Our Management's Discussion and Analysis or Plan of Operations contains not only
statements that are historical facts, but also statements that are
forward-looking. Forward-looking statements are, by their very nature, uncertain
and risky. These risks and uncertainties include international, national and
local general economic and market conditions; demographic changes; our ability
to sustain, manage, or forecast growth; our ability to successfully make and
integrate acquisitions; raw material costs and availability; new product
development and introduction; existing government regulations and changes in, or
the failure to comply with, government regulations; adverse publicity;
competition; the loss of significant customers or suppliers; fluctuations and
difficulty in forecasting operating results; changes in business strategy or
development plans; business disruptions; the ability to attract and retain
qualified personnel; the ability to protect technology; and other risks that
might be detailed from time to time in our filings with the Securities and
Exchange Commission.
Although the forward-looking statements in this Quarterly Report reflect the
good faith judgment of our management, such statements can only be based on
facts and factors currently known by them. Consequently, and because
forward-looking statements are inherently subject to risks and uncertainties,
the actual results and outcomes may differ materially from the results and
outcomes discussed in the forward-looking statements. You are urged to carefully
review and consider the various disclosures made by us in this report and in our
other reports as we attempt to advise interested parties of the risks and
factors that may affect our business, financial condition, and results of
operations and prospects.
Overview
Currently, WEED and its subsidiaries are working on or planning for several
different business opportunities in the cannabis & hemp field, including, but
not limited to: both indoor and outdoor "grows", cultivations & harvest for
research, product development, processing and manufacturing of both Pharma &
non-Pharma products, services, therapeutics, and treatments on a global basis
for both the Medical Cannabis & Hemp (<.03 thc) global market space. Long terms
goals include hopeful cures for many diseases and ailments for both man &
animals utilizing the Cannabaceae plant and its derivatives. We will need
additional financing to attempt to accomplish these goals.
Second, on November 22, 2021, WEED completed the purchase of the Sugar Hill Golf
course property located in the town of Portland, New York. WEED's acquisition of
this ~43 acre property with ~2000 ft. of Lake Erie waterfront also comes with
the "unlimited water extractions rights" from Lake Erie related to the property,
along with a complete wastewater management plant. WEED's initial plan is to
utilize the property to access the hemp and infused beverage markets as our
property in the middle of the largest concord grape producing region of the
United States. In the future, WEED may look to use the unique property
infrastructure to build a luxury condos & resort development in the most natural
settings to be ESG compliant in conjunction to WEEDs forming its Social Equity
Advisory Council (SEAC) to create Diversity & Equality in our industry. This
project is only in its conceptual stage, no funding or plans have been developed
other than the proposed name: The 4 Winds Luxury condos & resort to be "Cannabis
Friendly" which would be a "FIRST" in the nation.
Third, WEED established WEED Australia Ltd. and its wholly owned Cannabis
Institute of Australia (C.I.A.) in Australia in March of 2017, for the purpose
of conducting cannabis and hemp research and potentially developing products and
educational services in and for Australians as stated above. C.I.A. is a
non-profit entity formed for the purpose of conducting cannabis and hemp
research with universities and other non-profits to protect all intellectual
rights, properties and usage in our highly regulated industry. The C.I.A. has
the potential to develop products in Australia for domestic research and
development of products, services and educational purposes to all seven States
and territories, including Tasmania, to be marketed globally.
Our first business opportunity was, and continues to be, through our
wholly-owned subsidiary, Sangre AT, LLC ("Sangre"), where we are focused on the
development and application of cannabis-derived compounds for the treatment of
human disease and animal ailments. To that end Sangre, was working on a planned
five-year Cannabis Genomic Study to complete a genetic blueprint of the Cannabis
plant genus, by creating a global genomic classification of the entire plant.
Sangre completed a 1-2 year Pilot Study in 2017 & 2018 at the University of
Texas-Galveston thru Industrial Metagenomics at a cost of nearly $1 million USD.
Sangre completed the pilot study with 30 cultivars from strains collected
worldwide that included 30 strains (twenty-four female and six male). These
results are highly proprietary and the basis of future studies to come. We need
to raise additional funds to continue the next steps in our Cannabis Genomic
Study.
