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 Four Winds Luxury condos & resort to be
"Cannabis Friendly" which would be a "FIRST" in the nation. The New York
property is now owned by Four Winds of Lake Erie, LLC, a wholly-owned subsidiary
of WEED, Inc.
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. WEED Australia is
also our gateway to the Oceania & Asia emerging legal cannabis marketplace.
23
Fourth, on May 2, 2022, we entered into a Share Exchange Agreement (the
"Exchange Agreement") with Hempirical Genetics, LLC, an Arizona limited
liability company ("Hempirical"), under which we acquired all of the issued and
outstanding membership interests of Hempirical from Jeffery Miller in exchange
for $603,284 payable in Two Million (2,000,000) shares of our common stock (the
"WEED Shares"), valued at $394,302 based on the value of our common stock, and
$250,000 in cash to be paid over four years. With this acquisition, our newly
acquired inventory includes over 200 High THC strains plus 15 "PURE" Landrace
strains including Panama Red, Acapulco Gold, Red Bud Colombian, Santa Marta
Gold, and ThaiSticks. Along with 30+ CBD & CBG strains. WEED believes that
multiple combinations of precise cannabinoid strains will achieve the precise
medical outcome desired.
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" i.e. recreational
psychoactive aspects of high THC usage of cannabis.
In conjunction with WEED Israel Cannabis Ltd., we made arrangements with
Professor Elka Touitou to be available 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. WEED looks to achieve that funding thru offerings of our securities.
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.
24
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.
25
This discussion and analysis should be read in conjunction with our financial
statements included as part of this Quarterly Report.
Three Months Ended September 30, 2022 Compared to Three Months Ended September
30, 2021
Results of Operations
Three Months Ended
September 30,
2022 2021
Revenue $ - $ -
Operating expenses:
General and administrative 110,903 56,877
Professional fees 143,572 79,489
Depreciation and amortization 21,255 33,544
Total operating expenses 275,730 169,910
Net operating loss (277,960 ) (169,910 )
Other income (expense)
Interest expense (31,030 ) (3,415 )
Other income (expense) 1,984 -
Gain on disposal of fixed asset - -
Net (loss) Income $ (307,006 ) $ (173,325 )
Other Comprehensive Loss (1,324 ) (912 )
Comprehensive Loss $ (308,330 ) $ (174,237 )
Operating Loss; Net (Loss) Income
Our comprehensive loss increased by $134,093, from ($174,237) to ($308,330),
from the three months ended September 30, 2021 compared to the three months
ended September 30, 2022. Our operating loss increased by $108,050, from
($169,910) to ($277,960) for the same period. The increase in net loss compared
to the same period of the prior year is primarily a result of increases in
general and administrative expenses, professional fees and other expenses,
partially offset by a decrease in depreciation and amortization. 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 $54,026, from $56,877 for the
three months ended September 30, 2021 to $110,903 for the three months ended
September 30, 2022, primarily due to increases in executive salaries and
property expenses.
26
Professional Fees
Our professional fees increased by $64,083 during the three months ended
September 30, 2022 compared to the three months ended September 30, 2021. Our
professional fees were $143,572 for the three months ended September 30, 2022
and $79,489 for the three months ended September 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 three months ended September 30, 2022 we had depreciation and
amortization expense of $21,255, compared to $33,544 in the three months ended
September 30, 2021. Our depreciation and amortization expense primarily relates
to our property and trademark acquisitions.
Interest Expense
Interest expense increased from ($3,415) for the three months ended September
30, 2021 to ($31,030) for the three months ended September 30, 2022. Our
interest expense primarily relates to notes payable from attorneys and related
parties.
Other Income
During the three months ended September 30, 2022, our other income was $1,984
compared to $0 for the three months ended September 30, 2021. The other income
during the three months ended September 30, 2022 primarily related to a foreign
fringe benefit refund.
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30,
2021
Results of Operations
Nine Months ended
September 30,
2022 2021
Revenue $ - $ -
Operating expenses:
General and administrative 423,511 591,188
Professional fees 705,622 1,654,345
Depreciation and amortization 85,050 94,505
Total operating expenses 1,214,183 2,340,038
Net operating loss (1,216,413 ) (2,340,038 )
Other income (expense)
Interest expense (96,549 ) (32,794 )
Other income 1,509 -
Gain on disposal of fixed asset 639,773 -
Net (loss) income $ (671,680 ) $ (2,372,832 )
Other Comprehensive Income (Loss) 229 (1,399 )
Comprehensive Loss $ (671,451 ) $ (2,374,231 )
Operating Loss; Net (Loss) Income
Our comprehensive (loss) decreased by $1,702,780, from ($2,374,231) to
($671,451), from the nine months ended September 30, 2021 compared to the nine
months ended September 30, 2022. Our operating loss decreased by $1,123,625,
from ($2,340,038) to ($1,216,413) for the same period. The decrease in net loss
compared to the same period of the prior year is primarily a result of decreases
in general and administrative expenses, depreciation and amortization, and
professional fees, as well as the gain on disposal of a fixed asset, partially
offset by increases in interest expense and other expense. These changes are
detailed below.
