 and 2021, which represents a decrease of $782,774 or 100%.



Other Expense




Other expense for the six months ending June 30, 2022 consisted of $71,258
interest expense and $32,569 gain on foreign exchange. Other expense for the six
months ending June 30, 2021 consisted of $562,257 interest expense and $23,538
gain on foreign exchange. The decrease in interest expense was a result of fully
converting $4,900,000 of notes payable into common shares during Q4 2021. The
loss on foreign exchange relates to a payable agreement with Cryomass LLC's
supplier.



CMI contributed no other expense for the six months ending June 30, 2022. CMI's
other expense during the three months ending June 30, 2021 consisted of $49,803
interest expense, which primarily relates to the related party note.



Net Loss



For the foregoing reasons, we had a net loss of $3,582,723 for the six months
ending June 30, 2022, or $0.02 net loss per common share - basic and diluted,
compared to a net loss of $3,816,566 for the six months ending June 30, 2021, or
$0.04 net loss per common share - basic and diluted.

Liquidity, Capital Resources and Cash Flows





As of June 30, 2022, the Company had working capital of $1,165,814 and
cash balance of $2,188,032. The Company estimates that it needs approximately
$4,000,000 to cover overhead costs plus an additional $500,000-$1,000,000 to
support the capital expenditures and operations over the next twelve months. In
addition to offsets from available cash balances, these costs are expected to be
offset by revenues which we believe will begin to be realized in the fourth
quarter of 2022. However, if needed, the Company also has available to it a
facility that can be used to put shares to an investment fund in return for
cash. The dollar amount of each put is determined by a formula which is based on
trading volumes and prices of our shares. Based on current trading volumes and
prices, we estimate that approximately $225,000 could be available every two
weeks until we reach the facility limit of $10,000,000 or the end of 2023,
whichever comes first. We believe that the combination of available cash,
revenue generation and the facility described above will be sufficient to meet
our anticipated costs going forward.



COVID-19 has resulted in, and may continue to result in, significant disruption
of financial markets, which may reduce the Company's ability to access capital
or its customers' ability to pay the Company for past or future purchases, which
could negatively affect the Company's liquidity. The Company believes that the
cash balances and cash from operations will be sufficient to satisfy its cash
needs for the next few months until it can obtain new long-term financing or
other sources of capital. If we are unable to attain additional financing, we
will have to seek additional strategic alternatives and relief from our
additional liabilities accumulated during COVID-19.



The impact of COVID-19 developments and uncertainty with respect to the economic
effects of the pandemic have introduced significant volatility in the financial
markets. The uncertainties associated with COVID-19 related to our industry
present risk and doubt about the Company's ability to continue as a going
concern.



Going Concern

Management believes it has sufficient cash available to support an anticipated level of operations for at least 12 months following the date of this report.





Capital Resources

The following table summarizes total current assets, liabilities and working capital for the periods indicated:





                       June 30,        December 31,
                         2022              2021
Current assets        $ 2,254,873     $    6,530,222
Current liabilities     1,089,059          1,882,419
Working capital       $ 1,165,814     $    4,647,803

As of June 30, 2022 and December 31, 2021, we had a cash balance of $2,188,032 and $5,772,839, respectively.

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