On May 14th, 2018, the 70th Anniversary of the statehood of Israel, WEED formed
its wholly owned subsidiary, WEED Israel Cannabis Ltd., with the goal of
completing and adding to the noted studies above. As such, WEED Israel worked
with the Hebrew University in Jerusalem and with the top scientists globally in
the field of Cannabis & hemp. To that effect, WEED Israel looked to conduct
clinical trials and product development that would be the quality and
acceptability of the FDA in the United States. Due to current laws and
conditions in the USA, all research results and product development for both
Pharma & Non-Pharma products, cannot be introduced the United States
marketplace. Since starting in 2018, the USA has made vast improvements and
advancements in the legalization of both Cannabis and hemp. As of the end of
2021 there are 37 States that have approved a State level medical cannabis and
hemp programs, along with the District of Colombia. In addition, there are 17
States that have implemented or approved the "Adult Use" psyhcoactive aspects of
high THC usage of cannabis.
20
In conjunction with WEED Israel Cannabis Ltd., we made arrangements with
Professor Elka Touitou to be the head of WEEDs Israeli Advisory Board to lead
and assist us with clinical trials in cannabis & hemp research studies in
Israel. Professor Touitou was the Head of the Innovative Dermal, Transdermal and
Transmucosal Delivery Lab at the Institute of Drug Research, The School of
Pharmacy, HUJ, now retired but still has HUJ clinical trial & independent
studies/lab privileges. Professor Touitou is an internationally renowned
authority in the field of drug delivery and design of new technologies for
efficient administration of drugs and development of new products. Professor
Touitou has been involved in Cannabinoid research since 1988 at The Hebrew
University of Jerusalem, (HUJ) Jerusalem, Israel. Previously, WEED was in the
process of buying Professor Touitou's various patents to include the
bioavailability aspects of the cannabaceae plant. However, after expending over
$500,000 USD to acquire the Professor Touitou's patents, we had to terminate the
agreement in 2019 due to the downturn of the Cannabis marketplace, and
specifically as to public cannabis companies, which could not be resumed due to
the Covid pandemic that was/is still ongoing globally. We have kept in constant
contact with Professor Touitou thru our Managing Director of WEED Israel, Mr.
Elliot Kwestel. As of 2022, Dr. Touitou still has interest in working with WEED
to complete the purchase of her patents and begin clinical trials upon proper
funding.
Corporate Overview
We were originally incorporated under the name Plae, Inc., in the State of
Arizona on August 20, 1999. At the time we operated under the name Plae, Inc.,
no business was conducted. No books or records were maintained and no meetings
were held. In essence, nothing was done after incorporation until Glenn E.
Martin took possession of Plae, Inc. in January 2005. On February 18, 2005, the
corporate name was changed to King Mines, Inc. and then subsequently changed to
its current name, United Mines, Inc., on March 30, 2005. No shares were issued
until the Company became United Mines, Inc. From 2005 until 2015, we were an
exploration stage mineral exploration company that owned a number of unpatented
mining claims and Arizona State Land Department claims.
On November 26, 2014, our Board of Directors approved the redomestication of our
company from Arizona to Nevada (the "Articles of Domestication"), and approved
Articles of Incorporation in Nevada, which differed from then-Articles of
Incorporation in Arizona, primarily by (a) changing our name from United Mines,
Inc. to WEED, Inc., (b) authorizing Twenty Million (20,000,000) shares of
preferred stock, with blank check rights granted to our Board of Directors, and
(c) authorizing Two Hundred Million (200,000,000) shares of common stock (the
"Nevada Articles of Incorporation"). On December 19, 2014, the holders of a
majority of our outstanding common stock approved the Articles of Domestication
and the Nevada Articles of Incorporation at a Special Meeting of Shareholders.
On January 16, 2015, the Articles of Domestication and the Nevada Articles of
Incorporation went effective with the Secretary of State of the State of Nevada.
On February 2, 2015, our name change to WEED, Inc., and a corresponding ticker
symbol change to "BUDZ" went effective with FINRA and was reflected on the
quotation of our common stock on OTC Markets.
These changes were affected in order to make our corporate name and ticker
symbol better align with our short-term and long-term business focus. Our
current, short-term goals relate to the Cannabis Genomic Study and the resulting
development of a variety of new cannabis strains, and, over the next 5 years, we
plan to process those results in order to become an international cannabis
research and product development company, with a globally-recognized brand
focusing on building and purchasing labs, land and building commercial grade
"Cultivation Centers" to consult, assist, manage & lease to universities, state
governments, licensed dispensary owners and organic grow operators on a contract
basis with a concentration on the legal and medical cannabis sector.