27
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 $167,677, from $591,188 for the
nine months ended September 30, 2021 to $423,511 for the nine months ended
September 30, 2022, primarily due to decreases in consulting services.
Professional Fees
Our professional fees decreased by $948,723 during the nine months ended
September 30, 2022 compared to the nine months ended September 30, 2021. Our
professional fees were $705,622 for the nine months ended September 30, 2022 and
$1,654,345 for the nine months ended September 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 nine months ended September 30, 2022 we had depreciation and
amortization expense of $85,050, compared to $94,505 in the nine months ended
September 30, 2021. Our depreciation and amortization expense primarily relates
to our property and trademark acquisitions.
Interest Expense
Interest expense increased from ($32,794) for the nine months ended September
30, 2021 to ($96,549) for the nine months ended September 30, 2022. Our interest
expense primarily relates to notes payable from attorneys and related parties.
Other Income
During the nine months ended September 30, 2022, our other income was $1,509
compared to $0 for the nine months ended September 30, 2021. The other income
during the nine months ended September 30, 2022 primarily related to a foreign
fringe benefit refund and interest forgiveness.
Gain on Disposal of Fixed Assets
We had gain on disposal of fixed assets of $639,773 for the nine months ended
September 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.
28
Liquidity and Capital Resources
Introduction
During the nine months ended September 30, 2022, because of our operating
losses, we did not generate positive operating cash flows. Our cash on hand as
of September 30, 2022 was $535,527 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.
Our cash, current assets, total assets, current liabilities, and total
liabilities as of September 30, 2022 and December 31, 2021, respectively, are as
follows:
September 30, 2022 December 31, 2021 Change
Cash $ 535,527 $ 19,654 $ 515,873
Total Current Assets 643,393 41,918 601,475
Total Assets 2,442,773 1,959,225 483,548
Total Current Liabilities 1,446,915 1,341,725 105,190
Total Liabilities 1,446,915 1,341,725 105,190
Our total assets increased by $483,548 as of September 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, prepaid expenses, computers and
equipment, and goodwill, partially offset by decreases in our building and
property and equipment, net.
Our current liabilities and total liabilities increased by $105,190, as of
September 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 $535,527 and $19,654 as of September 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 $632,710 for the nine months
ended September 30, 2022, as compared to $494,558 for the nine months ended
September 30, 2021. For the period in 2022, the net cash used in operating
activities consisted primarily of our net loss of ($671,680), adjusted by
depreciation and amortization of $85,047, debt discount amortization of $43,241,
estimated fair value of shares issued for services of $591,100, imputed interest
on RP loans of $24,407, and gain on disposal of fixed asset of ($639,773) and
further adjusted by increases in assets related to prepaid expenses and deposits
of $21,643, increases in liabilities consisting of accrued expenses of $78,296,
and decreases in liabilities consisting of accounts payable of $121,705. For the
period in 2021, the net cash used in operating activities consisted primarily of
our net loss of ($2,372,832), adjusted by estimated value of stock-based
compensation of $1,786,850, depreciation and amortization of $94,505, and
imputed interest on RP loans of $16,226, and adjusted by increases in assets of
deposits - related party of $90,000 and prepaid expenses and deposits of $3,846,
and increases in liabilities of accounts payable of $8,884 and accrued expenses
of $65,655.
29
Investments
For the nine months ended September 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 nine months ended
September 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 nine months ended September
30, 2022 was ($108,683), compared to cash provided by financing activities of
$488,801 for the nine months ended September 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 ($542,564), partially offset by
proceeds from the sale of common stock of $40,000, and proceeds from notes
payable of $468,765. For the period in 2021, our financing activities related to
proceeds from the sale of common stock of $480,000, proceeds from notes payable
of $45,500, and stock payable of $10,000, partially offset by repayments on
notes payable of $46,699.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
© Edgar Online, source Glimpses
WEED, INC. 