Our long-term plan is to become a true "Seed-to-Sale" global holding company
providing infrastructure, financial solutions, product development, and real
estate options in this new emerging market. Our long term growth may also come
from the acquisition of synergistic businesses, such as distilleries, to make
anything from infused beverages to super oxygenated water with CBD and THC.
Currently, we have formed WEED Australia Ltd., registered as an unlisted public
company in Australia to address this Global demand. We have also formed WEED
Israel Cannabis Ltd., an Israeli corporation, to address future global demand.
We will look to conduct future research, marketing, import/exporting, and
manufacturing of our proprietary products on an international level.
On April 20, 2017, we entered into a Share Exchange Agreement with Sangre AT,
LLC, a Wyoming limited liability company, under which we acquired all of the
issued and outstanding limited liability company membership units of Sangre in
exchange for Five Hundred Thousand (500,000) shares of our common stock,
restricted in accordance with Rule 144. As a result of this agreement, Sangre is
a wholly-owned subsidiary of WEED, Inc.
21
This discussion and analysis should be read in conjunction with our financial
statements included as part of this Quarterly Report.
Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
Results of Operations
Three Months Ended
June 30,
2022 2021
Revenue $ - $ -
Operating expenses:
General and administrative 175,818 76,765
Professional fees 202,649 1,103,244
Depreciation and amortization 28,846 27,603
Total operating expenses 407,313 1,207,612
Net operating loss (407,313 ) (1,207,612 )
Other income (expense)
Interest expense (19,438 ) (17,233 )
Other income (expense) 13,275 (2,918 )
Gain on disposal of fixed asset 639,773 -
Net (loss) Income $ 226,297 $ (1,227,763 )
Other Comprehensive Income 2,309 75
Comprehensive Income (Loss) $ 228,606 $ (1,227,688 )Operating Loss; Net (Loss) Income
Our comprehensive (loss) decreased by $1,456,294, from ($1,227,688) to $228,606,
from the three months ended June 30, 2021 compared to the three months ended
June 30, 2022. Our operating loss decreased by $800,299, from ($1,207,612) to
($407,313) for the same period. The decrease in net loss compared to the same
period of the prior year is primarily a result of a decrease in professional
fees and the gain on disposal of a fixed asset, partially offset by increases in
general and administrative expenses, depreciation and amortization, and interest
expense. These changes are detailed below.
Revenue
We have not had any revenues since our inception. Once we have sufficient
funding, we plan to research and possibly enter the hemp and infused beverage
industry through our newly acquired property in New York, and conduct Sangre's
Cannabis Genomic Study and process those result. In the long-term we plan to be
a company focused on purchasing land and building commercial grade "Cultivation
Centers" to consult, assist, manage & lease to licensed dispensary owners and
organic grow operators on a contract basis, with a concentration on the legal
and medical marijuana (Cannabis) sector. Our long-term plan is to become a True
"Seed-to-Sale" company providing infrastructure, financial solutions and real
estate options in this new emerging market, worldwide. We plan to make our brand
global and therefore we will look for opportunities to conduct future research,
marketing, import and exporting, and manufacturing of any proprietary products
on an international level.
General and Administrative Expenses
General and administrative expenses increased by $99,053, from $76,765 for the
three months ended June 30, 2021 to $175,818 for the three months ended June 30,
2022, primarily due to increases in executive salary and property expense.
Professional Fees
Our professional fees decreased by $900,595 during the three months ended June
30, 2022 compared to the three months ended June 30, 2021. Our professional fees
were $202,649 for the three months ended June 30, 2022 and $1,103,244 for the
three months ended June 30, 2021. These fees are largely related to fees paid
for legal and accounting services, along with compensation to independent
contractors, and decreased significantly primarily as a result of decreases in
the value of stock-based compensation awards due to issuing shares for services
during the period. We expect these fees to vary quarter-to-quarter as our
business and stock price fluctuate if we continue to use stock-based
compensation. In the event we undertake an unusual transaction, such as an
acquisition, securities offering, or file a registration statement, we would
expect these fees to substantially increase during that period.
22
Depreciation and Amortization
During the three months ended June 30, 2022 we had depreciation and amortization
expense of $28,846, compared to $27,603 in the three months ended June 30, 2021.
Our depreciation and amortization expense primarily relates to our property and
trademark acquisitions.
Interest Expense
Interest expense increased from $17,233 for the three months ended June 30,
2021 to $19,438 for the three months ended June 30, 2022. Our interest expense
primarily relates to notes payable from attorneys and related parties.
Other Income (Expense)
During the three months ended June 30, 2022, our other income was $13,275
compared to other expense of ($2,918) for the three months ended June 30, 2021.
The other income during the three months ended June 30, 2022 primarily related
to foreign fringe benefit refund and interest forgiveness, the other expense for
the three months ended June 30, 2021 primarily related to finance charges.
Gain on Disposal of Fixed Assets
We had gain on disposal of fixed assets of $639,773 for the three months ended
June 30, 2022, compared to $0 for the same period in 2021. The gain on disposal
of fixed assets in 2022 relates to our sale of company-owned residential
property near La Veta, Colorado.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
Results of Operations
Six Months Ended
June 30,
2022 2021
Revenue $ - $ -
Operating expenses:
General and administrative 312,608 527,481
Professional fees 562,050 1,574,856
Depreciation and amortization 63,795 60,961
Total operating expenses 938,453 2,163,298
Net operating loss (938,453 ) (2,163,298 )
Other income (expense)
Interest expense (65,519 ) (26,800 )
Other expense (475 ) (9,409 )
Gain on disposal of fixed asset 639,773 -
Net (loss) income $ (364,674 ) $ (2,199,507 )
Other Comprehensive Income (Loss) 1,553 (487)
Comprehensive Loss $ (363,121 ) $ (2,199,994 )Operating Loss; Net (Loss) Income
Our comprehensive (loss) decreased by $1,836,873, from ($2,199,994) to
($336,121), from the six months ended June 30, 2021 compared to the six months
ended June 30, 2022. Our operating loss decreased by $1,224,845, from
($2,163,298) to ($938,453) for the same period. The decrease in net loss
compared to the same period of the prior year is primarily a result of a
decreases in general and administrative expenses and professional fees, as well
as the gain on disposal of a fixed asset, partially offset by increases in
depreciation and amortization, and interest expense. These changes are detailed
below.
23
Revenue
We have not had any revenues since our inception. Once we have sufficient
funding, we plan to research and possibly enter the hemp and infused beverage
industry through our newly acquired property in New York, and conduct Sangre's
Cannabis Genomic Study and process those result. In the long-term we plan to be
a company focused on purchasing land and building commercial grade "Cultivation
Centers" to consult, assist, manage & lease to licensed dispensary owners and
organic grow operators on a contract basis, with a concentration on the legal
and medical marijuana (Cannabis) sector. Our long-term plan is to become a True
"Seed-to-Sale" company providing infrastructure, financial solutions and real
estate options in this new emerging market, worldwide. We plan to make our brand
global and therefore we will look for opportunities to conduct future research,
marketing, import and exporting, and manufacturing of any proprietary products
on an international level.
General and Administrative Expenses
General and administrative expenses decreased by $214,478, from $527,481 for the
six months ended June 30, 2021 to $312,608 for the six months ended June 30,
2022, primarily due to decreases in consulting services.
Professional Fees
Our professional fees decreased by $1,012,806 during the six months ended June
30, 2022 compared to the six months ended June 30, 2021. Our professional fees
were $562,050 for the six months ended June 30, 2022 and $1,574,856 for the six
months ended June 30, 2021. These fees are largely related to fees paid for
legal and accounting services, along with compensation to independent
contractors, and decreased significantly primarily as a result of decreases in
the value of stock-based compensation awards due to issuing shares for services
during the period. We expect these fees to vary quarter-to-quarter as our
business and stock price fluctuate if we continue to use stock-based
compensation. In the event we undertake an unusual transaction, such as an
acquisition, securities offering, or file a registration statement, we would
expect these fees to substantially increase during that period.
Depreciation and Amortization
During the six months ended June 30, 2022 we had depreciation and amortization
expense of $63,795, compared to $60,961 in the six months ended June 30, 2021.
Our depreciation and amortization expense primarily relates to our property and
trademark acquisitions.
Interest Expense
Interest expense increased from $26,800 for the six months ended June 30, 2021
to $65,519 for the six months ended June 30, 2022. Our interest expense
primarily relates to notes payable from attorneys and related parties.
Other Expense
During the six months ended June 30, 2022, our other expense was ($475) compared
to ($9,409) for the six months ended June 30, 2021. The other expense during
the six months ended June 30, 2022 primarily related to broker commissions
related to a loan, the other expense for the six months ended June 30, 2021
primarily related to finance charges.
Gain on Disposal of Fixed Assets
We had gain on disposal of fixed assets of $639,773 for the six months ended
June 30, 2022, compared to $0 for the same period in 2021. The gain on disposal
of fixed assets in 2022 relates to our sale of company-owned residential
property near La Veta, Colorado.
Liquidity and Capital Resources
Introduction
During the six months ended June 30, 2022, because of our operating losses, we
did not generate positive operating cash flows. Our cash on hand as of June 30,
2022 was $821,094 and our monthly cash flow burn rate was approximately $45,000.
Our cash on hand was primarily proceeds from the sales of our securities and the
sale of our residential property near La Veta, Colorado. We currently do not
believe we will be able to satisfy our cash needs from our revenues for many
years to come.
24
Our cash, current assets, total assets, current liabilities, and total
liabilities as of June 30, 2022 and December 31, 2021, respectively, are as
follows:
June 30, 2022 December 31, 2021 Change
Cash $ 821,094 $ 19,654 $ 801,440
Total Current Assets 922,184 41,918 880,266
Total Assets 2,774,479 1,959,225 815,254
Total Current Liabilities 1,554,065 1,341,725 212,340
Total Liabilities 1,554,065 1,341,725 212,340
Our total assets increased by $815,254 as of June 30, 2022 as compared to
December 31, 2021. The increase in our total assets between the two periods was
attributed to increases in our cash, inventory, computers and equipment, and
goodwill, partially offset by decreases in our prepaid expenses, and property
and equipment, net.
Our current liabilities and total liabilities increased by $212,340, as of June
30, 2022 as compared to December 31, 2021. This increase was primarily due to
increases in accrued officer compensation, accrued expense, lease liability and
notes payable, related party, partially offset by decreases in accounts payable,
accrued interest, and in notes payable - in default.
In order to pay our obligations in full or in part when due, we will be required
to raise capital from other sources. There is no assurance, however, that we
will be successful in these efforts.
Cash Requirements
We had cash available of $821,094 and $19,654 as of June 30, 2022 and December
31, 2021, respectively. Based on our lack of revenues, our cash on hand and
current monthly burn rate of approximately $45,000, we will need to continue
borrowing from our shareholders and other related parties, and/or raise money
from the sales of our securities, to fund operations.
Sources and Uses of Cash
Operations
We had net cash used in operating activities of $441,653 for the six months
ended June 30, 2022, as compared to $378,937 for the six months ended June 30,
2021. For the period in 2022, the net cash used in operating activities
consisted primarily of our net loss of ($364,674), adjusted by depreciation and
amortization of $63,795, debt discount amortization of $43,241, estimated fair
value of shares issued for services of $507,800, imputed interest on RP loans of
$18,235, and gain on disposal of fixed asset of ($639,773) and further adjusted
by decreases in prepaid expenses and deposits of $3,174 and accounts payable of
$127,912, and increases in accrued expenses of $54,461. For the period in 2021,
the net cash used in operating activities consisted primarily of our net loss of
($2,199,507), adjusted by estimated value of shares issued for services of
$1,743,350, depreciation and amortization of $60,691, and imputed interest on RP
loans of $16,226, and further adjusted by an increase assets of deposits -
related party of $60,000, decrease in assets of prepaid expenses and deposits of
$6,989, and increases in liabilities of accounts payable of $12,433 and accrued
expenses of $40,611.
25
Investments
For the six months ended June 30, 2022, we had cash flows from investing
activities of $1,257,037, all related to proceeds from disposal of a fixed asset
for the sale of the residential property in Colorado. For the six months ended
June 30, 2021, we had cash flows from investing activities of ($3,734) related
to purchases of property and equipment.
Financing
Our net cash used in financing activities for the six months ended June 30, 2022
was ($15,497), compared to cash provided by financing activities of $409,131 for
the six months ended June 30, 2021. For the period in 2022, our financing
activities related to repayments on notes payable of ($74,884) and repayments of
notes payable-related party of ($445,591), partially offset by proceeds from the
sale of common stock of $40,000, and proceeds from notes payable of $464,978.
For the period in 2021, our financing activities related to proceeds from the
sale of common stock of $380,000, proceeds from notes payable-related party of
$38,500, and stock payable of $30,000, partially offset by repayments on notes
payable of $39,369.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
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WEED, INC. 
